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Thursday, 25 November 1971
Page: 3698

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - In resuming the debate on the War Service Homes Bill I want to say, as other honourable members have said, that the war service homes institution in Australia is highly regarded right throughout the community. Indeed, it has brought great benefit to large numbers of ex-servicemen. The war services homes principle has been upheld by both Liberal and Labor governments, and it goes without saying that this will always be so in the future. The War Service Homes Act was enacted in 1918 and it came into operation on 6th March 1919. It is interesting to note that some 320,000 ex-servicemen have been assisted with loans over that period. I understand that the assets of the War Service Homes Division are in the vicinity of $936m, and despite the benefits extended to ex-servicemen, the fact is that this great institution runs at a profit. I was intrigued to hear the honourable member for Bennelong {Sir John Cramer) express the view that exservicemen were being subsidised. The operation of the War Service Homes Act is not a subsidising process at all. As I have indicated, it is a very profitable venture.

The war service homes scheme is financed by allocations of money from Consolidated Revenue. The money comes from revenue, not from loans. Of course, from that standpoint very beneficial results are derived for ex-servicemen and also for Consolidated Revenue. The country al large has benefited enormously at the expense, if you like, of ex-servicemen. Large profits have been made out of providing war service homes for Australian ex-servicemen. That may come as a surprise to the honourable member for Bennelong. If he is harbouring any kind of malice or anxiety because he thinks that we have been subsidising ex-servicemen, let me encourage him to get 'hat idea out of his head for all time, because it is not so. As I have said, actually we have been deriving considerable profits from the operation of the war service homes scheme. In fact, 1 understand that this year we have spent some $61 m on the scheme, but we have collected $16m more than we have spent.

Mr Irwin - That is not right.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - I am just indicating the position for this year. If the honourable member for Mitchell were to look at the operations of the scheme during the years, from 'he time of its inception - and I am sorry that I have not had time to do so - he would be able to establish that this fabulous rate of profit has been made. As my colleague the honourable member for Reid (Mr Uren) has said, if the Government can do this in regard to the provision of war service homes for ex-servicemen, it can also do i'. in regard to the provision of homes for other people. The honourable member for Bennelong is trying to interject. If he has a point of view to put I would be quite happy to discuss this matter with him because what 1 have said is unquestionably true. If it is necessary, on the mo' ion for the adjournment of the House I will produce figures to substantiate the points I have been making.

The war service homes picture has not always been a rosy one. The honourable member for Bennelong talked about the benevolent attitude which the Government has adopted towards ex-servicemen in the 20-odd years it has been in office. But the fact is that for many years there were great queues for war service homes and the waiting periods extended over 15 or IS months. Thousands and thousands of exservicemen have been required to accept temporary finance at high rates of interest from all kinds of high interest money lenders and to repay those loans at 12 or 13 per cent interest. After financing those temporary loans the ex-servicemen have had to start afresh with their war service loans. T think that the honourable member for Bennelong and the Minister for Housing (Mr Kevin Cairns), who is sitting at the table, would be prepared to concede the truth of what I am saying. For years and years the Government adopted an altitude of indifference towards the provision of war service homes. Year after year the Opposition contended that strong efforts should be made to take up the backlog of applications for war service homes, but 'he Government did not respond until a short time ago.

Let us consider what happened last year. The memories of honourable members opposite are very short in this regard. Do not challenge me on this question because I have the substantiation here. LaU year there was a 6-months delay before exservicemen received war service loans. Why was that? This year there is a Budget surplus of $630m. Such is the state of the economy and the affluent nature of the Government's finances, yet last year it obliged ex-servicemen to queue in order to borrow money at high rates of interest, lt kept them waiting for 6 months for war service loans. The Government has had a record of stop-go policies, and it has not always been benevolent in its attitude towards ex-servicemen regarding the transportation of their loans, the provision of second loans and such matters.

