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Wednesday, 24 November 1971
Page: 3616

Mr UREN (Reid) - My remarks will be brief. I rise in the Committee stage to seek clarification of clause 3(1.) which says in part: building society' means a society or association of persons registered under the laws of a State as a building or housing society, whether terminating or permanent and whether or not a co-operative society;

Under this Bill , 0 per cent of the money allocated will go to State housing authorities and the other 30 per cent will be allocated to building societies. Clause 7 (2.) says:

Subject to the next succeeding sub-section, there shall be credited to the account in each prescribed year not less than thirty per centum of the amount set aside by the State for housing in that prescribed year.

The Minister for Housing (Mr Kevin Cairns) made great play of terminating building societies and eulogised them.

Quite frankly, we in the Australian Labor Party have great respect for the diligent work done by the terminating building societies and their officers. Let us analyse the Government's policy and attitude towards them. In New South Wales, in which I reside, the maximum loan that one can get from a terminating building society is $10,800. However, the average cost of land and dwelling provided under the war service homes scheme in that State is $14,800 while the average cost of land and dwelling in the Sydney metropolitan area is over $19,000. Yet the maximum loan from a terminating building society is $10,800. Let me now talk about the Government's hypocrisy and of the wonderful job that the terminating building societies do. This Government gives a mere pittance to these organisations. We know that those to whom these organisations give a loan must obtain a second mortgage loan to meet their commitments.

Let us expose the policy of the Government on this question of the role that it plays with respect to terminating building societies or co-operative building societies. Looking ot the permanent building societies we see that the proposition is different. Not one cent of the money about which the Minister for. Housing has spoken goes to the permanent building societies because they raise their money on the open market. Consequently the home buyers with whom they deal are people who can obtain a loan of $1.5,000.

The average loan in New South Wales last year from permanent building societies was $14,600. In the second reading debate I gove the figures with respect to average loans. Approximately $115 a month must bc repaid on an average loan of $15,000 over 25 years. In New South Wales, ti.e money that is allocated under this part of the Bill goes to the terminating building societies and the maximum loan from those societies is $10,800. I want to know what sort of a home can be purchased in the Sydney metropolitan area for that amount. The Minister should look at the figures which appear in the annual report for this year of the War Service Homes Division. He should study the average cost of war service homes. He should look at the average cost of land in Sydney, which is $8,000. He should look at the average cost of a home within the area of the Sydney Metropolitan Water, Sewerage and Drainage Board-

Sir John Cramer - 1 rise to order. The honourable member for Reid is discussing a matter to which this Bill does not relate at all. The amount of a loan by a terminating building society is for the States to decide. It has nothing whatever to do with this Bill.

The DEPUTY CHAIRMAN (Mr Drury) - The honourable member for Reid will relate his remarks to the Bill.

Mr UREN - With respect to your ruling. Mr Deputy Chairman, may J say in passing that honourable members opposite have eulogised the role of the terminating building societies but we on this side of the Committee have not deprecated the role of those societies. What I am explaining is that we live in the world of reality and not in the world of make believe in which the Government likes to live. I am talking about the State in which I live. There the terminating building societies are given such wonderful financial scope by this Government that they will receive onethird of the allocation by way of grants being made available under this legislation. Yet the maximum loan provided by one of these societies is $10,800. This is what the Government proposes to do at this time when it is allowing inflationary trends to develop. The Government cannot pass the buck.

In reply to the criticism expressed by the Minister, I say that the Minister should look at the policy of his own Government. He ought to make sure that more money is made available to the terminating building societies. He ought to make sure that at least the average loan that can be made available through the terminating building societies is made available even though the interest rate that they charge is H per cent. This is made up of an interest charge of 6i per cent plus an additional } per cent for management costs. These societies make loans at an interest rate of 7£ per cent, which represents quite a large repayment. The interest rates of terminating building societies should be reduced. Not only should interest rates be reduced but the size of Joans also should be increased to enable terminating building societies to make available loans of a realistic amount so that people can meet their commitments without resorting to second mortgage loans.

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