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Wednesday, 7 September 1983
Page: 461


Mr HURFORD (Minister for Housing and Construction)(11.40) —I move:

That the Bill be now read a second time.

This Bill provides for the repeal of legislation which authorised sale of the Housing Loans Insurance Corporation to the private sector. It also extends the Corporation's charter to allow it to insure commercial building loans. The previous Government proposed to sell the Corporation to the private sector. This move was opposed by virtually all areas of industry associated with the encouragement of home ownership in Australia. Despite this, the previous Government had introduced legislation, as part of the Commonwealth Functions ( Statutes Review) Bill 1981, to provide for the sale of the Corporation. One of the first actions of the Hawke Labor Government was to announce it would not proceed with the proposed sale. This decision has been warmly welcomed by the finance and building industries. At the time of the announcement, I indicated that, in line with our election policy commitments, the Government would be looking at ways of expanding HLIC's role, while at the same time ensuring there was no unfair competition with private sector ventures. The first stage in that process is to extend the Corporation's charter to provide for the insurance of commercial building loans.

In addition to the insurance of normal home ownership loans, the Corporation is already empowered to insure loans for commercial housing projects, such as major flat and home unit developments, retirement villages and the like. Inclusion of commercial building loans is a natural extension of the Corporation's existing charter. By assisting the borrowing prospects of persons wanting to buy or build commercial property, this extension of the Corporation's charter will lend support to the Government's priority aims of stimulating the building and construction industries and generating employment opportunities. It is, of course, also a practical demonstration of the Government's commitment to constructive ways of assisting business, particularly the small business sector. The Bill will enable the Corporation to insure, in respect of commercial buildings, a similar range of loans to those it can already insure for housing. It will provide for insurance of loans for the purchase, construction, alteration, improvement or extension of buildings and structures or the acquisition and development of land.

The scope and direction of the Corporation's activity in this area can be controlled through existing powers given to the Minister for Housing and Construction under the legislation and the Government will be looking to see that HLIC moves cautiously into this new field of business. It intends that at least in the early stages HLIC will concentrate on loans for small to medium scale projects. It should be clearly stated that this is expected to be a relatively minor part of the Corporation's total activities. HLIC will be expected to seek appropriate reinsurance cover on this new field of business from available commercial sources.

At the second stage of ensuring that, as far as possible, HLIC competes on an equal footing with the private sector mortgage insurers, the Government has decided that HLIC should pay to the Commonwealth an amount related to the reinsurance costs that private firms need to take out. The new annual payment will be introduced in 1983-84, and work is now proceeding to establish the basis for determining the payment. At a later stage, a further amendment will be introduced to provide a separate specific statutory provision for this new payment.

Mr Deputy Speaker, this Bill marks the end of a period of great uncertainty for the Corporation, its staff and clients. I would like to place on record my personal appreciation to the directors and staff of the Corporation for their efforts during what must have been a very difficult time. During this period the Corporation has continued to achieve a fine trading record with a profit every year. HLIC has been a real success story in housing. Its forward looking approach and competitiveness have assisted many Australian families into home ownership. We will be looking to further ways in which the Corporation can play a greater role in assisting with the Government's housing objectives. I commend the Bill to the House.

Debate (on motion by Mr McVeigh) adjourned.