House of Representatives
18 March 1965

25th Parliament · 1st Session

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 10.30 a.m., and read prayers.

page 109




– Would the Prime Minister inform me of the number of Commonwealth secondary scholarships awarded in Victoria in 1964 in the following categories: State secondary schools, State technical schools, non-State secondary schools and non-State technical schools? I further ask the Prime Minister whether he is aware that the method of awarding Commonwealth secondary scholarships has raised protests in Victoria, particularly at the high school level. In view of this resentment, will he give consideration to changing the method by which these scholarships are at present awarded to that used in Victoria for State junior scholarships?

Prime Minister · KOOYONG, VICTORIA · LP

– I atn sure that my friend would concede to me that I do not carry all these figures in my mind. I will certainly obtain them and give a full answer to his question. I will treat his question as if it were on the notice paper.

page 109




– I direct a question to the Postmaster-General. I ask the Postmaster-General whether it is a fact that between 15,000 and 20,000 applicants in Sydney alone are awaiting the installation of a telephone, and that a large percentage of these applications are from the northern suburbs of Sydney, including North Ryde, Ryde and Artarmon, which are in the electorate of Bennelong which I represent? Is the Postmaster-General aware that the long delay in having telephones installed is seriously affecting the establishment of new industries and commercial undertakings, particularly on the north side of the harbour? What is the reason for this undesirable position? Is it a shortage of funds, equipment or manpower? Will he make a full statement on this matter and urge the Government to provide the facilities, particularly the necessary increase in funds, to overcome this problem?

Postmaster-General · PETRIE, QUEENSLAND · LP

– I think honorable members will realise that there is not a short answer to the number of questions which the honorable member has asked. I am aware of the problems associated with the installation of telephones for the whole of New South Wales, and particularly Sydney. But I would mention that in the current Budget there was an increase in capital funds from £68 million last year to approximately £77 million this year and, because of increases in lead and copper prices, the Treasurer granted an additional £2,500,000, which makes a total of approximately £80 million. However, this will not enable us substantially to overcome the back log of telephone applications in New South Wales, which is the State worst affected, overall, throughout Australia. I appreciate that there are serious problems. To a degree, these problems could be overcome by finance if, in fact, the materials and also the manpower were available. I am quite sure the honorable member will appreciate that substantially the installation of telephones requires skilled labour and that skilled labour for this type of work can be provided only from the training schools of the Postmaster-General’s Department. It is impossible for us to see an overtaking of the lag in the reasonably near future, because of the difficulties he mentioned, namely, the supply of materials, manpower and money.

page 109




– I direct my question to the Minister for Primary Industry. Is it a fact that the Government proposes to set up an Australian Tobacco Board, which will comprise representatives of the Commonwealth and State Governments, four representatives of the tobacco growers and four representatives of the .tobacco manufacturers? Is it the Government’s intention to appoint also to the proposed Board representatives of the Tobacco Workers Employees Union? If not, why not?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The Commonwealth Government does intend to establish a Commonwealth Tobacco Board, but this will require complementary legislation to be enacted by the States. Meanwhile, we have set up an interim committee to carry out the functions of the proposed Board so that we can cater for the crop which is now being harvested and sales of which commenced this week. The constitution of that interim committee, as far as I can remember, provides for representatives of the three State Governments concerned, four representatives of the manufacturers, four representatives of the growers and one Commonwealth representative. I think that adequately covers the needs of the industry.

page 110




– Will the Minister for Primary Industry consider convening a meeting of growers’ representatives, officers of the government departments concerned and parliamentary representatives with a view to promoting the sale of berry fruits both within Australia and overseas? If the Minister is agreeable to this suggestion, will he consider convening such a meeting quite soon so that the position that arose in the past few seasons, when the industry applied for assistance at a very late stage, will not arise again? Further, will the Minister consider convening such a meeting for the purpose of endeavouring to establish sales on a long term basis so that this small but very important industry will not be wiped out?


– I agree with the honorable member’s comment that representations which were made in past years by the berry fruits industry were rather belated. He has asked whether I am prepared to convene a conference of the industry. I am not prepared to do that. I do not think it is the responsibility of the Minister to convene a conference of any industry. I think that responsibility should be accepted by the industry itself. However, if a conference, of this industry is held and if there is a reasonable representation of the industry I shall be prepared to make available a senior officer in an advisory capacity to see whether he can assist in any way.

page 110




– Can the Minister for Labour and National Service enlighten us on whether progress is being made in the negotiations relating to the claim by waterside workers for service pensions? Has the Government generally or the Department any sympathetic attitude to this proposal?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I cannot throw any enlightenment on the problem raised by the honorable gentleman. I think he will know that this matter has been raised before the Commonwealth Conciliation and Arbitration Commission and that we have asked that we be placed in full possession of the facts before we make up our minds on what should be done. As yet, we are not in full possession of the facts. Consequently, I cannot enlighten the honorable gentleman.

page 110




– I should like to address a question to the Minister for Territories. I ask him whether the Papua and New Guinea House of Assembly recently passed an amendment to the Public Service Ordinance of that Territory and, if so, whether the effect of the amendment is correctly reported as wresting control of the Public Service from the Minister. Is he aware that many Australians serving in the Administration in the Territory are gravely concerned that the responsibility for their terms and conditions of service may pass out of the hands of the Commonwealth Government?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I would say that there is a great deal of misapprehension about the meaning of the amendment to the Public Service Ordinance passed by the House of Assembly in the Territory of Papua and New Guinea. It appears to me that responsibility for the Public Service is retained by the Minister for Territories instead of being given to a local Territory authority. I base that view particularly on section 8H(i) of the amending ordinance, which refers to the Public Service Board of the Territory and reads as follows -

The Board shall give effect to any direction given to it by the Minister on any matter of policy relating to the performance or exercise of its functions, duties or powers under this Ordinance.

When the amendment is related to the principal Ordinance, quite a few complexities, particularly of a legal nature, appear. Possibly, the amendment was drafted hurriedly and it may have been passed very quickly. Until these matters are unravelled, I am unable to express a view about my final decision.

As to the second part of the question, I agree that there is considerable concern among expatriate members of the Territory

Public Service. As I mentioned before, responsibility still remains with this Government, and I should like to state very clearly that it intends to retain that responsibility.

page 111




– I direct my question to the new Minister for Social Services. Is it a fact that, on 16th September last, in the debate on the Social Services Bill (No. 2) 1964, he strongly criticised the iniquitous provisions of the means test and advocated a national superannuation scheme free of the means test? Does he intend, now that he is in an effective position with respect to social services, to proceed with legislation to give effect to this proposal?

Minister for Social Services · NEW ENGLAND, NEW SOUTH WALES · CP

– As the honorable member will be aware, the responsibility of a Minister in this place is not to answer questions concerning his own opinions or opinions previously expressed but to answer questions about the administration of his own department. Accordingly, I shall leave the honorable member to continue in his uncertainty.

page 111




– My question is addressed to the Attorney-General. I ask him whether he knows who organised the “ North Vietnam Peace March “ in Canberra yesterday when Parliament House was invaded. Was the march organised by the New South Wales Peace Council? Is the Minister aware that, on 5th March last, the Rev. Alan Brand, Chairman of the Council, led a deputation of three, including well known Communists, to the United States Consulate-General in Sydney and that this delegation threatened industrial action against United States naval units in Australia if the American forces did not stop the air raids against North Vietnam?

Attorney-General · BRUCE, VICTORIA · LP

– This question raises matters that I need to consider further before I give the honorable gentleman an answer.

page 111




– My question is directed to the Minister for the Army. Despite correspondence that has appeared in newspapers and that may have been received by the

Minister, I ask whether he will seriously consider the formation of a Torres Strait infantry unit based on Thursday Island, where land and buildings are available. Untapped sources of potential officers and non-commissioned officers exist amongst the islanders, who are very keen, wish to be a part of Australia and want to learn how to defend what they truly love. If the Minister accepts this suggestion, I am sure we would have a very fine infantry unit based on Thursday Island. If it is not possible for such a unit to be administered from Cairns, perhaps it could be administered from Townsville or Brisbane.

Minister Assisting the Treasurer · BARKER, SOUTH AUSTRALIA · LP

– I will be glad to consider the matter raised by the honorable member.

page 111



Sir Wilfrid Kent Hughes:

– I wish to ask the Minister for Trade and Industry a question. Is he aware that Red China has been quoting to Australian importers certain calico cloth not at any firm price but 10 per cent. under the Indian price, whatever that Indian price may be? Has not India previously been our main supplier of this kind of cloth? As this Chinese cloth has practically ousted the Indian cloth from the Australian market, does this mean that the Commonwealth clothing factory will be using the cloth for the pockets of Australian uniforms? Will not this trend mean that, whereas Australia gives India aid under the Colombo Plan, we more than cancel such aid by allowing the destruction of its Australian textile market by allowing the dumping on the Australian market of calico cloth and other textile items from Red China?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– I am not aware that quotations of the price of calico from Red China have been made on the basis stated by the honorable member for Chisholm. Clearly, if quotations are made irrespective of the cost or the domestic price in the producing country but are merely designed to undercut a competitor, this is a class of dumping in respect of which action can be taken and should be taken. I will undertake to ascertain what is known of the situation.

I can tell the honorable member that the Government is at present studying quite closely the need to tighten, and the possibility of tightening, the general provisions dealing with dumping. In the classical terms which are broadly accepted internationally, dumping is the selling of goods for export at a price lower than the domestic price. This is the general test, but it is very hard to apply this test when the sale is made by a government agency and when costs of production are not ascertainable and perhaps a domestic price does not really exist. I will look into this matter.

The honorable member referred feelingly to the needs of India. I am very conscious of these needs. Over the last few years, I have had successive consultations with the Minister of Commerce and Industry and the Minister of Finance of India. For more than a year now senior officials of the Australian Department of Trade and Industry and of the Indian Department of Commerce and Industry have been studying the possibility of providing better opportunities for India to earn exchange in Australia. Progress has been made and indeed the Indian Minister of Commerce and Industry will visit Canberra within the next few days and I will have discussions with him on this very matter.

page 112




– I address my question to the Minister representing the Minister for Civil Aviation. Will he say when the air strip on Lord Howe Island, which is part of my electorate of West Sydney, will be built?

Minister for National Development · FARRER, NEW SOUTH WALES · LP

– At the present moment I have not any information other than that which I gave the honorable member towards the end of the last sittings. I will make inquiries through the Minister for Civil Aviation in another place and will give the honorable member a reply as soon as I can.

page 112




– I direct a question to the Prime Minister. As it is not infrequent to see and hear from almost every corner of this great Commonwealth repeated requests for more and improved telephone facilities, particularly in country electorates, and although the regular answer from the present Postmaster-General and his predecessors has been along the- lines that the various delays have been caused by both financial problems and the lack of suitable equipment, will the

Prime Minister give consideration after discussions with the Postmaster-General, to setting up a committee, select or otherwise, with a view to trying to overcome this all-important problem of delays that have a tendency to hamper industry and development?


– I will, of course, be quite happy to talk to the Postmaster-General about this matter.

page 112




– I ask the

Minister for Labour and National Service a question. Once again I ask the honorable gentleman for the reason for the decision by which only one of the draws for national service training was held publicly. Will he tell the Parliament why the remainder of the draws were made secretly? Is it correct that 96 of a possible 182 birth dates were drawn in the ballot? If so, does this mean that more than half of the quota of about 40,000 youths covered by the ballot have been drawn initially and will be liable for service? What is the reason for drawing so large a number when only 4,200 will be required? When will the Department begin to inform those who are being exempted or deferred; and when will those liable for service be warned to be ready to spend the next two years in the Army? What courts will consider exemption claims and how will those courts be constituted?


– I gave the answer to the first part of this question yesterday. I then pointed out that the reason for having the marbles drawn and not disclosing the birth dates was that we are anxious to help those who immediately come forward and register. We are not prepared to give assistance to those who may wish to evade registration. For that reason we have found as a result of long experience that it is better not to publish the birth dates. This practice operated successfully for several years under the old scheme and I have no reason to think that it will not operate successfully under this one.

As to the second part of the question, it is true that on this occasion we had to draw half the number of birth dates so that we could get the required number of persons to go into the Army. We did this on the best statistical advice available to us both from within and from outside my own Department. We were advised of the number of marbles that ought to be drawn and we drew that number. The honorable gentleman is correct in saying that half of those persons normally available to be called up will in fact be interviewed. The reason why about 20,000 will have to be interviewed to enable us to get the 4,200 is that many who are considered will not be eligible. To illustrate this, I point out that this morning I was informed that 4,000 of the people who would otherwise be considered as eligible, will not be called up because they are married or would be married before call up action commences.

Mr Clyde Cameron:

– If they intend to marry, are they exempt?


– No. They are exempt if they marry before a prescribed date.

Mr Clyde Cameron:

– What is the date?


– I have not the date in my mind. The honorable member pays me a compliment by thinking that I am inside the age group. I am well outside it. I was attempting to give the honorable gentleman a reasoned answer to his question. I was getting to the stage of dealing with the men who were exempt. There is another large classification of people who would not be called up. I refer to those who would be exempt for health or medical reasons. I can summarise the answer in this way: We think that the method we have adopted will, with a reasonable tolerance, give us the numbers that are required for immediate service in the Army. If the honorable gentleman puts the remainder of his question on the noticepaper, I shall give him an answer that will be just as informative as what I have already said.

page 113




– The Attorney-General will recall that on 17th November 1964 he said, in answer to a question on notice, that he hoped to introduce a bankruptcy bill in 1965. Is he in a position to inform the House when this long awaited bill will be introduced?


– I think it is worth reminding the House that annexed to the report of the Bankruptcy Law Review

Committee was a bill which was designed to give effect to the recommendations of the committee. This was made available to the public. As a result hundreds of representations were made by responsible and eminent people and organisations. The evaluation of those representations has been a long job, but I am glad to be able to say that I am now nearing the end of it and I hope that I shall be able to introduce the legislation within a short period from now.

page 113




– My question is addressed to the Minister for Health. I refer to the newly approved tables of medical benefit fund contribution rates in all States except Western Australia, and ask: Were the increased rates approved without consideration being given to the medical fraternity’s inquiry into its own current cost structure? Is it not likely that, shortly, doctors’ fees will be increased? If so, does this mean that the newly approved fund contribution rates will be regarded as being inadequate and further increases will have to be made within a relatively short time? Has the Government sought any stabilisation of doctors’ fees at any particular level of rates in relation to the newly approved medical benefit fund rates?

Minister for Health · DARLING DOWNS, QUEENSLAND · LP

– The advisory body that advises the Minister for Health on this matter is the Commonwealth Health Insurance Council. The Council met in October last It submitted certain recommendations for new tables and recommended that they be introduced on 1st April. This was approved. The fund associations in the various States then considered the matter and made some submissions to me for consideration. Those submissions have been considered by my officers and have been submitted to me for approval. The Council met again in Canberra a few weeks ago to finalise arrangements for the introduction of the new tables. At present we are in the process of dealing with many applications from all States in relation to the changes that are to take place. Higher tables will be introduced which will provide for increased benefits and higher contributions. There will also be reconstructed tables on a basis similar to that of the tables which are already in existence. One of these will increase contributions but maintain benefits at about the existing level. We anticipate that in certain States there will be a lower tabic as well, which will provide for a lower contribution rate and lower benefits.

The reconstruction was necessary because of the financial position of some of the funds, lt is necessary for them to maintain certain reserves so as to ensure that in the event of an emergency they will be able to deal with the situation. The reconstruction was based principally on that necessity and the recommendations were made after very careful consideration by the Commonwealth Health Insurance Council.

The question of doctors’ fees has no relationship whatever to this situation but is a matter for separate consideration. As the honorable member knows, an assurance was given by the Australian Medical Association that there would be a stabilisation of basic doctors’ fees for two years. That period will terminate in November 1965. A survey was made recently by certain authorities - not a Government survey but one on behalf of the A.M.A. - of changing costs. The result of that survey will be considered, I understand, by the Australian Medical Association in the next few months. After that, the Association will consider whether there should be any increase in basic doctors’ fees. I can assure the honorable member that this will not affect the tables which will be introduced on 1st April and will not change the situation for some time.

page 114




– I direct to the Minister for Trade and Industry a question concerning the recent reductions in the prices of Canadian wheat and the increased subsidy on exports of wheat from the United States of America. To what extent will these moves affect returns to Australian wheat growers? Has the Minister been successful in negotiating with exporters - and importers for constructive discussions to be held with the object of maintaining access to export markets at satisfactory prices?


– Recently, there has been a reduction in the quoted prices for wheat from the North American countries and from Australia. Under the pool system, any reduction in selling prices by Australia naturally affects the Australian grower.

However, the effect on the Australian grower is cushioned by the fact that there is <a pre-determined price for home consumption, which is constant each year, and that the same price is guaranteed by the Government in respect of 150 million bushels a year, whatever the selling price may be. So the Australian growers will be modestly affected by the price reductions. These reductions are a reflection of big European harvests last year and of record crops in most of the wheat exporting countries. Over the past two months, prices for export wheat generally have been quoted at a reduction of ls. to ls. 6d. a bushel by the exporting countries, including Australia.

As to international negotiations, almost since the inception of the Kennedy Round, tentative discussions on wheat have proceeded in the General Agreement on Tariffs and Trade Cereals Group. Frankly, progress has been slow and difficult. Negotiation has been complicated by the fact that in the past couple of years ‘the European Common Market countries have been in the midst of trying to sort out their own domestic difficulties in wheat and other cereals.

The Common Market countries in total are very big producers of wheat and quite substantial importers of wheat. Until they had sorted out their own policy lines it was quite impossible to make any real progress. However, within the last few weeks, I am glad to be able to say, there has been evidence that there will be a constructive resumption in Geneva of negotiations on this issue and on the establishment of world understanding on wheat. It is too early yet for me to be optimistic; I am certainly not pessimistic about it. The objectives which will come within the ambit of the negotiations will embrace the price at which wheat and other cereals may be traded internationally. The question of the assured volume, access to importing markets and the control of the disposal of surpluses all are things which are very much within the interests of the Australian wheat grower. With negotiations recommencing in the very near future we will be devoting ourselves to trying to advance the interests of the Australian wheat grower and, I am sure, we shall not forget the interests of those who need wheat but do not have the money to pay for it.

page 115




– I address my question to the Minister for National Development. He is aware of the protests being made by scientists, including many employed in the Commonwealth Scientific and Industrial Research Organisation, against engineering works within the Kosciusko Primitive Area, which it is reported will be carried out hy the Snowy Mountains Hydro-electric Authority. Will these proposed works be carried out? If the Minister cannot at present give a definite answer, will he say when he expects to be able to announce a decision? Will he see that the honorable members who will visit the Snowy Mountains area this weekend at his invitation will be shown the primitive areas and the sites of the proposed works and will be given an opportunity to become thoroughly acquainted with the need to preserve the Primitive Area for scientific purposes?


– I will be having a discussion this afternoon with one of the persons organising the tour of the Snowy Mountains area. I shall certainly see that the Primitive Area is pointed out to members undertaking the tour over the weekend. There are two proposals involving the Snowy Mountains Authority in the Primitive Area. One proposal has been completed and the area has been restored almost in its identical form before the works were undertaken. The other proposal is for works to be carried out in the quite distant future and I am sure that there is plenty of time to iron out any difficulties related to this project. From memory, I think it is the intention of the Authority to carry out the second proposal in about seven or eight years’ time.

page 115




– My question is directed to the Postmaster-General and follows upon the question directed a few moments ago by the honorable member for Wimmera to the Prime Minister. Is the Postmaster-General aware that one of my constituents has to sleep on an undertaker’s premises to be in attendance near a telephone at night in connection with his duties of collecting corpses during the hours of darkness, and cannot sleep at his own home because the Postmaster-General’s Department cannot provide a telephone there? When the honor able gentleman discusses the question of telephones with the Prime Minister will he bear in mind that not only is the overwhelming industrial requirement in the cities but also that country dwellers are not the only people who suffer hardships through lack of telephones?


– I shall be pleased to bear in mind the matter raised by the honorable member.

page 115




– I ask the Minister for Social Services: In view of the rises in the cost of living since the introduction of the last Budget, will the Minister consider recommending the implementation of a supplementary Budget so that our age, invalid and widow pensioners may be granted an appropriate increase of at least £1 a week in their entitlements to offset spiralling living costs?


– It is rather interesting to hear a member of the Opposition advocate at this stage that a supplementary Budget should be brought down. I feel that the standard of prosperity at present enjoyed in the Australian economy is something of which we all should be very proud. The Government is to be congratulated for the continuing state of prosperity that we enjoy. As the matter raised by the honorable member touches on policy I will leave it for consideration at another time.

page 115




– I ask the Minister for Supply a question. In view of the pressures being felt by Australia to spend more on defence and to build up our resources for defence, will the Minister say whether any industry advisory committees now report to the Government and how often reports are received? Are the personnel leading any of the advisory committees of 1965 vintage or are they leftovers from World War II committees? Has the Minister found the substance of any recent report to be useful and has it been used to strengthen sections of industry?

Minister for Supply · PATERSON, NEW SOUTH WALES · LP

– Since World War II the Government, through the relevant war production machinery, has enjoyed the benefit of the efforts of a number of advisory committees but, of course, with the passage of time some members of those committees have grown old and retired from their firms and some have shifted into unrelated fields of production. In addition some industries have been affected by quite substantial changes in technology. More recently, in anticipation that we would need to upgrade the industrial backing for the defence effort, it was considered wise to review the constitution of these committees, in relation to both personnel and their functions. The result will be that within the next week or two it will be possible to form a new membership for 12 industrial advisory committees, on which approximately 100 of Australia’s industrial leaders will serve. Of that number 30 will give the benefit of their assistance to the committees for the first time. The committees will cover the whole range of light and heavy engineering, the electrical industry, and machine tools and gauges, down through materials, footwear, chemicals and so on into aviation and transport.

The committees do not report to the Government formally. They act with and for the Department of Supply and report to it. I should like to give two illustrations of the kind of service performed by the committees. When it was proposed that the United States tracking stations should he operated by private contract in Australia we sought and received valuable advice from the radio and electronics industry advisory committee. Another committee that sits regularly is the materials advisory committee. This group of skilled and experienced industrialists of standing has under review the extent of the stockpile of strategic materials that we need to maintain in Australia. These committees are most valuable additions to the Government’s advisory services. Since the honorable gentleman has raised the matter I should like to take this opportunity to thank the members of the committees, past and present, and by anticipation, future members, for their assistance.

page 116




– I ask the Minister for Labour and National Service a question. Now that the lottery to determine who will constitute the first batch of national service trainees has been completed, will selected conscripts, before being finally accepted as national service trainees, be required to pass medical and educational tests similar to those undertaken by applicants for the Regular Army?


– Yes, those who are balloted in and are required for service will be medically examined and tested as to their educational standards. They will be required to pass tests and to comply with standards similar to those prescribed for applicants for the Regular Army.

I should like now to answer one of the points raised by the honorable member for Hindmarsh. Notices to those persons who will be called up for service will be posted shortly. Those who have been balloted out also will be quickly informed of the fact and will not be immediately required for service.

page 116



– I ask the AttorneyGeneral a question. I refer to the interesting report of the committee which investigated the Bills of Exchange Act presented to the House last year. I ask the Minister: What timetable will apply to any proposed new legislation? Does he propose that bills to implement recommendations of the committee will be left on the notice-paper for a period of months to allow interested parties to give close scrutiny to the Government’s decisions in relation to this important field of commercial operations?


– I think that the honorable member - to use a phrase - rushes the fences somewhat. This is a very complicated report which goes to matters of great commercial importance. It will need very widespread consideration by the public generally and by interested and qualified people and organisations. At this time any legislative programme would be completely beyond forecast.

page 116


Royal Australian Air Force Academy, Point Cook, Victoria; Top Springs to Wave Hill Road, Northern Territory


– In accordance with the provisions of the Public Works Committee Act 1913-1960, [ present the report of the Parliamentary Standing

Committee on Public Works relating to the following proposed works: -

Royal Australian Air Force Academy, Point Cook, Victoria;

Top Springs to Wave Hill Road, Northern Territory

Ordered to be printed.

page 117



Mr. KILLEN (Moreton) 111.181. - I move -

That as the Canberra Advisory Council is but part elected and believing that the citizens of Canberra have a right to say whether or not they want fluoridation of their water supply this House is of opinion that a referendum on the question should be held.

I should like to make one or two preliminary observations concerning the motion and the fact that this issue is again before the House. First, I interpret the Government’s attitude on this matter to be simply that all Government supporters may regard themselves as having a free vote. In other words, they will not feel themselves committed to a Government attitude or to a ministerial stand. My argument, as I shall unfold it, is this: Whereas loyalty to a Minister and to a government is an admirable quality that we all respect, there are occasions when there devolves upon the individual a clear responsibility to show a greater loyalty, that is, loyalty to the House of his election. I hope to make it crystal clear, in the time available to me this morning, that this argument does not centre merely upon the question of water. It centres in great measure upon the authority of this House and the respect to which it is entitled from every Minister of the Crown.

The second thing I want to say is that I offer no apology for my persistence in this matter. In point of fact, my persistence has been sired by the baffling reluctance of the Government to treat the matter properly. Thirdly, I should like to dismiss summarily the view that because of the mechanics of the situation, that is, because the system of fluoridation is in operation it should not be disturbed. On that argument I say, Sir, with the utmost frankness, that time does not make any wrong right. This House has been treated on previous occasions, I venture to say, in a rather offhanded way. That is to use a euphemism; I should like to indulge in stronger and franker language to the Minister. Because the House has been treated in this shabby, offhanded way, it is entitled, I think, to redeem something of its authority and something of its honour.

What are the facts of this matter? I raised it some years ago. The present Minister for Shipping and Transport (Mr. Freeth) who was then Minister for the Interior, allowed the debate to proceed, ft was one of those delightful every other Thursday morning debates in which members, if they are interested, can waffle away and pass one or two discursive observations about the matter before them. But precisely nothing was done about the matter. There is an overwhelming and long entrenched temptation in this place, I regret to say, simply to regard the rights of private members - not ordinary members - of the Parliament as though they were merely entitled to have a talk. There are some provinces, I submit, in which members are entitled to do more than merely talk, and this is one of them.

