First home savings accounts 'in limbo' because of election

Reform of the government’s troubled first home savings account scheme is now in a state of limbo because of the upcoming federal election, it has been suggested.

Felicity Williams of the Herald Sun noted that while treasurer Wayne Swan acknowledged the need for reform at the federal Budget, nothing has been done in two and a half months.

“Now with an election just weeks away there’s no certainty when – or if – the laws will be changed,” she commented.

Such uncertainty could prompt more Aussies to compare savings accounts in search of better options. As Ms Williams observed, the first home savings accounts suffer from a lack of flexibility, with the 15,300 Australians who have invested about $50 million in the scheme unable to draw on the funds for at least four financial years.

It means account holders face being frozen out of the housing market as property prices continue to rise while others find themselves locked into an arrangement no longer suited to their changing circumstances.

Choice spokesman Christopher Zinn argued that the savings accounts must offer more flexibility, adding that government consultation on the reforms should come “within a reasonable period”.

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