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Thursday, 24 May 1973
Page: 2655

Mr ASHLEY-BROWN (Mitchell) - The main provision of the new CommonwealthState Housing Agreement is that moneys should be provided by the Australian Government to enable the States to increase lower rental housing. The Minister for Housing (Mr Les Johnson) has stated, and I agree, that the 3 Bills are inter-related. As I mentioned when speaking on the second reading of the Housing Bill and also on the Defence Service Homes Bill, the fact that nearly 100,000 families are waiting for homes is something that needs urgent and immediate attention. The main issue is to reduce this long waiting list of people who have made application and are waiting for homes. Negotiation with the States, particularly with the Housing Ministers of Victoria and New South Wales, has not been easy but this Bill now requests the authority of Parliament to enter into agreement with the States so that such agreement can come into operation as from 1 July 1973.

The need for good quality, low rental accommodation for families with low incomes is easily understood when one considers the economic factors operating in the housing industry at present. Firstly, there are the observed facts that both the cost of land and the cost of home building are rising rapidly and in excess of inflationary increases in money value. As examples of increases in land costs, the Minister for Urban and Regional Development (Mr Uren) is quoted as saying:

Speculation is running riot in Melbourne. The cost of a medium priced suburban block in Melbourne has gone up by 43.75 per cent to $5,750 in the past 5 years. In Sydney the price has gone up by 133 per cent from $5,500 to $12,000 a block in the 5 years.

A survey carried out by the Knox City Council in suburban Melbourne has shown an average land price increase of 62.63 per cent in the 12 months to February this year. The price increases average $48 a week for land 15 to 20 miles from the GPO with made roads and all other services but unsewered. Sewered blocks in the area sell from $9,000 to $11,000. The speculation appears to be caused to a large extent by a disequilibrium between demand for and supply of serviced residential land, particularly in major urban areas.

With an interest rate of 4 per cent for housing authority purposes and 4i per cent for home building accounts, which are fixed rates for the duration of the agreement, and repayment by the States over 53 years, the proposition is very attractive and will go a long way towards keeping costs down and creating a more settled community. Building costs have been caught up in the inflationary spiral and one recent estimate put the cost increases at about $30 a week on low budget mass produced homes. As the Minister for Housing has stated, '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 the State Housing Authorities with our advances will be allocated to families where the average gross weekly income of the main breadwinners will not exceed 85 per cent of average weekly earnings per employed male unit as defined in the agreement and, where the family includes 2 or more children, this will be increased by $2 a week for each child beyond the second. Those eligible are 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 short-run factors causing this housing costs increase are the short supply of both skilled tradesmen, especially - and I emphasise this - bricklayers and carpenters, and of materials, particularly timber and imported timbers such as Oregon and Canadian Pine. It has been estimated that 10,000 more workers will be needed in the housing industry by 1973 to meet the growing demand for bouses. Unless skilled tradesmen can be diverted from other types of construction, this shortage, aggravated by large injections of public money, will drive housing costs even higher. Another short term factor affecting housing costs is the prosperity currently being enjoyed by the community.

Finance is readily available, although not so easily obtainable as it was 6 months ago. Over the last 2 years housing construction has been fairly static, so there is now a certain element of pent up demand. In addition there is one pressing long term factor which will affect demand over the next decade, that is, the bulge of the 20 to 29 years of age section of the population. As the babies of the postwar boom reach this age, marry and begin to rear children - I stress this point - they will want to see their dream of a home of their own translated into a bricks and mortar reality. Providing the level of prosperity does not decline, demand, especially by this group, is not expected to slacken until the 1980s.

The effects of cost increases are two-fold. Firstly, absolute increases in prices of the order mentioned earlier can add as much as $4,000 to the cost of a home over a 12 months period. This increase will be reflected also in prices for existing dwellings, especially as they are often situated more favourably to places of work and social amenities. Since few private lending bodies will provide finance at less then 10 per cent, anyone saving for a home will have to save an extra $400 a year - about $8 a week - in order to be eligible for finance. In addition, money must be available to pay both legal fees and stamp duties, which are generally a percentage of the cost of the house and thus increase as the price goes up. At the same time, people who are waiting to buy houses generally occupy rented dwellings. The cost of these dwellings also is rising because of the general pressure on dwelling space. In Canberra, for instance, rents for private 2- bedroom flats range from $32 to $45 a week, and 3-bedroom unfurnished houses are rarely available below $35 a week. There is a waiting list in Canberra of 38 months for 3- bedroom homes provided by the Government.

The net result is that price increases in land and building costs push the low income earner further and further behind in the struggle to accumulate enough capital to buy his own home, while the other dwellings that are available to him are generally increasing in price, leaving him with less of his weekly earnings to put towards his future home. The Minister for Housing has estimated that each of the 93,000 applications on the waiting lists of the nation's housing authorities represent a family of 4 or more. The Minister for Housing further stated:

Taking into account . . . that other people don't join the waiting lists because it is hopeless to do so, one can conservatively calculate that today perhaps 400,000 people are seeking a decent adequate home - so far without hope. For an appalling number of people, both individuals and families, home ownership is just not available.

This legislation seeks to rectify that very position. It is those people that the present legislation seeks to help. In his second reading speech the Minister for Housing said:

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 the housing authorities with our advances may be sold at a fair price to families who satisfy the needs test.

For the most part they would be families which would be unable to borrow privately the finance they need to own their own homes. The interest charge to purchasers, including the costs of administration, shall not be more than 5i per cent per annum The agreement with the States provides for 2 options to be open to applicants for a home - they can either buy or rent.

It is very pleasing to see that the Minister has recognised that the co-operation of the States with local government is vital and that the States will have the power to advance to local government by way of bridging finance moneys that will be used by local government to provide essential amenities, such as park and recreation areas, community centres, swimming pools and so on. I wish to quote for the information of the House and for the information of councils of outer metropolitan areas what the Minister has provided for in the agreement. This is something for which local government in the outer areas has been waiting for years. He said:

The Government is also concerned at the frequent absence of essential community amenities m 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 government and housing authorities.

For how long has local government waited for the opportunity to do something about amenities? It has never had such an opportunity before. This legislation will give local government the opportunity to provide, in addition to housing, the essential requirements so far as amenities are concerned. Local government now has 2 avenues of finance open to it for amenities, over and above its normal loan allocations, namely, bridging finance as provided for in this legislation and, as a result of the introduction of the Grants Commission Bill, the opportunity on special occasions to make application for grants. A weakness in the past has been the inability of local government, especially in the outer metropolitan areas of the cities where mushroom growth has taken place because of the erection of war service homes and housing commission homes and the construction of homes by private builders, to provide the amenities that are so essential to the making of home life more comfortable, particularly where children are concerned. This legislation provides for that. Briefly, bridging finance will help councils to meet the expenses involved in providing amenities, without disturbing their normal loans. Also councils will have the opportunity under extraordinary circumstances to seek assistance from the Grants Commission. This legislation is long overdue. The sooner it comes into operation the sooner we will have a more contented community.

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