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Thursday, 24 May 1973
Page: 2601

Mr Les Johnson (HUGHES, NEW SOUTH WALES) (Minister for Housing) - lt is very difficult for the House to know-

Mr Lynch - I rise on a point of order. There is a motion before the Chair.

Mr SPEAKER -Order! The Minister for Housing has the call.

Mr Sinclair - Mr Speaker, I rise on a point of order. Prior to the last division you gave the call to the Leader of the House (Mr Daly), pointing out to the honourable member for Hotham (Mr Chipp) that the Leader of the House had the call because the preceding speaker had been from the Opposition side. The Deputy Leader of the Opposition (Mr

Lynch) therefore has priority over the Minister for Housing and it was to him that you gave the call.

Mr SPEAKER -Order! The Minister for Housing has the call because the debate has not concluded. Two speakers from the Opposition side have spoken on the Bill before the House. The call therefore is to go the Government side.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - The Government is endeavouring to facilitate a debate on the housing needs of the young people of Australia. It is extremely difficult for members of the House, let alone for the public at large, to know the reasons why the Opposition is seeking to frustrate such a debate when the Bill before us has emanated from one of its own members. It is an amazing situation that when a Minister sets out with all the good intent in the world to come to an arrangement with the honourable member for Mackellar (Mr Wentworth), there is the inevitable likelihood that this arrangement will be repudiated. One wonders why the honourable member wants to engage in this hit and run tactic of standing up and putting his point of view and then doing everything possible to ensure that the Government cannot comment on the points that he has made. This seems to display all the tendencies of notorious publicity seeking rather than a genuine intention to have the matter properly ventilated.

I think the disgust in this situation does not rest just with this side of the House; it is apparent that some honourable gentlemen on the Opposition side have found the proceedings so undesirable and unsavoury that they have left the precincts and refrained from voting. I know of several cases. The fact is that in respect of this Bill I am speaking on behalf of the Opposition. The Opposition, which might have formulated an attitude on this legislation, could have helped the proceedings of the House, if we had before us a Bill which was indicative of the attitude of the Opposition. The fact of the matter is that this Bill was introduced by the honourable member for Mackellar. One is entitled to ask why is it that the honourable member has not sought the support of his own Party and why he has not sought a party attitude on this matter in the same way as I, as Minister for Housing, have sought a party attitude. The fact is that if an Opposition attitude had been taken the Government would have been able to negotiate on this matter in respect of

Opposition spokesmen. It is a fact, however, that at my request the honourable member made a copy of the Bill available to me, I think last Wednesday or Tuesday evening. At least I received the copy in time for all the Party meetings which take place concurrently in this House. I ask the honourable member for Mackellar the following question: Since it was printed and available for presentation for the Government Party, why was it not presented for the consideration of the Opposition? I discussed the matter with the honourable gentleman and I told him that consistent with the philosophy of this Government we would facilitate a debate on this Bill. It should be remembered that this is a private members Bill and not a Bill endorsed by the Opposition. I negotiated with the honourable member for Mackellar and I said that the Government would agree to hearing his second reading speech and the speech of the seconder, who in this case was the honourable member for Sturt (Mr Wilson), after which I would reply and that we would be doing everything possible to get a vote on this matter. Surely a member who initiated a private members Bill - and the same position should apply if the legislation was initiated by the Opposition - would desire a vote to be taken on his proposal. One wonders what the motivation is for this delaying tactic.

So the fact is that I made commitments to the honourable member for Mackellar. Last night I had a phone call from the honourable member for Herbert (Mr Bonnett) who in the usual course of events leads for the Opposition on housing matters. He asked me what the arrangements were and he concurred with the explanation I gave. I do not know how the Government is supposed to function in this situation. Surely it is a virtuous attitude that we should do what we can to facilitate discussion on private members' urgency motions and Bills.

Mr MacKellar - Did you discuss it in Caucus?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Of course we discussed it in Caucus.

Mr MacKellar - Why did one of your own members say you did not?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - I said we did.

Mr MacKellar - And he said you did not.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Everybody sitting on this side of the House will be able to reaffirm what I am putting to honourable members opposite, that this matter was naturally listed. I do not know how honourable members opposite run their business in their Party meetings, but so far as the Government was concerned this matter was listed on the parliamentary notice paper and as such it was a matter which was to receive the consideration of the Party. We are a Party. We formulate Party attitudes on these matters. I suggest that if the Opposition had done the same thing we would not have had this disgraceful performance today at the expense of the legislative time table which is of great importance to the people of Australia. It is one thing to be facilitating private members urgency motions and private members' Bills but is is another to ensure that they are dealt with in proper perspective. These matters cannot go on needlessly and recklessly. This Government has a mandate from the people and we intend to implement that mandate despite all of the disruptive endeavours that are made by honourable members opposite.

