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Proposed amendements to the home savings grant scheme

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Increased Limit on the Value of a Home

The Homes Savings Grant Bill 1970 presented to

Parliament today will give effect to the already announced

intention of the Government to raise the limit on the value of a

home from $15,000 to $17,500.

The Commonwealth Minister for Housing, Dame Annabelle

Rankin, also drew attention to some other significant amendments

that will widen the forms of acceptable savings and extend the

classes of persons eligible for the grant.

Divorced Persons

The bill will extend eligibility for a grant to

divorced persons aged less than thirty-six years with one or more

dependent children. The acceptable savings of eligible divorced

persons may be held in a wide variety of forms up to 31 December,


Savings Bank Accounts need no longer be esignated "Home Savings Accounts"

Dame Annabelle said that another amendment will extend

the forms of acceptable savings to include moneys held in savings

bank accounts and on fixed deposit with trading banks that have

not been designated as Home Savings Accounts.

Date of Application

These three amendments will apply to young people whose

prescribed date was on or after 27 October, 1969, the first day

of business after the recent General Election. An applicant's



prescribed date is the date on which he or she entered into a

contract to buy or build a home or, as an owner-builder,

cpmmenced to construct it.It marks the end of a person's

savings period.

Dame Annabelle said "I wish to emphasize that these

proposals will not become effective until the bill has been

approved by Parliament and assented to by the Governor-General.

The Government will, in its future publicity campaigns, continue

to encourage young people to open a Home Savings Account, and all

young persons who may be considering opening such an account

should do this. A passbook designated as a Home Savings Account

is a continuing reminder of the desirability of saving for a home.

On average, applicants for the grant who designated their accounts

when they commenced to save have saved more than those who failed

to designate, or delayed designating, their accounts."

Savings with Credit Unions

The bill also provides that savings with a credit union

will become acceptable, provided it can satisfy a number of

conditions. Broadly, they are that a credit union regularly

makes a significant number of loans for the construction or

purchase of homes, and that these loans are comparable in size,

interest terms and repayment periods with loans made for these

purposes by banks and building societies.

Conditions for Approval of Savings with Credit Unions

For savings with a credit union to become acceptable -

a credit union must be approved by the Secretary

of the Department of Housing;




' it must be making loans to its members.

Housing loans will be loans made for purposes

in connection with the acquisition of a home;

' the loans must be made at an effective rate of

interest of not more than 72 per cent per annum

on a reducing balance basis;

at least 20 per cent of a credit union's total

lending in its most recent financial year must

have been by way of housing loans;

' at least 15 per cent of its total lending in that

year, or about three-quarters of the 20 per cent,

must be in housing loans of not less than $7,000

and be repayable over a period of not less than

twelve •years;

' the total lending by a credit union by way of

housing loans during a financial year must not be

less than $50,000; and

' a credit union seeking approval must give an

undertaking that it will continue to meet these

conditions in each subsequent financial year.

Dame Annabelle said she appreciated that very few, if

any, credit unions are as yet in a position to meet these

conditions, although a number are making loans of $4,000 or more

over periods of up to ten years or even longer to their members

to assist them to acquire a home of their own. But once these

amendments are approved by Parliament, the door will be open for

savings with a credit union to become acceptable if it wishes to


make a reasonable effort in lending to its members for the

acquisition of homes.

Dame Annabelle said she felt sure that the amendments

proposed will be welcomed by many thousands of young people who

are aoquiring their first matrimonial homes or are saving for

this purpose.