On the second occasion, when this matter had deteriorated, I pressed for the appointment of a select committee. My argument on that occasion was simply this: There was such a tremendous conflict of evidence in this field on the clinical and therapeutic side that it would be useful if the country were given the opportunity to have all this evidence before a select committee. I thought that surely by now it would be clear, even to the most mule like individual in the community, that on every occasion when this matter is raised people want to silence it. They want to silence it either by raising a smear or raising an argument which, frankly, could not be described as respectable. We had another one of those every other Thursday debates on my motion for the appointment of a select committee. The debate was adjourned, and then what happened?

It is not for me to give any ex parte account of any discussions that took place elsewhere or, for that matter, to give any account of any correspondence that may have ensued on this matter, but what was the position as far as this House was concerned? This is the crunch. This House had before it an adjourned motion and no member could ask a question on any matter relating to that adjourned debate. No member could proceed so far as that adjourned debate was concerned. In other words, the House was hobbled on the issue, and what happened? The Minister for the Interior (Mr. Anthony) went outside and issued a Press statement. Let me state without ambiguity that if there is any business before this House on which the House is properly entitled to hear a statement, the statement should be made in this House and not outside the House. That is my conviction. I live with it and I am prepared to perish with it, politically or in any other way. The Minister’s stand in this business has been this: We want to leave it at a local government level. That is his attitude and he dare not deny it. That has been his attitude through and through. Let me say to my honorable friend with all of the benevolence of mind that I can command that the cats of Canberra are still giggling at the fact that he described the Australian Capital Territory Advisory Council as a local government authority. Time and again the Minister has received recommendations from the Advisory Council, but they have been tossed to one side with a summary despatch that must certainly confuse and bewilder the members of the Council. Yet on this occasion the Minister venerates the recommendation made to him by the Council. The Minister has said on occasions: “ Look, we cannot possibly have a referendum on this issue because too much emotionalism will be created.” That is the Minister’s argument. I put it to him again with goodwill and benevolence that it is an incredibly stupid argument. Here in Canberra, there was a referendum on liquor hours. I venture to say that the question whether or not we should have the pubs open till 10 o’clock or whether we should close them at 6 o’clock could generate a great deal of emotionalism. I am not one who contends that emotionalism can or cannot be injected into the question of a referendum but, on the matter of liquor hours here in Canberra, the then Minister for the Interior approved of a referendum.

Take the Minister’s own argument a little further. Take it into the field of conscription during the First World War. I should imagine that if there were any quality of emotionalism it would reside in the argument that you can say to a man: “You are likely to be conscripted, sent overseas and shot.” But on this occasion the Minister says: “ No.” I put it to the House - I hope I put it to a wider audience - and to the people who want to quieten an exchange of views that if that is their argument then I describe it as a refuge of the timid, the weak and the tyrannical.

Let me take it a little further. A former Minister for Health in this Parliament who, I hasten to say, was a doctor, is reported on page 1539 of “ Hansard “ of 3rd October 1961, as having been asked this question by the honorable member for the Australian Capital Territory (Mr. J. R. Fraser)-

. Will an expression of opinion of the people of Canberra be sought before this step is taken?

The then Minister for Health, Dr. Donald Cameron, is reported as having replied -

I cannot be precise as to the investigations that have been made without refreshing my memory by reference to my department; but it is unlikely - “ Unlikely “ is the operative word - that any programme of fluoridation would be put into effect in the A.C.T. without obtaining an expression of opinion from the inhabitants of the Territory beforehand.

What does the Minister say about that? I ask him whether he would be prepared later, when he gets an opportunity to reply, to go on record in this Parliament as describing Dr. Cameron as emotional. I invite the honorable gentleman to say that. That is the crunch on that issue. I hope the honorable gentleman will be prepared to address his mind to this matter. I venture to say that the Minister is on a hook on this matter, and that the Government is on a hook on this matter. I have long contended - and I contend again - that the people of Canberra are entitled to some say in this matter and that the country is entitled to a little more enlightenment in the matter than has hitherto been accorded to it.

Let me turn to the powerful Press statement issued by the honorable gentleman, snubbing this Parliament - a statement issued outside in the paddock to the crows, and other birds and to the pussy cats which are still giggling. First, the honorable gentleman said - lt had been accepted throughout Australia that the responsibility for deciding this issue or putting it to a referendum in any community rested with the local authority concerned.

That is clear. There is no ambiguity about that. Ergo, the only local governing authority that I know of in existence in Canberra is the Advisory Council. The statement goes on -

Mr. Anthony said that the A.C.T. Advisory Council - a largely elected body-

Not completely elected, mark you, but largely elected - representing the people of Canberra - had twice recommended in favour of fluoridation. Their second recommendation followed an independent inquiry-

You can almost hear the creaking humbug in this - into the matter by a council sub-committee which was unanimously in favour of fluoridation.

Let us now look at this powerful subcommittee’s report. For a start, it contains only 124 words. There is a touch of Moses on Mr Sinai about this. If it were such an impressive document, I venture to say that it would have been treated with the utmost decor and with all the sensitivity of approach in the world. How was it treated? Listen to the raconteur of this subcommittee. He said -

T propose at the next meeting of Council to move a motion consequent upon this finding of the committee. I must apologise for the fact that we have not copies of this report to circulate to all members tonight. They were typed, but by inadvertence they were left in the office.

The Minister has a sense of humour. What would Gilbert and Sullivan do with this incredibly Gilbertian situation and with this powerful report of 124 words, to which the Minister clings like a limpet? What would they do? I say that the report would be ridiculed. It deserves to be ridiculed and it deserves to be rejected completely.

Again let me refer to this powerful Press statement by the Minister, hobbling this Parliament. Do not let any person be under any misapprehension as to my views on this matter. Parliament is entitled to respect not only from the members who sit in it but most certainly from those who act in an executive capacity, and I take a very poor view of the off-handed way in which we were treated on this occasion. The Minister went on to say -

I have already expressed, in the House, my reasons for opposing a referendum and my attitude in that matter was recently endorsed by the Advisory Council.

I ask the Minister why it is that on this occasion, without even one off-handed expression of regret or reservation, he is prepared to grasp hold of the Advisory Com mittee’s report and to accept in toto the recommendation from the Committee.

I have not dealt with, nor do I propose to deal with the clinical or therapeutic argument that ranges about this matter. All along, my view has been simply that this is basically a philosophical argument. There may be some who disagree with me. It is their right and prerogative to disagree with me, but it is also my right to maintain that it is a philosophical argument. I believe that if the responsibility for dental care is left with the individuals, that is where it should properly be left. If the philosophical concept is going t,o be that we should have a totalitarian society in which matters such as the eating of sugar, the drinking of alcohol, the driving of cars, indeed the doing of all sorts of things that wreak havoc to the human body and to human society should be resolved and settled according to the establishment of the day then, I say to those who support that concept that, on every possible occasion, I will savage it and give them no rest whatsoever. Right through from Plato to Aquinas and Burke and Mill the basic proposition of all political endeavour has been the relationship of the individual to the State, and that concept is as real today as it was 1,000 or even 2,000 years ago. I do beg of the Minister to recognise that in this matter the people of the Australian Capital Territory have a complete right, indeed a clear right, to be treated as respectable, intelligent individuals and that they should be given an opportunity to express their views on this matter in a free and democratic way.


– Is the motion seconded?


– I second the motion. In doing so I must say that, in my view, circumstances have changed since this motion was first moved and seconded in that there is now fluoridation of the water supply of Canberra, and I do personally question whether, in the particular case of Canberra, any great purpose can be served at the moment by a referendum. It would probably merely serve to stir up muddy and already fluoridated water.

I think that what has been said demonstrates what tremendous, incredible passions are stirred by this issue of fluoridation. As the honorable member for Moreton (Mr. Killen) has so eloquently and adequately demonstrated every effort is in fact made by the protagonists of fluoridation to silence their opponents. I must say, however, that I do not personally believe that I have been treated shabbily in this House. I believe I have had a very fair run. I have had ample opportunities to express my views. If I have not been able to have my view adopted, it is because I have not been able to put my case strenuously enough.

In the case of Canberra, I believe there is no tremendous urgency. My reading on this matter indicates that it would take from 15 to 20 years for serious and permanent toxic effects of fluoridation to appear. I do believe, however, that there are such toxic effects. My reading shows quite definitely that, with the present concentration of fluorine in the water supply, toxic effects will ensue in some instances. What the incidence will be, no-one knows.

I am in distinguished company in this matter. Professor Theorell of Sweden, despite statements to the contrary, is still of the opinion that the safety of this measure is not proven. The health authorities in Moscow - I am sure this will win the support of honorable members opposite - have paid a great deal of attention to this problem. They still believe that there is no proven safety in fluoridation and consequently have not recommended its adoption in Moscow. Many distinguished Australian scientists also hold this view. I believe that the time has come to be completely objective about this matter. Very distinguished people take a view contrary to the one I am expressing. On the other hand, a very distinguished body of scientific opinion says that fluoridation is a dangerous procedure, and I believe that there is ample clinical material to support this view. The material is coming in all the time. Quite clearly, there is a condition of fluorosis, which can occur with a relatively low level of concentration of fluorine in public water supplies. The extent to which other factors are involved, again has not been proven. I know that in India, in the countries around the Mediterranean seaboard, in Arabia and many other countries, protagonists of fluoridation say that this condition of fluorosis arises because of factors other than fluoridation. Admittedly there are other factors. As I have said in previous speeches on this matter, malnutrition is a factor. However, there are people who, for medical reasons, will be malnourished even in this wonderful and prosperous country. Consequently this risk cannot be ignored.

There is only one possible thing to do, and that is to develop a body of impartial and objective evidence. I do not believe that anyone could object to that. The only intellectually honest thing to do is to develop a body of objective, experimental evidence which will demonstrate conclusively whether the fluoridation of water is safe or unsafe. That has definitely not been done so far. I know that the protagonists of fluoridation - I have one on my left - say that the safety of fluoridation has been proven conclusively. That is a completely untenable position. With all the conviction at my disposal, I say that the safety of fluoridation has not been proven and that the dangers are such that this matter must be resolved once and for all.

We have a magnificent organisation in this country which could do the work required to bring the matter to a conclusion. It could do the work under Australian conditions. I strongly suggest that this matter be referred to the Commonwealth Scientific and Industrial Research Organisation for full investigation, not beginning with the premises adopted overseas, but beginning where we should begin, at the beginning, with evidence obtained from experiments with animals. We should work up from those initial experiments until the matter is brought to a proper and objective conclusion.

Mr J R Fraser:

– I think it is demanded of me that I should speak briefly on this matter, which so closely affects the electorate that I represent. I do not propose to traverse the arguments for or against fluoridation. I have expressed my views on the matter here and elsewhere. I have always opposed the arbitrary addition of fluoride to a water supply. I have always demanded that the people themselves shall have the right to say whether or not fluoride shall be added to their water.

The fact is that fluoride has been added to the water in Canberra. Although great heat was generated when this subject was under discussion previously, it is doubtful whether today you could provoke an argument in the streets anywhere in Canberra on the subject of fluoridation, other than with those who intensely advocate one course or the other. Nevertheless, having sought a referendum on this matter, I support the motion that is now before the House. I still believe that the people of Canberra should be given an opportunity to vote on this question. Admittedly fluoride is now in their water, but they could be given an opportunity at a referendum 10 say whether or not fluoride should be taken out of their water. I do not think they should have been denied an opportunity for expression of their views originally, and I think they should be given an opportunity to express their views now.

Minister for the Interior · Richmond · CP

– We have listened this morning to three speeches on this subject. First, we heard the honorable member for Moreton (Mr. Killen), who has quite a passion about fluoridation. He is very much against the introduction of fluoride into public water supplies. However, his main ground’s of complaint this morning are that neither he personally nor the Parliament generally has had adequate opportunity to discuss this matter, that the people of Canberra have not had sufficient opportunity to say whether or not they want fluoride in their water, and that it has been introduced against their will. The honorable member for Bowman (Dr. Gibbs), who spoke very strongly on this subject some time ago, would not agree with the honorable member for Moreton that the Parliament has not had sufficient time to express its views. I think that ample opportunity has been given in this House to talk about fluoridation generally and the introduction of fluoride into the Canberra water supply. The honorable member for Moreton has adopted a rigid attitude to this subject, and I do not think he would compromise. He would not agree to anything but no fluoride in the Canberra water supply.

As the Minister in charge of a public department, I have always approached this subject with a very open .mind. I have never been a fluoridationist or an antifluoridationist. I have approached the subject from the viewpoint of what is most beneficial for the people of the Australian Capital Territory. We must look at the history of this matter to see whether the Canberra people have had ample opportunity to express themselves. The idea of putting fluoride into the

Canberra water supply was initiated 18 months or two years ago by the Australian Capital Territory Advisory Council, which is a partly elected body. Eight members are elected locally and four are appointed by the Minister. This Council submitted a recommendation to my predecessor to introduce fluoride into the Canberra water supply. He received the recommendation but did not act upon it. He instructed the Department of Health and his own Department to investigate thoroughly the effects of adding fluoride to a water supply. Time went by. The Australian Capital Territory Advisory Council thought that another move was needed, and it set up its own special committee to investigate the matter. This committee consisted of three members, one a doctor, one an engineer and the other a scientist. The committee examined all the evidence it could find and brought down a recommendation that fluoridation was safe, that it was beneficial in preventing dental caries, and that the introduction of fluoride into a public water supply was the most economical way to approach the matter. A motion supporting the findings of the committee was carried by seven of the eight elected members of the Council, the other elected member abstaining from voting. My predecessor, still looking at the matter, received reports from the Department of Health and from his own department. The evidence was overwhelmingly in favour of the introduction of fluoride into the Canberra water scheme. In 1963 the question was postponed because of the Federal elections. In 1964 I was appointed as Minister for the Interior and it became my responsibility to decide whether to continue with the introduction of fluoride into the Canberra water supply. I studied all the evidence on the file and it was my opinion that the evidence was overwhelmingly in favour of the introduction of fluoride into the water system.

The honorable member for Moreton then introduced a motion in this House suggesting that a parliamentary committee should be set up to investigate fluoride in water schemes. The Prime Minister (Sir Robert Menzies) spoke on this issue and said that the matter had been examined by many authorities throughout the world, including the World Health Organisation. He rattled off the names of many different organisations in Australia, Canada, Britain and the United States of America which had investigated this matter and he espressed the opinion that the evidence was overwhelmingly in favour of the introduction of fluoride. He commented that he thought this was a scientific subject and one on which an inexpert committee of members of Parliament was not qualified to give a decision, particularly when so may expert scientific and medical committees established throughout the world to examine the question had come down in favour of fluoride. But he did say that the Government would have another look at the question and would consider holding a referendum in the Australian Capital Territory.

The Government did look at this matter, and it was decided that Canberra should have the same policy as had been accepted in other towns throughout Australia, namely that the question should be determined by the local residents. It was decided that the National Parliament should not establish a policy of overriding local opinion and that we should not decide whether there should be a referendum to reject or accept the proposal. It became a local issue. This threw the proposal back into my court. As Minister for the Interior I am responsible for the administration of the Australian Capital Territory and most ordinances in the Territory come within my jurisdiction.

I considered the matter a second time. What did the Canberra people think? The Australian Capital Territory Advisory Council, which is largely elected by Canberra residents, had submitted two recommendations that fluoride should be introduced into the water supply. I had three choices: first, I could accept its recommendations, which meant accepting the overwhelmingly favourable evidence placed before me; secondly, I could reject its recommendations; or, thirdly, I could decide on a referendum.

The member for the Australian Capital Territory (Mr. J. R. Fraser) asked me in this House whether I was in favour of a referendum. 1 told him that I was not, because with a referendum on this subject some emotion and fear would be engendered. I do not hold that a referendum is the right way of deciding medical, scientific or technical questions, because the public has not the information nor the capacity to interpret what is right. If we took any medical issue to the general public I should say that in most cases it would be rejected. There would be little medical progress in the world if every issue had to be decided by referendum. Think of a medical condition which required surgery, for instance. Consider injections against poliomyelitis. Do honorable members think that if a referendum had been held poliomyelitis injections would have been accepted by the Australian public? I think enough fear and doubt could be injected into the minds of people to cause them to reject such a proposal. This was my reply to the member for the Australian Capital Territory in this House.

At its next meeting the Australian Capital Territory Advisory Council passed a motion strongly supporting my remarks about a referendum. Lest it be thought that the Advisory Council is overriding popular opinion I point out that since then residents of the Australian Capital Territory have had the opportunity of expressing themselves on this subject. An injunction was taken out against the Minister for the Interior to prevent the introduction of fluoride into the water supply, but it was rejected by the Supreme Court a week before the Advisory Council elections last year. Whether or not fluoride should be added to the Canberra water supply was very much an issue during those elections. Eight positions were contested by 14 candidates, two of whom campaigned on a policy of anti-fluoride. They were not elected. When one realises that under proportional representation where eight people are required either of those two candidates needed only 9.1 per cent, of the votes to be elected to the Council, it is unfair to suggest that the Canberra people did not have the opportunity to express themselves on this matter.

If today this Parliament were to reject the recommendations of the Australian Capital Territory Advisory Council it would be a retrograde step. Since I have been Minister for the Interior I have done everything possible to try to build up the prestige and standing of the Advisory Council in Canberra. I believe that the Council has a very important function to perform in advising the Minister for the Interior on the wishes of the Canberra people. Of course, the

Minister cannot accept all of the Council’s recommendations, many of which are of a financial nature and have to be rejected, but I give its recommendations every consideration and accept them where possible. My reason for wanting to build up the prestige and standing of the Council is that sooner or later there must be some form of self government in the Australian Capital Territory, and I see the building up of the standing of this organisation as an immediate stepping stone to a form of self government.

If the Parliament rejects what the Council has twice recommended, after investigation, and after the subject has been a major issue during an election, it will greatly demoralise the Council and will defeat my object of helping this organisation to help itself. Canberra has a very sensitive public, probably because of resentment that it does not have a greater voice in the Houses of the Parliament and does not have some form of self government. Any suggestion of dictatorship in Canberra would evoke an immediate response from the public. If the impression were gained that Parliament was overriding the Advisory Council or dictating to it there would be an immediate reaction from the residents of Canberra. I am sure that the Canberra people have accepted the recommendations of the Advisory Council and have accepted the method adopted by myself and my predecessor in introducing fluoride into the water supply. I hope that this Parliament will support me in what I have done and will agree that I have not been dictatorial and have not overridden the wishes of the Canberra people.


– The words of the Minister for the Interior (Mr. Anthony) have finally convinced me that this motion should be supported. After all, he cannot have it both ways. Either there is to be some local form of control or there is not. It is all very well to say that the Australian Capital Territory Advisory Council is a local body. As a matter of fact it has nominated members on it - not a majority perhaps; but far more important than that, pressures and considerations which affect its decisions are such as to make it, in a sense, a subservient body, even in respect of its elected members.

It is all very well for the Minister to say that he wants to put teeth into the local council. I do not think he is doing so. If you are going to disregard the people in this matter - where the people, after all, have the sole vote - and put the decision into the hands of a body where the people are only partly represented, you do not in fact serve the purposes which the Minister says he serves.

Furthermore, I feel that the honorable member for Moreton (Mr. Killen) has a point when he says that the dignity of this House has to some extent been invalidated and attacked. It is true that a decision was made outside this House while the matter was pending on the business paper of this House. It should have been brought to a vote in this House. I am not trying either to support or oppose fluoridation. That is not the question before us. There is a double question before us: Firstly, whether it was right and proper for a decision to be made outside this House while a matter was pending inside it, partly debated; and, secondly, whether or not the former Minister for Health was correct when he said it was unlikely that this matter would be decided without reference to the people of Canberra.

If Canberra had a full local council untrammelled by Government interference then I would feel that the contention of the Minister, that it should be decided on a local level by the local council, would be correct. But if it is to be decided on a local level, then, in the circumstances which exist in Canberra, it can only be decided by a referendum. If the Government had taken the responsibility and said “ This is not a local matter “, then one would have thought differently on the question. But, as things stand, I think the only way of carrying out the Minister’s intention of putting a decision in this matter into local hands, in the circumstances which exist in Canberra today, is to have a referendum.


.- I do not propose to occupy the time of the House for more than half a minute. The arguments have been well put already. I simply want to say this: The dignity of this House has been affronted and I will not sit idly by.

Question put -

That the motion be agreed to.

The House divided. (Mr. Speaker- Hon. Sir John McLeay.)

AYES: 56

NOES: 52

Majority . . . 4



Question so resolved in the affirmative.

page 124


Bill presented by Mr. Gray, and read a first time.

Second Reading


.- I move -

That the Bill be now read a second time.

The provision of a medal to commemorate the military campaign at Gallipoli, of course, is a little overdue. In 1917, the Australian Government authorised the issue of this medal. It had Royal approvalfrom King George V and the ribbon was woven and issued to the troops who served on Gallipoli. I show honorable members the ribbon. This ribbon was subsequently withdrawn at the instigation of the Government of the United Kingdom even after Royal Assent had been granted. It was stated then, and it has been restated by the Prime Minister (Sir Robert Menzies), that this battle was a defeat and that medals are not issued for defeats. But this was only a battle in the course of a war. That war was won. The British troops who went to Belgium in 1914 to assist in the defence of Brussels were defeated also. This was a defeat in a battle in the course of a war. But the Belgian Government has seen fit this year to issue a medal to commemorate this occasion and has conferred it on all British troops who served in Belgium in 1914, 51 years after the event, and one year longer than the time that has elapsed on this occasion when we suggest that this Anzac Medal should be issued to the people who, in the first instance, were to have received it, but who did not receive it. It is worthy of note that General Monash wore this ribbon. He had his portrait painted wearing it. On its withdrawal, the ribbon had to be painted out of that portrait.

The lapse of time is of no significance. We have plenty of precedent for this case. The British General Service Medal for 1793 was issued in 1848, 55 years after the event, as also was the Naval General Service Medal for the same period. The first India Service Medal which was gained in 1799 was issued in 1851, 52 years after the event. The Canada General Service Medal of 1866 was issued in 1899, a lapse of 33 years. The Egypt General Service Medal of 1801, after a lapse of 49 years, was issued in 1850. The Peninsula War Medal which was gained in 1808 was issued in 1848. a period of 40 years after the event. The Service Medal commemorating the Battle of the Nile in 1798 was issued in 1848, 50 years after that battle. The Service Medal to commemorate the Battle of Trafalgar in 1805 was issued 43 years later in 1848. Now we are told that the lapse of time is a factor in denying this medal to the veterans who served on the Gallipoli Peninsula. This lapse of time is well covered by precedent. If the Government decides to issue this medal now, the period of time which will have elapsed will not be the longest such period a” time. We have been told also that other interested nations have taken no action. How long has it been necessary for this Government to pass legislation only because someone else has already done so or only because someone else has agreed to pass complementary legislation? Surely we are independent enough to issue a service medal.

One of the curious facts about this proposal is that the Government has not consulted at any time any of the ex-service organisations which are concerned in this matter. The Gallipoli Legion, although it has approached the Government and although it has approached individual members of this Parliament, has never been consulted officially by the Government in connection with this matter. Surely, if there is any body of interested citizens in this country concerned in this particular proposal, it is those who served at Gallipoli, and their organisation surely should have been asked its opinion. The Government did not have to accept its opinion, but these people are the persons concerned. Now, we are approaching, as all honorable members know, the 50th anniversary of the landing at Gallipoli. We consider that this is a very appropriate time, seeing that this period has elapsed in any case for the introduction of this medal for those who served on this particular occasion as part of the celebrations of this 50th anniversary. I trust that we can anticipate that recent history will repeat itself and that the Government will do down again - twice in the same day.

Mr Bryant:

– A jolly good idea.


– I could not think of a more appropriate ending to this long period of waiting for these people than to have this service medal restored to them. In all the other cases that I have quoted where there has been a lapse of time between the event and the granting of a medal for that event, there has not been one occasion on which a medal was issued and withdrawn. There was merely a lapse of time in the making of a decision to grant the medal. But, in this case, we have a different set of circumstances which makes it all the more imperative that we should redress the wrong that has been done to these men.

Gallipoli probably means more to us in this country than the campaigns for which these other medals were issued. It is generally conceded that this was the first occasion on whian Australian troops carried out a military exercise in war under the command of Australian officers, right to the top. We are fully aware that we were not the only people at Gallipoli. Australians were not even the largest body of troops there. There were British, Indian and French troops as well as the Australians and New Zealanders. But to us, Gallipoli has made a much greater impact on our history than it did in the case of these other involved nations.

So, Mr. Acting Speaker, I appeal to this House on this occasion, approaching as we do the 50th anniversary of the landing at Gallipoli, to grant to between 5,000 and 6,000 surviving veterans of this campaign and to the relatives of those who no longer survive, this medal which, without any doubt, would commemorate one of the greatest events in the history of this country. In view of the fact that my time is running out, I will content myself with appealing to the members of this House to vote in favour of this measure. It is petty to refuse it. It will cost the taxpayers and the Government next to nothing, but it will mean so much to those people who, in the last few years of their lives, may have the satisfaction of receiving this medal from the Government. Once again I appeal to the members of this House to grant this medal to the veterans of the Gallipoli Peninsula.

Mr J R Fraser:

– I second the motion and I reserve my right to speak later.

Dr Forbes:

Mr. Deputy Speaker, I suggest that it might suit the convenience of the House to continue the second reading debate on this Bill forthwith.

Mr. DEPUTY SPEAKER (Mr. Lucock).

Is it the wish of the House to continue with the second reading debate on the Bill forthwith? There being no objection that course will be followed.


.- At the outset let me say that I propose to support this Bill and to vote for it. It seems to me that the excuses offered for refusing to grant this very well merited medal are, to say the least of it, quite weak. I cannot go along with the view expressed by the Government that after all these years it would not be worth while to grant this medal, or with other views that have been expressed to the effect that because of the time lapse the medal should not in fact be granted. There have been many other instances, of which the honorable member for Capricornia (Mr. Gray) has already given illustrations, of medals having been granted long after the completion of the actual campaigns which they were to commemorate.

