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Tuesday, 20 October 1970



The rent on a 3-bedroom State Housing Commission dwelling in 1945 was S3. 80 a week. By 1949 it had risen to $5.15 a week. It is now S17.20 a week. Can anyone imagine a Housing Commission 3bedroom dwelling costing $17.20 a week to rent being in the category of low cost housing? It must be kept in mind that no person in 1949 paid more than one-fifth of his earnings in rent. If the same principle were applied today it would mean that a person would need to have an income of $86 a week to pay $17.20 a week in rent. Of course we know that under the CommonwealthState Housing Agreement the rebate system has been eroded over the years to such an extent that the lessees of Housing Commission houses are not being given a fair go. In fact to a great extent a means text is applied to many people seeking low cost housing. Only a very small percentage of people in Housing Commission homes have an income of $86 a week. In fact the average weekly earning of all workers is $77 but 65 per cent of all people working earn less than $77 a week.

We need a revolutionary change in low cost housing. We need to return to an interest charge of no more than 3 per cent. We should progressively increase the number of dwellings that the Government authorities construct each year. We should not have a ghetto mentality in regard to the construction of low cost housing. The National Capital Development Commission in Canberra has set an example in integrating all levels of income earners with differing backgrounds. We should be able to do the same elsewhere. It will be necessary for the Commonwealth to co-operate with the States to acquire large areas of land for residential development. If it has been possible in Canberra to reduce by one-third since 1963 the cost of land on which to build a house while the cost of land over the same period in Sydney has increased by 200 per cent, it should be possible, if the Commonwealth Government takes action, to do the same in all the capital and provincial cities. It is all very well for Senator Dame Annabelle Rankin to speak about a special priority and a special consideration for low cost housing, but we want more than words, we want action. Action by this Government in regard to low cost housing is long overdue. But, as the Minister for Housing is aware, low cost housing is well down, in fact it is near the bottom, in the priority list of this Gorton administration. This Government has given no consideration at all to low cost housing. It gives special consideration to the rural sector of the community to such an extent that when the Reserve Bank recently increased interest rates a special rate was fixed for the rural sector. But no special consideration was given to the homebuilding sector of the building industry which needed assistance.

In a reply to a question on 22nd September I was given some figures on the direct assistance that the Commonwealth has given to the rural sector. In 1965-66 the Commonwealth payment to rural industries by way of subsidy or bounty amounted to $84.6m and in 1970-71 it is estimated that it will increase to $215. 3m. The Commonwealth's contributions to promotion and research, in addition to its support of the Commonwealth Scientific and Industrial Research Organisation, for industries such as the wheat, meat, dairy, fishing and tobacco industries increased from $16.4m in 1965-66 to an estimated $37.3m in 1970-71. If one examines pages 66 and 67 of the Budget Papers one will see that rural industries also receive in direct and indirect taxation concessions another $100m. So one can see that this sectional government is concerned first with the wealthy sector and then with the wealthy rural sector and it has very little consideration for the people in this community who really need help, the people who need low cost housing. To show how far down the Government's list of priorities this matter has fallen, in 1954-55 Commonwealth money was available to such an extent that 22 per cent of all homes built were government built while today the proportion has dropped to 9.7 per cent. I have no doubt that when figures for the current year are available it will be found that the percentage has dropped still further.

I want to refer to another aspect of this allocation of money for housing. Each year at least 30 per cent of it goes into a fund known as the home builders' account. In other words, the Commonwealth instructs the States to allocate at least 30 per cent of the money they receive to the home builders' account. The total housing allocation in 1968-69 was $132.2m and of this amount $44. 9m was set aside in this special account, it is distributed differently in each State. For example, in New South Wales it is distributed basically to the terminating building societies, while a little goes to the Rural Bank of New South Wales. In Victoria the whole lot goes to the terminating building societies. In Queensland most of it goes to the terminating building societies and a small amount to the permanent building societies. In Western Australia the amount available is cut down the middle. In other words, 50 per cent goes to the terminating building societies and the other 50 per cent goes to the permanent building societies. In South Australia since 1956 there have been 3 permanent building societies which draw substantially from this fund and the remainder goes to the State Bank. In Tasmania the money is distributed among the agricultural banks and the terminating building societies.

