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Thursday, 21 March 1957


Mr O'CONNOR (Dalley) .- An amendment to the motion for the adoption of the Address-in-Reply has been moved as a motion of censure, directed against the Government for its failure to face up to the very important problem of housing. It is most significant that the speaker who preceded me, the honorable member for Isaacs (Mr. Haworth), failed to make any reference to housing. This Government is deserving of censure because of its cavalier treatment of, and approach to, this very important question. The form of escapism that was indulged in by the previous speaker can in no way detract from the importance of this matter. It is an economic and social question which affects all phases of our community. It is a problem that should be kept in the forefront of all our problems and for that reason, because of its magnitude and influence, I submit that the Government has fallen down lamentably on the job and is deserving of censure.

Any hope that the country might have held while awaiting the speech of the Prime Minister (Mr. Menzies) last night was quickly dispelled. It was quite obvious from his approach to the question that this country can expect no relief in the future from this Government regarding housing. Notwithstanding the approach of the spokesmen of the Government, the Prime Minister and the Minister for National Development (Senator Spooner), people who are feeling the effects of this problem are in no way impressed either by their attitude or their arguments. The Prime Minister, in the course of his statement last night, made a defence of what has become known as the rugged individualism of the United States of America. He pointed out that he was quite proud of what private enterprise had accomplished both here and in America. I do not know how any one can be proud of an accomplishment of any private enterprise that permits the charging of interest rates up to 20 per cent. That is the problem that exists to-day in regard to housing.

Every one knows that, due to the activities of private enterprise and the activities of certain government instrumentalities, people who require houses to-day are compelled to go to financial institutions and pay usurious rates of interest. There was a time in history when usury was a criminal offence. Apparently, with the connivance of this Government, it has become a fashionable offence. This Government, as the statement of the Prime Minister shows, sits idly by and allows this community to be exploited to the extent that it is compelled to pay whatever interest rates private companies or financial institutions demand of it. How can this Government justify the condition of affairs that has crept into the administration of war service homes? There is a lag of approximately eighteen months to two years in the waiting time and the applicants are advised by the Government to try to get private financial accommodation for that period. When they go to private enterprise for the money, they are expected to pay from 12 per cent, to 15 per cent, interest for that period.

The Government is, in effect, telling the applicants for war service homes to go to the black market for the period in which they are waiting for their applications to be finalized. This is a deplorable state of affairs. It is a state of affairs that should not be tolerated, yet a government instrumentality has been advising its clients to act in that manner. The Prime Minister says that he is proud of the achievements of private enterprise. If private interests are forcing the people to pay exorbitant rates of interest for housing loans, then he is entitled to whatever pride he can get from that position.

The Prime Minister tried to make the point that there was no dislocation of building activity and no crisis of any kind in this country, and he went on to dismiss as being of no importance the present level of unemployment in the building trades. One is forced to conclude from the Prime Minister's attitude towards the unemployment that undoubtedly prevails in the building industry to-day that he has accepted the statement of Professor Hytten that a pool of unemployed is desirable. Hence the Prime Minister's failure to attempt to minimize the effects of this unemployment which he casually accepts as being normal. He and other Government supporters tried to substantiate the argument that there is no crisis of any kind in the building industry. Perhaps it would be appropriate for me to read just one of the many letters that have appeared in the press recently. The letter that I propose to read, which will perhaps answer the Prime Minister, appeared in the " Sydney Morning Herald " on 9th March of this year. It was, of course', addressed to the editor of the newspaper, and it reads -

It is quite evident, from your report on March 8 of Mr. Menzies's remarks in Canberra on housing, that Mr. Menzies knows little or nothing regarding employment in the building trade.

I am a working proprietor of a joinery works, with fifteen years of business experience on my own. I have never seen business as bad as it is now; and my plant and machinery are working at less than one-third capacity.

Regarding lack of building materials, Mr. Menzies is very wide of the mark.

I can buy any quantity of any material used for home building, with immediate delivery. I dare not advertise for labour as I would be embarrassed by the response.

This is not an isolated case, as business acquaintances in both identical and allied businesses have intimated that the tempo of building activity regarding homes had been slowing down for some months past.

