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Wednesday, 30 October 1974
Page: 2114

Senator TOWNLEY (TASMANIA) -I direct a question to the Minister representing the Minister for Housing and Construction. Is the Minister aware that examination of the various State statistics regarding housing shows that the Australian housing market has undergone a very large drop and as yet shows no sign of hitting a low? Is the

Minister further aware that with the rundown of the building and supply sectors that we are now experiencing, when the Government does decide to reduce interest rates shortages and consequent higher prices will only add to the cost of buying or building a home? Does the Minister realise that in order to obtain a $20,000 building society loan a borrower must command a salary of almost $2 10 a week and thus a loan is out of the reach of most young people trying to buy a home? Finally, will the Minister ask the Government to review housing policy and take steps so that young people particularly can look forward to owning their own homes in the Australian tradition and not just being tenants of the Government?

Senator MURPHY - On behalf of the Minister I indicate that the Government clearly wants people, especially young people, to be able to obtain their own homes on reasonable terms which will not be oppressive to them. It is a fact that interest rates are high. It is also a fact that the lending of money and the operations in the housing field are in the private sector of the economy. It is also true that the Government is doing whatever it can to enable young people to get their homes at reasonable rates. It is quite clear that even in the last few weeks the Government has taken steps to have interest rates lowered, and there have been indications that the direction of Government policy is to see that interest rates are lowered. But I think there is something which ought not to be forgotten when we are looking at all the problems of inflation.

I suppose it is true in our society, which is a great home-owning community, that one of the side effects of inflation is that many people who have acquired homes over the years, especially fairly recently, with a mountain of debt have, because of the operation of inflation, found it comparatively easy to pay off those debts which would otherwise have seemed astronomical. This is one of the ways in which inflation has worked to the benefit of home owners who have a mortgage. That is very often forgotten. People constantly enter into arrangements to pay enormous sums with which they could probably cope only if they remained healthy and able to earn constantly. They enter into these arrangements optimistically and it is a fact of life that inflation has paid off for them. I am speaking of those who entered into these arrangements some time ago and Senator Townley agrees with what I say.

Senator Townley - Oh, no.

Senator MURPHY -Inflation has largely paid off for these people.

Senator Withers - How about the poor old lender and how he gets butchered?

Senator MURPHY -The Leader of the Opposition asks: What about the poor old lender and how he gets butchered? It is nice to know that he is on the side of the lender in such circumstances.

Senator Withers - I mean the Commonwealth Savings Bank.

Senator MURPHY -The Commonwealth Savings Bank can look after itself and show a handsome profit. The strength of what Senator Townley asks is: Will the Government keep taking steps to ensure that people can get homes at reasonable rates of interest? I indicate that clearly the direction of Government policy is that people, especially young people, ought to be able to get, at reasonable rates of interest, advances which are sufficient to enable them to get the kind of homes they want in which to bring up their children. I assure Senator Townley that that is what the Government is endeavouring to do.

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