The Coalitions' Offer to Improve Housing Affordability

John Howard has put forward a low-tax deposit savings account pledge to assist first-home buyers as part of the Coalitions' election bounty. The $1.56 billion plan is similar to the $600m pledge of Kevin Rudds.

Under the Coalition's scheme, two forms of saving account will be available:

1) Adult first-home buyers will be able to make contributions of up to $10,000 per year into a home deposit saving account. The first $1000 deposited each year is claimable as a tax deduction and interest earned on sums in the account are tax free.

2) Adults will be able to make a total contribution of up to $1000 per year towards the first-home purchase of a family member or friend below the age of 18. The contributions are tax deductible or, for people with no taxable income, subject to a 15% cash rebate.

Additionally, Howard has also promised to exempt first homes purchased in shared equity arrangements between the occupant and a contributing family member from capital gains tax.

If you're trying to work out which party's offer is the most generous, here's what the Housing Industry Association’s Chris Lamont had to say:

“Tax concessions under the Coalition policy appears more generous than what’s offered by Labor,” Lamont says. “But Labor has more of a focus on balancing the needs of home owners with the rental market, so overall they are both very good policies.”

The reality, however, is that neither policy is likely to improve housing affordability, despite the multi-million dollar tax concessions involved. What is being promoted is creating a culture of saving.

Thus, whilst the housing affordability crisis will not be solved by such policies, it would appear that both parties are listening to the concerns of Australians. Simon Turner

Read Marquette Turner's account of Labor's policy.

Australia's Broadband Speed

Broadband is front and centre in election campaigning today, with Coalition Communication Minister Helen Coonan seeking to capitalise on OECD figures showing that Australia has the 9th fastest broadband in the world.

According to Coonan, the OECD’s global internet rankings show Australia is performing well compared to many other developed nations, and clearly does not support Kevin Rudd's claim that Australia's broadband performance is woeful.

As well as the 9th fastest broadband in the world, Australia also has the 4th most affordable broadband, the 6th fastest broadband connection speeds and the 12th fastest take-up of broadband services of the 30 countries surveyed by the OECD.

Simon Turner

Election round-up: the story so far...

The Howard camp had a difficult weekend with a rift developing between Environment Minister Malcolm Turnbull and John Howard over signing the Kyoto protocol and coming under increasing pressure of a broken promise over interest rates.

Meanwhile the Greens and ALP are negotiating a preference-swap deal that leaves Family First out in the cold. But reports this morning point out this could mean that tough competition between the minor parties could mean the Coalition will remain in control of the upper house.

The biggest promise comes from Labor leader Kevin Rudd. He has promised a $1 billion package of grants and tax breaks designed to encourage investment in desalination and water recycling infrastructure.

Local and state governments will be able to apply grants of up to $100 million for desalination or waste water recycling projects, while businesses will be eligible for tax breaks worth up to 10% of the value of eligible projects.

Howard has committed a further $390 million for the Work Skills Voucher program. The program provides vouchers worth up to $3000 for people to take courses in areas such as ICT, accounting and administration. The new funding will make room for a further 110,000 people to claim the vouchers.

Jacqui Walker, smartcompany