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Wednesday, 30 March 1966


Mr IRWIN (Mitchell) .- I desire to reply to a statement made by the Deputy Leader of the Opposition (Mr. Whitlam) in relation to town planning. Town planning as it has applied in New South Wales has been responsible for a tremendous increase in the price of building allotments. Prior to the advent of the Cumberland County' Council, which later became the State Planning Authority, building blocks in areas such as the city of Parramatta could be purchased for £400. When the Cumberland County Council who established it coloured the map of the metropolitan area of Sydney with various colours which denoted certain zones, what happened? We found that the home seeker, who should be one of the most assisted persons in the community, had, within two years, to pay £1,000 for an allotment he could have bought in 1950 for £400. Before this zoning scheme came into being people who owned farm lands would have been happy to sell land to any developer for £200 an acre, but immediaately the Cumberland County Council designated their land as either residential or industrial a black market was created.

Naturally the people who owned this land wanted the highest price they could get. The action of the Cumberland County Council sent the price of land in parts of Blacktown and St. Marys up to £1,500 a block. But for the action of this authority allotments in those areas could have been purchased for no more than £700 each.

Socialistic legislation always acts against the small man. We have in New South Wales many men of great ability who could start out in an engineering business of their own if it were not for the terrible price of industrial land. In Artarmon an acre of industrial land costs £35,000 and industrial land in the Blacktown area - land, at present being used as farm land - cannot be purchased for less than £5,000 an acre. This has happened in a free country simply because this octopus, the Cumberland County Council, later the State Planning Authority, decreed that there should be a zoning plan. Local authorities have ordinances which set down their requirements. Provided people who want to develop an area by commencing an industrial establishment comply with those ordinances why should they be prohibited from doing so? Why should they be forced to set up their businesses in areas prescribed by the State Planning Authority? The present situation is against all ideas of justice. It is against freedom under our British heritage and is a living disgrace to the people who allow such things to occur.

As I said, in the case of all socialistic legislation it is the small man who gets hurt. Many men with great engineering ability could establish themselves if it were not for these requirements. I well remember as a bank manager starting a young man off in business who had but £200. Last year the Broken Hill Pty. Co. Ltd. took over his works when he was employing 1,000 men. There are many men of that calibre with similar ability. They have the ambition but they have not the capital. With the present set-up in Sydney they have no possible opportunity of starting a business because, as I have said, land for industrial purposes would cost them from £5,000 an acre. We want to get back to free private enterprise. These men should be given a chance. At present they have to continue to work for a boss, whereas but for these regulations they could obtain patents and develop the ideas that they possess.

The Deputy Leader of the Opposition spoKe about investment in housing. No reasonable man can be expected to build a house in New South Wales for letting purposes under the present State Landlord and Tenant Act. After all, an investor is entitled to a reasonable return, but under the New South Wales Landlord and Tenant Act that return is denied. Mention has been made of the great housing commissions. Immediately after the war these commissions had an up to 80 per cent, call on all building materials, leaving other building authorities only 20 per cent, of the available materials. What did we find? We found wholesale inflation. - Naturally, once a black market is created costs increase and there is inflation. I think it would have been much better if these housing commissions had not been created. People would have obtained their homes at a lesser cost than they have had to pay during the intervening years. I have an extensive knowledge of this subject, because I had the unique experience and considerable pleasure of assisting 1,500 battlers to get their homes. Most of them did not have £200. Any bank manager can arrange for a home to be built if the borrower has a block of land and £500, but I built 1,500 homes under the sub-contract method. They cost £600 less than the selling price of homes built by Mala Homes Pty. Ltd. Mala Homes Pty. Ltd. was financed by the Rural Bank of New South Wales. "Mala" is " Alam " spelt backwards and Alam was a member of the Legislative Council. He received preferential treatment from the Rural Bank of New South Wales. I can prove, from the specifications, that the homes I arranged to have built, using the same methods as those used by Mala Homes Pty. Ltd., cost £600 less than that company was charging for its houses. The houses were identical. These are facts and should be known to people on the sidelines who want to see the young married couples get a home at reasonable prices and on reasonable terms.

The honorable member for Hughes (Mr. L. R. Johnson) said that insurance companies were not now providing finance for home building. That is not a fact. Most insurance companies will lend money to a person who is willing to take out an insurance policy for the full amount of the loan. As a bank manager, I was not prepared to recommend to my bank thai i. should lend money to building societies so that they in turn could finance home builders. 1 told my bank that I could lend all the money it had available in Blacktown, keep it under my supervision and ensure that the borrowers obtained a better type of home at a lower cost. My attitude was that once I lent money, whether it was for a home, a farm or a business, I wanted to become the borrower's best friend and have his respect for the rest of his life. Unless this attitude is adopted by those who lend money, they are false to themselves and to the institution for which they work. Unfortunately, many people who lend money do not approach the task in that way. I have known people who have agreed to buy a home for £400, £500 or £600 more than the home was really worth. I have pointed this out to them. If they have insisted on purchasing the home, I have refused to lend them the money because, if I had lent it to them, I would not have been their best friend. However, they could go to other institutions that did not care what the purchase price was so long as their equity in the home was adequate.

Sitting suspended from 6 to 8 p.m.


