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Tuesday, 20 October 1970

Sir JOHN CRAMER (Bennelong) - This afternoon we have listened to the usual speeches that we hear from the honourable member for Reid (Mr Uren) and the honourable member for Hughes (Mr Les Johnson), both of whom take a lively interest - and it is good to see that they do - in this question of housing. 1 have taken part in this kind of debate for about 21 years. We are discussing the allocation of money under the CommonwealthState Housing Agreement. T take it that if there were a change of Government the honourable member for Reid would be the Minister for Housing. If his only ideas on housing are those which he expressed when we have debates on housing that would be pathetic for Australia. But 1 do not think that there is any chance of his becoming Minister for Housing because the people are not so foolish as to give him the opportunity to do so.

I have been thinking about this question, and really I do not want to talk for very long on it. Labor's complaints about housing can be summarised in a number of points. Firstly, honourable members opposite talk about a shortage of accommo dation. I wonder whether they are able to analyse this question. Actually, in Australia today we have an abundance of housing to meet the requirements of the population if we consider the matter from the point of view of the units or houses available compared with the population and apply the usual formula of a unit to every 2i to 3 people. By doing that one can see that there is ample accommodation in Australia. But many unusual things happen in a time of prosperity. I have been in the housing business for so long that I know that the demand for accommodation is a fluctuating thing. The demand rises and falls with fluctuations in the affluence of the community.

Today there are tens of thousands of young girls in the community who get together in groups and rent a unit or flat. Also, young men leave home and can afford to set themselves up in a house. This leaves vacant space in the home. This is going on in ali of our cities and it is creating a sort of artificial shortage of housing. I have said before in this House that there is only one real problem in housing - and to the credit of the honourable member for Reid, he mentioned it - and that is the provision of suitable housing for the low income group in the community.

Do not let anybody get the idea that the standard of housing in Australia is low by world standards. This is not so. As a matter of fact, the standard of housing in Australia is far superior to that in the United States of America, which is one of the richest countries. Only recently I had an American staying with me and he expressed surprise at the standard of housing in Australia. Of course, the standard has risen in recent years. Labor always creates the impression that there are many applicants waiting for Housing Commission homes. This is not a true measure of the shortage of accommodation because a great number of people who apply for Housing Commission homes already are housed although perhaps not as well as they would be if they were in a new Housing Commission home. Great numbers of people are not really destitute for housing, although some are in great need of accommodation of that kind.

Labor says that more money should be made available for housing and that wider powers should be given to the Government to enable it to control housing, lt says that the Government should engage itself even more actively than it does today in the field of housing. Labor says that if it were in power it would supply this money and the Government would operate in this way.

Honourable members opposite have referred to land prices. I wonder whether they really know the cause of the very high land prices in Australia. Land prices in the city of Sydney have increased pro rata to a greater extent than they have in most other cities in Australia, and there is a reason for this. There has been too much government control over the availability of land in Sydney. This happened because of the operations of the Cumberland County Council, to which my friend the honourable member for Mitchell (Mr Irwin) referred this afternoon. When Labor was in government in New South Wales it introduced the grandiose scheme of providing a green bell around Sydney. This included enormous areas of land that were not made available to the people! It was . a magnificent idea but it broke down because the pressure upon it later forced the release of the land. Then, of course, we had the present State Planning Authority and with great respect to the Authority, it has been a main contributor to the rising costs of land in the city of Sydney.

There are other factors bearing upon this, many of which date back to Labor control in the past. Labor destroyed, for instance, the incentive tq invest in land by its control system and by the perpetuation of its control system after the war, because even when the wage pegging was lifted and the price controls were lifted it still kept this artificial control upon rents under the rent control system in New South Wales. This had the effect on people who invested for their old age in houses and this kind of investment of destroying that incentive for investment. The people disposed of the houses because of the low incomes from them. They got their capital back and invested it in other things. Running with this was the encouragement for what became fringe banking. We had investment in debentures and what have you, and the great hire purchase organisations grew up because of this controlled system by governments in a field where people's savings, instead of going as of old into investment in land or rent producing property, went into these other avenues which then created another problem. We had an upsurge in the purchase of television sets and motor cars, one or two for each home, and that type of thing. So it went on, and the investments and savings of the people were diverted from the proper place.

As a result of this we had the great financial organisations buying up large areas of land and locking them up. Running along with this were other government controls, such as War Service Homes which bought big areas, and the housing commissions which bought up big areas. The poor fellow in the street had nowhere to go, and these people were able to lift the prices up to a point where they became uneconomic from the point of view of the individual. This process has been going on to a greater extent in Sydney and to some extent in each of the other cities until land prices have become out of hand. Prices could be reduced tomorrow if sufficient available land were released to bring about a competitive state so that the people would have to sell the land to get their capital back. Much has been made crf the question of interest rates. Interest rates were, of course, 3 per cent, and 1 notice the honourable member for Reid (Mr Uren) criticised this. He said that under the Chifley Government interest rates were only 3 per cent and under this Government they are 6 per cent. Could one imagine a more foolish statement to make? As though the Chifley Government had something to do with keeping the rate of interest down to 3 per cent.

