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Thursday, 9 May 1985
Page: 1618


Senator MacGIBBON(11.42) —The Senate is now dealing with the First Home Owners Amendment Bill 1985, which seeks to amend the First Home Owners Act 1983. This legislation has been in place for a very short time. The amendment Bill makes some significant changes. It is worth noting that housing is a large industry and a response to these significant changes will result in a cost penalty being imposed on the building of houses. People who want to buy houses will have to pay more. It is characteristic of a Labor administration that things change rapidly because matters are not thought through before they are implemented. The common perception in the community is that the Australian Labor Party is bad at economic management, but it goes much wider than that. Members of the Labor Party are bad managers, period. This Bill illustrates in a classical way the fact that the Labor Party never thinks anything through before introducing provisions into Parliament.

I would like to deal with the Labor argument which has been put by speakers both here and in the other place. The first point that should be made-it was well made by Senator Lewis and Senator Haines-is that the fact that the Senate is now dealing with an amendment to the Act represents a clear breach of an election promise by the Prime Minister (Mr Hawke). He stood on the steps of the Sydney Opera House in the election campaign and said-and I quote from page 4 of his policy speech on 13 November 1984:

We introduced the First Home Owners Scheme, to bring home ownership within the reach of thousands of young Australians of limited means. The number of new houses being built in Australia has increased by one third. And we are going to keep it that way.

That was a clear promise. That promise, of course, turned out to be as valid as his promise to the United States of America on co-operation in the MX missile tests. I remember how for a long while the cartoonist in one of the well known southern papers drew Mr Hawke running around with a cardboard shoe box under his arm in which he carried his integrity. Needless to say those cartoons do not appear any more. No doubt the Prime Minister got caught in a shower of rain and the cardboard just fell away.

The second point in the Labor argument is that somehow or other this Labor Bill is the first home owners Bill ever to be presented in the Parliament. Twenty-two years ago, in 1963, Sir Robert Menzies introduced the first home owners scheme. That scheme, in the economy of the time, was very successful. For 22 years Australian home buyers have had some support program from the government for the purchase of their first homes. Those schemes have been progressively upgraded to cope with different economic circumstances.

There is also a large element of deception and dishonesty in the presentation of this first home owners scheme by the Labor Party. Very few people mention the fact that in bringing in this scheme, which looks attractive because it gives a handful of money to people straight off, two other important supporting schemes were abolished to make way for it. The first was the home interest rebate scheme, which provided help for some home buyers in the low income categories against high interest rates. The second scheme was the home deposit assistance scheme. The fact that those two schemes were abolished gave the Government $300m in the year-and $300m is not a bad windfall to be generous with for the Bill that is now in place.

As Senator Haines so accurately said when calling for some new housing interest rebate scheme, that earlier scheme was valuable. I remember the occasion that I bought my first house in 1966, when interest rates were about half today's figure; I think I was paying between 5 per cent and 7 per cent. That seemed an enormous, usurious sum at the time but, looking back, it was very cheap. When I signed the contract I talked to an elderly friend of mine and told him about the interest rate I was paying. He said that the important thing with house ownership or any business operation is the interest rate one pays. It is not the repayment on the capital but the interest rate that is the killer. At present, as a legacy of the Whitlam Government in 1972-75, Australians are still coping with high interest rates as a consequence of the inflation that was then engendered by ill-conceived economic policies. Today, Australia has the highest real interest rate terms ever in its history.

There is a real case for some sort of housing interest rebate scheme to take the burden off first home owners. That need has been heightened by the deregulation of the banking industry. The introduction of banks from overseas is a move supported by the Liberal Party and the National Party; we believe that it is in the long term interests of the Australian community. But the consequence is that the market is deregulated. Australia for most of this century has enjoyed an artificially low interest rate for home purchases. The rate has been kept below the real market rate for people who buy their first house-or indeed any house, because it was not restricted to the first house.

In this there was a misallocation of Australia's resources. In other words, money and capital that should have gone into wealth creating programs, such as the building of factories, industries and that sort of thing, got channelled into home ownership, thereby diminishing the economic growth in the country in one sense, although clearly the housing industry provided employment and demand for goods and services. But those times have changed. Although a big increase in interest rates for home ownership has not yet been experienced, it is inevitable that some increase in the present figure will occur and that the interest rates for borrowing money to buy houses will be on parity with other commercial transactions. Therefore, the need for some home purchase interest rate accommodation from the Government is more pressing today than it was before. But this Bill and this Government take no recognition of that need for the Australian community.

The amendment Bill deals broadly with three categories. There are changes in the money available under the scheme; there are procedural changes; and there are evidentiary changes. I wish to deal with the first of those categories, which is the most important one. It deals with the funding available under the Bill. It applies from 16 April 1985, so it is already in place. In essence it cuts $1,000 off each category for which assistance was available. In percentage terms $1,000 does not seem very much when talking about houses which today range in cost from $35,000 and $40,000 and upwards, but as a percentage of the money made available under the First Home Owners Act it is a cut of between 14 and 24 per cent, which is highly significant.

