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Tuesday, 16 October 1956

Mr WHITLAM (Werriwa) .- The House has been treated this evening to two thoroughly unrealistic and irresponsible speeches by Government supporters. The housing position in Australia is nothing about which any of us can be complacent, but the Government takes the attitude that all our housing deficiencies are the fault of either its predecessor in this place or of the governments of the six Australian States, whether Liberal or Labour. The honorable member for Lilley (Mr. Wight), who was the last honorable member to speak, true to his theories and in complete defiance of all actual practice and experience, would have us believe that private enterprise would build better houses than public enterprise, and that it would build more houses. Let it be frankly stated now that in no Australian State is there any prohibition or restriction on private enterprise which would prevent it from building as many houses or flats as it wants to build for letting to tenants. There is also no restriction in any Australian State on the amount of rent that may be charged those tenants by persons who now build houses. I believe that the same position applies in every State in respect of houses that have hitherto not been let, no matter how old they are. If private enterprise wishes to build houses it can do so. Private enterprise, however, is too selfish to build houses now, just as it has always been too selfish to build houses unless it could secure exorbitant rentals for them. Investors now realize that they can get away with a bigger profit from investing in other fields than they could obtain if they were to invest in housing. It is legal but not practicable for them to secure whatever return they wish on their investment in houses which have been built in the last two years or have not been let before that time.

Reference has been made to the position shown by the census. Ministers and their satellites would have us believe that Australia's housing position must be satisfactory, because if you divide the number of houses by our population you will get a smaller quotient than you will get by making a similar calculation with respect to European or North American countries. However, that calculation overlooks the fact that Australia's population has grown in the last ten years, and is continuing to grow by a greater ratio than is the case in any North American or European country.

It overlooks the fact also that our principal cities, where the housing position is most grim, have been growing and spreading to a greater extent than any North American or European city. In Australia the average number of occupants to each house seems satisfactory, but the great majority of our houses have either too few occupants or too many.

Let me refer to the census statistics as at 30th June, 1954. On that date 49,148 Australian families were living in sheds and huts, and another 107,216 Australian families were living in portions of houses.


Mr WHITLAM - One hundred and seven thousand two hundred and sixteen Australian families were sharing premises. That is 1,000 more families than were sharing premises at the census on 30th June, 1947. In the hand-out which he read the Minister for the Army (Mr. Cramer) made a comparison which would seem to indicate that more houses have been built under this Government's administration in nearly seven years in office than were built by the Chifley Government in the four postwar years for which it was in office. I concede that. It would be a shocking thing if that were not the position, because the population is now 1,500,000 greater, the resources of our country have been completely adapted from a war footing, and apparently there are now fewer rumours of war than there once were. But whereas in every year under the Chifley Government an increasing number of houses was commenced, completed, and under construction, and that momentum was maintained for the first two years of the present Government's term of office, since then, in the horror budget and then in the financial panic measures of the last twelve months, the brake has been very severely applied.

If one looks at the figures supplied by the Commonwealth Statistician or by the Minister for National Development (Senator Spooner) one will comprehend the appalling fact that the number of houses being constructed is declining the whole time. T cite the figures from the " Monthly Review of Business Statistics" for June last, which is the latest issue. It will be seen at page 35 that the number of houses commenced in the June quarter of this year was 16,479. That is a smaller number than in any quarter of any year since the

March quarter of 1953, and except for the March quarter of 1953 it is the smallest number of houses commenced in any quarter during this Government's seven years in office. If one looks at the number of houses under construction, one finds that there was a smaller number of houses under construction in the June quarter of this year than in any quarter in any of the seven years during which this Government has been in office. If one looks at the number of houses completed, one finds that fewer were completed in the June quarter of this year than in any June quarter since 1953 and fewer than in the June quarter of 1952. Of course, completions are not the real test of the position in the building industry. One must look at the number of houses under construction and the number being commenced. The number being commenced indicates how the money for housing is coming forward. It is plain from the figures to which I have referred you, Mr. Acting Deputy Speaker, that the position has never been so grim except in one of the quarters of the year of the horror budget.

Mr Duthie - What did the Minister for the Army say?