The Opposition is contending that the Government should raise the level of war service loans. It is ridiculous that at this moment an ex-serviceman can borrow only $8,000 for a war service home. The honourable member for Bennelong ha-< the audacity and the hide to stand up in this place and give the impression that the

Government really cares about exservicemen. Just a short time ago in another debate the Government was lauding the actions of the ex-servicemen who have returned from Vietnam. Of course, we all applaud what has happened there, but if one looks at the level of benefits that are paid under the Repatriation Act to servicemen who have lost an arm or a leg, one is unable to .support the contention that the Government has been benevolent in its attitude towards ex-servicemen. We are asking that the amount of a war service loans should be increased from S8.000 to a larger figure. I know thai lbc Government is proposing to raise the figure to $9,000, hut we are saying that it should be larger than that. We say that it ought to be approximately $15,000, because that is the amount of money which ex-servicemen are in fact paying for their homes.

The Government has adopted a petty and pedantic attitude in these matters. There has not been an original idea from the Government on the provision of war service homes for many years. Why should not we be thinking of expanding the war service homes scheme? There are many are'as into which it can justifiably be expanded. At the present time a serviceman has to be a member of the special overseas force before he is eligible to receive benefits, such as the preferential interest rate of 3$ per cent, under the war service homes scheme. We take the view that die scheme should be expanded to include other people. In fact, we say that its benefits should be available to all servicemen - the members of the permanent forces who indicate their willingness to get to war and to accept a military career. What would be wrong with extending the scheme to include all national servicemen - the young men of our country? 1 have already indicated that the war service homes scheme is not costing the Government anything; in fact the Government is making money out of it. What is wrong with making the scheme an enticement to young men of this country to serve in the forces? If we did this sort of thing we would be able to eliminate compulsory national service training. The provision of benefits such as this could be one of the attractions to entice young men to make a career in the Services. I suggest to the Government that it should earnestly consider these proposals.

There are many other things which could be done. Because of the profitable nature of this scheme in my view the Government ought to be prepared to extend it to people such as public servants and residents of the Northern Territory. I think that a contention was made in this regard even by the honourable member for Northern Territory (Mr Calder) who could hardly be regarded as the most intrepid of thinkers so far as these matters are concerned. There is an incredible reluctance on the part of the Government to take a compassionate and even a human attitude in regard to .such matters as the request for second assistance.

My colleague the honourable member for Barton [Mr Reynolds) has a very great involvement in the affairs of ex-servicemen. He takes a great interest in the Returned Service's League of Australia and is always readily available lo ex-servicemen. He told me the other day that he had made representations on behalf of several exservicemen who had sought second assistance under the war service homes scheme; that is to say, they had already received a loan and they were asking for another loan. In effect they were asking for approval lo use the first loan for the acquisition of a second house which suited their convenience. One ex-serviceman, who f think my honourable colleague said was a TPI pensioner, built his house at a location near where an expressway has now been constructed. Six lanes of traffic roar up and down not far from his house. Naturally this ex-serviceman, who receives a pension for his war condition wants to be able to transfer his war service home loan (o finance the purchase of a dwelling in another area. But the request made on his behalf by the honourable member for Barton was rejected. Other people are in a similar situation.

The honourable member for Barton has told me of people who have been moved from one Stale to another, lt is incredible that the Commonwealth, in these cases, often deprives itself of the portability of ils public servants because of its unwillingness and its unpreparedness to provide second assistance or a second loan for a public servant who is compulsorily being moved from one State to another. There are many cases of this kind. I had a constituent who asked for consideration for his application for an additional grant. He bad received a second loan or second assistance because - I speak from memory - his house was to be resumed by the Education Department of New South Wales provided the Commonwealth would make second assistance available to him. He received second assistance and relocated himself in another house. However, he took only a small proportion of the , loan to which he was entitled. Subsequently he made a request for additional assistance. He wanted to take up the balance of his second loan because he wished to provide a sewerage service to the second house. He was told that he was unable to get additional assistance, which is made available to enable people to enlarge their homes and provide sewerage and things of that nature, because he had successfully applied for second assistance. Just how can we reconcile those things? What justification is there for an attitude of that kind?

