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Friday, 25 May 1973
Page: 2704

Mr ERWIN (Ballaarat) - These Bills are being brought into the House at a time when the agreement between the Commonwealth and the States is still in draft form and has not yet been agreed to by the States. Is this not another example of an attempt by the present Government to ride roughshod over the States through the power of the purse? The new agreement would allow the Commonwealth Government to stipulate that a much greater proportion of housing finance should go towards the building of Government homes for rental. The agreement would replace the present system of virtually unconditional grants with a scheme whereby Commonwealth financial aid would be given subject to a number of clearly defined conditions. Mr Dickie, the Minister for Housing in Victoria, has asked what power the Commonwealth has to direct Victoria how to spend money raised from Victorian taxpayers for the betterment of Victoria. The Melbourne 'Herald' in its editorial of 22 February reaffirmed this point of view when it stated:

Canberra has not 'created' housing funds. Through its taxing power, it has raised this money from Victoria and other States, and is merely returning capital to be applied through the elected State Government apparatus. Why the money should have to suffer a distant policy change in the process in a mystery.

The Minister for Housing (Mr Les Johnson) has also proposed that the sale of new homes built by the State Housing Authority after 30 June next should be severely restricted, if not entirely prohibited, with sales to continue from its existing stock. He has also said that to relate assistance more closely to needs the annual determination of the amount to be allocated to the Housing Commission for welfare housing could no longer be left entirely to the individual States. The Minister for Housing in Victoria, Mr Dickie, has gone on record as saying:

It has been quite obvious to me that from the outset Mr Johnson has been completely unaware of what the housing situation is in Victoria. I am certain that there are difficulties in New South Wales and most certainly in the electorate that he represents, and he has formulated a policy for the whole of Australia which could make some contribution to correcting the housing problems in his own electorate.

The more that you look at these proposals the more you will realise that we can only be worse off. I believe that we can be justifiably proud of our housing operations here in Victoria. The Commonwealth has made great play in its Press releases and in its official documents that they intend to provide houses for needy people. Mr Johnson seemed to be unaware that under the charter given to us in the Housing Act the Housing Commission only has one responsibility, and that is to spend money to provide homes for people of limited means who are living in substandard housing. Now people of limited means are needy people and, of course, we have the added protection of the means test to ensure that we are building these houses for needy people only. The means test has always been applied whether a person is interested in only becoming a tenant or is interested in actually purchasing his home.

Since coming into office in mid- 1955 the Liberal Government in Victoria has always sponsored home ownership. It is a basic plank in our Liberal Party platform, and one that we believe in intensely. Since 1955, 33,832 housing units have been sold to people who meet the requirements of the means test. None of them have been directed by the Victorian Housing Commission to buy their houses. They have bought them because they wanted to buy them; they have bought them because they have wanted to become home owners and, whether you rent a house or sell it, exactly the same person is going to occupy that house, possibly for the period of his lifetime. Sponsoring home ownership does many things that are good for Victorian Housing Commission applicants, and also for Victorian Housing Commission estates. Needy people are now able to buy a Housing Commission home by simply indicating to the Commission that they wish to purchase their home, and no deposit is required. They will simply be paying for their home; the home will be theirs by simply keeping up their rental payments.

Buying a house is compulsory saving, and if there is one thing in this community that a family should have it is security in some form. Should the death of the breadwinner unfortunately happen, a death benefit insurance scheme provides security for the family of an eligible participant by providing payments for all outstanding loan money and this, of course, is a marvellous thing, because even a week after a tenant has decided to buy his home and the necessary documents have been finalised, should the breadwinner die then the wife and family become the owner of the home entirely unencumbered. What magnificant security this is for people of low income! And remember that none of these people can purchase these homes if they earn, exclusive of overtime, more than $80 a week on the day that they take the house over.

Many people seek to buy their homes, but are advised against this policy by the Victorian Housing Commission because it believes that many of them, because of circumstances, would find difficulty in servicing a purchase contract and it lets them enter into a contract only after they have discussed the possibilities with the Commission thoroughly. It is interesting to know that of the 33,832 homes sold only a small percentage of the purchasers have found it necessary to revert to a tenancy basis. Mr Dickie has stated:

Now we have been told by the Commonwealth Government that as from 1 July 1973 we must not sell any more houses excepting from old stock. What a fantastic direction to be received from a Government that has no constitutional powers to direct us to do a thing but only has the power of the purse strings by which to try and call our bluff. We will not accept this directive. We believe our home ownership policy is an excellent one and that people who have availed themselves of it are very happy people in our community. Why should we stop doing these things?

