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Thursday, 8 April 1965


Senator PALTRIDGE (Western Australia) (Minister for Defence) . - I do not think anyone would wish to argue against the proposition advanced by Senator Prowse that this is a most interesting piece of legislation. He used other words when referring to it. He said that it is beneficial legislation, and I am sure everyone will agree with that. This is a piece of social legislation which has proved to be of great interest not only in our own country but in other parts of the world where legislation of this kind has a sympathetic acceptance and receives close study by governments which are bent upon increasing and upgrading the living standards of their people.

I am sure not very many people will argue with me when 1 say that in the relatively few months that this Department has been in existence it has done a good job and has demonstrated its increasing ability to continue to render a service for the Australian people. I am glad, therefore, and not surprised that the Bill attracts the support of the Opposition. I would have been surprised if the Opposition has opposed it. However, the Opposition will propose cirtam amendments and we will have an opportunity to debate in some detail in the Committee stage the points relative to those amendments.

I want to refer to one matter which will come up again in Committee because of the amendments which are to be submitted - that is, the question raised by Senator Cavanagh regarding the form in which acceptable savings are to be held at a person's prescribed date before December 1964. He made certain comments on what was said by the Minister, but the outstanding point in this matter is that the prescribed date and the form of savings which are to be regarded as acceptable are clearly laid down in, I think, section 16 of the Act. Although I must embark in muted terms upon any criticism of one who sits on the opposite side of the House, I do say that, the prescribed date and acceptable savings having been so clearly defined in the measure that was previously before the House, I am mystified that Senator Cavanagh should have proceeded on the assumption upon which he says he proceeded. We will debate this matter in Committee, but I make the point that the Act clearly prescribed the form in which acceptable savings had to be held at the prescribed date before 31st December 1964.

I pass from that matter for the moment and refer. to the other point that was made at some length by Senator Cohen this morning. This was the point the honorable senator raised with reference to the discretionary powers which have been vested in the Secretary of the Department of Housing. In pointing to these powers, he said that there were a number in the original act and that the amending Bill added further discretionary powers to be vested in the Secretary. This is undoubtedly right. In pointing this out, the honorable senator said - I do not quite know why he said it - that he did not object to this discretionary power.


Senator Cohen - I said I was not canvassing that aspect of it. I did not say I did not object.


Senator PALTRIDGE - The fact of the matter is - and I take the opportunity to emphasise it because I think it is interesting to note in respect of this sort of legislation - that where we have social legislation which deals with human problems and where a department has to deal on an individual basis with virtually thousands of applicants, each applicant having a different problem, discretionary power must be vested in someone. The Parliament itself realises that, of course, because it passed the original Homes Savings Grant Act as recently as last year. That Act conferred discretionary powers upon the Secretary of the Department. I have no doubt that, in passing the measure, Parliament had well in mind that other social legislation, again dealing with human problems and in the light of experience, necessarily conferred ' such powers upon the person who was administering the Act. The best example, I suppose, is in relation to the Social Services Act itself where the Secretary of the Department of Social Services has powers which range over a very wide field indeed.

Of course, this principle has been accepted. I suggest that it is the experience of every member of the Parliament who has had to do business with the Department of Social Services that because of the complexity and the very nature of the important problems which arise, this discretion has to be vested in the Secretary of that Department. I have mentioned the Social Services Act. It is of interest to note that section 7 of the Aged Persons Homes Act provides that the Secretary -

.   . may in his discretion on behalf of the Commonwealth make a grant of moneys in accordance with this Act to an eligible organisation.

This is, again, the sort of provision which is necessary in this Act.


Senator McKenna - The point that I think Senator Cohen was making was that when the exercise of a discretion hardens into a firm rule, as in the two cases he put to the Senate, it should be made the subject of a regulation and be reviewable in the Parliament. That was the honorable senator's point.


Senator Cohen - That is my point.


Senator PALTRIDGE - I am coming to that point because the honorable senator referred particularly to two instances in which he pointed out that the discretionary powers were to be exercised by the Secretary in a way which would introduce restrictions on the Secretary's power where no restrictions existed before.

Sitting suspended from 12.46 to 2.15 p.m.


