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Wednesday, 20 March 1957

Dr EVATT (Barton) (Leader of the Opposition) . - At the outset I should like to congratulate the honorable member for Barker (Mr. Forbes) and the honorable member for Wentworth (Mr. Bury) on the maiden speeches that they delivered in this House last evening. Although congratulations of this kind are customary, on this occasion they are not only inspired by custom but also imbued with sincerity. My speech this evening will not be connected directly with what those honorable members said, but I think it is my duty to make just one remark regarding their speeches. I agree with what the honorable member for Barker said regarding the great development of the south-east portion of South Australia, which is particularly important to the rural industries of wool and dairying. I think, however, that his remarks needed just one supplement which was, indeed, furnished by the honorable member for Wentworth. The development of which the honorable member for Barker spoke was commenced through the planning of the previous Government. That fact was recognized by the honorable member for Wentworth. In the days before the Labour Government came to office, there was no plan for the dairying industry. The wool industry had not been encouraged. The development of the great pastures that now characterize that part and many other parts of Australia was helped tremendously by the Labour Government, particularly through the efforts of my colleague, the honorable member for Lalor (Mr. Pollard).

I wish also to add one other comment, in no way deprecating but rather as a corollary to what was said by the honorable member for Barker. The honorable member for Wentworth fully recognized - and this might be a lesson to many critics - that the planning of the development of Australia was very largely founded in the most difficult years of the immediate post-war period, by the person who made Australia's development the chief object of his political life. I refer to the late Mr. Chifley. I am very pleased that the honorable member for Wentworth recognized these facts.

This evening, Mr. Speaker, I shall deal with one small portion of the GovernorGeneral's Speech, that dealing with the subject of housing, or, as I prefer to call it, home building. Many subjects were touched upon in the Governor-General's Speech. Some of them were mentioned in a cursory way. Other important subjects were left untouched. There was virtual silence on the question of foreign affairs, at a time when the world is in a state of crisis. However, the immediately important question before the people of Australia, to which attention is being given from one end of the country to the other, is that relating to homes for the people. The people are asking whether this Government has done its job or whether it has fallen down on its job.

At this stage I move -

That the following words be added to the Address: - " but add-

1.   That the Government is censured for the statement of housing policy made by the Prime Minister on 7th March last and for the acute social ills caused by its continued failure to establish, in conjunction with the States, a national housing plan.

2.   This failure has been largely caused by the provision of inadequate finance for home-building for-

(a)   State governments;

(b)   war service homes;

(c)   co-operative building societies;

(d)   Australians seeking to build their own homes.

3.   The national plan should have regard to -

(a)   the immediate reduction of migrant intake;

(b)   employment of the maximum work force in the home-building industry;

(c)   availability of materials.

4.   It should also provide for -

(a)   priority to home-building over less essential private investment;

(b)   provision of sufficient finance to promote home ownership at low rates of interest."

Mr SPEAKER - Is the amendment seconded?

Mr Calwell - I second the amendment, and reserve my right to speak later.

Dr EVATT - The amendment commences by mentioning the statement made by the Prime Minister on 7th March. At that time, after a great deal of controversy had occurred about the causes of the housing shortage, the Prime Minister said that the factor limiting home building in Australa was not money but man-power and materials. He went on to say that the moment the money supply was increased the price of man-power and materials began to increase and inflationary pressures began. The Prime Minister was defending, at a press conference, the Commonwealth Government's approach to housing, which had been under heavy attack by the Government of New South Wales, and he indicated that in due course his Cabinet would consider government policy in relation to housing finance. He went on to indicate - in an odd manner, I submit - that the controversy regarding money for housing puzzled him, because Australia's housing achievements in the last seven years were as great as those of any other country in the world. He challenged claims that employment was slack in the building industry and said that more money could not create more building works. Many of those statements are quite correct, but they have no application to the present circumstances. It is perfectly true, for instance, that if we provide more money for an enterprise that is already using all available man-power and materials, some degree of inflationary pressure will begin.

