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Tuesday, 20 October 1970

Mr ARMITAGE (Chifley) - I seem to be destined to always speak after the honourable member for Bennelong (Sir John Cramer). I must say once again, as I did last time I spoke after the honourable gentleman, that whilst I have a great deal of personal regard and consideration for him I must take him to task for some of the statements he made. For example, the honourable member stated that there is not any real housing shortage. He also said that the figures of the New South Wales Housing Commission over-estimate the housing shortage. The contrary is the case. I do not think there is any doubt that many people who know that the wail for a Housing Commission home will be 4 or 5 years do not bother to go along to the Commission and put their names down. Therefore, the figures quoted by previous speakers on this side of the House in regard to Housing Commission statistics underestimate the housing shortage in New South Wales. I suggest that the honourable member for Bennelong should get a little bit up to date. I believe he is losing touch. The honourable member should mix around. In particular he should mix with the younger people in our community who are trying to obtain housing or trying, as the honourable member said, to become little capitalists and own their own home. The honourable member should find out how impossible the situation is today for a young married couple, unless they are very fortunate in regard to their economic circumstances, to own a home. These people have a great problem because of the deposit gap which they have to meet if they can get finance. A great body of these people have found finance virtually impossible to obtain from building societies, banks and the like. Far too many of them are being forced into the hands of private money lenders who are charging extortionate rates of interest.

I know of a young couple who recently purchased a home with temporary finance which was obtained at a 15 per cent flat rate of interest. That is a ridiculous position. I suggest to the honourable member that he should get more in touch with those young people and mix around with them.

Mr Uren - Consider the age of both of them. They are both over 70.

Mr ARMITAGE - The honourable member for Bennelong should come out to my area and have a look at Blacktown, Seven Hills and places like that. This is one of the youngest areas that one could possibly find. The honourable member for Reid, who just interjected was correct when he made the point that the 2 honourable members from the other side of the House who have spoken on this matter are both over 70 years of age. Therefore, they would find it difficult to understand the problems which face the younger people today.

I believe we must look at the cause of the downturn in home building, particularly over the last year or so. Honourable members will recollect that the Reserve Bank of Australia recently, in 2 lots of i per cent, called in from the trading banks a total of 1 per cent of their deposits. The money called in was put into the statutory reserve deposits of the Reserve Bank. This was done at a time when the liquidity of the trading banks was being pressed because of the downturn in the rural sector of the economy. In other words, there was a demand upon the trading banks to assist rural industry because of a depression in our rural areas. Therefore, the Government, through its organisation the Reserve Bank, called in deposits of 1 per cent to be placed into the statutory reserve deposits and this happened at the very time when there was a depression in the rural sector of the economy. As I have said before, a demand was made on the trading banks to assist in this regard. As a result, the trading banks had to make a choice and the easiest sector of the economy to hit and to refuse advances to was the housing sector which included building societies which required finance. Also, individual customers who required finance were refused advances.

For this reason I wrote to the Treasurer (Mr Bury) on 18th June of this year and I pointed out to him the facts that I have just stated. By the way, the Treasurer did hot question those facts. In my letter I asked:

I would like to have your comments as to whether this would be a good time to release a proportion of the statutory reserve deposits and, at the same time, issue a Reserve Bank directive to trading banks on lending policy, which would ensure that the housing industry received a reasonable proportion of this release.

This is the way to overcome some of the dearth of housing finance. I received a rather long-winded reply from the Treasurer. He did not argue against the proposal that I had put up. Not for one moment did he argue that it would not help housing. He argued only whether June was the right time to do what I suggested. Most of us have read in the Press only today that a downturn is now taking place in the inflationary movement. We know also that there has been a downturn in housing.

Surely this is the time for the Government to act and to release a proportion of the statutory reserve deposits held by the Reserve Bank and at the same time to give a Reserve Bank directive to the banks that that release should be channelled into the housing sector, not the building sector as a whole. As pointed out in the 'Australian* of 28th July, today there is a boom in commercial building and building of that type, but the depression exists in the housing sector. In an article in the 'Australian' of 28th July headed 'Boom in Office Building; Credit Squeeze Hits only Finance for Homes' it is stated:

The number of new houses and flats approved in May and June is down 23 per cent on the first 4 months of 1970, after seasonal adjustment.

At the same time the value of commercial and industrial building approvals is up 35 per cent in the June quarter compared with the same period last year.

In the year to 30th June the value of approvals for hotels, hostels, etc., jumped 94 per cent to $97m, while office approvals rose 80 per cent to $231m.

This sector of the building industry appears to have been hardly affected at all by the credit squeeze, and will tend to take up some of the resources of labour and capital released by the decline in the home building sector.