Senator PALTRIDGE - in referring, before the suspension of the sitting, to the discretionary powers given to the Secretary of the Department of Housing under this legislation. Senator Cohen suggested that, where the Secretary exercises discretion in a consistent manner so that the use of the discretionary power becomes, in effect, a firm rule, the Secretary's decision should be prescribed by regulation. Two possible instances were referred to. The first was the requirement that a person who enters into a contract for the building of his home must produce evidence that he has made progress payments of at least 10 per cent, of the contract price before the grant will be paid. The second example was the decision that if a person saved more than £250 in a year of saving that began before 1st July 1965 these savings may be accepted provided they are not more than three-quarters of that persons total savings or not more than £560. I will certainly bring this suggestion to the attention of the Minister for Housing (Mr. Bury) for his consideration. However, he will have to consider very carefully the prescribed amount for which the Secretary has this discretion at present. There may be cases, for example, where a person needs the grant to pay portion of his first 10 per cent, progress payment to a builder.

If the Department is satisfied that the contractor will proceed, a payment of something less than 10 per cent, may be accepted. Moreover, as what I might call the " three-quarters ruling " or the " £560 ruling " in respect of annual savings applies only to savings in a savings year which commenced prior to the 1st January 1965, 1 do not see the necessity for including this in a regulation at this stage. However, the proposal made by the Opposition will be considered carefully. Last evening Senator Cavanagh queried the necessity for the requirement of the Department that an eligible person who enters into a contract for the building of a home must produce evidence that he has made progress payments of at least 10 per cent, of the contract price before the grant is paid. As the purpose of this scheme is to pay a grant on savings for the acquisition of a home it must be reasonably established that the person will acquire a home before the grant is paid. Sub-section (1.) of Section 23 of the Act - -


Senator Cohen - That is the one I mean.


Senator PALTRIDGE - I think it is a very fair means by which to establish this. Then sub-section (1.) of section 23 of the Act provides that a grant to an eligible person shall be paid at such time as the Secretary determines. In order to be sure that a person will acquire a home, the Secretary might defer payment of the grant until the home has been completed. However, it is our intention to pay the grant as early as possible. As some contracts to build are not proceeded with, the mere production of a building contract is insufficient evidence in a number of cases. We may, however, be reasonably satisfied that a contract will be completed if a person has paid 10 per cent, of the contract price to a builder. This is eminently reasonable action to protect the interests of the taxpayer. Senator Cavanagh also criticised what he called the arbitrary action of the Department in fixing any limit on acceptable savings in any saving's year that commenced before 1st January 1965. Section 22 of the Principal Act provides that the maximum savings in any savings year that commences on or after 1st January 1965 shall be limited to £250. The purpose of this limitation on annual acceptable savings is to encourage regular saving over a period of years. This is a fundamental requirement of the Government's offer. It is not a reward of £250 for £750 deposited in a home savings account shortly before a person's prescribed date. The scheme aims to encourage young people to save as' regularly as possible for the acquisition of a future home as soon as they are in receipt of an

Income. It was also for this reason that the Minister directed that there should bc an annual limit on a persons savings in any savings year that commenced prior to 1st January 1965. However, as the scheme was a novel one and was to lay down the requirements for future acceptable savings, the Minister directed the Secretary to take a liberal view of the amount of acceptable savings in a savings year in the early days of the scheme. It was therefore decided that, 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 or not more than £560. The limit of £560 is approximately three-quarters of the maximum acceptable savings of £750. To make this limit any higher would be to make nonsense of the requirement of continuous saving over a period of years. The authority for this action is contained in sub-section (1) of section 20 of the Principal Act, which provides -

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

J am sure that all honorable senators would agree with me that the Secretary, in exercising this discretionary power in determining generous limits on annual savings in the early savings years has acted in a most sympathetic manner, taking into account the purpose and conditions of the legislation.

