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Wednesday, 11 November 1964


Senator CAVANAGH (South Australia) . - I take the opportunity on a motion for the first reading of a money Bill to discuss a matter which is not relevant to the Bill. I refer to the matter of Commonwealth grants for homes which I raised in some detail in the Estimates debate. I then challenged the Government on the right to insist on receipts for the payment of 10 per cent, of the contract price of a home before making a grant. I sought information as to the authority under the legislation for limiting a person's acceptable savings to not more than three-quarters of the total savings or £560, whichever was the greater. I commented on the fact that the legislation made a very small contribution towards assisting home building. The Minister for Defence (Senator Paltridge) representing the Minister for Housing (Mr. Bury) said that I would receive a written reply from the Department of Housing. I am still awaiting that reply. Believing that the Department will give a reply, I do not want to pursue matters that have not been taken further by subsequent events. Therefore, on the right of the Department to insist on the payment of 10 per cent, of the contract price before making a grant, I say only that this insistence is not beneficial to the poor section of home builders, that it leads to a grant being made after financial arrangements for a home have been concluded, and that it results in a grant intended for assistance in home building being spent for some other purpose.

I have received from the Minister representing the Minister for Housing a reply to my question in relation to applicants who apply before the end of this year and receive a grant on the basis that their acceptable savings are limited to not more than three-quarters of the total savings or £560; I am doubtful whether the Minister's answer justifies the Department in not treating the whole of an applicant's savings as acceptable, when the prescribed date is this year. 1 make a point of this because I say, first, that there is no authority in the Act to make a lesser grant than one-third of the savings, to a maximum of £250. To make a lesser grant, which is being done today, is contrary to the promises that were made when the legislation was introduced. If we accept the Department as the authority to do this, the present practice will have more serious repercussions in future years. My question on notice to the Minister was as follows -

Where in the Homes Savings Grant Act does the Minister obtain the authority to disregard as acceptable savings in any one year prior to 1965 any savings in excess of three-quarters of total savings or £560?

Senator Paltridge,the representative in the Senate of the Minister for Housing, supplied me with the following answer -

The authority for limiting the amount of acceptable savings in any savings year commencing prior to 1st January 1965, is section 20 (1.) of the Homes Savings Grant Act 1964, which leaves with the Secretary of the Department a discretion to determine the amount, if any, of a grant made under the Act.

I invite honorable senators to read section 20(1.) of the Act to see whether it does, as I assume the Department believes, contain authority for limiting the amount of acceptable savings in any savings year. Section 20(1.), which is the Minister's authority for making a lesser grant, states -

Subject to this section, the Secretary may, in his discretion, on behalf of the Commonwealth, make a grant of moneys in accordance with this Actto an eligible person.

It will be seen, therefore, that in accordance with the Act a grant can be made to an eligible person at the discretion of the Secretary of the Department. Nowhere in that section of the Act on which the Minister relies is there any suggestion that the Secretary of the Department can make a grant of a lesser amount than is prescribed in the Act or, in other words, a proportionate payment for any moneys saved. The Minister's reply to my question continued-

It was thought reasonable to accept some savings in excess of £250 in any of these savings years, and sub-sections (1.) (a) and (9.) of section 22, in association with section 20(1.), were designed to give the Department this discretion. It was never the intention that there would not be a limitation on the amount of acceptable savings in this early period, and this was made clear when an amendment was moved for the insertion of section 22 (9.) of the Bill as originally presented.

The reply then gives a " Hansard " reference to a debate in another place. I have studied this Act to learn whether there is any authority, in the combination of the sections to which reference has been made, for what the Department is doing. Before reading section 22(9.) it is necessary to read section 22 (8.) and to know that the Government does not lend on excess savings. Section 22 (8.) states -

For the purposes of this section -

(a)   excess savings of an eligible person occur in a savings year if there is an increase in acceptable savings of the person in that year exceeding £250; and

(b)   the amount of the excess savings is the amount by which that increase exceeds £250.

Therefore, according to that sub-section the Department does not make a grant for home construction on savings in any one year in excess of £250. Section 22(9.) reads -

A reference in paragraph (a) of the last preceding sub-section-

That is the one I have just read - to a savings year shall' be read as a reference to a savings year commencing on or after 1st January 1965, and not to any other savings year.

