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Thursday, 15 March 1973
Page: 639

Mr Les Johnson (HUGHES, NEW SOUTH WALES) (Minister for Housing) - There is a very limited time for me to apply myself to the legislation on hand, the Commonwealth Banks Bill, but first I would like to say that I appreciate the comments of the 3 honourable gentlemen who preceded me. Although this is not a Bill which I am handling myself it has relevance to the responsibilities that I have, and I will be having considerable regard for the points made. The honourable member for Kingston (Dr Gun) has proposed that a bureau of housing economics should be established and I am impressed with the idea that some form of advisory group could represent a very useful facility to enable the Government to be properly advised on this very fast moving and tremendously important field of social endeavour.

The honourable member for Herbert (Mr Bonnett) made some mention of a matter which might best be dealt with in another context, that is the remarks I have made in respect of the Commonwealth State Houstng Agreement, the arrangements that exist now and the arrangements that we hope will exist after 1st July. All I want to say to him at this stage is that it seems to be the case that for 93,000 families or more home ownership in fact has not been the solution to their problem because it has been inaccessible to them. Many people are waiting for State Housing Commission homes. They are waiting for rental homes because they are unable to secure the deposits that are necessary to purchase a home and then of course unable to meet the repayments that are necessary in respect of houses. After that, if they are able to pay the deposits and meet the other requirements, there is the question of looking at their capacity to meet maintenance costs, insurance charges, rates and charges of that kind generally.

The first priority that the Government sees in respect of housing is the need to ensure that everyone has a decent house in which to live. We do not feel that it matters all that much if a number of people will own houses, if that is highly virtuous, as against the other proposition that a lot of people will be inadequately housed. We want them all to be adequately housed and we want to build up the stock of rental houses. We know the extent to which housing commission houses have been sold off represents an enormous liability to this country. I know that in one State houses to the value of about S200m have been sold. The replacement costs represent something like $500m in the present situation of rapidly aggrandising costs. It must be remembered that it was the Minister for the Interior in the last Government who decided that for this kind of reason no further government houses were to be sold in the Australian Capital Territory. It must be remembered that in New South Wales, where a Liberal-Country Party Government prevails, similar attitudes are being taken and similar restrictions are being imposed. So the views that I am manifesting in my approach to the States about these matters is not without precedence by any means. I believe that they are well and truly justified. I have not left myself much time to talk about the Commonwealth Banks Bill.

Mr Whittorn - You have a minute left.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - I think I have more than that. I have about 10 minutes to talk on some of these matters. The matter that is before the House is part of the New Australian Government's perspective about housing. For too long the whole question of housing has been in a backwater. This is an integrated part of the new emphasis being brought to bear, It does not stand in isolation by any means, as honourable members will have noted. It is in the perspective of an overhaul of the War Service Homes Act, now to be called the Defence Services Homes Act. It is in the perspective of a new housing assistance Bill under which $6.5m will be paid to the States as an emergency allocation for the work of the States' housing authorities. It is also in the context of a new Commonwealth-State Housing Agreement which is intended to make more money available at lower rates of interest to the States so that those people who have been deprived of decent housing opportunities for so long can have better prospects in the future. These things are already in the parliamentary pipeline. It is a very real situation that is occurring with respect to the implementation of the Labor Party's policy objectives.

The Government has an election commitment to repeal as quickly as possible section 66 of the Commonwealth Banks Act. I am very pleased that my colleague the Treasurer (Mr Crean) has taken this early initiative which has been so warmly applauded from both sides of the Parliament. This matter also has to be taken in the perspective of other obligations and other commitments which the Government has made. It is the Government's intention to ease the burden of interest for home seekers generally; to look at the problem of student accommodation, a matter which has never hitherto been accepted as a Commonwealth responsibility; to remove the anomalies from the Homes Savings Grant Act; to overhaul the Aged Persons Homes Act; to work very hard to achieve uniformity in building codes and to encourage the introduction of the metric system with its consequential savings on home building costs throughout Australia.

