The Claim
“Scrapped the First Home Buyer's Account scheme, which provided sorely needed assistance for young people to buy homes.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The core claim is TRUE. The Coalition government did scrap the First Home Saver Accounts (FHSA) scheme in the 2014-15 Federal Budget announced on May 13, 2014 [1][2].
The scheme was introduced by the Rudd Labor government in 2008 as a 2007 election commitment under the First Home Saver Account Act 2008 [3][4]. It provided:
- A concessional tax rate of 15% on interest earned in the account [5]
- Government co-contributions of 17 cents per dollar contributed, up to $6,000 per year (maximum $1,020 annual contribution) [5][6]
Treasurer Joe Hockey announced the abolition, stating the accounts "have done little to improve housing affordability" [1][2]. The scheme was formally repealed through the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Bill 2015, which abolished the First Home Saver Accounts Act 2008 and related legislation [7].
At the time of abolition, there were approximately 46,000 accounts open with total balances of around $521 million [1][5]. The government co-contributions ceased from July 1, 2014, and tax/social security concessions were withdrawn from July 2015 [1].
Missing Context
The claim omits critical context about why the scheme was abolished:
Low take-up and popularity: With only 46,000 accounts nationwide after nearly six years of operation, the scheme had extremely low participation. Banks had long reported the scheme was "unpopular with their customers" [5]. For context, there were approximately 25 million people in Australia at the time - meaning less than 0.2% of the population had opened an account.
Restrictive conditions limited effectiveness: The scheme required account holders to contribute at least $1,000 per year and maintain the account for at least four years before accessing funds for a home deposit [5]. These restrictions made it unattractive to many potential first home buyers.
Ineffectiveness at addressing housing affordability: The official justification for abolition was that the scheme "failed to make meaningful inroads into housing affordability" [5]. Treasury and the government concluded it was not achieving its policy objective.
Budget savings: Abolishing the scheme saved the budget $134 million over four years [5]. This was during a period of significant budget consolidation following the Global Financial Crisis stimulus spending.
Alternative assistance was later introduced: The Coalition subsequently introduced the First Home Super Saver Scheme (FHSSS) in 2017 [8] and the First Home Loan Deposit Scheme (FHLDS) in January 2020 [9], demonstrating continued commitment to first home buyer assistance through different policy mechanisms.
Source Credibility Assessment
The original source, rebonline.com.au (Real Estate Business/REB), requires careful evaluation:
Nature of publication: REB is "Australia's leading source of breaking news, opinions and market intelligence that real estate businesses and agents count on" [10]. It is an industry publication serving real estate professionals.
Vested interest: The real estate industry has a direct commercial interest in first home buyer assistance programs, as these stimulate demand in the property market. Industry publications advocating for the retention of such schemes represents a predictable position that aligns with industry financial interests rather than independent policy analysis.
Bias assessment: The source headline "First Home Saver Account should be fixed, not axed" reflects an industry advocacy position, not balanced policy journalism. There is no discussion of the scheme's low take-up, ineffectiveness, or the government's rationale for abolition.
Credibility rating: While the source accurately reports industry views, it lacks independence on this issue due to the commercial interests involved.
Labor Comparison
Did Labor do something similar?
Search conducted: "Labor government abolished first home buyer scheme discontinued"
Finding: Labor introduced the FHSA scheme; they did not abolish a comparable first home buyer savings scheme. However, Labor governments have discontinued or restructured other assistance programs:
First Home Owner Grant changes: Various state and federal Labor governments have modified, reduced, or temporarily suspended first home owner grants during different economic conditions [11].
No direct equivalent: There is no precise Labor equivalent of abolishing a first home buyer savings scheme because Labor created this particular scheme.
Comparative context: Both major parties have restructured first home buyer assistance over time based on changing economic conditions, housing market dynamics, and budget priorities. The Coalition's abolition of FHSA was unusual in that it eliminated a savings-based mechanism without immediately replacing it (the replacement schemes came 3-5 years later).