In other words, the maximum of £250 applies to savings after 1964 and not to any other year. Honorable senators will remember that my question to the Minister related to savings prior to 1st January 1965.

Now we come to savings prior to 1965. The Department claims that under the Act it can lend on savings in excess of £250, this year acknowledging that the Act contains a provision that the Government's total liability will not exceed £250.I remind honorable senators that section 20(1.) which I have read, gives the Secretary of the Department the discretion to make a grant of moneys but not to make a proportionate grant. We then come to what I regard as the only other pertinent section, which is section 22. It is in these terms - 22 (1.) Subject to the next succeeding subsection, the amount of a grant under this Act to an eligible person shall not exceed an amount equal to -

(a)   if the prescribed date in relation to the person is a date not later than 31st December 1964 - One-third of the amount remaining after deducting from the total of -

(i)   any acceptable savings of the person and his or her spouse as at a date seven years before the prescribed date; and

(ii)   the sum of the increases in acceptable savings of the person and his Or her spouse in savings years of those persons, the amount of any decreases in acceptable savings of the person and his or her spouse in those savings years.

When we reduce that to language that we can understand, it means that the savings of an eligible person shall be his savings seven years previously, plus any increase in savings that he has had over those seven years until the prescribed date, less any amount by which his bank account at the end of a year was less than it had been at the beginning of the year, that is,less any decrease in savings. After following that method of calculation the Department makes available an amount not exceeding one-third of the total savings.

The only consolation we have is that section 22(1.) of the Act provides that, subject to the next succeeding sub-section, the amount of a grant under the Act to an eligible person shall not exceed an amount equal to one-third of the savings. It may be said that the use of the words " not exceed " implies that something less than the stated amount is acceptable. But nowhere in the Act is it stated that the Secretary of the Department has power to grant anything less and it would appear that he is not to accept as savings anything but an amount arrived at under the provisions of Section 22. On that basis the Secretary of the Department may grant one-third of the amount saved.

I have discussed this matter with various persons with knowledge superior to my own and we cannot read into the legislation any other interpretation than that there should be a payment of one-third of the amount saved. While it is true that the Secretary has discretionary power under section 20(1.) of the Act to make a grant to an eligible person, he cannot use his discretion capriciously. He cannot refuse to pay the grant because he does not like the colour of a person's tie, or his politics or religion. We think he is obliged, within some bounds, to pay the grant in accordance with the Act. But then we come to section 22 of the Act which relates to the commencement of the relevant period, and see this wording -

Subject to the next succeeding sub-section, the amount of a grant under this Act to an eligible person shall notexceed an amount equal to -

(a)   if the prescribed date in relation to the person is a date not later than the thirty-first day of December, One thousand nine hundred and sixty-four - one-third of the amount remaining after deducting from the total of -

(i)   any acceptable savings of the person and his or her spouse as at a date seven years before the prescribed date; and to

(ii)   the sum of the increases in acceptable savings of the person and his or her spouse in savings years of those persons, the amount of any decreases in acceptable savings of the person and his orher spouse in those saving years; ...

We sec a repetition of this section in subclause (b) providing for grants after 1964 which does not provide that the Secretary of the Department has a discretion to grant only a proportion of the amount as stated in the Act. He has a discretion to pay proportion only if we read such discretion in the words " amount not to exceed ". When the announcement of this grant was made by the Prime Minister (Sir Robert Menzies) it was generally believed that anybody who saved £750 towards the construction of a house over a period of years and who qualified in respect of age and marital status would get a grant of £250. We find now, if there is reliance on the words " not exceeding" to permit a proportionate payment, that we voted in this Senate, not for a grant of £250, but for a grant according to the discretion of the Secretary of the Department of Housing. It is left entirely to the Secretary of the Department to decide how much a person may receive and we find that the Act is not what we thought it was. The Department of Housing has issued a brochure entitled "A Grant' For Your Home ". At page 1 3 it states -

The amount saved in any year of saving is acceptable up to £250. However, if a person saved more than £250 in a year of saving that began before 1st January, 1965. these savings may be accepted provided they are not more than three-quarters of that person's total savings and not more than £560. The limit of £560 is approximately three-quarters of the maximum acceptable savings of £750. Suppose a person whose savings period ended on 25th September 1965 had saved £40, £60, £130 and £450 over successive years. Total savings would be £680. As three-quarters of this tola) is £510, the £450 saved in a year of saving beginning before 1st January 1965 would bc acceptable.

