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Wednesday, 30 March 1966

Mr Kevin Cairns (LILLEY, QUEENSLAND) .- Mr. Deputy Speaker,the Deputy Leader of the Opposition (Mr. Whitlam) has just treated us for nearly three-quarters of an hour to a discourse on the provisions of the new Commonwealth and State Housing Agreement that will come into force later this year. I believe that his contribution was not really pertinent to the clear purpose of this very short measure, which was intro duced by the Minister for Labour and National Service (Mr. Bury) on 23rd March. It arises as a consequence of a policy decision which was announced by the Treasurer (Mr. McMahon) in a ministerial statement on 16th March. The Treasurer on that occasion spent about five minutes making clear the purpose of the additional allocation of funds for which this Bill provides. He made it clear that the purpose is to provide a short term stimulant of the economy, and it is evident that this should be clearly understood to be the purpose of this measure. In his statement, the Treasurer said -

The view we reached was that it would be timely to make a certain further amount of finance available, and it appeared to us thar the earliest and most certain effects would be achieved if this were done through the State Governments under the Commonwealth and State Housing Agreement.

That explains the purpose of this measure. The sum involved is $15 million, which will be spent on housing over three months. This represents a considerable and effective short term stimulant of an economy that has gone through a tremendous and most debilitating drought. The Treasurer, in his statement, went on -

We therefore decided to make an offer to the States. We told them we would agree to support an increase of $15 million in the borrowing programmes for this financial year on condition that the share of each State in the additional amount was used wholly for housing purposes.

As is quite evident from the honorable gentleman's statement, these funds are to be used to provide additional support for housing in the public sector. When one looks at the movements in activity in the public and the private sectors, one sees that it is appropriate that support be given in this way. So this is an economic measure designed to give affect to the policy enunciated by the Treasurer. As such, it is an important social measure.

In the light of the considerations that I have just outlined, it was, I suggest, a little fatuous for the Deputy Leader of the Opposition to state that he was not concerned about statistics showing the number of commencements, the number of completions or the number of approvals of houses because he would take into account economic and social considerations, and then to neglect completely the background against which this Bill was introduced. That attitude was fatuous because this measure is designed to provide a short term stimulant of the economy for very important social reasons. It is intended to stimulate business activity and employment. The stimulation of employment particularly is important to a lot of large country towns and provincial centres. This Bill will help to stimulate employment and eliminate a certain amount of underemployment. The economy is at present just recovering from the severe effects of the drought. So this is above all a social measure, and the speech of the Deputy Leader of the Opposition, in which he set out the five grounds that the Committee should consider, was a little inappropriate and might have been more appropriate if he had waited until next September or October to deliver it.

There are many questions we could ask ourselves concerning this Bill, but one that readily comes to mind is this: What, in real terms, has been the decline in housing? One of the most useful kinds of data that we can assemble is that concerning housing approvals. How can approvals, which lead housing commencements and which in determining trends are more important than housing completions - which suffer a decline only when everything else has gone down - have moved differently in the various States? It is against the differing movements in housing approvals that we have to consider the allocation of the money as between the various States. But before we even consider the actual movements between the States it might be worth while to have a look at the loan programme - and the consequent support for housing - which was decided on earlier in the year.

It will be recalled that for 1965-66 the States elected to nominate as their allocations for housing under the Agreement a total amount of $102 million. For 1964-65 the allocation was a little higher, $102.7 million. It is clear that there was an overall reduction in the 1965-66 allocation for housing. There is a table here which shows clearly that the reduction is attributable almost wholly to South Australia, in which State there was a marked decrease. I will read out the allocations under the Agreement with respect to the various States for the two financial years. In New South Wales in 1964- 65 the amount was $35 million and in 1965- 66 it was $35.3 million. This showed a minimal increase. For Victoria the amount was $27 million for the first year and $27.3 million for the second year. Queensland had allocations for $6.6 million for both years. The only State in which there was a decline was South Australia, where the figure fell from $20.5 million to $19 million.

These were the allocations for housing from the loan programmes. As far as this programme was concerned the rate of housing in succeeding years was not to be increased above that for the present year - and that was certainly a correct judgment at the time when it was arrived at.

Mr L R Johnson - But the States were not happy about it.

Mr Kevin Cairns (LILLEY, QUEENSLAND) - If the honorable member will look at the other data he will find that the resources for building have been pretty fully employed even when we have suffered a slight downturn in the economy. The honorable member should face the facts. Last year I think approvals were running at the rate of about 117,000 a year, which is a very high figure. If he then looks at the amount of overtime worked in the building industry, which is a measure of the industry's capacity and its unused resources, he will see that the figure has remained high even in the time during which there has been a slight downturn. So if he is going to criticise the level of housing activity I suggest that he should not look at just one year, but rather at a number of years.