Mr Lynch - You can say goodbye to your housing Bills.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - The honourable member said: 'You can say goodbye to your housing bills'. I think it is a bit pathetic if, because some honourable members opposite are being found out in regard to their repudiation of an agreement, they now intend to follow a course of action presumably taken officially on behalf of the Opposition, which would have the effect of preventing the 95,000 families who are waiting for housing commission homes around Australia from getting the assistance they urgently need. (Honourable members interjecting).

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Mr Speaker,do I have to speak over this continuous barrage of interjections?

Mr SPEAKER - Order! I think that the Minister, too, is getting a little wide of the Bill.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - I take the point and I hope that there will be less provocation so that I can talk about this Bill. As I said, I have an attitude which I will express on behalf of the Government. Firstly, let me say that we are not prepared to accept the provisions of the Young Couples' Home Assistance Bill.

Sir John Cramer - Why?

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - The honourable member asks why. Let me start giving him several of the. reasons. First of all we take the view that the Bill offers unjustifiable tax concessions. It favours the affluent at the expense of the deprived. It is uncosted and, in my view, financially irresponsible. It is at variance with the homes savings grant scheme and is capable of undermining that scheme.

Sifting suspended from 1 to 2.15 p.m.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Before the suspension of the sitting for lunch I was summarising the Government's attitude to this Bill - the Young Couples' Home Assistance Bill. It is necessary for me to repeat it, although in a slightly different way. The Bill proposes a system of unjustifiable tax concessions. It favours the affluent at the expense of the less affluent. The proposal is uncosted and, in that sense, is financially irresponsible. It is also apparent that the Bill runs at variance with the Homes Savings Grant Act. It could have deleterious effects on building societies in Australia. It certainly could undermine the banking system. The Government criticises the fact that the Bill also contains a proposal, the effect of which would be to restrain the beneficiary from exercising the right to sell his house for 3 years. The Government believes that that would be an undesirable byproduct of the legislation. Lastly, the Government disregards this way of solving the housing problems of the nation because it is at variance with the attitude of the Government.

We cannot accept the proposition that the Bill is an effective answer to the housing problem. After all, the proponent of the Bill is one of those who have to accept responsibility for the present situation, lt is a bad situation. Home ownership in Australia is beyond the reach of large numbers of young people. This gives the Government concern. It is sad and pathetic to see this belated concern on the part of the Opposition in the face of 23 years of relative inaction. The country is reeling under the impact of 23 years of inaction and the honourable member for Mackellar, as a former Minister, must accept his part of the responsibility. After all, that was the era in Australia's history when land prices took their meteoric rise to such prohibitive levels, when our overcrowded cities were allowed to grow to such massive proportions, when the fierce competition for developed land occurred, when no new cities at all were planned, when there were long waiting lists for housing commission homes throughout Australia, when interest rates spiralled and when deposit gaps became the order of the day.

The legacy of inadequate housing that the Government has inherited will now be resolved in accordance with the mandate given to this Government so generously by the Australian people. We are going to do it our way. It certainly is not intended to compound privilege with a bonanza - that was the word used by the honourable member - represented by wads of Wentworth's housing certificates. More purchasing power and massive tax remissions for the privileged minority are not the antidote for the chronic sociological ailment which is our nation-wide housing crisis. Th:s Bill will do nothing to alleviate the distressing spectacle of 100,000 families, or thereabouts, comprising the waiting lists - the increasing waiting lists - for State housing authority homes.

The r;ch already have access to lucrative avenues of investment through the hire purchase and land speculation corporations and the mining companies. There is no need to embellish those arrangements. No housing certificate scheme is needed to assist the person who, under this Bill, could acquire housing certificates to such an extent as to increase his tax deductibility by $1,000 a year. Under this proposal the higher the income, the bigger the deduction or remission that is made in respect of the Bill. Not only do these people crack the tax jackpot in the year of purchasing the housing certificate but they also win a super jackpot at the time of redemption. The amount received on redemption of housing certificates is not deemed to be assessable income under the Income Tax Assessment Act 1936-1972. No wonder the Opposition would not officially endorse this Bill. No wonder the Bill has never seen the light of day, even in 23 years of LiberalCountry Party administration.

