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Monday, 16 November 1964

Senator CAVANAGH (South Australia) (12:12 PM) . - The debate was adjourned to enable me to conclude remarks concerning grants for homes which I had been making in the Senate on an earlier occasion. Last week, I endeavoured to deal with the question of the wholesale rejection of applications for grants, on the basis of regulations or orders put out by the Department of Housing. In my opinion the rejections were not in accordance with the Homes Savings Grant Act. On that occasion, the Minister representing the Minister for Housing was not in the chamber, but it was stated subsequently that he was notified of my comments. I was informed that the matters I had raised would be referred to the Department and that I probably would receive a reply. I have not yet received a reply. I notice that on this occasion the Minister representing the Minister for Housing again is not in the chamber, although he was notified of my intention to speak on this subject when the debate on the Excise Tariff Bill was resumed. It is regrettable that answers have not been supplied to the questions 1 have asked, because the matter is of great concern to applicants for home savings grants.

I shall endeavour tonight to deal in the main with the position of applicants for grants whose applications have been rejected by the Department, in my opinion contrary to the Act. During the second reading debate on the Homes Savings Grant Bill it was agreed that in South Australia only houses constructed by the South Australian Housing Trust and sold on a deposit of £50 would be excluded from the provisions of the Act, since those homes were constructed from Commonwealth and State Housing Agreement money. However, we now find that that is not so. We do not condemn the Act on this ground, but we say that attempts have been made in South Australia, by means of falsehoods, to make political propaganda from its provisions.

During the second reading debate on the Homes Savings Grant Bill, Senator Bishop referred to a statement which appeared in the Adelaide "News" on 7th May 1964, attributed to Mr. Cartledge, the Chairman of the South Australian Housing Trust. It was as follows -

South Australian Housing Trust homes offered for sale are not excluded from the Federal Government's housing subsidy.. All homes built by the trust under its house sales schemes qualify for the subsidy, with the exception of those sold under the £50 deposit scheme.

According to the report, Mr. Cartledge went on to say -

This is a great victory for South Australia . . . This has been brought about by strong representations to the Prime Minister by the Premier, Sir Thomas Playford.

It was stated on the following day in the newspapers that the Premier had said that the grant would be applicable to all homes in South Australia other than Housing Trust homes sold on a £50 deposit, and that this was a result of his strong representations to the Prime Minister (Sir Robert Menzies) on the matter. On investigation, it is found that the grant is not applicable to a large number of homes built by the South Australian Housing Trust. The Premier has sought to make great political capital from his achievements in South Australia in this respect, but in fact he has achieved nothing.

I have been informed by Mrs. Masters, who is secretary to the manager of the South Australian Housing Trust, that the timber framed houses at Elizabeth, which have been built under CommonwealthState grants, are sold, not" on a deposit of £50, but on the normal deposit applying in the housing market at the present time. I asked Mrs. Masters what benefits the purchasers of such houses received. She said: " Well, they get cheaper money. There is a reduction of 1 per cent, in interest on the Commonwealth money. While the purchasers of homes sold under mortgage get no benefit from the reduction of interest, the cheaper money is reflected in the purchase price of the home." This may be so. Although I dispute it, there may be some reduction in the price of the house when, it is sold to the purchaser.

Let us consider the situation which arises when the purchaser re-sells the house. On the second occasion it is sold at market value. Because the purchaser takes over the existing mortgage and pays no less interest than he would pay on other mortgages, he does not qualify for a grant under the Act. While that may be in accordance with the Act, it would appear that such anomalies need to be considered. I have had several complaints from applicants whose applications were refused on the ground that previously in their married life they had owned houses, that at some time or other they had been purchasing houses under mortgage, that they had never completed the payments, or that they had made arrangements to dispose of the house, thereby terminating the contract. When they sought to purchase a home with the assistance of a grant under the Act they were told that they were ineligible. One such case concerned a person in Western Australia who had been transferred by his employer to South Australia. His home in Western Australia was under mortgage and was disposed of there.

The Act provides, amongst other things, that for a person to be eligible for a grant he must not have owned a house previously in his married life. The legal question arises of whether a person who is purchasing a home under mortgage really owns it. It may be said that while the home is under mortgage it belongs to someone else. I would appreciate it if the Department would consider that question with a view to clarifying the position of persons who have had an application rejected and who wish to apply for a grant in the future. The names of all applicants for this assistance are available and it would be possible for the Department to investigate the individual cases. For public reasons, I will not mention names tonight. I received a letter from a man whom I will call Mr. A for the purpose of this discussion. In the letter the following statement appears -

When my wife and I signed our contract note on 7th December 1963 1 had £275 in voluntary savings with the South Australia Superannuation Fund, and £206 in various banks. Only the £206 was allowed and we have therefore been denied a Government payment of one-third of £275 which is a considerable sum of money to a person of my means.

