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Thursday, 27 February 1975
Page: 866

Dr GUN (Kingston) -This Bill represents a new approach to housing policy. As the Minister for Housing and Construction (Mr Les Johnson) has stated in his second reading speech, certain defects in the provision of housing have been identified and the Australian Housing Corporation has been established to act directly to plug those defects. To provide housing for people, we need land, we need building workers together with building materials, finance and the entrepreneurs, either private builders or government housing instrumentalities.

As I see it, the Australian Housing Corporation will act in 2 of these areas- finance and entrepreneurship. Finance will be available to various categories of home buyers and to builders. Provision is made for the Corporation to act as joint entrepreneur with private enterprise, particularly in the provision of rental housing. It is in this area of rental accommodation that the Housing Corporation will have the greatest potential to do good. It is not intended that the Corporation will duplicate the functions of existing institutions, such as the savings banks or the State housing authorities. It is intended that the Corporation will compliment the activities of other bodies. That is not to say that there is not a need for a co-ordinated approach to housing policy. There is a very great need for this and, later on, I will say something about it.

The greatest problem that we have today is with rental accommodation, both houses and flats. This Bill will assist that problem but a very great deal of thinking and action will still be necessary not just to overcome the shortage but to prevent it from becoming worse. What is responsible for this shortage? There are a number of factors. Firstly, there is the fact that so many forms of Government assistance discriminate in favour of home purchasers. Although it is not intended that way, the actual redistributive effect is harmful to people paying rent. For example, the home owner may deduct council rates and land taxes from his taxable income, thus getting a reduction in his income tax. This is a benefit which discriminates against those who do not own their own home. The same may be said of the tax deductibility of the interest component of home mortgage repayments.

However, before any members of the Opposition criticise this proposal, it is worth reminding them that exactly the same criticism is valid of the similar proposal of the right honourable member for Lowe (Mr McMahon) in his 1972 election policy speech and of the home savings grants scheme introduced by the Menzies Government in the 1960s. A further benefit to home owners is the exemption of the family home from death duties. This, of course, is of no benefit if one has no family home of one's own. I believe that these forms of discrimination may well be a reason for the sluggishness of expansion of rental accommodation. A developer building houses for purchase also has the problem of high costs and interest rates, but he knows that the prospective buyer will have some relief in the form of tax deductions whereas the tenant paying rent does not. This could well be a factor in discouraging development of rental accommodation such as flats.

A second factor in the shortage of rental accommodation is the prejudice of State Liberal governments against rent payers. This attitude is apparently ideological. It is cruel and indefensible. It is all very well for the Governments of New South Wales and Victoria to say that they want to encourage home ownership, but this does not justify their harsh, in fact punitive, attitude to those families who cannot, or for various reasons do not wish to, buy their own homes. This attitude was made quite plain by the Victorian Minister for Housing in the negotiations leading up to the new Commonwealth and State Housing Agreement. But the greatest monument to the approach of the Victorian Government is revealed in some figures contained in a pamphlet published recently by the Brotherhood of St Laurence. It is noted that in the year 1973-74 the Victorian Housing Commission's total stock of rental homes actually declined. The Commission built 894 houses and sold 1181. What an achievement that is.

The question arises of whether the Australian Housing Corporation can help to overcome this problem. I think it can. Of course many other things also need to be done, but the Corporation can make a contribution. One thing it can do, and must do, is to provide funds for rental accommodation at concessional rates of interest. This will help to redress the balance towards rent payers as a counter to the considerable concessions already available to home buyers. The role of the Corporation acting as a joint entrepreneur with private builders is also important. One of the problems at present is psychological. If the Government comes in actively in this area it should bolster the confidence of builders and get them into action again.

What is needed above all in the housing industry is guaranteed continuity of activity. The real demand for housing in Australia is almost limitless because Australians will always want houses. The fact that there is this guaranteed market should be exploited to the maximum to ensure that housing is a growth industry. It is not an industry which can be greatly affected by competition from imports and it can therefore be planned to expand irrespective of international economic trends.