As honourable members will have noted, the Government is now active in an effort to introduce into this country a system of preferred dimensions which also relates to metrication. There are many other matters in which it is showing very active interest, as I think will be readily acknowledged. There is the matter of an assault on land prices, which is led by the endeavours of my colleague, the Minister for Urban and Regional Development (Mr Uren) who will probably be pump ing something like $200m into the effort to build up the national stock of land. The Government is interested in looking at the problems of stamp duty and the delays related thereto, and ways and means of speeding up the conveyancing processes and minimising the costs of conveyancing when ownership of land and houses is affected.

Much has been said about section 66 of the Commonwealth Banks Act. Sufficient it is for me to say that it has outlived its usefulness. Its overhaul is well overdue because it is so outmoded. It should have received the attention of the previous Government years ago. I believe that this omission on its part has been readily acknowledged during the course of this debate. The provisions were of good intent and were designed to help low income earners, but they have come to be accepted and recognised as very genuine impediments. They have involved 2 ceilings on the availability of loans for home building from the Commonwealth Bank. The first ceiling has been to the effect that a loan should not exceed 90 per cent of the valuation. The second has represented a limitation on the size of the loan to no more than $9,000. The fact is that that figure has ceased, to have any realism in terms of the costs that apply around Australia at present. I will not be able to give figures to the extent that I should have liked but I will mention one or two to demonstrate my point. The average cost of construction of a house, excluding land, in Sydney, for example, in 1971-72 was $12,177. The difference between the maximum $9,000 which the Commonwealth Bank has been able to make available and the cost of construction which is $12,177 is $3,177. That becomes the subject of a second mortgage but that is not the extent of the second mortgage because I am simply talking about the average cost of construction, excluding land, and the cost of land has risen astronomically in recent times. In my own electorate - without getting involved in the chart of figures which I have with me - land is being made available to young people 17 to 20 miles from Sydney at a cost varying between $15,000 and $20,000 per block. This shows how out of date is the provision which the former Government failed to remedy.

I now mention some of the difficulties which are associated with the borrowing processes that young people are involved in at present. Because of the hobbling of the Commonwealth Bank and the economic policies pursued by the previous Government, the finance companies have been left to run riot with deleterious effects on home builders - people seeking to own their own homes. Enormous interest rates are being charged. It might interest honourable members to know that even on a Commonwealth Bank loan of $18,000, secured at 6i per cent interest over 20 years, the interest payable amounts to $13,576. If one borrows $18,000 from a permanent building society for 20 years at 8 per cent the interest payable on that loan amounts to $18,660. With the finance company range of lending an interest rate of 12 per cent applies and this requires an astronomical repayment which can cause extreme liabilities for the person involved.

One of the most disturbing features of the present situation is that just about every trading bank has an interest in a finance company. The Australia and New Zealand Banking Group Ltd has 100 per cent equity in Esanda Ltd; the Bank of Adelaide has 100 per cent in Finance Corporation of Australia Ltd; the Bank of New South Wales has 43 per cent in Australian Guarantee Corporation Ltd; the Bank of Queensland Ltd has 40 per cent equity in the Permanent Finance Corporation Ltd; the Commercial Bank of Australia has 100 per cent equity in General Credits Holding Ltd; the Commercial Banking Co. of Sydney Ltd has 42 per cent equity in Commercial and General Acceptance Ltd and the National Bank of Australasia Ltd has 60 per cent equity in Custom Credit Corporation Ltd. It is interesting to note that while the hobbles have been on the Commonwealth Bank, massive advances of loans have been made by finance companies. There has been a usurping of the traditional role of banks in respect of home lending on the part of the finance companies. I had many figures to give to honourable members in this regard but time will not allow me to do it as the House has an obligation with the Governor-General in a short time.

The Commonwealth Banks Bill, which has been brought down by the Treasurer, will do much to shift the emphasis back where it should be to give young people the right to go for their loans for housing to banks where they can get loans at reasonable rates of interest rather than pay higher interest rates on loans which have been taken over and shared predominantly by the finance companies of Australia. I commend the Bill to the House and I feel sure that it will reflect very great benefit for a very large number of home seekers in Australia.

Question resolved in the affirmative.

Bill read a second time.

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