Budget Implications – First Home Buyers Grant (FHBG)

The Federal Government’s own advisors – the Australian Bureau of Statistics – advise that 93% of FHBG’s go to established home buyers and only 7% go to new home buyers. Therefore, the FHBG does very little to stimulate the economy or create jobs. The only beneficiaries of established home transactions are real estate agents, lawyers and financiers.

We need more new homes constructed in Queensland and around Australia, to employ more trades people and purchase more building materials. But the FHBG boost, which will extend until 30 September, and a further extension until 30 December 2009 is in the same form as before.

Even though there is a small incentive (+$7,000) to buy a new house, this obviously has not had the desired effect. The boost needs to be a lot more than $7,000 because new houses require landscaping, fencing, windows, carpets etc which are additional costs compared to established homes.

Effectively, the FHBG should give more incentive for new home buyers and less for established home buyers. The overall cost of the scheme would have been lowered at the same time because there are considerably less new home buyers than established home buyers in the system.