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Wednesday, 16 May 1973
Page: 2220

Mr Les Johnson (HUGHES, NEW SOUTH WALES) (Minister for Housing) - I move:

That the Bill be now read a second time.

This Bill and 2 Bills that I shall be introducing shortly - the States Grants (Housing) Bill 1973 and the States Grants (Housing Assistance) Bill 1973 - are inter-related. The purpose of the Housing Agreement Bill 1973 is to obtain parliamentary approval for the Commonwealth to execute an agreement with each State that will be substantially in accordance with the form contained in the Schedule to this Bill. The Agreement provides that, during each of the 5 years commencing in 1973-74, the Commonwealth will make advances at low rates of interest to the States for welfare housing purposes. Unlike the housing assistance offered to the States by the former Government, we propose, and the Agreement provides, that our assistance will henceforth be directed towards those families and persons most in need of it. No less than 85 per cent of the family homes to be built by State housing authorities with our advances will be allocated to families where the average gross weekly income of the main bread-winner - exclusive of any overtime and child endowment payments - does not exceed 85 per cent of average weekly earnings per employed male unit as defined in the Agreement. Where the family includes more than 2 children, this will be increased by $2 per week for each child beyond the second. Those eligible will be mainly the lower income families who are paying too high a proportion of their incomes in private rents or are living in unsatisfactory accommodation. The State housing authorities may also use our advances to build homes for couples without dependants where the main breadwinner is an aged person or an invalid with a gross weekly income that does not exceed about 60 per cent of average weekly earnings. A single aged person or an invalid will also be eligible to obtain a housing authority unit where his or her income does not exceed 40 per cent of average weekly earnings.

These families and persons include the majority of those in need of decent accommodation at a modest price. We are determined to ensure that more of this type of accommodation will be built by the State housing authorities than has been built in recent years. To take into account the high cost of constructing a home in some remote areas of Australia and in areas where incomes are on average far higher than in the capital cities, the Minister may approve for those areas somewhat higher needs tests than those that will apply generally throughout the States. To those who will claim that the needs tests to be applied by State housing authorities are too restrictive, our reply is that those most in need of housing assistance, certainly the majority of applicants on the waiting lists of the States, are persons with relatively low incomes, and that, even with expanded government home building programs, it will be some years before the housing needs of all these persons are met. It is, of course, open to any State to use portion of its approved borrowings or semi-governmental borrowings to build homes for those less in need. The emphasis of our assistance is on the needy.

I wish to make it perfectly clear, Mr Speaker, that despite this emphasis there is no thought that a person who has been allocated accommodation by a State housing authority will be asked to vacate his dwelling if his income subsequently rises above the needs test level. There is absolutely no truth in statements that have been made to this effect. Those statements have emanated especially in Victoria during the current Victorian election campaign. Subject to the granting of priorities in cases of urgent need, dwellings provided with our advances shall be allocated to persons in the order in which their applications are lodged or accepted by the housing authority. The Agreement also provides that each State will ensure that the number of family dwellings allocated by its housing authority to families who satisfy the needs test shall not be less than the total number of family dwellings built with our advances and become available during the year for allocation for the first time, and 25 per cent of the number of family dwellings constructed by the States with financial assistance under this and. previous Commonwealth-State Housing Agreements that become available during the year for re-allocation.

Although there is no mention in the Agreement of the maximum rents that may be charged on the dwellings to be built with our advances, this does not mean that the Australian Government is unconcerned about the level of rents to be charged. Indeed, we are most concerned to ensure that the benefit of our housing assistance in the form of a relatively very low rate of interest be passed on to needy families and persons. I have suggested to the States that rents charged to families with incomes close to the upper limit of the needs test should not exceed 22£ per cent of those incomes and that the proportion of income paid in rent should be reduced as income declines. The States have accepted these general guidelines. Infrequent and large increases in rents should be avoided. The Agreement provides that at least once in each financial year a State shall review the finan cial position in regard to the rental activities of its housing authority and shall ensure that rents are adjusted whenever an increase would appear to be justified.

Whilst the Government is firmly convinced that those most in need of housing assistance are families and persons who are seeking rental accommodation, we are certainly not opposed to home-ownership. Under the proposed Agreement up to 30 per cent of the family dwellings built by housing authorities with our advances may be sold at a fair price to families who satisfy the needs test. For the most part, these will be families who would be unable to borrow privately the finance they need to own their own homes. The interest charge to purchasers, including costs of administration, shall not be more than 51 per cent per annum. As it is our policy to assist the States to build up a reasonable stock of government homes and so reduce the existing far too lengthy waiting periods in most States, the Agreement provides that a purchaser may not dispose of the dwelling, except by reversion to the housing authority, for at least 5 years after the date of sale. It is recommended that subsequent intending vendors of these homes be required to give the housing authority first option to purchase at a fair market value at that time.