The experience of that employer is the experience of every one associated with the building trade, yet the Prime Minister again last evening tried to disparage the activities of a fact-finding committee of the Austraiian Labour party which investigated the problem in Sydney several weeks ago. The party offers no apologies for the activities of that committee. I am sure that it would do some Government members good if they came down from their ivory towers and acquainted themselves with the facts instead of seeking to be impressed by speeches made by their leaders. Employer and trade union representatives, manufacturers of bricks, suppliers of timber, and men associated with all other aspects of the building industry, including representatives of the co-operative building societies, appeared before the fact-finding committee to give it a picture of the situation. The tenor of their evidence was that the building industry is now passing through the worst period it has experienced in the last seventeen or eighteen years. In the light of that evidence, which was obtained from representatives of all sections of the industry, it is extremely difficult to understand the Government's attitude to the problem. All the Government does is to try to make the people believe that there is no crisis, and to attack the achievements of Labour governments.

The record of the present Government in fields in which it has exclusive control over housing is anything but impressive. An examination of its record, particularly in war service homes, reveals that the number of homes constructed has been substantially reduced. On the subject of the reduced 'number of homes being made available through the activities of the War Service Homes Division, I may add that the reduction has occurred almost exclusively in New South Wales. Government supporters are making a point of concentrating their criticism against the Labour Government of New South Wales, and I should like to know why the reduction in the rate of building of war service homes has been confined exclusively to that State. We would be very glad if Government supporters would explain why this reduction has taken place in New South Wales alone. They have tried to make the point that more people are waiting for homes in New South Wales than anywhere else, but there isnothing extraordinary about that. Indeed, it would be unusual if that were not so. New South Wales has the largest population of any of the States and the fact that it has also the largest number of people waiting for homes is no condemnation of its Government.


Mr Coutts - During World War II. New South Wales provided more soldiers than any other State.


Mr O'CONNOR - That is perfectly true. If the Government's reasoning is applied to the Northern Territory and the Australian Capital Territory - territories in which it has sole contol of housing - we find that, on a population basis, its record is appalling. On the basis which this Government has used to attack New South Wales, the comparative lag in the Northern Territory would be 65,000 homes, and, in the Australian Capital Territory, 180,000 homes. Government supporters are very fond of saying that New South Wales has the highest number of unsatisfied applicants for housing and is, therefore, deserving of criticism; but if the same argument is applied to the territories controlled by the Federal Government the housing position there is seen to be very serious indeed.

Last night the Prime Minister made a further apology for the private trading banks. He said that, as a result of figures that had been supplied to him, he had no doubt that at the end of twelve months the private trading banks would be making a substantial contribution to the relief of the housing problem. Even if that statement is accepted we must still wait another twelve months before the improvement takes place! Moreover, I question whether any improvement will take place as a result of help from this source. Dr. Coombs, the Governor of the Commonwealth Bank, has stated that the entry of the private trading banks into the Savings bank field has resulted in a reduced sum being made available by the Commonwealth Bank for housing purposes.

Members of the Opposition said at the time that this would be the effect of permitting private banks to enter the savings field. Their criticism has been vindicated. There has in fact, been a flow of savings into the private banks. This can only act to the detriment of the Commonwealth Bank and, of course, home-building. Naturally, the Commonwealth Bank can now make less money available for that purpose. The private trading banks are not channelling back into housing anything like the amount of money they are getting by way of savings deposits. The latest figures show that, of £100,000,000 deposited as savings, £70.000,000 went to the private banks and £30,000,000 to the Commonwealth Bank. Formerly, all that money would have been available for homebuilding, but now 70 per cent, is in the hands of the private savings banks and may be used for other purposes.

The Prime Minister spoke in defence of the new housing agreement which was, in effect, forced on the States last year by this Government. 1 am very disturbed by certain features of that agreement, and what may flow from them. First, the principle of economic rental has been disregarded completely. People who get their homes under the new Commonwealth and State Housing Agreement will no longer have that protection. Secondly, the agreement provides how the States shall spend the money and requires that 20 per cent, of the allocation be spent on homes for rental purposes.

That brings me to a question which J believe looms very large and is one of the most important in connexion with home building. To-day, of the allocations made to the States for home building, only 20 per cent. - and I emphasize that - is to be set aside for rental housing. What will be the position in ten to fifteen years' time of people who require homes and who are only in a position to pay rent? Only government instrumentalities are building for this purpose. Notwithstanding what one could say on the desirability of home ownership and how it should be encouraged, the fact remains that there will always be a formidable percentage of our population who will never be in a position to purchase a home. Many reasons could be advanced for that fact, but recognizing it and acknowledging that there will always be that formidable percentage, one asks: What is their future? Under the programme of this Government, they have no future. As a consequence, this point should be emphasized time and time again because people will be sleeping in the streets unless something is done to build homes for rental purposes.