It would be idle for me to recapitulate the happenings at Gallipoli. So many word’s have been written about that campaign that it ‘has become familiar to every household in Australia. So I say that it would be idle for me to recapitulate the events that took place. They have become very much a part of our history and accepted by all as representing a magnificent effort of Australian men in one of their very first real engagements in military conflict.

The Anzac Star, as it was originally known, was a bronze eight-pointed star with a circular centre inscribed “ Gallipoli 1914-15” and with a crown above. As the honorable member for Capricornia has said, the ribbon to accompany the medal was actually made and is still available in London. A specimen is on view at the Gallipoli Legion Club in Sydney and the honorable member for Capricornia in fact actually produced the ribbon in. this House. It is a striking ribbon, with yellow representing the wattle of Australia, grey the fern leaf of New Zealand, red the Army and blue the Navy. Needless to say, in those days there was no Air Force as such. The medal was to have been issued to those men who embarked in Australia or New Zealand on or before 31st December 1914. Those who left after that date and served at Anzac were, rather absurdly, to be excluded from this award.

It is interesting to note that the French and the Turkish authorities were very much awake to the historic importance of the Dardanelles campaign and special awards were made to the troops of those countries who served in the area. The honorable member for Capricornia mentioned that an objection was raised based on the suggestion that the campaign in fact ended in defeat, but if it could be called a defeat then I suggest it was in fact a glorious defeat, and the fact that history may show that it was not a win for our side, shall we say, does not in any way detract from the assertion that the whole episode was in itself something really worthy of recognition.

The British forces who served in France and Belgium from 5th August to 22nd November 1914 were awarded the 1914 Star, and those who fought at Mons were eventually given the honour of wearing a clasp on their Star and a distinctive silver rosette to place on the ribbon bar of their 1914 Star - ‘and they well deserved it. Referring back to the suggestion that the campaign resulted in a defeat, let me remind the House that during that 1914 period the British Forces did not enjoy a run of complete successes. There were defeats involved in their campaigns.

At the time when the decision was being taken to issue the Anzac Star, what is known in the circles of those interested in this matter as the “ unfair charge “ was made. The War Office at the time said that the award would be somewhat unfair to British, Indian and other troops who had fought on Gallipoli or in other theatres of war. Be that as it may, it was open to the Australian and New Zealand Governments to go ahead and issue the award, instead of which, I think, somewhat to their shame, they in fact backed down. I am convinced now, having read some ‘history of this matter, that had the Governments of Australia and New Zealand at that time really protested strongly and insisted on the award, it would have been issued.


– Order! As it is now two hours after the time fixed for the meeting of the House, this debate is interrupted.

Motion (by Dr. Forbes) agreed to -

That the time for the discussion of Notices be extended until 12.45 p.m.


– Perhaps I may refer to the actual announcement which appeared on 12th December 1917 in London newspapers. It was in these terms -

As a result of representations made on behalf of Australia and the Dominion Government of New Zealand, the Imperial authorities have agreed to recommend the issue of a special star and ribbon to members of the 1914 contingents of the Australian Imperial Force and the New Zealand Expeditionary Force. It is suggested that the Commonwealth and Dominion Governments shall agree upon one or more designs for the proposed star and ribbon and that the designs be submitted to His Majesty for approval.

Despite this promising beginning, however, the award was never actually made. Perhaps I may, in concert with the honorable member for Capricornia, cite several instances of medals which were granted at periods substantially subsequent to the campaigns which they commemorated. The first Indian medal, for instance, of 1700 to 1826, was not issued until 1851, so that a soldier who took part in the storming of Allighur on 4th September 1803 waited 48 years for his medal. The British Military General Service Medal, with bars for engagements between 1793 and 1814, was not issued until 1848. The first Naval General Service Medal was also issued in 1848, for actions between 1793 and 1840. These instances clearly establish precedents to justify a decision to issue now the Anzac Star.

Most Empire countries have issued more medals than Australia. Canada, for instance, has the Canada Medal, the Canada Volunteer Service Medal and the Canadian Force Decoration. The Canada Medal, instituted in 1943, was the first distinctly Canadian decoration intended to recognise meritorious service above and beyond the faithful performance of duties, and it is worn before all war medals. Some of the Canadians who took part in the France and Germany operations of 1944-45 received this award, and nobody suggested that this was unfair to the British and American troops who fought with the Canadians. New Zealand, too, has shown more enterprise than Australia. Apart from the Long Service and Good Conduct Medal and the Territorial Medal, both of which are now obsolete, New Zealand issued in 1946 the very fine New Zealand Memorial Cross, awarded to widows and mothers of New Zealand servicemen who were killed or who died on active service in the last World War. Even so, New Zealand must share with Australia the blame for not having issued an Anzac award.

I do not wish to labour this matter unduly. Most of us are reasonably familiar with the pros and cons of the arguments for and against the need for this award. This is, I think, a most appropriate time for the issue of the award. The fiftieth anniversary of Anzac will be celebrated this year very widely throughout Australia. Special prominence will be given to the Anzacs in the marches through the cities on Anzac Day. Special services will be held. My own opinion is - I hope it is shared by many others - that we now have an ideal opportunity to right what in my view has been a wrong.

Mr J R Fraser:

– I support the motion which I have seconded. It is undoubtedly true that this medal was promised 48 years ago. There have been many representations made to this Parliament and to this Government from the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, from the Gallipoli Legion of Anzacs of Australia and from others. Members from both sides of the House have sought to persuade the Commonwealth to now issue this medal to the surviving Anzacs who served at Gallipoli in 1915, or to their next of kin.

The argument has been advanced that there are so few now surviving that it would not be worthwhile issuing this medal. I remind the House that upon other occasions we have sought to honour the few because they were so few. In a letter to me dated 16th March 1965 the Prime Minister (Sir Robert Menzies), in reply to my own representations on this matter, said - . . the question of the issue of a separate medal for Australian and New Zealand troops who fought at Gallipoli was first proposed at the time of the First World War but the proposal was not adopted as it was felt to be unfair to members of the Forces of other countries who had fought there. Tn addition, it was thought inappropriate to have a special Gallipoli Star whilst not giving similar recognition to troops in other combat areas.

My understanding of the history of this proposal, Mr. Deputy Speaker, is that not only was the matter proposed, but it was adopted.

The Australian and New Zealand Governments of the day duly requested that their troops be awarded a commemorative medal. The late King George V gave his assent to this proposal. A special medal was designed, and a ribbon, that the honorable member for Capricornia (Mr. Gray) has shown to the House this morning, indicating the two countries, was actually woven. In a statement to the House of Commons on 15th November 1918, the then Parliamentary Secretary to the War Office, when notifying the approval of the 1914-15 Star, concluded by recalling - the fact that it was proposed and sanctioned that the Governments of Australia and New Zealand should present their troops with a special medal for the operations onGallipoli.

The history goes on to show that this annoyed a politically powerful section of the British Press, which commenced a campaign. The War Office reversed its sanction, and that reversal was accepted, apparently, without question by the Australian Government of the day.

I think that all the arguments which have been advanced this morning show clearly that now is the appropriate time to give, belatedly, recognition to those men who served at Gallipoli by making the medal and ribbon available to them and to the surviving next of kin of those who are no longer with us. To show that it is important to the next of kin, I refer to “ Hansard “ of 5th October 1961, when the honorable member for Richmond, the present Minister for the Interior (Mr. Anthony), spoke on this very subject during the defence estimates. Only to illustrate the point that it is important to the relatives of those who served I point out that he said -

In fact, it must be admitted that even if the medals had been issued in 1919 great numbers of soldiers would not have been able to receive them personally because so many never left Gallipoli. But their next of kin would be very proud indeed to have one of these medals. My father took part in the initial landing on Gallipoli and, as his next of kin, 1 would like to have something to pass on to my children to show that their grandfather actually took part in that campaign. I am not one of those who believe that medals should be issued all round the countryside like tin cans, and I know that there have been many other great military exploits, such as at Tobruk, on the Kokoda Trail and Shaggy Ridge, all just as heroic as Gallipoli, but Gallipoli marked the birth of Australia as a nation. It is of such great significance to Australia that we commemorate it, and it is only right and proper that the men who took part in heroic campaigns, such as Gallipoli and El Alamein, should be given something in recognition of what they did.

That is what the honorable member for Richmond said in October 1961 when supporting a proposal for the issue of the very medal which the House is now discussing. His father was an original Anzac who served in that campaign.

Mr. Deputy Speaker, the 50th anniversary of Anzac will be commemorated on the 25th of next month.

Mr Whitlam:

– Before the next day for the discussion of General Business.

Mr J R Fraser:

– Yes. I believe it is highly important to this House that the members of the House should express their opinion on the Bill that is now being debated. It has not, of course, had an opportunity so far to run its full course of debate. I think it is important that the members of this House should be given the opportunity to express their views on whether or not, in effect, they believe that the surviving Anzacs should be given a medal to commemorate their heroic deeds in that campaign.

I move -

That the question be now put.

Question put. The House divided. (Mr. Speaker - Hon. Sir John McLeay.)

AYES: 49

NOES: 59

Majority . . . . 10



Question so resolved in the negative.


– Order! The time allotted for precedence of General Business has expired. Resumption of the debate will be made an order of the day under General Business for the next day of sitting.

Sitting suspended from 12.48 to 2.15 p.m.

page 129


Second Reading

Debate resumed from 12th November 1964 (vide page 2881), on motion by Mr. Bury.

That the Bill be now read a second time.


.- It is ironical that the House has to resume the debate on this Bill, which was introduced four months ago, at a time when interest rates are going up again. The Treasurer (Mr. Harold Holt) was unable to tell us last week by how much interest rates would go up on loans made by savings banks or trading banks directly to home builders or to cooperative building societies which, in turn, lend money to home builders. This will be the fourth increase in interest rates on housing loans since this Government took office. Interest rates were increased first in August 1952 by five-eights per cent., a second time in April 1956 by one-half per cent., and a third time in March 1961 by one-quarter per cent. Then there was a decrease in April 1963 of one-half per cent. Now there will be an increase, presumably of the average amount of the increase in trading bank overdrafts, that is, one-half per cent., bringing the rate back to what it was at the time of the third horror budget in 1961.

I have cited the figures as they apply to the Commonwealth Savings Bank, the original and by far the largest savings bank engaged in making housing loans. If one takes the case of the private savings banks which came into operation in 1956, the year the second horror budget was introduced - the year of this Government’s second credit squeeze - the interest rate is higher still. Interest rates charged by the private savings banks have always been at least one-half per cent, higher than those charged by the Commonwealth Savings Bank, and in the case of one of them - the National Bank of Australasia Savings Bank, they have been three-quarters per cent, higher than those charged by the Commonwealth Savings Bank.

It is ironical, as I have said, that a bill which is ostensibly designed to stabilise interest rates at a low figure and to prevent rises during the currency of the housing loan should be debated when the fourth of the Government’s increases in interest rates, including interest rates on housing loans, is coming into operation. Unfortunately, therefore, the examples which the Minister for Housing (Mr. Bury) gave of the costs of this scheme are already out of date.

Perhaps at this early stage in my speech, then, I might ask him two specific questions because they will be referred to by many of my colleagues and inevitably the debate will be speculative unless the honorable gentleman can answer them. He has had another four months in which to answer these questions since he made his secondreading speech on the Bill. The first question is: What level of interest rates does he believe the Housing Loans Insurance Corporation will regard as reasonable for it to insure, that is, what amount above or below or in relation to ordinary savings bank or trading bank interest rates will the Corporation regard as the proper basis for its insurance policies?

The second question - he was asked this question four months ago by my colleague, the honorable member for Melbourne Ports (Mr. Crean) - is: What premium does he now believe the Corporation will charge on its insurance policies? There should now have been sufficient opportunity for the Minister to examine American practice over the generations since President F. D. Roosevelt introduced this type of legislation in the New Deal, and in the ten years or more since the Canadians introduced it, and for him to study its application in Australian conditions.

There should also have been an opportunity for him to work out the degree of default in loans, that is, the degree of risk for insured or guaranteed loans in the experience of the War Service Homes Division and the various State Governments. The Division’s losses on its advances, as we know from its annual reports, are completely trivial. We know also that the Victorian Government and, over a longer period, the New South Wales Government, have never suffered losses in their guarantees of co-operative building society loans. In the circumstances I should hope that the honorable gentleman would permit this debate to proceed on more specific lines by telling us what will be the level of interest rates and what will be the amount of premium.

The Minister made a considered and helpful second-reading speech on this Bill. It was in keeping with the speeches he has made on housing in the three years in which he has had the responsibility of handling housing bills in this place.

Mr Bury:

– It is one year.


– I think the Minister first introduced a loan housing bill in 1962.

Mr Bury:

– Yes, but the honorable member will remember that my tenure was cut somewhat short at that stage.


– The Minister was shot down but he has now taken off again. I am not flattering him by saying that his speeches on housing have been the best by any Minister in this House since 1950. He will be introducing two further housing bills this year and this will be an appropriate time for me to make a few general remarks about the subject. This Bill is aimed, one can say, at making housing loans as safe as government bonds, thereby encouraging lenders to advance a greater proportion of the cost of a house and land, and to make their loans at a lower rate of interest than now available. Secondly, there will be some amendments to the Homes Savings Grants Act which was introduced in May last year pursuant to a promise which the Prime Minister (Sir Robert Menzies) made with too little consideration in November of the preceding year. It took most diligent efforts by the Minister and by the secretary of his new department, resulting in the latter’s breakdown in health for some time, to produce a plausible bill. We made many suggestions at that time and I have no doubt that they will be incorporated in the amendments now to come to hand.

The irony is that the £250 grants which have been made under the restrictive circumstances ordained by the Act have been eaten up in the meantime by increased costs. A house now costs at least £250 more than a precisely similar house would have cost 12 months ago.

Mr Bury:

– The initial deposit has not risen proportionately.


– The initial deposit is at least as great as it was.

Mr Bury:

– The total cost may have gone up by £250 but not the amount of deposit.


– The £250 grant, at its best, merely compensates for the rise that has taken place in the last 12 months. I am not saying that this has been a disadvantage to the persons who have received the grant. Obviously it has been an advantage, but unfortunately the advantage is a diminishing one.

In the Budget session the honorable gentleman will introduce a third bill, the Loan (Housing) Bill. That will be the last measure to be introduced to carry out the 1961 Commonwealth and State Housing Agreement or, as it should be called, the 1961 States Grants Act. The States had no option but to agree to the proposals. These are grants made under section 96 of the Constitution on conditions laid down by this Parliament. The significance of that Bill will be that it will afford honorable members the last opportunity, perhaps apart from the consideration of the estimates for the Department of Housing, to make suggestions for improvements in the arrangements which the Commonwealth next makes with the States for housing, or, should I say, in the terms and conditions which the Commonwealth next lays down for its grants to the States.

I expect that before the end of this year or, more likely, early next year, the House will be asked to pass a bill to set out the terms and conditions on which, during the next five years, the Commonwealth will make grants to the states for housing. Therefore, Sir, the coming year will be one in which honorable members can expect many debates on housing. These will be concerned partly with new features introduced since the last election for the House of Representatives. In other respects, these debates will merely provide the fourth opportunity to consider the arrangements which the Commonwealth and the States have made concerning housing over the last 20 years. Looking back, I think that we all would agree that the most significant social measure which this Parliament has debated over the last two decades was the Commonwealth and State Housing Agreement of 1945.

As a general principle, the Opposition supports all these Bills, because we adopt the attitude that Commonwealth participation in housing is likely to be better for the Australian people. It was not until the Commonwealth showed an interest in housing that any governments took an interest in it. Whatever improvements can be made in this field, which depends so greatly on the Commonwealth’s appropriations of funds and its regulation of private funds in banks and insurance companies, will depend on this Parliament. The States have no authority to pass laws concerning the use which trading banks and savings banks make of their moneys. There is no portion of the field left for the States to pass laws concerning such matters. The States now have no latitude in which to make grants for housing. The Financial Agreement and the uniform tax arrangements have ensured that the States are unable to enter any new financial fields.

Two aspects of the cost of housing arise, Sir. One is the cost of land and the other is the cost of finance. The cost of both land and finance affects the cost of housing whether the houses are for rent or for purchase. This Bill will make no contribution to the reduction of the cost of land. Nor will any of the other Bills which I have mentioned contribute to the reduction of the cost of land, except insofar as the State housing authorities acquire land with funds provided by the Commonwealth. The cost of housing is an acute problem in two areas - in the inner parts of cities and in the outer suburbs. Except in the housing estates of State housing authorities in the inner cities and the outer suburbs, the whole cost of the renewal of inner city areas and of the development of the outer parts of the cities is in the hands of private enterprise. It is in the hands of land developers, as they are called now. Before the war, we used to call them estate agents.

Mr Cope:

– Land sharks.


– That term is just as appropriate now as it was ‘before the war, but I do not want to stir up Government supporters by using such inflammatory expressions. There are too many land developers among honorable members opposite.

Mr Jess:

– But-


– The first shark has already risen.

Mr Jess:

– I am not a shark.


– I described the honorable member as a land developer.

Mr Jess:

– I am not.


– Apparently, the honorable member has got out of it now. He may have made his pile. The point which I wish to make, Mr. Speaker, is that, in our system, private enterprise is allowed free rein, except in estates developed by State housing authorities. This situation is chiefly responsible for the present high cost of land in inner city renewal and outer city development.

I believe that two things are quite plain after our experience over the last ten or fifteen years. The first is that public planning is required to a very much greater extent, in both inner city areas and outer suburbs, than we have at present. The other is that public participation in both the renewal of the inner cities and the development of the outer suburbs must be increased. The Minister for Housing says that the Commonwealth can do nothing in this field. But there is something which it can do. If there is to be economic or, indeed, aesthetic development of the outer suburbs or renewal of the inner city areas, governments must acquire land and develop it or redevelop it themselves. I do not say that they have to do it alone. But I do say that this can no longer satisfactorily be left to private developers alone. There is great virtue, we are told, in competition. We all would get cheaper land and better serviced land if there were more competition between public development and private development. The present exclusive private development has meant that the cost of land has risen much more than the cost of materials, much more than the cost of labour, and much more than the cost of interest or finance in general.

Mr Jess:

– Would the honorable member acquire the land?


– Yes. Of course I would.

Mr Jess:

– Is this the Cairns line or the Calwell line?


– I am sure that all the “ C’s “, including my colleague, the honorable member for Melbourne Ports, would agree with it. We ought to acquire land - nationalise land, if one likes to use a slogan - to ensure that the inner cities are redeveloped and the outer suburbs are properly developed, both economically and aesthetically.

The Minister was still placing emphasis in his speech solely on how many housing units can be provided, whether they be individual cottages or groups of flats or home units. We all place far too much emphasis on this. It is not good enough to look at the housing problem merely as a problem of how many units can be provided. We have also to consider the kinds of environment we create or recreate. A great number of the troubles which we have in these areas of acute problems in the inner cities and the outer suburbs stem from the fact that we concern ourselves with providing housing units instead of proper housing environments. Our sole interest in the number of units provided would not be tolerated anywhere in western Europe or in North America. In those parts of the world, governments have realised for quite some time - even when Eisenhower was in office and not just under Kennedy and Johnson, arid under the Conservatives in Britain as well as under Labour - that governments have a responsibility for ensuring that families are housed in proper environments as well as adequately housed in a particular cottage or flat.

All the urban problems of delinquency, vandalism, transport, distance and family disruption flow from the fact that we are not creating adequate housing environments. These can be provided in two ways. First, governments could make much more use of overall planning for the recreated parts of cities and for the new parts. This is largely a province of State Governments, but insofar as acquisitions are involved, clearly State Governments do this with Commonwealth money. The land is acquired with proper compensation in the way that land is acquired, say, for Housing Commission estates at the moment. But we do not want to have Housing Commission estates alone.

The other action that governments must take - here again the State Governments acting constitutionally with the Commonwealth co-operating financially - is to acquire land to be developed and serviced by them and then to be built upon by home-builders or construction companies. As I said earlier, the Housing Commissions were the most significant social development for which this Parliament has been responsible in the past 20 years. They could not have come into being without the initiative of this Parliament and they were made possible by the Curtin and Chifley Governments. But it is possible, by an extension of the same technique - the Commonwealth making grants to the States for specific purposes; - for land to be acquired, to be serviced and developed by governments and then to be taken over by individuals or by building companies. This is what happens in Canberra, lt is what happens in the United States. To a lesser extent, it is what is happening all over western Europe.

It is reasonable enough to acquire the land for development, because the increased value of the land is due to the public services that are provided. I know the argument that increased rates later on compensate for this, but it is possible, indeed it is now necessary, to eliminate a good deal of the cost of the middle men. The land ought to be developed and serviced at cost. I have mentioned Canberra. Canberra is self-supporting. The States do not pay for Canberra; the people who live in Canberra and buy land in Canberra pay for Canberra entirely.

Mr J R Fraser:

– It shows a profit.


– Yes. But the public, rather than the individual, gets the profit. It has been calculated that every year Sydney and Melbourne between them must provide 14 times as many new housing units as Canberra has to find. That will give some idea of the size of the problem in the two largest cities in Australia. In another quarter of a century, by 1990, these cities will have twice the population that they have at the moment. So the problem will be with us for quite some time and the way to deal with it is much as we have done in Canberra. In Canberra, not only additional housing units are provided each year; all housing units are provided in housing environments. People who come to live in Canberra are, for the price of a block of land, provided with proper communications, not only by road but also by telephone, and with all services such as water, sewerage and electricity. There is none of the relative squalor or primitiveness that one finds respectively in the inner and outer suburbs of the big State capitals.

I said that this Bill is designed, briefly, to ensure that housing loans are as safe as Government bonds. This is a desirable trend. Government bonds, which are used for public works, compete with housing for the principal institutional funds in Australia, both from the banks and from the life assurance societies. The inevitable trend and the healthy trend is to finance public works from taxation, rates and charges. It is appropriate to finance public works from rates and charges, because the people who use the services pay for the public works involved in providing the services. It is appropriate to finance the public works from taxation, because the people who are better able to pay should pay a greater proportion. The method that always applied before the war, but which is now going out, of financing public works from loans, in fact, merely gave an advantage to people who had capital to spare. It is better for them to contribute through taxation. I know that there will be plenty of Liberals and other Conservatives who will say that there is something wrong with providing buildings or public works out of taxation, but they themselves are doing it. This Liberal Government has been on the right track in one matter, apart from continuing the financial agreement and the uniform taxation system in a firm way, and that is to continue and accelerate the trend for public works to be financed from taxation. This means that institutional funds become more available for housing.

Housing has increasingly depended on institutional funds. In the old days before the war there were private mortgagees. There are fewer private mortgagees now than there were and there will be fewer still. The remaining private mortgagees are largely those who have lent their funds through solicitors on interim mortgages from those who are waiting for a loan from the War Service Homes Division. What this Bill does is to give a further guarantee in respect of loans made by banks and life assurance societies. Their solvency has already been guaranteed by Commonwealth legislation. No bank or life assurance society ever goes broke. It cannot. But this legislation ensures that they can never lose on any loan they make for housing. Accordingly, since these loans will be as safe as Government bonds, complementary action must now be taken by the Government to see that the institutional lenders do, in fact, exercise the rights given to them by this legislation. This legislation is on the right track, but it will be incomplete until further legislation is enacted.

There can be no question of the extent of the mischief that this Bill is designed to correct - that is, the high interest rates and the large deposits that are exacted. The extent of the interest rates, particularly on second mortgages, can be seen from the surveys conducted at various times by the War Service Homes Division - ‘the last was in October 1962 - on the interim mortgages that are granted, with the approval of the Division, by applicants for loans who are waiting until the Division is in a position to make an advance to them.

These interest rates are the charges for first mortgages, not second mortgages, in effect guaranteed by the Commonwealth. These are mortgages which the War Service Homes Division has approved and which it has virtually guaranteed it will take over 18 months later.

Mr Daly:

– Do war service homes come under this legislation?


– No. The Division reported that 61 per cent, of these interim mortgages were given at an interest rate of 7 per cent, or less. One does not know what the interest rates were below that. Apparently the Division thought that 7 per cent, was a reasonable interest rate for a first mortgage guaranteed by the Commonwealth and 61 per cent, were granted at that rate. The interest rate on 20 per cent, of the interim mortgages was between 7 per cent, and 8 per cent., on 11 per cent, between 8 and 9 per cent., on 7 per cent, between 9 and 10 per cent, and on 1 per cent, it was above 10 per cent. If we add up the others, we see that 38 per cent, of the Commonwealth guaranteed first mortgages were granted at interest rates above 7 per cent, and up to 10 per cent. This was at a time when interest rates were half of one per cent, lower than now. Undoubtedly there is a mischief to be corrected in this respect.

The other mischief concerns the deposit which has been required. I cited to the House a couple of years ago some figures from publications of the Housing Industry Research Committee of Melbourne, which has been producing some very good analyses and statistics on housing. Those figures showed that in Victoria in 1946 the cooperative building societies required a deposit of 10 per cent., the State Savings Bank 25 per cent, and the Commonwealth Savings Bank 15 per cent, and in 1961 they required deposits of 34 per cent., 40 per cent, and 45 per cent, respectively. So the mischief was becoming much greater in the 15 years there covered.

I refer now to a later bulletin of the Committee. It states -

The deposits required to buy different types of homes at average prices on low priced land as at June 1963 were -

All homes average: £1,768.

Brick veneer: £1,948.

Weatherboard: £1,057.

Those large deposits were based on advances made by the State Savings Bank of Victoria.

One then comes to the question: What benefits will this Bill confer? New South Wales and Victoria have for a long time guaranteed larger loans by co-operative building societies. Those States, by giving guarantees in respect of loans, have encouraged the co-operative societies to lend more than 80 per cent, of the value of a house and land. There have been no defaults on the few loans that have been granted. Nevertheless the State governments have found that the institutional lenders will not respond. They are not interested in lending a greater percentage of the cost of a house. Will this Bill mean that there will be additional funds for housing? If not, the only result will be larger but fewer loans.

