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Wednesday, 31 March 1965

Senator PROWSE (Western Australia) . - The Bill that we are now considering is part of the Government's programme to provide more adequately for the housing needs of the people. Last year we considered the first instalment of the programme which has been undertaken by the Minister for Housing (Mr. Bury). I join with my colleagues in paying a tribute to his sincerity and to the hard work that the Minister has put into what is a new approach to housing by the Commonwealth since the establishment of the Ministry for Housing.

This Bill has been covered fairly adequately by honorable senators on this side of the House. The Minister described its purposes in his second reading speech. First and foremost, the Bill has the primary function of establishing the Housing Loans Insurance Corporation which will insure lenders against losses arising from the making of loans for the purchase of homes or for additions, repairs and improvements to homes. It is designed to help refinancing existing mortgages and, by adding vastly to the security of such loans, it should attract more money into housing and at lower rates of interest. This is the purpose and aim of the Bill.

In its gentle way, the Opposition has endeavoured to poke fun at the Government's hopes, but I can see nothing wrong in introducing legislation in the hope that it will do something. It would be absurd to introduce legislation in the hope that it would not do something. We are all activated by the hope that what we do will be successful. This Bill is not exceptional in that regard and I do not see any fault in the Government's approach.

The Opposition has told us many things that the Bill will not do. Of course there are many things that it never set out to do. I was very interested in the criticisms of the Bill that emanated from the Opposition. Although the Opposition is not opposing the Bill, it is carrying out its rightful Parliamentary function of examining and criticising the Bill. I think the debate has been interesting and, in a great measure, constructive.

I was interested in Senator Cavanagh^ jeremiad about the Bill. He was somewhat in contradistinction to his colleague, Senator Bishop, who could see at least some fine sentiments in the Bill. Senator Cavanagh welcomed the Bill with as much enthusiasm as a mother welcomes her 13th child. He complained that the Bill would not do anything. He adopted this line of thought when comparing it with what is done by somewhat comparable Canadian legislation: but he conveniently forgot that the Commonwealth's constitutional powers in relation to housing are quite different from those of the Canadian Parliament. In those circumstances our approach to the matter must necessarily be quite different from the approach of the Canadian Government. Canada's legislation has been carefully examined by the Minister and bv the Government, and those parts of it which arc applicable to the Australian housing position have been applied wherever possible.

The honorable senator described the premium of possibly 2 per cent, that will be charged to insure a loan as a load upon the finance to be provided, but he omitted to say that if, as the result of this legislation, a borrower can obtain finance at 7 per cent, interest instead of at 10 per cent, interest, the 2 per cent, once and for all charge will be infinitesimal in relation to the total cost of providing the home. He said that the 2 per cent, would be an additional charge, lt will be an additional initial charge but it will help the borrower to reduce the rate of interest payable during the currency of the loan.

Senator McClellandis an expert at setting up Aunt Sallys. He made some kind of a case about the fellow who has an average income of £23 a week. I do not admit that his figures are correct but I will accept them for the purpose of examining his case. He said that £23 a week was the average income of a worker in the Australian community and that the average cost of a home is £6,000. But that is not the average cost of a home. I have considered this particular aspect. I am very familiar with the set-up in Western Australia and I have in my hand quarterly statistics which show the cost of houses in that State. For the quarter ended June 1964 I notice that 1,529 brick, stone and cement houses were completed. Their total value was £5,840,000. The average cost, therefore, was about £3,810. The average cost of fibro-cement houses for that quarter was £3,125.

Senator Drury - Docs that include the cost of the land?

Senator PROWSE - No, it does not include the cost of the land. In case anyone should say that those figures relate to Western Australia only and may be all wrong for the whole of Australia let me turn to the annual report of the Director of the War Services Homes Division. I think Senator McClelland has this report in his possession. On the back page of the report are figures relating to the average cost Of homes erected by the Division in each of the States during 1963-64 compared with the average cost in 1962-63. For New South Wales the average cost in 1963-64 was £4,214, for Victoria £4,082, for Queens land £4,074, for South Australia £4,435, for Western Australia £4,195 and for Tasmania £3,848. I can see no reason for the astounding figure of £7,388 for the Australian Capital Territory.

Senator Benn - What was the average cost for the previous year?

Senator PROWSE - I shall not read Che average cost for all the States because they are much the same so I shall take the cost in New South Wales. In 1962-63 the average cost was £4,063 compared with £4,214 for the following year, as I have already mentioned. The report to which I have referred contains the figures for the years 1955-56 to 1963-64. They reveal variations up and down during that period.

Senator McClelland - What does the honorable senator estimate to be the value of a block of land?

Senator PROWSE - This publication shows that in New South Wales the average cost of a dwelling house and land in 1963-64 was £5,053, so Senator McClelland has merely thrown another £1,000 in to make his story look a little better than it really is. It is a convenient dodge but it does not always come off.

