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Wednesday, 7 April 1965

Senator GORTON (Victoria) (Minister for Works) .- I move-

That the Bill be now read a second time.

Mr. President,our brief experience in administering the homes savings grant scheme has extended our knowledge of the many ways in which young people save for and acquire a home. This experience has satisfied us that some amendments should be introduced into the Homes Savings Grant Act 1964. The Homes Savings Grant Bill 1965 will do this. The main purposes of this Bill are to make a number of young persons excluded by the existing legislation from the benefits of the scheme eligible to receive a grant, and to allow money saved and used in a number of ways to acquire a home to be treated as acceptable savings. The amendments not only will increase the number of young people eligible to receive a larger grant, but also will permit others to receive a larger grant than is payable to them under the existing legislation.

The payment of homes savings grants is, of course, a novel operation. In devising the initial administrative arrangements, we recognised that the sensible approach was to determine the basic principles, to provide an operational framework that would take into account the factors then known to us, and to stand ready to propose amendments to overcome fringe problems brought to light by experience in administering the scheme.

In presenting the Homes Savings Grant Bill to the Senate in May last year, the Minister then representing the Minister for Housing (Mr. Bury) indicated that it would be unlikely that we had foreseen all the circumstances in which young people save and acquire their homes.

Applications for the grant were first received in July last year. Since then, 26,000 applications have been lodged, of which 19,000 have been determined. Almost the whole of the applications not yet determined are either awaiting further advice or evidence from the applicant, held pending passage of this amending Bill, or are in process of being examined in our offices. Some 1 7,300 grants have already been paid. Of the 1,600 applicants who have failed to qualify, some will become eligible for a grant if and when the amendments now proposed are accepted.. A total of nearly £4 million has been paid out in grants, and the average grant has been close to £230. I think these figures leave no doubt that the scheme has got off to a successful start. Letters we have received indicate that the grants have been of material assistance to very many young couples acquiring and furnishing their own homes.

The principles on which the scheme has been based have been proved to be fundamentally sound, but, as expected, experience has revealed the desirability for some amendment of the administrative provisions. The amendments have been drafted to ensure that the scheme will benefit the people it is designed to help and will achieve the broad objectives it has been framed to assist.

Some of the amendments will vary the legislative requirements in respect of the house and land for purposes of the scheme. Others will widen the definition of acceptable savings, including a manner in which the savings may be held at a person's prescribed date, savings used in the acquisition of the home, and savings held in trust. Also the opportunity is being taken to make a number of minor amendments of a technical or tidying up nature. I do not propose to comment on all the proposed amendments. An explanatory memorandum setting out the meaning of each proposed amendment is being circulated to all honorable senators. All the significant amendments are summarised in the first six pages of this memorandum.

I now wish to comment briefly on the more important proposals. It is proposed that a person who does not have a satisfactory tenure of the land on which the home is being built at the time he enters into a building contract will become eligible to receive a grant if he satisfies the secretary that he will secure adequate tenure of the land, lt is also proposed that the Act be amended to permit persons who have not entered into a contract in writing to buy or build their homes to become eligible if they satisfy the Department of Housing that they are taking steps to acquire, and will acquire, a home. However, production of a contract in writing will expedite the payment of a grant.

In many cases, the contract to buy or build the home is entered into, or the land is held, by a parent or another person as trustee for an applicant for the grant. This is frequently the case where the applicant is a minor. Under the present Act, persons are ineligible for a grant if they do not settle their affairs in their own names. Where the contract for the purchase or construction of the home is entered into or where the land on which the home is to be built is held by a trustee for the sole benefit of the applicant and the applicant satisfies the Secretary that he will acquire an approved interest in the land, he will be eligible to receive a grant.

A number of young people will benefit from the proposal that money held in trust in acceptable forms for the sole benefit of the applicant, and money expended out of such a trust on or before the beneficiary's prescribed date on a home for the beneficiary, may be treated as acceptable savings. Under the existing Act, expenditure on the home prior to the entry into a contract to buy or build the home may be treated as acceptable savings only if it is made to pay for the land or to pay a deposit in respect of the purchase of the home. We propose to remove these limits. All savings spent by a person prior to his prescribed date in connection with the acquisition of the home may be admissible as acceptable savings.

There are a number of cases where a person bought land on which he intended to build his home, but subsequently purchased an existing home or built elsewhere and later sold the first block. As the Act stands at present, the savings invested in the land first acquired do not count as savings for the purpose of the scheme unless the land was sold and the proceeds were paid into one of the acceptable forms of saving before the person's prescribed date. In some instances, a person has been unable to do these things before his prescribed date. An amendment will provide that the amount paid by- the person for this land will be treated as acceptable savings, provided he has sold the land not later than six months after his prescribed date. However, money invested in land for speculative purposes will not be acceptable savings.

The Government's decision to introduce these and other proposed amendments so soon after the commencement of the scheme demonstrates the sincerity of our promise to administer the scheme sympathetically. The Bill provides that the amendments will apply from 2nd December 1963, the effective date of commencement of the scheme. There is, of course, no time limit on the duration of the scheme. Nor is the grant, as some people have come to believe, a loan that must be repaid. It is a tax-free gift. We offer the benefits of the scheme to our young people, and I feel sure that all honorable senators will support me in advising those who have not already done so to open at once a home savings account with a bank or an account with a building society. I commend the Bill to honorable senators.

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