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Thursday, 29 October 1964

Senator CAVANAGH (South Australia) . - I refer to Division No. 260 - Administrative. Under sub-division 2, last year an amount of only £16,951 was expended from an appropriation of £32,600 for administrative expenses. 1 take it that this underspending was because of the lateness of starting the operation of the new Homes Savings Grant Act, which this provision would appear to cover. I desire to say a few words on the administration of the grants.

From my interpretation of the Act, I believe that the Department of Housing is imposing conditions which are contrary to the Act and to the intentions of the Parliament. Some time ago Senator Tangney, referring to a newspaper article in which it was alleged that the grant of £250 could be spent on wine or for various other purposes, asked whether this was so. I think that the then Minister for National Development, Senator Sir William Spooner, disputed that that could be done. I recall that in piloting the Bill through the chamber the Minister agreed that the money could be used for other purposes, and he took the attitude that a person could receive a grant only once and the abuse would not be great. In the Adelaide " News " of 14th October, Mr. Raymond Kerrison, a journalist, wrote -

Let us look at what happened to the two election stunts. The £250 gift supposedly was earmarked to help fill the deposit gap. In practice, it works out that the lucky receivers can spend it on a house, or a holiday, or even dump it all on Eskimo Prince - and there are no questions asked. 1

It is incredible that this can be done with a gift made for a home. I directed to the Minister representing the Minister for Housing, Senator Paltridge, a question on notice, to which I received a reply on 23rd September. The Minister said -

Sub-section 23 (1.) of the Act says that a grant to an eligible person shall be paid at such lima as the Secretary determines. Paragraph (0 of section 14 says that a person to be eligible to receive a grant must have entered into a contract to buy or build a home or, as an owner-builder, have made substantial progress in the building of a home. Clearly the grant may not be paid to a person who merely expresses an intention to acquire a home.

Obviously, it will not be paid under those conditions. The Minister went on to say -

As section 24 of the Act implies, before a grant is paid the Department must be reasonably satisfied that the home will be bought or built, and lived in, by the married couple.

The only thing wrong with that part of the answer is that section 24 implies nothing. It refers to methods which the Government may take to recoup grants that have been made, if certain conditions prescribed in other sections are not complied with. Section 20 lays down the conditions under which the grant is payable. The Minister for Housing or the Secretary of the Department must be satisfied that the couple intend to use the home for their matrimonial home. There was a question about signing an affidavit to that effect. Contrary to the Act, the Department is insisting that before any grant shall be made receipts must be produced to show that 10 per cent, of the contract price of the home has been paid. So we find the Department imposing conditions on the grant which are contrary to what Parliament determined should be imposed.

Senator Wright - Contrary in what respect?

Senator CAVANAGH - The Act provides that the grant shall be paid when certain things are done. It is necessary to understand two points. One is the prescribed date, which decides not only the date at which savings end, for the purposes of the grant, but also the period at which they commence. There are also the question of acceptable savings and a very important provision as to eligibility of applicants. To be eligible an applicant must have saved for a period of three years. The prescribed date, which is the date of signing a contract, determines the three year period. The savings must be in the three year period before the prescribed date. Another condition of eligibility is that a contract must be signed. Of course, there is nothing in the Act to say that payment must be made at that time. I have referred to the only requirements as to eligibility, but the Department has imposed the condition that applicants must have paid 10 per cent. The Minister justifies this by saying that the grant shall be paid when determined by the Secretary of the Department. I agree that this is a fact, but the Secretary has not a right to apply other conditions that determine time of payment. Section 9 provides that the Minister shall treat all applications in accordance with the Act. He cannot go outside it. Later in the reply the Minister stated -

There is nothing to prevent a lender agreeing to lend up to a given amount before the grant is paid and the amount of the grant subsequently being used to complete the payment for the home. The grant may be used to reduce the amount of the loan drawn or to repay portion of the loan. Alternatively, the couple may decide to pay a higher deposit on the home in the knowledge that they will receive a grant and that it will be available to assist them to buy furniture and fittings for the home.

Of course, if it is used to buy furniture and fittings for the home it is not used for the building of the home. They could also decide to buy other things or they could adopt the alternative suggested by Ray Kerrison and dump it all on Eskimo Prince.

Before constructing a home, a person must arrange his finance. Savings before the end of this year, or money spent on the purchase of land on which it is intended to construct a home, are acceptable savings. Before anyone can arrange finance to construct a home, he must have completed purchase of the land. The lending institutions then lend a proportion of the total cost of the land and of the completed dwelling. It is generally found that the lending institutions will lend the proportion that the owner has to find if he has a reasonable block of land. If a man can arrange to buy land and uses the grant to assist him in his negotiations with the land owner, he can then build a home. But this imposes further conditions. The grant can be made available only to a person who has sufficient money to complete the purchase of and for the construction of a house and to pay 10 per cent, of the construction cost to a builder. The impoverished person who is struggling to establish a home cannot receive the grant while these conditions operate, despite the Minister's statement during the debate on another measure today about the wonderful success of the scheme. This scheme has been in operation since 1st January of this year. While it is true that an application could not be made before 1st January, I think that some time in December last year it was decided that the owners of houses built or purchased before that date were entitled to the grant if they complied with the other requirements.

Let us consider Senator Prowse's remarks. In South Australia 156 applications have been accepted and 11 have been rejected. According to the Commonwealth Statistician, 5,444 contract built houses and 265 owner built houses were commenced in South Australia in the March and June quarters. This is while the Act has been in operation. The number of homes commenced in South Australia has almost reached the 6,000 mark, but the Government grant has applied to only 156. The contribution that the Government is making to home building is there for all to see. It is true, and it can be said, that all of those homes would not be eligible for the grant, because some would come within the scope of the State housing grants, under which a deposit of £50 is permissible; some would not be eligible for other reasons, and some could be in the hands of speculative builders. However, the Government's actions are causing considerable hardship to that section of the community which it was thought would be helped by the grants.

Another section of the pamphlet published by the Department of Housing, entitled " A Grant for Your Home ", is in these terms -

The amount saved in any year of savings is acceptable up to £250. However, ifa person saved more than £250 in a year of saving that began before 1st January 1965, these savings may be accepted provided that they are not more than three-quarters of that person's total savings and not more than £560. The limit of £560 is approximately threequarters of the maximum acceptable savings of £750.

Will the Minister tell me from what section of the Act the Department gets any authority to limit the person's acceptable savings to not more than three-quarters of the total savings and not more than £560? A person employed in this building who has applied for a grant has been affected in this way.

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