I listened with a great deal of attention to Senator Laught. He mentioned the absence of provision for strata titles in some States and said that this would prevent the wider use of the provisions of this Bill. Senator Laught suggested a Federal-State conference to consider this matter. I welcome that suggestion because I am particularly anxious to see such a conference to consider not only this but also other matters that need to be considered when the Commonwealth institutes a housing programme and has to use State instrumentalities to bring it into being. There is an urgent need for close and careful cooperation between the Commonwealth and the State authorities in this matter and I support Senator Laught's suggestion wholeheartedly.

Senator Laughtand other speakers on the Government side have agreed with the Minister for Housing that this legislation will make possible a mortgage market for housing. That is a most desirable and long overdue provision. I confidently expect that the Minister's hopes will be realised in this connection. Like Senator Scott, I was particularly interested in certain lines in tha

Minister's second reading speech. The lines Senator Scott quoted ware -

The Corporation may insure a loan secured by a first mortgage made to a farmer for the erection of any type of dwelling on his property.

But Senator Scott did not quote the part of the Minister's speech which I think has a greater interest in this connection. The Minister went on to say later -

There are many people who wish to borrow to extend or improve their homes, but have already given a first mortgage over their properties. In these cases, it is not proposed to rule out the insurance of a home extension or a home improvement loan secured by a second mortgage, or some other type of security over the borrower's interest in the land, but a first mortgage, including a renegotiated' first mortgage, will be preferred. 1 was very interested in that section of the Minister's speech in which he said -

It is not proposed to rule out the insurance of a home extension or a home improvement loan secured by a second mortgage, or some other type of security. . . .

This problem has concerned me greatly for a long time because anybody who is interested in justice and equality in the distribution of long term finance for home building should be interested in the case I have submitted previously, and now submit, of a big section of our people who need long term finance for housing. Australians who are engaged in primary production find that they are virtually denied any access to long term loans for home building. This affects all people engaged in agriculture whether as owners or employees. Because of this inability to secure suitable finance, the present legislation will have no application to a considerable section of the people.

Senator Scottmade a suggestion that has been made often before, lt is that by deleting a small section of a farming property and securing a title to that section, the owner of a property can thereby secure the benefit of this legislation. But before he can secure the benefit of this legislation, the owner of the property must find somebody who is prepared to lend money on a security of that sort, and I do not think anybody is prepared to lend money on a section of a farm deleted from the rest of the property. Instead of adding to security, such an arrangement destroys security. Tt is of no use whatever. This plan has been put up many times but it will not help either in adding any security to a home or attracting lenders.

We have already had experience of the homes savings grant. We find that at 21st August 1964 only 13 per cent, of the successful applicants for this grant had come from the non-metropolitan areas whereas there are 44 per cent, of the people in that group. Although statistical records are generally made to sub-divide this group further into other rural and urban areas - and rural means farming areas and country towns of fewer than 1,000 people - this has not been done with the figures available in relation to the homes savings grant. Therefore, we have to guess at this distribution. If the figures had been available, I am sure we would have seen that the second group of people - described as rural - would have had virtually no successful applications at all.

Figures available for Western Australia to the end of February show that of the total number of applicants for the homes savings grant, 70 per cent, were successful but of these only 8 per cent, were from the nonmetropolitan area as against 62 per cent, from the metropolitan area. If we look at the needs of people on a percentage basis, we find that in 1962 the distribution of marriages was 59 per cent, in the metropolitan area against 41 per cent, in the rest of the State, which closely approximates the population statistics. Again, having regard to the fact that the majority of the successful non-metropolitan applicants are to be found in the large towns outside the capital cities, the situation is serious indeed. These figures show that 43 per cent, of the people get only 8 per cent, of the grants.

The same causes that prevent the provisions of the Homes Savings Grant Act from operating in rural communities will surely operate against the provisions of the Housing Loans Insurance Bill. Loans will continue to be unavailable unless the problem of security is tackled. That is why I say at the outset that the Minister does give me some hope by suggesting that a second mortgage or some other form of security will be acceptable. I know that the Minister is studying this problem carefully.

Senator Wright - That reference is limited to alterations.

Senator PROWSE - Yes. So far, I have endeavoured to study this problem in cold statistical figures. But it is a problem which concerns people - people who are engaged in Australia's foremost industry, the industry which is providing the great bulk pf our export wealth. I believe that those people deserve a little consideration in this regard. Occasionally one finds a perambulating journalist who stumbles across this problem and writes about it. There was one such journalist who contributed an article to the "West Australian" of 30th January this year. Because I believe that the Senate is interested in this problem I would like to read this article, It is headed " Modern Pioneers - The Women of Esperance " and was written by Catherine Martin. The article reads as follows -

Much has been said of the new settlers at Esperance - the men, many of whom crossed the Nullarbor in trucks to take up their virgin scrubland, and are now developing it into rich pasture. Little, however, has been said of the women, who with stoicism and tenacity are living in conditions that the ordinary city girl would not tolerate. Some are newly weds having their first babies. Others brought their young families with them. . . .

