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Thursday, 9 May 1985
Page: 1614


Senator LEWIS(11.11) —The Senate is debating the First Home Owners Amendment Bill 1985. I might just make the point that this debate has been brought on very suddenly and far ahead of the anticipated time. I hope that honourable senators who are going to speak on this matter have been alerted to that fact.

The Opposition does not intend to oppose this legislation. However, I move as an amendment to the motion that the Bill be now read a second time:

At the end of motion, add 'but the Senate, whilst accepting the need for overall budgetary cuts in Government spending, including in the First Home Owners Scheme, condemns the Government for- (a) introducing this Bill which amounts to a shameful dishonouring of an election pledge to maintain the First Home Owners Scheme, and

(b) its arbitrary action in determining that the heaviest cuts would fall on the poorest and most needy members of the community'.

The truth of the matter is that the Prime Minister (Mr Hawke) and the Government totally misled the people at the last election by announcing that this Government would continue the first home owners scheme. The truth of the matter is that the Bill before us goes back on that promise and in fact makes very substantial cuts to the first home owners scheme. The legislation is a total dishonouring of the election pledge which no doubt many thousands of young people were conned into believing.


Senator Primmer —It helped many thousands.


Senator LEWIS —Many thousands of young people would have believed at the last election that they would be able to gain from this scheme. The truth of the matter is that this legislation cuts back the scheme. Senator Primmer rightly has said by way of interjection that the scheme helps many thousands of young people. I agree with that. However, if Senator Primmer were to look back he would remember that the Fraser Government had in place an enormous first home owners scheme which provided more funds for a larger variety of people in the community and encouraged young people to save towards the cost of their first home. One of the major criticisms of the Government's legislation is that it does not contain a savings provision. There is nothing in the legislation to induce young people in the community to save towards the cost of buying their own home.

The financial limitations on the scheme are such that it is extremely difficult for young people to take advantage of the scheme and actually to earn enough income to meet repayments on a housing loan. We have made that criticism frequently. One presumes that in this day and age a young husband and wife are both working. That couple must have a taxable income of no more than $24,300 to get the maximum advantage of the scheme. They are totally cut out of the scheme altogether if their combined income reaches $27,900. Couples earning such a low combined income clearly have to obtain a housing loan which allows them to make very long term repayments. It must be clearly obvious to even the Government that the only way in which young people with such a low combined level of income can repay a housing loan is to pay it off over a period of, say, 40 or 45 years. They have to take out a very long term loan in order to get down their monthly or quarterly repayments to a reasonable level. Of course, they run the risk all the way along the line of having to sell their house if the wife becomes pregnant and is unable to work because the husband's income is insufficient to meet the repayments. This criticism has been made right from the word go.

During the past year, average weekly earnings have risen by 7.6 per cent. However, the limitations in the legislation of a combined income of $24,300 or below and a family income maximum of $27,900 have remained the same. It is very clear that young people who are desperately seeking this sort of support would need a combined income of $24,000 anyway if they were thinking about buying a home. They are just the people who have probably received a 7.6 per cent increase in average weekly earnings and as a result they have been cut out of this scheme. A large number of young people have complained bitterly to me that they have not been able to come within this scheme and say how much better off they would have been under the Fraser Government scheme.

I want to raise the way in which the Minister for Housing and Construction (Mr West) has totally misled the people by selectively quoting statistics. The reality is that the number of dwelling approvals for January 1985 is very little different from the number, for example, for January 1981. There were 13,614 dwelling approvals in January 1981 and 13,933 in January 1985. The Minister keeps saying that the scheme has been an overwhelming success and that so many young people have been able to purchase a home. The truth of the situation is in fact set out in the Department of housing and Construction's own reports. The annual report of the Department of Housing and Construction for 1983-84, at page 55, states:

In 1982-83, reflecting the general economic climate, conditions in housing and construction were depressed.

It states that dwelling commencements fell. All the Minister is saying is that there has been a general economic recovery. We all know that there has been a general economic recovery. We know that the United States's economy has recovered and that that has flowed around the world. We know that the drought has broken in Australia and we know that as a result of the wage fixation policy of the Fraser Government the Australian economy has recovered during 1984 with a resultant increase in the dwelling construction area.

Frankly, I say that this scheme of the Government has made no greater contribution to housing construction than the Fraser scheme which it replaced on a much poorer basis. In fact, that is also set out in the same annual report at page 53, where it is stated:

The level of activity in the housing and construction industry fluctuates more than in most other sectors. Activity is sensitive to changes in

the investment climate, including the cost and availability of finance, and investor and consumer confidence

the overall level of economic activity and especially the demand for resource exports

the level of public expenditure

population growth and household formation, and especially the level of migration.

They are the points which determine the level of activity in the housing and construction industry. The Minister's claim that this scheme has meant a return to the previous levels of housing construction in Australia is in fact a nonsense.

The great pity of this legislation is that it will not only dishonour an election pledge, but that this arbitrary action will determine that the heaviest cuts will in fact fall on the poorest and neediest members of the community. The shadow Minister for Housing and Construction, Mr Michael Hodgman, presented in the House of Representatives five different scenarios in which he set out the differences in the scheme and how it affects the joint home buyers with lower incomes. I simply refer to his speech in the Hansard rather than repeat that information for the Senate, but there is no doubt that all of these proposed changes will in fact be hitting the poorest in the community the hardest. The pensioner home buyer with children and the underprivileged will clearly be hit the hardest. The final point I make is that the truth of the matter is that at the time the Prime Minister (Mr Hawke) was saying at the last election that the first home owners scheme would proceed, 75 per cent of the funds allocated had already been spent and the year still has a long way to run. The explanatory memorandum produced by the Minister in relation to the First Home Owners Amendment Bill and circulated with his authority explains the financial implications of the Bill in one simple sentence. It stated:

These changes will ensure that the integrity of the First Home Owners Scheme Budget appropriation is assured.

It is quite fascinating that even in those few words there is a slight attempt to mislead because it appears when one first starts to read it that it says these changes will ensure that the integrity of the scheme is assured. Of course, it is not, because it is really the Budget appropriation in relation to the scheme that is assured. What the Government is saying, in effect, is that we have to make sure that we do not spend more than $290m. We have already spent 75 per cent of the $290m before the first half of the year is over; so we have to make sure that we are not going to spend more than $290m because the Budget appropriation must be assured.

The Government is not looking at what first home buyers might get out of this legislation. It is looking at maintaining the Budget appropriation to make sure that it is not over-expended. I do not have a great deal of argument with that. I believe that the Budget should be maintained. My criticism is that the Government knew this when the Prime Minister went to the last election called in December. That election could have been called in May of this year. The truth of the matter was that this Government knew that if it maintained the first home buyers scheme the way it was, the Budget appropriation would be greatly over-expended, probably by over 50 or 60 per cent. Perhaps $125m would have been involved because of all those people who would have qualified.

The Prime Minister went into the election saying to the young people of Australia, and this is why I say he conned them, that the Government would maintain the first home buyers scheme. Now honourable senators opposite are in Government they say: Look, if we had maintained it in its previous form we would have over-expended our Budget very substantially, so we have to cut back. That is why I moved:

At end of motion, add 'but the Senate, whilst accepting the need for overall budgetary cuts in Government spending, including in the First Home Owners Scheme, condemns the Government for- (a) introducing this Bill which amounts to a shameful dishonouring of an election pledge to maintain the First Home Owners Scheme, and

(b) its arbitrary action in determining that the heaviest cuts would fall on the poorest and most needy members of the community'.