Life insurers as well as banks, building societies and credit unions will be able to offer "first home saver accounts" that will qualify for federal government co-contributions from July 2008.In the first concrete policy initiative relating to financial services from Australia's new Labor government the scheme will provide a government contribution equal to 15 per cent on after tax contributions of up to $5000 for low income earners on no or low tax rates. The contribution will rise to 30 per cent for those on higher incomes, and thus the higher marginal tax rates.The government will channel the contributions directly to eligible accounts.Details of the scheme at this stage remain vague, though Treasury will publish a consultation paper later in the week.The tax consequences on the interest earned, for example, are not clear, though presumably the interest will be taxable as part of normal income.The media release from the treasurer, Wayne Swan, and the housing minister, Tanya Plibersek, yesterday said that the first home owner saver accounts "will reflect the arrangements for superannuation", whatever that means.So whether this savings vehicle is intended to cover merely conventional bank deposits or other collective investments also isn't clear.The government said it budgeted to spend $850 million over four years, which appears sufficient to fund median co-contributions for around 150,000 savings accounts and an aggregate flow of favoured deposits of around $750 million a year.