The Industries Assistance Commission- the IAC- has mentioned in its annual report those industries which require little assistance against imports. First on its list, which is implicitly a list of industries in which growth should be encouraged, is service industries. I suggest that the first item in this section should be housing, that is, the building industry and the manufacture of building materials. In order to achieve a growth of this industry there must be planned continuity of activity, and that means of course planning. This Government and the Australian Labor Party are committed to a policy of economic planning. To achieve national economic planning will not be easy.

As the Treasurer (Dr. J. F. Cairns) pointed out on 'Monday Conference' on Australian Broadcasting Commission television this week, most economists in Australia have a macro-economic approach, that is, they are concerned mainly with overall demand management by budgetary or monetary means. The existing bureaucratic institutions are unable, and probably in some cases unwilling, to take a more vigorous approach. I strongly recommend to the Government that a start be made on economic planning by going to work on the housing industry. If we cannot embark on an overall 5-year economic plan, let us at least have a housing plan. If it is effective it could be a prototype of an overall economic plan.

At the present time there is no machinery at all for housing policy except in the area of public authority housing. In the private sector, which is responsible for housing most Australians, there is no policy. Housing is of course the traditional responsibility of State governments, but even State Housing Ministers are really directly concerned only with their public housing authorities. There is a completely laissez faire approach in the field of private housing. I believe this is a rebuttal to those Opposition spokesmen in this debate who asserted that this Bill usurps the role of the State housing authorities. In fact, the State housing authorities are concerned really only with public housing. On the question of private housing there is really no overall policy in any field. Even in the field of public housing there is no real on-going planning. There is the conference of Commonwealth and State Housing Ministers, but this does not really represent a joint planning approach. Rather, each Minister arrives at the conference with a prepared position and the result is usually some kind of compromise.

The overall level of housing activity in Australia has been governed by the very blunt instrument of monetary policy or so-called demand management. I said 'so-called demand management' because what has been called demand for housing is not really that at all. Demand for housing is a euphemism for the supply of money for housing. When the Reserve Bank reduces the demand for housing it is of course not reducing the desire of people to buy houses; it is making it harder to borrow for houses. The reliance on monetary policy has had serious effects on the industry. Because the level of building is so sensitive to monetary policy, the result of monetary management has been that the economy is regulated by turning the housing industry on and off or rather from hot to cold to hot. A new approach is required, not of demand management but of assessment of the real housing needs of Australians; not of demand management, but of supply management; not so much the supply of money, but the supply of real resources for the building industry.

The planning authority should be a commission, not an Australian Government commission, but a joint Commonwealth-State commission. Perhaps the nearest analogy already in existence would be the River Murray Commission, which has a commissioner from the Australian Government and one from each of 3 States. The Commission would not have only Government appointees, however. It is essential to include building unions. Builders should also be represented, perhaps through the Housing Industry Association, which represents builders and building materials manufacturers and which has a fairly good finger on the pulse of the industry.

It is pleasing to see in the second reading speech of the Minister for Housing and Construction a reference to the Housing Indicative Planning Council which has just been set up under the Minister's auspices. I believe this is a most welcome development but I should like to see the Council develop into a statutory body with a permanent infrastructure for evaluating needs and planning for the future, and with adequate powers to ensure a stable but growing industry. For guaranteed growth of the industry continuity of activity is needed. This means continuity of supplies and continuity of workers. One of the problems which results from the fluctuations in the housing industry is the departure of people from the industry during a downturn, and some never return. If there is guaranteed continuity there will not only be fewer departures from the industry but also more people will enter it.

Having more people enter the building industry raises the perennial question of adult apprenticeships. Officially the trade union movement has adopted an accommodating approach to this question, but there must still be some reservations by building workers about what will happen to them if there is a sudden glut of newcomers into the industry and a downturn occurs. If building workers were to feel that way, who could blame them? The answer to this conundrum must surely be permanency for building workers. If job security is guaranteed for workers already in the industry an expansion of the work force would mean more employment, not less. To achieve permanency should not be an impossible task. It has been achieved in the stevedoring industry, in the Australian Stevedoring Industry Authority. Incidentally, the ASIA was established for what was believed to be a declining industry in terms of employment. Surely the same objective would be even easier to achieve in a growth industry, which the housing industry must be.