When this matter has been dealt with in the past, supporters of the Government have made some ludicrous statements. One that comes readily to the mind is that made last year by the Minister for the Army (Mr. Cramer) when he said that 150,000 homes were available for rental in Australia. That statement seems to be on all fours with the unrealistic approach and escapism of the Government on this question. Private enterprise is not doing anything in respect of home building for rental purposes. When rent control applied in the various States, those who defended private enterprise told us that if the controls were lifted the problem would immediately disappear and private capital would flow into the home-building industry. Those persons claimed that while those controls remained, no private capita] could be expected for housing because it would bc ridiculous to put money into a field so restricted by legislation when better returns could be obtained elsewhere. Two years ago that claim sounded very plausible. Lel us look at what has happened.

Two years ago the New South Wales Government amended its landlord and tenant regulations. To-day no rent control restrictions apply to new homes built in New South Wales or to homes that come on to the market for letting purposes for the first time since 1941. Therefore, for the past two years no rent control restrictions have applied on building in New South Wales. But what has happened? Not one penny of private capital has been available to provide homes! Supporters of the Government who maintain that controls keep capital out of this field will have to answer that fact.

The greatest indictment of private enterprise and capital in this country is that they are not doing anything to relieve the housing situation, lt is true that government institutions are doing something in this matter, but many private financial institutions are exploiting the situation. A few weeks ago in New South Wales Mr. Jacoby proposed to make £2,000,000 available for housing at the interest rate of 10 per cent. Such a rate makes it utterly impossible for the average man even to think about borrowing on those terms. Perhaps this offer may provide some benefit for a very few people, but it gives no hope at all for the average person. If that is the approach of private enterprise to this problem, then there is no hope for the average person. 1 submit that the Government can and must face up to this situation. The Prime Minister has said that no further increase will be made in the financial allocation for housing. In the light of that statement it is extraordinary to consider that all those connected with the building industry have said that shortage of finance is the reason for the slowing down in the industry and the minor recession that is occurring. There is no lack of materials or of man-power, but what is lacking is finance; yet the Government says that it does not propose to increase its financial allocation. This means that in the future there will be no improvement in the situation, which will be allowed to deteriorate as it has done during the last six months.

One of the factors contributing to the spiralling cost of building is the continued increase in interest rates. The Government is responsible for this, and it has not yet made out a case to justify the increase that has occurred in interest rates. It is anomalous for the Government to say to a person who receives a loan from the War Service Homes Division, " You will pay 3 1 per cent, interest ", and to a person who gets his loan from the State Housing Commission, " You will pay 5 per cent.". One may acknowledge the fact that people who receive housing loans should pay a reasonable interest rate, but the Government would find it difficult to substantiate the proposition that because some people are paying only 3J per cent., others who receive loans from State instrumentalities, must pay 5 per cent.

I submit also that if the Government is sincere in this matter, and if it is anxious to do something about reducing costs, of which Government supporters have spoken so often, it has a simple means of doing so, by reducing sales tax. For every £100 spent in the furnishing or building of a home £10 goes to the Government in the form of sales tax. For every £500 or £1,000 spent by a person who gets a home, £50 or £100 goes to the Government.


Mr Fox - There is no sales tax on building materials.


Mr O'CONNOR - I am talking about furniture.


Mr Fox - The honorable member spoke of building materials, too.


Mr O'CONNOR - Even if I am corrected in regard to building materials, the fact remains that a person who spends £500 or £1,000 on furnishing a home still has to pay 10 per cent, sales tax. Removal of that sales tax would represent a considerable saving to persons who are furnishing their homes.

This problem of home building and planning has gone beyond the stage when various authorities should approach it separately. The Government would make some contribution towards ironing out the difficulties if it would, in association with the States, constitute a committee for the purpose of home planning and home building. The Government has said, however, " We will draw up an agreement. We will lay down the terms of that agreement. The States have to abide by it. We shall be the authority to make the finance available for the programmes of the States". It is ridiculous to suggest that 'the States should make available for their home-building programmes more money than they receive for that purpose from the Commonwealth. The States have many commitments and they must trim their budgets accordingly. Their building programmes are conditioned by the financial assistance that they receive from the Commonwealth.

This problem of home building affects every one in the community, and many of our people are suffering very grievously as a consequence of the ill-advised policy that the Government is following. This Government has bungled the housing question. All that its supporters can say in reply to us is, " What did your Government do?" How long must we tolerate this parrot cry from supporters of the Government? It is about time that members of this Government realized that they have had seven years of uninterrupted occupancy of the government benches, seven years in which they have had control of this country, seven years in which to put into effect any worth-while policy.







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