Mr IRWIN - Before proceeding to discuss the Bill, I should like to reply further to the Deputy Leader of the Opposition and the honorable member for Hughes who spoke about slum clearance. I suggest that' they would have been bettor occupied if they had used their influence within the Australian Labour Party to put first things first. Had £24 million been made available for slum clearance instead of for the colossus which we call the Opera House, great benefit would have accrued to the nation. The theatres in Sydney will be adequate for some time to cope with the number of people who are likely to want to see an opera. I am not against culture but I put first things first. The Opera House could have waited for many years until our population was sufficient to warrant such a vast expenditure.


Mr Peters - Where would the honorable member and I be then?


Mr IRWIN - I do not know where the honorable member for Scullin would be, but I would like to be in heaven. The purpose of the Loan (Housing) Bill is to authorise the raising of $15 million. This amount will be advanced under the Commonwealth and State Housing Agreement to the States during the remainder of this financial year. The amount of $15 million is additional to the $102 million already allocated under the Housing Agreement to the States for housing for 1965-66. The $15 million to be provided under this Bill will give a further stimulus to house building. Housing commencements reached an all time peak in the September quarter of 1965 but have shown a decline since then. Other building activity continued to rise throughout 1965, but recent monthly figures of approvals could indicate some decline in . this section also. Employment in the building industry as a whole has increased by 20 per cent, in the last three years and is still high. The demand for building materials has also been strong because of the unprecedentedly high level of other building activity.

From the June quarter of 1964 to the September quarter of 1965 dwelling commencements were never below 28,000 in any quarter. However, in the December quarter of 1965, commencements dropped to 24,850 and approximately this number of dwellings is expected to be commenced in the March quarter of this year. Despite the additional amount of finance, estimated at $24 million, that is being provided by the savings banks during the second half of 1965-66, the rate of recovery of housing activity is proving sluggish. This has induced the Government to apply a further stimulus in the form of the loan allocation of $15 million. It is clear that the general level of economic activity is high and is tending to rise, even if not quite so fast as six or eight months ago. The demand for labour is strong and unemployment is quite low for this time of the year. This seems to hold good for the building and construction industries almost as much as for any other part of the economy. But the Government does not regard housing as a residual factor which can reasonably be allowed to fluctuate as the play of economic forces would dictate; it recognises that whilst some degree of fluctuation is inevitable, the housing of the people is a social function and should be so treated in determining Government action.


Mr Kevin Cairns (LILLEY, QUEENSLAND) - Hear, hear!


Mr IRWIN - The honorable member for Lilley has already expressed that view. The level of housing should rise at a steady rate as needs increase. At the same time, pressures on resources which would have the effect of raising housing costs must be avoided. If costs go up rapidly, this will defeat the objective of a supply of good dwellings at moderate prices. This Bill is a reflection of that attitude. It is designed to give an appropriate stimulus to housing construction. The amount of $15 million tq be provided under this Bill and the additional savings bank lending add up to nearly $40 million of additional money. The Government believes that this amount will provide what is needed to get the industry, moving upwards again.

The main effects oi the $24 million additional savings bank lending will be seen in activity during the June quarter and the effects of the additional $15 million of loan money should also soon be felt. The $.15 .million is being put. out through the Housing Agreement because the Government believes that this is the quickest and most certain way to achieve the necessary stimulus. It seems likely that the States will exercise their rights under the Housing Agreement to allocate the major portion of the $15 million to their housing authorities as the surest and speediest way of increasing housing commencements where the need is greatest. These authorities are in a position to call tenders and get the construction of dwellings under way more quickly than private lending institutions. Moreover, the demands of young families and migrants on the housing authorities for moderately priced rental accommodation and homes that may be purchased on relatively favourable terms and conditions are increasing, whilst the number of dwellings being commenced by the housing authorities has been decreasing.

The $15 million will be allocated between the States on the basis of the allocation of the initial overall Australian Loan Council borrowing programmes for works and housing in 1965-66. In conformity with the provisions of the Housing Agreement, the additional advances of $15 million will be repayable by the States over a period of 53 years and will bear interest at 1 per cent, below the long term Commonwealth bond rate, which at present is 5i per cent. The

Housing Agreement requires each State to allocate to its Home Builders' Account not less than 30 per cent, of the advances made to the State under the Agreement, excluding the supplementary advances made for Service housing. The amounts so allocated to the Home Builders' Account are for lending to persons seeking to buy or build their own homes through building societies and through other lending institutions approved by the Minister for Housing. Home Builders' Account funds result in more dwellings being provided, dollar for dollar, than are constructed with the funds allocated to the State housing authorities. Loans made by building societies and other approved institutions from Home Builders' Account funds involve larger deposits from individual home seekers than when houses are bought from the State housing authorities, and the repayment period may not exceed 31 years. The repayment period of Commonwealth-State advances to the Home Builders' Account is 53 years and as instalments are repaid into the Account by institutions the surplus over what is needed to amortise the Commonwealth loan can be re-lent to other institutions. An actuarial computation shows that moneys advanced to the Account will be employed about twice over the 53 year amortisation period of the Commonwealth-State loans. The combined effects of the revolving fund operation of the Home Builders' Account and the provision of larger deposits on loans by building societies over the nine year term of the Agreement from 1956 to 30th June 1965 is illustrated in the following table -

Thus, on the average, one house was provided for each $6,092 advanced to State housing authorities for civilian housing whereas one house was financed for each $5,134 advanced to the Home Builders' Account. To make the comparison in another way, each $10 million advanced to the Home Builders' Account provided 307, or 19 per cent., more houses than the same sum advanced to State housing authorities. The advantages of the Home Builders' Account arrangement will become even greater in later years as the repayments to the Account increase. Mr. Speaker, I have much pleasure in supporting the Bill.







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