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Wednesday, 16 March 1966

Mr McMAHON (Lowe) (Treasurer) . - by leave - Mr. Speaker, when discussing aspects of the economy in his statement to the House on 8th March, the Prime Minister (Mr. Harold Holt) referred to housing which had been described as a weak spot in the current situation. He mentioned the additional finance, estimated at $24 million, being provided by the savings banks for housing in the second half of 1965-66 and went on to say that the Government had under consideration other measures to support housing. We have, in fact, gone into the position of home building exhaustively, not only studying the available statistics and similar information but also taking the advice of many people and organisations connected with the industry.

The rate at which new dwellings are being started has of course dropped back considerably from the extremely high levels reached in 1964-65 when nearly 117,000 houses and flats were commenced. Yet in the December quarter it was still running at 100,000 dwellings per year, which was high by comparison with most earlier periods. Meanwhile there was a great amount of other building going on and there appeared to be very little spare labour in the industry. The Government attaches very special importance to home building as an element in the economy, this for several reasons. We need more and more homes for the increasing number of young people reaching marriageable age and also for the rising flow of migrants, many of whom come as family groups or are young people who will soon marry. There is nothing more discouraging to people arriving in Australia than to find housing difficult to obtain.

From another standpoint, dwelling construction is one of our largest industries and probably the most pervasive of all in that it goes on practically everywhere. It may not be generally realised that these days, as nearly as can be estimated, ex*penditure on dwellings, including alterations and additions, runs at close to $1,000 million a year. A good deal would have to be added to that for maintenance of existing dwellings and, of course, that is by no means the end of the story. New houses have to be fitted out with appliances and furniture and furnishings, and expenditure on these amounts to a great deal annually. The rate of dwelling construction thus has a vital interest for a very wide range of industries, trades and occupations.

The Government believes that dwelling construction ought to be kept up to the highest practicable level; by which I mean practicable in relation to the resources of labour, materials and equipment available at any time. It is no use trying to push things beyond that point. In fact it would be foolish because all we would get would be delays in construction, rising costs, and a drain of resources from other important activities. The view we reached was that it would be timely to make a certain further amount of finance available, and it appeared to us that the earliest and most certain effects would be achieved if this were done through the State Governments under the Commonwealth and State Housing Agreement. We therefore decided to make an offer to the States. We told them we would agree to support an increase of SI 5 million in the borrowing programmes for this financial year on condition that the share of each State in the additional amount was used wholly for housing purposes. The States have accepted this offer and will probably start to step up their home building activity at once. I should like to point out that the $15 million of additional expenditure will mainly be concentrated in the three months between now and the end of 1965-66. Taking this with the addition of $24 million of savings bank money in the current half year, it is plain that the level of dwelling construction is now being strongly stimulated.

I present the following paper -

Additional Housing Finance - Ministerial Statement, 16th March 1966- and move -

That the House take note of the paper.

Debate (on motion by Mr. Whitlam) adjourned.

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