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Wednesday, 24 November 1971
Page: 3602

Mr HANSEN (Wide Bay) - 1 rise to support the amendment moved bv the honourable member for Reid (Mr Uren). This Bill has been described by the Minister for Housing (Mr Kevin Cairns) and other Government speakers in this debate as representing a change. But how much of a change does it represent? Since this measure was first publicised the Minister has adopted a stock phrase. He used it tonight when interjecting to the honourable member for Hughes (Mr Les Johnson). The Minister said: 'You do not understand the Bill'. He said the same thing to the Queensland Minister for Housing, Mr Max Hodges. When Mr Hodges complained that the States were being let down, the Minister for Housing said: 'You do not understand the Bill'.

To enable honourable members to understand the purpose of this Bill, I put it to the Minister that he should follow the example of his predecessors. When the first Minister for Housing in this Government, the honourable member for Wentworth (Mr Bury), who held the portfolio in 1964 and 1965, and the former Minister for Housing, Dame Annabelle Rankin, introduced measures of this nature, and particularly legislation associated with the home savings grants scheme, they issued explanatory memoranda which to some extent enabled people who were interested in a Bill to understand it a little better. My understanding is that the grant over 30 years represents the equivalent of the 1 per cent interest rebate over the 53 years duration of the loan. But, in effect, this does not take into account the actual amounts that might be sought by the States because the amounts of the grants in lieu of the 1 per cent rebate have been fixed for a 5- year period.

The housing industry has always been considered as the barometer of the economy. We find a falling off in housing - not so much in the building trade generally - when the economy is tightened. The honourable member for Wentworth in 1965 stated that to dampen down housing because of undue expansion in other sectors of the economy could distort our ultimate priorities for survival. The same honourable member earlier this afternoon, when he followed the honourable member for Reid in this debate, criticised the Australian Labor Party policy which proposes a subsidy of 2 per cent in respect of interest repayments on a home for the first 10 years of those repayments. He said that people might keep up their interest repayments so that they might obtain this 2 per cent rebate and invest their money elsewhere. My knowledge of most people who are purchasing a home on a mortgage or who are buying a home from a State housing commission is that they have not money to re-invest or to speculate in this way. The honourable member for Wentworth stated that taxpayers' money cannot be used to support private people. But taxpayers' money is being used by way of this grant to support people and to provide them with cheaper housing.

In his amendment, the honourable member for Reid has made special mention of lower income earners, pensioners, migrants, Aborigines, deserted wives and similar disadvantaged people. T do not think that any member of this House, irrespective of the type of electorate that he represents, has not at some stage or other come across people of this type. It is generally accepted that one-fifth of the earnings of a low wage earner is the maximum that he can spend on housing and still provide adequately for his family. We believe that the States have been able to live up to their responsibilities in this regard. What is happening in fixing the grant is that the States will not be encouraged to enter into higher borrowings to provide housing of this type because no encouragement is offered to them to increase their borrowings in this regard. When they received a ratio of reduction on the I par cent rebate on interest, there was encouragement but now no encouragement is given because the amount that is divided among the States is fixed for the period specified in the Bill.

The Bill ako provides for a noncumulative grant of Si. 25m each year for the next 5 years, totalling S6.25m, which is to be used, to quote the Minister: . . for the purpose of reducing rents for families in indigent circumstances'. I presume that the States have met the costs of these rebates from profits from the operations of housing authorities. My reason for believing this is to be found at page 60 of the Commonwealth Grants Commission 37th Report of 1970. Under the heading 'Housing Finance' the report states:

Tasmania is the only State to bring into its budget the profit of its Housing Authority and the cost of rental rebates. In that Slate the cost of the rebates exceeds the profit arising from other aspects of the Homing Department's activities, in other States the profit is at least sufficient to cover the cost of any such concessions. lt also stales:

In support of its suggestion Tasmania claimed that 'in the standard States, mainly because of their large scale operations, the activities of the Housing authorities are profitable, even after making rental rebates'. It also claimed that profits retained and made available for further housing development represents interest free money available for the construction of houses which can be rented or sold on the same basis as houses built with interest bearing loans'.

I ask the Minister: How was this profit made? Was it made by charging higher rentals than were necessary? Was the profit to meet the rental rebate made by increasing the prices of homes which were offered for sale? Will the fact that the States are now to receive $ 1.25m to meet the cost of providing a rental rebate instead of having to find the money from the profits of their own operations mean that there will be cheaper rental rates and will it mean that the overall price of homes will be reduced? 1 do not know the answer to those questions. I would like to believe that this will be so hut, if the usual trends are followed, T do not think it will be.