The letter refusing to allow this £275 was dated 27 7th October 1964 and signed by the Regional Director of the Department of Housing in South Australia, Mr. M. C. McTaggart.

I strongly query the rejection of this claim. Section 22 (l.)(a) of the Act provides for the purchase of homes during the present year. To money .saved in the seven previous years there is added any money saved during the seven savings years. From that amount we take any decrease in savings in any one of the seven savings years. Under the Act, the Commonwealth should pay an amount not exceeding one-third of the remainder. " Acceptable savings " are denned in section 15 of the Act, which provides -

This section applies to an eligible person in relation to whom the prescribed date is a date not later than the thirty-first day of December, One thousand nine hundred and sixty-four.

I would point out that section 15 is pertinent to the matter I am raising. Sub-section (2.) of section 15 provides -

For the purposes of this Act, the acceptable savings of a person to whom this section applies as at a time before the prescribed date are, subject to this Act, the moneys that were saved in Australia before that time by the person and were held at that time in Australia by the person, or by the person jointly with his or her spouse, whether in the form of an investment or otherwise.

Sub-section (3.) provides -

For the purposes of this Act, the acceptable savings of a person to whom this section applies as at the prescribed date are, subject to this Act, the moneys that were saved in Australia before that date by the person and -

(a)   were maintained at that date by the person, or by the person jointly with his or her spouse, on deposit with a branch in Australia of a savings bank or of a trading bank.

The sub-section then goes on to refer to other institutions. It is necessary to grasp the significance of this matter. The Commonwealth gives an amount equal to onethird of the savings. For this year, they must represent money that was earned and saved in Australia. In relation to those making a claim this year, the money may be earned, saved or invested in any place at all, but on the prescribed date the money had to be in one of the institutions named. The prescribed date is the date on which the contract was signed.

Mr. A.had £275 in a superannuation fund which is not one of the institutions named in the Act. He had not transferred the money to one of the institutions on the prescribed date and therefore he does not become entitled to have those savings counted for the purposes of the grant. I raised this matter during the second reading debate on the Bill and I pointed out that what has in fact happened would be likely to happen. I pointed out that the position would be unfair and that some alteration of the legislation was needed to cover such cases. I did not proceed any further because I was given an assurance by the Minister then in charge of the scheme that money deposited anywhere for this particular year would be accepted as savings. I refer the Senate to "Hansard" of 21st May 1964, page 1432. It will be seen that I raised the matter with the Minister. I asked - 1 want to know what happens to those persons who have entered into contracts between the date of operation of this legislation - 2nd December 1963 - and the present date. Those who have entered into contracts as at the prescribed date are obviously entitled to the grant if they fulfil the other requirements, but those who had their money invested at the prescribed date in something other than one of the institutions mentioned in the legislation are not eligible for a grant. Will the Minister for National Development (Senator Sir William Spooner) say whether this distinction is fair and whether there is any way of overcoming the anomaly?

It will be seen that I foresaw the very thing that has happened as a result of the interpretation that has been given to the Act. I pointed out that there was an anomaly, I suggested that the legislation needed to be changed and I asked the Minister to find a method to overcome the anomaly. Senator Sir William Spooner replied to my question as follows -

Taking the last point first while it is fresh in my mind, I point out that the period between now and the end of December 1964, is in the nature of a transitional period. In that transitional period savings, no matter in what form they are evidenced, become eligible for the grant. So if the couple many and build a home they become eligible for the grant by virtue of the department accepting their savings in any form, investment or otherwise. That, I think, is the foundation for the answer to Senator Cavanagh's query.

I interjected -

But their savings must be in a particular bank at the prescribed dale.

In effect, 1 pointed out to the Minister that he might be wrong as the Bill prescribed that the savings had to be in a particular institution. The Minister answered my interjection by saying -

Not until 31st December 1964.

He went on -

When you get to 31st December 1964, by and large, with certain exceptions, your savings must be in a narrow group of savings banks, permanent building societies or trading banks. That proviso becomes operative from 1st January 1965, with an exception in the case of credit unions and friendly societies, which may continue the even tenor of their ways until 1967.

