First home buyers grant up for discussion

The end of June could see the last of the first home buyers grant, as the Government is not prepared to commit to an extension.

According to data released to day the boosted Grants part of the Government's first stimulus package appears to have prompted a surge in housing finance.

The latest housing figures have shown that home loans to owner-occupiers rose by 3.5 per cent in January. First-time home buyers made up 26.5 per cent of the market. Last years Governments stimulus package doubled the first home buyer grant for established homes to $14,000 and tripled it to $21,000 for new homes. But the higher grants are due to run out on June 30.

Finance Minister Lindsay Tanner told the National Press Club in Canberra that whether the grant should be extended would be discussed during the budget debate. Mr. Tanner further stated that it had been "very tough" to deal with the next Budget, due to be handed down in May, and defended his razor-gang approach during tough economic times and warned of more public service cuts to come. "Due to the most savage global downturn in decades we don't need less reform, we need more", he further added.

Mr. Tanner further suggested that we could carry waste and inefficiency in government in good times if we choose to. We simply can't afford it when things are tough. Finding more savings isn't undermining temporary surges in spending to stimulate the economy. It's complementary.

The Australian reported that Mr. Tanner slammed the Coalition's record on public administration, saying that the Rudd Government inherited an inefficient, wasteful and disorganized public sector and that whatever the Liberals' claims to be good economic managers, the record shows they were terrible managers of government.

From 2001 to 2007, public sector employment grew from 212,000 to 247,000 for outstripping private sector employment growth. Huge sums were wasted on political advertising, workchoices and unlikely grants to private companies.

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Published on March 3-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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