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Thursday, 29 October 1964

Senator POKE (Tasmania) .- The Bill now before the Senate authorises the raising of loan funds to be expended by the various States, under the Housing Agreement Act 1961. In his second reading speech Senator Paltridge, the Minister representing the Minister for Housing, pointed out the various amounts to be made available to the States by the Commonwealth, totalling £51,350,000. The Minister referred to advances which are made to the States and are repayable over a period of 53 years at a certain interest bearing rate. One of the problems of the home seeker today is the high interest rate payable on housing loans. Whilst a period of repayment of 53 years seems to be quite a good proposition as a long term loan, one should stop to examine it, and consider the age of the borrower and the amount of interest that will be paid over that period.

The average cost of a home at present exceeds £4,000. I shall have more to say in this respect later. For the purpose of this discussion at the moment I shall refer to a house costing £4,000. The deposit payable may be low, or as is the case with some housing authorities, no deposit may be payable and instalments may be paid weekly or monthly. Very few people buying such houses will ever see the day that they are paid for. As a rough calculation, one could say that by the time a £4,000 home is paid for, the total amount paid on it would exceed £7,000. Over a period of 53 years a house will depreciate considerably and before it is fully paid for probably it will have passed to a younger member of the family.

I wish to refer now to the present housing lag. 1 am fairly reliably informed that 62,000 or 63,000 persons are waiting to buy or rent homes from housing authorities in Australia. The measure before us will assist in providing finance to home builders, but I suggest that it is insufficient to overcome the present lag. Young couples today are faced with the major problem of finance for deposit and for payment of instalments on houses. I am not sure of the conditions that prevail in other States, but in Tasmania young couples who are about to marry or who have recently married have a very poor chance of obtaining a house through the housing authority. Generally it is necesary for a married couple to have two children in order to be in line for a house through the housing authority. We may ask ourselves: " Why does this lag exist?" In a word, the answer is " finance ". I think finance is the most important factor in housing. Government supporters have played on the point that the rate of home ownership is at present higher than it has ever been in our history. J suggest that the actual owners of homes - those who have the deeds to their homes - are very few. One cannot regard a person as a home owner unless he has the deeds of his home. Certainly, thousands of people gain an equity in a home, but I cannot see the logic of classifying as home owners those people who are simply home purchasers.

Other than for financial reasons it is hard to understand why there is a shortage of housing. I think everybody will agree that there is no shortage of building materials throughout Australia. A few years ago the Government relied for an explanation of the housing lag on the shortage of building materials and of skilled labour. In Tasmania, with the possible exception of bricklayers, all building workers are available to work on housing. Applicants to housing authorities who qualify for a house must wait for anything from six months to two years. I have dealt with cases in Tasmania where applicants have had to wait up to four years. In such cases there have been special circumstances, as honorable senators will realise. Nevertheless, the time lag is a big factor. If a young couple are planning to be married and must find temporary accommodation, even for six months, they must live with their in-laws or find a flat for which a very high rent is payable. Difficulties are created for them. It is necessary for them to furnish their temporary accommodation, but when a house is allotted to them by the housing authority, the furnishings they have purchased may not fit into that house.

I am also concerned at the high cost of land, which adds considerably to the cost of building a home. I shall quote from a bulletin issued by the Housing Industry Research Committee in Victoria as recently as January of this year. The book states that the all-homes average deposit is £1,768. The average deposit on a brick veneer cottage is £1,948, and on a weatherboard cottage £1,057. I realise that those figures do not touch upon land prices, but I thought it was as well to mention them before referring to land prices in Victoria which could quite easily be regarded as being a guide for the rest of Australia.

Land prices vary from capital to capital, from State to State and from municipality to municipality. Nevertheless, the figures I am about to cite can be taken as a guide. The average price of blocks of land in and around Melbourne in 1960 was £1,045. In 1961 the average rose to £1,184, in 1962 to £1,275, and in 1963 to £1,364. Those figures reveal an increase of slightly more than £300 a block in a period of four years. That rise considerably increases the purchase price of a home. The same trend is apparent in regard to the average price of homes in Victoria. In 1960 the average price of a brick veneer home was £3,822, and of a weatherboard home £2,993. In 1961 the respective figures were £3,981 and £3,052, in 1962 they were £4,042 and £3,159, and in 1963 they were £4,084 and £3,193. It will be seen that the average cost of a home and a block of land is considerably more than £4,000. I shall have more to say about that as I develop my remarks.

I now propose to cite some figures which appear in a newsletter prepared by the Housing Industry Research Committee in October 1964. These figures show that the average price of building blocks in the fringe areas of Melbourne rose by about £80, or 5.9 per cent., during the 12 months ended in June 1964. One wonders whether wages are keeping pace with the increase in land values and in the cost of materials. The figures which have been obtained from 20 municipalities around Melbourne, show that the average price of the building block in fringe areas has risen by 32.8 per cent, since June 1962.

People are having to move further from the heart of the city. That in turn means an increase in the cost of transport to and from the city for persons who are employed in the city. Not only are transport costs increased, but also the value of wages is depressed. The effect has been more marked in the metropolitan area of Melbourne as a result of the increase in rail and tram fares imposed by the Bolte Government. I admit that Mr. Bolte has now decided to withdraw some of the increases. So the workers will be assisted in that way. People who have to live in these fringe areas must also pay a higher cost for services. The newsletter that I have just mentioned shows that between 1954 and 1964 the average price of a block of land has risen by £1,116. In 1954 the cost of a building block in Melbourne was £32S whereas today it is £1,444. Another significant set of figures reveals that from 1955 to 1959 the price of land rose by 139 per cent., or an annual average of 27.8 per cent. There has been a tapering off in the last few years, but the overall increase between 1955 and 1964 was 177.2 per cent.