Another advantage concerning home ownership is that in a State where we have a balance of roughly SO/SO as far as home ownership and tenancy are concerned it does lend to lift a housing estate. A person who owns his house usually keeps his house in good condition and this rubs off automatically to neighbours who are renting. Our Housing Commission estates both in the metropolitan area and in the country have benefited by this policy of 50/50 roughly of home ownership and tenancy because it has elevated the image of Housing Commission Estates right throughout the community. '

The Victorian Government will not take a directive that houses built after 1 July 1973 by the Housing Commission cannot be sold. It will not sign any agreement that signs away its right to do this type of thing simply because a socialist government does not believe in home ownership. Mr John Dedman, Minister for Post-war Reconstruction in the Chifley Government, spelt this socialist philosophy out loud and clear in 1947 when he was asked on the hustings whether his Government would make money available for people of low income to buy homes. Mr Dedman said that they would not, because home ownership only created a community of little capitalists. Why should the present Government push such a philosophy on a Liberal government which has seen a policy bloom into such remarkable success in Victoria where 33,832 home owners, all needy people, are at last assured of some security as far as their wives and family are concerned?

Mr Dickiehas been criticised for making the statement that under the new Commonwealth/State Housing Agreement in Victoria rent will rise, and I want to explain to the House exactly why he knows that rentals will rise. The Minister was completely unaware of the fact that average rentals apply in Victoria. It is not done in any other State of Australia. Victoria is the only State that averages rentals, and the Minister and the Commonwealth Government were completely unaware of this. Other States charge what is called an 'economic rental', that is, a rental which should be imposed to service the cost of a house in the particular year that it was built. In Victoria houses built many years ago could have been rented at a figure as low as $5 a week, but houses which are built today would have an economic rent of approximately $18 to $20. Because of Victoria's averaging system, nobody pays more than $12.30 for a 3- bedroom unit, and with rebate rentals applicable rent can be as low as 80c a week.

The Bolte Government decided years ago on the averaging system for rental and there was a great deal of discontent attached to it because those people who at the time were in houses for which they were paying low rentals had to be brought up to a higher rent which was the average rental, but that Government felt it was very unfair to tenants in later years who, because of rising costs, would have to pay higher economic rentals, that there should be varying rentals throughout the metropolitan and country areas depending on which year the house was built. The Victorian Government took, the bit in its teeth many years ago and decided on the average rental policy, and it has been instrumental in keeping rentals down to a very low figure - lower than any figure which is imposed anywhere in Australia, but unfortunately it would appear that the Minister was not aware of this fact.

The Minister has said that economic rentals must be charged. An economic rental in Victoria is somewhere between $18 and $20, and with the 15,000 units that could be built over the next 5 years it would be higher still. There will be provisions even under the Commonwealth policy to give concessions on economic rentals, but in most cases it would not amount to any more than $3 at the most. Therefore, if an economic rental is charged in Victoria, less any concessions that are given by low interest rates or any other form of subsidy, the best rentals that a tenant could possibly hope for in Victoria would be around about the $15 to $16 mark, or at least $3.50 above the $12.30 which is at present the maximum which anyone would pay.

Economic rent is charged in New South Wales and in the other States. It is interesting to read in a Press statement issued only about a month ago that Mr Bourke, Chairman of the New South Wales Housing Commission, said that under the economic rental formula the rentals on the houses that the Commission would build with the special $3im grant made available to it to house needy people would be $20 to $25 a week. These are the economic rents that the Minister talks about that will be imposed, or have to be imposed, under the Commonwealth/ State Housing Agreement. What a ridiculous situation it is when the Minister was unaware that the rentals in Victoria, having been averaged, are lower than any rentals that could ever be hoped to be achieved under any new Commonwealth policy.

There is another very important aspect which will be instrumental in rentals rising in Victoria. Under the rental averaging policy it means that if we had 3 houses - one built in 1950 which had an economic rent of $5; one built in 1960 which had an economic rent of $10; and one built in 1970 which had an economic rent of $15 - by applying the averaging formula all 3 tenants of the 1950, 1960 and 1970 houses would be paying $10, and it is the low $5 figure of 1950 that tends to bring this average rental figure down to $12.30.

I believed that the constitutional convention to be held this year was to look at the powers of the States and Commonwealth and make recommendations where it felt changes were necessary. But this socialist government in Canberra has seen fit to move quickly ahead of the constitutional convention and by using the power of the purse strings proposes an agreement which will mean a complete takeover in the housing field.

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