Senator Cavanaghreferred to the staffing situation in the Department's regional offices. He also said that some applicants have waited a long time for a reply. He asked for an assurance that the staffing position in the States would be attended to without delay. The Public Service Board provided an initial organisation for the Homes Savings Grant Branch when the scheme commenced. Since then, approaches have been made to the Board from time to time as the need for additional staff has been established. These approaches have been approved. The fact that the Department and the Public Service Board have kept up to date in this matter is well illustrated by the fact, first, that the examining staff has been increased from 22 to 72 since the scheme commenced to operate and as the number of applications being received increased; and, secondly, in New South Wales - the State receiving the highest number of applications - whereas there were nearly 3,000 applications on hand in January on which processing had not commenced, following the unprecedented rush of applications just prior to and around Christmas, there were less than 100 awaiting processing last Friday. In other words, as soon as the need for them was seen, the Department sought and obtained the Board's approval for the extra staff, with the result I have just mentioned. Staffing needs for the examining of applications are kept under constant review and action is quickly taken to avoid any undue delay in processing. The Opposition has said that the scheme is so complicated that an examiner can process only four applications a day and that as a result there is a congestion of applications in the Department. First, it is incorrect to say that an examiner processes only four applications a day. On the average, he processes between 10 and 12 a day, approximately 4 of which are finalised and the remainder directed for further action, such as a request to an applicant to supply some document not forwarded with the application or a valuation of the home. Secondly, there was a congestion of applications during the week immediately preceding the Christmas break and the following week. However, this is no longer the position. Processing of applications had not commenced on only 206 applications throughout Australia last Friday. In general, an applicant who submits a properly documented application receives a grant within 10 days of its receipt by the Department. Last evening, Senator Cavanagh appeared to be uncertain about the meaning of the amendment in clause 10 of this Bill, which will permit the Secretary to adopt a combination of cost and value in respect of the land and improvements in determining whether the home falls within the limit of £7,000.

Section 20 of the principal Act requires the Secretary in making this determination to take either the cost of the house and the land or the value of the house and land. The amendment will give the Secretary freedom to take either the cost or value of the land and the cost or value of the house. This will be of considerable benefit to some owner builders. An owner builder might have bought his land five years ago for £500. He commences to build now and his land may be worth £1,000. His house may be valued at £6,500. By taking the cost of the land and the value of the house, he would be eligible. If the Department were required to take both the value of the land and the value of the house, he would be ineligible.

In referring to clause 8, Senator Cavanagh said that he could see no justification for the proposed section 17b. This new section will provide that the savings made overseas by a serviceman and his wife and his children under the age of 21 will be acceptable as savings. Senator Cavanagh seemed to be under the impression that money saved by a child under 21 would be accepted as part of the savings of the serviceman himself. This is certainly not intended - nor is it provided for. The savings overseas of the child of a serviceman will be recognised as the acceptable savings of the child only if, and when, he or she returns to Australia, marries and acquires a home.

The Opposition has contended that widows with dependent children should be eligible for the grant. I wish to emphasise first that the scheme is aimed primarily at encouraging young people, before they are married, to establish the habit of saving and to save for the acquisition of their future home after marriage. The grant is a reward for saving by young people for a home, it is not a marriage grant. If the grant were to be regarded as a general social service benefit, it might be extended to quite a number of persons, including widows and widowers, deserted wives and husbands, de facto wives and others; but this is not the purpose of the scheme. It is designed to pay a grant as a reward for saving by young people for the acquisition of their first home after marriage.

Senator Prowsereferred to the case of a young couple who were building their home by stages on a farm. Anyone who commenced to do this on or after 2nd December 1963 could be eligible for a grant. There is another point I wish to make. If a young couple build a shack on their farm and it is not recognised by a local or shire as a habitable dwelling, and then commence to build a permanent residence on the property, the shack will not be regarded as a previous home and the couple could be eligible for the grant.

The general impression I have gained from this debate has been that honorable senators are, by and large, very satisfied with the scheme as it will emerge after passage of the amending Bill. The Bill now before the Senate will correct a number of anomalies. Our approach has been to extend eligibility for the scheme and to treat savings as acceptable as far as we can in conformity with the basic principles of the scheme. The amendments will make eligible many more deserving people.

Question resolved in the affirmative.

Bill read a second time.

In Committee.

The Bill.

Clauses 1 and 2 agreed to.

Clause 3 (Interpretation.)







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