Suppose the total savings in one year were £450. This becomes an acceptable saving which the Government subsidises to the extent of one-third. But if the savings arc in excess of £650, or three-quarters of the total savings, the Government would not subsidise the total savings in excess of threequarters. That seems to be in contradiction of section 9 of the Act. This was referred to by the Minister for Defence (Senator Paltridge) representing the Minister for Housing, in an answer to me. The Minister said that this year was a transitional period and it was not intended to reduce the savings of any particular year. I ask the Minister to give us some information better than he has given us to far as justification for the statement, which does not appear at first blush to bc supported by the Act, that the Secretary has a discretion as to how much will bc paid.

The Minister gave as his authority section 20 (I ,) of the Homes Savings Grant Act. But as I have said, there is no discretionary power under section 20 (1.) as to the amount to be granted and the Minister has not given a satisfactory reply to the question. If there is any support for the Minister's statement it must bc found somewhere else. If the Minister is relying on section 22 which states that the amount, of a grant " shall not exceed an amount" let the Minister say so. Let him make it clear that this is not a guarantee of £250 to home builders but a grant at the discretion of the Secretary of the Department who may decide the amount himself if a person saves' £750. I have not the time to give details of what is happening in South Australia. But in that State the Department is exercising a discretion as to whether it will or will not make a grant to those who have saved a certain amount. It is granting an amount in some cases and refusing a grant in others. lt will be necessary to take up these cases with the Department to ascertain why the applications were not granted.

In an endeavour to get some information on this matter, I wrote to an Adelaide newspaper and quoted the replies' given by the Minister to Senator Prowse who had asked how many applications had been determined. At that time it was said that 156 applications in South Australia had been accepted and 11 had been rejected. When speaking on the Estimates I stated that this had had only a minor impact on the housing shortage because Commonwealth statistics showed that at that period 5,444 contract built houses had been commenced and 265 owner built houses. I have not the correct figures, but the biggest proportion of those houses would have been built by persons who would be eligible for grants under the Homes Savings Grants Act.

This was followed by a reply from Mr. Geoffrey O'Halloran Giles, the honorable member for Angas in another place. He said that my figures were misleading, as they applied only to the first week of operation of the scheme. He would be in a position to get the correct figures. He said that, as at 30th October, 661 applications had been approved in South Australia. He showed that the rate of approval in South Australia was a little above that of the other States. Mr. Giles' letter seems to support my argument. Although the number of applications rejected by the Minister for Housing would seem to be low, correspondence 1 have received suggests that a number of applicants for grants are rejected at the counter without their filling in an application form.

The booklet issued by the Department invites people who think they are eligible to apply to the Department's office in their own State, but when they go there and supply the necessary details they are told that it would be useless for them to apply because they would not qualify for a grant. Many would-be applicants do not apply simply because of the advice they are tendered -at the counter. It is very difficult to understand why these people would not qualify. Time will not permit me to do so now, but at some other time during the session I shall quote some specific cases and seek an explanation as to why the people concerned do not qualify. This scheme was announced with a blare of trumpets for the purpose of winning an election. When the legislation was introduced the Minister for Housing himself said: "If I was not the author I would not know what it was about ". Stringent conditions are being imposed by the Department to refuse en bloc a number of genuine applicants.

I ask the Department to consider the position of public servants in South Australia who, in Addition to paying into a

The only other point I raise at this stage is this: Has it ever occurred to the Minister for Housing that the deferred pay of Army personnel cannot be used for housing purposes under the provisions of the Homes Savings Grant Act? It is the desire of those who leave the Army to use their deferred pay for some particular benefit. Although deferred pay is not regarded at the present time as being part of acceptable savings for housing purposes, I ask that consideration be given to accepting it as such as a recognition of service with the Army, to which we are desirous of attracting men, and to enable the personnel concerned to obtain the benefit of it when they leave the Service.







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