But the general feeling in New South Wales, and throughout Australia, was that the Prime Minister did not give a true statement of the position.

We must look back a little, and recall that it was this Government that forced upon the States of Australia the new Commonwealth and State Housing Agreement. There are some features of that agreement that should not be forgotten. I refer, for instance, to the removal of the provision for assistance to those people who probably will never be able to own a home, and who depended upon the rental rebate system. Another and even worse feature of that agreement, which was forced on the States, was the substantial increase in the rate of interest. That merely fitted in with the Government's general economic policy of forcing increased rates of interest upon the people of Australia. While the Labour Government was in office the general rate of interest on Commonwealth loans was approximately 31/8 per cent. By failing to support the bond market this Government deliberately caused the rate of interest to rise to 4½ per cent., and ultimately to 5 per cent3. and more than 5 per cent. The Government pursued exactly the same policy in connexion with the Commonwealth and State Housing Agreement, making the task so much more difficult for ordinary people to acquire a home at all and putting the day of the home being their own years ahead of what it was previously. Continuing his statement, to which reference is made in this motion of censure, the Prime Minister said -

The quaint idea that exists in some minds that whatever involves money means that the Commonwealth finds the money and has the responsibility is too childish for words. It ignores the Constitution and I am not prepared to ignore its existence.

I say that the question of constitutional power does not arise at all. The Commonwealth has the supreme power over finance in this country. It has control over all the main sources of power in relation to credit. It has, in effect, the supreme direct taxing power. In the Loan Council, despite what the States may say, in the long run it is the view of the Commonwealth that prevails. So, in this vital field of home building the Commonwealth has not any really difficult constitutional obstacles to overcome. It is perfectly true that the Commonwealth has not complete power over the subject of housing, but it has power - practically complete power - over the subject of finance, and therefore the Prime Minister's, point that finance could do no good would be an important point if it were true; but I think it can be proved beyond any doubt whatever that it was not a correct statement of the position. Indeed, on the very evening that the Prime Minister made his statement, the Director of the Building Industry Congress of New South Wales, Mr. Fraser, contradicted the allegation that there was a shortage of man-power and materials and said this -

Every section of the building industry is able to deliver materials over the counter.

He was commenting on the statement by the Prime Minister. Mr. Fraser said, in addition, that builders of homes in New South Wales were desperate for work and that the worst danger was that they would lose their teams, because the men would drift into other employment. That is how this particular controversy started - the Prime Minister trying to find an alibi for inadequate finance and alleging that no materials and man-power were available for an expansion of home building. Accordingly, there was commenced by my colleagues in the Parliamentary Labour party in Sydney, a specific inquiry to which witnesses were invited. Of course, it was not a statutory body, but assistance was invited from all persons who might be able to help the committee to ascertain the facts. The committee was presided over by my colleague the honorable member for East Sydney (Mr. Ward) and another member of it was the honorable member for Parkes (Mr. Haylen).

Government supporters interjecting.

Dr EVATT - Honorable members opposite can laugh. My colleagues found out the facts. The facts were given in evidence before the committee and they cannot be laughed off. I shall refer to them. First of all, with regard to man-power, it was shown that there was unemployment in the building industry unions ranging from 5 per cent, to 12 per cent. It was proved that one in every eight members of the Operative Painters Union was out of work. The Plasterers Union reported that 100 of its members were out of work. The Brick, Tile, and Pottery Makers Union reported 5 per cent, unemployment. The Building Workers Industrial Union's representatives said there was widespread and growing unemployment in the building industry. Those figures apply, of course, only to Sydney, but that is a situation which is applicable generally throughout Australia. In fact, I know of no real exception.

