Will Labor’s plan to axe the first home buyer super saver scheme net $400 million?
By Tiffanie Turnbull and Louise Evans
“Over the forward estimates, Labor’s abolition of the first home super saver account is $400 million in extra tax that Bill Shorten is going to collect from young Australians saving for their first home.”
Trade, Tourism and Investment Minister Simon Birmingham. May 13, 2019.
At the Liberal Party campaign launch on May 12, Prime Minister Scott Morrison announced $550 million in loan guarantees to help first home buyers enter the market by building equity rather than paying rent. Investment Minister Simon Birmingham claimed this policy builds on the government’s First Home Super Saver Scheme (FHSSS) which Labor was going to abolish. 
AAP FactCheck examined the minister’s claim Labor’s abolition of the first home super saver scheme amounts to $400 million in extra tax over the forward estimates that Labor leader Bill Shorten will collect from people saving for their first home.
The prime minister's plan to underwrite home loans for first home buyers means they only need a five per cent deposit. Most banks currently require buyers to have a 20 per cent deposit or take out additional mortgage insurance. The government claims first home buyers will be able to get into the market earlier because it will underwrite any shortfall in the 20 per cent deposit. 
Labor matched government’s new commitment, but the government claims it is the better choice for prospective first home owners because it will also keep the FHSSS.  
The FHSSS allows prospective first home buyers to save for a deposit inside their superannuation fund by making voluntary concessional (before-tax) and non-concessional (after-tax) contributions into their super fund with the benefit of paying lower tax on these contributions. Once buyers have saved enough to purchase a house, they can apply to have their savings plus earnings released from their super. 
A spokesperson for Mr Birmingham told AAP FactCheck his $400 million claim was based on Labor’s own costings.
Labor’s Fair-go Budget Plan released on May 10 shows its policy to “close the First Home Super Saver Scheme to new entrants” would save $373 million from 2019-2023. It states $97 million would be returned in 2019-20, $96 million in 2020-21, $92 million in 2021-22, and $88 million in 2022-23. 
However, the 2017-18 budget papers which introduced the FHSSS estimated it would reduce government revenue by $250 million over the four years from 2017-21. The budget papers estimated it would cost $50 million in 2017-18, $60 million in 2018-19, and $70 million in both 2019-20 and 2020-21. 
Based on this evidence AAP FactCheck found the minister’s claim Labor’s policy would mean Australians saving for a first home would pay an extra $400 million dollars in tax to be mostly true. The error was that he rounded-up Labor’s figure of $373 million by $27 million.
- Mostly True - Mostly accurate, but there is a minor error or problem .
1. ‘Coalition denies budget black hole’. RN Breakfast with Fran Kelly. ABC. May 13, 2019: https://abcmedia.akamaized.net/rn/podcast/2019/05/bst_20190513_0735.mp3
2. ‘Morrison pledges $500m for first-home buyer deposits’. by Matthew Cranston. Australian Financial Review. May 12, 2019: https://www.afr.com/news/politics/national/coalition-pledges-500m-for-first-home-buyer-deposits-20190512-p51mi6
3. ‘Labor matches Coalition's first home buyers scheme’. Australian Associated Press. May 12, 2019: https://www.9news.com.au/national/morrison-promises-first-home-buyers-help/ca112354-79f4-4505-ad17-0ca291351b63
4. ‘First home super saver scheme’. Australian Taxation Office. Feb 19, 2019: https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/
5. ‘Labor’s Fair-go Budget Plan’. Australian Labor Party. May 10, 2019 Page 28: https://www.alp.org.au/media/1878/2019_labor_fiscal_plan.pdf
6. ‘Budget Paper No. 2 2017-18 - Budget Measures’. Australian Government. May 9, 2017 Page 30: https://budget.gov.au/2017-18/content/bp2/download/bp2.pdf
- First published May 14, 2019 17:50 AEST