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Thursday, 27 February 1975
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Mr McLEAY (Boothby) -This Bill seeks to appropriate an amount of $25m for the establishment of an Australian Housing Corporation which subsequently will be financed by an unknown and so far undisclosed, appropriation from general revenue. The legislation was introduced initially into the Senate in the dying moments of the last sitting by Senator Cavanagh, who was representing the Minister for Housing and Construction (Mr Les Johnson). For some reason, known only to the Government, the Bill was withdrawn from the Senate and introduced into this House last week. It was interesting to note that the second reading speech of Senator Cavanagh bore absolutely no resemblance to the second reading speech of the Minister for Housing and Construction. Yet the Bill is completely unchanged. One of the reasons obviously is that the speech by the Minister for Housing and Construction in this House last week was one of his typical public relations exercises. It was designed to conceal the true purpose of the legislation in a sea of words and pious hopes, all aimed at securing headlines in the media. The Government is saying one thing when it means another and, consistent with its behaviour in the past, it purports to demonstrate concern for the individual when in fact it has no interest in the rights of the individual at all. All this Government seeks is total power for the Government

The Opposition has studied the Bill very carefully for the purpose of suggesting amendments to improve it, but there is little in the Bill which could be considered to be in the national interest and a full range of amendments would emasculate the Bill entirely. We therefore oppose it outright. In the first place we believe there is no need for a Canberra-run housing corporation which, in fact, would be a Canberra-run housing commission competing with each of the commissions in each of the States. If the Government has surplus funds for this purpose we believe that the money should be channelled directly through the existing structures already established in the field.

The Government claims it has the constitutional powers to do this and the Opposition makes no comment on this aspect of the constitutional powers with respect to the Bill. Even if it were established that the powers asserted by the Government are constitutional, we reject the Bill because we believe that it is a retrograde piece of legislation. There is no need for it and it is a gross waste of resources. At a time when the Prime Minister (Mr Whitlam) is claiming that the Government will cut back public spending, the Government is actually expanding public spending in this unnecessary and wasteful manner. We believe that it is an extravagance that Australia can well do without.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - What, money on housing?

Mr McLEAY -What does the Minister think? Is he prepared to say where the Government would cut back on expenditure?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - But you are saying it is extravagant to spend money on housing.

Mr McLEAY - The Government has said it is going to cut back on expenditure. I think it was last week that it announced an expenditure of $17m and this week an expenditure of $25m to set up what is an unnecessary corporation. I say that is a waste of money. We believe this legislation is an exercise in empire building by the Minister for Housing and Construction in competition with the Minister for Urban and Regional Development (Mr Uren). It is consistent with the Government's philosophy to seek total control over all aspects of our lives- Big Brother style socialism. The Minister for Housing and Construction has not told us how much money is to be advanced from taxpayers' funds, nor does he tell us at what rate of interest the Treasurer (Dr J. F. Cairns) will be advancing moneys to the proposed corporation. I would have thought this to be a significant question.

Dr Edwards - A key question.

Mr McLEAY - Yes, it is very important. To obtain a proper assessment of the Government's intentions it is necessary to study everything except what the Government is now saying. It is especially revealing to study the Minister 's earlier well-placed leaks to the Press. On 2 1 September 1974 there was such a leak and I quote from the Press report:

According to a spokesman -

Apparently in this case it was not the Minister but a spokesman for the Minister - the new Australian Housing Corporation is being given powers to buy land, build housing estates, and provide mortgages for people earning up to $8,000 a year.

That is not spelled out anywhere in this Bill. I quote again from the same Press report:

The Corporation will provide the focal point for the Government's plan to have trade unions, and possibly the ACTU operate terminating building societies.