Balanced Perspective
Criticisms of the abolition:
Critics, including the real estate industry, argued that removing the scheme eliminated a structured savings mechanism specifically designed to help young people save for home deposits [10]. For those 46,000 account holders who were actively using the scheme, the abolition removed expected government co-contributions and tax benefits they had been counting on.
Legitimate policy rationale:
The government's decision was based on evidence that the scheme was failing to achieve its objectives. With only 46,000 accounts after six years, it was reaching a tiny fraction of potential first home buyers. Treasury analysis concluded the scheme was not making meaningful contributions to housing affordability [1][5]. The $134 million in budget savings was redirected to other priorities.
The scheme's design flaws - particularly the four-year minimum savings period and $1,000 annual contribution requirement - created barriers that limited participation. For young people struggling with cost-of-living pressures, locking away savings for four years with restricted access was unattractive [5].
Subsequent policy evolution:
The Coalition demonstrated continued commitment to first home buyer assistance through alternative approaches:
- The First Home Super Saver Scheme (2017) allows voluntary super contributions for home deposits with tax advantages [8]
- The First Home Loan Deposit Scheme (2020) allows purchases with 5% deposits without Lenders Mortgage Insurance [9]
These schemes reached significantly more Australians than the FHSA scheme ever did.
Key context: While the Coalition did scrap this specific scheme, they subsequently introduced more popular and effective alternatives. The abolition was not an abandonment of first home buyer assistance, but a recognition that this particular mechanism was not working effectively.
TRUE
6.0
out of 10
The claim is factually accurate - the Coalition did scrap the First Home Saver Accounts scheme. However, the framing presents this as purely negative ("sorely needed assistance") without acknowledging:
- The scheme's extremely low take-up (46,000 accounts nationally)
- Its acknowledged ineffectiveness at improving housing affordability
- The government's legitimate rationale for abolition based on poor policy performance
- The Coalition's subsequent introduction of alternative first home buyer assistance programs that achieved broader reach
The source (rebonline.com.au) has a vested interest as a real estate industry publication, which undermines its objectivity on housing stimulus measures.
Final Score
6.0
OUT OF 10
TRUE
The claim is factually accurate - the Coalition did scrap the First Home Saver Accounts scheme. However, the framing presents this as purely negative ("sorely needed assistance") without acknowledging:
- The scheme's extremely low take-up (46,000 accounts nationally)
- Its acknowledged ineffectiveness at improving housing affordability
- The government's legitimate rationale for abolition based on poor policy performance
- The Coalition's subsequent introduction of alternative first home buyer assistance programs that achieved broader reach
The source (rebonline.com.au) has a vested interest as a real estate industry publication, which undermines its objectivity on housing stimulus measures.
📚 SOURCES & CITATIONS (10)
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1
sbs.com.au
Australians saving for their first home will no longer receive government contributions and tax breaks.
SBS News -
2
afr.com
The government will discontinue first-home saver accounts – a Rudd government scheme that provided people saving up a deposit with tax breaks and co-contributions from government.
Australian Financial Review -
3
en.wikipedia.org
Wikipedia
-
4PDF
C2008B00141FR 1
Legislation Gov • PDF Document -
5
perryfinance.com.au
Kevin Rudd’s first home saver accounts scheme has been scrapped by Joe Hockey’s federal budget.
Perry Finance -
6
everything.explained.today
Everything Explained
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7
aph.gov.au
Helpful information Text of bill First reading: Text of the bill as introduced into the Parliament Third reading: Prepared if the bill is amended by the house in which it was introduced. This version of the bill is then considered by the second house. As passed by
Aph Gov -
8
ato.gov.au
Ato Gov
-
9
housingaustralia.gov.au
1 JAN 2020 TO 30 JUN 2020
Housingaustralia Gov -
10
realestatebusiness.com.au
Real Estate Business is Australia's leading news source for real estate agents, delivering breaking news, features and opinion.
Realestatebusiness Com
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.