Some mention has been made of wage rises affecting the cost of building houses. My colleague, the honourable member for Hughes, referred to increases in the wholesale prices of building materials. The Treasury Information Bulletin' of October 1971 states at page 19:

The wholesale price index of materials used in house building increased by 1.1 per cent between June 1971 and September 1971. In the 12 months to September. this index rose by 7.3 per cent. The largest increases during this period were recorded in the. group indexes for steel products (11.0 per cent), cement products (9.8 per cent) and concrete mix, cement and sand (8.5 per cent)

In view of . those rising costs one might wonder why no arrangement has been made for an alteration in the rebates that will be going to the States by way of grants. lt has been said that the States are all agreeable to this legislation. . The fact is that a second meeting had to be called of the Commonwealth and State Ministers for Housing. We have heard pious utterances from supporters of the Government of Commonwealth-State co-operation instead of federalism. It should be remembered that, as the Commonwealth holds the purse strings, the State Ministers for Housing had no more option than did the wheat growers or dairy farmers who were told to reduce their production. They had to accept the Commonwealth's demand. It was simply a matter of no money being made available if no co-operation was given. If is very easy to obtain co-operation when one is holding the purse strings. Irrespective of the thoughts of the various Ministers for Housing in the States and their opposition to the Commonwealth's proposal they had a job to do and the Commonwealth was holding out on them. It was therefore very easy for the Commonwealth to obtain the co-operation of the States. I suppose many of the members of the Australian Country Party will agree with me that the best way to get a poddy calf to drink its milk is to let it go without it until it is hungry. A similar situation applied in regard to the negotiations beween the Commonwealth and State Ministers for Housing.

I can readily understand why certain Ministers for Housing are happy about the percentage of the grant they will receive. I can equally understand why others, like Mr Hodges of Queensland, have expressed disappointment. The percentage of the grant is fixed for 5 years. So too, though on a different ratio, is the percentage of the grant for rental rebate. Neither makes any allowance for variations in the demand for housing or increases in costs in the States. The demands for housing in Western Australia and South Australia have tapered off to some degree. When a Labor government is restored to office in Queensland next year there will be an unprecedented demand in that State for Government housing. I would prefer to see the percentage varied over a shorter period than 5 years.

The second part of the amendment which the honourable member for Reid has proposed requests the Commonwealth Government lo provide the States with adequate funds to enable them to acquire existing dwellings for restoration and allocation by way of rental or sale. Anyone who has had any experience of trying to purchase a home will admit that it is very hard to obtain a loan for homes which are IS years of age or older. Parents of families which have grown up and left their homes to live elsewhere or to get married, often find themselves in a home which is larger than they need and which requires a considerable amount of upkeep. As they get older and find i'. getting more difficult to look after their homes so they often move into smaller ones. These larger homes are generally within the inner city areas. Because of their location they are usually serviced and do not require, as the honourable member for Hughes pointed out, channelling and kerbing and all the other service facilities because they are already there. But anyone who is interested in purchasing one of these homes will find out as soon as he goes to a bank or any other lending authority that as soon as the age of the home is mentioned he is asked immediately for a substantial deposit. That immediately puts off most young couples, particularly those in their twenties.

More people are now marrying in their twenties. People are marrying at a much younger age. These people have not usually got the deposit which is necessary to buy the type of home to which I have been referring, although it is often cheaper than other homes which are available to them. Perhaps such a home will need some repairs as time goes on. Nevertheless these people are young enough to face up to this problem. This type of home would suit them better because it is larger. These homes are what one would regard as family homes. Lots of young people are interested not in a little 2-bedroom flat or home unit but in larger homes in serviced areas. Many of them would be able to buy these homes if they were available on a lower deposit or if such a body as a State housing authority were to buy them and make them available to these young people on the same conditions as these bodies make available homes which they themselves construct. If this were done the local authorities would not be faced with the task of having to provide services on the fringes of the cities. One also would not find dead hearts in the cities because the inner areas would be alive with people. These people would not be crowded into high rise home units. They would be young families who are prepared, because of their work and because the type of home suits them, to live in homes in these areas. However, these young people are at the moment debarred for financial reasons from acquiring these homes. I believe that, in particular, the second proposal put forward by the honourable member for Reid is worthy of the attention of the Government. I have much pleasure in supporting the Opposition's amendment.

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