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Thursday, 27 February 1975
Page: 861

Mr McKenzie (Diamond Valley) - As usual when the honourable member for Lilley (Mr Kevin Cairns) talks about housing matters, he speaks with a great deal of knowledge and, I believe, a great deal of restraint. It is a pity that some of his colleagues do not adopt a similar approach. As I pointed out when we were debating the Appropriation Bill (No. 1) 1974 last year, the honourable member for Lilley, although he denied it by interjection, seemed to disagree with the honourable member for Boothby (Mr McLeay) and many other honourable members on his side of the House when it came to housing.

I hope to satisfy some of the disagreements which the honourable member for Lilley finds with the Bill. In contrast to the honourable member for Lilley, the honourable member for Bendigo (Mr Bourchier) seemed to me to invoke all sorts of fears. He used the usual catchcries of nationalising the building industry, socialist governments and so on. This was also a feature of a previous debate on this matter. The honourable member for Darling Downs (Mr McVeigh) said that the Bill was a blueprint for social degradation. None of these statements can be substantiated. The honourable members who are taking this attitude are defending a situation that has been in existence for a long time. Name calling is no substitute. Why is there a need for a Bill like this? Why do we need this sort of legislation?

Mr McVeigh - That is exactly what we want to know.

Mr McKenzie (Diamond Valley) - We need it to provide those things which are not presently provided by existing legislation either in the Australian Government area or in the area of the States. We are not- I stress it again and it has been mentioned by other honourable members- aiming to take over the role of the housing commissions in the States. Their role is properly in the field of welfare housing. This Bill provides money and organisation for all sorts of other things.

The honourable member for Lilley criticised the Bill as being vague when he referred to particular clauses. I take the point of view that those clauses are not vague, but flexible. In regard to his belief that action could be taken without the approval of Parliament, I point out to him that under this Bill, if passed, $25m which already has been provided for in the Budget will be allocated. Any further moneys to do any of these other things must be appropriated by Appropriation Bills which come before this House and are voted on by the Parliament.

Mr McLeay - He is talking about the powers of regulation.

Mr McKenzie (Diamond Valley) - Those regulations must be backed up by money and the money must be provided by the Parliament, by appropriations, and can be provided only by the Parliament. I see absolutely no foundation in that objection. The honourable member for Bendigo also mentioned an advertisement. It is my understanding that the positions were advertised very widely in Australia and it has been impossible to fill them. They have now been advertised overseas. There is absolutely no foundation in his accusation. It is a rather cheap political jibe.

The Liberal-Country Party coalition has no real viable policy on rental housing. In 23 years, former Liberal-Country Party Governments did little, and did it very slowly, to ease the situation. What has this meant? It has meant that people in difficult circumstances- the people we see appearing on television programs; the people whose plight is put before the people of this nation in the Press- are the people who have not been helped. For many years they have just existed. It is time this Parliament did something about it. This Bill will do something about it. It is not before time. The Liberal Party and the Australian Country Party have no policy and no compassion in this area and only a very mealymouthed recital of platitudes.

As the Minister said in his second reading speech, the Bill concentrates and mobilises the power which the Australian Government possesses in the housing field for the benefit of the people. This Bill is not an ad hoc approach to housing but will sustain a co-ordinated effort to improve housing in Australia. The Corporation will be an organisation which will be able to bring co-ordination to the housing area and to look at the problems as a whole. It will be a body with a viewpoint and a body with resolution. It will also be a counter-cyclical organisation. It will be able to do something about the downturns and the upturns in the building industry which occur far too often. For the first time we are invoking constitutional powers to provide a new and co-ordinated scheme for those people who are the responsibility of the Australian Government.

For the benefit of the House I think we ought to mention, as set out in clause 6, what the functions of the Corporation are. They are:

(a)   to grant money for the building of dwellings, the purchase of dwellings and the purchase of land to be used for dwellings;

(b)   to build dwellings or take part in, or be associated with, the building of dwellings;

(c)   to sell and lease dwellings built, purchased or otherwise acquired by the Corporation;

(d)   to provide, or ensure the provision of, facilities and services for persons in dwellings with which the Corporation is concerned; and

(e)   such functions as are conferred on the Corporation by any Act.

And that includes the War Service Homes Act.

