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Wednesday, 30 March 1966

Mr L R JOHNSON (Hughes) .- 1 support the amendment moved by the Deputy Leader of the Opposition (Mr. Whitlam). It outlines clearly the problems besetting the housing industry in Australia today. I cannot see how anybody could really oppose the amendment. Would any honorable member opposite, for example, take the view that the Commonwealth and State Housing Agreement has fully met the housing requirements of the Australian people? By our amendment we submit that it has not and that because of this failure some innovations should be introduced. The Deputy Leader of the Opposition has proposed that there should be an all party committee to look at the Commonwealth and State Housing Agreement before it is renewed in the middle of this year. The honorable member for Lilley (Mr. Kevin Cairns) seems to discount the advisability of such a course of action. He says that this is a small Bill and that it is inappropriate to move such an amendment; that it might be more appropriately moved when the next Loan (Housing) Bill is before the Parliament. Of course, that would be a fait accompli. The terms of the new Agreement would have been negotiated between the Commonwealth and the States and once again the Commonwealth Parliament, which is responsible for making these funds available, would have been denied a say.

The former Minister for Housing, now the Minister for Labour and National Service (Mr. Bury), on 17th August 1965 when discussing the Loan (Housing) Bill of that year said -

I expect before the end of this year - to consider a new Commonwealth and State Housing Agreement to extend or replace the existing Agreement. . . .

No doubt his successor, a lady senator in another place, has given consideration to the terms of the new Agreement, but one would have thought that in introducing the last measure to come up under the terms of the existing Commonwealth and State Housing Agreement some intimation might have been given to the Parliament about the new terms, if any, to be included in the Agreement. It seems to me as though the Parliament is being treated almost with contempt when such a cursory speech is made on such a vital issue.

I am not at all impressed with the honorable member for Lilley who says in effect: " This is a quick response to a crisis. There has been evidence of a housing shortage. Housing is one of the most remarkable reactors - the finest measure of sensitivity almost." The decline in the housing situation should never have been allowed to happen. During the course of- my several remarks in this debate I want to emphasise that the Opposition warned that a decline in housing would happen. In fact, the then Minister for Housing himself said that there was to be a deterioration in the housing situation. It is not good enough to try to placate anybody with the notion that there has been a sensitive response and that the Government should be commended for remedying a problem that it breathed life into itself.

This Bill pertains particularly to the State housing authorities, and they are very important. In answer to a question, which I believe was asked by the honorable member for Newcastle (Mr. Jones), it was stated that for the year 1963 the Commonwealth and State Housing Agreement provided funds for 30.9 per cent, of all Government financed housing and that the State housing authorities accounted for 14.9 per cent, of all commencements while 6 per cent, were represented by homebuilders' accounts - in other words, a total of 20.9 per cent, of commencements came under the provisions of the Commonwealth and State Housing Agreement. We are dealing with a matter of great consequence. This Bill is but further evidence of the Governments considerable incompetence in the housing field. The extent to which the Bill attempts to prop up the flagging rate of home construction is but a measure of the Government's past misdemeanours in this field. Here is a panic measure - a $15 million shot in the arm for State housing authorities and, through them, in some minor degree for the building societies. The Bill authorises the raising of $15 million loan moneys which will be advanced to the States and which will be repayable over 53 years, bearing interest at 1 per cent, below the ruling long term bond rate. I think it is important-

Mr Curtin - It is a smokescreen.

Mr L R JOHNSON - Yes, the honorable member for Kingsford-Smith says that it is a smokescreen. It is an aspect of the housing problem; not much more than that. It is that part of the problem pertaining to the low income section of the community for which the State housing authorities have been established. We have not yet during this parliamentary session had the opportunity to debate the housing problem at large. It is important to recall, for the sake of anyone who takes the trouble to read " Hansard ", that this is a loan to the States. Many people are under the impression that the Commonwealth gives the States money for housing. Of course this has never been the case. In fact, the Commonwealth has always been reasonably paid for the assistance that it gives.

On 21st October 1965 I had the privilege of moving an amendment to the Estimates in relation to the housing problem that the Opposition believed was pending at that time. I then moved -

That the proposed expenditure for the Department of Housing be reduced by £1.

In so moving I said -

I do so as a mark of concern at the Government's failure to ensure an adequate flow of finance for housing.