The reason given for the cuts, as instanced by Senator Lewis, was the need to bring down the deficit. I am delighted that this Government, which is the biggest taxing and biggest borrowing government in Australia's peace time history and a government which is running the biggest deficits we have ever had in peace time, should be concerned about its big spending. It cannot be ignorant of or blind to the great social consequences that the changes to the First Home Owners Act entail because they affect most significantly the lowest income groups in the country. The Liberal Party is very concerned about the low income groups. We are concerned to give support to families with children and to get them into their own homes. Yet the very effect of this Bill is to strike hardest at those single income families, those low income families, with children and to make it much more difficult for them to get into their own homes. They are the ones in the community who most need help.

If the Government wants to save money there are thousands of ways in which it can do so. We need not have had the expansion of the Parliament by 35 new members. I would say that each parliamentarian in the Federal sphere generates conservatively at least $250,000 in expenditure with his staff, his officers and travel-and that might be an underestimate by 25 or 50 per cent. To increase the size of the Parliament needlessly by 35 new politicians, as was done last year to enable the Government to cling on with a slender majority to its position in power, cost the Australian taxpayers conservatively at least $8m to $9m, and that expenditure will run on year after year.

One of the things that has come to my mind recently is the community employment program which, at its best, I thought, was just a means of recycling the unemployed of the community, taking the youth cynically off the dole and putting them through a scheme for a few weeks and thereby driving the unemployment figures down. I was with Senator Sheil at a rally for the ANZUS pact in February of this year in King George Square, Brisbane. There was in the square a gaudily-painted double-decker bus containing a bunch of rather disrespectful young people who interjected very rudely on the eminent speakers such as Senator Sheil. I made some inquiries because word was around that these people were funded under the CEP scheme. This week I had a reply from the Minister for Employment and Industrial Relations (Mr Willis) that this was indeed so and that the Australian taxpayer spent $74,756 for six young people to refurbish an old bus and to drive around promoting unilaterist disarmament views in schools, in shopping centres and generally around the countryside, views which are against the professed policy of the Government in relation to defence.

I guess that this is just the tip of the iceberg. One would not know how many millions are being wasted under the CEP scheme. Let us look at the huge Government propaganda scheme. We all get the publication entitled Government In Focus which comes around every two weeks or every month and in which one sees the smiling faces-the only time one does see those smiling faces-of members of the Ministry on every page. That probably costs $10m or $20m a year to run and it is a simple Goebbels-type propaganda thing.

I return to the Bill itself. The Prime Minister has broken his election promise. In his policy speech he said:

We introduced the first home owners scheme to bring home ownership within the reach of thousands of young Australians . . . The number of new houses being built in Australia has increased by one-third. And we are going to keep it that way.

Yet four months after that speech the promise that he was going to keep it that way had been broken. According to the Minister in the other place we are going to see a reduction in the number of homes being built from 143,000 to something like 80,000 or 85,000 next year. The sad part about the Bill is that the people most seriously affected are the low income groups in the community, specifically those earning below $27,000 per year, which is the vast majority of the Australian work force. It is a very big group.

The precise details of the scheme have been gone through by other speakers in the Senate and in the House of Representatives, and it would be repetitious for me to repeat them. The classical example is that a single or joint applicant without children faces a cut of 20 per cent under the first option given them, 22 per cent under the second option, and 24 per cent under the third option. It is not valid for the Labor Party to argue that, even though these cuts of up to 24 per cent are taking place, home seekers are getting more money than under the Fraser Government. The truth is that one has to see the entire housing picture. The abolition of the home deposit assistance scheme and the home loan interest rebate scheme has significantly altered the picture.

I come back to the point that I made earlier. There is definitely a need for some compensatory scheme to support the interest payments that people now have to meet because the present scheme does affect the neediest. We are going through all this trauma to the neediest group in the community for a saving of only $25m a year. It is peanuts really, considering the profligacy of this Government. It is very hard to take it seriously when it comes up with a proposition that is going to save it only $25m. Over and above everything else, it is tinkering with the real issue, the state of the Australian economy, which is going down hill very rapidly. We all know that the Hawke socialist dollar is worth only about US62c or US65c on the international market. The real need for this Government is not to mess around with housing interest, first home owners Bills, or anything like that, but to look at the structural problems which bedevil the Australian economy, to get unemployment and interest rates down and to revitalise Australian industry.

The crux of the matter is the lack of productivity of the work force in Australia. It costs too much to employ people here for what we get in return. That is a consequence of the monopoly position on the supply of labour by the union movement in Australia. The consequence of that is quite disastrous in an economic sense. There is nothing at all wrong with the Australian work force. It is as good, as competent, and as capable as any in the world but it cannot produce under the present management practices imposed on it, with respect to the monopoly supply of labour, by the union movement. Mr Hawke, the Labor Ministry, and the Labor Party as a whole are presiding over the slide from a developed country to Third World status. We are going back because of the total inability of the Hawke socialist Government to address the fundamental structural problems of the Australian economy. If we got the economy right, the acute housing problems would largely be solved.

I said at the outset of my speech that the first home owners assistance Bill came from the Menzies Government 22 years ago. If we look back to the years in the 1950s and 1960s we realise that they were not only the golden years in an economic sense, but were the golden years for all of Australia. They were the golden years because responsible economic policies were followed and we all benefited from a high standard of living coming from the efficient economy we had at the time. We are now sliding back to Third World status because of the inability of the Labor Party to manage the economic situation in this country. The first task of this Government is to fix the problem, not tinker with the symptoms.