Sub-clause (3) states:

The Corporation may perform its functions to the extent only that they relate to matters with respect to which the Parliament has power to make laws and, in particular, may perform its functions-

That is, with regard to territories, defence Services, defence forces and other things. The particular powers of the Corporation are set out in clause 8. They are:

(a)   to purchase or take on hire, and to dispose of, plant, machinery, equipment or other goods;

(   b ) to enter into contracts;

(c)   to erect buildings and to demolish buildings;

(d)   to set out, construct and maintain roads, and construct and maintain shops and other buildings and works, for the provision of facilities and services to persons residing in dwellings built by the Corporation or with which the Corporation is otherwise concerned;

There are many other provisions in this clause which provide a far-going and far-seeing resolution of the problems which face us in the housing field in Australia today.

I can envisage the situation where, in conjunction with the Department of Urban and Regional Development, we can develop new areas for people in Australia at a reasonable cost to give them good living conditions, nothing like the sort of thing which the honourable member for Darling Downs implied in degradation of housing- nothing like that at all, but pleasant homes, pleasantly designed in parks away from the centres of our cities. This is the sort of thing I would like to see. I believe it is one of the things that is provided by this Bill which will enable us to achieve that very laudable objective. Modest housing has rapidly disappeared from the market. Nobody is building low rental housing. This type of housing was not built under the previous Government. This legislation will enable us to fill the gap. Some welfare housing has been built by the housing commission but there has not been this particular type of low rental housing that the legislation before us provides for. Private enterprise has been unable, for a variety of reasons, to provide sufficient rental housing at reasonable rates or to help those people who need assistance in bridging the deposit gap. Housing has tended over a considerable period of time to move out of the reach of a large number of potential home owners. This Bill will enable the Corporation to provide finance to assist those people who are not helped at present. It is not to replace the things that are happening at present but to provide the means by which the present gaps can be filled.

I could point out to the House that in places such as Canada and New York rental subsidies are paid. Often they are paid to entrepreneurs who put up buildings to enable this sort of rental accommodation to be provided. This legislation will enable private enterprise to provide houses and flats which can then be used for rental housing. This action will be applauded by the building industry, particularly the small builder, and those other industries associated with the building industry. At the moment the small builder, no matter what the conditions are, finds himself in an invidious position. He is either struggling for building materials in a time of building boom or is having difficulty with finance in a time of downturn in the industry. What we want to see, as I mentioned before, is some kind of countercyclical organisation. The Corporation set up by this Bill will provide it.

I would like to say something about a scheme which was mentioned in the Prime Minister's policy speech, namely, the deferred payments scheme. Some people, because of particular circumstances, might have difficulty in the first 5 years in meeting payments. By money which can be provided in this legislation these people can have interest and capital repayments deferred in the early stages. It is not believed that a great number of people will take advantage of it but there are people in particular circumstances who may wish to take advantage of it. Young couples who have commenced their family very early in life and are finding it difficult to provide money immediately would get great benefit from such a scheme. We should not deny these people the opportunity to have decent housing. Why should we ask them to live with their relatives and put up with conditions that many have to put up with at the moment. I think that that is of particular relevance as this House is at present considering another Bill which deals with family matters. The Bill will allow such assistance to be granted. I point out to the House that the money can be provided for under the powers contained in section 51 (XXIIIA) of the Constitution which was the amendment to the Social Services Act of 1946. I will read the relevant section to the House because I think we need to remind ourselves of the powers that exist. It states:

The provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorise any form of civil conscription), benefits to students and family allowances:

It is under this family allowance part of section 5 1 of the Constitution that it is proposed to provide assistance to the people about whom I have been talking.

I have already pointed out that the Australian Housing Corporation will become responsible for those activities which are presently being carried out under the defence service homes scheme. This will require the Corporation to make about 10 000 loans annually to exservicemen and women, involving advances totalling in excess of $ 100m. The administrative and technical expertise in the field of direct lending which the Corporation will possess as a result of employing the staff who have operated the defence service homes scheme will make it easy for the Corporation to develop procedures for making loans to home-seekers for whom the Australian Government has constitutional responsibility. However, this group is so broad that it would be neither desirable nor feasible to suggest that the Australian Housing Corporation should try to meet the requirements for housing loans of everyone in the group. It is not the intention of the Government to duplicate the functions of established lending institutions such as the State housing authorities, the Government and private savings banks and the terminating and permanent building societies. I hope that members of the Opposition pay attention to that because it has been one of the main points of their argument. Nor is it the intention of the Government that the activities of the Australian Housing Corporation should conflict in any way with established policy on the provision of housing for particular groups, such as migrants, students or Aborigines. While in some cases the Government may decide to integrate existing housing programs into the broad framework of the Housing Corporation, the fundamental intention is that the activities of the Corporation will complement those of existing organisations.

