Productivity Commission Report on hold

14 May 2004

Although the discussion paper by the Government’s Productivity Commission into First Home Ownership was handed to Parliament over a month ago, the final report and resulting recommendations may not be released until as late as August 2004. According to the Treasurer, Mr Peter Costello, the reason for the delay in releasing the report was the release this week of the latest Federal Budget.

The Productivity Commission Report recommended several steps to help first home owners and increase housing affordability in Australia, including...

• A recommendation that high income earners should not be able to receive taxpayer funded subsidies toward the purchase of their first home.
• Income means testing for first home owners and an allocation of a first home owners’ grant based on the results.
• The removal of stamp duty on first home purchases.

Although many industry groups and commentators also recommended allowing first home buyers access to their superannuation for a deposit on their first home purchase, the Commission did not include this recommendation in their draft report to the Government.

The Commission also elected not to make any changes to negative gearing legislation or capital gains tax.

Mr Costello said, “the Productivity Commission Report will be considered by cabinet and when it is considered by cabinet it will be released."