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Friday, 18 November 1927

Senator NEEDHAM (Western Australia) .- This bill is entitled the Commonwealth Housing Bill, but I think it is wrongly named. It should be called the Commonwealth Money Lending Bill. As a result of it the Commonwealth Government will not build a single room ; but I suppose that, in order to keep faith with promises made before last election, it was necessary to bring in a housing scheme of some description. The head of this Government said then that it was the intention of the Government to launch a Commonwealth housing scheme, and he is now endeavouring, by means of this flimsy measure, to fulfil that promise. Personally, I do not think that the Commonwealth Government could constitutionally undertake a real house building scheme. If I interpret the Constitution correctly, it does not give power to the Government, no matter what its political colour, to build and sell houses to the general public. It could go no further than to build homes for its own employees. No one knew better than Mr. Bruce when he announced the policy of his government that it could not carry out the housing scheme. I wish it to be understood that I am not opposed to such a proposal. On the contrary, I welcome any scheme to assist persons to secure homes of their own, and particularly those who find it difficult to make ends meet. Any assistance which the Government can give to enable them to escape from the tyranny of the rack-renting landlord - that class of person is not confined to Ireland - is welcome. The 25th of this month will be the second anniversary of the last federal election. On that day two years ago this Government, by misrepresentation of its opponents, secured another lease of power. During the campaign that preceded the appeal to the people, the Government and its supporters indulged in a campaign of vilification, and abuse of their opponents. The policy upon which the Ministry was returned included child endowment, national insurance, insurance against unemployment, and a housebuilding scheme. Nothing of a concrete nature has been done, up to the present, in connexion with national insurance ; nothing has been done to prevent a recurrence of those unfortunate periods of unemployment experienced in Australia.

Senator Payne -What has that to do with the housing scheme?

Senator NEEDHAM - If I am not confining my remarks strictly to the bill, I am sure that you, Mr. President, will intervene. If Senator Payne had to wander about the streets of Hobart or Launceston seeking work, and if he had no money to payhouse rent, he would see a very definite relationship between unemployment and house building. This measure is the first instalment of the four principal planks of the Government's election policy; but all that it proposes is that the Government, with the assistance of the Commonwealth Bank, shall raise a loan which the board of directors of the bank will hand over to an existing State authority for the purpose of house building.

Senator Sir Henry Barwell - Under certain conditions.

Senator NEEDHAM - That is true. But the directors of the bank will not engage in the business of house building. They will not lay one brick upon another and they will have no responsibility for the carrying out of the scheme. All that they will do will be to raise the money and make it available to certain State authorities which will be responsible for the collection of the deposits, the building of the houses, the payment of interest and the return of the money. It would have been more honest if, during the election campaign, the Ministry had confessed that the Commonwealth had not the constitutional power to build houses for the people, and that any assistance which it proposed to render would be given through existing agencies. As has already been said in the debate on another measure, therewas no need for the creation of new machinery, and there was nothing to prevent the Government from rendering assistance to the various State authorities. In the case of Western Australia, for instance, the Government could have assisted the Workers' Homes Board to make more liberal advances to home-builders, and that body could have carried out the work. There was really no necessity for an alteration of existing, or the introduction of fresh, legislation. Even now the States will do the work and the Commonwealth Government will get all the credit. In five, if not six, of the States house building schemes have been' in operation for many years; but the amount of advance, the amount of deposit required, and the interest chargeable, vary somewhat. Were the States consulted before this legislation was introduced? I hope we shall be informed on this point before the bill is disposed of. It is important that we should know this, because of the difficulties that might arise in the event of one State not coming into line.

Senator Sir Henry Barwell - Certainly the legislation was not requested by the States.

Senator NEEDHAM - Because, as I have already pointed out, the State schemes are functioning satisfactorily. But we should know whether the States have agreed to carry out the work. If they have not, we are wasting time in discussing this legislation. I believe it has been urged in support of the bill, that the States have some difficulty in getting the necessary money to carry out their home-building schemes. I have no personal knowledge of that. I have not heard of the Western Australian Government being in difficulty in this respect. I know that the house building scheme in that State has been in operation for many years and that the Workers' Homes Board is doing good work. The principal reason for the introduction of this measure is, I believe, that it will enable larger advances to be made.

Senator Andrew - It is a more generous scheme.

Senator NEEDHAM - I admit that, in regard to the amount of advance, it is a more liberal proposal ; but I doubt if the States ever had any difficulty in finding all the money they required.

Senator Reid - Queensland has had great difficulty.