How easily obtainable are these loans? The Minister said in his second-reading speech -

The Corporation may refuse to insure a loan if it thinks that the amount of principal and interest payable on the loan, and rates and any other payments in respect of the property, would exceed a certain proportion of the borrower’s established income. Assuming this proportion were 25 per cent, of income, a loan repayable by regular instalments at intervals not longer than 12 months over a period of 25 years at an interest rate of, say, 6 per cent, per annum, would be about three times the borrower’s established annual income.

The average weekly earnings of male employees working under Commonwealth awards in December 1964 was £28 8s. Under this scheme, if a man wished to buy a house for £5,000, which the Minister said was the average cost of a house and land, he would be required to have a weekly income of £31. On the face of it, under this Bill the average wage or salary earner cannot expect to buy an average house. So there is already a gap in the provisions of the Bill.

I quote the Housing Industry Research Committee of Victoria - it can be seen that a £3,500 loan is available only to those buyers whose income is above £22 per week. In his speech, Mr. Bury said that the average house and land costs about £5,000. In order to be granted a 95 per cent, loan on this amount, the borrower would need an income of around £30, which is considerably above the average earnings.

Another way of looking at the table is to say that even with the help of mortgage insurance, home buyers on incomes ranging from £20-£24 will still require to find relatively high deposits to buy a moderately priced home.

I now quote the top and bottom examples from the tables that follow that extract. The maximum loan that a man with a weekly income of £20 can receive on a house and land valued at £4,000 is £3,120. He would have to find a deposit of £880. This is a very large deposit for a man to find if his weekly income is only £20. If a house and land were valued at £4,000, the house would be very modest indeed. Let us consider a house and land costing £4,500. If a man were receiving £20 a week he would have to find a deposit of £1,380, and if his income were £24 a week he would have to find a deposit of £756. Therefore, this Bill will be of very little assistance to people whose established incomes are below the average amount or even of the average amount. The Committee reported -

The answer to the problems of this group of prospective home buyers appears to lie in extending the length of the loan. At present, most private banks prefer a term of about 13 years, while State and Commonwealth banks are allowing terms of 20 to 26 years. The extension to 30 to 35 years could be a real way of helping this group, but such a policy seems remote at this time.

It will be noted that the Minister chose as a sample a term of 25 years. That is the maximum term of a loan from a Government bank and is 10 years longer than the term of a loan from a private savings bank. It is a longer term than one can get from a life assurance society, even if one takes out the collateral life policies which are now required.

It is clear that if we are to help the people who most need housing help, we must extend the terms provided for in this Bill. One would hope that the Minister’s sample will not be typical. In the United States of America and Canada loans can be obtained for periods up to 35 years. In each case, it is possible to obtain an advance of 95 per cent, of the cost of land and a house. In the United States, if the land costs no more than 15,000 dollars it is possible to borrow up to 97 per cent. The percentages of income on which the calculations are made are the same as in Australia. They are 25 per cent, in the United States and 27 per cent, in Canada. But in the United States, under its federal system, loans can be made available for a period 10 years longer than the sample the Minister gave. I remind honorable members of the war service homes scheme, under which loans can be secured over a period of 45 years. The great benefit of the war service homes scheme is that loans may be obtained for that period and the interest rate is still what it was when Labour was in office more than 15 years ago. It is the only housing scheme under which the interest rate has not been put up. If it were put up, the Commonwealth clearly would have to take responsibility, in the form of a regulation, for doing so. The Commonwealth could not pass off the increase by hiding behind Reserve Bank directions, the charters of the savings banks or State legislation. I repeat that the Commonwealth would have to take the responsibility, and very admirably it has never had the courage to do so.

How many larger loans will be made? As we know, until a year ago the savings banks were limited to lending no more than 30 per cent, of their deposits on the security of land. This meant that they could lend up to 30 per cent, of their deposits to land developers or, in other words, real estate agents. They could lend that money for commercial building; they did not have to lend it for housing. When the last count was taken last year, they had lent 22.2 per cent, of their deposits for this purpose. They may now lend up to 35 per cent., but in fact they lend only two-thirds of what they are permitted to lend. Last year, the ratio of the life offices’ housing advances to their assets in Australia was 12.3 per cent. The major trading banks advanced 11.5 per cent, of their total advances for housing purposes. It will be seen that these institutional lenders did not lend a very great amount. That is in contrast to the position in the United States of America, where the federal savings and loan associations advanced from 70 to 80 per cent, of their loans for housing purposes. Their depositors are still quite secure; they get the same guarantee and the same insurance as is provided for in this legislation.

In the United States the ratio of housing loans to bond lendings is the reverse of what it is here. In 1951, the Government told the representatives of the life assurance societies that it wanted them to invest their premiums in bonds rather than in cooperative building societies. The co-operative building society movement has never got over the blow which the Government, in the persons of the present Prime Minister (Sir Robert Menzies) and Sir Arthur Fadden, administered to it at the time of the first credit squeeze in 1951. In 1949-50, the first year in which this Government came to office, the co-operative building societies in New South Wales obtained from the banks and the life assurance societies a sum of £12,015,000, and in the following year a sum of £12,030,000. In the last financial year the sum obtained was £9,970,000, that being an increase on the amounts obtained in the intervening years since 1952-53, when there was a temporary upsurge after the request of 1951. The building societies are now getting only five-sixths as much money from the banks and life societies as they got when this Government assumed office. The balance has been found by diverting to the co-operative building societies housing commission funds which are designed to help the most deserving section of the community.

What is the lesson in all this? The Bill permits larger loans to be made and permits lower interest rates to be charged on those loans; it does not require these things to be done. I am not suggesting that this Bill is the appropriate medium in which to require larger loans to be made available and lower interest rates to be charged. The Commonwealth should act under its undoubted constitutional powers over banking and insurance. It would be in accord with the trend away from government borrowing for public works and towards institutional lending for housing if the Commonwealth were now to amend the charters of the savings banks and if the Reserve Bank were to amend its direction to the trading banks to ensure that this legislation is really made effective.


.- Mr. Speaker, it is always interesting to follow the Deputy Leader of the Opposition (Mr. Whitlam), because he offers arguments that are presented in the most logical and convincing manner and, I should think, in all honesty, though perhaps because of his political philosophy he tends to ignore the real nature of the problem. It will be recalled that early in his speech the honorable member referred to the rise in prices which in general, I think he said, had eaten up the £250 homes savings grant. Later in his speech he said that he had sought information from the same source to which I have gone - the Housing Industry Research Committee. I compliment that organisation upon the information it has prepared. The Committee, in its bulletin of January 1965, said in relation to the rise in prices -

The general upward trend in values has three separate causes. Firstly, the houses are becoming larger. Around 1945 to 1950, the normal home was about 10 squares, but by 1963 had moved to about 12 squares. Secondly, the standard and finish on the homes has increased and buyers demand more fittings with their home, more expensive materials, and the latest features. Thirdly, the cost of materials and the labour costs, over the long term, tend to increase steadily.

Further on the Committee said -

The preliminary figures indicate that, to have built a house at the end of September 1964 would have cost about 4.3 per cent, more than building the same house at the end of December 1963. This increase reflects, in the main, increased labour costs. Materials have also contributed to the rise, but fittings have not had much effect at all. The wholesale prices of most fittings have increased over this time, but due to a high level of competition, the retail or trade prices have not followed this trend to any extent.

If the honorable gentleman’s comment about increased prices means anything at all, it means that the increases in prices are to be deplored. If that is so, then rising wages are to be deplored. I do not see any other significance in what the honorable gentleman said.

When the Minister for Housing (Mr. Bury) introduced the Bill, he said -

The main purpose of this scheme is to assist people to obtain as a single loan and at a reasonable rate of interest, the money they need, and can afford to borrow, to buy or build a home.

The Bill is designed to be a constructive and positive approach to a problem, the nature of which is not yet completely understood. In some of his remarks, the Deputy Leader of the Opposition tended to obscure the real nature of the problem. The Minister has given expression to a Liberal philosophy which is in accord with the principles enunciated by the Government and with the policy that it has carried out over the years. The problem must be viewed in the light of the realities of the situation that we face today. I hope that my approach to it will not be so obviously coloured by what I believe to be my political philosophy as was the approach of the Deputy Leader of the Opposition. Unquestionably, he looked at the problem as being one which should be, or could be, confined to the fairly narrow approach of a democratic socialist who is slightly to the left of centre in his party and who thinks in terms of the nationalisation of land, of controls, and of using the force of government to make people conform to what the government of the day wishes them to conform to. Those of us who remember the final days of the last Labour Government know the unholy mess that sort of philosophy caused in the economy.

It is true that in this legislation the Government breaks substantial new ground. This was illustrated by the Deputy Leader of the Opposition who referred to the amendments to the Homes Savings Grant Act which the Minister has indicated he proposes to introduce. The very fact that the Minister proposes to introduce amendments to this measure which has been in operation for some time illustrates a great truth in relation to the Bill before the House. It is new, forward reaching legislation. Unless legislation is designed to make people conform to the wishes of the Government, it must be amended in one way or another to meet the wishes of the people and conditions of the day.

I want to refer to the facts and conditions we must acknowledge if we are to face reality with this sort of legislation and I do not find myself in substantial disagreement with the Deputy Leader of the Opposition on these matters. In a statement issued on 21st December 1964, the Minister for National Development (Mr. Fairbairn) informed us that between 1954 and 1961, the population of Australia had been increased by something over 14 million people. During that period, Sydney had grown by roughly 2.5 per cent, a year in terms of population and Melbourne by 3.5 per cent. Between the censuses of 1954 and 1961, the population of those cities had increased by more than one million people. The Minister for National Development added that one Australian in two now lived in the four larger cities of Australia and over 80 per cent, in urban areas of more than 1,000 people. That is the sort of pattern of growth that has existed in Australia for the census of 1954 onwards. Most honorable members will agree that it was the pattern also before 1954.

This movement of population brings its own problems and I think we should look at the nature of the economy that we propose to influence by this legislation. In recent years we have seen an enormous industrial expansion in Australia. I shall not labour the point because this fact is widely acknowledged. We have seen also a progressive rise in the standard of living and a very high level of employment. We also know - although the Deputy Leader of the Opposition ignored the fact - that because of the vast development in Australia over recent years and other factors we are a capital hungry country. Whatever we may wish to do, in many ways we are capital hungry and capital short.

The improved conditions, with a rising standard of living with which we are all familiar, have produced their effect on housing to which I referred earlier. The tendency towards home ownership has increased in the post-war years. Estimates in this connection range from 79 per cent, to about 73 per cent. Be that as it may, it is a safe assumption that about threequarters of the Australian people own or are buying their own homes. This is a most significant factor in housing. My recollection is that the Minister estimated that between the census of 1947 and the census of 1961, our population increased by about three million. According to the statement I cited earlier, houses in Australia generally are larger now than they were. They are better furnished and require more equipment and in the main they occupy larger allotments than did houses before the Second World War. In that connection, it is significant that 200 houses - 100 on each side of the road - require about one mile of road and two miles of pathway. This means a greater supply of electricity, gas, water and sewerage and all other amenities. It also means that when more than 100,000 dwelling units - to use the jargon - are built in the Commonwealth, there is a huge demand on resources outside the narrow ambit of the building societies.

The Government has made some contribution already to these requirements, as the Deputy Leader of the Opposition has acknowledged. He did not agree with what the Commonwealth Government had done under the Commonwealth and State Housing Agreement although as another example of forward legislation, the Government amended the relevant legislation some years ago to provide in general terms that about 30 per cent, of the available finance should go to the co-operative housing societies if required.

I turn now to the official journal of the Federation of Co-operative Housing Societies of Victoria. Reference is made in that journal to the sources of funds for housing in the year ended December 1964. Of the total of £121 million, almost £5) million came from the Commonwealth and State Housing Agreement. It is generally admitted - although it may be denied in this House - that the co-operative housing societies can build a better home £1 for £1 than can the housing commissions, of the various States. In fact, they build better and cheaper houses than do the government instrumentalities. On these figures, the earlier policies of the Government have made some real contribution to the solution of the housing problem in Australia.

Last year, the Minister for Housing (Mr. Bury) introduced the Homes Savings Grant Bill which was subsequently passed. I recall the debate on the measure. There was a good deal of confusion about the purpose of the measure and extent to which it would be used. In December the Minister announced that grants totalling more than £2 million had already been paid to some 9,000 young couples and the number of applications was increasing week by week. That is a fairly good record for a few months. I turn now to another authority and this is a pamphlet issued by the Australian Bankers Association and entitled “The Banks and Housing Today “. I think this was published in December 1964, and it stated -

Prospective home buyers and home builders have already opened many thousands of additional savings bank accounts in recent months with a view to qualifying for the subsidy.

I do not wish to labour the point. I merely refer to these matters as some evidence of the success of earlier Government policy. I come now to the principal area of disagreement with my honorable friend from Werriwa. As I have said, Australia is a capital hungry country and because of the demands on capital for so many forms of development over recent years, there has grown up a system of rationed finance for building. Following that rationing of finance, there grew up what was known as a deposit gap in the demand for secondary finance.

Honorable members will recall that during the late 1950’s and perhaps the early 1960’s the current and popular cry was: “More money from the Federal Government”. Indeed, the Deputy Leader of the Opposition, in effect, said the same thing in relation to this problem only a few moments ago. This sort of attitude serves only to distort the approach to the problem, to obscure its real nature, and hence to prevent a proper approach to a solution of the problem. The problem was not shortage of finance. In 1960 - the boom year admittedly - something over £400 million was invested in houses and land, and over 100 million dwelling units were built; so the problem was not shortage of money. What happened was that rationed finance at reasonable rates of interest was heavily supplemented by finance at relatively high rates of interest from other than recognised financial institutions. That was then and is now the problem.

I do not think that there are many people outside this House and perhaps a few Labour Party branches who hold any real objection to reasonable rates of interest if, in other ways, the proposals are effective and practicable.

Mr Bryant:

– What is a reasonable rate of interest?


– A reasonable rate of interest is that determined from time to time in relation to the market and in relation to the amount of capital available to meet the demands on it. We might differ on that point, but that is my definition.

Mr Bryant:

– So that the only consideration is for the moneylenders, and not for the borrowers?


– No. The honorable member for Wills, who may be regarded as an academic Socialist in these matters, ignores the realities of the situation. The high interest rate institutions themselves obtain money through fixed deposits, securities and investments from thousands of members of the community. They are not a single body. They represent people who try to take advantage of a situation. I believe that this legislation is one practical method of removing from people generally the opportunity to take advantage of others in the community. I do not think that theoretical Socialism in this situation will do anything but produce chaos.

Mr Bryant:

– The honorable member is a rapacious capitalist.


– If the honorable member for Wills was as well informed as he is talkative he would be a giant. The high interest money that was available in quite considerable amounts had a variety of effects in the community. To the individual borrower it represented an additional cost burden on his standard of living. To the community it represented partially concealed inflation. Further, and more significantly than I think has been realised, it represented a major factor in the instability of the building industry. When it appeared that there might be a time of financial shortage, the high interest money flew backwards and forwards in accordance with the financial pressures or freedoms of the davit thus affected the stability of the building industry and because the stability of the building industry affects the economy, in this situation it had a major effect on the stability of the economy.

In purpose this legislation is designed to replace high interest money with money at reasonable rates of interest. The real question for this House is not so much the matters raised by the Deputy Leader of the Opposition. The real crux of the question is this: Will the scheme, which offers complete security and some degree of liquidity through a mortgage market, attract finance previously invested at high interest rates and at high risk? Recent history shows that the element of high risk was there. That seems to be the crux of this question. While all honorable members may and should have opinions on this problem, none of us can provide a definite solution. Time alone will tell. I believe the scheme will work. I agree with the honorable member for Werriwa that it will bring to investment in housing quite considerable sums of money from outside the recognised financial institutions that he dealt with, because the scheme does offer security and some degree of liquidity.

The Bill contains other provisions which are important in relation to the sort of world in which we live today. I do not wish to refer to the detailed clauses of the Bill because I think they will be effectively dealt with at the Committee stage. In his second reading speech the Minister said that Clause 4 defines insurable loans as loans made for a variety of purposes. Among those purposes are the purchase of an existing dwelling. AM honorable members know that it has been quite difficult to obtain finance to purchase existing dwellings because of the system of rationed finance. Clause 4 provides also for loans to alter, improve or extend a dwelling house. These will include loans for the provision of permanent water supply, electricity and sewerage, and the conversion of an existing dwelling into two or more dwelling units. Provision is also made for loans to meet expenses on roads, kerbing or footpaths, in connection with land which the borrower owns. Those are the three purposes to which I wish to devote a few moments.

Honorable members who, like myself, represent electorates in the rapidly growing outer metropolitan areas and near-rural areas will agree that the residents who have moved into those areas in the last 10 or 12 years have in the main carried the burden of the cost of development that has gone on in this country since the war. On the average, those people pay about £5,000 for a house and land and usually they do not have the amenities enjoyed by people who live in the cities and in the larger country towns. They do not have roads and footpaths and, in huge numbers in Sydney and Melbourne, they do not have sewerage. It is impossible to escape this type of cost in development of the nature that has gone on and will probably continue. Therefore it seems to me that the Government must face the realities of the situation and must endeavour to bring into the field of housing investment moneys which can be invested to supply these amenities.

I do not wish to labour this point, but honorable members will recall earlier debates on this subject. A number of members taking part in the discussions quoted information included in reviews of a research organisation. It was said that among the concealed costs of housing and the concealed inflationary items was the cost of providing roads, footpaths, electricity and other amenities with money raised at high interest rates, whereas under the normal process of supply by local councils, money would be available at the ruling rates - rates far lower than those charged on outside finance. When these works are carried out by local authorities there is a continuous labour force and an assured availability of machinery and equipment, and the costs therefore are very much lower. If that proposition is doubted by honorable members, I would be happy to discuss it, but I do not think it can be disputed.

Therefore it seems to me that if a government is faced, as this Government is now and has been faced, with the problems of development and of an increasing population, sooner or later it has to move away from the established, known, orthodox, recognised practices. It has to attempt to meet the conditions of the day and to envisage the conditions of tomorrow. I think the Government is taking that course. I think the Minister did something along those lines and has gone a good deal further. I think the purpose of the Bill is a worthy one. I know that some of my friends opposite will not agree with the Bill’s purpose, but I think the Bill is sound and should be supported. I think it is practical. It recognises the reality of the situation. If individual members of this House could free themselves from what I might term the narrow political outlook and look at this legislation critically but nonetheless constructively I am sure they would agree that here we have the basis of an approach to the problem of housing in this country which might cure or, at any rate, alleviate the problem in the years that lie ahead. I have much pleasure in supporting the legislation.

Melbourne Ports

.- The measure now being debated is before us as a consequence of a promise made by the Government in the general election which was held in December 1963. In the campaign that preceded the election the Government promised that if returned to power it would set up what it called a Housing Loans Insurance Corporation. One is inclined to feel, now, that the Government has been satisfied merely to come along to the Parliament with a bill to set up an insurance corporation and to leave the matter there. Like the honorable member for Deakin (Mr. Davis) I hope that I may be constructive but I shall also be critical. I venture to suggest that the majority of home seekers in Australia will be little advantaged by the passage of this Bill and the establishment of the Insurance Corporation. One of the great mysteries about the Bill is that although it is to set up this institution there has so far been no indication of the magnitude of the premiums that will be charged by the Corporation. At first glance it would seem that all the establishment of the institution will do will be to add another burden to the potential home buyer - a charge in the form of an insurance premium, as yet unspecified. To be realistic and constructive rather than merely critical, in our approach to this debate, we should have had some indication of the magnitude of the premiums to be charged by the Corporation. I understand that the Minister for Housing (Mr. Bury) has given some rather vague indication that the premium will not be collected by means of an increase in the annual interest terms payable, as is done in some other countries, but that it will be imposed initially in the form of a single payment from the lender to the Insurance Corporation. There has been some talk this afternoon of loans of the order of £4,000. I would have liked to know the amount of premium that will be charged, as a result of the setting up of this Corporation, on a typical loan of £4,000 for a period of 15, 20 or 25 years. In my opinion, until we have that information we are in the dark as to the value of this institution.

In dealing with an institution such as that envisaged by the Bill one should have some idea of the nature of the insurable risk to be covered by the institution. It would appear, to judge from statements made by the Minister, that the insurable risk is what he imagines is the difference between the amount a potential lender would lend in the case of a loan being insurable and the amount that he would lend if the loan could not be insured. The suggestion is that whereas previously when a loan was not insured a lender may be willing to lend up to 70 per cent. of the value of the house and land, in consequence of the loan now being insured he will be willing to lend, in some circumstances, as much as 95 per cent. of the value of the house and land. But this will not be so in practice. The amount that is available to the borrower will be limited by his weekly income.

As I see it, the scheme will have application to only one-quarter of the population. Earlier the Deputy Leader of the Opposition (Mr. Whitlam) referred to the interesting publications sent to all honorable members by the Housing Research Institute. The publication of February 1965 is devoted to an analysis of the legislation that we are now considering. The publication claims that in order to obtain a loan of 95 per cent. of valuation the borrower would need to have an income of about £30 a week, which is considerably more than the average income in Australia. I do not know whether honorable members are aware of how many male taxpayers in the community earn in excess of £30 a week. Figures furnished by the Commissioner of Taxation show that only 25 per cent. of male taxpayers earn in excess of £30 a week. In essence, they would be the only people who could obtain the maximum 95 per cent. loan contemplated by this legislation. So three-quarters of the population will be denied the full advantage of this legislation. The legislation covers only a small percentage of the population initially.

This Bill does not provide finance for homes. All it does is insure lenders against default on the part of the borrowing party. This type of legislation would be courageous if introduced in the midst of a depression but I do not think that the existence of the proposed Corporation will greatly affect a large number of transactions in the community.

I was interested to read something about the American scheme. The Minister has indicated that he drew on the experience of both the American and Canadian all mortgages transacted in the community are still transacted outside the scope of the insurance corporation. The insurance corporation covers only about 30 per cent. of all mortgages in the United States. That seems to me to bear out the point I have already made. This legislation will apply only to a very restricted section of the community. The statistics of mortgage terms in Australia are not very edifying in relation to the rates of interest charged to the great majority of borrowers. I refer to a very interesting, voluminous document entitled “Finance for Housing”, prepared by Mr. L’Estrange, a Victorian solicitor, in which he analyses housing finance in the United States of America, Great Britain, South Africa and Australia.

As an appendix to this document there is a statement, taken from the Commonwealth Statistician’s figures, showing interest rates on mortgages for the 12 months ended 31st December 1961. Victoria has more than one-quarter of Australia’s population, so if we multiply the Victorian figures by four we get the perspective for the whole of Australia. The figures show that first mortgages to the value of £120 million in round figures were taken out in Victoria during the 12 months ended 31st December 1961. Over 50 per cent. of those mortgages were taken out at rates in excess of 6 per cent., 26 per cent. at rates between 7 and 8 per cent., 10 per cent. at rates between 8 and 10 per cent., 9 per cent. at rates between 10 and 15 per cent., and 2 per cent. at rates actually in excess of 15 per cent. This measure, of course, will not do anything to alleviate the plight of that group in the Australian community.

Making a rough calculation, it would seem that about £250 million worth of mortgages are taken out in Australia every year at rates in excess of 6 per cent., and about £120 million worth at rates in excess of 8 per cent. Will this measure do anything to meet that very difficult problem in the community? I do not think that it will. In essence, the greatest virtue that one can see in the measure is that it will enable some of those people who are in the more fortunate 25 per cent. of the Australian community to escape the predatory descent of the second mortgagee. At least the scheme has that minimal value. Some people who, because insurance was not available, could get loans only to about 75 per cent, of the value and had to take out a second mortgage of some kind for the remaining 25 per cent, or so, will, when this Corporation is in existence, be able to get a first mortgage to cover the whole transaction at an average rate of interest considerably less than the average of the rates of the first mortgage and the second mortgage. The scheme will have that minimal value, but that seems to me to be about the beginning and the end of its virtues.

As the Housing Industry Research Committee points out, the incomes of the majority of the people are less than £30 a week and considerable numbers of family groups are actually living on incomes of less than £20 a week. It is easy enough to talk about the average wage being £27 or £28 a week. The average is calculated by taking the wages over what the average turns out to be and those under it. As the figures of the Commissioner of Taxation show, quite a number of families consisting of man, wife and children are living on incomes between £20 and £25 a week. This is one of the great problems that will be thrown up at the Australian people in the next few years. In terms of today’s land values and building costs, how is the family consisting of a man, wife and one child or more, with an income of less than £25 a week, to get into the category about which the honorable member for Deakin spoke - the 75 per cent, or so who own homes? Unfortunately a large number of them are already among the 25 per cent, that do not own homes and it will be very difficult for them to get out of that position. Unless something is done systematically to tackle the interest rate problem, for the sake of the generation that is growing up hopefully, the percentage of home ownership to total families will drop considerably within the next few years.

The organisation to which I have already referred states in its October 1964 leaflet that in the 10-year period between 1954 and 1964 the cost of a typical block of land in Melbourne in what is called a low cost fringe area rose from £328 to £1,444, an increase of almost 450 per cent. Over the 10 years the value of land more than quadrupled. Appendix M to the latest report of the War Service Homes Division, which is for the year 1963-64, shows the average cost of a dwelling house plus land for each year since July 1955. In New South Wales in 1955-56 a dwelling house and land could have been bought for £3,483. In 1963-64 the purchase price had increased to £5,053. Over the nine-year period that was an increase of nearly £1,600, or almost 50 per cent. In Victoria there was an increase of £1,725, or more than 50 per cent. - from £3,374 to £5,099. In the Australian Capital Territory, where at least one would expect the Government to have a little control over the position, the figure has risen from £4,225 to £7,388- an increase of £3,163 or over 70 per cent. The minimum average annual rate of increase is about 5 per cent. This means that the house and land which we are now talking about as being valued at £5,000 will increase to £5,250 by the time we are examining the figures for 1964-65 if values rise by 5 per cent., as they have been doing each year over the last nine years.

