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Wednesday, 19 November 1986
Page: 2468

Senator MICHAEL BAUME(11.41) —The point Senator Newman raised is very serious and extends beyond contractors seeing the Department of Housing and Construction coming and hitting special prices for governmental housing. The reality is that there is massive incompetence in the specification and components within Defence housing. It is traditional, I suppose, within governments that once a set of specifications has been established it is difficult for governments to be sufficiently mobile to keep it up to date, to respond to the market. The simple fact is that it costs a lot more to build a government home because, in many instances, of nonsensical requirements put by this Department, the ludicrous specifications set by this Department--

Senator Newman —And by Defence.

Senator MICHAEL BAUME —Yes. These are totally unnecessary, do not fit into good commercial practice and add massively to the cost of each house. Senator Newman has outlined the ludicrous expense involved in building an ordinary, reasonable house for Defence purposes, which is far greater than the cost of buying a house of similar quality from a developer. I asked the Housing Industry Association about this matter. Its letter to me of 10 November this year states:

Our investigations show, since receiving your letter, that when standard components are not used in public housing or any other housing, the cost escalation is in the order of 20%-30%.

I had asked specifically about windows. The letter continues:

Our advice from window manufacturers indicates that many specifications are only millimetres outside standards. Furthermore, when colour matching is required using non-standard colours, one can assume that changes to non-standard sizes and colours will increase the costs by 40%-50%.

The sizes specified in government housing requirements cannot be met on long production runs and this increases the cost. It is ludicrous that public housing in Canberra and for defence forces elsewhere is being inefficiently produced by this Department and this Government because the Department is not following specifications and standards that are acceptable and reasonable. One has to ask what is the reason for the enormous difference between the figures Senator Newman gave and what is a reasonable figure. This is clearly the explanation. I have received another letter from someone in the housing industry who knows what he is talking about. I would like to quote from parts of it. The letter has been sent to the Joint Committee of the Australian Capital Territory and to the Secretary of the Joint Committee on Public Accounts. The correspondent wishes to bring to my attention the gross waste of public money in the current program of construction of government housing in the Australian Capital Territory. He states:

I have been involved in the ACT residential housing construction industry for approximately 10 years as an employee of a material supplier . . . and in my capacity as an estimator have an adequate knowledge of construction costs of simple dwellings.

. . . the NCDC is causing gross overspending on each cottage constructed by individual successful tenderers, by farming out to local and interstate architectural groups, guidelines and parameters which then become monuments to architects and NCDC town planners.

The charges these architects levy to design a group of simple 3-bedroom cottages of approximately 10 squares must be horrendous. What they specify in these houses would make the State Housing Commissions scream with envy. I can specifically and knowledgeably relate to the cost of windows and would advise you that the average cost of a set of windows in a `government designed' public house is approximately twice the price of a similar sized house designed and built by any medium sized local builder.

He raises these questions:

Why does the NCDC permit such over specification of certain materials, when there are any number of builders in the ACT who would design, specify and construct simple 10 square three-bedroom housing for 15 to 20 thousand dollars less per house than is currently the case under the present system?

. . . .

A saving of 15 thousand dollars in a house could be put to use in building more housing of a simpler but nonetheless comfortable and perfectly adequate nature, just as many low cost budget price houses are being constructed and more importantly approved, every day by professional private builders.

Why does public housing have to cost more per unit than private housing, without there being an evidently higher standard involved in the end product? I think this Department has an awful lot to answer for. I remember last year during the consideration of the Estimates we looked at some townhouses being built in Sydney by this Department for the Department of Defence. The cost was $96,000, as I recall, for three-bedroom units. That price did not include the buying of any land; it was government land. These sorts of expenses are just indefensible.

One other point I would like to make is that the Government is participating in a program, through this Department, called the International Year of Shelter for the Homeless. Last year the Government appropriated $650,000 for this program and this year $625,000 is to be appropriated. I might say that that is at variance with the Press release put out by the Federal Minister for Housing and Construction, Mr West, in June this year, when he said that the Government had approved $750,000 for this year. Obviously, $125,000 has been quietly chopped off, or maybe there is some other explanation. The reality is that $1.3m will have been spent on this program for the International Year of Shelter for the Homeless.