To-day, in Queensland the situation is becoming most serious indeed. Hundreds of tradesmen in the building industry are threatened with dismissal, so it is not a case of a shortage of man-power. Indeed, in addition to those figures of unemployment, there is a kind of concealed or masked unemployment because many members who are out of work do not report to their union. It was proved beyond any doubt that quite a number of them gradually had sought employment outside the building industry because they felt that there was uncertainty and no secure employment in that industry. In addition, so far as materials were concerned, it was shown that 80,000,000 super, feet of dressed and sawn timber lay at grass in New South Wales and that small timber mills had been put out of production simply because there was no opportunity to sell their timber. In to-day's newspapers it is reported that on the north coast of New South Wales alone, because of the slump in the building trade, 83 timber mills have closed in the last three months. The mills employed more than 800 men and the representative of the union said that a recent survey of the State's timber belt between Port Macquarie and the Queensland border had shown that large stocks of timber were stacked high around the mills. That is not peculiar to New South Wales. Indeed, in some respects the situation there is not as critical as, for instance, it is in Tasmania. The position of the timber industry in Tasmania, as has been stated by the honorable member for Bass (Mr. Barnard), gravely affects the whole economic position of the State.

It was also shown to the committee that 10,000,000 tiles were surplus to order; that Metters Limited, manufacturers of baths and other home equipment, had reduced staff during the fortnight before the committee's inquiry.

I do not wish, Mr. Speaker, to say more than this: From beginning to end of the inquiry it was clear beyond any question that the statement of the Prime Minister that the difficulty lay in a shortage of man-power and materials was quite wrong, and that the real problem in the home building industry, was the problem of finance. The Commonwealth, having the complete key to the financial problem, refuses to use the key to unlock the credit, so that Australian people in need of homes may obtain the necessary finance. That has been, I submit, a deliberate policy of this Government. I have already referred to the increase of interest rates, under the Commonwealth and State Housing Agreement. For some reason the Government will not face up to the position in connexion with home building.

Yesterday when the honorable member for East Sydney summarized a number of points which were proved before the committee, the Prime Minister said that he would very much like to compare what had been done under the present Government with what had been done under the previous government. Let him do so; but if he is accurate he will find - and I refer to the December, 1956, statistics - that the record of the Chifley Government, despite the enormous difficulties which had to be overcome in a period of shortages before the great crisis caused by the war had been entirely removed from the immediate economic scene, will stand comparison with the record of this Government. The rate of completion of homes at present is practically the same as the rate between 1949-50 and 1951-52, under the influence of the policy of the Chifley Government.

But what is the difference between conditions now and conditions then? The difference is that since this Government came to power, 852,000 immigrants, I think, have arrived in this country. Although there is an additional demand for homes, there has been no increase of what is being done to find homes for the people. Therefore, the housing shortage is becoming worse. The rate of construction of homes in 1949-50, the last period of office of the Chifley Government, and in the following year, the first complete year of office of the present Government, was equivalent to the rate of construction during the last several years, taking the figures on an annual basis. So it is clear that a comparison of the rates of home building under the Chifley Government and under this Government, even if it is relevant, cannot affect adversely our criticism of this Government.

The real question is: What is to be done now, in this crisis? The Prime Minister talks about lack of constitutional power. He knows, as does everybody else, that in the Australian Capital Territory there is no constitutional restriction of the powers of the Commonwealth in relation to housing, yet the Government has failed to provide sufficient homes to meet the needs of the people of this district. To-day, there are 3,000 names on the waiting list for homes in the Australian Capital Territory. At present, the waiting time for a home here is from two years and four months to two years and six months. The people who are being allotted homes to-day are those who registered 28 or 30 months ago. The present rate of building is barely keeping pace with new registrations, and the waiting time has been extended. To meet the needs of the people on the waiting list here who are ready to accept homes now, we need another 1,500 homes immediately. The transfer of departments from Melbourne to Canberra will bring an additional 2,000 public servants to Canberra, but no plans are being made to provide houses for them. The Government's failure to provide homes in Canberra has created a great problem. In relation to Canberra, there can be no alibi in the form of an excuse that the power of the Commonwealth in relation to housing is limited by the Constitution. 1 say that, in reality, there is no such limitation of the power of the Commonwealth in any other part of Australia.

