Funds want fees prohibition on FHSAs

Fiona Reynolds

The Australian Institute of Superannuation Trustees (AIST) has called on the Federal Government to ensure that its new First Home Saver Account entails a 20 per cent flat Government contribution instead of the proposed income-linked Government contribution rebate scheme.

AIST chief executive Fiona Reynolds said there was a need to ensure the scheme was structured in a way that made it first rate for first home buyers at the same time as assisting those hardest hit by the housing affordability crisis.

The AIST has argued in a submission to the Government that the proposed income-linked Government contribution rebate scheme would be regressive because it would award the greatest monetary benefit to those on higher incomes and higher marginal tax rates.

The AIST with the Industry Super Network and Industry Funds Forum have filed a submission with the Government on the new scheme, with industry super spokesman David Whiteley claiming that the structure of the account would be central to take-up by consumers.

“Straightforward disclosure of fees will be critical and consumer testing, to ensure first home buyers understand any fees charges, should be a priority,” he said.

The submission argues that there needs to be a uniform approach to disclosure and advice including prohibiting entry and exit fees as well as sales commission and advice fees.