As I see it, the legislation before us does nothing whatever about that problem. I should mention that the figures I have given are the cash prices. It has to be remembered that the overall cost of most housing transactions is almost doubled when we take into account the fact that repayment is generally spread over a long period of years and that interest has to be paid over that period. There is one fortunate group of people - those who borrow from the War Service Homes Division - who obtain their money for, I think, 3J per cent, and some borrowers from co-operative bousing societies obtain their money for 5 per cent, or 5i per cent. But the majority of people are obliged to borrow at higher rates. The minimum rate at which money is available to them is 6 per cent. I remind the House that the young breadwinners of today become the fathers and heads of families of tomorrow, and more than half of these men are receiving incomes of less than £25 per week. Let -s assume for the purposes of our argument that one of these young men is obliged to borrow £4,000, and that he can raise £1,000 by way of deposit. Unfortunately, there are many people in the community who cannot raise £1,000. The deposit gap is the difference between what one can borrow for the purposes of building or buying a home and the actual cost of the home.

Whether it represents the triumph of hope over inexperience, I am not sure, but the fact is that, on the average, people are getting married at an earlier age. Statistics show that the average age at which they are getting married is falling rather than rising. Let us take the case of a person who is obliged to borrow £4,000 at 6 per cent, irrespective of whether he has available to him the services of the Corporation. In interest and amortisation, that man is required to pay a minimum of approximately £300 a year, exclusive of rates. If we take Victoria as a typical example, he would be required to find another £50 a year for rates. In other words, he has to find £350 a year or £7 a week out of an income of £25 a week. How can he do it? I think that is the sort of problem that the Government should have been looking at instead of introducing the scheme which is proposed and which, in my view, will have an impact on only about one-quarter of the community.

I am not suggesting that the people who make up that one-quarter are not worthy of consideration, but their problems are nowhere near as onerous as are those of many other people in the community who will not be able to come within the ambit of this scheme at all and who still will suffer from this deposit gap difficulty. They are the people who sometimes rush into what are often unsatisfactory transactions because they need to get a roof over their heads. I represent an industrial electorate. There are many people in the electorate who are paying as much as £8 a week rent for houses which they are living in, I am sure, only because they have no choice. It may be argued that anybody who is paying £8 a week ought to have been able to do something about purchasing a home, but these people cannot buy homes because they have not a deposit of £1,000. In many cases they are lucky if they have £100 or £200, so that the deposit gap with which they are faced ranges between £1,000 and £2,000. The Government ought to be doing something in the housing field in an endeavour to grapple with this very difficult problem.

We hear estimates of what the population is likely to be in the next 20 years. One sometimes looks with horror at the prospect that in another 10 years Melbourne will have approximately another one million people which means, I should say, a further 250,000 houses in a sprawl which is already extensive enough. Surely we ought to be doing something for young families. For instance, we should be considering whether they ought to be required to live in the metropolis or whether we should be attempting to decentralise industry systematically. I realise that that is not an easy problem to solve, but surely we ought to be facing up to it.

It is quite an easy matter to obtain statistics relating to family incomes. It is also easy to work out what weekly repayments will be required of people who borrow £4,000 at 6 per cent., which is a moderate rate. The last “Financial Review of Business Statistics “ - that for January 1 965 - sets out the average private first mortgage rate in New South Wales as being 8.8 per cent, as at November 1964. This is well above the minimum of 6 per cent, about which we are speaking. I repeat that it is not difficult to work out this sum, and if we do we realise that many hundreds of thousands of future Australian families are in an impossible situation when it comes to purchasing a home. These unfortunate people have been affected by inflation which, on the figures I have given, has been relatively higher in the field of land values and building costs than it has been in some other directions.

An honorable member suggested this afternoon that two out of three Australians live in the capital cities or in areas with populations in excess of 5,000. The majority of them are faced with the fact that the cost of a modern home in the metropolitan areas of Melbourne and Sydney is about £5,000. The figures I have quoted disclose that the cost of average fringe land, some miles distant from the heart of Melbourne, was £1,444 a block as at the end of 1964. The report of the War Service Homes Division discloses that the cost of a house and land in Victoria as at that period was £5,099. This bears out my suggestion that there are many families who, through no fault of their own, will not be able to acquire homes because they will not be able to get together anything like £1,000. To them, the deposit gap represents almost the total cost of the land and home.

As I see it, this is a problem of considerable magnitude. It is a problem of great social significance to the future welfare of the Australian people and I think it is a problem with which we have been only tinkering so far. It is aggravated at the moment in Australia because we are now faced with a rise in interest rates. Because of the monetary and banking action that has been taken in this country, interest rates are now one-half per cent. higher than they were three or four months ago. I have quoted already from the housing bulletin of January 1965 of the Housing Industry Research Committee. This is what happened when the last credit squeeze took place. It was not so much that total building activity declined but that the building of lower value homes declined more rapidly than did the building of higher priced homes. In other words there were still plenty of people who could afford to build notwithstanding the credit squeeze but the people who were prevented from doing so were those most genuinely in need of homes. We take a lot of consolation today from the fact that statistics show that the total number of houses being completed is rising but the statistics do not show how many people are excluded from buying houses because of their economic position and the high deposits required.


– Order! The honorable member’s time has expired.

Debate (on motion by Sir John Cramer) adjourned.

page 144


Customs Tariff Proposals (No. 31); Customs Tariff Proposals (No. 32); Customs Tariff Proposals (No. 33)

Minister for Housing · Wentworth · LP

– I move - [Customs Tariff Proposals (No. 31).]

  1. That the Schedule to the Customs Tariff 1933-1964, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals and that, on and after the nineteeth day of March, One thousand nine hundred and sixty-five. Duties of Customs be collected accordingly
  2. That, in these Proposals, “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates: - 9th November, 1964: 12th November, 1964; and 17th March, 1965.

[Customs Tariff Proposals (No. 32).]

  1. That the Schedule to the Customs Tariff 1933-1964, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals and that, on and after the nineteenth day of March, One thousand nine hundred and sixty-five, Duties of Customs be collected accordingly.
  2. That in these Proposals, “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates: - 9th November, 1964; 12th November, 1964; and 17th March, 1965.

[Customs Tariff Proposals (No. 33.)]

  1. That the Schedule to the Customs Tariff 1933-1964, as proposed to be amended by Customs Tariff Proposals, be further amended as set-out in the Schedule to these Proposals and that, on and after the nineteenth day of March, One thousand nine hundred and sixty-five, Duties of Customs be collected accordingly.
  2. That, in these Proposals, “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates: - 9th November, 1964; 12th November, 1964; and 17th March, 1965.

Mr. Deputy Speaker, Customs Tariff Proposals Nos. 31, 32 and 33, which I have just tabled, relate to proposed amendments of the Customs Tariff 1933-1964 and, in the main, give effect to the Government’s decisions in respect of the following Tariff Board Reports -

Copper and brass sheet, strip and foil;

Acetyl products; and

Safflower seed and soya beans, safflower oil and soya bean oil.

The new duties will take effect from tomorrow morning. At a later stage I shall table the relevant reports.

In its report on copper and brass sheet, strip and foil, the Tariff Board found that the local industry should be accorded continued assistance. The production of radiator strip has passed the experimental stage and the Board recommended that the present bounty should be replaced by a corresponding increase in duty. The payment of bounty under the Copper and Brass Strip Bounty Act 1962-64 will cease as from tomorrow, when the recommended duties take effect. Other variations in the duties on certain gauges of brass sheet, strip and foil will bring them into line with the duties on similar copper products.

Honorable members will recall that on 3rd March 1965, as an emergency measure to protect copper fabricators from serious damage as the result of the present dislocation of copper prices and supplies, the Minister for Trade and Industry (Mr. McEwen) announced that quantitative restrictions had been imposed on certain sizes of copper and brass sheet, strip and foil. These restrictions followed a recommendation by the Tariff Board in the report on copper and brass sheet, strip and foil. The Board had found two important recent changes to have occurred in the copper situation. One was the difference between the London Metal Exchange price and the world producers’ price which developed in a situation of temporary world shortage of copper supplies. The other was the cessation of supplies from the Mount Isa mine which provided about 70 per cent. of Australia’s copper requirements.

To ensure adequate supplies, Australian copper producers and fabricators had formed a pool to buy stocks from overseas. Because supplies were not obtainable from overseas producers who had committed their output to traditional buyers, the pool had been compelled to purchase at high London Metal Exchange prices. To recover the additional cost, a pool surcharge was applied to all copper sold to fabricators in Australia. The effect has been that Australian copper fabricators have been at a severe disadvantage in their material costs against overseas suppliers who are paying the lower world producers’ price for a substantial part of their requirements. The Tariff Board received evidence that several users were placing the bulk of their orders for copper and brass strip overseas. It considered that this situation called for the quantitative restriction of imports until such time as Australia again became selfsufficient in the supply of unwrought copper. The Tariff Board will report again on this subject before the end of this year.

The new duties proposed on the various acetyl products will provide overall assistance to their local production. The level of protection has been increased on vinyl acetate monomer and cellulose acetate moulding compounds, while the rate of duty on acetic acid has been decreased. Bounty payments on the production of rayon grade cellulose acetate flake for use in the manufacture of cellulose acetate rayon yarn are to be continued for a further three years. However the rate is being reduced by one penny to sixpence per lb. and legislation giving effect to this change, as from the date of operation of the new duties, will be introduced as soon as possible.

On the recommendation of the Tariff Board, the ordinary duties on safflower seed oil have been increased by1s. per gallon and the sliding scale temporary duties have been removed. The Board considers that the increased fixed rate of duty will adequately protect the Australian industry. There is no current local production of soya bean oil but as it is interchangeable with safflower seed oil and other locally produced vegetable oils, the present ordinary duties are being retained to guard against substitution. Accordingly the sliding scale temporary duties are being removed from soya bean oil and also from modified vegetable oils having a safflower seed or soya bean oil base. No change is proposed in respect of the duty-free admission of safflower seed or soya beans.

Following the conclusion of international consultations, the duties on ginger in liquid have been simplified by the elimination of separate tariff items for imports in small containers. This action is in line with the recommendations of the Tariff Board which were tabled in November last year. Other amendments dealing with preserved fruits, vegetables and gherkins do not change the existing rates and are of a drafting nature only. A summary of the tariff amendments is at present being circulated in the chamber. I commend the proposals to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 149


Reports on Items.

Minister for Housing · Wentworth · LP

– I present reports by the Tariff Board on the following subjects -

Acetyl products.

Copper and brass sheet, strip and foil.

Flax fibre.

Safflower seed and soya beans, safflower oil and soya bean oil.

Ordered to be printed.

page 149


Second Reading

Debate resumed (vide page 144).


– I listened with interest to both the Deputy Leader of the Opposition (Mr. Whitlam) and the honorable member for Melbourne Ports (Mr. Crean), the two leading members of the Opposition, to see whether they would criticise the Bill or suggest some major alteration or an alternative to it. I was very disappointed that they did neither. The Deputy Leader of the Opposition commenced by complaining that interest rates were rising. Surely this is an added reason for the introduction of this Bill. He then dealt with two matters which he considered should be covered by the Bill. He said that interest rates should be reasonable - of course, the Bill is intended so to provide - and then he dealt with the premium that is to be charged. But after all, this Bill seeks to create a corporate body which, whilst its policy is laid down, will be independent and will carry out its own functions. It will be charged with not making a profit but only meeting its expenses. The premium rate will, of course, be designed for that purpose. One can well imagine that the premium rate will be very low, but it would be quite wrong when setting up a corporate body to stipulate the premium rate before the statutory body has actually commenced business. There can be no criticism on that score at this stage, although there may be some criticism later.

The Deputy Leader of the Opposition said that the 1945 Commonwealth and State Housing Agreement was the greatest piece of legislation ever enacted. This statement staggered me and I will have something to say about it later. It was the overstatement of the year. Then he dealt, quite properly 1 thought, with the cost of land, as did the honorable member for Melbourne Ports, and with the cost of finance. He said that these represented the major part of the cost of building. This is true. However, we had in plain terms from the Deputy Leader of the Opposition his expressed belief in the nationalisation of land; in other words, Government ownership of all land. This is quite right and proper coming from a party which declares itself to be a Socialist party, and we heard it in no uncertain words from the Deputy Leader of the Opposition today. He continued in that strain with the suggestion that the Government should provide all housing money. He said that housing depends on institution funds today, and he expressed himself as favouring the Government providing all the money for housing. This is all quite clearly in line with the Opposition’s policy. I will touch upon some of those matters as I continue my remarks.

First I want to congratulate the Government on this very forward legislation. It is the second leg of legislation which was introduced towards the end of last year and which provided great encouragement for the young people of Australia by subsidising home building savings to the extent of £250. This was advanced thinking and as my colleague, the honorable member for Deakin (Mr. Davis), said, it was breaking new ground. No doubt the Opposition is somewhat jealous that when it was in power it did not think of legislation of this character. The Government is to be congratulated on it because it is making history in this particular field. I believe that in the years to come this legislation will be of immense benefit to those people seeking to become home owners. It is legislation of a type which has proved itself in both Canada and the United States of America although it is somewhat different. To put it in my own words, and not to use the words of the Minister for Housing (Mr. Bury), I should say the purpose of the Bill is to encourage the investment of money from a wide variety of sources, on the security of homes, at a low rate of interest, on a long term basis and with absolute safety to the lender, thus enabling the borrower or prospective home owner to acquire a home on a low deposit and with the best possible conditions of repayment. That, I think, expresses what the Bill is intended to do. This is in line with the Government’s policy of encouraging home ownership which has met with great success in recent years.

I emphasise that it is not a government department which is being created. I think this needs emphasising because the practice of the Labour Party, both State and Federal, in establishing bodies of this type is to create government departments. This will be an independent statutory body run by its own directors according to policy laid down in broad terms by the Government, with certain powers in the hands of the Minister. Whilst I do not think it is appropriate today to discuss all the details which cross one’s mind, I remind the House that the measure provides for straight out insurance against loss by lenders. The authority is to be an insurance corporation. Its revenue will come from the premiums paid - premiums calculated to meet expenses and any losses which may be sustained. The premiums will be very low. No profit is to be made and, what is of more interest, no tax is to be paid. Of course, the corporation is expected to pay its own way. Absolute security is ensured to the lenders, as the corporation will be guaranteed by the Australian Government. In my opinion this is excellent. Because the scheme is new and we have had no experience to guide us on legislation of this type it will obviously take some time to settle down. We cannot expect a revolutionary change immediately, because the scheme has to become known both to lenders and to borrowers. Some little time will elapse before they realise what is going on. Also, those administering the scheme will take some little time to determine the best course to take in relation to certain matters. However, as a result of my vast experience in this field, I believe that we will be able to expand this legislation as we gain experience.

I suggest to the Opposition that it might be better not to criticise in detail today, but to wait until the legislation is operating and the statutory body functioning. Some important features are worth noting. The legislation will influence not only the building of new homes and the buying of new homes and units which are built for sale, but it will put in the same category the buying of old homes. This aspect has not been understood by many of our financial institutions, not even excepting the Commonwealth Bank. There has been a tendency to believe that one could do better for the Australian economy by applying loan money to encourage new building. The idea has been to keep the building trade going. The money has been provided to stimulate the building trade in the belief that by so doing, most can be done to help people to acquire homes. Of course, that is completely false in actual practice. Old homes have their place; they are a commodity as are new homes. It must be remembered that every family unit changes its complexion considerably at least once in every 10 years. This is brought about by such things as marriages, births or deaths. Consequently, the requirements of family units change. This change means that they may require a bigger or a smaller home or alterations to the existing home. Therefore, the need to facilitate the market for older homes is of the greatest possible importance, compared to the construction of new homes. I have argued this with many people before. Anybody who has spent many years in real estate will understand it, but unfortunately some of our public servants and some of our banking institutions do not quite understand the significance of this point. It is of the utmost importance that loan funds should be as available for existing or older homes as they are for the construction of new homes. 1 am very glad to see that this matter is put on a proper basis in this Bill. I cannot over emphasise this particular point.

It is good to see that additions and repairs, improvements, and the refinancing of existing mortgages, which does not occur in many of our lending institutions, are provided for under this legislation and that the borrower can obtain up to 95 per cent, of the value of the property. The Minister mentioned that this Bill may stimulate a market for housing mortgages as being a most desirable source of investment of private funds and savings, and this is one of the most important features of it. I believe it will stimulate the market in housing mortgages. This is a great need in Australia and I believe this Bill can encourage such a market in a proper way. There is a mortgage market available today in the discounting of mortgages, but what I am talking about is a wide market in housing mortgages and this can be stimulated by the activities under this Bill. This will be a splendid thing for Australia.

I think the Deputy Leader of the Opposition criticised the provision that the premium for insurance was to be fixed once and for all at the beginning of the loan. This is a very good thing because it means that there is no need to provide year after year for an annual commitment of this character. It is important to draw attention to the fact that whilst the Minister will lay down the classes of approved lenders, such as banks, insurance companies, and building societies, the Corporation itself will approve the particular lender and, whilst this is not stated, I hope that the Corporation will make the field as wide as is possible.

I believe that this Bill and this Corporation, when it is functioning, will be of particular interest to the permanent building society movement in Australia. This movement has grown tremendously in recent years. It was established, as we all know, by the Stevens Government in New South Wales. Our present Government has encouraged it. The movement has great importance in the United Kingdom. These are splendid organisations, fully established in Australia, and they are specialists in home finance. This cannot be said of many other organisations which deal in finance. The building society movement knows the needs and has the facilities to handle repayments and all the matters concerning loans of this character. A considerable part of the funds of permanent building societies come from small deposits and the taking up of investor shares. This Bill gives added security to them and should encourage more private savings to be put into the societies - small amounts which are not big enough for independent investment or to be dealt with as approved lending. This Bill will encourage the small investors to put money into the permanent building societies which, in turn, will be approved lenders and therefore will add to the security of the small investors with the building societies.

If a mortgage market is developed, as I have mentioned, this will give increased liquidity to the funds of the permanent building societies so that they can meet any refunds of the investor shares that they may be called upon to pay out. I am looking forward to the part that permanent building societies will play as a result of this legislation. I pointed out that this is not the same as the State housing indemnity schemes which were mentioned by the Deputy Leader of the Opposition. These indemnity schemes are Government operated and controlled, in New South Wales at any rate. They are different from this scheme and they are limited in guarantee to only the excess of lending over normal with a very limited ceiling. In this Bill setting up this Corporation there is no naming of a ceiling. I presume there will be a ceiling but I also presume that it will go quite beyond the present basis applicable to certain organisations such as building societies and savings banks. I hope that it does go beyond that ceiling and that lending authorities are not hedged with restrictions on the borrower as they are in the State scheme. These schemes in the States do not apply to a wide variety of borrowers who will be able to benefit under this Bill, such as investors in renting projects. Of course they cannot be covered in the State indemnity scheme or in connection with the development of roads and other things that are mentioned in the Minister’s speech. Repairs and additions, residential attachments to professional and commercial premises, and so forth, are not provided for in State schemes, so there is very little comparison from the point of view of their effect.

I think that the big thing that will be brought about by the creation of this Corporation, if it is properly developed, will be the encouragement of new money from private sources into housing and home property investment. I sincerely believe - as a matter of fact, I could prove it if we had time here this afternoon - that one of the greatest postwar tragedies was the destruction of the incentive to invest private savings and capital in real estate in Australia.

This was brought about by the Australian Labour Party, both Federally and in the States, through the perpetuation of wartime controls in the postwar period. That is the basic reason for the destruction of confidence. It was a great tragedy and flowing from it there have been some extraordinary results in postwar days. I would remind honorable members that in pre-war days the great bulk of finance for homes, commercial and industrial property investment came from small investors who have been driven out of the market altogether by the effect of Government control. Trustee estates, superannuation funds and insurance companies have been driven out. Private banks have been affected to a certain degree, too, as also have been building and starr bowkett funds. There was no shortage of money in those days. People could get money at the current rate of interest. But very little money came from government sources, except through the War Service Homes Division. The sources to which we look and on which we depend now were unheard of in those days; yet there was no shortage of funds or of homes. I agree that there was a problem in relation to -

Mr Peters:

– Slums.


– Yes, slum conditions. That was a matter with which local government was called upon to deal. That was the only problem in pre-war days. In every suburb in every city in Australia there were “To Let” notices. There is no question about that. But that situation has gone because of what has happened.

We recollect - it is not wrong to say this in a discussion of this kind and I am not trying to be offensive to my friends on the other side of the House - that immediately the war ended the Labour Party made a deliberate attempt to socialise housing in Australia.

Mr Curtin:

– What is wrong with that?


– Labour tried to set up an Australian housing commission, but that was found to be illegal. There is nothing wrong with that proposition from the honorable member’s point of view and it is completely in line with what the Deputy Leader of the Opposition said in the House today. He said that he would nationalise land and use exclusively government money for housing.

Mr Curtin:

– Hear, hear! Give everyone a home.


– The honorable member will remember that in the first instance the then Labour Government tried to set up a Commonwealth authority to deal with this matter. Having failed constitutionally to do that, it then drew up the Commonwealth and State Housing Agreement, which the Deputy Leader of the Opposition has called the greatest piece of legislation ever enacted. Yet that legislation, which was drafted in 1945, made no provision whatever for home ownership or the encouragement of home ownership. It was only when this Government came into power and amended the legislation that the Agreement was used to encourage home ownership.

It is also true that Labour Governments in Australia, to the extent that they could, kept rent control on until they drove all investors in this field out of it. They created in the minds of the people a fear complex in relation to investment in real estate, both big and small. So the great flow of private money then sought other avenues. We all recollect the extraordinary rise in purchases of motor cars, television and radio sets, gadgets, household equipment and so forth, the company flotations that followed and the fringe banking investment which also followed and which attracted from people money which formerly went into sound investment. Labour drove money out of sound investment into other spheres. I believe that that was the primary cause of the inflationary trend which occurred in Australia. In my opinion, this is a very serious matter. This Bill is designed to prevent that sort of thing happening again and to give people proper encouragement.

I have said in this House before - I say it again with some knowledge and notwithstanding what other people may say - that there is no real shortage of housing in Australia today.

Mr Curtin:

– Oh, turn that up.


– The honorable member may say what he likes. There is only one State in which it would appear that there is some housing shortage; that is New South Wales, which is the only State which has retained the pegging of rents to 1939 values. In that State there is not really a housing shortage; there is a complete distortion of the occupation of existing premises, which is brought about by the system of controls which persists there. Can anybody, in their wildest dreams, believe that it is fair and just to peg rents in 1965 to values as they were in 1939? In my opinion, the New South Wales legislation is the most diabolical legislation that has ever been retained in Australia.

Mr Curtin:

– Would the honorable member abolish rent control?


– I am, not suggesting that it be abolished entirely. What I am suggesting is that rents should be brought more into conformity with conditions as they exist today. The present position is scandalous and offends our sense of British justice. It is difficult to understand how anyone in Australia could vote for a party or government which would perpetuate that type of thing.

I would not want to hurt people in New South Wales who would be affected as a result of changes. They should not be hurt. They could be provided for and looked after. However, in New South Wales there are tens of thousands of people who do not need the protection that is provided by this control system and who are living under it, using it to their own advantage and doing permanent damage to housing conditions in that State. This is a matter for the State Government. I know that many people who are not affected financially and are not interested financially in this matter find that their sense of justice is offended by this type of thing.

This afternoon we heard the Deputy Leader of the Opposition say that he would nationalise land and set up an organisation which would mean that housing would be provided by government money. The great difference between his thinking and our thinking on this matter is shown by this Bill, which is a means of encouraging a wider spread of investment, including investment by small people out of their savings and capital, in the greatest security that this country can offer, namely, its own land and housing for its own people.

This is a tremendously important matter. I again congratulate the Government and the Minister for Housing, who has a very ticklish job. My opinion is that this Bill is making history and that as the years go by the basis which is laid in this legislation - it is only a basis - will prove to be of immense value to the people of Australia. Many aspects of this legislation could be broadened for the benefit of the people, and 1 am sure they will be broadened. This Bill will increase the incentive for home ownership. It is supplementary to the Bill which was initiated by the Government and passed by this Parliament last year in order to encourage young people to save. I believe that this is a splendid Bill which will be supported wholeheartedly by the people of Australia.


.- Many of us, in our youth, read of the knight in shining armour rushing to the aid of people in distress; but as we heard the knight who preceded me in this debate, the honorable member for Bennelong (Sir John Cramer), we recognised that he had no answer for the large numbers of people in every State who are suffering as a result of the inadequacy of housing in Australia at present. If ever there was a brazen election speech designed to influence a State election, the honorable member’s speech was it. It is incredible that a man who probably has been an estate agent for many more years than he has been a parliamentarian could demonstrate such a lack of fundamental knowledge of the housing situation in the State from which he comes.

He contended that the Labour Party diverted private money from investment in housing. Of course, when we recall that Labour was last in office 16 years ago, we realise that the present Government has had plenty of opportunity to encourage private enterprise to move back into the field of housing.

We have heard a great deal about the Commonwealth and State Housing Agreement. It was a good agreement as initiated by the Labour Government in 1945. But this agreement has been mutilated, and the mutilation has been enthusiastically supported by the honorable member for Bennelong who preceded me in this debate. When we come to recognise the fact that 10 per cent, of the money over a substantial period was diverted to provide houses for serving members of the Forces, that a large proportion of the money meant for people on low incomes who would receive homes from the State housing authorities has been diverted to building societies, and that no effort has been made to ensure that that vacuum is adequately filled by the supply of money from banks and insurance companies, we can see that this Government has fallen down on the job.

The honorable gentleman contended that the housing shortage was limited to New South Wales. It is true that in New South Wales at the present time there are 28,000 approved applicants for houses from the Housing Commission. But let me mention figures for the other States, for the year 1963. The number of applications received by the State of Victoria in that period was no less than 8,492. For South Australia, the figure was 9,784. No figure is available for Queensland. The figure for Western Australia was 7,598 and for Tasmania, 2,191. These are official figures from the annual reports of the State housing authorities concerned. I believe that if an honorable member stands up in this place to make such an important allegation, he should be equipped with the facts. I express great regret that the honorable member for Bennelong has spoken so recklessly about this matter today. There are 75,000 outstanding applications with the various State housing authorities at the present time and, as I have said, only a proportion of those applications is the prerogative of the New South Wales Government.

