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Friday, 3 December 1976

Mr Les Johnson (HUGHES, NEW SOUTH WALES) -The honourable member for Mitchell (Mr Cadman), who preceded me in this debate, put up a fairly good performance for a new member who has not been involved in the housing industry. He is due for congratulations. I think he is showing the benefit of his experience in the Old Players group back in his electorate, where he was a distinguished actor. He was able to make a lot from a small amount of information. He could benefit by knowing something of his Government's performance in the housing field. I refer to the Government which went out of office in 1972. 1 have a feeling that that Government was relieved to get out of office because of the great problems it had created in many fields, including the housing field.

Mr McVeigh - We could not get back in quickly enough.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) -Here is old Ocker interjecting again. He turns up every time we have a debate on housing. It would be useful for honourable members to know that as a result of the policies of the Liberal-National Country Party Government the increase in the money supply, which in previous years had been running at 6 to 8 per cent, suddenly in 1972-73 jumped to 26 per cent. The housing industry in particular was awash with funds. The value of housing loans by banks, building societies and life offices almost trebled in 2 years, from $ 1,250m in 1970-71 to $2,988m in 1972-73. Of course, no attempt was made by the LiberalNational Country Party Government at that time to formulate a plan for a commensurate increase in the supply of labour and materials. I am pleased to see that the Minister for Environment, Housing and Community Development (Mr Newman), who is responsible for these matters, is showing an interest in what I am saying, because the same kind of problem could occur again. In other words, what the Australian Labor Party Government inherited was a great tidal wave of money. Nobody has to stretch his imagination very far to recall that the country had run out of bricklayers and that one could not get bricks or timber and that the white metals which go into housing were in short supply. The whole industry had lost its interrelationship between material, manpower and money.

Those are the facts. The honourable gentleman is shaking his head. I suggest that he go and look at some statistics. We do not want to have a cliche debate, with superficialities of nonsense. We want to get down to the fundamentals. I am giving the House the fundamentals. The LiberalNational Country Party Government of that time put the country into a very serious situation. The National Country Party has never known anything about housing. I look for an intelligent response from the Liberal Party; that is a possibility. But there is no chance of getting such a response from the National Country Party. Let me tell the House what the present Speaker, the then Leader of the Opposition, thought of the situation at around that time. This is very important. He stated:

The first way to cut down private spending - he obviously thought that it was necessary to cut it down- is by making money scarcer and therefore dearer. We would be willing to do this only as part of an overall approach involving reduced Government spending.

That was a statement made by the right honourable member for Bruce (Mr Snedden), the present Speaker, on the Australian Broadcasting Commission on 26 July 1973. Mr Leslie Bury, a former Treasurer and former Housing Minister and the man who introduced the original legislation which we are debating, reacted to that Liberal-National Country Party-caused situation on 1 May 1973. He stated:

If the Government does nothing at all to restrain the development of the building sector the inflationary problem will become worse and worse.

In other words, he was simply commenting on the stupidity which characterised the LiberalNational Country Party Government's approach in the period preceding the 1972 election. That is the situation the Labor Administration inherited. It was an extremely difficult time. It may be that the honourable member for Mitchell was not even interested in politics at that time, I do not know. Maybe he knew nothing about housing. But anybody with any recollection knows full well that as a result of that flood of money the whole industry went beserk when the Labor Government first came into office. Every person around the place who was interested in making a quick quid out of housing, and who was able to do so, got an option over a bit of land or a house and jacked the price up, and then away they went.

Mr Stewart - Were not the Cadmans in that racket up there?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) -I am unable to comment on whether the Cadmans were in it or not. I would not be unfair and steal an unjustified advantage over the honourable gentleman. But clearly, for the sake of responsible government and to ensure that the kids of the future had a chance of getting housing, some remedial action had to be taken. The Labor Government acted very responsibly in that situation. That is a little lesson for the honourable member. I shall take him aside some time and give him a little more useful information which will make his contributions to these debates in the future even more interesting.

