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Thursday, 10 March 1977

Mr LYNCH -I find it ironic that the Deputy Leader of the Opposition should raise in this House a question on housing. The problems of the housing industry, both dwelling and nondwelling, can be sheeted home very significantly to the stop-go policies of the former administrationto its programs which fueled wage increases, which fed into costs and therefore into the price spiral in relation to all sectors of the housing industry. The industry was in very bad shape when this Government came into office. It is now a healthy industry. I am quite happy to -

Mr Uren

Mr LYNCH - The honourable gentleman seeks to take issue with that point. Five key facts indicate that the housing industry has been growing and that activity will remain at a satisfactory level. First of all, real private investment in dwellings in the 6 months to last September was at a rate 27 per cent higher than in the previous year. Secondly, total dwelling approvals for the 3 months to January were running at a seasonally adjusted annual rate of 154 000, compared with 147 600 in the same period last year. Thirdly, total dwelling commencements, seasonally adjusted, in the December quarter were running at an annual rate of 148 800, compared with 133 600 a year earlier. Fourthly, total dwelling completions in the December quarter were at a rate 10 per cent higher than in the same quarter of 1975. Fifthly, lending for housing has been rising steadily from the somewhat restrained levels experienced around the middle of 1975. Bank lending has been fairly stable.

The recent figures, to which the honourable gentleman referred, do show a flattening out process in the building society area. That does not represent a warning signal for the Government. The situation is subject to the closest monitoring with the Reserve Bank. The honourable gentleman ought well to understand that flow of funds is no total answer to the problems in the housing field, whether those moneys are going into the private banking system or are feeding into the building societies. The honourable gentleman should have regard to some of the States in which an overheating in relation to building has been emerging. I reaffirm that the position is being watched closely. I say again to the honourable gentleman that we are emerging from the situation which his own administration created. So far as overall monetary policy is concerned, whether for the housing industry or for the non-housing industry throughout the country, the Government's policy is to ensure that there is adequate capacity and liquidity to underwrite economic recovery but not at the same time to be accommodating to an increased rate of inflation.

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