I know that the honorable member has long been concerned about the rent control issue. Rent control in fact does not prevail at the present time in New South Wales except in regard to properties that were constructed before 1955, so there is little ground on which to quibble about rent control. What does the honorable member for Bennelong want to do? Does he want to exploit these unfortunate people who have been required to live in sub-standard housing in the inner city areas? If they are in old-fashioned houses, it is probably reasonable to contend that a pound of flesh has already been extracted from them. Let me say to the honorable member for Bennelong who is now leaving the chamber that the Labour Government of New South Wales will never apologise for its actions in defending people on low incomes and ensuring that they get housing at a reasonable rental. So, this contention about the failure of the New South Wales Government to look seriously at the housing problem can hardly be sustained. I wish I had more time to answer the honorable gentleman, but we are dealing with the Housing Loans Insurance Bill.

The Australian Labour Party, in the 1963 election campaign, made proposals which had some similarity to those contained in the Bill before the House at the present time. We did not contemplate that intending home owners would pay for the cost of insurance. In specific terms, we proposed that the Labour Party - we hoped it would be the Government - would guarantee loans to lenders. As a result of that proposal, we anticipated we would be able to attract some increase in the amount of money available for housing purposes. Of course, this was only a part of the scheme. We proposed also that there should be a great public housing authority, set up to provide people with housing loans on a low deposit and low interest basis. It rather intrigues me that the Commonwealth’s limited concern with insurance related in the first place to the Export Payments Insurance Corporation and now to the proposed Housing Loans Insurance Corporation. Each of these instrumentalities is subject to taxation and is a non-profit making concern. On the other hand, the general field of insurance is extremely lucrative. One wonders why the Government has never contemplated moving into the lucrative field of insurance where public competition would serve a very valuable purpose. It would have a stabilising effect. Doubtless, monetary benefits would be derived which could be directed to housing purposes.

When we have a look at this Bill, I think it is fair to contend that even as things stand at the present time it is competent for a lender to go to an insurance company and require as a condition of a loan that the borrower should pay the cost of insurance against loss. But nobody has ever been interested in doing this. Surely it is competent for insurance companies lending money for housing purposes to require their clients to insure against loss. After all, if an insurance company was confronted with this problem and if it felt that the element of risk involved in a loan was the main problem, one would think that it would use its own resources towards this end. But there has been no precedent for that to my knowledge in Australia. Even the insurance companies have not seen this action as the answer to their problem. Yet, the Government apparently considers this proposal to be the priority housing issue of the day.

What is the problem in fact? It is the limited amount of money available for housing. The Minister for Housing (Mr. Bury) has said - in different words, but this is what he meant - that the loans being made available for housing purposes are too small a part of the value of the home and that he undertakes to encourage by means of this insurance proposal the making available of a larger proportion of the value of a home by way of a loan. At the present time, borrowers are forced to take second mortgages at high rates of interest. Fairly enough, the Minister has contended that this is undesirable. But how can it be overcome? This is the issue about which the House is concerned at the moment.

I feel that the Government itself should set the example. After all, we can establish, by a quick and cursory look at any annual report relating to the War Service Homes Division, that the maximum loan available to an applicant for a war service home is £3,500. So, the Government is guilty here of the mistake about which it has expressed concern. That is to say, almost every successful applicant for a war service homes loan is forced to take a second mortgage. Figures have been made available from time to time to indicate that many applicants obtain these mortgages at fantastic rates of interest. In fact, people who are waiting for their war service home loan to come through after it has been approved - and the waiting period, I think, is currently in the vicinity of 20 months - are forced to seek temporary loans at high rates of interest. One wonders why the Government does not come to grips with this problem. The fundamental answer to this question is that insufficient money is made available for war service homes purposes. The amount is spread over a large number of people on the basis that it is better to give 100 people £2,000 than it is to give 200 people half that amount. Of course, that is a reasonable attitude to take. Larger amounts of money are the answer to this isolated part of the problem regarding war service homes. I believe that this argument can be broadened. The granting of larger amounts of money is the real answer to the housing problem which besets us at the present time.

Many proposals have been made with respect to the War Service Homes Division. I noticed something today when going through some figures which to me constituted an incredible revelation. The figures gave the amount of capital that has been repaid to the War Service Homes Division. The amount was £128 million, which was equal to the amount of interest that has been paid. Of course the war service homes proposition is the best housing arrangement that can be obtained in the Commonwealth of Australia at present, with money being made available at 3j- per cent, interest. Yet the War Service Homes Division has been able to collect as much in interest since its inception soon after the conclusion of the First World War as it has collected in capital repayments. What kind of lucrative racketeering is indulged in by many of the other lending authorities, including some of those which are to be approved for the purposes of the legislation now before us?

I suggest to the Minister that a special loan should be launched for housing purposes and that people should be encouraged to realise that they can make a worth while contribution towards the solution of the problem by subscribing to that loan. I was interested to see, from the 1962 quinquennial analysis of the Commonwealth Superannuation Fund, that reserves to the extent of £93 million were available in that fund. I think that the figure has now risen to £104 millions. 1 wonder why Public Service employees are not assisted in respect of housing by having some of the reserves deployed in that direction. We know that the Commonwealth Superannuation Fund grants loans to local government authorities and that it has even granted a substantial loan at low interest rates to David Jones Ltd. in Sydney. From my standpoint, and the standpoint of many of my colleagues who sit on this side of the House, the housing needs of the people must always take priority if there is ever any conflict between those needs and the requirements of a big concern like David Jones Ltd.

I suggest to the Minister that he might also consider the need to require the banks to make more of depositors’ money avail able for housing purposes. I have loads of figures that 1 could cite in this connection to bear out the soundness of my recommendation. I also suggest that the insurance companies might be encouraged to do likewise. It is the total amount of money that is the fundamental problem today, and a great deal could flow from action initiated by this Government.

At the present time £3,500 is the maximum that one can obtain in the way of a housing loan from a bank, and £3,700 is the maximum available from building societies. In the case of the War Service Homes Division £3,500 is the limit. In regard to each of these three major sources of home finance there are ways in which the Commonwealth can affect the situation, but it is doing nothing in this direction. I was interested to read the most recent issue of the Building Industry Research Committee’s “ Newsletter “ which had something to say along the lines I have been referring to. It said -

When the supply of money for housing is limited, most lenders prefer to spread it among as many people as possible. It is not difficult to see that a bank, say, would rather lend a limited amount to three customers than a large amount to one. This type of rationing will only be overcome when the overall amount of finance available becomes greater.

This comment is directed specifically towards the Housing Loans Insurance Corporation. I say to the Government that a far more thoughtful approach is needed to the question of housing than is displayed in the legislation before the House, expecially when we consider the increase in the birth rate in the immediate post-war period. I have before me some figures made available by Mr. Frank Purse, the Federal Secretary of the Building Workers Industrial Union of Australia, who applies himself to this subject with great enthusiasm After referring to the figures compiled by Dr. Hall of the Australian National University, and which have been available to all honorable members, indicating the great increase in housing demand, Mr. Purse summarised the situation in this way -

I have had a look at the marriage rate and find that at 82,472 for the year 1963-64 it is 10.000 greater than it was 8 years ago.

Of course you can go on from that starting point and continue to apply Dr. Hall’s figures, and you must concede that large amounts of money will be needed in the future, larger amounts than have ever been required before. New ground has to be broken, and the proposal now before the House is not imaginative enough.

Summarising some of the major problems in the housing field, I think the comments I am now about to make are fair and appropriate. Home finance arrangements need a drastic overhaul, and this legislation does not purport to carry out such an overhaul. It is estimated that 400 homes are awaiting buyers in the Australian Capital Territory at present and that 3,000 homes are awaiting buyers in Victoria. These are empty homes. Where did I get this information from? Not from the secretary of a builders’ union, not from some Labour source, but from Mr. J. R. Hall, Managing Director of the Savoy Corporation Ltd. This concern has established thousands of homes and its Managing Director says that there is something wrong with present financial arrangements because thousands of homes are going begging for the reason that people have not been provided with the necessary money to purchase them.

The instability of the building industry is demonstrated by the fact that 270 builders were declared bankrupt last year. Of course many builders wait as long as 18 months for the final payment to be made on account of houses that they have constructed. This is the kind of situation that should be looked into, but this legislation does nothing about it. Interest on second mortgages is usually 9 per cent, flat, and the average second mortgage last year was £900. The interest payments on this amount usually come to about £2,000.

Then there is the matter of deposits. It is estimated that the home purchaser requires £2,000 deposit to avoid involvement with second mortgages. Then, of course, there is hire purchase finance to be considered. When you think of a home you do not think merely of a house and a block of land. Furnishings and appointments in the home are also involved. Many young couples find themselves saddled with a large mortgage while also having to meet heavy hire purchase commitments.

Mr. Hall went on to say that in his view the Housing Loans Insurance Corporation is not needed, that there are no bad debts in the building industry at the present time. I do not know whether the Minister can give us evidence of the incidence of bad debts in the building industry. I would be very interested to hear from him in that connection. Mr. Purse of the Building Workers Industrial Union had some comments about interest rates. He took the case of a home costing £3,100 and said that a loan repaid at 5 per cent, over 30 years involved a repayment of £4 2s. a week or a total repayment of £6,398. In other words the repayment is more than double the amount borrowed. This involved a loan obtained at an interest rate of 5 per cent., but of course it is almost impossible to obtain money at 5 per cent, at the present time. Obviously this is an aspect of the situation that needs to be considered.

The Opposition, Mr. Deputy Speaker, is not opposing this Bill. We feel that it does little enough anyway in face of the great problems confronting the people at the present time. We contend that the establishment of a corporation to insure housing loans is but a side issue, a solitary component of a great complex. New finesse is needed to overcome the inadequacy of housing. We have seen a number of these gimmicks. The last one was the home savings grant of £250. We know all the anomalies in that scheme, and we have them listed so that we can deal with them at the first opportunity. We recall, for example, that the secretary of the Administrative and Clerical Officers Association, who came before the Labour Party’s housing committee recently, said that the scheme is such a shemozzle and the rules are so complex that at the end of December there were 2,700 applications outstanding in the Sydney office alone. The officials just could not process the applications. There are so many tricks and hazards involved that one needs an attorney to interpret the legislation. Yet that was the type of thing that was held out as a bait before the last general election. This housing loans insurance proposal was also part of the electioneering bait. So, one and a quarter years after the Prime Minister (Sir Robert Menzies) delivered his impetuous election speech, we find the badly harrassed Minister for Housing (Mr. Bury) coming here with this ambiguous Bill. Some honorable members might be inclined to support the measure, but it is so ambiguous that we do not know what is to be the cost of insuring a housing loan. We do not know whether the premium rate is to be one-half per cent., five per cent, or ten per cent. It may be on a sliding scale. I do now know, and neither do any other honorable members. All we know is that honorable gentlemen opposite are proposing to require young people, who are confronted with the need to borrow money, to pay a premium to insure the lender against loss. The borrower and not the lender will ultimately pay the premium. It is fair to say that this is an ambiguous Bill.

I seriously believe that the Minister has not worked out the premium rate himself at this stage. I invite him to tell me, by way of interjection if he likes, what the premium is to be. Is it to be one-half per cent., one per cent., two per cent., or is it to be on a sliding scale? As I said, 16 months have elapsed since the elections were held. We have given the Government a fair opportunity to put something down in black and white.

The Bill is designed to help the lenders and not the home owners. If the Government is concerned about the home owners, it could do some of the things that I have proposed and some which I hope to suggest before I sit down. The Bill has been represented as some imaginary cure-all, but it can have only a mild remedial effect in a limited area of the home finance dilemma as we see it in Australia at the present time.

I want to say something about the things that the Bill will not do, but before I do so I will refer to some of its peculiar characteristics. The home lending authorities, such as the banks, the building societies and the like never sought the proposals contained in the Bill. I have indicated that if the insurance companies had thought it worthwhile to insure against losses on loans, they could have made insurance a condition of their own loans and so could have made money out of the process. But they never asked for it. The Bill is d’esigned to make it possible for any lender to insist on a loan being insured against loss, even though only a small proportion of the value of the home is being loaned. I doubt whether the Minister can deny that. Under the Bill, in some instances the cost of a home could be increased and the borrower would derive no benefit at all. The borrower could be required to insure a loan and pay the premium and yet he might not receive an increase in the amount of the loan. For example, a young couple can go along to an insurance company, a bank or a building society at the present time and receive a loan of only 70 per cent, of the valuation of a home. Under the Bill they may still receive only 70 per cent, but be required to pay the cost of the insurance to the lender. So, they will derive no benefit at all.

I challenge the Minister to indicate whether or not the Bill specifies that there has to be a degree of benefit; that the loan has to be 80 per cent, or 90 per cent, of the valuation of the home. The Minister in his second, reading speech said that loans might be made up to those percentages, but there is no guarantee that they will be. So, a surcharge, an added burden can be imposed on young people for which they will receive no benefit. What honorable member would vote for an ambiguous bill of this type? I suggest to honorable members opposite that they ought to do their homework on this matter and on many other matters.

The Bill provides no guarantee that its stated objectives will be fulfilled, namely, that larger first mortgage home loans will be provided. It excludes any mention of the cost of the service which it facilitates, that is, the rate of the insurance premium. In my view, it is designed to project housing finance into the squalid scramble for dividend’s and profit through the market for housing mortgages advocated by the Minister in his second reading speech. No attempt has been made to encourage the public sector of our economy to provide more money for housing. The Bill is designed to cause the business of raising money for housing to be thrown into sharp competition with Mount Isa Mines Limited, with L. J. Hooker Limited, with the hire purchase rackets, with Ansett Transport Industries Limited and companies of that kind. Who will put money into housing if it is more profitable to invest with these other concerns? We will not attract the major investor. We might attract the minor investor who wants a safe and secure investment. But, of course, one can put money into some of the group investments and get a much more lucrative return than by putting it into building societies because there is a limit to the price that people can pay in interest for money for housing. It is not a profit making business, and this is the fundamental point where the Government is going wrong.

Then, of course, I am appalled at the proposal that we will encourage investment from overseas. There has been a great deal of criticism about this matter from the Housing Industry Research Committee. It said -

The ability of the scheme to attract overseas capital, however, yet remains to be proven. Inquiries have already been made of overseas interests, but no definite answers can be given. It does not appear, at this stage, that the interest rate will be high enough to attract overseas capital to any extent.

The Minister said that he wants overseas capital to be invested in this country to provide houses for young Australian people. He wants the young people to be at the mercy of the Hong Kong millionaires and the entrepreneurs in the United States and Great Britain. What has happened, anyway, about the repatriation of profits and our balance of payments, which we debated yesterday as a matter of public importance? These are important matters. We do not want to put the young people of this country in pawn to overseas interests.

We contend that the Bill is not the answer to the housing shortage because there are so many facets of it which can be criticised. Unfortunately, time will not permit me to go through all the criticism. The Bill is a steal from the American and Canadian schemes but when you see the tremendously comprehensive governmental approach to housing in Canada and the United States you can see that this Government is obtuse and uninformed- It has no genuine concern about, and certainly no answer to, the housing shortage. I hold in my hand a list of the tremendous ramifications of the United States Housing Authority, and I can see that this Bill is but one solitary, infinitesimal, ineffective part of the total complex scheme which is needed.

I indict the Government for coming up once again with too little too late. At the committee stage of the Bill I, with my colleagues, hope to devastate the Minister and indicate to the people that this proposal is not the answer to the housing problem.


– Order! The honorable member’s time has expired.


.- The honorable member for Hughes (Mr. L. R. Johnson) said in his closing remarks that he hopes to devastate the Minister for Housing (Mr. Bury). I think it is obvious from the speech we have just heard that the honorable member for Hughes does not have a first knowledge of the Bill. I do not really see how he can go about this proposed devastation. During the whole of his speech he showed the usual venom and jealousy that we have come to expect from members of the Opposition when the Government puts forward a proposal that is completely new. This scheme will be completely and happily accepted by the people of Australia. The honorable member spoke about the home savings grant of £250 to home builders as a gimmick. I can introduce him to many young Australians who are endeavouring to build their home and who are delighted with the policy of the Government in giving the £1 for £3 grant.

I will demonstrate the insincerity of the remarks of the honorable member for Hughes about the Government’s insincerity towards home building, later in my speech. I believe the Government should be congratulated on the introduction of this Housing Loans Insurance Bill. The first thing which the honorable member failed to recognise is that the measure gives lenders increased security against borrowings by home builders and takes the risk out of lending because the possibility of loss of capital and interest has been removed. I think it is true to say that housing is the centre of both social and family life in Australia. Since coming into power in 1949 this Government has tried to encourage home building and home ownership by young people throughout the Commonwealth. It has done this not only through the Commonwealth and State Housing Agreement but also - for exservicemen - through the War Service Homes Division and, for aged persons, through the Aged Persons Homes Act. It has endeavoured to make opportunities available for every Australian who desires to own his own home.

Here are the figures about which the honorable member for Hughes talked so glibly: In 1962-63 this Government voted a total of £97 million for home building throughout Australia, and this was no light figure, considering its total Budget commitments. Indeed, there was just on £300 million spent on home building in Australia in that year, the money coming from banks, building societies, Government sources, life insurance companies and private resources. So one can see that the total sum available for home building across the Commonwealth is fairly heavy. This Government’s voting of £98 million for home building in 1963-64 demonstrates its sincerity of attitude towards the right of each individual to purchase his own home.

I want now to demonstrate that, despite the attitude of the Government in this regard, there is one section of the community which is unable to take advantage of the money made available for home building because of the generosity of this Government, through housing societies, and through banks and insurance companies. I am talking about the people who live on rural holdings outside the towns. I want to compare their situation with that of the business man, the manufacturer, and the employee living in a city or town. Let us take the case of a business man who, perhaps, has some capital tied up in his business in a working overdraft. Despite the fact that he may have a very minimum equity in the business he may be able to go to a housing society, insurance company or the homes loan division of a savings bank and borrow enough money to build himself a good home in a town or in the suburbs of a city. In this case the lenders are assured of the security of the proposition because the home has a ready sale, being built in a populous area. The case of the employee who works for the business man is somewhat similar. This young man may be making his way in the world and although he may be drawing quite a low wage at this stage he is still able to apply for and obtain a State Housing Commission home through the various State agencies, or go to a housing society and obtain a loan and build his house in that fashion.

This demonstrates that the greater proportion of home builders or those desiring to build homes are catered for by this Government in association with the State Governments. But, as I have said, there is one section of the community which is not catered for and which we of the Australian Country Party believe should be catered for. I refer to those who live on rural hold ings. They do not have opportunities to borrow from the same places as the people I have cited. If the young farmer who owns a property and has a working mortgage goes to his bank and asks for a housing loan the bank manager is likely to say one of two things to him. The young farmer may say to the bank: “I want to build a home “. The bank manager may say in reply: “ We would like to help you but, with the tightness of credit at this time, there are too many demands on our money and we cannot put money into home building. We have to keep our money for building dams and increasing the productivity of farms and therefore we cannot assist you “; or the bank manager may say: “ We would like to help you, but you will have to repay this money in a maximum of four or five years.” Because of the shortness of the term of the loan the young farmer, in assessing his budget possibilities, probably sees that he cannot meet the short term repayments. If he had available to him the longer term repayment available to his cousin in business in the town or city - a 30- year term - he would be well able to meet the terms. As that is not the case the bank manager has to refuse him the loan. This source of finance is cut off from the young farmer.

He may then go to a savings bank to endeavour to get a loan, but be told: “ It seems that your security is tied up by mortgage with the trading bank, and therefore you should apply to the trading bank for a loan “. So that source of finance is also cut off. It is obvious that this section of the community has not the same facility to borrow long term loans for housing as have the other people I have mentioned. This also affects ex-servicemen who have gone on the land and who wish to build homes. They go, perhaps, to the War Service Homes Division, which may say to them: “ If you are prepared to excise a living area from your property for your house block then we are prepared to grant you a loan on first mortgage “. This man may already have a mortgage. Therefore he has to get his mortgagee to accept a second mortgage so that he can give the War Service Homes Division a first mortgage and he must excise a portion of his land comprising a living area in order to obtain this loan. It can therefore be seen that very few ex-servicemen are able to make full use of loans from the War Service Homes Division.

Mr Daly:

– Then it is time the Government did something about it.


– I am about to ask the Government to do something about it and you can rest assured that this Government will do something about it. There is a whole area of people that the generosity of this Government does not at present benefit. I drew the attention of ‘the Minister for Housing (Mr. Bury) to this matter on 26th August last, as recorded at page 600 of “ Hansard “. My question was -

Although the Commonwealth has made annual grants to the States for housing amounting to hundreds of millions of pounds over the years not one penny of the amount has been made available to house farmers or other rural workers. Accordingly will the Minister assure the House that the proposed Commonwealth legislation relating to housing mortgages will pay due regard to the need of this vital sector of the community?

In reply the Minister said -

Once again I cannot emphasise too strongly that the distribution of funds provided under the Commonwealth and State Housing Agreement is a matter for the State Governments concerned.

This states the position as between the State and ‘the Commonwealth. The Minister went on to say -

Certainly, in considering the housing loans insurance scheme we shall pay regard to rural areas just as much as to any other area.

The Minister mentioned this problem in his second reading speech on this Bill, when he said -

The Corporation may ensure a loan secured by a first mortgage made to a fanner for the erection of any type of dwelling on bis property. As the Corporation will not be empowered to insure the repayment of a loan made to acquire land for farming and commercial purposes, the amount of an insurable loan made for farm housing will be determined in relation to the appraised value of the dwelling or dwellings proposed to be erected.

The Minister has recognised the problem. Having regard to the situation to which I have directed his attention, I hope that he will go further in an endeavour to find a solution so that people who live in rural areas will have the same benefits when borrowing money for home building as do those who live in other areas. This Bill will have only a minimal effect on the total borrowings by people in rural areas. It is my contention that there must be a new look at the opportunities that exist for borrowing for rural housing purposes. Dis-

page 161

F2518/65.- «.- [S\

cussing this point with the Minister some time ago, I was told that the Commonwealth and State Housing Agreement is due for renewal in June 1966. I hope that when the negotiations are taking place consideration will be given to this aspect.

As I mentioned earlier, the Minister has said that this is a State responsibility, but no State makes provision for this aspect Indeed, information given to me by a colleague in another place, Senator Prowse, and by the honorable member for Canning (Mr. Hallett), proves this to be the case in Western Australia. In that State, which has a city population of 57 per cent, of the total and a country population of 43 per cent., we find that 62 per cent, of the funds made available for house building went to the city areas and only 8 per cent, to the country. The disposition of the remainder of the funds has yet to be considered. In any case, probably most of the 8 per cent, that went to the country was used by home builders in the large country towns. I hope that the Minister will give thought to this problem when the Commonwealth and State Housing Agreement is under review.

It is no use the honorable member for Hughes or any other Opposition member, particularly from New South Wales, decrying the Commonwealth Government’s actions in this matter, because the State Labour Government of New South Wales certainly has not faced up to the problem. New South Wales has a Department of Decentralisation which spends a few hundred thousand pounds a year in an attempt to decentralise industry while at the same time the State is spending something like £20 million on an opera house. The State Government just has not faced up to this problem. My advice to the electors of New South Wales is to vote for Country Party candidates in country areas and for Liberal Party candidates in other areas when the State election is held in a few months, and put into office a government which will tackle this problem.

I suggested to the Minister on a previous occasion that he might study the United States Farmers’ Home Administration Act. After having studied the scheme he was kind enough to write to me, directing my attention to the fact that such a scheme in Australia would have to be implemented by the States. During the negotiations between the Commonwealth and the States I think it would be proper for the Minister to propose to the States that they adopt some scheme along the lines of the American one, which gives young farmers an opportunity to borrow money and repay it over 33 years. This is a much better proposition than the repayment period of five years at 4 per cent, interest which is offered by the banks in Australia. In America the farmers are able to build new homes for themselves and for their workers. I point out that practically the only way of attracting employees to country areas is to offer them decent accommodation. In addition, the American farmers are able to improve homes already on the properties. The security for this is an equity in the farm itself. Because of this scheme, the standard of farm homes in America has been improved tremendously.

Certain members of the Australian Country Party who have been studying this problem have suggested that a caveat system be introduced. I hope that the Minister will propose this at the forthcoming meeting. I believe that the system is used by the State Electricity Commission in Western Australia. The Commission is granted the first charge on the income of a property. One way in which a farm owner could obtain a home and repay the advance to the lending authority over, say, 30 years would be by granting a first charge against the income from the property.

This Government has been very sincere in its attempts to improve the ‘housing situation in Australia. There is no doubt that its record is very good. I hope that the Minister will take note of the points that I have raised and will advance them when the Commonwealth and State negotiations are taking place and that in due course some of the suggestions will be implemented.

Wide Bay

.- The honorable member for Gippsland (Mr. Nixon) criticised the honorable member for Hughes (Mr. L. R. Johnson) for having digressed a little from the text of the Bill. I will not criticise the honorable member for Gippsland for having fallen into the same error. I believe that the provision of housing is a matter of the utmost importance. Much more will have to be done by this Government before the housing problem will be solved and before the needs of the many thousands of people already on the waiting lists will be met. In addition, we must not forget the claims of the rising generation of Australians and the migrants coming to this country.

I hope that the objectives sought by the Minister for Housing (Mr. Bury) and expressed in his second-reading speech will be attained and that this legislation will assist those most in need. The Minister stated -

The scheme aims to assist people to borrow, by means of a single loan secured by a first mortgage, the difference between available personal savings and the cost of a home suited to their requirements.

If this Bill does only that, the Minister will have made some contribution to solving the problem of providing homes for the people. But both the Minister and the Government are deluding themselves if they think that this is the whole answer to the problem. This proposal by no means comes up to similar proposals implemented in Canada, United States of America and, I believe, New Zealand, where mortgage guarantee schemes are already in operation.

