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AFR FIRST USE ONLY. new housing estate at PEMULWUY near prospect in western sydney. generic housing , development , residential , rental , mortgage , building , builders , economy , for sale , real estate , land , rates , investment Photo by ROB HOMER SPECIAL 103506home loanhome loanssuburb
One in five recipients of a now abolished $5000 “new home grant” double-dipped on the scheme to receive multiple grants, including 1500 people and 1869 companies who pocketed more than five grants each.
First home buyers were not eligible for the grants, which were introduced by the Baird government in 2012 and pitched as a way to boost housing construction.
But economists have been highly critical of the scheme, saying it boosted the bottom line of builders and further inflated property prices.
A total of 83,151 grants worth $416 million were handed out under the controversial scheme, which was shut down by the Berejiklian government on June 30 after criticism from former Reserve Bank governor Glenn Stevens.
In a review for the government, Mr Stevens was critical of all grants to home buyers but singled out those going to non-first-time buyers as particularly wasteful.
“It is important to note that at present about half of the grants made by the government do not go to first home buyers: they go to those buying their second or subsequent home, if it is a new dwelling,” he wrote in his report to the Premier in May. “There may have been a case for this to assist the building industry during the financial crisis, but the builders don’t need that demand stimulus now: what they need is faster processes for converting zoning and development applications into construction and an ability to respond to those segments of the market that will accept smaller, lower-cost dwellings.”
Independent economist Saul Eslake said it was possible the scheme had led to “some marginal increase in supply” but “the most significant effect would likely have been to fatten builders’ profit margins by something close to the amount of the grant”.
Initially unlimited, the scheme was modified in 2014 to exclude foreign buyers and to introduce a cap of one grant per buyer per year.
But a new breakdown of the scheme, obtained by the NSW opposition under a freedom of information request to the NSW Department of Finance, reveals the extent of the double-dipping that occurred.
During the five years of the scheme, there was a total of 131,203 recipients. A single grant could go to more than one recipient, for example a husband or wife.
Of the total recipients, 23,341 – or 18 per cent – received more than one grant, the figures show.
Of these multiple recipients, 3,378 pocketed more than five grants each, including 1509 individuals and 1869 companies.
Shadow treasury spokesman Ryan Park described the figures as “staggering”.
“It must have finally dawned even on them – Berejiklian and [Treasurer] Perrottet – that it was not a good look to give away tens of millions of dollars to help people get their fourth or even fifth home, while hundreds of thousands of people were struggling to get a toehold on the property ladder,” he said.
“If you’re looking for evidence that this government has failed to honour its pledge to tackle the housing crisis, then here it is.”A spokesman for the Treasurer pointed to record new housing construction and approval figures in NSW.
“When Labor was in government they were averaging 2,666 approvals a month. The Berejiklian-Barilaro government is averaging 4,679 approvals a month, or a 76per cent increase,” the spokesman said.
“The New Home Grant scheme, introduced to stimulate supply in the market, is being phased out from the July 1 this year, having been replaced by a package of reforms including stamp duty exemptions and reductions for first home buyers.
“Labor’s empty words on housing affordability ring hollow after 16 years of inaction when they were in government.”
Previous information provided by the department revealed that postcodes on Sydney’s urban fringe were the biggest recipients of the grants, including Camden, Spring Farm, Cambridge Park, Marsden Park, Liverpool and Campbelltown and Kellyville.