Senator NEEDHAM - Queensland is a member of the Loan Council which for some years has been negotiating loans for the States. Consequently it cannot be argued that the Commonwealth Government can obtain cheaper money for such a scheme. As a member of the Loan Council, Queensland would be treated as generously as any other State. I am satisfied, therefore, that there is no trouble so far as State borrowing is concerned. I could imagine such difficulty existing prior to the establishment of the Loan Council because then two States might have been on the market at the same time endeavouring to float loans, with the Commonwealth standing waiting for its chance to get in. Borrowing under those adverse conditions was not always a satisfactory business, and realizing this, the Commonwealth Government and the majority of the States agreed to the formation of the Loan Council, which now has been functioning for some years. Under this bill the Ministry proposes to make advances available to persons whose salary does not exceed £12 a. week. The Government should have shouldered the responsibility for house building to a much greater extent than is contemplated under this measure. The bill is only another ex

Senator Reid - If you cannot do a thing yourself, is it not wise to have it done by some one else ?

Senator NEEDHAM - Yes, but this is not a house-building scheme; it is a money-lending scheme.

Senator Sir Henry Barwell - It is a house-building scheme because it directs the policy of the States in regard to house building.

Senator NEEDHAM - I have pointed out that there are already house-building schemes in the States. This bill will simply enable the States to advance more money under their existing schemes. The only difference is that the State laws provide for, advancing money to persons with smaller incomes than those for whom pro vision is made in the bill before us. Under this bill 90 per cent, may be advanced up to a maximum of £1,800.

Senator Reid - That is very liberal.

Senator NEEDHAM - It is very liberal. I may be criticizing the procedure adopted, but I have no intention of opposing the bill. The Commonwealth Bank { Savings Bank Bill originally provided for the separation of tlie savings bank from the general trading bank business of the Commonwealth Bank, but that has now been altered, and the Commonwealth Bank will remain, intact. There will, however, be extra bookkeeping and flotation costs. I do not think that very much money will be available under the provisions of clause 7, sub-clause 2a, which provides that one-half of all increases in deposits over the total amount of deposits now existing shall be made available for investment by the commissioners. That is the point that Senator Findley so strongly stressed on another bill, when he pointed out that 70 per cent, of the existing deposits in Queensland are earmarked for the development of the State, and the remaining 30 per cent, is to be disposed of as the Treasurer of the State determines. I understand that the terms of the Tasmanian agreement are the same. There are, therefore, only four States we can look to for money for investment by the commissioners, and in those four States only one-half of the new business will be available for investment on the Commonwealth's housing scheme. It is clear, therefore, that we cannot get the whole of the money that will be necessary from deposits, and that we must resort to borrowing for the purpose qf this bill. There is not much more I can say on the measure. The complementary bill has passed through the committee stage. The Housing Bill is a purely machinery measure to carry out work started by another bill. I support the second ' reading ; but before resuming I should like the Minister in charge of the measure to answer the questions I have repeatedly put: Were the States consulted prior to introduction of this bill, and if so, what will be the position if a State declines to fall into line with this legislation? Will it mean, that the bill cannot be operative until all the States agree, or can it be put into effect if only one State agrees? I repeat that this is not a house-building scheme, but is merely a puny effort on the part of the Government to try. to fulfil an election promise". I am always readY to do anything to help the people of Australia to get cheaper homes, but in my opinion, even without legislation of this character, they could have been helped to get homes under the schemes already in existence in the States.

Senator SirHENRY BARWELL (South Australia) [3.40]. - Any measure which involves nu expenditure of £20,000,000 must be looked upon as one of great importance, demanding close scrutiny in order to see whether the expenditure is likely to be reproductive, or, if not, is likely to serve an essential purpose. Any one who has studied the position of Australia during the last few years must realize that its financial and economic position is unsatisfactory. There is a money stringency; there is a severe trade depression throughout the Commonwealth; and as the bill deals with the expenditure of a large sum of money, I propose to review very shortly the financial position in order to see whether this expenditure is justified. Australia has a public debt which at the end of June last was £1,016,000,000. It has an interest bill of £52,000,000 a year. That represents £1,000,000 per week to be met by a population of 6,000,000 people. The position would not be so serious if Australia was paying its way. But, unfortunately, that is not so: the financial drift is growing more serious almost every week. That is clear from a comparison of the trade balances. Australia's adverse trade balance for the last four years has been about £140,000,000. To that extent the value of our exports has failed to meet the value of our imports and the interest on the oversea debt. Last year the average of about £35,000^000 per annum for the past four years was exceeded, for we find that the adverse trade balance was about £47,000,000, representing an excess of imports over exports amounting in round figures to £20,000,000, and interest on oversea debts amounting to £27,000,000. Already, for the first quarter of this financial year, the value of our imports exceeds that of our exports by over £13,000,000, and, in addition, the interest bill on our oversea debts is between £6,000,000 and £7,000,000. It will, therefore, be seen that for the first three months of this year we have gone back by about £20,000,000, or at the rate of £80,000,000 per annum. Those figures show the seriousness of our position, and explain why we should be exceedingly careful about spending large sums of money. That, unsatisfactory position cannot be attributed to bad seasons, or to poor prices having been received for our produce. That is our position following an unparalleled succession of good seasons and high prices for wool, wheat, and other commodities.