It has been the practice of the Tasmanian Housing Department to sell a very high proportion of newly completed homes. Because of this, we have agreed that that Department will be permitted to sell 50 per cent of the homes built with our advances during the first year of completions - 1974 - and 40 per cent of the homes built during the second year of completions - 1975. Thereafter the 30 per cent ceiling on sales of new homes will apply to all parties to the Agreement. We have not overlooked the most helpful role of the cooperative terminating housing societies in assisting lower income families to own their own homes. Whilst we intend to persuade private lending institutions to make significantly more finance available long term at a reasonable rate of interest for the formation of more co-operative terminating housing societies, we also recognise that this movement will continue to be dependent on receiving a continuing flow of government finance to maintain a desirable level of activity. The Agreement therefore provides that not less than 20 per cent nor more than 30 per cent of the welfare housing advances by the Commonwealth to a State in a year shall be paid into a home builders' account to be lent to prospective home-owners through cooperative terminating housing societies or a lending authority of a State approved by the Commonwealth. However, at the request of a State Minister and in respect of a State in which its annual allocation to its home builders' account in each of the 2 financial years ending on 30th June 1973 has exceeded 30 per cent of total new advances for welfare housing, the Commonwealth Minister may approve an advance to its home builders' account in a year in excess of 30 per cent of the total Commonwealth advance in that year. This will avoid a disruption of the flow of housing finance to low-income prospective home-owners in South Australia.

In line with our policy of ensuring that our housing advances for welfare purposes benefit the more needy, applicants eligible to receive home builders' account advances will be families consisting of a married or engaged couple, or a single parent or guardian with one or more children, where the average gross weekly income of the main breadwinner, inclusive of overtime but excluding child endowment payments, does not exceed about 93 per cent of average weekly earnings, plus $2 a week for each child beyond the second. The minimum deposit to be found by a borrower of home builders' account moneys shall be 3 per cent of the value of the property in respect of which the loan is made. The maximum interest charge, including management fee, on these loans is not to exceed the equivalent of 5$ per cent per annum.

The Agreement provides that each State shall advise the Commonwealth Minister before the commencement of each financial year of the amounts it wishes the Commonwealth to advance during the financial year. After consultation with the State Minister, the Commonwealth Minister shall determine the amount to be advanced to the State during the financial year for expenditure by its housing authority and to be allocated to its home builders' account. All advances shall be repayable over 53 years with interest in equal annual instalments. The interest rate payable by a State on Commonwealth advances allotted to its housing authority in each of the next 5 financial years shall be 4 per cent per annum, and on advances allotted to its home builders' account shall be 4i per cent per annum.

Commonwealth advances allotted to a State housing authority may be used by the authority: (a) to meet the costs of acquisition and development of land primarily for residential purposes; (b) to meet the cost of construction of dwellings; (c) to meet the cost of purchase and upgrading and renovation of dwellings, and of substantial improvements to its existing dwellings, but not so as to include the cost of maintenance; and (d) subject to the approval of the Minister, to provide bridging finance for community amenities that are not the responsibility of the housing authority.

I wish to draw the attention of honourable members to the last 2 purposes for which our advances may be used. In many cities there are dwellings close to the centre that are in need of upgrading and renovation if they are not to be condemned as unfit for human occupation. They are ideally situated in relation to amenities and work opportunities, and all essential services are available. When renovated, they can not only provide decent homes for families for many years, but can also improve the quality of the residential environment. We wish to encourage the States to acquire such homes, and upgrade and renovate them, where this can be done at reasonable cost.

The Government is also concerned at the frequent absence of essential community amenities in many new estates developed largely by State housing authorities. In developing areas where the local authority is not yet receiving its full potential revenue from general rates, the Government is willing to approve the temporary use of portion of our housing advances in order to accelerate the provision of essential community facilities where a satisfactory arrangement is entered into between the local and housing authorities.

It is the policy of the Government to avoid the development by State housing authorities of estates in which almost all the residents are in receipt of government housing assistance, and there is a tendency on the part of some people to regard families living in those areas as being second class citizens. We are determined to do our best to prevent such unfair social discrimination. To this end the Agreement provides that, to the maximum extent reasonably practicable, dwellings built with housing authority advances shall be intermingled with dwellings privately constructed, and a State housing authority will acquire some blocks in residential areas developed by private enterprise, and will construct and let dwellings on those blocks.

Coir intention is that our welfare housing advances will not be part of State programs approved by the Loan Council. During the process of negotiation of this Agreement, all State Housing Ministers sought certain assurances in respect to borrowing to be approved by the Loan Council and the minimum allocation for works, including any housing other than welfare housing. Ground-clearing exercises have been carried out by Australian and State Treasury officers so that, at the June 1973 meeting of the Loan Council, Ministers may consider what would be necessary to ensure that what is done on housing does not in itself prejudice the positions of the States on the Loan Council program side when all factors are taken into account. However, as the Government wishes to be in a position to offer the States advances for welfare housing from 1st July next, it is important that the legislation to authorise it to enter into this Agreement, and make advances, be approved by the Parliament during the current sittings. I commend this Bill to honourable members.

Debate (on motion by Mr Bonnett) adjourned.

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