The success of this scheme will depend to a large extent upon the co-operation of the lending authorities in Australia - in the main, banking and insurance organisations. As most of these are already interested in subsidiary companies which offer second mortgages at a very high rate of interest, one wonders how they can become interested in lending their additional funds for housing at the ruling lower rates of interest. The measure hopes to encourage these lending authorities to lend a greater proportion of the value of a home, increasing the loan from somewhere near 70 per cent, up to 80 or 90 per cent, of the valuation, or even to 95 per cent, in cases where a borrower’s capacity to repay appears to be unusually high.

One of the problems facing purchasers of homes in recent years has been meeting second mortgage payments. The system of second mortgages has added considerably to the cost of housing.

It has contributed to much discord in homes and, in some instances, has in fact disrupted and broken homes completely because the husband and wife have both had to go out to work to earn sufficient to meet the cost of the repayment of the original loan and the second mortgage. This point has been dealt with in numberous debates and many honorable members have referred to the survey conducted by the Brotherhood of St. Laurence into the methods used by young couples, particularly those in the lower income group, to obtain the finance for the purchase of a home and to get around the necessity of raising a second mortgage. Many of the wives who have gone out to work to bring in extra money have found that they have acquired a certain measure of independence, even though married, by bringing money into the home. In many such instances, this has led to disruption in the home and eventually the breaking up of the marriage. This is a most unsatisfactory situation. If the Bill will do something to eliminate the need for second mortgages on homes, it will be worthy of praise. I wish the Minister and the Government success in seeking to achieve this objective.

The Minister stated that he hoped that foreign capital could be attracted into this field of housing finance. My friend, the honorable member for Hughes, spoke of speculators. I hope that the Minister has in mind housing schemes for migrants financed by the governments of the countries of origin, as is at present being done by the Netherlands and Italy for migrants who have come here from those countries. I think it is somewhat to the discredit of this Government - not of the Minister for Housing, but of the Minister for Immigration (Mr. Opperman) and the Minister for External Affairs (Mr. Hasluck) - that similar arrangements have not been made to provide housing for British migrants who come to Australia. I understand that some years ago the Minister for Housing in the New South Wales Government sought to interest the then Minister for Immigration, when they were both in London, in having a joint interview with the British authorities to seek their cooperation in providing homes for immigrants coming from the United Kingdom to Australia, possibly by the establishment of some sort of building society.

It appears that the societies that have been formed by the Netherlands Government and the Italian Government in Australia are doing much to help the migrants from those countries to settle down here, purchase their own homes and become assimilated into the Australian way of life. But nothing of this kind has been done for British migrants. Now that we have in the Commonwealth sphere a Minister for Housing, I hope that he will take up this matter with the Minister for Immigration with a view to making finance available, through the United Kingdom Government, to enable migrants from Britain to build their own homes in this country. We find many instances of migrants becoming disgruntled because they have been unable to obtain homes, and then returning to Britain. It is very pleasing to note that many of them, after returning there, soon afterwards decide to return to Australia because they have come to realise the benefits that they enjoyed while they were in this young and growing country. I believe that the provision of homes for British migrants is of prime importance and that nothing would be lost by trying to interest the United Kingdom Government in a scheme similar to those already sponsored by the Governments of the Netherlands and Italy.

This Bill could be of assistance by making it easier to finance the purchase of existing homes. In inner city areas and heavily industrialised suburbs, particularly, we find that many dwellings are old, though most of them may have been kept in a reasonable state of repair. It is very difficult to obtain, over a reasonable term and at a reasonable rate of interest, finance for the purchase of a home that is 8 or 10 years old, regardless of its structural condition and the manner in which it has been looked after. In many instances, an existing home in an inner city area is more suited to the needs of a young couple setting up home, because it is closer to the husband’s work. Many of these dwellings are larger than newer ones and therefore may be better suited to the requirements of young couples than the smaller, new homes in outer suburbs. However, because finance for older houses in inner areas is not readily available on reasonable terms, many young couples are forced to buy a block of land in an outer suburban area far removed from the husband’s place of work. As a consequence, the husband may have to spend one hour or more each day travelling to work. A young couple may have to build or buy a new home in an outer suburb because loans repayable over long periods and on terms suited to the husband’s income are available only for new dwellings.

Recently, I had the privilege of talking to Mr. S. F. Arneil, who, I believe, is well known to the Minister, for he is President of the New South Wales Credit Union League, and has made repeated approaches to the Minister to have savings and credit unions recognised as being eligible for .the grant of £250 or part thereof under the homes savings scheme. I use the words “or part” because, although many people have been able to obtain the full £250, probably the great majority of those seeking the grant have been able to obtain only part of this amount. Furthermore, many of those who have obtained the full sum of £250 have been less in need of it than have been many who were able to obtain only part.

In conversation with members of the Labour Party housing committee, Mr. Arneil quoted the case of a couple who were seeking funds to finance the purchase of a home for which they required a loan of £3,200. I repeat that existing homes in inner city areas are cheaper than new homes in outer suburbs. In the case mentioned by Mr. Arneil, the husband was in a reasonably good position and considered that he could repay a loan at the rate of £46 a month. After obtaining a loan and making repayments for 28 months at this rate, he found that the burden was becoming too heavy and the effects on his family were too severe. His wife and family were doing without various things so that the repayments could be kept up. The rate of £46 a month is a very heavy rate of repayment. Over 28 months, repayments totalled £1,288. The borrower inquired of the lending company by how much he had reduced his indebtedness and learned that it had been reduced by only £34. Mr. Arneil told me that he was able to assist this man by arranging a loan of £2,200 from a building society and another of £1,000 from a credit union. This loan from the credit union was secured by what we call a second mortgage. Under these arrangements, assuming that the total repayments of £1,288 over 28 months had represented repayments of £560 to the credit union and £728 to the building society, the borrower’s overall indebtedness would have been reduced by £726, not £34 as had happened owing to the unfavourable terms on which the original loan of £3,200 had been obtained.

Another point arises concerning the purchase of old homes in inner city areas. This is a matter that has some relation to the latter provisions of the Bill. Basic services are already available in inner city areas. There are main roads with kerbing and guttering, sewerage and water services exist and parklands are available. As the Deputy Leader of the Opposition (Mr. Whitlam) pointed out, the provision of all these services, facilities and amenities is part of the overall task of providing homes. All these services are already available in the inner city areas. People who must move to the outer suburbs find that they must pay the cost of these services and they borrow to pay the local authorities.

Clause 38(3.) of the Bill permits the Corporation to pay that part of rates or taxes which may fairly be regarded as being in respect of services. This is only just. It enables the Corporation to pay rates in respect of offices it occupies. In many cases, the Government does agree to pay rates. However, local authorities are frequently left with debts of hundreds of pounds in respect of rates on war service homes that are resumed. The local authorities lose completely in these instances; they cannot make any claim to recover the outstanding rates. I believe that the time has come when the Commonwealth should recognise its responsibility for rates and I will probably speak again on this aspect during the Committee stage.

When legislation is introduced with the object of encouraging people to make finance available for housing, some action should be taken to reduce interest rates. I have examined information regarding housing in other countries and I find that the most common rate of interest on housing loans is three per cent. New Zealand has made an effort to help those on low wages by offering loans at the rate of 3 per cent, to breadwinners whose incomes for the preceding 12 months did not exceed £1,000, and this amount is increased by £50 for each dependent child. This assists those on low wages to purchase homes. Nothing in this Bill will assist a person with a low income to purchase a home and it falls far short of the action that is required to meet housing needs in Australia.

Many honorable members on both sides have referred to the Housing Industry Research Committee. The Committee has done much research into housing needs. While it accepts this Bill, it does so in a very backhanded way. This is shown in the latest issue of its bulletin. It is very hard to see where additional finance will be found. The people to whom we will look to provide this finance are already lending money on second mortgage at a much higher rate of interest than they could otherwise have obtained. The honorable member for Hughes referred to a statement that the banks have only a certain amount of money available and would prefer to spread it over a number of people instead of giving a larger loan to one person. This comes down to a matter of finance, and we look forward to the Government taking some action to provide additional finance. The Australian Labour Party has been criticised for asserting that this is a matter in which the Government should act. This measure, with supplementary measures, could be of considerable benefit to those who are seeking homes, and I have in mind especially young Australians who are about to- marry and are thinking of purchasing a home, and migrants. Perhaps the Minister has a secret weapon that he can use to convince lenders that they should divert their funds from loans at high interest rates to loans at the ordinary housing rate. The measure falls far short of the Government’s stated intentions. I will have more to say during the Committee stage.


.- The Minister for Housing (Mr. Bury), when introducing the Bill said that its purpose is to establish the Housing Loans Insurance Corporation to insure lenders against losses arising from the making of loans for housing. I prefer to see its purpose as the fulfilment of the Government’s policy, which is to assist every Australian family wanting to own a home to obtain one on the best possible terms. The Bill will not of itself provide any additional money for housing, but the Government hopes that the provision of the guarantee on approved loans will result in a great deal more money being made available for housing and that this money will be made available at reasonable rates of interest because the lender will be insured against loss. The honorable member for Hughes (Mr. L. R. Johnson) said that the

Bill is designed to help lenders. He said that it is designed to divert money to a scramble for dividends. I think that this is a shocking statement and I venture to suggest that nothing the Government could do would meet with the approval of the Opposition, unless it completely socialised the building industry. Opposition members say, “ Hear, hear! “ If the building industry were socialised, we could say goodbye to all types of individual architecture in Australia. I remind Opposition members that far more people are buying their homes under this Government than ever tried to buy their homes under Labour.

It is a fact that the borrower will not be insured against a loss of any kind, but because of the Government’s guarantee lenders will be able to make loans on terms that will bring home ownership within the Teach of many families that could not otherwise have afforded it. Surely this is of benefit to the borrower. The legislation will provide insurance for loans made to enable persons to buy a home, to build a home, to discharge an existing mortgage, to finance additions and alterations and to pay for both road and sewerage construction. No provision is made for the re-negotiation of a second mortgage. People who advance money on second mortgage are already receiving a very high rate of interest. In my opinion, they have security enough and are not entitled to the protection that should be afforded to those who lend money at reasonable rates of interest. At present, many people have not sufficient money to meet what is known as the deposit gap. They have to borrow money on second mortgage at rates ranging from 6 to 12 per cent. flat. This means that they are paving anything from 11 per cent, to more than 20 per cent, per annum. When money is repaid at regular monthly or quarterly intervals without any adjustment being made for the amount of principal that is repaid, the actual rate of interest is much higher than many borrowers may realise.

The Prime Minister (Sir Robert Menzies) is reported as having said -

We are making a genuine attack on high interest rates on second mortgages.

There is every reason to believe that this Bill will bring about a reduction of interest rates by providing more money for housing. This is not just my opinion. I want to quote two authorities. One is Mr. N. Bluett, who is Secretary of the Civic Co-operative Building Society in Canberra. He was reported in the “Canberra Times” of 20th June last as saying -

This will mean increased investment in societies, which will then be able to increase their lending rate sharply. The scheme could result in a swing away from fixed deposits and other solid debentures into Government guaranteed housing investment.

Mr. John Eddy, who is the financial writer for the Melbourne “ Herald “, said on 21st November 1964 -

The Housing Loans Insurance Corporation should be a great help because it will encourage lenders to provide money for houses.

By providing a government guarantiee for loans representing up to 95 per cent, of the valuation, the necessity for borrowing money on second mortgage is almost eliminated. Most couples should be able to obtain all the money that they require in a single amount secured by first mortgage. By providing this insurance cover for lenders against losses on money lent for housing, the Government hopes that an increased percentage of the nation’s savings will be available for housing. Indeed, df we are to maintain our present rate of progress and our present migration programme, it is essential that a greater proportion of money should be made available for home building.

The Minister said in his second reading speech -

In offering to insure housing loans we hope to attract additional overseas capital into the Australian home building industry.

His hopes must surely have received a severe jolt by the recently announced decision of the United States President to restrict overseas capital outgoings. I should like to make some passing reference to this because I believe that the policy of the U.S. will have at least a detrimental effect on the hopes and aspirations of those who support this Bill. This subject was referred to by the honorable member for Hughes (Mr. L. R. Johnson). I should like to say at the outset that I have a very great admiration for the U.S. people and the American Government. I believe that all Australians are grateful for the part that America played in this part of the world during the last war and also for the colossal job that the U.S. is doing almost single handed, playing a lone part in the maintenance of freedom in South East Asia today.

I believe that the U.S. Government sometimes is so busy looking to distant horizons that it overlooks problems that exist virtually on its own doorstep. I do not know how many honorable members read a newspaper cartoon which is written by Al Capp. A few weeks ago the cartoonist was dealing with the locality of Dogpatch, which in the cartoon is a very poor area of the U.S.. At that time a nuclear weapon was encircling the globe and it appeared that it would land on Dogpatch and obliterate it. The Government held discussions to see what it should do to make the lot of the inhabitants of Dogpatch happier during its last days. One suggestion made was that the Government should allot 1,000,000 dollars to provide housing and other amenities in Dogpatch. When this suggestion was made an official said: “We could do that, but what a scandal there would be when people found out that we were spending this sort of money on Americans “.

I feel that sometimes Americans are inclined to take Australia for granted. In my opinion, anything that weakens Australia in any way is not in the best interests of the U.S., and if the amount of U.S. capital which is flowing into Australia is important to the U.S., with its population of nearly 200 million people, how much more important is it to the development of Australia which has a population of only a little over 11 million. I would like to say quite a bit more on this subject but, as I said, this is a passing reference. If the President’s announced policy is carried out I believe that it will have some effect on the success of the Bill. I hope that he can be persuaded to realise that financial restriction is a two edged sword which can react in the other direction. I hope that he will have second thoughts about his policy.

I believe that this Bill will fill a great need for housing finance. There are many aspects on which I should like to compliment the Minister, but at the same time I should like to make a number of suggestions, which I hope will be regarded as constructive, for ways in which the legislation could be improved. The Minister has said that the Corporation may refuse a loan if it thinks the amount of principal and interest payable on the loan, plus rates and any other payments in respect of the property, would exceed a certain proportion of the borrower’s established income. This is a good thing. I do not think the Government should be a party to placing a burden on the financial resources of a family man. The Minister cited as an example the total repayments being 25 per cent, of income and mentioned that the loan, repayable at regular intervals over a period of 25 years, could be about three times the established annual income of the borrower. I know that this was only an example, but I do not believe that payments for rent should exceed 20 per cent, of the amount coming into a home.

The three essentials required of a borrower under the American scheme are, first, that his credit rating must be sound; secondly, that he has the deposit required; and thirdly, that he has a regular income which will enable him to meet the repayments without difficulty. It is proposed also that the insurance cover to be provided by this legislation may be cancelled if a lender varies the rate of interest charged without the consent of the Corporation. This also is a good thing. I do not think it is the Government’s duty to protect persons who lend money at exorbitant rates of interest for those persons are already receiving protection through a high rate of interest.

The Minister went on to say that the maximum permissible interest rate will be notified in the “Gazette”. I compliment him also on that. I think it is good, too, that the Bill provides that the Minister cannot direct the Corporation either to accept or reject any application. I believe that this provision will protect the Minister against insinuations which otherwise would be directed against him. The Minister said in his second reading speech that classes of approved lenders would include banks, life assurance companies and building societies and that, as time goes on, other types of lenders will almost certainly be approved. I hope that provision will be made to include private individuals who lend money on first mortgage, either through solicitors or builders. I am not aware of the percentage of Australian housing finance which is provided by private individuals, but I was interested to learn that in the U.S. it has been estimated that approximately 17 per cent, of housing finance is provided in this way. If we are to achieve our objective of diverting additional moneys for housing, we should not overlook the money which co’uld be provided by private lenders of insured loans.

I was pleased to learn that the legislation was not drawn up without the Minister first having given very deep consideration to similar legislation in both the U.S. and Canada and drawing on the experience of the governments of those two countries. However, there are one or two suggestions that I should like to make about matters which are embodied in the U.S. legislation. First, the Bill provides for insurance on loans of up to 95 per cent, of the value of a property or of work done, whether on alterations or additions or for the discharge of existing mortgages. The U.S. legislation, which allows for a total advance of up to 97 per cent, in certain circumstances, differentiates between money advanced for homebuilding and money advanced to the person who is to occupy the home. I believe that this is a very good thing. It means that if the home occupier wishes to borrow money under the insurance scheme he may be advanced up to 97 per cent, of the value of the property, but the highest amount which can be advanced to a non-occupying owner is 85 per cent. I believe that that is a good provision and I think it would be of advantage if it were embodied in our legislation. In addition, there may be a tendency for lenders under the insurance scheme not only to lend a higher proportion of the amount required than they normally lend - this is what we want them to do - but also, perhaps, for them to inflate the valuation and to calculate the advance on an inflated figure.

The U.S. legislation provides that the percentage guaranteed shall be based on a valuation by the Federal Housing Authority. I believe that such a provision should be embodied in our legislation. The U.S. act states that if the purchaser buys a home which is worth more than the F.H.A. valuation, he must pay the difference in cash. I believe that that is fair enough.

This Minister said in his second reading speech -

May I draw the attention of honorable members to clause 23 of the Bill. I believe this clause will be of very great significance in the future. It will authorise the Corporation to refuse to insure a loan if it is not satisfied that a dwelling house wilt be, or has been built according to sound standards of construction. We all wish to see improvements in the standard of housing in Australia, and the maximum feasible adoption of uniform standards that will increase the efficiency of the industry and reduce its costs. The Corporation should be in a position to assist acceptance of minimum building standards by having the power to refuse to insure loans for dwellings that fall short of reasonable standards of construction.

That is fair enough, but it is a negative way of tackling the problem. I believe that the Americans had adopted a positive method by providing that money may be lent for terms of 10, 15, 25 or 30 years but that where the home is built under F.H.A. supervision and to F.H.A. standards the terms may be extended to 35 years. I believe that that approach will achieve exactly the same objective as the provision written into this legislation by the Minister is designed to achieve. It would be considered by the Government. It must result in a home of higher quality being built.

In the few minutes still available to me I want to turn again to the legislation of the United States. Whilst the Federal Housing Authority does not actually provide the money any more than the authority to be set up under this legislation will provide it, the American legislation contains a provision which enables the borrower to repay either part or the whole of his loan in a shorter time than he originally intended and to obtain a rebate of interest by giving notice in writing to the lender 30 days before he intends to make the increased payment. That is a provision which could well be considered by this Government.

Taken all round, the Bill is a good one. That does not mean that in my opinion it could not be improved. But it is a real attempt to assist people to obtain a home of their own on the best possible terms. I compliment the Minister upon the way in which he has approached the problem and the work that he has put into the legislation to make it worthwhile for prospective home owners. I support the measure.

Sitting suspended from 5.57 to 8 p.m.

East Sydney

.- The Bill before the House is the Housing Loans Insurance Bill, but I am afraid that it will not solve the great housing problems confronting the people of Australia. The Government will not contribute any more finance to the building industry as a result of the Bill. The proposal is to expend only a paltry £100,000 on insurance to cover any losses likely to be incurred by the faceless financiers who support this Government and are leading a sheltered life under its administration. Throughout the years, even in the years of the great depression, practically no money was lost in the manner visualised by the Bill, so how can there be any losses today when the Government claims so often that this is a time of great prosperity?

This Bill purports to be the fulfilment of an election promise by the Government, but it proves that once again the Government has misled the people of Australia. What is proposed falls far short of the Government’s promise to set up a housing corporation to lend up to 95 per cent, of the money required by people who want to buy homes. There is really no shortage of money for housing in Australia. Money can be borrowed at high interest rates. In the past, lending institutions have lent up to 70 or 80 per cent, of the price of a house. This Bill is designed to encourage them to lend up to 90 per cent., and in some cases up to 95 per cent. But many sections of the community will be excluded from the provisions of the Bill. For example, people who wish to purchase homes through State housing commissions will be denied any privileges under the Bill.

In Australia today there are more than 80,000 applicants for homes on the housing commissions’ lists. There are 38,000 people on the waiting list of the Housing Commission of New South Wales. I suppose such a number is to be expected in the State which has the largest population. But it is estimated that approximately 35 per cent, of all those on the waiting list of the Housing Commission of New South Wales want to buy cottages on a low deposit of £50. They will be excluded from the provisions of the Bill. That means that in New South Wales alone 16,000 of the 38,000 persons on the waiting list will not benefit from this Bill. Most of these people are in the low income bracket. They have an income of less than £20 a week. They are the people who will suffer because they are not covered by this measure. It is merely a sectional Bill designed to benefit certain sections of the community and will not help those who have the greatest need.

It is provided that a certain deposit has to be found by a person seeking a home before he is eligible to come under the provisions of the Bill. Many young couples are forced to live with their in-laws when they get married as that is the only chance they have of getting accommodation at a small weekly rental. If they rent a flat, they have to pay 10 or 12 guineas a week and they can pay such a rental only if both of them go to work. If one gives up working, the burden is thrown on the other partner to provide the rent. It is impossible for these young people to save enough money for a deposit on a home.

The deposit required in most Australian States is about £2,000. Unless a young couple save that money before they are married, it is practically impossible for them to save such an amount afterwards unless they forego a family in their early married title or live with relatives. Finally many of the young couples who are forced to pay high rentals have to apply to a housing commission. They are put on the waiting list and they might have to wait five, six or seven years. I am afraid that this Bill will do nothing to relieve the housing shortage in Australia.

The provisions of the Bill also exclude those who are entitled to war service homes. Many ex-servicemen are compelled to take second mortgages because they are short of money and cannot get a big enough loan from the War Service Homes Division. These people are excluded from the provisions of the Bill. This is typical of the Government’s policy; this is how it looks after the welfare of the ex-servicemen.

The Commonwealth Government itself should enter into the field of housing to help overcome the great lag. For example, the Government could have invested £100 million in housing by lending money directly to young couples at rates of interest comparable with those paid by those who are buying war service homes. This would be a major step towards a solution of the housing problem. The Government should compel the insurance companies to enter further into the field of housing. Huge reserves are held in superannuation funds in Australia, and these could be used for housing. There is no better investment than in housing for it offers security to the lender. There is plenty of money which could be lent to young couples at a rate of interest no more than 3J per cent., which is the rate charged on war service homes.

There should also be a curtailment of the building of office blocks. A great deal of development is taking place in the inner areas of Sydney. Great projects are under way by Lend Lease Corporation Ltd., such as the Australia Square project. These big works take a lot of finance and employ many building workers but in Sydney there is no shortage of office space. There are buildings in the city which have been completed for many years and the owners cannot get tenants to take suites and offices in them. Great projects are in course of construction in the inner city, financed by insurance companies and other big financiers. When they are finished they will look nice but there will be a lot of empty space in them. If the workers and the money involved were transferred to overcome the housing lag, there would be some merit in the effort and we would be doing much more to assist those unfortunate people who want to get homes but are unable to do so.

The Bill provides that interest rates shall be determined by the Housing Loans Insurance Corporation. The Minister for Housing (Mr. Bury) has not given us enough detailed information on that portion of the Bill. He has stated that the rates will be gazetted at a later date. I am sure that many of us would like to know now what the interest rates will be. The Minister could have told us the interest rates and the maximum amount to <be advanced.

The Bill also provides that a young couple wishing to build a home must prove that they own or lease a block of land before they qualify for a loan. In New South Wales today the average price of a block of land is about £2,000. The Bill provides that a young couple must own a block of land or have one on lease. The only place where one can get a leasehold now is Canberra and of course the national capital will also be excluded from the provisions of the Bill. It is very hard for the young people to raise the £2,000 necessary to purchase a block of land before they may even start to build a home.

I repeat that the people in the lower income bracket will not receive much assistance from this legislation. It will simply increase the cost of home building to these people because they will be compelled to pay higher interest rates and increased weekly repayments. It will be necessary for them to pay about an extra £100 in insurance premiums, which will be another slug on the poor old wage plug. I believe that the Minister should have given us more details about the insurance premiums payable; he should have stated whether the premium is payable on the whole of the loan or only on part of it. Loans obtainable for housing vary from 70 per cent, to 95 per cent, of the value of the home. Is the insurance premium to be paid on the full amount of the loan or is it to be paid on part only of the loan? It seems to me that the Minister should have informed the Parliament on this matter.

The amounts to be repaid as instalments will be determined by the Corporation according to the capacity of the borrower to pay. The Minister has stated that instalments will be about 25 per cent, of the income of the borrower. For example, a wage earner with a weekly income of £20 clear will be liable for repayments of £5 a week.

It seems clear that the maximum loan of £4,000 will be required by most borrowers. Any honorable member familiar with building costs today knows that it is necessary to pay about £4,000 to build a home, and a block of land must be bought before building can commence. I shall use an interest rate of 7 per cent, for the purpose of this example. Today most banks lend money at 5i per cent, or 5i per cent. The rates charged by some lending institutions are even higher, so that allowing a margin of 1 per cent, to pay the insurance premium, a borrower must pay approximately 7 per cent, interest on his loan. On these figures his weekly repayments will be £6 10s. 3d. Over a period of 25 years the total interest paid would be £3,385. In order to be able to repay the loan a borrower would need an income of £32 1 ls. 3d. clear a week.

A wage earner receiving £20 a week clear could not repay a loan of £4,000 over 45 years, because calculating the interest payable at 7 per cent., his weekly instalments would be £5 12s. 3d. Taking the same wage earner receiving £20 a week and using the information provided by the Minister, he would be liable for weekly repayments of £4 17s. 6d. or monthly repayments of £21 5s. Od. on a loan of £3,000 at 7 per cent, interest.

The total interest payable over the period of the loan would be £3,375. If the interest rates were higher than 7 per cent., the prospective borrower would fare even worse. At 8 per cent, interest on a loan of £3,000, his weekly repayments would be £5 6s. 8d. Should the interest rate exceed 7 per cent., he would fail to qualify because he could not afford to pay weekly instalments of 25 per cent, of his wages.