The Homes Savings Grant Bill was introduced in 1964 by Leslie Bury, as I mentioned. Many of us remember it well. It was the subject of raging controversy from the time the concept was first thought of and certainly from the time it was implemented in legislative form. Actually, it was a Menzies Government gimmick. That right honourable gentleman had a very great capacity for approaching elections in terms of picking up that extra one per cent or 2 per cent which he needed. He was a percentage man. He used to think in terms of what kind of gimmick could be contrived in order to pick up another one per cent or 2 per cent. On one occasion it was the science laboratories grants to non-public schools. On this occasion in 1 964 it was the homes savings grant scheme.

Mr McVeigh - And the Petrov affair.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - That is another matter which worked on the same percentage basis. Whether it had principle or not did not matter. Whether it had electoral mileage was the criterion in the approach of Sir Robert Menzies. Of course, he is not exceptional among Liberal administrators. This was a election gimmick. It was loaded with anomalies. The honourable member for Mitchell has acknowledged that. Through the years this legislation has been characterised by inequalities. It is the most absurd, ridiculous and unfair legislation which could possibly be put together. I see the honourable member for North Sydney (Mr Graham) sitting over there. I have no doubt that he has represented hundreds of people who have been unable to get the homes savings gram. I am sure that he would acknowledge that, even by his silence.

Mr Stewart - He is nodding his head.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) -I do not want him to nod his head too much; that could be very deleterious to his health. The type of problem in evidence was that people did not have their savings in approved accounts. Then there were the valuation limits. That was a ridiculous proposition. At one point one had to have a house which did not exceed $22,500 in value. In electorates such as mine one could not buy the block of land for that price. Then there was the matter of savings not being held for the period of 3 years. There was a 3-year residential requirement which excluded some of the most needy people who had come from overseas. For example, there were migrants in the Cunningham electorate -

Mr Connor - You know the valuations there, too.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) -Yes, the valuations. These people, first of all, had the problem about residential qualification. The valuation provision made it impossible for 30 000 or 40 000 people a year to qualify. That is about the number of people whose applications were rejected for the reasons I am enunciating. There was the age barrier of 36 years. The Minister would have been a young officer, probably a young lieutenant, when this legislation was introduced. If he had served his time in the Army he would not have been able to take on a permanent house, to locate himself permanently. He is probably over 36 years by now and he would have been excluded by virtue of the nature of his service. Single people were excluded. Then there were all the fights about what was the first home. It was arguable whether a little weekender that people might have somewhere was their first home. Often that kind of consideration excluded them from qualifying under the homes savings grant scheme. Credit unions were totally excluded to start with but afterwards there was some modification of that condition. The housing commission tenants, some of the most needy people in the country, were unable to receive assistance. Even widows were excluded from the benefit of the scheme at that time.

That is the kind of messy legislation which the Government introduced and which operated over that period of time. It is true that about 350 000 people have qualified for some kind of grant but that figure is used misleadingly. It is often used to give the impression that all those people received the maximum grant, but some of them received a miserable little bit; and usually they were the most deserving people. When this legislation was introduced it was disparaged by the discerning people in the building industry. The estate agents were able to predict that as soon as those grants were introduced- I am not sure whether the initial grant was $500 or $750- prices would rise to swallow them up. In fact they did. Any analysis of that period will show that this is what happened. That might not have mattered very much to the people who received the grant, but for the thousands of people who did not receive the grant it was a very serious matter indeed, because prices went up for everybody. Land prices jumped almost overnight as soon as the developers knew that there was more money to gobble up through the homes savings grant scheme, and building costs spiralled as well. I believe that that will happen again. I predict that we will see a very serious inflationary trend in the housing area.

One of the worst features of this entire conceptthe 1964 concept and the 1976 concept- is that the Liberal-National Country Party coalition is obsessed with throwing money around to people whether they need it or not. There is no sense of priority in its approach. In other words, this Bill is simply about providing a premium on affluence. The Bill provides a subsidy of $1 for every $3 saved to a maximum saving of $2,000 a year over 3 years. Of course, the scheme will not become completely effective until January 1979. It is almost a never-never scheme. In the short term people will receive less. During 1977 the maximum grant will be only $667 because the applicants can demonstrate savings only for one complete year up to that time. Then the grant on the 2-year savings period will be $1,333 on savings of $4,000. In general terms the legislation is designed to give $2,000 to people, with no strings attached, who can save $40 a week. As I understand it, the maximum savings over a 6-month period can actually go to $48 a week. People who can save $48 a week can hardly be designated as the deserving poor. Even the Minister for Environment, Housing and Community Development, who has come out of a very protected life in the socialised service of the Army, would probably know that there are lots of people around who lack the capacity to save $40 or $48 a week. But in any event they will all be contributing to make this grant to people who can save $40 or $48 a week.