I appeal to all honorable senators to look at this question quite frankly. What I said could happen has happened. The Act needs amending. Senator Sir William Spooner was not speaking off the cuff when he gave the answer I have read out. He had sent the Secretary of the Department to see me in order to find out what questions I should be raising, so that he could have his answers prepared. I told the Secretary of the point I intended to raise. The Minister had the assistance of officers of the Department, who were sitting next to him during the debate. As a result of what he told me, no doubt was left in anyone's mind that any savings made in 1964, no matter where they were invested, would be acceptable savings. As a result of that undertaking given by a responsible Minister, I did not make any further attempt then to have the provision amended.

I wish to know now whether the Government intends to make any alteration of this provision, which operates quite unfairly against the people I have mentioned. On the assurance given to me by the Minister, Mr. A., to whom I have referred, is entitled to a grant equal to one-third of his savings of £275. There can be no equivocation about that. Does the Government get over this matter simply because the Minister who gave this assurance has now been dismissed from the administration of this portfolio in the Senate? Are we arriving at the position where senators should not accept assurances from Ministers in this chamber? It is a sad state of affairs if senators cannot accept those assurances. The proposal for the amendment of the clause went no further because we obtained the assurance from the Minister. Now 1 ask whether the Department of Housing looks into such assurances and gives a prompt answer to them.

I come now to the next case which I shall refer to as the case of Mrs. B. She writes -

I applied for the Housing Grant having checked on the requirements needed, and having found I fulfilled them all as listed in the booklet "A Grant for Your Home ", I was surprised to be contacted by an officer of the Department of Housing. This gentleman informed me that because my husband end 1 were temporarily absent overseas and had transferred our Australian money to an Australian Bank in London, without leaving money actually deposited in this country, we were ineligible for a grant.

The next pertinent portion of the letter reads -

All the time we were overseas we deposited any savings in the Commonwealth Bank inside Australia House and in the Bank of Adelaide, London. Is not Australia House, Australian territory?

The letter continues -

I feel that a person born and bred in Australia could reasonably call a two year working holiday abroad, " Temporary Absence ". My husband, British born, and resident in Australia 10 years prior to departure, returned to U.K. to see his parents; this should be termed "Temporary Absence ".

Section 14 defines " eligible persons ". It reads -

A person is an eligible person for the purposes of this Act if-

(d)   the Secretary is satisfied that the person has saved moneys in Australia throughout a period of not less than three years preceding the prescribed date.

This money was saved in Australia for three years before the prescribed date. These people know that they cannot make any claim on moneys saved in England because such moneys are not recognised as savings as they were accumulated during a holiday. The other pertinent section of this Act in regard to the case of Mrs. B. is section 1 5 (2.) which reads -

For the purposes of this Act, the acceptable savings of a person . . . are, subject to this Act the moneys that were saved in Australia before that time by the person and were held at that time in Australia by the person, or by the person jointly with his or her spouse, whether in the form of an investment or otherwise.

On the prescribed date, these people had the money saved in Australia in a bank in accordance with section 15 (2.). Because, at one time, that money was not in a bank in Australia, they are deprived of the benefits available under this Act. I cannot see that this case is entirely contrary to the provisions of the Act and it needs, to my mind, some explanation.

I pass on to the next case which I shall call the case of Mr. and Mrs. C. This couple put their savings into a block of land. They then decided to purchase a house. The contract of purchase dated 16th March 1964 stated the purchase price at £5,800. The deposit was nil. A further sum of £850 was payable from the proceedings of the sale of the block of land. For the balance, there was a loan from the savings bank of £4,500 and a second mortgage arranged by the selling agent. Clause 5 of this contract stated -

This contract is subject to the sale of the block of land, and the purchasers authorise the agent to apply the full proceeds of the sale of the land as deposit of this contract.

A separate memorandum of agreement permitting the agent to sell the land and to keep the proceeds as a deposit on the house was signed.

Now, section 17 (a) accepts as savings moneys invested in a block of land provided that the claim for a grant for the house is made in respect of a house to be built on that particular block of land. These people bought a block of land. Had they built on that block of land, they would have been entitled to the grant of £250. But because they never built on that block of land, but sold it for the purpose of purchasing a house, according to the Department of Housing they do not become eligible for the grant. I haVe read section 17 (b) to the Senate already. I do not want to go over the same ground again. Section 22 (2.) deals with the amount of the grant, and section 15 defines what are aceptable savings. This couple had an added claim on this particular contract, because if we look at section 17 we see that it reads -

Where, but for me operation of this section, the acceptable savings of an eligible person as at any time would not include moneys that were saved in Australia by the person before that time and were expended before that time -

(b)   in the payment of a deposit in respect of the purchase by either or both of those persons of a dwelling house in respect of which an application for a grant under this Act has been made by by the eligible person. the acceptable savings of the person as at that time include those moneys.