Mr Armitage - It did.

Sir JOHN CRAMER - It did not. I was Chairman of the Sydney County Council and went to America and borrowed S8.5m at 34- per cent and sold it at 101 in 1946. That was at the time Chifley was in power. This was the ruling rate of interest and that is the poInt. Today interest rates all over the world - and this Government has no control over it - have increased. This is a fact that one must face. It is foolish to blame a government for that sort of thing. Then the Opposition talks about the high cost of building, but this has gone up only in accordance with the increased cost of wages and the increased cost of materials, which have gone up because of the cost of wages and so forth. This is only in line with the normal increases in prices in every direction. Labor wants an extension of the housing commission idea into a huge building organisation. I, and I believe other members on this side of the House, am very much opposed to this idea. There is a place for the commission but its place should be confined in my opinion to the production of homes for very low income earners. Homes should be made available to them within their means. It would be interesting if one had time to go back over the history of housing, because I have a very clear recollection of the conditions which have existed in the last 40-odd years since I have been in the business. There has been no shortage of houses except on 2 occasions, one immediately after the First World War and immediately afterthe Second World War. But during the other periods there was a very full supply of homes and there was no finance available from any government anywhere in Australia. It was all done by private enterprise. Private finance was available.

As I said before, this was an avenue of investment for the people's savings. Of course, the Labor Party has destroyed that and, I think, effectively destroyed it forever, although the permanent building societies are now encouraging further investment of savings. We well recollect that on the origination of this agreement that we are talking about under the postwar reconstruction plan of the Labor Party it was never intended by the Labor Party that we would have in the future the right to private ownership of homes at all. Under MrDedman - I. do not like to repeat this always - who was the Minister for Post War Reconstruction immediately following the war, a scheme was introduced in this Parliament for an Australian commission to deal with the question of housing, and under that scheme no provision whatever was made for encouraging home ownership in Australia. When challenged on it by the then Opposition the Minister's answer contained those famous words: 'We do not want to build up in this country little capitalists'. I do want to build up little capitalists. I think they are the best possible kind of citizens.

This Government's record is very good indeed. It has encouraged home ownership to the point where it is at the highest level in the world.It has introduced a scheme, which is growing every year, for the provision of homes for the aged. Under this scheme it gives a subsidy of $2 for every $1 self-help by whatever organisation likes to start a scheme. This is growing year by year and providing homes for the aged people. The homes saving grant scheme which was initiated by this Government is a magnificent scheme and an encouragement to young people to save the deposit for when they get married and want to start buying a home. All these matters are directed towards the encouragement of home ownership which in our opinion is the best kind of community to develop. Another scheme this Government has introduced is the Housing Loans Insurance Corporation. This scheme effectively enables home buyers to bridge the deposit gap. The premium on a total loan for 30 years, or however many years it is, is at the rate of only11/2 per cent, which is added to the loan and is included inthe weekly payments the home owner makes. This is a splendid thing because it enables building societies to insure their loans. This enables building societies to make an advance of up to 95 per cent ofthe value of a home. Of course, this means that it is within the ability of the average worker to aspire to, and indeed, to acquire, his own home. The Housing Loans Insurance Corporation is designed in such a way that it does not make a profit. The Corporation must create proper reserves but it does not seek a profit and to the average working man in Australia and the average person on medium and low incomes this is a magnificent encouragement to own his own home because he can obtain finance on a very low deposit. This works hand in hand with the building society movement in Australia, particularly the permanent building society movement.

As honourable members know, there are 2 types of building societies. Firstly, there arc the terminating societies which are very good and which obtain money from insurance companies and banks. The loans given by these societies terminate over a given number of years. Terminating societies are quite good and their interest rate is perhaps a little lower. But the permanent building society is a vehicle for encouraging people to invest their savings. Some people invest their savings in the anticipation that they will want to borrow from the building society when they want to purchase their own home. Others do it purely as an investment and others because of some national spirit. These building societies are controlled by people who are dedicated to assisting people. Although the directors of the societies perhaps receive a few pence in fees the societies are non-profit making organisations. They are run in a co-operative manner and people today are given 6i per cent interest on their money. This is a very good rate of interest and the money that is invested can be withdrawn at any time. As I have said before in this House, I know of no organisation better suited for saving than the permanent building societies. Investment in permanent building societies enables funds to be available for people, and particularly those on low incomes, who can borrow up to 95 per cent of the cost of their home at a reasonable rate of interest. The interest rate was increased recently but I hope and I believe that this rate will shortly be decreased. Therefore, I say that this Government has done a very good job in the field of housing. This is an interesting field and I could speak at great length on it. However, I. am sorry to see that my time has almost expired. I sincerely hope that when we come to consider the new Commonwealth and State Housing Agreement we will look at housing in a proper light and that we will see that the Agreement provides homes for people on low incomes.

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