Then, in the supporting argument which I advanced - and which a number of my colleagues advanced also- I mentioned that there was a decline in approvals from 10,128 in the September quarter of 1963 to 8,286 in the June quarter of 1965. I indicated that loan money had fallen from a peak of £31.5 million in the September quarter of 1963 to £26.9 million in the June quarter of 1965. 1 stated that approvals were running at the rate of £140 million in 1965 as against £155 million in 1963-64. The Opposition moved, using the traditional forms of the House, that the departmental estimates be reduced by £1, for the express and specific purpose of alerting this Government to the tragedy which was befalling Australian housing construction. What we put forward was not even hotly contested by the Minister for Housing of the day. He concurred with what we said and, indeed, he had even preceded what we had said with warnings of his own. Yet the honorable member for Lilley has the audacity to stand here today and commend the Government for its sensitive response to a problem that it stood by and watched develop. He seems to think of this in terms of bare economics. On one occasion someone was referred to in the House as an elongated academic egghead. I would not cali anyone names like that, but it seems to be a matter of great regret that there is not a greater inclination on the part of the honorable member for Lilley and those who sit with him to think about the human aspect' of this problem, not just the economic graph that he referred to when speaking of the situation averaging out over a period and so forth.

The clear fact of the matter is that every bird has its nest but every Australian does not have his home. This is 1966, when nations are talking of sending men to the moon. We are one of the most affluent nations by virtue of our capacities and great resources, but we are incapable of providing the young people of our community and, indeed, the old people of our community, and many in between, with a fundamental of life - decent homes. Now we come to the panacea - this Bill to provide $15 million for State housing authorities. Sums expressed in dollars seem to be larger than equivalent sums expressed in terms of the old currency. This $15 million or £7,500,000 is an infinitesimal sum when compared with the total Commonwealth budget. Let us assume that $10,000 or £5,000 is the cost of a home, including land. No-one can say that that is an unreasonable assumption. If a person can buy a decent home for $10,000, he is doing fairly well. In the suburbs of Sydney - I suppose this applies also to Melbourne and other capital cities - land costs up to £2,000 a block. That is the sort of price that has to be paid even as far out as 17 miles from the hub of the city. If there were effective planning authorities, the exploitation which is taking place at present would be avoided. If the Commonwealth and State Housing Agreement made provision for the forward acquisition of land in association with industrial development, young people would not be held to ransom. They would not have to pay between £2,000 and £3,000 for a block of land on which to build a home.

Taking the cost of a home at $10,000, the $15 million mentioned in this Bill would build only 1,500 homes throughout the six States of Australia. As there is a lapse of between two and three months from time of approval to time of commencement, we can see that there will be a continuing housing problem for some considerable time to come. However, it is important to note that only $10.5 million or £5.25 million will be used by the State housing authorities. The balance is to go to the building societies. At £5,000 or $10,000 a house, this means that only 1,050 homes can be provided by the State housing authorities for low income earners throughout Australia - the people who are not able to raise large deposits, the people who have to rent houses, the people who can buy only on the smallest of deposits, the people who, since 1945, have had to look to the State housing authorities to provide them with homes because nobody else would measure up to their circumstances. The honorable member for Mitchell (Mr. Irwin), who has been interjecting, knows something about banking. He knows just what kind of finance can be obtained from the banks for housing, and he would be the first to concede that for the thousands of low income earners there is no alternative to the State housing authorities of this country.

Our first complaint is that the Bill should not be necessary - because the Government could easily have taken action to avoid the crisis which it now claims to be facing up to. Why did the Government fail to make sufficient funds available to the State housing authorities in its Budget for the year 1965-66? The sum provided under the Loan (Housing) Bill 1965 was £350,000 less than was provided under a similar Bill the previous year. How could this lower provision be justified in the face of rising costs, a soaring number of applications and an expanding waiting period?

One thing that causes me and many other people interested in housing a great deal of concern is the tendency on the part of this Government to use housing to regulate the economy. Why is the tap being turned on now after the flow has been stemmed for so long? Housing has become an economic weapon in the hands of the former Treasurer and the present Prime Minister (Mr. Harold Holt). I suppose that one of the hazards of having a spear fisherman as Treasurer is that he may have a tendency to have a stab at things now and again, and the stab often is not an accurate one. I am not alone in arguing this way. As recently as 11th March 1966, Mr. A. M. Gall, President of the Master Builders Association of New South Wales, had this to say -

The building industry is being used as a tool to regulate the economy.