How can this scheme be reconciled with the homes savings grant scheme which was introduced by the previous Government and which is designed to attract savings by young people into prescribed savings institutions? There is not even a reference to the way in which these 2 matters can be reconciled. It is obvious that the 2 schemes cannot possibly live together. Either young people save through the traditional institutions and attract a $750 grant on $2,250 savings under the Homes Savings Grant Act, or they buy housing certificates. Is the proponent of this Bill intending to destroy the homes savings grant scheme which, despite its apparent anomalies - anomalies which the Government is committed to rectifying - at least provides benefits to a universal maximum for all participants? It is apparent that the honourable member is proposing a course of action which represents a collision course and which would throw all the young couples who are saving under the Homes Savings Grant Act into a state of utmost dilemma.

Under this Bill there is no limit to the extent of the investment and, accordingly, no reasonable limit on the benefits that could accrue. The Bill actually includes a table showing the redemption value of a $10 housing certificate each year for 50 years. One would have thought that 50 years would be regarded as too long a period for which to save for a first home. The table shows that $10 is worth $286.02 after 50 years. For an investment of $1,000 the yield is $28,602. By then, I should imagine, the young couple concerned, who have been saving for 50 years and are still without a home, could get accommodation under the Aged Persons Homes Act and possibly go for a holiday on the Riviera. There is some sort of benefit in that, but it is not the stated intention of the legislation. Surely it is not a reasonable proposition that the Parliament should take this seriously. I am encouraged to note that the Opposition has not taken it seriously.

If this scheme were to be approved, it would have devastating consequences for the building society movement. Savings at present directed to the building societies would be diverted into a new housing certificates trust account. The lending capacity of building societies would be seriously impaired. I wonder whether the honourable member has given consideration to this fact and whether he has gone to the trouble of having any discussions with the building societies. In the light of current events and the recent expressions of consternation, it is easy to anticipate the response he would have received if he had proposed to the building societies that there be some new scheme designed to attract savings into yet another area. Meanwhile, presumably the trust account would assume swollen proportions, yet would be put to no real use in assisting the home-seeking community. I think I am right in saying that nowhere in the Bill or in the honourable member's second reading speech was any explanation given as to the manner by which the funds held in the trust account would be utilised for housing purposes.

The Government firmly rejects this Bill. We reject it because it would be economically and socially unjust in principle and in practice. At a time when hundreds of thousands of our less privileged citizens are struggling to obtain adequate housing, it would divert government funds not to the needy but to those people who already are moving in a determined way along the path to home ownership. The Government upholds home ownership and stresses the need for more rental housing as well. But while we have a crisis in housing it would be financially irresponsible to use a large part of the funds available for housing on a scheme such as this. It is significant that no attempt has been made to give any estimate of cost. No costing has been given because the scheme represents virtually an open-ended commitment. To agree to it would commit the Government to an economic decision of great magnitude. For instance, it would intrude quite powerfully into the taxation structure, adding to the regressive nature of much of that system. If such a scheme were to be seriously considered by any government it would need much more research than is evident from the Bill before the House.

The scheme described in this Bill is an extremely generous one. No one argues about that. Its costs would be high. No doubt the young people able to take advantage of the scheme would benefit in a number of ways. Firstly, money used for the purchase of housing certificates would be deducted from taxable income in the year of purchase. The value of this benefit may be considered by taking the case of the person of moderate affluence who, if his income increases by $10 will pay, roughly, an additional $5 in tax. For such a person the value of this first concession is such that for every $10 housing certificate purchased the Government would, in effect, pay half. Secondly, and provided that the certificates when they are cashed are used for the purchase of the first matrimonial home, they would attract interest at 10 per cent per annum. This is a healthy rate even in present conditions of high interest. It would be an even better rate if, as the Government is determined to bring about, there is a fall in the general rate of interest. We must also bear in mind that this interest is paid on money of which a portion has, in effect, been provided by the Government.

Thirdly, and on condition that the certificates when cashed are used to purchase a home, the interest credited during the life of the certificates would also be exempt from taxation. Thus, there are two quite separate taxation benefits which in the average case would add up to a considerable value. Finally, there is the extremely important concession that the value of certificates when cashed for home purchase would be increased in proportion to the price level as measured by the consumer price index. In other words, the holders of these certificates are to be singled out as the only members of the community who are to be fully protected against the effects of price inflation. Even if the proceeds of cashing the certificates are not used for the purchase of the first matrimonial home, the amount invested in the certificates could still be deducted from taxable income. Although people who use the money in this way do not receive further benefits, this indicates it would be an attractive means of saving, especially for people of high income.