Mr WHITLAM - He does not worry about statistics. He speaks in general and inaccurate terms. It is regrettable that the Minister for the Army always talks on housing matters. He wants to hark back to the days when he made his fortune from letting houses and flats, collecting rents, and investing money in housing on behalf of private investors under that system which lamentably failed during the depression and failed to overtake the lag during the 1930's.

Mr Haylen - But the honorable member will agree that the Minister has the key to the situation.

Mr WHITLAM - And he charges for it. 1 refer the House to the figures issued by the Department of National Development, particularly those dealing with the dwellings constructed by State Housing authorities under the old Commonwealth and State Housing Agreement. In 1953-54, 17,063 dwellings were commenced. In the following financial year, 16,634 were commenced, and last financial year, 14,646 were commenced. In the June quarter of 1956, 2.881 houses were commenced, and in the

June quarter of 1955, 4,043 were commenced. It is quite plain that the number of houses being constructed with the money the Commonwealth makes available to the States under the agreement has very drastically declined. I shall cite the figure for completions in my own State of New South Wales. In 1954-55, the number of dwellings completed under the agreement was 5,254. Last financial year it was 3,655, and it is calculated that this financial year it will drop further to 3,400, including 265 homes which are being provided for serving members of the forces - one category of the community for which the Commonwealth has undoubted power to construct houses if it so desires.

One other field in which the Commonwealth has undoubted power to construct homes if it so desires is war service homes, which have been the Commonwealth's responsibility ever since 1918. The constitutional power of the Commonwealth in respect of war service homes has never been challenged. Yet, we find in the report of the War Service Homes Division, which was presented to us three weeks ago, that during the last financial year 13,524 applicants were assisted, compared with 13,861 in the previous financial year. However, applications totalled 22,131, and unsatisfied applications - that is, the backlag from previous years, together with that for last year - stood, at the end of June last, at 24,655. The total number of homes provided by the War Service Homes Division dropped from 12,788 in 1954-55 to 11,803 last financial year. The number of existing houses which were purchased with assistance from the division dropped from 7.160 in 1954-55 to 6,026 last year.

From the latest figures of the Department of National Development it appears that, at 30th June last, 2,111 houses were under construction for applicants to the War Service Homes Division, whereas at 30th June, 1955, 3,547 houses were under construction. The only thing which has increased in connexion with the War Service Homes Division is the waiting period before one gets one's money. Nobody who applies for a loan in order to buy or build a home with an advance from the War Service Homes Division will receive an advance this financial year or, in fact, in this calendar year or in the next calendar year. But that is another subject. I refer to it in passing because it very clearly indicates the Commonwealth's own default in a matter which has for over a generation been its responsibility.

I want to come, more particularly, to the provision made by this bill towards solving Australia's housing problem. Many references have been made to the housing agreement in previous years. That agreement, for the ten years after the Chifley Government made it with the six Australian States, provided 95,008 new houses and enabled 100,421 houses - one in every six built in Australia since the war - to be commenced. It is rather miserable to criticize an agreement which has made so many houses available in Australia in the last ten years. Some snobbish remarks about Housing Commission houses were made by the two Government supporters who have spoken on this bill.

Mr Hamilton - What does the honorable member mean by " snobbish "?

Mr WHITLAM - I would not accuse the honorable member for Canning (Mr. Hamilton), who I believe will speak after me, of being a snob, because he has very little to be snobbish about. If these houses were not well built, then the Commonwealth Auditor-General and the responsible Ministers have failed in their duty in making the money available from Commonwealth sources to the six Australian States. We can assume that they were good houses. That is what the Auditor-General has certified. It is what successive Ministers have claimed. This agreement, if it was not palatable to the Government, could have been ended by the Government upon twelve months' notice being given to each of the States operating under it. The Government declined to give that notice to them. It declined to do the honest, direct thing. Instead of that, it gradually starved the States. It had not the courage to kill the agreement, but it is only too willing to starve the States.