Many farmers are living on their capital sweating out the first five years till they can hope that their farms will become productive. Any money made from the first crops is ploughed back into the land. Stock, farm machinery and buildings must of necessity come before the homesteads. Families are living in partitioned-off portions of the woolshed or other farm buildings till a start can be made on the family home. Others have put up one or two rooms of what will ultimately be the permanent home, and are living there.

The author instanced some of the cases. She said -

Mrs. WallaceDeane, former textile examiner, drove wilh her husband and two boys, now aged two and six, in a truck from Bendigo last January. They drove straight into the scrubland in the Munglinup district (making the first road on their property), parked the truck on a knoll, pitched a tarpaulin over the back, unloaded beds, a table and chairs - and they were in residence. They lived this way for two months till the couple, who had never built anything in their lives before, put up the corrugated iron shed in which they are now living.

Mrs. PeterStandish, a former school teacher, came from Victoria two years ago. She lives in a converted bus and has a baby less than a year old. . . .

Mrs. DavidSteer, who started housekeeping with two trams, " stuck in the middle of nowhere," near Gibson's Soak, said the shortage of water was the biggest problem.

This article does deal to some extent with' the manifestation of the problem but the author did not delve into the reasons for it. I am trying to present those reasons to honorable senators. 1 have read what the author saw at Esperance but she could see a repetition of this through all the developing areas of Western Australia and some areas that have been developed for quite a long time. It is all very well to glamourise this sort of thing but the glamour wears off. Last year, 1 received a letter from a woman farming at Lake Grace, an area that was pioneered many years ago. She said - 1 have seen many women, used to good houses, who become disillusioned after years of battling, and become an unwitting fifth column against the success of the farm. They just can't stand the inefficiency any longer, the unloveliness, and lack of dignity.

This is a human problem. It is a problem which I believe we cannot ignore. No other section of the community is asked to put up with these conditions in housing for the lack of long term finance. I feel that our legislation has never adequately tackled this problem of security. 1 believe there is an answer to the problem if we only try to solve it. I believe that the Minister is making a serious attempt to find a solution.

In case any honorable senator thinks that this is a matter which only concerns the 17 per cent, or so of Australians living in areas classified as rural, let me assure them that part of the pressure at present being felt in the capital cities is generated by these forces that I have mentioned. We speak a great deal about the need for decentralisation. I feel that this is one of the forces producing a great deal of the concentration in the cities. This is because people who want to live in the country cannot get housing on suitable terms. Farmers cannot provide housing for their employees except by using money that is required for immediate developmental purposes.

Senator Scottmentioned the building of homes for farm workers in country towns. This would be an excellent thing. I am all for it. But at the present time the Commissioner of Taxation will not give the concession that is granted with regard to homes built for workers on farms if they are built in a country town. This is one aspect of housing that I think the Government should have a look at. I feel that a lot of the demand for housing in the cities is brought about because of the complete absence of long-term finance in the rural areas. The other day Senator Drake-Brockman related to me the instance of a person who had £1,500 available in cash as a deposit on a home. This person was informed by his bank manager that the bank could not give him any assistance if he wanted to build a home in an area about 30 miles outside Perth, but the money would be available if he moved into the metropolitan area. 1 recently discussed the position regarding war service homes For many years any returned man eligible for a war service, home found that he could not get finance from the War Service Homes Division to build a house on a farm. That position obtains today, to all intents and purposes, unless some part of the farm property is virtually a part of a town. If he lives any distance from a town it is virtually impossible to find an ex-serviceman in agriculture, either as an owner or employee, who has succeeded in getting a war service home. 1 discussed this matter the other day with a returned man who had been farming for many years. He could not get a war service, home on his farm. He retired from farming and moved and lived in Perth. He applied for a war service home. He was eligible for it and received it. But while he was living in the country he could not get one.

I feel that this state of affairs is not good. It is not good for the welfare of the country and it produces the pressures of centralisation and demands for more money. The demand for more money for underways and overways in the cities is an extra cost to the community and the city man should be interested in decentralisation because he is involved in the matter. I do appeal to the Minister to redouble his efforts with regard to housing so that we can remove What I believe is a standing disgrace to this country.

Senator Scott - I desire to make a personal explanation.

The ACTING DEPUTY PRESIDENT (Senator Wedgwood). - Does the honorable senator claim to have been misrepresented?

Senator Scott - Yes. I think I have been misquoted by the previous speaker, Senator

Prowse. He quoted something which was out of context. With your permission, Madam Acting Deputy President, I shall read the relevant part of the Minister's second reading speech so that it will be apparent to everybody that what I said was quite correct. The Minister said -

The Corporation may insure a loan secured by a first mortgage made to a farmer for the erection of any type of dwelling on his property. As the Corporation will not be empowered to insure the repayment of a loan made to acquire land for farming and commercial purposes, the amount of an insurable loan made for farm housing will be determined in relation to the appraised value of the dwelling or dwellings proposed to be erected. 1 went on to say that the value that would be determined by the Corporation would not be as much as in ordinary circumstances. If the land involved was separated as a one-quarter acre block, it would not have any real value in the eyes of the Corporation and/or the lender.

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