Because of this, the individuals, beyond those eligible under the defence service homes scheme, to whom the Corporation could be empowered to make direct loans would necessarily be selected with great care. The Minister for Housing and Construction, in consultation with other interested Ministers, would draw up the regulations setting out the terms and conditions under which a loan could be made. While no decision can or should be made at this stage as to what is the appropriate lending policy to follow, it is of interest to discuss some of the possibilities. The Corporation could be directed to lend to families who did not meet the eligibility conditions set out in the Commonwealth-State Housing Agreement, but who could not meet the repayment burden imposed by the much higher interest rates charged by permanent building societies and banks. Under the 1973-74 Housing Agreement, advances are being made available to the States at the very low interest rate of 4 per cent per annum on advances allotted to the State housing authorities and 4'/2 per cent per annum on advances allotted to the States' Home Builders' Accounts. I think that members of the Opposition ought to take note of that. They have been going on a great deal about interest rates.

The Government has acted positively in this field and had provided a great deal more money than could normally have been expected, bearing in mind the situation of inflation in Australia. So there has been an advance in real terms. Under present arrangements to be eligible for a loan of Home Builders' Account moneys, the average gross weekly income of the main breadwinner of the family, exclusive of overtime and child endowment payments, during the 6 months immediately prior to applying for a loan must not have exceeded 95 per cent of the Commonwealth Statistician's estimate of average weekly earnings during the preceding December quarter. Each State may use the State or the Australian figure for the purpose of the income test. All the State Ministers have now indicated that they are in favour of quarterly adjustments of the needs test in order to preserve, to the maximum extent practicable, relativity between the needs test and the general level of wages throughout the year and, accordingly, the 1973-1974 Housing Agreement is to be varied to provide for this by using as the basis the seasonally adjusted series of quarterly average weekly earnings which the Commonwealth Statistician first published in September 1974. 1 note that in answer to a question I asked the other day in the House the Minister made this particularly clear. The State of New South Wales can be used as an example. Here, insofar as Home Builders' Account applicants are concerned, this variation in the method of computing the needs tests will have the effect of raising the limit at the present time for a family with up to 2 children from $117.80 to $136.80. The maximum loan is $ 17,520; monthly loan repayments vary depending on the terms and conditions of the loan, but a figure of about $102 would be normal given the maximum interest rate of 5% per cent stipulated in the Agreement. This would give many borrowers some scope for taking up second mortgages. However, now consider the case of the person who has an income slightly above the income limit and is faced with an interest rate of at least 1014 per cent, and commonly 12 per cent, generally together with a shorter repayment period. A similar size loan at these interest rates would require repayments of $165 to $185 a month. This is far too much for a person on a weekly income of $137 to pay. Even if this much could be paid, a loan of $ 1 7,520 is not enough to purchase a dwelling in Sydney unless a very substantial deposit has been saved, and this is a most unlikely circumstance in many situations. This is the kind of person who needs Government assistance. The Australian Housing Corporation could lend to a family in this situation at a subsidised rate of interest. A loan of $20,000 over 30 years would require a monthly repayment of $ 140 if an interest rate of Vh per cent was used. However, consideration should be given to regular review of the terms and conditions of the loan so that a Government subsidy would not be provided when it was no longer required.

This is just one example of how this Bill would operate in practice. I am appalled at the attitude of the Opposition in opposing this legislation. It provides sufficient safeguards to ensure that this Parliament is not over-ruled. It enters into areas in which governments have not entered before in sufficient strength or with sufficient variety. It is my opinion, and I am sure it is the opinion of my colleagues, that this piece of legislation is particularly important because it will do something about what I consider to be the intolerable situation which has developed over the years. I ask honourable members on the other side of the House to search their conscience, to really look at the situation. Do they really believe that what has been done over the last quarter of a century is in the interests of those people who need assistance. If they look at the situation logically- it is not too late yet whatever they decide to do in this House- and they have a degree of compassion for those people who would be assisted by this legislation they should use their influence to ensure that the legislation goes through. I believe that one of the most important things that this Parliament can do is to provide housing which is one of the basic needs of the Australian community.

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