Let me compare the figures for the last three years with the figures in the bill. In the financial year 1953-54, for the first time the five mainland States participated in the old agreement. South Australia, under a perennial Liberal government, came into the agreement for the first time in that year. An amount of £37,200,000 wa> made available. In the financial year 1954-55, the Australian Loan Council decided that the five States should receive £32,000,000. In actual fact, after a review which was made in December, 1954, they got only £29,150,000 for the whole year. Last year, the five States got £33,200,000. This year, the six States will receive for this purpose £24,522,625, a drop of one-third. That drop has come on top of increasing building costs. It has been estimated that costs in the last three years have increased by 25 per cent. So not only has the amount of money allocated been decreased but the cost of every house has increased. It is little wonder that the number of houses being completed and commenced in every successive financial year has gone down and down and down.

I said that £24,500,000 was being made available this year for the housing commissions in the six States instead of £33,200,000 which was made available to five of them last year. In addition, £6,430,000 is being made available to building societies and £1,197,375 is being made available for the construction of those service dwellings which the Commonwealth has the constitutional ability to provide itself if it wants to provide them.

Mr Hamilton - It has provided £33,000,000 for housing alone.

Mr WHITLAM - It has provided only £24,500,000 for the purpose for which, for the last ten years, we have passed Loan (Housing) bills.

Mr Hamilton - It is still £32,150,000.

Mr WHITLAM - This year the Government proposes to spend £24.500,000 on a purpose for which, in 1953-54, it spent £37,200,000, when the £1 went a third of the distance further. It has been claimed that the States are getting what they want. At least the Minister for the Interior (Mr. Fairhall), who is now at the table, made it plain in the reply that he gave me on the 11th of this month, and which appears at page 1462 of "Hansard", that the States will receive £32.150.000 for all purposes instead of the £35,532,000 for which they asked. His reply very clearly sets out that the Commonwealth declined to give the States the amounts for which they asked and, furthermore, that the Commonwealth will review in December of this year, as it did in December, 1954, the amount promised at the Australian Loan Council meeting in June.

The Minister also set out, as one may see at page 1463 of " Hansard ", the exact amounts which are to be made available in each State for the service dwellings.

Since housing grants to the Mates of Victoria and Queensland have been given by the honorable members for Batman and Herbert, 1 shall give the figures for New South Wales for the last three years and this year. They have declined as follows: -


lt is quite plain, therefore, that in a State in which 30,000 people are waiting for housing commission homes and applications are coming in at the rate of 203 a week, where there are 25,000 applicants waiting for building society loans, and where there are 12,000 applicants waiting for war service homes, instead of providing more houses, the Government is definitely precluding the erection of more than two-thirds as many houses as were erected four years ago.

I have referred to the provision that is being made for the first time for building societies. I shall quote the figures relating to advances for building societies under the Chifley Government, the figures for the first of such advances under this Government, and contemporary loans from all sources to building societies in New South Wales. In the financial year 1948-49, the New South Wales building societies received from all sources £10,835,000. In 1949-50, the year in which this Government shared office with the Chifley Government, the societies received from all sources £12,500,000. Last year they received £6,627,000. As the president of the Association of Co-operative Building Societies of New South Wales is reported in this morning's " Sydney Morning Herald " as saying, this is almost the smallest amount since the war.

What contribution will be made by this bill to the building societies in New South Wales? They will receive £2, 1 60,000, which will still leave them £2,000,000 less than the amount they received in the last full year of the Chifley Government's term of office, and £4,000,000 less than they received in me financial year which this Government shared with the Chifley Government. Do not let us be mealy-mouthed about it. The position of the building societies has deteriorated ever since that notorious conference of 9m August, 1951, when the Prime Minister (Mr. Menzies) and Treasurer (Sir Arthur Fadden) told the life insurance societies, which had hitherto been the mainstay of the building societies, to transfer their investment from building societies to government loans. Since that time the life assurance societies have not reinvested in building societies to any appreciable extent. A reference was then made to the position of the four private savings banks, which have been started in the last financial year. Three of those savings banks, as 1 understand it, have made no announcement of their intentions as regards building societies, and the Bank of New South Wales Savings Bank which, under its charter, could make, and honorably should make, 30 per cent, of its deposits available for housing, has, in fact, made less than half of that proportion available for housing. It has made nearly all its deposits available for personal loans - Credit Foncier loans - to its customers, and a purely negligible amount to building societies. The only cases in which the Bank of New South Wales Savings Bank has made any worthwhile advances to building societies have occurred in new areas where it has set up branches and wants to have a few ready-made customers on its books.