A lot of records have been set by this Government in this field. I think the Deputy Leader of the Opposition might even explain to the honorable member that sometimes the graph shows a rise which is a little too steep, and it is not good that this should be so. This is exactly what has happened in recent times. When the rate of housing rises too steeply the people who are hurt most are those least able to afford housing. That is one reason why this extra boost is to be given principally in the public sector of housing, to help those people who need assistance a little more than others do

The details of the allocation of the $15 million as between the States are worth considering. Nearly $5 million goes to New South Wales, £3.8 million to Victoria, $1.9 million to Queensland, a little over $2 million to South Australia, approximately $1.5 million to Western Australia and a little over $1 million to Tasmania. Why should the distribution be made in this way? This is an important qualitative question because it has a bearing on the only means by which the problem is to be solved. What has been the change in the rate of building approvals in the States? Surely an important determinant of the stimulus to be provided through housing construction to general economic activity and general social conditions would be given from a study of the changes in rates of building approvals in the various States. As between February 1965 and February 1966, the last month for which one can obtain any data, the largest decline has been in New South Wales. There was a decline of approvals for new houses and flats of something like 23 per cent. So we find that a large proportion of the extra $15 million is to go to New South Wales. This is the correct thing to do. In Victoria the decline has been quite small. Between February 1965 and February 1966 there was a decline of only 5 per cent. The figures for Queensland actually showed an improvement. Approvals for new houses and flat's increased in that State by 10 or 11 per cent. In South Australia there was a similar improvement. In Western Australia there was a decline of 1 1 per cent., while in Tasmania there also was a decline.

It is perfectly clear and logical, therefore, that New South Wales should obtain such a large proportion of the $15 million, nearly a third of it. It is also reasonable that Western Australia should obtain SI .5 million. It is clear that it is in those States that support is most needed to stimulate the building industry, and this fact has been recognised. If we look at the figures for building approvals for Australia as a whole, without breaking it up into States, we see that the decline has occurred in the public sector, the Government sector, and this is another reason why it is completely logical for the support to be given to that sector. Over the same period, from February 1965 to February 1966, the decline in the private sector in Australia was only 5 or 6 per cent. The decline in approvals in the public or government sector was about 40 per cent. So a short term strong stimulus had to be applied to the govern ment' sector, and this is what is being clone. The recent monetary measures introduced through the savings banks will assist the other sector.

This measure has been described as a short term stimulus to the Australian economy for social reasons in order to preserve full employment and ensure that people can progress in the community. One or two matters touching on some of the comments made by the Deputy Leader of the Opposition (Mr. Whitlam) are worth considering. He spoke of 'town planning. He wants a committee appointed to consider town planning. This could be done if you want to remove all authority from local government bodies and other people who are now responsible for town planning. In Brisbane the City Council has tremendous authority in respect of the provision of roads, sewerage and services to the suburbs. It is responsible for town planning, but it is town planning of such a nature that the suburbs will have to bear the cost of it. It was claimed that if the heart of the city were renewed, services would become cheaper. In Brisbane there is a local authority. It is controlled by people of the same political faith as honorable members opposite. It is building a town square. The building of the town square is in my opinion a most inappropriate use of the people's money at a time when services in the suburbs are lacking. The square will cost several million dollars. It will put out of action a large part of the centre of the city. Its construction will channel money away from the provision of sewerage, transport and other services in the suburbs. I am unable to see any economic benefit flowing from this refurbishing of the centre of the city of Brisbane. This is an example of town planning gone wrong. It is the kind of town planning which one would hesitate to allow some people to do. First things first. I submit that services come before non-essentials. But in this case in the northern capital services have come a long way last.

This measure may be considered from the aspect of the stimulation it will provide to the building of houses in provincial towns. If the young people of the provincial towns leave their areas to seek work before marrying, there will not be the demand for housing in those towns or cities which could quickly refurbish me local economy. As the honorable member for Maranoa (Mr. Brimblecombe) knows, if 30 or 40 per cent, of the young people of the town leave to find work the demand for housing, which can be a useful stimulus to a local economy, is reduced. This situation applies in many Queensland provincial towns. Without a high marriage rate and a strong demand for workers, there is not room to manoeuvre in order to stimulate housing and local business conditions. I know that this subject is tied up with the problem of decentralisation but what I have said highlights the fact that the use of housing as a stimulus does not apply equally in all areas of Australia.

Let me give an example. We know that owing to the recent drought there was a downturn in the economy. This began in the latter months of last year. In Queensland it began a couple of months earlier. We know that the downturn coincided with a downturn in the number of houses commenced. 1 am not now talking about houses completed. In Queensland the downturn in the economy occurred notwithstanding a constant improvement in the rate of approvals for houses and in the number of houses commenced. Applying remedial measures to housing without being aware of the need for housing in precise areas can over stimulate certain areas and under stimulate others. The manner in which the $15 million provided in this Bill will be distributed indicates that assistance will be given to those areas where it is most needed.

This Bill follows other proposals that have been announced recently to stimulate the economy. I refer to certain monetary proposals, including the release of money from the statutory reserve deposit. I refer to the new lending arrangements for housing adopted by the savings banks. I refer to the money provided for drought relief in certain areas. The net result of all of these proposals is that Australia is climbing up more quickly than ever before from the downturn in the economy brought about by a tremendous drought. This is important. Since the effects of the drought were first felt, unemployment has risen only minimally and is currently declining. Overtime, which had declined, is again rising. Various other economic indicators are rising.

This measure, which must be considered in conjunction with other proposals adopted by the Government, should be appreciated. lt and the other measures represent the most sensitive and the quickest response to a decline in economic conditions that we have ever witnessed. The Government's proposals in general, which should be considered from the point of view of their social impact, deserve the highest approval. The Government is conscious of the need to maintain employment at a high level, lt has ensured that employment will be maintained at a high level in the building industry notwithstanding a decline in building activity. This Bill is a most valuable contribution towards the maintenance of a high level of employment in the building industry.

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