Prime Minister Kevin Rudd has given the strongest hint yet the enlarged first home buyers grant will end come budget night.
“All good things must come to an end,” he said.
Mr Rudd said he wouldn\’t speculate further on what was a budget matter.
But he said this had been an important boost for first home buyers and the housing industry had made strong representations about maintaining the scheme.
The government also had to make a judgement about its longterm financial sustainability, he said. “It\’s been a big help,” he told Fairfax radio in Melbourne.
“The figures I have here is… a total of 36,000 across the country, here in Victoria 8,600. That is quite a lot of people.”
The scheme was a $1.5 billion inclusion in the $10.4 billion economic stimulus package announced in December last year.
Grants to first time buyers of existing houses were doubled to $14,000, and tripled to $21,000 for those buying new houses.
Mr Rudd clarified that the basic $7,000 grant was likely to continue.
“What we are talking about is the boost,” he said. He rejected opposition suggestions that the grant had served only to push up home prices through boosting demand while doing nothing to increase the supply of homes.
“When we looked at this decision for government last October, it was very practical – how could you reduce the impact of this recession on Australia.”
“This boost, as the industry has told us and many people have told us, has helped keep our housing construction figures up when the rest of the world has actually been falling in reverse,” he said.
Mr Rudd said the Housing Industry Association and other construction related associations had assured the government this measure was essential to sustaining employment.
“We take that advice seriously and that is why we have done it. We think it has been an important part of cushioning Australia from the full impact of the global recession,” he said.