What is happening in Canberra? People are living in all sorts of temporary and shared accommodation - in garages, in shacks and in caravans. Many of those living under such conditions are married men with families. A further problem is that public servants transferred to Canberra from Melbourne must be accommodated here while they maintain their families elsewhere and while they wait for a very long time to secure homes here. That is the position in this Territory, as reported to our party by the honorable member for the Australian Capital Territory (Mr. J. R. Fraser).

It is an indication of the course that the Government should follow to meet this crisis. It should use all available man-power and obtain all the materials required. Why, timber cannot be sold in many States of the

Commonwealth! There is quite a depression in the timber industry. People who are on the edge of the building industry and "who would resume their activities in it if work were available should be brought back to the industry. The argument of the Prime Minister, in which he blamed everything on the absence of man-power and materials, was completely negatived by the evidence given by 50 witnesses, covering a wide field. Union representatives were called, and information was obtained from every possible source.

I say that the Commonwealth and State Housing Agreement is failing because of the increased rate of interest and also because of the absence of any determination on the part of the Commonwealth to act resolutely to overcome the housing shortage. All sections of the community are affected. The State governments are short of funds for housing. We know that they have unanimously made demands for finance upon the Commonwealth. All the State Ministers responsible for housing met yesterday in Melbourne and joined in a demand upon the Commonwealth Parliament to obtain the extra money required for housing. This debate should not finish to-night without a definite statement from the Prime Minister to indicate whether he still says that the -real limitation is a limitation of man-power and materials. If he still says that, I ask him to review the position in the light of the facts. If he refuses to review it, he must be censured by this House for basing the Government's refusal to assist home builders upon a ground that is quite unsound.

All that is needed in connexion with war service homes is additional finance. If additional finance were provided, the long waiting time for loans from the War Service Homes Division would be shortened. For the ex-serviceman, hope deferred maketh the heart sick. There are many exservicemen who desperately need homes. In this field, the limitation again is a lack of finance, not a lack of man-power or a lack of materials.

Co-operative building societies do a very important job in connexion with housing. They, too, have joined in this demand upon the Commonwealth Parliament. The position in Queensland is slightly different from that in other States, because in Queensland co-operative building societies are few in number, but similar conditions obtain there. Citizens are trying to obtain homes. I have referred to the conditions prevailing in Canberra. The conditions in other parts of Australia are exactly the same. The position in Queensland is no different. There is a housing shortage there, too.

In some States the situation is really serious. Indeed, it is appalling. As was pointed out during the last session by the honorable member for Batman (Mr. Bird), housing conditions in suburbs of Melbourne and Sydney are really disgraceful. The overcrowding in some of the suburbs of Melbourne has been referred to in reports published by the Melbourne press and has been emphasized by the honorable member for Batman. In June of last year, at a meeting of the Victorian Public Health Commission, it was revealed that apartments housed 30 inmates, who shared one copper and one trough. It was stated that houses were so crowded that people had to share beds, one after the other. Honorable members from Victoria have referred to the cramped, unhealthy conditions which have to be faced in the immigrant hostels at Williamstown, Brooklyn, Maribyrnong and other places. In addition, there is cruel and heartless exploitation of people, especially immigrants, who take sub-tenancies. They are charged extortionate rentals for the occupancy of accommodation which is quite unsuitable.

The view of the Labour party is that it is absolutely vital to a proper plan for housing that there should be an immediate reduction of the immigrant intake. It is impossible to ignore what is happening now, which is unjust to both Australians and new Australians. Under present conditions, we cannot possibly solve the problem of housing. There should be an immediate and substantial reduction of the intake of immigrants.

The next point is the employment of the maximum work force in the home-building industry. That is the vital point, and it is quite correct to stress the necessity of that. The fact is that people want to be employed in that industry. But they have to have security of tenure in the industry. They have to know that it will not be a casual job. They have to feel assured that they will be able to stay in the industry. When that problem is solved, we shall have solved one very important part of the overall problem.

