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Thursday, 27 February 1975
Page: 893

Mr LAMB (La Trobe) -Mr Speaker,may I be the first in a normal debate to congratulate you on your elevation to your present position. It has been easy to serve under you in your position of Chairman of Committees. I know from that we can expect to experience only the best of your ability in your new position.

I had hoped to speak for longer than the time available to me. I believe that the debate has not been adequate and two matters have certainly been ignored in their more important parts by the Opposition. I refer to the role of a national government in the field of housing and how comparative overseas governments have tackled their national responsibility. The second point is the need for flexible government assistance in hardship cases brought about perhaps by a drop in income experienced by home purchasers, by an unemployment situation which brings about hardship in meeting payments due to a depleted income and finally by a sudden call-up for people to meet all the finance they have undertaken to purchase their own homes, perhaps on vendor's terms or on an interest rate only payment arrangement.

I rise also to rebut some of the more fallacious arguments put up by the Opposition. As a Government, we cannot claim originality for the concept of the Australian Housing Corporation. Similar bodies operate overseas. What we can claim is that we have studied similar overseas schemes and have adapted them to a uniquely Australian corporation that fits in with the Australian constitutional system, the Australian housing practice as we know it and Australian housing needs as we perceive and anticipate them. We have brought to Australia for the first time at national level- accepting a national responsibility- a national policy that complements, not competes with, State housing commissions and what we have benefited from in the private sector. But time does not really enable me to bring to the attention of the House a close examination of those overseas corporations.

The honourable member for Boothby (Mr McLeay) believes that the Australian Housing Corporation Bill will be a threat to State rights, an intrusion into State affairs and a monster body which will sweep aside State housing bodies. What is proposed in this legislation complements rather than competes with the State bodies which, I point out, really arose from the Commonwealth and State housing agreement of the Chifley Government in 1945. That agreement has led, I believe, to the construction of about 280 000 homes, mainly for those in the area of welfare housing. Nothing could be further from the truth than that contribution, that accusation, that charge by the honourable member for Boothby whose argument was so finally dispelled by, the honourable member for Diamond Valley (Mr McKenzie). The correct and proper responsibility for the States is in that area of welfare housing.

The Australian Government does not have full constitutional power to perform all housing functions, but the full powers - available to the Government for housing have never really been fully taken up. That is what the Government proposes to do. It proposes to explore the other avenues of assistance by a national government to home ownership in this country. The national responsibility for housing would never have been taken up if the Chifley Labor Government had not started the ball rolling. As I said, 280 000 homes have been constructed under the scheme which the Chifley Government introduced. The previous Government could not dismantle these arrangements but it could and did avoid developing a national housing policy. The previous Government- the Liberal-Country Party coalition- did not develop a national housing policy as such. It was content to use the arguments of the honourable member for Petrie (Mr Hodges) to rely hopefully on stable interest rates. What a narrow viewpoint, divorced from the real economic situation. It ignores the need for the national government to construct policies which are compatible with flexible economic policies.

The previous Government could not have coped with the dilemma that faced this country when the McMahon Government allowed a rapidly inflating money supply to precipitate the worst inflationary period since the Menzies Government in 1952-53. Let us examine what the Liberal-Country Parties would have done. Either they would have let excess demand ripwith inflation rife in the building industry- so that interest rates remained relatively stable or they would have let interest rates rip and, by their own admission in this debate, destroyed their own simple housing policy based, hopefully, on stable interest rates. They have never developed a policy to cope with a change in interest rates or a change in economic circumstances. The honourable member for Kingston (Dr Gun) stated quite accurately that the building sector has dominated and has been used for economic management. How often have we heard complaints from the private builders, the private sector of the housing industry, that they are the first sector to be hit, that they are the ones to suffer economic collapse. For 23 years they have experienced this situation. Until we are in a position to bring in new initiatives in national policy they will continue to suffer. But now, due to the enterprise of the Minister for Housing and Construction and due to the content of this Bill, we can look forward to better fortunes in the private building sector.

