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Thursday, 27 February 1975
Page: 858

Mr Kevin Cairns (LILLEY, QUEENSLAND) -The honourable member for Henty (Mrs Child) was towards the end of her speech rather mouthing a few political slogans, but the rest of her speech contained some interesting matters that deserve to be looked at. It is leaning into the wind a little, I think, to suggest that the present Government can claim virtue for its housing policy. The facts of life dispute that proposition, and dispute it very clearly and very cogently. The honourable member for Boothby (Mr McLeay) in leading for the Opposition in the debate spent some few minutes, I understand, dealing with those propositions, and he stated the general position of the Opposition on those matters. I would not be one who would claim unadulterated virtue for past housing policy, but it was far more successful than has been the housing pOliCY administered over the last Vh years. Not a person in Australia could dispute that proposition.

I will just spend one or two moments dealing with the past. It is always useful to look at the past even if only to stand on its shoulders so as to look a little bit further into the future. I will deal with one or two policies that have been proposed by the present Government, both when in Opposition and as a government. In 197 1 the famous 2 per cent interest reduction policy was brought forward, and that 2 per cent interest reduction policy which was enunciated at Launceston and which was promoted by the honourable member for Reid (Mr Uren) was found to be a mess and a giant failure. If there is one virtue that the Government can claim it is that before it came into Government it fled as quickly and as far as it could from that proposition. It was clearly a monstrosity.

The Government has also made promises in relation to interest rates. I will say something that has been said in the past and which has to be said again: In total, housing cannot be dealt with unless interest rates are satisfactory. There is a simple equation: Reasonable interest rates make a reasonable housing policy possible; high interest rates make any housing policy extremely difficult to administer. If there is one overriding thing which has been an umbrella over the whole of the Government's housing policy it is what has happened in respect of interest rates. One illustration makes the point. For every 1 per cent rise in interest rates on a $10,000 mortgage over 25 years or 30 years, a person has to pay an extra couple of dollars a week for that period of time. That is how damning and how destructive interest rates can be. So low interest rates mean the possibility of a reasonable home ownership policy.

The third proposition which the Government put forward- it was referred to by the honourable member for Bowman (Mr Keogh) in a moment of lucidity- was in relation to its policy concerning tax deductibility for interest paid on home mortgage payments. I was always interested that the Government never referred this proposal to its Priority Review Committee. It knows that it is a regressive policy. It knows, as the honourable member for Bowman says, that it is not designed to help, nor does it help, those in the low income groups. It helps those people very little who build modest homes compared with those who build castles, and that point has to be acknowledged.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Does the Opposition officially oppose it, or are you one out on this matter?

Mr Kevin Cairns (LILLEY, QUEENSLAND) -No, the Opposition does not officially oppose it. I am pointing out the regressive nature of the policy and that if a virtue is claimed by the Government in that it wants to help the battler in this world and those people in the low income groups, its policies deny thai fact. In an article in the 'Courier Mail' newspaper towards the end of 1 973 the Minister for Housing and Construction (Mr Les Johnson) came very close to admitting that fact.

What is involved in this Bill? Having said those things, I do not say that the Bill is all vice. I think that it is capable of doing some very worthy things. But there have to be doubts. The doubts concerning the Bill relate to the precise proposals which the Housing Corporation is designed to administer. I am attracted to the proposition that the family allowances power in the constitution will be utilised in order to help certain families and certain classes of families who presently are not eligilbe to obtain the finance that is available. For example, I am convinced that there is an area of need between those people who can negotiate a loan from a cooperative building society and those who can negotiate a loan from a savings bank. There is a very big interest rate gap there. Insufficient attention is paid to such people because of different social circumstances judged according to levels of disposable income, judged according to levels of dependants, judged according to the circumstances of the repayments, the- years of repayments and the age of the people who desire the loans. If the Government can administer those areas correctly I will give it full marks, but it is precisely here that the very great doubts concerning this Bill project themselves. It is as vague a proposition as I have seen. With three or four, perhaps five, amendments it could be fixed and could be made more precise.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Did you put this to your Party meeting?

Mr Kevin Cairns (LILLEY, QUEENSLAND) -I never discuss what happens at Party meetings, as the Minister would know. The new areas designed to be covered by this Bill are set out in clauses 29, 30, 31 and 32. Each of those clauses has the same type of opening sentence. They are dealing with proposed loans by the Corporation, grants by the Corporation, sales by the Corporation and leases by the Corporation. Clause 29 says that 'the Corporation may, in accordance with regulations, lend money'. Clause 30 says that 'the Corporation may, in accordance with regulations, grant money'. Clause 31 says that 'the Corporation may sell a dwelling in accordance with regulations'. Clause 32 says that 'the Corporation may grant a lease of a dwelling in accordance with regulations. I suggest to the Minister- I acknowledge his goodwill in this respect and I would not for one moment deny it- that it would be far more appropriate if each of these clauses had said that the Corporation may grant or lend in accordance with legislation- not regulations.

The new schemes are designed to help people to obtain second mortgages on land, by deferred payments on mortgages and so on. These imaginative new proposals could be beneficial to a lot of people. But what are the proposals? I do not think that schemes of this nature should be brought in by regulation. They should be brought in by legislation. That is a clear fact of life. It may be said that regulations are capable of being perused by this House, but regulations have not the capacity to be perused in the same way as legislation. When the Minister looks at these clauses I hope that he will consider those factors. The point I am making is that there is a need. The question uppermost in my mind is how that need will be satisfied.