This section means that even although these people never had that money in a special purpose account in a bank, if the money had been paid as a deposit on a house it would have been acceptable in the view of the Department to attract a grant. This money was paid on the purchase of a block of land. One of the conditions of the contract through the agent for the purchase of this house was that this couple should pay no deposit but that the" gent should, in effect, take the block of land in lieu of a deposit on the home. Obviously, this was money invested in the block of land which was then accepted as the deposit for the house. Not only in accordance with section 1 7 (b) are these applicants justly entitled to the grant, but also they are entitled to it in accordance with the guarantee by Senator Spooner that in matters of this kind the money invested is entitled to attract the grant.

The next case to which I shall refer is that of Mr. D. He purchased a home on 8th July 1964. His application for a homes savings grant was refused. He had all qualifications other than residential qualifications. The interpretation in section 14 of an eligible persons makes provision that the applicant, if an Australian citizen, throughout the period of three years before the prescribed date must have resided in Australia for a period of three months immediately preceding the prescribed date. Sub-section (4.) of section 4 states that -

For the purposes of this Act, a person shall be deemed not to have ceased to reside in Australia during any temporary absence from Australia.

This man was four and a half years in the United States of America and so, at first sight, he would not come within the provisions of the Act. He is classed as an Australian citizen if his absence away from Australia can be regarded as a temporary absence. His absence in the United States may seem to provide a difficulty here, if we look at the question to temporary absence in view of the fact that he and his family were four and a half years in the U.S. However, looking at the facts of the case, we find that Mr. D. was born, in Australia and lived here until 1959 when he left to spend four and a half years in the United States on an exchange visa through the

American Fulbright Scholarship Foundation, which Australia has now joined, as a student engaged in medical research at the University of California. While in the United States he was paid a trainee allowance from this Foundation and at all times was taxed on bank interest. He had money deposited in Australia and kept it here. He was also paid child endowment by the Australian Government for the four and a half years that he and his family were in the United States. On this exchange scholarship and American visa, he was not permitted to remain in America after he had done his training in medical research. This man was sent to the United States to gain knowledge that he would apply to his employment in Australia, and all the time he was there the Government taxed the interest earnings on his savings bank deposit and paid him child endowment. Surely the authorities did not believe that he was absent from Australia on other than a temporary basis. The question at issue was whether, within the meaning of section 4 (4.) of the Home Savings Grant Act, his was a temporary absence. I do not think that by any stretch of the imagination the Government could claim that this was other than a temporary absence from Australia, in view of the circumstances of his case. I ask that consideration be given to this question.

I refer now to cases which have arisen in which people have taken an option on a house by paying a deposit so that the house will be held for them until such time as they can arrange finance. On one occasion a school teacher from the country came to Adelaide and selected a house on which he paid £5 as a holding deposit. He wanted his wife to inspect the property and to approve of it before he completed the purchase. He is only one of many who have taken options on properties. Because he had taken this option before 2nd December last year, the date from which the Act operated, he found that as a result of the interpretation placed on the Act by the Department he was denied the grant, although the contract to purchase was signed after the date from which the Act had effect. The Act has application to people who enter into a contract to purchase or to build a home after 2nd December, but in the case to which I have referred there was no firm or binding contract, nor could there have been, until a date after the date of commencement of the scheme. Yet this person was refused a grant. There are similar cases. During the past week I have been informed by my office of similar cases in which people have been refused grants but are awaiting consideration as to whether or not they are eligible for the grant.

I make a strong protest about the disinterested attitude adopted in the Department of Housing. The officers of the Department are a law unto themselves. The Secretary of the Department, acting on his authority under section 20 (1.) of the Act, decides whether or not a grant shall be made. He acts capriciously and rejects applications, relying on his power under that section. Yet some of the applicants have all the qualifications to meet the requirements of the Act. Under section 20 (1.) the Secretary may, in his discretion, make a grant in accordance with the Act, and he is limited to that power. On some occasions we have found that our queries to the Department have been sent on to Canberra and the ruling that we have received has come from Canberra. I have found on occasions when this subject has been debated that the responsible Minister has not been present to assist us. On three occasions I have raised this subject in the Senate and have been promised a reply, but I have not yet received any reply. The only replies that I have received were to questions that I have placed on the notice paper.

The instances I have cited are only samples of what is being done by the Department of Housing. The Department has shut itself off from the public and people are often refused grants for no other reason than that the Secretary has decided to refuse their applications. Now that Senator Sir William Spooner has returned to the chamber, I would say that the Government is refusing the grant in complete contradiction of the promises that were given by Senator Sir William Spooner.

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