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Tuesday, 13 September 1983
Page: 706

Mr HURFORD (Minister for Housing and Construction)(9.40) —in reply-In closing the second reading debate I want to thank all of those honourable members who have spoken. Government members who participated in the debate included the honourable member for Bowman (Mr Keogh), the honourable member for Melbourne (Mr Hand), the honourable member for Stirling (Mr Ronald Edwards) and the honourable member for Macquarie (Mr Free). I sincerely thank them for their support and for the homework that they have done on this important legislation. As the honourable member for Melbourne, among others, indicated, this is a first step. We are not resting on our laurels. However, we have undertaken an enormous amount of consultation with a wide range of people. We believe that we have it right in this area. We shall be watching the results and, indeed, trimming the sails and undertaking initiatives as they are required.

The honourable member for Ryan (Mr Moore), the shadow Minister for Finance, led for the Opposition in substitution for the honourable member for Farrer (Mr Fife ), who is the shadow Minister for Housing and Construction. I would like to send a message to the honourable member who, I believe, has been unwell and who may be listening to the broadcast tonight. We hope we shall see him back in the House very soon. I know that he will miss the opportunity of being able to take part in this debate. The honourable member for Ryan made a few points in a serious speech to which I would like to respond. First of all, he seemed to think that the Fraser Government's panic measures of March 1982, which were its last attempts at a housing policy, were satisfactory. The honourable member presented some distorted figures and sought to suggest that the housing activity position had been improving after the 6 March 1982 initiatives-that is hardly the word I would use-or the 6 March 1982 changes made by the Fraser Government. That is far from the truth. The best indicator of how the housing industry is faring is housing commencements.

I want to read to the House some figures relating to housing commencements in a more recent period. Leading up to March 1982, commencements were at a relatively low figure of 29,130. Then came the measures to which I have referred. In the June quarter commencements were down to 28,420, in the September quarter to 26, 620, in the December quarter to 24,920 and in the March 1983 quarter to 24,010. We do not yet have the figures for commencements for the quarter ended June 1983 . However, on every indication dwelling commencements for the year ended 30 June 1983 are going to be about 106,000. This is a 20-year low. This is the inheritance of this Government from the previous Government. We have to go back to 1962-63 to find housing commencement figures as poor as those for the year 1982-83.

The honourable member for Ryan sought to make capital out of the need to terminate tax rebates on home interest repayments. Tax rebates have not been terminated for first home buyers who qualified for the first home buyers tax rebate scheme upon buying their first home after March 1982. He pointed out reasonably accurately that the general rebate made a difference in interest rates of 1 per cent to 2 per cent. At the same time, of course, he and his colleagues made great play about cutting government spending and the deficit. They have told this nation, as they have told members of this House, that they would want to cut the deficit by about $2 billion. Now where would they make cuts other than perhaps in housing and construction? They said that if they were in office they would not cut expenditure on defence or social security. If we take out the great amount of expenditure on defence and social security we are not left with many areas. We can be certain that there would be enormous cuts in the interest rebate. There would be nothing like the first home owners scheme that is the subject of the legislation before the House tonight. The fact is that due to wise economic management we are now seeing a reduction of interest rates. That reduction of interest rates will more than offset the benefit available to those who could take advantage of the general tax rebates.

The third point made by the honourable member for Ryan related to our waiting until 1 October for this scheme to be introduced. I pay tribute to the honourable member for Darling Downs (Mr McVeigh), the previous Minister for Housing and Construction, because he takes a constructive interest in the administration of housing. He could educate those on the other side of this House as to the fact that my officers have had to work incredibly hard for four months in order to get this legislation to the stage at which it is today and for it to be launched in the way in which it should be launched so that the people who can benefit from it will know about it. Some of those officers are here tonight and I pay tribute to them for the work they have done. Of course they have needed these four months in order to bring the legislation to this stage.

The fourth matter raised by the honourable member for Ryan was the removal of the savings requirement. That arose out of the need to stimulate the market prior to 1 October. We anticipated that there would be problems. We knew that we were bringing in a very attractive scheme. We knew that the scheme that we had inherited from the Fraser Government was a miserable scheme that had not been properly presented. Part of the home deposit assistance scheme was reasonable, but as to the tax rebate, nobody knew what they would benefit from until the end of the financial year. There was no way that the lending institutions could understand just how much would be available to those who were benefiting from the previous Government's tax legislation. We have combined the two forms of assistance. We have combined the help which is now available for those who require assistance with their deposit gap with direct help with interest rates over the first five years of home ownership-the most difficult years when large mortgage repayments have to be made.

The honourable member for Ryan and his colleague the honourable member for Braddon (Mr Groom) suggested that there was some merit in the discipline of savings leading up to the taking out of these contracts. I say to them both that that is nonsense. The people who can really determine whether an applicant is ready for home ownership, is ready to take on a mortgage, are those who are doing the lending. They are the people who will be sitting down with the applicants and assessing whether they are suitable to receive the loans. Whether or not they have a savings interest will not be applicable to this decision in many cases. It will depend on the individual circumstances. I believe that a troglodyte attitude has been expressed in relation to this matter and that we can safely leave the decision to the lenders. They will know whether the applicants have the capacity to undertake home ownership. Home ownership itself, of course, creates a discipline and requires people to save.