I want to make some brief reference, in the time that remains to me, to the justification of the case for increasing the loan from $8,000 to $15,000. 1 am aware that the purpose of this Bill is to lift the loan to $9,000, but in my view that is not sufficient. I have some statistics to utilise in this regard but, Mr Deputy Speaker, I wonder whether 1 could do this after dinner?

Sitting suspended from 5.59 to 8 p.m.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Before the dinner adjournment I was advocating the expansion of the war service homes scheme and contending that rather than the war service homes scheme being a liability on the nation it in fact has made a profit. This is because the finance for war service homes is not derived from loan funds at all but is an allocation from Consolidated Revenue. I was making the point also that the war service homes scheme because it is making a profit even at its low rate of interest, 31 per cent, should be used as the basis for a scheme that would give housing opportunities to many other Australians in addition to ex-servicemen. I certainly believe that all ex-servicemen, including those who are at present doing national service or who have done national service, could be encouraged to undertake a military career if they had the war service homes scheme as an incentive. Similarly a lot more can be done to expand the scheme in the short term into the Public Service area and into the Northern Territory.

More importantly, there is no reason why the Government cannot show a bit more enthusiasm and take a very hard, efficient and effective look at the economics of the scheme. And if what I have been saying is the fact, that is, that it is making a profit - and I believe this to be the fact - we should take the business of financing homes out of the realm of money lenders and give the young people of Australia the opportunity to get housing at a reasonable rate of interest. To my way of thinking there is no reason in the world why this should not be done. We have been operating the war service homes scheme on the present basis since 1918 and this Government has been in office for a long time. It has been there especially during the period of rising land prices and housing costs and there is good reason now why we should be looking at this scheme to see whether it can be a kind of millennium for everyone and whether it is the kind of principle that should be expanded. When all is said and done, there have been many ex-servicemen who believed they had an entitlement under the war service homes scheme and who because of their belief applied for a loan but were unsuccessful. The fact is that since the scheme has been in operation something like 553,000 applications have been made and 321,000 have been approved. So there are 227,000 ex-servicemen who believed they had an entitlement and who have been rejected. Of course, there are many others who have never submitted an application at all.

The honourable member for Bennelong, who preceded me in this debate, was contending that there is no need to increase the maximum amount of the war service home loan which at present stands at $8,000. The Government intends under the Bill now before the House to increase it by $1,000 to $9,000. However, the honourable member believes it is unnecessary to increase the amount and says in effect that if these people want more money they should borrow it. He has advocated an arrangement whereby these people should be able to obtain coverage from the Commonwealth Housing Insurance Corporation. This is an expensive process. There is a high rate of interest involved and the person borrowing the money has to incur the costs involved, f do not believe this action is necessary. If they do have to obtain a second mortgage it ought to be sufficient for the Commonwealth Government to give its imprimatur to the lending authorities, lt ought to be sufficient for the Commonwealth Government to say to any lending authority in respect of a person who is an approved war service home applicant and who seeks the approval of the Commonwealth to obtain a second mortgage: 'Yes, he has the collateral'. That should be sufficient and the great financial resources of the Commonwealth should be there to back him up. lt should not be necessary for these ex-servicemen to incur additional expense.

I want to mention just a couple of figures to show why the war service home loan should be lifted to a limit of SI 5,000 from the $9,000 it will be as a consequence of this Bill. The figures in the annual report of the War Service Homes Division indicate that the average cost of dwelling houses has been much higher than the loan which has been made available. The average cost of building a house in New South Wales has been $14,990 and there are many other figures which time will not permit me to enunciate now. Between 1961 lo 1971 the increase in the average cost of a war service home has been $6,000. One can imagine the kind of increase that will take place in the future. It is sensible and reasonable, as the Opposition proposes to show by its amendments to this Bill, that we should raise the limit on war service home loans from $8,000 to $15,000 because this is in keeping with the real costs that ex-servicemen are incurring at the present time. The alternative to doing this is to force the ex-servicemen in this country, who have been eulogised this afternoon, onto the mortgage market and into the hands of money lenders so that they will be spending large amounts of money meeting high interest rates. I believe that this is completely unnecessary.

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