This is not mentioned in the Bill, nor has there ever been any indication from the Minister whether the financial allocation for the ACTU 's proposed housing schemes would come from the States or from the Commonwealth. The Bill does mention assistance for 'classes of persons'. It seems that the Government has in mind selective assistance according to certain income levels which will be decided solely by regulation. In my view, to govern by regulation is a very slippery way to govern. It is on the track to totalitarianism. There is no right of appeal in this Bill. This is not explained in the Bill; we have to guess at what the regulations are and accept them. In the same Press release in September the Minister said:

With new methods and cheap land now held in stock by the defence service homes scheme the Corporation will hope to offer lower priced homes than are now available.

Dr Edwards - There is some chance of that happening.

Mr McLEAY - The Government has not explained this in the Bill at all. All it has mentioned is that the defence service homes loan funds are to be transferred to the Corporation. These funds amounted to $986.6m at 30 June last, with total receipts last year standing at $ 1 .5m. It seems that it is the Government's intention to use this money ultimately for persons other than ex-Service personnel. Once again, the Bill does not state this clearly but it was referred to in an earlier Press release of the Minister when he used the expression 'rotating the funds'. The Minister is laughing; I do not know whether in agreement or not. On 10 December 1974 somebody leaked a similar story to the Press following a Cabinet discussion on the proposed housing corporation. Apparently the Minister had said:

At first the Corporation will concentrate on lending directly and indirectly to servicemen, ex-servicemen, and low and middle income families.

I ask the Parliament and the people: What right has the Government to use ex-servicemen's housing funds for persons other than exservicemen? Equally, what right has the Government to use land already purchased for defence forces homes for other purposes? We believe the answer is: No right at all. The Minister's Press release on 12 February 1975 was no more helpful than his second reading speech. He talked about 'considering low repayment second mortgage loans '. I do not know whether it is possible to underline words in Hansard reports, but if it is I would like to underline the word 'considering'. The Government is always considering. The Press release further stated:

The Government could provide second mortgages . . . these special second mortgages could have very low repayments in the earlier years.

The Minister asserted that the scheme would assist one in five Australian homebuyers, which is all great material for a Johnson Press release, but pure waffle when the positives are examined. The only positive statement by the Minister about this proposed corporation which is clearly honest is:

Specific schemes are not yet finalised.

With magnificent rhetoric he asks:

Why should the home renter be neglected?

We believe this is a fair question and ask the Government the same question because once the Government abandons the home savings grants scheme there will be absolutely no legislation to assist renters to become home owners. I dc not believe that this Government is sincere when it claims to support the principle of home ownership, and nothing in this Bill or any other Bill introduced in the last 2 years will do anything except assist those classes of persons favoured by the Government. Nowhere in this legislation is there an indication that the desirable social objective of home ownership is to be pursued.

Dr Edwards - Government supporters do not believe in it.

Mr McLEAY -They say they do but in fact this Bill demonstrates that they do not. The Liberal and Country Parties do support the principle of home ownership for those who wish it and we believe it is the right of all Australians to be able to strive for, achieve and choose their own design and location in housing. The Government claims that this Bill will assist the lower income earner to purchase a modest home or other dwelling unit or to obtain adequate rented accommodation in cases where home ownership is not reasonably attainable or, in certain circumstances, not desirable'. What these words mean is that the Labor Government, like Big Brother, will tell the lower income earner, who is as yet undefined, that lie has no hope of obtaining a home, or that he is unsuitable to be housed in a home or that he is suitable to be housed only in rented premises. He will be put in the appropriate accommodation according to where the Government believes he or she should live.

Apparently the Government envisages the lower income group as- to quote from the Billthat large section of the community who are at present not catered for by the existing public housing authorities. The Bill does not explain just who comprise this section of the community, but under clause 6 of the Bill it would appear reasonable to regard that large section of the community as very nearly one-quarter of the Australian people. I ask the House: What can be more divisive, more damaging to the Australian people, than a centralist socialist bureaucracy dictating its own terms by the device of regulationdividing the community into various groups who may receive a housing loan at subsidised interest rates and other groups who may not?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - You would not help anyone.