The Opposition would have continued its homes savings grant scheme. Let us examine what was achieved with that scheme. It has been justly criticised because it really only helped those under 36 years of age. The honourable member for Bendigo (Mr Bourchier), who is interjecting, would not have qualified. He is about double that age. The scheme has been criticised because it helped people to buy only their first home. If they had to move assistance from the national government was not available. It only helped those on incomes and with responsibilities which would enable some savings to be made. It ignored those who were never in a position to be able to save in the first place. The grant did not close the deposit gap to any great extent. What it did- as the honourable member for Bendigo will realise, having operated and worked in the building industrywas to add to the price of the land-house unit. In other words, like most subsidies which were brought in by the previous Government, these subsidies end up in the pocket of the seller and support an inflationary market for the particular commodity.

Let us examine what the Housing Corporation can do to assist hardship cases. This Government has tried to shelter low income people from high interest rates. I recall that many honourable members who have spoken in this debate have said that this Government has protected low income people by increasing Housing Agreement advances to the States; by promoting increased lending by savings banks- $ 130m on loans in the last increase; by providing in the tax deductibility of interest paid on housing loans a benefit which, for people on low incomes, is as good and as effective as a reduction in interest rates of up to 3 per cent.

I would like to recount a situation that is not uncommon in outer suburban or inner suburban areas. It is a situation where couples wishing to purchase their own homes are attracted- indeed lured- by attractive advertisements and billboards announcing that unlimited finance is available on low deposit, with vendor's terms, only $ 1 ,200 to $ 1 ,500 needed and 5 years paying interest only. This is not a new situation. It is one that has existed for many years. 'The family negotiates and no solicitor is required', is the usual spiel. These arrangements say that the vendor makes all the contractual arrangements. The vendor kindly shares his solicitor with the purchaser. What happens? After 5 years the buyer has no increased equity in the house. If he cannot pay out the loan he must refinance it. His equity is too low to arrange alternative finance through a bank or a building society. I take the case of one constituent of mine, a purchaser of a landhouse unit in an estate in Croydon. His case is typical of 20 others in the same street and hundreds on this estate and similar estates.

Mr McKenzie (Diamond Valley) - They were taken down.

Mr LAMB - These people were taken down, as the honourable member for Diamond Valley says in summarising the situation. These people purchased through an agent, Kappel, who was the subject of another speech in this House by the honourable member for Holt (Mr Oldmeadow), from a developer, Evington Holdings, which built and operated during the housing boom, the product of the previous Government in late 1 972 and 1973. As this company has now found itself under-financed it has been forced to call up money owed on the houses. To save their homes these people are now forced to refinance their loans not 5 years after purchase, which they expected to do in the normal course, but 12 to 1 8 months after purchase. My constituent informs me that in the private housing finance sector he cannot get a loan to cover the purchase price or a first mortgage loan at interest rates of less than 12 per cent. He has to turn to a second mortgage. If he is lucky to get one he will have to bear a rate of interest of 1 6 per cent to 1 8 per cent. He needs reasonable finance to protect his family shelter.

As I said, this is not new. Cases similar to this have been going on for 20 years. The previous Government did nothing about the situation. We intend to do something. Means which might be used depend upon the development of the powers and the functions of the Corporation. One way in which the Corporation might act would be to take over the loan by purchasing the property and paying off the lending institution to which the payments are due. Having done this the Corporation would allow the borrower to remain in possession of the property on the basis of a loan by the Corporation on terms that the borrower could afford. These terms would have regard to the family circumstances as well as the income of the borrower. When the hardship is of a temporary nature, such as in the case of unemployment, it would be possible for the terms of the loan by the Corporation to be changed to reduce the concession so that assistance is not provided to people who do not need it.

This is an area which produces 2 problemstemporary finance and an emergency situation. For the first time under a new Minister we have a national policy that will cope with such situations. It is an indictment of the previous Government that no national policy such as this was introduced earlier, but now those income groups above a welfare level but not in a high enough income bracket to be able to fend easily for themselves are offered a new opportunity to protect their homes. For these people the goalthe dream- of their own home is not threatened by some exploiter in the private finance sector but is protected. I commend the Bill to the House and I urge the Opposition to rethink its position, not to reject this Bill but to pass it through this House.

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