The Bill is a general Bill. It may be an administrative one which would gather under its umbrella all the housing areas which are at present administered by the Commonwealth Government, such as housing for Aborigines, certain immigration procedures and defence service homes. The innovative measures, which are very vague, deserve to be spelt out with some precision. Regulations are unsatisfactory in that respect as a means of merely handing over power. I hope that in his reply the Minister will deal with these matters in some detail. They deserve to be dealt with in detail. If the Bill works it will work well. But one has to look at the present state of the industry to which this Bill is proposed to apply. I was fascinated to read some days ago that the Minister claimed great virtue for the fact that the level of housing activity in Australia and the level of housing approvals were rising. If one looks at the latest details, which apply up to December last year, one will find that there has been a gentle rise. But there is no virtue in claiming that a halfhearted resurrection has occurred when the Government has beaten the industry half to death. After all, that rise has developed from the steepest decline in the level of housing activities ever registered in this country. That is a significant statement to make.

I say to the Minister that whilst this Bill may contain some virtues and may be able to do a great deal, we want to know what it is proposed to do, to whom it will apply, how the bans will apply, how the grants will apply, how the second mortgage schemes will apply and to what classes of persons deferred payment mortgage schemes will apply. It just cannot be left there. Other clauses of this Bill need to be cleared up in order to give some source of confidence to the industry and to those people in Australia who are at present wanting homes.

Having dealt with some of the factors of this Bill in the few minutes available to me- I will advert to them later when the clauses are discussed at the Committee stage- I put a question to the Minister. It relates to the Bill which was presented to this House towards the end of last year. At that time the Government imaginatively proposed a Bill which was designed to distribute $150m to savings banks to boost the housing industry. The Minister will recall that on that occasion I made a plea that those States in which the availability of funds for housing had declined most should receive some compensating benefit. He will recall that on that occasion I pointed out that, due to the operation particularly of the Commonwealth Savings Bank, 2 States had been deprived of one of the most valuable sources of finance for housing- savings bank funds. Those 2 States were Queensland and New South Wales. I ask the Minister whether he can indicate the distribution to the States of the $150m for housing. I want to know how it has been distributed and whether on the understanding of the Treasurer at the time, the honourable member for Melbourne Ports (Mr Crean), almost in the midst of a handing over operation -

Mr McLeay - Taking over.

Mr Kevin Cairns (LILLEY, QUEENSLAND) - He was in the midst of a taking over operation. I want to know how those funds have been distributed and whether they have been distributed to make up for the drastic short fall that was occurring in various parts of Australia. I ask that because in any part of this country when savings bank funds are not available people are inevitably driven to much higher cost sources of finance. It is no mistake or accident, I believe, that in those areas where savings bank funds have not been available people have had to have recourse more than elsewhere to funds from the finance companies at a 3 per cent, 4 per cent, 5 per cent or 6 per cent hike in interest rates. Nobody could disagree with the aim of this Bill. It is supposed to be opposed to the private industry sector where it presently does not apply. We want to know the precise proposals to assist in this area. We want to be assured that it will not displace State housing commissions, nor is it intended to displace State housing commissions I do not believe it will. I do not believe it is capable of displacing State housing Commissions. Nevertheless that is not the principal reason the honourable member for Boothby, leading for the Opposition, indicated the Opposition's attitude to this Bill. We stand behind him in that respect.

There are other unanswered questions. I put another proposition to the Minister. In clause 40 of this legislation there is a rate of return payable on account of the funds which are allocated to the new Corporation, and I would like to know what rate of return will be appropriate to the funds allocated to the Housing Corporation. Will the Minister make a distinction in the rate of funds which are returned according to whether they are defence service home funds or funds utilised for the other purposes for which the Corporation, under this Bill, when and if it becomes an Act, would become an administrative organisation. I think this almost strikes at the crux of the question concerning the whole operation of the proposed Australian Housing Corporation.

One other matter deserves to be mentioned. There has always been concern in Australia when the rate of housing activity has declined. That has applied in the past and it applies today. I would hope that those who look to the future level of activity in the housing industry peruse the Borrie report very closely. I hope that they have other plans for the housing industry in Australia because if the facts contained in the Borrie report are correct and if the appropriate priorities are applied to the projections made in that report, one can look forward to a steep decline in the total overall level of activity in the Australian housing and building industry from the late 1970s.

Unless people are going to be persuaded to build two homes instead of one and unless that is going to occur en masse, rather than spasmodically as it does at present, the total level of activity in the housing and building industry needs to be perused. I would hope that the Minister, with the committee that he has set up under an eminent academic, will make proposals in these areas having as first priority- not the second- the position of the Australian community. The Minister, I am sure, will take those suggestions to heart.

I revert to the principal problems that one sees in this legislation. The principal problems are the vagaries of the legislation. Regulations are designed to be the heart of it and to indicate what all future activity is about. We want to know what interest rates are proposed for the lending operations. We want to know why the class of Australians to whom this Bill will apply has been expanded so widely beyond the classes already served by the Commonwealth Government. I am excepting, in that respect, the use of the family allowances provision. I refer in that respect to clause 6 (3) (d) and clause 6 (3) (e). The latter clause is wide and makes the activities of this Corporation almost limitless. It states in part:

The Corporation may perform its functions ... for any purpose of Australia or an authority of Australia.

I would like the Minister to explain the precise meaning of that phraseology and of that paragraph. I would wish the Bill well if it could be amended in great substance. I suspect that it will not be; I suspect that it cannot be. Above all, promises can roll off the tongue very easily. I would like some substances spelled into the vagueness of some of the promises made in the Minister's second reading speech.

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