Naturally, I asked what this would be spent on. No one would be terribly surprised to find out that none of it will be spent on housing the homeless. The biggest single item I can see relates to promotion and public relations. Of the $1.3m, a total of a quarter of a million dollars will be spent on promotion and public relations. Obviously, the Government will seek to use this program-as it uses so many programs-to promote itself. No doubt there will be pictures of Stewart West, or perhaps the Prime Minister (Mr Hawke), as is the case in most of the other bunkum programs which are aimed more at promoting the Government than at solving any basic problems. There will be expenditure of $100,000 on a video. When I asked what it was all about, I was told that no new construction would be funded under this IYSH program. The response given to the question I asked during the Senate Estimates committee hearing was this:

. . . the primary focus of IYSH in Australia is directed towards reviewing, developing and improving the efficiency and effectiveness of existing policies and programs.

These are housing programs. Who runs the housing programs? Governments run them, particularly the Federal Government. So this program appears to be directed towards reviewing, developing and improving the efficiency and effectiveness of existing policies and programs by the Government. Why does the Government have to spend a quarter of a million dollars on a promotion campaign to tell itself how to fix up its policies? The response continued:

It is envisaged that by spending relatively small amounts through IYSH to undertake this review process, current levels of funding for housing may be able to be used more effectively and efficiently.

I add by way of parenthesis `by governments', because they are the ones who run the programs. I find it incredible that we are spending $1.3m on a program to advise the Federal Government, in particular, how to fix up its apparently incompetent or inadequate housing programs. That is the clear implication of this statement. The response continues:

The three key aims that have been identified for IYSH in Australia are:

1. Improving the effectiveness of the current housing programs and relevant aid programs.

2. Increasing the contribution of the government, private and community sectors towards assisting the homeless and inadequately housed.

3. Encouraging innovation and equity in the use of the low cost housing.

No doubt there is an attempt to seek participation by private community sectors, and I acknowledge that. The reality is that the bulk of this allocation is clearly aimed at smartening up the role of government. I wonder to what extent that is achieved by the sorts of programs we see being funded by Mr West's three-quarters of a million dollar program.

Let us look at one of the projects. One is to provide $7,300 to the First Fremantle Housing Collective to produce a personalised account of and a technical guide to the history and development of the First Fremantle Housing Collective. Maybe there is great merit in the Government advising itself about what went on and how that money was spent; but if the Government wants to find out what went on, does it have to go through all of the public relations bulldust that is involved in this program and provide money to this group to do so?

The list goes on and on. There are pages and pages. An amount of $3,500 is allocated to the National Youth Coalition for Housing to produce master copies and a written summary of a one-hour and four 20-minute videotapes of the National Youth Housing Conference held in Wollongong in 1985 from the 12 hours of existing footage. The tapes will comprise a one-hour conference overview videotape, a videotape on women and housing, a videotape to be tailored to fit into the NYCH national shelter education kit, and so on. In other words, this promotional stuff is aimed at making it appear that the Government is doing something positive to fix up its own inadequate housing policies. There is no point in having it unless it is to fix up policies that are clearly inadequate, on the Government's own admission. This is directed towards reviewing, developing and improving the efficiency and effectiveness of existing policies and programs, and it is costing us $1.3m in very publicly spent, highly promoted taxpayers' money to do so.

Is there a need for this area to be smartened up? Apparently there is, because in April 1984 the Department commissioned consultants to undertake a study into homelessness and inadequate housing. The consultants estimated:

Around Australia, possibly 40,000 people sleep out of doors or in refuges. Perhaps 60,000 live on the verge of homelessness, without secure tenure and extremely dependent on income maintenance and welfare services. In June 1984, 135,000 households were on waiting lists for State housing authority accommodation. Very rough estimates suggest that 700,000 households in Australia may have insufficient income to live at the poverty line and pay their rent or mortgage costs. Over 240,000 households in the private rental sector pay more than 20 per cent of income in rent.

So what is the Government going to do to resolve this problem? It is going to blow $1.3m on a self-congratulatory public promotion which involves no spending whatsoever--

Senator Newman —Typical.

Senator MICHAEL BAUME —As the honourable senator said, it is typical. It involves no spending whatsoever on actually doing anything to resolve the problem of the homeless.

Senator Vigor —They are spending $49.9m overall on advertising.

Senator MICHAEL BAUME —Exactly. If only this money had been given to an organisation such as the Sydney City Mission, which actually does something about providing shelter for the homeless, or to other organisations. Instead of cutting back on them and making their lives hard, the Government should do something positive, particularly at the lower end, to assist those private sector organisations which provide the most effective help to overcome this very serious problem. Frankly, I am sick of seeing taxpayers money being thrown away on this kind of tawdry promotion aimed at making big fellows of Ministers and the Prime Minister of this country at the expense of the people who should really be getting the benefit.