Before dealing with the last point raised by the honourable member for Ryan in relation to the Housing Loans Insurance Amendment Bill, on which, due to ignorance, I believe he will divide this House, I wish to deal with a couple more points made by the honourable member for Braddon. He said that the home deposit assistance scheme was just as good. I ask the rhetorical question: Why has there been such enormous enthusiasm for the first home owners scheme from everyone in the industry, be it the Real Estate Institute of Australia, the Housing Industry Association, the Master Builders Federation of Australia, or the lending institutions, all of whose members had a hand in the consultation and advised us leading up to the introduction of this scheme. Honourable members have to take only the slightest interest in what is happening in this country's housing market right now and to learn just how the number of applicants to offices of the Department of Housing and Construction around the country has mushroomed enormously since people learnt of the first home owners scheme, to know that they are talking nonsense when they say that the home deposit assistance scheme is anywhere near as good as the one that we have introduced. I pay tribute to the quality of the advice that I have received, starting off at the mini-summit on 28 April, which was when this scheme took a very important new stage of birth.

The second point made by the honourable member for Braddon concerned young people working and the difficulties that that creates. He has probably overlooked the fact that, unlike some schemes in the past, if a young couple's previous year's taxable income debars them from taking advantage of this scheme, but one of them has left work-perhaps to have a baby-we shall take into consideration not the previous year's joint income but the current year's joint income. that will help enormously to look after the people for whom the honourable member has a genuine and proper concern.

The next point raised by the honourable member was: When will the lump sum be paid? I draw his attention to the outline of the details in my second reading speech. The application can be lodged as soon as there is a contract. Of course, in the case of an established house, that is easy to determine. In the case of coming to an arrangement with a builder, the point of contract is when the agreement is signed with the builder prior to the house being built. But then, payment of the lump sum will be made before settlement, or it could be made at settlement if the amount is assigned to a lending institution.

Mr Groom —Can it be before settlement?

Mr HURFORD —Yes, it can be, but we would prefer to pay it to the lending institutions in those cases, because we want this money to attract people into home ownership. We do not want it to be just for an extra, for building a fence, or anything like that. We want it to attract a whole new class of people into home ownership, those on the margin of home ownership who otherwise could not afford home ownership. In the way in which the scheme has been designed, with this option available-whether it is the $7,000 if there are two children over the age of 5, or, if there are two children, at the other end of the scale, $3, 500 help with the deposit gap, and then $750, $650, $550, $450 and $350 interest help-it will be best if that is assigned to the lending institution so that the institution itself feels that there is security in making, perhaps, an additional loan.

Mr Goodluck —Can single girls get it?

Mr HURFORD —We can have any permutation and combination of people who can benefit from this scheme. It could be single men, single girls or two or three people together. But whoever is named on the contract has his or her or their income included in the calculation to see whether jointly he, she or they deserve this help from the Commonwealth.

Mr Groom —What will be the delay between the application and the payment?

Mr HURFORD —We are hopeful that our administration will be such that we shall be able to get the payment made about two weeks after the application is made. Lastly, the only other honourable member who took part in the debate was the honourable member for Curtin (Mr Rocher). He has left the chamber already but I will say that I thought his contribution was disgraceful. It was ill-researched. He has obviously not been in touch with the industry. His remarks have been more than adequately answered by the honourable member for Stirling. He did not speak about the subject for most of the time. How on earth he beat Senator Fred Chaney for preselection for the seat of Curtin is just beyond my understanding.

I come now to the Bill dealing with the Housing Loans Insurance Corporation, on which I understand the Opposition will divide this House. The fact is that the previous Government's decision to sell that Corporation was strongly opposed not only by the then Opposition but also by most people who are involved in the industry. The Corporation's retention was a clear commitment by the Australian Labor Party, now in government. When the Government announced that the Housing Loans Insurance Corporation was to be retained-I announced that at an annual conference of the permanent building societies-that announcement was warmly welcomed not only by the Australian Association of Permanent Building Societies but also by the Housing Industry Association, the Real Estate Institute of Australia and, indeed, the cream of the private sector in the housing industry.

The Opposition has failed totally to mention the two-pronged approach we take to the Housing Loans Insurance Corporation in this Bill. Firstly, we are extending its charter. We do not resile from that in one small way. Secondly, of course, we are introducing that special payment to put the Corporation, as far as possible, on an equal footing with the other bodies in the housing loans insurance area. Far from further advantaging the Housing Loans Insurance Corporation, the action we are taking will equalise the position in regard to its competitors in the private sector. Clearly, as was stated in the Press releases put out by the permanent building societies and others, there is enormous support for this measure the Government is taking. I say to the Leader of the Opposition (Mr Peacock), who is in the chamber at present, that he really ought to be better advised by those of his colleagues who are involved in this area. Let me read from the Press release of the building societies:

The building society industry also welcomed the Government's decision to extend the charter of the Housing Loans Insurance Corporation . . .

AAPBS had campaigned vigorously against the decision of the previous Government to abolish the HLIC.

No wonder the Opposition has lost its traditional support when it cannot even keep up with what bodies such as the permanent building societies want in an area such as this.

Mr Groom —Mr Deputy Speaker, I raise a point of order. One of the important issues raised earlier was sales tax. Can the Minister answer that point, please?

Mr DEPUTY SPEAKER (Hon. Les Johnson) —Order! There is no point of order.

Mr HURFORD —The way that point was put was so convoluted that it was unintelligible. I think it could be said that I have done more than the normal task in answering questions in this second reading debate. I have been very proud of the support I have received for this measure. I thank those who have helped us to bring it to this stage. We believe that we can lift the number of housing commencements in this country from the 20-year miserably low figure of 106,000 to a rate of 130,000 to 135,000 by the second half of this financial year. It has been with pleasure and pride that I have introduced this Bill to the Parliament. I now hope that the Parliament generally will not only pass the First Home Owners Bill and the Home Deposit Assistance Amendment Bill but also support us in what we are doing with the Housing Loans Insurance Corporation.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.