PM Transcripts

I am pleased to announce that if re-elected a Coalition Government will provide a further boost to the highly successful First Home Owners Scheme to help underpin the strong recovery of the housing industry.
In March this year I announced the doubling of the First Home Owners grant to $14,000 for buyers of newly constructed homes, effective until the end of the year.
To ensure that the recovery and consolidation of the housing industry is not affected as a consequence of the $14,000 grant reverting to $7,000 on 1 January 2002, there will be additional assistance extending beyond the end of the year.
From 1 January 2002 until 1 July 2002 the First Home Owners Grant for newly constructed homes will be $10,000, reverting to the original $7,000 beyond 1 July 2002.
In addition, the building commencement and completion requirements currently applying to the $14,000 grant will be liberalised. Under the new rules, construction of the home must commence within 26 weeks of entering into the contract (instead of 16 weeks at present), and the contract must specify a completion date within 18 months of the date of commencement (instead of 12 months at present).
These commencement and completion requirements will apply to all new applications made after the re-election of the Coalition government.
The Government remains committed to retaining the $7,000 grant for those first home buyers who choose to purchase an established home. The cost of extending the scheme for newly constructed homes is estimated to be in the order of $50m in 2001-02.
The doubling of the First Home Owners grant for newly constructed homes has been a major contributor to the strong recovery in the housing sector. Since the announcement of the $14,000 grant in March, private sector housing approvals have increased by 75 percent.
The housing industry is expected to be a key driver of the economy into next year, and the measure I am announcing today will provide further encouragement to this vital sector of our economy.
Coupled with the lowest home mortgage interest rates in 30 years it will help more Australians realise their goal of owning their own home, a goal the Coalition strongly supports.
Under Labor, variable mortgage rates hit a record high of 17%, averaged almost 13% and were still above 10% in March 1996.
By contrast, the substantial reduction in interest rates to the current level of 6.3% under the Coalition has provided homebuyers with a monthly interest saving of around $350 on a typical $100,000 mortgage. This is the equivalent of a tax free saving of more than $4,200 per year.