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 |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
Total |
Government contribution |
-100 |
-175 |
-250 |
-325 |
-850 |
Concessional tax treatment of earnings |
-5 |
-15 |
-30 |
-50 |
-100 |
Total cost — fiscal balance basis |
-105 |
-190 |
-280 |
-375 |
-950 |
Total cost — cash basis |
-5 |
-115 |
-205 |
-300 |
-625 |
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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