Australian Government, A Plan to Simplify Superannuation

First Home Saver Accounts - Consultation Paper

Appendix A: Fiscal impact

The cost of the First Home Saver Accounts is estimated to be $625 million over four years on a cash basis and $950 million over four years on a fiscal balance basis (the Government contribution costs $850 million and the concessional tax treatment of earnings costs $100 million). These costs exclude departmental administration costs.

Costing for first home saver accounts






    Government contribution






    Concessional tax treatment of earnings






Total cost — fiscal balance basis






Total cost — cash basis






The variation between the cost of the policy on a cash basis and fiscal balance basis is due to a timing difference.

When benefits are delivered through a Government contribution, the cash cost is deferred to 2009-10, as the Government contribution is paid in arrears after individuals have lodged their income tax return. However, on a fiscal balance basis, the full cost of the policy is accounted for in 2008-09, the financial year in which individuals contribute to their accounts. Accordingly, the cost on a cash basis is deferred by one year relative to the cost on a fiscal balance basis.

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