A further comment on the nature of these benefits is that they represent blank cheques. The value of the interest to be credited by the Government would depend on how the rate of 10 per cent compares with the rate which could have been obtained in alternative investments. The value of the suggested adjustment for price inflation contained in the Bill will depend on the extent to which inflation actually occurs. To provide to any section of the community a benefit which cannot, with any precision whatever, be evaluated, would be quite contrary to the proper principles of public finance. However, as I said before, the main objection to the scheme is that it would be enormously expensive. It is a firm policy of the Government that the major aspects of expenditure in its social welfare program must benefit people of relatively low income. That is our sense of priorities. In other words, in selecting the people who will be assisted by the Government, the main criterion is their degree of need.

Under the homes savings grant scheme everyone who has saved the maximum amount receives the same payment from the Government. Under the provisions of this

Bill people of high income receive a much bigger benefit than people of low income. It is inherently inequitable. If the Government were to adopt this scheme it would be at the expense of other and more urgent social objectives. There are many people in greater need than the relatively well-to-do home purchasers. Unlike our predecessors, the Government does not pursue the principle that to those who have shall be given.

During the course of my contribution to this debate I contended that the Government chooses to face up to this problem, the legacy of the previous government, in its own /ay. This afternoon, it is scheduled for the House to consider some Bills which represent a facet of the way in which we intend to approach this problem. We do not need any intimidation from the Deputy Leader of the Opposition (Mr Lynch) who by way of interjection threatened to make the going tough for the Housing Assistance Bill if we dared to reply to the measure before us. We have taken the view today that, since the Government made an arrangement which would enable the proponent of this Bill to give a second reading speech to the full limit of time provided for under the Standing Orders and since we also allowed the seconder to speak, thus ensuring that a period of 50 minutes was used by the advocates of this Bill, it would be reasonable for the Government to have one speaker in reply. After that, in keeping with our declared obligation to give private members the opportunity to bring down Bills, we felt that we should proceed to a vote.

We have assumed that any private member bringing down a Bill would have the desire to see it go to a vote. I suppose there is a reaction in respect of the treatment that this Bill has received and that a certain slate of affairs is prevailing. ] can understand that because it has not been the nature of this Parliament for many years for the Government to permit any private member's Bill to be debated, let alone to bring it right to the culmination point of a vote. We have made a commitment to the honourable member for Mackellar. We are firmly obligated to uphold our part of it. Subsequently it is our intention to go along and do things our way so that we can effectively assail this problem - the problem which young people are experiencing in regard to their access to finance for a home.

We intend to do a number of things We have already done a number of things. We increased bank loans by amending the Commonwealth Banks Act. We have lifted the lending capacity of the Commonwealth Bank so that loans can now be made available at a $12,500 limit instead of the $9,000 limit which prevailed previously. Honourable members know what has been done under the Defence Service Homes Act - very generous embellishments. It is also understood that the Government proposes to make much larger allocations of finance available for State housing authority purposes at lower rates of interest. There are a number of other things we intend to do. It is known that my colleague, the Minister for Urban and Regional Development (Mr Uren) currently is engaged in negotiations with the States to assail the basic problem, the question of land prices which has been ignored for 23 years. 1 am pleased to hear that he is making good progress in that regard. We want to see low cost land. We want to see low cost money.

The Opposition knows of our commitment to provide tax deductibility on home loan interest rates. It knows of our commitment to bring about a system of uniform building codes in Australia, which eminent builders have contended for many years could effect cost savings in respect of the purchase of a house of between $800 and $1,000. We are actually in the business of doing something about that. I am not flying kites; I am talking about a matter which has been the subject of consideration by our Cabinet committees and which will soon be given effect to in a most practical way. I am talking about the concern we have about getting conveyancing costs down and indemnifying the States so that we can prevent the delays which occur and the excessive costs which result from the stamp duty system.

The Opposition has some regard, I think, for our intention to remove the anomalies from the Homes Savings Grant Act. Of course, the Government is intent on reviewing the whole question of building technology. Towards that end we will be setting up proper processes - innovations the like of which have not been seen for 23 years. We will continue to regard the housing problems of the Australian people as being paramount and of high priority and sociological importance. We do not accept this unjust proposition as the way to set about it. Accordingly, the Government opposes the Bill.

But one thing which is inherently characteristic of the Government is that it wants to tidy up the situation. We want to have a vote on this Bill. Accordingly, I move:

That the question be now put.

Mr SPEAKER -Order! I did say that after the Minister concluded his remarks I would give the honourable member for Mackellar the opportunity of making a personal explanation. Accordingly I call the honourable member for Mackellar.

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