I think it is obvious that there is a need to shift the emphasis away from commercial building and industrial building and to use in home building the men and resources available. The use of the statutory reserve deposits held by the Reserve Bank is one of the most effective methods that could be employed. I do not think very many people would deny that there is an extraordinary lack of finance available from building societies. Yet it is only through the banks and the building societies that we can help our younger people to obtain homes instead of forcing them into the hands of private money lenders, as is happening today.

I think there is also a need to review completely the homes savings grant legislation. This legislation should be used to overcome the deposit gap and to save young people to some extent from the second mortgages of the money lenders I have already mentioned, who charge extortionately high interest rates. But unfortunately there is a jungle of technicalities in the legislation which one cannot help but suspect is deliberately designed to prevent applicants from qualifying for a homes savings grant. There is a lack of discretionary power for the Minister to act in respect of those technicalities, and there is little doubt that a large proportion of people who should qualify, if the intention of the legislation as announced on the eve of an election campaign were implemented, cannot qualify simply because of those technicalities.

I would like to deal now with a very important issue, and that is the fact that the Commonwealth and State Housing Agreement comes up for re-negotiation with the States in the coming year. As the Minister mentioned in his second reading speech, the allocation that is being made to the States under this Bill will be the last under the present Housing Agreement. 1 would like to deal first of all with the question of Housing Commission areas. I believe that the time has arrived - and I ask that the Government consider these issues - for a .complete re-appraisal of the Commonwealth and State Housing Agreement, particularly as it affects Housing Commission areas.

I believe it is time that, when there is an allocation of funds to build a housing area, a package deal should be given. That package deal should cover not only the acquisition of land and the building of the houses but also should go on to help build a community with a decent quality of life. I believe that it should provide for the allocation of local government finance for ovals, community centres and the like. It should provide for the essential finance for education so that the needs of education in these Housing Commission areas can be met. I can quote as an example Mount Druitt where classes in the schools are overloaded and where schools that are only months old or a year old already have temporary buildings. There is a decisive lack of the necessary educational opportunities in- those areas.

The package deal should provide also for improved transport services. I give as an example here the Western Suburbs railway line in Sydney. Because of the Mount Druitt, Marayong, Seven Hills and Lalor Park Housing Commission areas the western line is reaching complete saturation, and the time is very close when governments will just have to look at the problem of people being left on the stations in the mornings because the trains simply cannot carry them. There is chaos on the Western Suburbs railway line. The issue has to be faced up to by governments. Therefore the package deal should cover not only local government finance and finance for education but also finance for improved transport services.

The package deal should provide also for financial incentives to industry to move into these areas. Industries could be attracted to these areas if they were offered cheap money by way of interest rebates, cheaper land and freight rebates for limited periods on the understanding that they would set up in the new developing areas. This in itself would overcome 2 basic problems. It would help to overcome the problem of transport which I have just mentioned, because local employment would be available, and at the same time it would also make sure that local employment was available for the people in these areas. Constituents of mine have to go from Mount Druitt right into the city in the very early hours of the morning to their places of employment, and they get back home very late at night. We must keep in mind that both husband and wife have to do this in these areas because, under the economic set-up of this Government, there have to be two breadwinners instead of one in a family.

I also think that the renegotiated housing agreement should also provide for far more emphasis upon housing for the aged. One can quote all the statistics one likes, but the fact is that the statistics of the New South Wales Housing Commission show - 1 could be subject to correction as to the exact time - that there is a waiting period of approximately 5 years for entry into an aged person's home. But these statistics do not take into account the great mass of elderly people who are living in degrading conditions today and who simply do not apply for admission to homes for the aged because they know that it could happen that by the time their date of allocation comes up they will not be alive. The statistics therefore completely underestimate the number of people who are waiting. I think that there should not be such large mass Housing Commission areas but that these areas should be integrated into other private housing areas. For example, persons entering most of the new housing commission areas in New South Wales today are subject to a means test, and therefore the people in them are on largely similar incomes, instead of being integrated into communities of varying income groups.

This is .not a good social base upon which Commission areas should be set up, and although it would be far more expensive to do what I suggest I nevertheless think we should revert to the methods used in the earlier years under Labor government, when the Housing Agreement first came into effect, and when the Housing Commission areas were integrated into private housing districts. I think this would mean the integration of communities and although it would be more expensive it would be a far more socially acceptable proposition. So 1 call for a consideration of these various requirements and needs in the renegotiation of the Housing Agreement with the States. I think that all these things are necessary. The Housing Commission should not simply buy land and build houses. There is a need for package deals providing for transport, industry and employment, local government finance, finance for education and finance for transport. All these facilities are needed to build a community and not just a number of stark homes without the necessary community services around them. This is a very rich country. We have great mineral, rural and industrial wealth and yet we have this extraordinary situation in which a great body of our people, particularly the younger people, in our community are unable to own their own homes,, have to live with in-laws or. in flats and therefore cannot enjoy a real quality of life.

Mr DEPUTY SPEAKER (Mr Corbett - Order! The honourable member's time has expired.

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