I think that that involves some very dubious principles. It might be better to say that it involves a lack of principle. When I am talking about saving approximately $48 a week I am talking about saving approximately $2,400 a year. So people are going to receive this grant whether they need it or not. That is the interesting and controversial part of it. People are going to receive it whether or not they need an incentive to save. This legislation is supposed to be about giving people an incentive to save. Whether or not they need an incentive to save they are going to receive this grant simply because they enter into a contract to buy or build a house. It is a matter of concern also that they are going to receive it regardless of from what source their savings come. They could be in the form of a backhander from over-indulgent parents. There is nothing to require people to show that they have really saved the money themselves. It can simply be a transfer from a prosperous person to a less prosperous person. The honourable member for Sturt (Mr Wilson) would appreciate what I am saying because this is done in the more prosperous family situations. Indulgent parents can ensure that their children receive every possible advantage.

The wealthy supporters of the Liberal Party and the prosperous graziers of the Country Party cannot possibly miss out on receiving this $2,000 hand-out when they go to get their house, but the kids of the poor old battlers cannot get a handout from mum or dad because those low income parents, the artisans of this country, the people who earn by the sweat of their brow, are the subject of vicious and unrelenting attacks by this Government which does not even want to give them wage indexation. It does not even want to sustain the value of their wages. They will not have the capacity to pass handouts on to their children so that they can have a lump of money which will attract this subsidy. A lot of people will be just gasping to get their hands on this money for nothing. After they get the money, whether or not they need it and whether or not they need an incentive to save, they can do what they like with it. In regard to the matter of incentive to save, I wonder whether the Government is very consistent in its economic policy. Does the Government want people to save now or does it want to unlock the banks? Does it want them to spend? Therein lies the answer to the economic difficulties confronting the country. So what we have is this low-brow, cheap electioneering approach to housing which is a disgrace to any government.

After the money is given to these people- in many instances to affluent people- they can go off and build a mansion if they like on the Yarra bank or in the most salubrious part of Australia. They would be receiving $2,000, at the expense of the taxpayer, whether they need it or not. They can do precisely what they like with it. They can go for a trip to Bali or Bangkok. They can go to Suva or Shangri-la, to Rangoon or the Riviera. This Government does not give a damn what they do with it. They can go and buy a fur coat with it or a Mercedes. They can go and blow it up at the Hilton. They can buy themselves a speedboat. It does not have to be used for housing purposes. If the Government has money to spend on housing let me tell those honourable members opposite who do not know, that there are people around this country at the present time who have been denied an opportunity by 23 years of previous Liberal-Country Party government to get a decent education and as a result an opportunity to earn a higher income. They now suffer from an inability to place a deposit on a home or to attract a loan from a building society. They are people on the housing commission waiting lists around this country. There is a queue of over 100 000 families on the waiting lists. There would be a lot more if people thought they had a chance of getting a house within 2 or 3 years. Many of them do not even attempt to join that queue because it is such a hopeless situation.

If the Government wants to do something and wants to spend $90m a year as it will be doing under this legislation, why does it not add some money to the coffers of the States which are trying to meet the needs of those underprivileged people? Why is it cutting down the money for aged persons homes and reducing the subsidy from $4 to $1? The Minister is shaking his head. He knows that that is a fact of life under this Government. He knows that whatever the area of need analysed in respect of housing, a toll is taken of the underprivileged people. For a miserable electioneering gimmick the Government is giving handouts in the form of this unprincipled legislation. Moreover, it is doing it at the expense of tax deductibility of mortage interest rates. One and a half million families have been receiving this deductibility and the Government is restricting it now to those people who are paying off their first home, and for the first 5 years. To pay for this scheme tax deductibility is to be taken away from thousands of Australian families.

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