It is evident that young couples find it quite difficult to obtain the necessary deposit for a home. As 1 mentioned earlier, the all homes average deposit in 1963 was £1,768. It is quite evident that deposits will continue to increase from year to year. What hope has a man in the low income bracket who is earning no more than £18 a week, and who has a family of three, four, five, and in isolated cases up to 10 children, of saving enough to pay a deposit on a home? One is entitled to expect that some authority should build homes that can be let at a reasonable figure to assist these people to rear their families. A person who has so many children is contributing much to the economy of this country and the country has a responsibility to assist him to the greatest possible extent. There is a great need for population throughout the

Commonwealth and people with large families are making the greatest contribution towards populating the country. An approach should be made somewhere along the line to keep land prices in check so that the average working man can purchase a block of land and eventually get sufficient money to pay a deposit to purchase a home through a co-operative building society, a bank or a government instrumentality such as a housing commission or housing department.

Many factors add to the cost of homes. Apparently, this has been recognised to some extent by people in authority. It is apparently recognised by the Commonwealth Minister for Housing (Mr. Bury). On 16th March 1964, at a luncheon of the Association of Co-operative Building Societies, he said that the complex building regulations added an estimated £250 to the cost of each new home in Australia. It is rather significant that shortly after he made that address the Government brought forward a bill to enable persons under the age of 36 who saved £750 within a certain period to qualify for a free Commonwealth grant of £250. Whether this was an effort on the Government's part to overcome the cost of the complex building regulations by granting £250, I do not know. Perhaps it was not. I think that the legislation, which was introduced in the early part of the year, was to honour a promise made by the Liberal Party during the last election campaign. That promise was made merely as a gimmick to get the young people to vote for the Liberal Party.

Senator Paltridge - The honorable senator should not believe that.

Senator POKE - I do believe it, and I have very good reason to believe it. Quite a number of young people told me that they voted for the Liberal Party only because they could get £250 to assist them in building a home. It was rather significant that when the promise was made conditions were not specified. The promise was played up by the Press, which is a good friend of the Liberal Party, in such a manner that young couples really thought they would get £250 with no strings attached. Quite a number of people fell for that gimmick.

I suggest that the amount of money being made available now to various authorities does not provide the assistance hoped for by people and organisations interested in housing the people. The Minister for Defence (Senator Paltridge), in his second reading speech, said that under this scheme 51,600 houses had been built in the past three years. That is an average of 17,200 homes yearly. Relating that number to the population of over 1 1 million - 1 know that many homes have been built in other years - I emphasise that it does not account for the housing requirements of much of the population.

I am particularly concerned with the Aged Persons Homes Act, under which about £30 million has been allocated. This has done much to relieve the housing worries of aged persons, but many of these people cannot qualify for assistance under that Act. They rent rooms or flats and live under deplorable conditions. If more money were made available to assist them it would be a humane act. For many years I have thought that the Government could do something to assist in the provision of homes for departmental employees at an economic rent. I know that in some instances houses are provided for Commonwealth employees at a rent which is a fixed percentage of income. In my opinion, that is entirely wrong. After all, a house costs so much to build, and the land on which it is built costs a certain amount. The occupant, irrespective of his standing, should not have to pay a percentage of his income in rent. He should have to pay only an economic rent. There are many departments with employees throughout the Commonwealth. If I tried to enumerate them, I would miss some, so it is better not to mention any.

The staffs are transferred from State to State, from area to area and from location to location. Some of them have felt really confident of remaining in an area or a district for a considerable time. They have found the deposit necessary to build or purchase a home, but after having made themselves comfortable for a few years they have been notified that they are to be transferred to another district or another State. They must dispose of the house. It may be said that they receive more for the house than they paid for it, but the point is that when they transfer to another location they must purchase another home which, because of the trend in housing costs, carries a highly inflated price, so they lose in that respect. Perhaps the Government could consider the question of, where possible, supplying its own employees with adequate housing.

The Minister mentioned in his second reading speech that of the £51,350,000 which is being advanced by the Commonwealth for the current financial year, some £33,750,000 will be allocated to the States for their construction programmes and some £17,600,000 will be made available to home builders through building societies and other approved lending institutions. The proposed allocation is £345,000 more than it was last year. If one takes £4,000 as the average cost of a home, excluding the cost of land, the increase in the proposed allocation will build the tremendous number of 86 homes. So the Bill does not do such a great deal to meet the housing needs of the people.

I suggest that the Government should set up a research and survey branch in the Commonwealth Department of Housing and that this branch should conduct investigations with a view to helping home seekers to decide whether it is better to build in fringe areas, such as those that I have mentioned in Melbourne, or in inner areas where facilities such as roads, water and sewerage are available. High density bousing in areas where facilities are already available would reduce housing costs. The proposed research and survey branch could inquire also into the possibility of lower interest rates and cheaper land. There is no doubt that a branch such as I have suggested would be of great assistance. I appeal to the Minister to give my suggestion some consideration and to bring it to the notice of the Minister for Housing.

It is not my intention to speak at any length on this occasion. The Opposition does not oppose the measure, and there is no reason why it should not pass through all stages without any difficulty.

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