Senator Reid - The last two seasons have not been good.

Senator Sir HENRYBARWELL.Taking Australia as a whole,' they have not been bad. There are various causes for this financial drift. I shall deal only with those connected with the expenditure of public money, because that is a matter directly associated with the bill before us. The principal causes of that financial drift are the over-borrowing of loan money, and its unwise expenditure by the various governments of Australia, both Commonwealth and State. There are other causes, such as unduly heavy taxation, the tariff, and the awards of the Arbitration Court; but I shall not deal with them now. The main cause of the drift is the over-expenditure of public money. The only remedy is the curtailment of expenditure, especially in respect to loan moneys. I do not know whether all honorable senators are as closely in touch with the affairs of their States asI am with the affairs of South Australia, but I know that in that State money tocarry out urgent public works cannot beobtained, with the result that those works are being closed down and men are beingthrown out of employment.

Senator Reid - The Commonwealth isin the same position.

Senator Sir HENRYBARWELL.I do not know that it is. In the case of" the States, there has been an actual curtailment of expenditure. Unfortunately,, there is little evidence of a similar curtailment of expenditure by the Common-- wealth. Either the Commonwealth Government does not realize the seriousness of the position, or it is not. facing the position in a way worthy of a responsible government.

Senator Reid - Does not the Loan Council control this matter?

Senator Sir HENRYHARWELL.No. The Loan Council does not prescribe the amount which any government shall expend.

Senator Chapman - It decides on the total amount to be borrowed.

Senator Sir HENRY BARWELL - That is true; but the Commonwealth gets the amount which it says it requires if the money is obtainable. Its estimated requirements for this year arc shown in the budget. Do honorable senators think that the budget discloses any desire on the part of the Commonwealth Government to economize? Whether we consider the estimated expenditure from revenue, or from loan, we cannot see any evidence of economy. For the services of the various departments the Government is asking for £809,000 more from revenue than the amount expended last year. Is thereany evidence of economy there?

Senator Andrew - The Commonwealth Government has reduced taxation.

Senator Sir HENRYBARWELL.Yes ; and the States, in order to make ends meet, have had to increase taxation.

Senator Thompson - Does the honorable senator think that the position would be improved if the Labour party occupied the treasury bench?

Senator Sir HENRYBARWELL.No: the position in that case would be much worse than it is now. That, however, is no reason why honorable senators should remain quiet. It is the duty of every honorable senator to take an independent stand in these matters, and to say exactly what he thinks. At any rate, I shall do so. Let us now consider the position from the point of view of loan expenditure. The expenditure from loan last year amounted to £7,748,000 - I speak from memory. The expenditure from loan this year is estimated at £9,000,000. Again, there is no evidence of a curtailment of expenditure similar to that which has taken place in some of the States.

Moreover, this increased expenditure by the Commonwealth is contemplated at a time when the States are financially embarrassed.

Senator Reid - Have not the States urged that the Commonwealth should economize in its expenditure?

Senator Sir HENRYBARWELL.I repeat that, while there is every evidence of economy on the part of some of the State . Governments, there is no such evidence of economy on the part of the Commonwealth Government. We have been told that the financial relations between the Commonwealth and the States have been placed on a satisfactory footing. With that statement I disagree. Two of the States are already dependent upon the Commonwealth; South Australia is now preparing her case for assistance, and I understand thatQueensland has threatened to do the same. Our financial position is not only serious, it is getting worse. The Commonwealth Government is not doing what it ought to do in order to stop the drift. That leads me to ask whether the present time is opportune for this Parliament to authorize expenditure on the scale provided for in this bill. It is proposed to advance money on a generous, if not lavish, scale for the provision of homes for the people. Desirable though that object may be, the matter is not urgent the expenditure is not necessary at this stage. For years the States have been providing homes for the people ; and they have done the work well. They are not asking for this money. Moreover, the principle underlying this bill - that one authority shall borrow money which will be expended by other authorities - has been, roundly condemned by the Government. I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

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