Many economic and social benefits would flow from planned continuity and growth in the building industry. With an expanding work force and with the industry insulated against fluctuations in the national and international economy, a guaranteed growth can be assured in the supporting industries; not only those making building materials but also in industries making the domestic appliances which go into most homes. This, of course, means that high employment levels can be sustained in the slumps which are intrinsic to the capitalist economic system.

It is also worth noting that the building and building materials industries are not unpleasant industries to work in, particularly in comparison with many other industries which Australian workers endure- industries, incidentally, which are very vulnerable to international economic pressures and which require heavy slabs of protection in times like the present. Another important function of such a planning body would be in assuring continuity of" supplies of materials. It seems anomalous to me that manufacturers of bricks, for example, should be laying workers off because of excessive stocks. If we return to a buoyant state in the building industry, which I believe we will soon do, the lay-offs now occurring, apart from the trauma to the workers concerned, could mean a future return to the shortages we experienced in the past. Rather than trying to re-employ these workers in the regional employment development scheme, which is a good scheme in its own right but which involves a heavy expense for each job provided, I would prefer to see some assistance given to manufacturers to continue production in spite of their large stockpiles. Perhaps the assistance could be in the form of servicing overdrafts on stocks. With the assurance of sustained activity in the industry we would then have the other essential ingredient of confidence. I have already mentioned labour and materials, but we also need confidence. Confidence is vital in an industry which is so dependent on the private sector. A planned approach would provide it.

Above all, planning means evaluation of supply and demand, not of money but of real resources. It is the thought that more money, or less money, will solve our housing problems which is quite fallacious. The Australian Housing Corporation Bill does, in fact, provide for the Corporation to act as a lending institution in respect of such things as bridging the deposit gap. This is a problem, not so much in the Bill but in a philosophical sense. Of course, everybody is in favour of helping people to close the deposit gap but what is really needed is more houses. In the short run some finance at relatively low interest rates to help bridge the deposit gap will help to get people to build houses. This is to be commended in this legislation, but there are limitations. Once we reach the stage of making full use of the resources available to the building industry the answer is not more money but to raise the capacity by manpower policies and planning. If the capacity cannot be raised more money will mean not more houses but dearer homes. Indeed, in these circumstances, further concessions to home buyers will only further disadvantage those who do not own houses. If concessions are given to home buyers, and houses are not available, the only effect will be rising prices. This is a further handicap to those who do not qualify for those concessions. I ask honourable members to remember that home owners have an inflation-proof asset as well as special privileges such as taxation advantages. It is time we gave rent payers a go because they have neither an inflation-proof asset nor tax advantages. I suggest that consideration might be given to providing direct subsidies to people who pay rent. I am not sure whether this Bill would enable this to be done.

Mr Les Johnson (HUGHES, NEW SOUTH WALES) - This Bill makes it possible.

Dr GUN - I thank the Minister for his comment. I think this is most important. A problem in areas where there are many people paying rent, such as in inner suburban areas and certainly in part of my own electorate, is that if the area becomes popular for redevelopment, the tendency is for council rates and other charges to increase heavily. The result is that many people will experience an increase in the unimproved values of their properties and if they are on low incomes they can be priced out of an area in which they might have lived for most of their lives. I should not like to see this happen nor do I think would any Government supporter. People should be encouraged to remain in the suburb of their choice. As the Minister said in his second reading speech, people of various income and social groups should be encouraged to live together in the one suburb rather than there being created what might be called ghettos. Provision could be made in this legislation for specific rental subsidies to enable people to remain in the suburbs of their choice. I am pleased that the Minister indicated that such provision is made in this legislation. It is an extremely progressive move. I support the Bill.

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