This is probably the academic approach, but it is an inhuman approach, lt ignores the hopes and aspirations of thousands of people who are desperately in need of homes. It ignores the hopes and aspirations of young couples, of parents with growing families and of aged persons.

Even the former Minister for Housing, the present Minister for Labour and National Service (Mr. Bury) predicted this calamity in his speech on the Budget on 2nd September 1965. On that occasion he said -

Savings bank lending for housing has fallen progressively in the past IS months and a further decline seems likely.

He went on to predict that housing loans would decline because of a slowing down in the rate of increase in savings bank deposits. But apparently even the Minister's warning was disregarded by the former Treasurer. The Opposition's warning certainly was disregarded. It moved an amendment to the Estimates for the specific purpose of drawing attention to this very crisis, and the amendment was rejected. The sequel is the present disaster.

On 17th March 1966, the present Treasurer (Mr. McMahon) said -

The home building rate dropped back from nearly 117,000 commencements in 1964-63, but in the last December quarter they were still at a rate of 100,000 a year.

Commencements had dropped back from 117,000 a year, but the Treasurer drew consolation from the fact that they stood at 100,000 a year. If ever there were guilty men in this matter, they are honorable members sitting on the Government side.

If we examine the latest official figures - the contemporary statistics, those supplied to the Parliamentary Library today by the Commonwealth Statistician - we see that, whatever measurement we apply, there has been a very serious decline in the housing position. For example, I point out that the number of new houses and flats approved in the three months ended in February 1966 was only 22,293, compared with 25,681 in the corresponding period last year. In terms of expenditure in dollars, the total value of new houses and flats approved for the three months ended on February 1966 was only $168 million, compared with $185 million for the corresponding period last year. There has been a decline to $339 million in the total value of all buildings approved in the three months ended in February 1966 - a decline from a total of $432 million for the corresponding period last year.

The figures relating to buildings other than homes and flats - 'that is, commercial buildings - disclose an expenditure of only $129 million for the three months ended in February 1966, compared with $202 million for the three months ended February 1965. Pages and pages of official statistics indict this Government for its actions. The Government was warned that this crisis would occur. The fact that a crisis is upon us and is being felt by the homeless is manifesting itself in a million unhappy ways such as people crowding in with their in-laws and families living in rooms, shanties and temporary dwellings. Building tradesmen lost work for a short period and entrepreneurs found that their capital could not be used for building, with the result that instead of the usual lucrative return on their capital they received only 3i per cent, or whatever interest rate one receives for money left in the bank. There are many who feel unhappy about this matter. That they are unhappy about the attitude of the Government will be indicated at the first opportunity the people have to express their views at the ballot box about these matters.

Headlines and news items in our Press in relation to housing have been confronting us day after day and week after week over a long period. I go back to 3rd September 1965, when the "Sydney Morning Herald " reported -

Savings bank Iendings would probably drop and home seekers would have to obtain finance from other quarters. . .

The headline in the " Australian " on 5th October 1964 read: " Home loans fall by £lm. over 3 months." The article began -

Lack of money has caused a sharp fall in New South Wales house-building in the last three months.

The article went on to refer to the dilemma of building societies and stated -

Funds available to terminating building societies have fallen by £1 million in this period.

The "Sydney Morning Herald" of 9th October 1965 published an item under the headline " Home fund fall more noticeable." The article read in part -

The two-monthdecline in housing finance had become more noticeable in the last two weeks. . . .

This statement was made by the President of the Master Builders' Association of New South Wales. The "Australian" of 25th February 1966 under the headline "Housing lowest for 3 years," reported -

The number of house and flat approvals in Australia in January were the lowest for three years.

The " Sun " on 24th February 1966, published an item under the headline - "$4m. loss in N.S.W. Big slump in home building." It stated -

There was a dramatic slump in Australian home building in the three months ended January this year.

On 6th March 1966 under the heading, "January home-building approvals down 20 per cent." the " Sydney Morning Herald" reported that building approvals for houses and flats in January were 20 per cent, below the figure for January 1965. So this sad and sorry story goes on.

I come to the 28th March 1966 when it was reported in a New South Wales newspaper T

Fewer bornes have been built in N.S.W.