Mr McLEAY -We will see about that. Our own record in the past gives the lie to that. The Government should bring down interest rates for everyone- that is the simple answer. It should give every Australian home-seeker a chance to service his debt. All that this Bill will do is to assist one section of the community at the expense of the other. The Government has done nothing to lower interest rates. With the longterm bond rate remaining at 9lh per cent Australia now has the highest interest rate on record. Labor promised low interest rates, lower priced houses and a socialist Utopia for city dwellers. Like so many other Labor election promises, these have been broken. The interest rate structure is cockeyed and unfair, and every measure that the Government takes only exacerbates the position- including this Bill.

Some Australians who can bridge the deposit gap can expect to be paying 5% per cent for their housing money; others up to 12 per cent- 14 per cent on first mortgage, and some over 20 per cent on a second mortgage. Every measure that the Government has adopted has further distorted the interest rate structure in this country and, given a continuance of its gross mismanagement of the economy, it seems likely to us that interest rates may creep even higher before the year is out. Is not that a reasonable suggestion?

An examination of the Bill itself shows that it seeks additional powers for the Commonwealth but does not indicate how these powers will assist the building industry or home seekers, except once again, those favoured by the Labor socialist Government. The Government has blamed the private housing sector for inflation and the current recession in the industry. This is clearly untrue. It is simply this Government's mismanagement of the economy which has created inflation, unemployment, and the highest interest rates on record. This Bill will not reduce inflation, unemployment or interest rates overall.

The cost of building a modest home is escalating more rapidly than the average Australian's wage. Last week figures issued by the Bureau of Statistics showed that the cost of building materials had increased more than 22 per cent for the period December 1973 to December 1974.' In the past when this has happened the Minister has invariably issued an optimistic Press release which has conveniently overlooked this inexorable cost escalation, and has usually referred in cheerful terms to the slackening of the increase compared with the previous month. On this occasion the increase for the month of December was actually less than for the month of November, but the Minister has remained unusually silent. As long as this rate of costinflation in the building industry continues, combined with high interest rates, fewer Australians will be able to afford even a modest home, no matter what the Labor socialist Government says it will do.

The private sector builds more than 90 per cent of the houses in Australia. It does not matter how many building corporations the Government sets up, they can never take the place of the private building industry. The purpose of the Corporation is obscured under the guise of consolidating existing but incidental Commonwealth powers into one corporate identity. These authorities are extended far more widely to embrace housing for any purpose of Australia or authority of Australia, and in this respect the Bill seeks to assume, I submit the role of the private housing sector.

In Australia last year there was a shortfall of 38 000 houses which will certainly be repeated this year, and this, combined with the cessation of private investment in flats, will mean that it will take many years before most young Australians will be able to achieve home ownership- if ever. Implementation of this legislation will do nothing to alleviate unemployment in the building industry, as claimed by the Minister. At the end of January there were more than 14 000 on-site building workers registered as unemployed. For every on-site worker there are four in the building supply trades, which means that at the end of January 70 000 of the 31 1 000 unemployed in Australia were directly or indirectly connected with the building trade. It seems likely that these figures could increase to 100 000 when the February statistics are released shortly.

As further evidence of the Government's intention to become a constructing authority, the Bill envisages that the Corporation will use existing resources of the Department of Housing and Construction; or, by arrangement, those of State government authorities, and the private sector. The words 'existing' and 'arrangement' in this context seem to signal that it is the Government 's intention to engage day labour which, as we have seen in South Australia, becomes grossly inefficient and wasteful of public funds. The Parliament House in South Australia is currently being repaired and renovated. The estimated cost was about $500,000. 1 believe that the cost has now risen to about $2m, as a result of the day labour process adopted by the South Australian Labor Government.