What are the terms of these loans? If one looks at the terminating building societies one finds that the maximum loan, particularly in New South Wales, is $9,600. ]f one repays that loan over a period of 31 years the monthly repayment is $81. I spoke earlier about the average weekly earnings in this country; they are $77 a week. But when we take into consideration that the loan is only $9,600 and when we realise that the average cost of a block of land and dwelling throughout Australia is at least $14,000, we see that the person who obtains this loan still has to find between $4,000 and $5,000 for the deposit gap. This is another problem that has to be faced by this Government because young people today cannot get a home.

As honourable members know, the interest rate charge of permanent building societies was recently put up by 4 per cent. What does that increase mean? On a loan of $12,000 from a permanent building society repaid over a period of 25 years it means an increase of $1,180 over the life of the loan or an increase in repayment of nearly $4 a month. In fact, under this Government the rate of interest charged by permanent building societies has increased from 6 per cent in June 1964 to at least 8 per cent. In some cases it is 8± or 8i per cent. But assuming it is charged at a rate of 8 per cent, what does this mean? It means an increase of $4,590 over the life of a loan, or approximately an increase of $15 a month in repayment. What chance have young people to meet the commitments necessary to buy a home?

This Government has the temerity to say that it is going to give special consideration to the low cost housing. Why, even on the overall question of home building there was a shortage of 8,000 homes this year and the estimate is that there will be 16,000 homes short next year. If there are special circumstances because of which the rural sector can receive special consideration, it is about time the home building sector of the building industry was given special consideration. 1 want to know why it cannot get special consideration. This consideration is long overdue. Young people who purchase land are being fleeced by land speculators, f have no doubt that the honourable member who is to follow me in this debate and who has had great experience in the real estate sector will say that all is well. The honourable member for Bennelong (Sir John Cramer) has been a great supporter of the Government over the last 20 years and he will say that all is well and there is no need to have any real raidcal change. I believe that he is completely wrong. In fact, young people just cannot afford to purchase a block of land. We think that the interest rates charged on the purchase of a home are high but if people want to go and buy a block of land it will cost them !3£ per cent in interest charges. They have to deal not with the banking institutions but with the fringe institutions. In this day and age 13* per cent is the lowest interest rate one can pay to buy a block of land. 1 want to analyse this position of the category in which a young person can purchase a home today. I put a question on the notice paper. A reply has been given to me by the Minister for Health (Dr Forbes) representing the Minister for Housing. I asked: ls the Minister able to say what weekly income is necessary as a pre-requisite to obtaining a $12,000 loan over 25 years from a permanent building society.

The building societies require a person to have a certain income before they will grant a loan. They do not assess it on the joint income of a young couple, because it is possible that after a short period of time the young lady may become pregnant and a child will be on the way. Therefore she would not be able to continue to work. So the societies assess it only on the male's earning capacity and they assess it as near as possible to what they say is 25 per cent. According to my calculations, and I have recorded them in Hansard, a person with a $12,000 loan to buy a home and a block of land pays §92 a month for 25 years. In this case the Minister has given me 3 interest rates. At 7i per cent the borrower has to have a weekly income of S82. If he pays 8 percent interest has has to have a weekly income of $85. If he is paying 81 per cent interest he has to have a weekly income of $89. As I said' earlier, the average weekly earning is $77; 65 per cent of all wage earners receive less than the average weekly earnings.

I know that the honourable member for Bennelong would like to deal with the question of interest rates. In 1964 a couple paid interest of $11,195 on a $12,000 loan. In other words, interest nearly doubled the amount. For a loan of $12,000 they paid back $23,195 over 25 years. But on today's assessment a person will pay $15,785 in interest alone on a $12,000 loan or a total of $27,785. That is what the increase is today. Where one paid $77 a month in June 1964 one now pays up to $92 a month, which is an increase of $15 a month in repayments. In the last few seconds I have to speak here today I would like to tell the Government that it is about time it stopped this hypocrisy and got down to basic truths. It is time the Government examined the real problems of young people and gave them a fair go. Low cost housing should be made available at interest rates of at most 3 per cent. Special consideration is needed. It is about time that the Government gave a better and fairer deal to those people who want to build their own homes.

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