N.S.W. councils have approved 3,374 fewer homes this year than for the corresponding eight months of the last financial year.

If anyone wishes to draw any pride, solace or consolation from that barrage of. news paper cuttings, which represent only a handful of the number on housing that can be gathered in a matter of minutes in the Parliamentary Library, then he can do so for what it is worth.

Honorable members do not have to take the word of the journalists in this regard. They can look at what the authorities in the home building industry have to say. The Housing Industry Association in a letter addressed to me on 7th March 1966 said -

As the largest National Organisation representing the Housing and allied Industries, we feel it our duly to emphasise the seriousness of the present situation. The most vital factor influencing the situation is the lack of finance for home purchasers, and this factor is the prime reason that Building Permits for new home construction for New South Wales are down by more than 20 per cent, over the past six months, as compared with the same period for 1963.

The Association went on to say -

We would stress that the falling off in production is in no way due to the diminished demands for housing. In fact, many thousands of home seekers, including Migrants, have tentatively agreed to purchase cottages or Home Units, but are unable to complete the transaction owing to shortage of suitable finance.

I come now to the magazine which is published as the official journal of the Association of Co-operative Building Societies of New South Wales Ltd. It is " Your Home Magazine ". Mr. Carl Weekes, the President of this Association said in that magazine -

The Building Society Movement is alarmed at the present shortage of money for home building. It has, for nearly thirty years, fought for the maintenance of a home-building industry at peak efficiency - it sees no need for a boomanddepression economy in this essential industry.

Mr. Weekeswent on at great length. He said in part -

Over the last 13 years the rise and fail in funds to Building Societies has been extreme.

He mentioned the figures and then continued -

We maintain that this fluctuation is reprehensible and shows a lack of awareness of a National duty to the small income-earner by some Banks and Insurance Companies.

I add that this fluctuation shows a lack of awareness on the part of this Government in that it has allowed such a fluctuation to take place and such uncertainty to prevail.

The clear fact of the matter is that building societies at the present time are getting a raw deal. The Australian Labour Party has provided in its policy for a completely different arrangement. The Federal platform of the Australian Labour Party provides that we will -

Ensure adequate finance to Building Societies by requiring banks and assurance companies to divert a prescribed proportion of securities to a central Building Society pool for allocation by a high council of Society representatives to individual Societies.

The clear fact of the matter is that the Commonwealth and State Housing Agreement has been mutilated and much of these funds has been diverted to building societies. In four years, £68 million has been diverted from the State housing authorities to building societies. Previously, funds of building societies had come substantially from insurance companies.

Mr Cleaver - What is wrong with that?

Mr L R JOHNSON - This is what is wrong with it. This Government has allowed insurance companies to substantially withdraw from the field of housing. Those companies have not shown the sense of responsibility that they previously demonstrated. This denial of responsibility has been acquiesced in by this Government which has allowed the insurance companies to do this. In diverting money from State housing authorities to building societies we do not make additional funds available. We simply substitute funds for the moneys previously made available by the insurance companies. There is a sense of irresponsibility on the part of honorable members opposite who fail to realise that the insurance companies have as large an obligation in the handling of the money of their clients as banks have in handling the money of their clients. This obligation is to use the deposits for the purpose of advancing the wellbeing of the Australian people. As far as honorable members opposite are concerned, insurance companies can be as free as the breeze to invest their money in sheep stations, hire purchase businesses, or anything of that sort which can exploit the Australian people. Honorable members opposite have not one skerrick of interest in ensuring that the money held by insurance companies, which has come from members of the people, is used for purposes which will advance their welfare.

We express concern about that matter. We express concern also about the haphazard nature of the flow of money for building societies especially. As indicated in the amendment moved by the Deputy Leader of the Opposition, we are concerned that this Government has not indicated as yet that it is prepared at this appropriate time when a new Commonwealth and State Housing Agreement is being drawn up to provide for slum clearance, and the restoration of the rental rebate scheme which, after all, is designed to help the little bloke, the underdog. Indeed, the Government has failed to recognise the peculiar and tremendously urgent housing needs of the aged people in our community. For these reasons, we are not satisfied with the paltry assistance that this Bill provides for the lagging home construction industry throughout Australia.

Debate (on motion by Mr. Irwin) adjourned.

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