Canberra “policy” experts…

Back in 2008 I sat in on numerous meeting of policy “experts”, not tax or housing “experts”, on the set up of first home saver accounts. This was the previous government’s answer to the “housing affordability crisis” – an account you can save for your first home with concessional tax rates on the interest (what interest) and a government co-contribution of 15% up to $750 a year.

I explained that this would just be ignored by most home buyers but it may be of interest of a few high wealth individuals with uni student kids. They get the kids to set one up, give them $5k each year to put into the fund, let the government kick in its $750 each year, and without taking into account any return, at the sand of their four year arts degree (they had to take a year off to travel in the middle of the three year degree) there is $23,000 to buy a loft in the inner suburbs…

The housing experts were just as unimpressed…

But we did not understand how “powerful” these tools will be…

In 2014 the government announces it is closing the scheme – AS THERE HAS BEEN VERY LIMITED UPTAKE… I bet that most of that limited uptake were my high wealth parents helping out their kids.

 

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
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