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Tuesday, 3 December 1974
Page: 3045


Senator CARRICK (New South Wales) -The Defence Service Homes Bill 1974 seeks to amend the main Act, the Defence Service Homes Act 1918-1973, in 6 main characteristics. Essentially this Bill has arisen because of one factor- the record inflation that has been engendered during the term of this government which makes the present maximum loan ceiling of $12,000 an unreality and demands a higher loan ceiling. To that extent and for the other features it contains, the Opposition will not oppose the Bill and will give it a speedy passage. Nevertheless, I move:

At end of motion, add- but, without in any way seeking to delay the passage of this Bill and whilst welcoming the measure of relief provided by the Bill, the Senate is of the opinion that-

(a)   the maximum loan or advance proposed should bc increased to a more realistic figure in view of spiralling inflation, and

(b)   all former members of the forces with an honourable discharge should be entitled to defence service loans'.

The 6 main characteristics of the Bill are as follows: The Bill proposes as a first measure to increase the maximum loan ceiling from $ 12,000 to $15,000. Secondly, it liberalises the eligibility of persons for loans and now proposes to include single men and widows. Thirdly, it will allow, at the discretion of the Minister, the transfer of the balance of an existing loan to another property in very special circumstances. Fourthly, it extends the definition of the word 'holding' to include a lease on Norfolk Island and in the Northern Territory. Fifthly, it reviews the interest rate, which has been 3% per cent since the commencement of the main Act, and provides that for the $3,000, or part thereof, above $12,000 there shall be a higher interest rate. That higher interest rate shall be a prescribed rate, and the measurement of that prescribed rate is that it shall be 2 per cent below the most favourable rate that is charged by the Commonwealth Savings Bank on housing loans. That rate at the moment is 9lA per cent, so the prescribed rate at the moment would be 714 per cent. I think it intends to reduce the term of the loan from 45 years to 32 years. Sixthly, it seeks to provide a measure of relief in relation to certain of the instalments to be paid by certain persons such as pensioners. In common with the Opposition I would acknowledge that last year the Government made amendments to the Act which widened the eligibility within the Act and were a step forward. To the extent that the latter 5 measures that I have mentioned do so, they are meritorious and we will of course fully support them. We go further. The amendment to the motion for the second reading is similar to the policy that the present Government, when in Opposition, claimed was its written policy and which it sought to assert as amendments in November 1971. So there ought to be a community of viewpoint in this matter.

I do not wish to be vexatious or to delay the Bill. However, the simple fact is that any measure that relates to housing today, whether special housing under the Defence Services Homes Act or any other measure, must take into account the conditions of housing that exist. Those conditions are of course nothing short of disastrous. The building industry today is at its lowest ebb in several decades at least, and still falling. The building industry has been deliberately wrecked by Government policy. The Minister for Housing and Construction (Mr Les Johnson) in another place has indicated quite clearly that the measures were taken to constrict the building industry and to achieve such a result. The credit squeeze, which the Government acknowledges is a direct action of its own, has bankrupted many hundreds of builders. In the weeks approaching Christmas one can expect many more builders will go to the wall as they face the problems of constricted credit, of 4 weeks annual leave with the 17% per cent loading and the impossibility of meeting rising costs. The housing situation is such that the rate of housing commencements will be reduced by at least one half. As some measure of the picture of housing at this moment I indicate that there would be a lag of at least 50,000 houses. By the end of next year the lag, on all authoritative trends, will be in the order of 100,000.


Senator Devitt - The Bill relates to defence service homes. Is that what you are talking about?


Senator CARRICK - This is the picture of housing in Australia, whichever way one goes to seek a house. Because of shortages, because of difficulties, people who are seeking defence service homes face the same frustrations in many ways as does anyone else. Let me illustrate this because of the intervention of Senator Devitt. Does anyone really believe today that if we increase the maximum loan ceiling to $15,000 any person in Australia can buy a house for approximately $15,000? Does anyone believe it is possible for a person on the average weekly wage to obtain bridging finance and pay it off in order to buy a home? Let us consider an example. Let us say that the most modest cost of a home is $25,000 and that an ex-serviceman seeks $10,000. He starts with one disadvantage in that this Government decided to abolish the home savings grant which was one way of giving him an initial deposit and some help. Bridging loans today are running at 1 5 per cent. This puts such a home well beyond his pocket. The ordinary costs of repayment are beyond the pocket of the ordinary person. Taking into account this proposed increase of $3000, one must look at the realities of the situation. In the period of this Government's tenure the cost of housing construction has gone up by at least 40 per cent, so this loan in itself has not kept pace with the cost of housing construction. It means that the $15,000 will purchase less than the $ 12,000 did initially. This Bill really is a backward step in that regard. That is obvious if we remember the Labor Party's promises when in Opposition. We are going backwards. The Minister for Urban and Regional Development (Mr Uren), when in Opposition in November 1971, spoke in support of an attempt to amend the Act. He is reported in Hansard of 27 November 1974 in this way:

We are asking honourable members opposite to vote for our amendment to increase the loan from $9,000 to $ 1 5,000.


Senator McLaren - A 75 per cent increase in 2 years.


Senator CARRICK -If that were right then, and if Senator McLaren helpfully commends it, let us apply our logic to it.


Senator McLaren - You could not buy a house 2 years ago for $9,000.


Senator CARRICK - Let me complete what I was saying about the situation. Mr Uren continued and said:

This is not simply something that has been pulled out of a hat. This is the policy of our Party. This was accepted at the last Labor Party conference, held at Launceston, and this action was taken after an evaluation of the whole situation in regard to housing costs with a view to finding a realistic level of costs.

I am grateful to Senator McLaren. If he commends the increase to $15,000 on 27 November 1974 as being realistic and if it was Labor policy then, the policy today should be to increase the amount to at least $20,000.


Senator Cameron - What is the date of that Hansard?


Senator CARRICK (NEW SOUTH WALES) - lt is dated 27 November 1 974 and the page is 4 1 8 1 .


Senator McLaren - You have the wrong conference. You know full well that the last conference was not in Launceston as you just quoted.


Senator CARRICK -No wonder they have 2 minutes silence. Let me repeat it. I was reading from the speech of Mr Uren. It was Mr Uren who said this, not I. Will the honourable senator please settle out of court with his own people? He already has been both accident prone to his own Party and enormously helpful to my cause.


Senator McLaren - I will never help your cause.


Senator CARRICK - The honourable senator never helps wittingly. That is where the defect lies with him. The simple fact is that the statement was made, uncontradicted by his Party, that that was his policy. The present Minister for Housing and Construction said on the same day:

The first amendment was to provide that former members of the forces who had been honourably discharged should be entitled to war service homes.

The amendments moved then were stated to be Labor Party policy and stated to be realistic in terms of prices. What the Opposition seeks to do by the proposed addendum to the motion for the second reading of this Bill is to bring that Labor amendment up to date. Clearly, if there is to be an increase in the maximum loan it ought to go not to $ 1 5,000 but to at least $20,000. Clearly, if it was policy then to extend the loan to all former members with an honourable discharge it ought to be policy now. This ought to be sweet reason. It is against that background, and incidentally while paying full tribute to the amendments made last year and proposed this year to this Act, that I support on behalf of the Opposition the Bill in substance and seek to make the addition to the motion for the second reading.







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