Mr Ian Allan - Give us some figures.

Mr WHITLAM - Well, the honorable gentleman has just come in, and I would not have thought it necessary to go over the matter again. I have been saying that private savings banks can, and in honour should, make available 30 per cent, of their deposits for housing, and they have not done so, that one of them has made available half of that proportion and that the others have not said what they are doing. The total advances of the trading banks during the last year for home purchase and home building dropped by £11.100,000.

The bill is designed to implement a new agreement which differs in three respects from the 1945 agreement. First, the amount of money to be available shall be decided by the Commonwealth, as distinct from the States, and secondly, a fifth of that amount shall be earmarked for building societies. I have dealt with those two features. The third feature is the increase of interest rates This increase of interest rates has been a feature of the Government's attitude towards home building, and also in regard to all those matters for which the small man has to borrow through the banking system. On the same day as the Minister for the Interior (Mr. Fairhall) gave me one reply on this housing agreement, the Treasurer was good enough to give me a reply to a question on interest rates. That reply appears at page 1461 of " Hansard ". I shall summarize it by giving the position of a man who has borrowed from a bank the sum of £3,000 and is obliged to make monthly repayments of the amount of his loan, and of the interest on it. When this Government came into office the overdraft rate was 31 per cent. It is now 5 per cent. Had it remained at 3 J per cent, a man who had to repay a loan of £3,000 over 25 years would have to pay £15 15s. a month. Now that the rate is 5 per cent, he has to pay £17 12s. 6d. a month - an increase of £1 17s. 6d. a month. If he is repaying the £3,000 over 35 years he would have had to pay at the rate of £13 2s. 6d. a month had the interest rate remained as it was when the Chifley Government left office; but now that the rate is 5 per cent, he will have to pay £15 5s. - an increase of £2 2s. 6d. a month. That is the increase on the same loan, and is due entirely to the increase of interest rates which has taken place under this Government.

First, the overdraft rate went from 3i per cent, to 4i per cent, in August, 1952, and then in last April it rose to 5 per cent. A man who is borrowing not directly from a bank on overdraft but through a building society, which, of course, gets its money on overdraft, has to pay an additional i per cent, on those figures to cover the building society's administrative expenses. It is said that the increase of interest rates is part of our fight against inflation. It may be true that an increase of interest rates will deter people from investing in houses, but this increase affects everybody who has already obtained a loan, whether from a bank, by way of overdraft, or from a building society. Surely there is no contribution to the fight against inflation in an increase of the amount of repayments which have to be made by people who have already obtained their loans, and already built their houses! By increasing interest rates in this way the Government is just making more expensive something that has already been put into operation.

The final attack that has always been made by the Government is on the rent control legislation in the States. Let me give one very clear example of what can occur if rent control on existing lettings is removed. In 1954, the Legislative Council of Western Australia, which is not democratically elected, refused to extend rent control legislation in that State, and the Commonwealth Statistician tells us that in the six months of the June and September quarters of 1954 the average rent in Western Australia increased by 41 per cent. It is quite plain that if rent control is removed a very great increase in the cost of living must be expected as the result. Although the Government never frankly states it, we have to face the position that housing is one of the first victims, and has, I think, been the chief victim, of the Government's fight against inflation. Since the Commonwealth, under the Constitution, has very extensive powers over government spending and the banking system, housing is one form of investment that the Government can control. It controls it, first, as regards war service homes, in relation to which it keeps to the provision of a steady £30,000,000 a year, despite the claims of the returned soldiers league and every interested person in Australia that the figure should be increased so that a similar number of houses, instead of a declining number of houses, can be provided each year. The Government also limits activity as regards housing commission houses, because it gives housing commissions in the States less money each year. This year the amount of money is decreasing from £33,200,000 to £24,500,000. The £33,200,000 was to cover the needs of five States, but the £24,500,000 is to cover the needs of six States. So that is another way in which the Government can restrict housing. The third way is to bring pressure on the banking system. The Commonwealth Parliament has no general power over investment. We have no capital issues control in this country but, since we have power over banking and the operations of those people who depend on the banking system for their funds - the small people who want to set up in business or to buy stock, or erect a house for themselves - the Government can restrict that investment, and it )has done so most drastically.

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