This legislation allows for a building and construction authority which can operate anywhere in Australia. Not only will it be competing with State housing authorities, it will also be competing with other development bodies, such as the Orange-Bathurst and Albury-Wodonga development authorities. Even within the Commonwealth, the Corporation will have the capacity to undertake building and construction work of its own volition provided it is not inconsistent with the National Capital Development Commission Act. We believe that this is contrary to all good planning principles, and is wasteful of resources. Even the Government's own advisers on land tenure- the Else-Mitchell royal commissionstrongly recommended that the management and control of land use should be under the one authority. The establishment of this Corporation will only further fragment such controls.

Under section 29 of the Bill the Corporation can lend directly to a person for the building or purchase of a dwelling, or it can lend to an approved lender for lending to other persons. The Corporation would have the power to determine the terms, conditions, circumstances and classes of persons to whom such loans may be made. The Opposition believes that the use of this process may counter, to some extent, cyclical fluctuations in the supply of housing finance, but it hardly seems necessary to establish an entire new bureaucracy, which is a duplication of other housing authorities, when there is an existing financial structure established to distribute housing finance. We remind the Government that only just 3 or 4 months ago it injected $ 1 50m into the supply of housing finance via the savings banks. At that time we made the suggestion that at least some of that money should have gone through the permanent building societies, because very little of the money has helped the building industry.

Clause 53 of the Bill gives the Government virtual total power to make any regulations which are not inconsistent with this Act. In short, the Corporation using this power can lend to whom it wishes and on whatever terms it wishes, and can do all things except borrow money. Is that your interpretation of it, Mr Minister. I think it is. Clauses 49 and 10 are especially repugnant to the States which have been involved in the public housing business for many years. Under Clause 49 the Corporation is given power to compulsorily acquire any land for its own purpose, including land that is Crown land of a State. Under clause 10 the Corporation is only required to have regard to the responsibilities of other Commonwealth, State or local government or other interested bodies, and- this is the important part- to consult with them when appropriate. There is no requirement whatever upon the Corporation to act in agreement with those authorities.

The Opposition believes that there is no need for the establishment of yet another Draconian bureaucracy which, in spite of the Minister's statements, can only be a competitor of the State housing commissions. It is an extravagant use of public funds which Australia simply cannot afford. Quite apart from the initial $25m and the Defence Service home loan funds, vast sums of public moneys will be required to finance the project around the Commonwealth.

Sitting suspended from 1 to 2.15 p.m.

Mr McLEAY - Just before the luncheon break I was making the point that the Opposition considers the setting up of the Australian Housing Corporation as a gross waste of public funds which the country cannot afford. Quite apart from the initial $25m and the defence services homes loan funds it will use, vast sums of public money will be required to finance the project around all the States and the Territories. The total funds employed by the combined housing commissions for the year ended 30 June were almost $2-5 billion. The housing commissions at that time employed staff of approximately 6 000 people altogether, and for the year ended 30 June 1973 they constructed approximately 12 500 dwelling units. That figure represents less than 10 per cent of housing completions in Australia. The proposed Corporation, which we are discussing today, could have only the same effect. The situation is unreal. The cost of building the 12 500 dwelling units a year or so ago was $135m. One wonders whether the money which will be advanced by the Treasury during the next 12 months will come from tax receipts to finance the Corporation. We make the point that this is not the way in which to cut back public spending. We wonder to what extent funds will be required for land acquisition. We make the point that a federal housing commission, which is really what the Corporation will be, could not achieve better results than the combined State housing commissions. If we lump them alltogether we find that the State housing commissions, and the Housing Trust in the case of South Australia, are currently using more than $2.5 billion in capital. We believe that that is an unreal situation. It is nonsense for the Government to claim that its Housing Corporation will complement the housing commissions. In our view, the Corporation will ultimately shrivel them out of existence.

I want to have recorded in Hansard a portion of the first page of the report of the Queensland Commissioner of Housing for the year ended 30 June 1974. It sets out the principal functions of the Commission and highlights this aspect of duplication. It is a document similar to the reports issued by all the other housing commissions and the South Australian Housing Trust. I have spoken to the Minister about having it incorporated in Hansard, and I seek leave to do so.

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