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Wednesday, 17 October 1984
Page: 1899

Senator ARCHER(8.31) —I wish to speak briefly to the States (Works and Housing) Assistance Bill 1984 and the Housing Assistance Bill 1984. It has become quite a custom at this stage of the year for us to have a fairly wide- ranging discussion on housing. I miss the fact that my old friend, the Minister for Veterans' Affairs, Senator Gietzelt, is not here to have the usual debate that he and I seem to have developed over a period of years. The Bills continue very much in the same pattern and cover the same area as have similar Bills in the past. They provide the renewal of a long on-going program.

There will always be a need for the community to look after those who need it, as there is a need to encourage others to avoid looking to government for help when they should not have to look to government for help. As a parliament we can do much to press for ownership or ownership prospects for people generally. If we can encourage people to own their own homes it takes much of the burden off the various authorities which have to maintain the houses, look after rental collections and carry on the general run of things that go with home ownership and which home owners do for themselves. It is becoming extraordinarily expensive for housing divisions of various States and the Commonwealth to maintain their houses, collect the rents and meet the housing costs. There is much to be said for encouraging the pride of ownership and ensuring that everyone who wishes to do so can become what Mr Dedman referred to as a little capitalist. We should encourage people to achieve that aim, if that is their aim .

I still question whether the very substantial grant by itself is the most appropriate assistance that can be given to housing. I find that it encourages people to go into price brackets which in many cases are beyond their apparent means. They then undertake very tight repayment programs which can be very easily upset. There should be more encouragement of assistance in the repayment sector. That needs to be watched, particularly as we are going into even further changing economic times. I am of the opinion that overall taxation and employment policies have the biggest effect on people's capacity not only to buy but also to sustain the purchase of a home once bought. I believe that greater consideration still has to be given to having income-linked mortgages for the general promotion and development of home ownership schemes. I think when we have got that far we will have a fundamentally sound and thorough housing system .

As I have already said, I see private home ownership as absolutely fundamental. I believe that should be the direction in which we go. I point to three cautions , however. Firstly, the policies under which we are presently operating were designed as economic stimulants, not just to catch up on a housing program but actually to promote a distinct change in the whole economic market at the time. The Government saw that as a way of being able to prime the market. This has placed enormous pressures on the market, and that pressure is very visible here in Canberra, as in most other places in Australia. The result of these pressures is that market prices have absolutely skyrocketed. Giving people money by grants has driven up the prices in most cases by considerably more than the amount of the grant and, in some places by several times the grant. I believe that must be watched. What happens when the grant is seen to be no longer electorally or economically advantageous and it is either cut back or removed? We will then look to see whether housing prices hold. If the prices do not hold, what then?

Secondly, the vast new group of home owners has been stretched to absolute limits in terms of financial commitments. All around Australia those people who have bought houses with the aid of grants in the last 18 months are now on very high repayment tables. I believe it is inevitable that we will have higher inflation and higher interest rates. I believe therefore that it is necessary for there to be a proper contingency plan to put into effect when these higher inflation rates and interest rates are realised in the fairly short foreseeable future. The third caution is that the market is running well above any expectation of sustainable levels. At the moment we are producing and selling houses at a greater rate than could normally be expected to last. Already the various housing organisations are pointing out that this is starting to flatten off. By this time next year there could be a quite substantial downturn. What is the Government doing as far as the maintenance of this level of housing is concerned? What does the Government see as the sustainable level of housing? Over what period does the Government intend to bring the rate of housing back to a sustainable level to avoid the inevitable crunch if we have a severe overrun, which appears quite likely at present?

I believe we need to address ourselves to those three points. While we are very pleased that the housing market has picked up and that people have been able to get into houses, we do know that the market cannot last on the present basis. I look to the Government to tell us what it proposes around the corner. There is one other matter arising from those questions that I believe we also should be told about. We would expect the Government to change the housing assistance programs. Whether this is done in an election context or, if the Government is re-elected, in the context of the mini-Budget that will inevitably follow, what changes can people on the outside expect? What changes will this mean, either to those who have recently bought houses or to those who would see themselves in the very near future in that market?

The housing market Australia-wide has been very satisfactory in the last 12 months, with enormous turnovers and considerable developments in every State. Prices have risen markedly. In fact we have taken up not only last year's slack and, this year's slack but also probably next year's and that of the year after as well. It concerns me that, to all intents and purposes, single people have been eliminated from the housing market. It seems that single people who are genuinely single are unable to obtain housing but if they enter into a de facto relationship they are eligible. I would be pleased if the Minister would in summing up give us some information on that as well. I support the Bills. I commend the Government on them and look forward to the continuation of the program.