Now, as to the availability of materials. The position in regard to the basic materials needed for home building, according to the facts placed before the committee to which 1 have referred, is the same in other States as it is in New South Wales. I think the New South Wales position is typical. One cannot go into the details applying in every State, but all the members of the party who assembled in Canberra considered that the situation is substantially the same throughout this nation.

There should be priority for home building over less essential private investment. Here we come, I think, Mr. Speaker, to the crux of the matter in many respects. Figures show that over the period since the Commonwealth and State Housing Agreement came into operation there has been an enormous increase in the moneys that have been expended not only in private investment generally, but also in building for commercial purposes - not in home building. We get the same situation as the Treasurer described in the budget speech two years ago, that is, a deliberate preference for investments for profit in the private sector of the economy. That is to say, the expenditure on homes is small compared with the enormous increase in the expenditure on large buildings for the purposes of commerce and industry. The fact is that the luxury expenditure in connexion with hotels, picture theatres and so on, and the expenditure on building materials in connexion with one-brand petrol stations has now become a characteristic of the whole industry in Australia. The building of these one-brand petrol stations is a most extraordinary thing. They all sell substantially the same petrol. If the petrol sold in these various one-brand petrol stations were analysed it would be found that it all comes from the same source, and that the only difference lies in the additions made to the petrol. Yet the call on the building resources of the Commonwealth made for the purposes of the oil combine is enormously heavy. That is something in respect of which the Commonwealth should endeavour, with the co-operation of the States, to insist upon priorities. There is no reason why that should not be done, and I have never heard one argument in favour of the expenditure of huge amounts of capital on the building of one-brand petrol stations. In these buildings the oil companies really put the profits they have made. At the same time, they are elaborate structures in many respects, and the materials used in their building would provide Quite a few homes. We most definitely need priority for home building over private investment, not only in the building industry, but also generally.

But why is it that the immense expenditure on building for private investment goes on? It goes on, as was pointed out by the Labour party in the budget debates of both last year and the year before, because of the profit motive which dominates everything, and is allowed to dominate everything. Investment in the private sector of the economy offers such profits that the tendency is for investment to become more and more restricted to the private sector, so that inadequate money is provided for basic necessities, not only for homes, but also for schools, hospitals and transport, with the result that the purposes and powers of the States are not, in effect, exercised or carried out.

We know now - everybody knows it - that under the tax reimbursement system the States receive a quite inadequate reimbursement. The reason for that is that money follows money. The profits follow bigger profits. That is happening, and is illustrated for us all in connexion with home building. It is not just as though it is a choice between one thing and another. The home is the basis of happy family life in this country. It is not a question of something additional, of some luxury expenditure. The provision of homes is something that is absolutely essential to the progress of Australia. But the position has been rendered impossible by the fact that there is no organization or planning by the Commonwealth. The Government seeks to shelter behind this wretched excuse that the necessary manpower is not available, when the facts show that the ' root of the problem does not lie in any lack of either man-power or materials, but simply in the withholding of credit. The credit is there, but those who could release it are refusing to do so. I submit that for this the Government deserves severe censure. The whole of the controversy that has gone on in the press and among members of the public proves that to be true beyond any doubt whatsoever. It proves, for instance, that the so-called clamour to which the Prime Minister referred condescendingly when criticism regarding the housing position was rising, is not clamour but bona fide criticism. All that can be done now - and the House must demand that it be done - is the provision of this finance.

There is reference in the Governor.General's Speech to the availability of labour and materials. Does the Prime Minister adhere to the view that the housing problem results from the shortage of manpower and materials? Will he study the position that we are putting before him in this debate, and will he act to see to it that the Commonwealth Government really cooperates with the States, and that there is a national plan which is truly worthy of Australia?

The last point made in the amendment concerns the provision of sufficient finance to promote home ownership at low rates of interest. I say that the vital point in that is the provision of finance, and I need not elaborate on that any further. The actual amount required could easily be ascertained. Action should be taken, but low rates of interest are a crucial feature of the need for the development of home building in Australia. The difficulty of meeting obligations under the present system of dear money has become notorious. It has become part of the economic policy of the Government. We thought at first that the Treasurer would be opposed to it, but it is apparently accepted. High rates of interest exist in all features of the economy. Of course, we find that the rates charged in the banking system are going up, and in addition we find that, because the banks want higher rates of interest still, they are engaging in other business, including hire purchase financing, in which the rates of interest are very extreme, ranging from 10 per cent, to perhaps 20 per cent. That is really an indication that the Government is not carrying out its duty to the people, but is allowing these financial masters of the nation to levy toll on the people, which is effective at every possible stage in relation to the expenditure of the home. It has been shown before the committee that interest rates play the greatest part in the ultimate capital cost of a home - that if there is an increase of interest rates, say double, compared with all other elements in the cost of the home, that increase of interest rate has thi greatest effect in adding to the ultimate capital cost involved.

Mr. Speaker,the crisis in home building provides the clearest indication of the effect on the people of Australia of the Government's inflationary policy. I say " inflationary policy ", because, although the Government came out with a plan or statement that it would end inflation, exactly the reverse has taken place. Inflation has been a characteristic of all the years of its period of office. First of all the Government lowered the living standards of pensioners and of wage and salary earners whose money incomes were controlled by courts or other authorities like the Parliament itself. Equally, it caused a rise in the incomes of the large manufacturing and trading companies whose power to increase prices is controlled, not by the Government or the people, but by themselves. They complain of the possibility of price fixation, or fixation of interest rates by law. But who fixes the rates of interest? We know that they are fixed, for instance, by the banking combine in connexion with its rates, and that that applies generally to the combines and monopolies of this country.

The second impact of inflation came when those companies sought a higher price, rate of interest or profit for the surplus money they had acquired. Then we find the Government allowing interest rates to increase still further and the companies and the banks charging, through subsidiary companies, even higher rates of interest. The Government failed to support the Commonwealth bond market in 1956. Inflation has become the permanent policy of the Government, and we now find representatives of large businesses in this country actually saying that inflation has its advantages. It has advantages from their point of view, because it enables startling profits to be made by the mere increase of stock during the trading year.

The position is that under the influence of the cheap money policy of the Chifley Labour Government the number of homes under construction - uncompleted homes - rose steadily after the war until, in 1949-50, there were 65,708, in 1950-51 there were 80,786 - that is, after the coming of this Government - and in 1951-52, there were 82,830. But as soon as the financial changes, or really distortions, became operative in this stage of inflation the figures began to fall. From more than 82,000 in 1951-52, the number decreased in 1952-53 to 69,714, in 1953-54 to 69,573, in 1954-55 to 65,359, and in 1955-56 to 60,687. Taking December, 1956, as the final point, the number was 60,062. The net result has been a disastrous fall of approximately 22,000 houses under construction since 1951- 52, or 27 per cent, of the total. That has had a devastating effect upon Australians, because in that period the population has increased by 842,000, of whom 300,000 were immigrants.

That is to say, we have lost the construction of an additional 80,000 houses. The cause of this fall in home construction has not been that labour and materials were not available for housing; it has been the giant diversion of money away from homebuilding to excess profit investment, which it was the real purpose of the Government to achieve. Even within the building industry, this giant diversion has taken place. While the number of houses under construction has fallen, the value of other buildings under construction, including commercial buildings, has increased from £115,000,000 in 1952- 53 to £234,000,000 in December, 1956.

We have to get back to the purposes of the original Commonwealth and State Housing Agreement. We must have a national plan to provide the money and give the people a chance to obtain their homes under the conditions to which I referred in the earlier portion of my speech. I ask the Prime Minister flatly: Does he adhere to his statement of 7th March that finance is not the difficulty and that there is a shortage of materials and man-power? The work of the committee to which I have referred negatives that statement. I submit that that claim is not true. The Prime Minister must really state to-night what he proposes to do about this great national question.

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