As the Minister is aware, statistics show that many Australian wage earners have incomes of considerably less than £20 a week and the majority of such persons work for the Commonwealth Government. They will not be able to qualify for a housing loan because their income is insufficient to enable them to pay the weekly instalments. Although these people work for the Commonwealth Government, they will have to depend on the State housing authorities to obtain a home.

The Minister has also stated that he has had discussions with the Australian Bankers Association, the Life Offices Association and co-operative housing societies. He has thanked them very sincerely for their expressions. I am sure a great many honorable members have not seen a statement made by any of the finance corporations that it is their intention to support the Minister’s plan. I am not aware that any such statement has been made. The Minister has interviewed representatives of the finance institutions and they have given him advice, but they have not openly stated that they will support the scheme. Perhaps the Minister will tell us at a later date whether he has their support and whether they have stated that they will support the legislation.

Today many Australians borrow money on second mortgages on which they pay interest at up to 15 per cent. In my electorate some people are paying up to 20 per cent, interest and this practice is prevalent throughout Australia. Therefore I cannot see that the finance institutions which charge such high rates of interest will decide to lend money at lower rates of interest, at 5 per cent, or 6 per cent., when they can obtain 12 per cent, or more. The financers are out to get every penny they can and to get every drop of blood out of the borrower. By supporting the scheme they would be reducing their profits.

Throughout Australia recently an appeal was conducted to set up a fund known as the Churchill Memorial Fund. Generous donations by Australians totalled about £2 million. Various suggestions have been made as to how the money should be invested. I believe that a great deal of benefit could be gained for Australia if it were invested in housing, and the people in the lower income brackets particularly could be assisted. Perhaps the Minister could give us his thoughts on this suggestion also at a later date.

One of the causes of the great housing shortage in Australia at present is the failure of the Federal Government to face up to its responsibility to house migrants. The Federal Government pays the fares of migrants to Australia. The migrants are told: “Here is a job for you. You are off our hands. We are finished with you.” The responsibility of housing the migrants is thrown on to the State Governments. When the Labour Party was in office and prior to the 1956 Commonwealth and State Housing Agreement, a migrant had to be in Australia for three years before he could have his name placed on the waiting list of a housing authority. After 1956 the Federal Government compelled the State housing authorities to place the names of migrants on their waiting lists upon their arrival in Australia. Migrants may therefore begin to establish qualification for housing immediately they arrive. As the Federal Government brings migrants to Australia, it is the Federal Government’s responsibility to see that they are decently housed. A great many migrants are returning to their former countries because they cannot obtain adequate accommodation. Many of them have complained that they have been misled about conditions in this country. British migrants have told me that they were misled by Australia House and by advertisements in British newspapers telling them that they could obtain a home in Australia for a deposit of £50 and occupy it within two or three months of arriving here. Everybody knows that it is impossible to do this, particularly in New South Wales. The Federal Government should accept more responsibility in the field of housing.

Every day in Paddington Court, which is in my electorate, orders are sought for the eviction from their homes of good Austra lian families to make way for other people, either migrants or the owners of the properties. I know of a woman in my electorate who had lived in her home for 35 years. Her three sons fought in the war; one of them cannot now work because of war disabilities. A month ago she was taken to court by a migrant who had bought the house and who said that he had entered into a bond with the Department of Immigration to provide accommodation for one of his relatives for a period of two years. I know that under the Migration Act he is required to provide accommodation for only 12 months. The magistrate who heard the case ordered the woman to vacate the premises within three months. Incidents such as this occur frequently in my electorate. This is something to which this Government should pay more attention because I think that no Australian, no matter who he is, should be thrown out of his or her home simply to make way for a migrant.

The Government should do more to protect pensioners who are tenants of houses. A great many pensioners in my electorate are being intimidated by real estate agents. Some of these agents should be deported. If I were a real estate agent I would not be proud to be associated with such people. I think the Minister for Housing knows who these people are. They intimidate pensioners and other people who have lived in the same house for 30, 35 or perhaps 40 years and who have done their bit to develop this country. These agents knock on tenants’ doors at all hours of the night. They offer alternative accommodation that you would not put a dog into. They drag the unfortunate tenants before the court every day in Paddington. They produce photographs and other evidence to show that the premises need renovation or that they are not safe and in no time at all the unfortunate tenant is out on the streets. The New South Wales Government has accepted a large part of the burden of housing pensioners. It receives no assistance in this regard from the Commonwealth. The New South Wales Government has already built 1,800 homes for pensioners and has under construction a further 1,000. The responsibility for paying social services is a Commonwealth one and the Commonwealth should accept the responsibility for housing and protecting pensioners. The Minister for Housing would strike a blow for the pensioners of this country if he were to introduce legislation to safeguard the tenancy of their homes.

We must find solutions to the problems that I have mentioned. One solution would be for this Government to co-operate more vigorously with the States in satisfying the demand for housing. The first step should be for the Commonwealth to review th: Commonwealth and State Housing Agreement.

Mr Chaney:

– That is an easy one.


– It is, but it may not be so easy after next month. We know that the Commonwealth charges interest on the money that it lends to the States for housing. I think the interest rate should be reduced. Over a number of years the States have paid to the Commonwealth more than £52 million in interest on money borrowed for housing. If that sum were ploughed back into housing it would go a long way towards easing the present problem. The funds of the private banks held by the Reserve Bank of Australia should be released to private home builders. We know that many of the private trading banks have large amounts of money lying idle in reserve funds and earning only i per cent. If those funds were channelled into housing they would help to overcome the problem. It would not hurt the Government to make a special grant of £100 million for housing. Something must be done to reduce the interest burden on money borrowed from the Commonwealth by the States for housing. The interest rate should be no higher than that charged by the New South Wales Housing Commission. A system of rental rebates should be introduced so that those who are unable to house themselves might enjoy the benefits of a dwelling of good standard, which is the right of every Australian citizen. Prices control should be imposed on all materials used in the construction of houses. Tax concessions should be allowed on the purchase of building materials by home builders. The price of land should be controlled. If these things were done many more young coupl”es would be able to purchase a house, or a block of land and later build upon it.


– Order! in calling the honorable member for Parramatta I remind the House that this will be his maiden speech.

Mr. BOWEN (Parramatta) L8.27].- Mr. Speaker, in exercising for the first time my right to speak in this House I would like to commence by paying a tribute to my predecessor from Parramatta, Sir Garfield Barwick. Sir Garfield represented Parramatta, from 18th March 1958 until he resigned in April 1964 to become Chief Justice of the High Court of Australia. During his period in the Parliament Sir Garfield served the electorate in a manner which I can only say, with some feeling, has led his constituents to expect a very great deal from their member. As AttorneyGeneral and later Minister for External Affairs Sir Garfield served his country with distinction. We are fortunate now that he occupies the high office of Chief Justice of the High Court.

The Bill that is before the House deals with a problem that affects all of us. Whether you are a person on a high income or a person on a low income - a pensioner, a new Australian or an old Australian - the provision of an adequate home is a problem that must be faced. I believe there are limits to the use that may be made of government money for this purpose and there are limits to the handling by government officials of the business of housing. One feature of the Bill, which I strongly support, is that it seeks to attract private capital to the field of home building and to give assistance particularly to those who are making their own arrangements for housing.

Reference has been made to the fact that the Bill gives effect to an undertaking given by the Prime Minister (Sir Robert Menzies) in his policy speech in November 1963. I ask honorable members to consider for a moment the pressures which led to the promises made in that policy speech and to the presentation of this Bill to the House. At the time of the start of the last war there was a housing lag. Since the depression of early 1930’s there had been a lag in housing which had not quite been overtaken. Building ceased during the war and after the war, of course, there was a shortage of materials and of labour. On top of this came the increase in population, particularly due to immigration. I should like to add a further factor: There has been an increase in what we expect in our standards of living and our standards of housing. All these factors have operated so that we have still not yet caught up with the needs of the people for housing.

Might I, Sir, use the position in my own electorate of Parramatta to illustrate some of the problems in this respect. Parramatta was, of course, the first settlement in New South Wales outside Sydney. One might say that its housing problems go back a long way. It contains the City of Parramatta and in and around this city are many old residences. There are here many people who will benefit from the provisions of this Bill which are particularly designed to make it possible to obtain finance for improving or adding to older properties. It will be useful to people who wish to buy and, indeed, it will assist those who wish to sell older properties. Also in this electorate, Sir, there is a high proportion of young married people. In the subdivisions of Eastwood, Epping and Rydalmere the number of electors from 1958 to 1963 increased by more than 8,700. Considerable housing growth has taken place in those three subdivisions. One problem which some of the young married people have in this area is that the amount which they can obtain on first mortgage to meet their housing needs falls short, and they have been obliged in some instances to obtain money for a short term and at a high rate of interest, on second mortgage. The Bill should assist by enabling them, if they wish, to borrow on guaranteed loan on first mortgage in order to pay off existing mortgages which .they have on unfavourable terms. It should also, of course, help those persons who seek finance in the future to avoid getting into that position with short term high interest finance.

One other matter is that the demand for housing finance at present is far greater than supply in this particular area. For example, the Parramatta District Permanent Building Society ordinarily has available for lending, moneys which run at the rate of about £100,000 a month. In the months of January, February and March of this year this money had been exhausted before half the month was through. In March over £100,000 has already been lent. The whole of it was exhausted in the first eleven days of the month. There is no doubt about the need for housing finance and this demand, indeed, is likely to increase because those persons who were born just after the war are arriving at an age at which they are marrying and looking for finance to enable them to have homes.

Sir, I have spoken of the position in the Parramatta electorate by way of illustration but these problems, of course, are nation wide. They demand a national policy. Other countries have faced similar problems and they have had a national policy. Even in those countries which, like our own, have a federal system of government, such as the United States of America and Canada, these matters have been dealt with by the federal government. Now, Sir, unfortunately, our founding fathers, when they drew up the Constitution, failed to give the Commonwealth Parliament any legislative power with respect to housing. The result has been that in order to meet this need, which certainly exists, for a national policy on housing, this Parliament has had to find other powers. It has used a network of other related powers in order to deal with the housing problem.

It has used the defence power to give assistance under the War Service Homes Act which, of course, helps servicemen and female dependants of servicemen. It has used its power under section 96 of the Constitution to make grants of financial assistance to the States under the Commonwealth and State Housing Agreement Act. This enables grants to be made to the States to assist them in their particular housing projects. The Commonwealth has used such power as it might have regarding social services to pass the Aged Persons Homes Act, under which it gives assistance to institutions providing homes for the aged. It has used its power - which is unlimited - to legislate with respect to territories, where it controls the administration of housing. Added to this pattern we have the policy to which I have referred in the speech of November 1963. The first part of that has been carried out with the passing of the Homes Savings Grant Act under this same section 96. Now we have this Bill, in which we seek to use another power altogether, the power under section 51 with respect to insurance. This is all part of what I would suggest to honorable members is a national policy on housing which is being carried out by this Government with such powers as it possesses.

One of the difficulties is that when one looks at this Bill the only power taken is a power to insure loans, that is, a power in respect of insurance. The corresponding corporations in the United States of America and in Canada have much wider powers. The American body is the Federal Housing Administration, which has been in existence since 1934. The body in Canada is the Central Mortgage and Housing Corporation, which has been in existence since 1945. The Canadian Corporation itself has power to lend and power to buy mortgages or to sell them. It can go into the mortgage market. One matter which may have to be considered when our corporation, as I foresee it, is operating, will be whether or not we will have to find the means of giving additional powers to it or creating a further corporation with a lending power and a power to buy and sell mortgages.

Sir, I suggest to honorable members that the principle of this Bill is a sound one. There is undoubtedly an unsatisfied demand for housing finance. Provided the corporation is successful in attracting private money by giving greater security to lenders, it certainly will help people requiring finance. Insured loans, as the Minister has pointed out, may be given for amounts up to 80 or 90 per cent. - in some cases 95 per cent. - of the value of the property, and it may be given on a long term basis. The length of the term and the percentage which may be lent are the important factors. The experience of this country, I suggest, is that as a loan goes on, the ability of a person to meet it, in this credit foncier type of financing, is found to increase. In addition, as instalments are paid and as the value of land gradually creeps up, the equity substantially increases over the length of the loan. The main difficulty is to find those early instalments, so if it is over a long period these are smaller. This Bill should enable that kind of assistance to be given to people who wish to borrow for housing but, of course, as I have suggested, if the Corporation is to be successful, it will be necessary for it to persuade lenders to use these insurance provisions.

Some honorable members have suggested that lenders will not be prepared to give insured loans because they are able to do better elsewhere. It is true that not many losses are suffered by lenders at present because, when they lend for housing, they keep the amount which they are prepared to lend down to a relatively low proportion - say 70 per cent. - and there are plenty of borrowers who are willing to accept this position. If repayment of the amount of the loan is guaranteed by the Corporation, and ultimately by the Commonwealth Government, this will be some incentive to increase the proportion which will be lent. But will the lenders come in and use this provision, or will they prefer to lend to a greater number of people a smaller proportion of the value of the property? I suggest that is one of the practical problems that will face the administration when this Bill is passed, as I suggest it will be.

I offer two suggestions in relation to this particular problem. There can be no doubt that if a mortgage market could be established where insured loans could be sold, it would be an incentive to institutions and other people with capital to lend under this Bill for they would know that, having lent money, they could go on to the mortgage market and sell if they wished to get it back. Indeed, where an institution, for instance, did go on to the mortgage market, sell its mortgage and get its money back, it would be in a position to lend that money again. It would mean that those investors who were not prepared originally to take the trouble of lending on an insured mortgage but were prepared to go on to the mortgage market and buy a mortgage just as they would buy, say, 7 per cent, debentures would, in fact, be providing additional capital for housing. It is, therefore, a matter of some importance to see whether a mortgage market can be established.

In his second reading speech, the Minister pointed out that, under the Bill, the insurance contract will be assignable along with the mortgage. He referred to the desirability of establishing a mortgage market, but he did not say how this market was to be regulated or conducted. We all know that the debenture market is conducted by stock exchanges. The debentures are quoted on the market. If they are 7 per cent, debentures, they may be quoted at a slight premium, such as 21s. for every 20s.; if they are 6 per cent, debentures, they might be down to 19s. in the £1. But there is a market and it is controlled and conducted by the stock exchanges. The mortgage documents - the mortgage itself and the insurance contract - will be complex documents, but they will be no more complex than a debenture trust deed. Provided1 the mortgage is guaranteed, as it will be, by the Corporation, and provided there is a stable market, there should be no question that a market could be established and conducted which would attract capital - and possibly overseas capital - to housing.

Of course, the matter would be simplified if the Corporation itself were able to buy and sell mortgages. As I have said, it has been -found in relation to the Canadian Corporation, which goes on to the market to buy and sell, the corporation itself has stimulated the mortgage market by selling its own mortgages. Whether it will be necessary to take a similar step here can be ascertained only in practice. But it will be important to have a mortgage market.

I should like to offer a further suggestion in relation to the question cf attracting capital to this field. One other honorable member has referred to this matter already. At the present time there is a large amount of money accumulated in superannuation funds. In fact, those who are members of the Superannuation Funds Association would have funds in excess of £400 million. These funds are increasing. One possible way of attracting some of these funds would be to provide that superannuation funds which seek exemption under the Income Tax and Social Services Contribution Assessment Act might have a proportion invested in insured loans which would be accepted as part of the ratio of funds which at present, for exemption purposes, they are required to have invested in government or semi government securities. As honorable members will know, if the superannuation funds are to retain their exemptions, they must have a 20-30 ratio of their funds invested in government or semi government securities. If insured loans were taken into consideration as part of that ratio, it should attract some of this private money to the field of home building.

One question which honorable members have raised concerns the rate of interest to be fixed under the Bill. Under clause 20 subclause (3.) it is left to the Corporation, with the concurrence of the Minister, to fix the maximum interest rates which may be charged. Those rates must obviously depend upon the Judgment of the Corporation, made according to the circumstances. This is not a Bill which is designed to control interest rates. It is a Bill which places the Corporation in a situation where it has to accept the interest rate position as it finds it. It is clear that an insured loan will be somewhat less attractive than a simple government bond. Therefore one would argue that the interest rate must be higher than that for government bonds. Even if the maximum rate is fixed at a figure which is comparable with the bank rate, it would still achieve the major objectives of the Bill. For example, if a person has a first mortgage at 6i per cent, and has been forced to borrow capital in another field at 12 per cent., would he not be better off if he had one mortgage at only 61 per cent, or 7 per cent.? It is clear that if he has the whole of it on a long term at the lower rate of interest he is better off than he would be in the present situation. It is that situation, which the Corporation will have to consider in determining its maximum rates of interest.

The question of premiums is an important one for the Corporation because it is from these that the Corporation will derive its revenue. This is the thing which will make the Corporation workable. If the premiums are spread over the full term, they will not become a burden on the borrowers. This has been found to be so in the United States of America and Canada. I understand that in America the charge is i per cent, per annum whereas in Canada the once and for all charge of 2 per cent, is preferred. Honorable members may think that the latter of those two systems would be preferable for Australia provided the premiums were advanced by the lender and spread over the entire term of the security.

I wish to refer to another matter. Clause 23 of the Bill deals with standards of construction. One thing which this country lacks is a nationally accepted set of building standards. It is true that the Commonwealth Government is providing excellent facilities. The Division of Building Research of the Commonwealth Scientific and Industrial Research Organisation is one. The Commonwealth Experimental Building Station of the Department of Works and the Building Research Liaison Service are others. The work of those bodies is undoubtedly of a high standard. For instance, one may go to the C.S.I.R.O. and ask for its opinion on a new building technique or a new building material.

The organisation will investigate the matter and make a first class report, approving or rejecting the material or the technique. Even if a material be approved, that will not necessarily mean that it will be acceptable for use in Australia. That would depend upon whether a local council, under its rules - in New South Wales, under Ordinance 71 - finds it to be acceptable. There are, in fact, no national standards in this regard. Clause 23, to some degree, provides a sanction for a nationally accepted standard. However, I would like to see a Commonwealth research and statistics organisation established to deal with the building industry. Whether such an organisation could be attached to this Corporation is perhaps a question for another day.

I have referred mainly to those aspects of the Bill which affect those who wish to borrow. I should like now to make some reference to the effect of the Bill on the building industry. We all know that the home building industry is an important one and that a large number of other industries supply goods and services to it. From experience, we know that it is the first industry to feel the effects of any recession and the last to recover. One of the important features of the Bill is that it is directed towards eliminating excessive fluctuations in the prosperity of this industry. On what one might call a lenders’ market, such as exists at present, there will be some difficulty in using the provisions of the Bill to the fullest extent, but at another time, when there is a borrowers’ market, the provisions will certainly be in demand.

Some power of control h reserved to the Minister under clause 20, sub-clause 2, which provides that he may direct the Corporation not to enter into contracts of insurance except in respect of specific classes of insurable loans. What this will mean in practice is that the Minister will be able to direct in such a way as to prevent excessive fluctuation of the prosperity of the industry.

The provision of more finance for home building cannot produce more homes on the ground unless labour, particularly skilled labour, to build the homes is available. The Minister acknowledged this in his second reading speech and indicated that efforts will be made to ensure a supply of skilled labour. He said also that efforts will be made to continue to attract skilled migrants. However, at the present time, there is, according to some, a slight easing of labour difficulties in this field, and there is the possibility that, with a decrease in commercial building, there will be a greater availability of labour for home building. This Bill will enable labour to be used to the fullest extent for home building.

In conclusion, may I say that the Bill has good long term prospects for Australia. It is in accordance with the policy of the Liberal Party that Australia should become a democracy of home owners. This policy serves the dignity of the individual, helps to preserve family life and serves the comfort and happiness of the people.


.- I congratulate the honorable member for Parramatta (Mr. Bowen) on his maiden speech in this House. It was a very thoughtful and calmly delivered oration. As he is a Queen’s Counsel, obviously this is not the first time that he has spoken before an audience. In wishing him a long and happy life I do not necessarily extend that wish to his length of time as the representative of Parramatta. The world of politics is a tough one. To quote from Hebrews, chapter 13, verse 14: “ Here we have no abiding city “. It is a fact that none of us in this place knows how long he will be here. I genuinely and sincerely congratulate the honorable member on a very well prepared and very constructive maiden speech. What I admired about him was that he was prepared to put forward several views that were not covered in the speech of the Minister for Housing (Mr. Bury). In doing this, he has shown an independence of thought. That is very valuable in this Parliament, whether it comes from our side of the House or from the other.

This is the second child, so to speak, of the new Minister for Housing and his new Department of Housing.

Mr Bryant:

– What a father.


– What a wife. His wife is the Commonwealth Government, now tired, old and wrinkled. That is no doubt the reason why it took 16 months to give birth to this child. The first child of this very unhappy and very unequal union was the Homes Savings Grant Bill. The Minister has produced these two children in a space of about 18 months.

Mr Bury:

– The honorable member’s arithmetic is pretty poor.


– It is fair enough. The first child was born about two months after the Minister came into office, so things got twisted a bit.

After that excursion into the biological field, I want to deal with some aspects of the Bill and make my comments on them. I think that the Minister is doing a very fine job. Honorable members on this side do not appear to agree with me, but I had not finished what I was about to say. He is doing a very fine job, considering the Government with which he has to work. With a new field to work in and with a Ministry only 18 months old, he has admittedly had a lot of difficulties to contend with.

The Bill contains a tremendous amount of detail. No doubt that is the reason why it took 16 months to produce. My first comment is that the Bill will not produce the results that the work that has been put into it deserves. Much of the Minister’s second reading speech consisted of expressions of opinion about what might happen if certain things were done. The first paragraph, which I will read, sounds very good and very encouraging. It states -

The Bill, which will authorise the Corporation to put into effect the Government’s promised Housing Loan Insurance Scheme, will empower the Corporation to insure loans made for the erection of homes, the purchase of existing homes, additions to homes, the repair and improvement of homes, and the discharge and refinancing of existing mortgages on homes.

Those are very laudable objectives. The Minister continued -

The main purpose of this scheme is to assist people to obtain, as a single loan and at a reasonable rate of interest, the money they need, and can afford to borrow, to buy or build a home . . . The offer by the corporation to insure against the risk of loss due to failure to recover the amount outstanding of a loan, together wilh accrued interest, will enable lenders to protect themselves against such losses.

I doubt very much whether that protection is necessary. It has never been asked for by the lending authorities to my knowledge and if it is not necessary the whole purpose of the Bill is destroyed. The Minister continued -

The scheme aims to assist people to borrow, by means of a single loan secured by a first mortgage, the difference between available personal savings and the cost of a home suited to their requirements.

That is what all loans are for - to fill up that gap. We say that the gap is everwidening between what one can afford as a deposit and what one can obtain as a loan. The Minister continued -

It is our hope and intention that this scheme win progressively remove the present need for many creditworthy borrowers to obtain a second mortgage loan, frequently on oppressive terms and conditions.

I fully agree with the Minister about the burden of second mortgage loans. I have two mortgages on my home, and I appreciate only too well the burden of the second mortgage. People who are still buying their homes realise this. If this scheme can help to decrease the number of second mortgage loans then it will achieve something, but I doubt whether it will achieve this creditable aim. It is a hope the Minister expressed, not a guarantee: There is no certainty that this will happen. He continued -

Insured loans may be 80 to 90 per cent, of valuation, or even 95 per cent, in cases where a borrower’s capacity to repay appears to be unusually high. However, to be insurable,

And this is the blind spot - loans must be made at reasonable rates of interest.

I will come back to that point later. This provision is designed to encourage increasing loans from 70 per cent, of the value of a home to about 85 per cent. This is ambitious. It is good in itself and we all would like to see more money available to borrowers to enable them to reduce the size of their deposits and probably increase the size of their borrowings. However, in this case, as with all hire purchase finance, there is a tendency for the borrower to borrow too much. This could be an encouragement for some borrowers to borrow beyond their capacity to repay. The Minister states that the corporation will go into this, but there could be a tendency for people to over-reach themselves. The aim of this provision is laudable, however.

I do not criticise every clause of a bill simply because I am in opposition. I have never believed in doing that and I will not do so tonight. I believe in trying to find what is good in the Government’s legislation and in giving credit where it is due. However, where I believe legislation is weak, unworthy or unjust I will criticise it with all the strength I can muster. The Minister also said -

We hope that our offer to insure the repayment in full of housing loans will stimulate private enterprise to establish such a market. Moreover, in offering to insure these loans, we hope to attract additional overseas capital into the Australian home building industry.

Again this is merely a hope; laudable, but still a hope. It is not a guarantee. The figures of the lending by private banks for home building are extremely poor. I should like to state a few facts about the efforts of private enterprise banks in the housing field. They have shied clear of housing as a massive field of lending, as the figures show. Let us examine how much the major trading banks have advanced to home building societies, and I refer to the June quarters in the years from 1960. These figures have been supplied by the Commonwealth Parliamentary Library Statistical Service. For the June quarter 1960 the trading banks loaned to building and housing societies £24.9 million; for 1961, £25.8 million; for 1962, £23.4 million; for 1963, £22.3 million; for the December quarter of 1963, £21.4 million; and for the June quarter of 1964, £22 million. In other words, from a peak lending of £25.8 million, the trading banks advances for housing decreased to about £22 million.

Mr Bury:

– The savings banks are the main advancers of money for housing.


– The figures for the savings banks are nothing to write home about. Savings bank loans approved for housing in the February 1962 quarter totalled £16.2 million; in November 1963, £40.7 million; in March 1964, £36.1 million; in July 1964, £39 million; and in October last year £37.8 million. The quarterly amount for housing has therefore averaged about £36 million. During the last two or three years the amount has hardly varied. It should be an ever-increasing amount, not a stationary and stagnant figure. It is this stagnation which worries the Opposition. Trading banks are lending less and savings banks are keeping to a stagnation level of lending for housing. Life assurance companies represent the other major lending institution for housing. In June 1960 they lent £13.1 million; in June 1961, £13.6 million; in June 1962, £13.1 million; in June 1963, £12.1 million and in June 1964, £10.8 million.

Mr L R Johnson:

– They have given the building societies away.


– There has been a distinct decrease over a period of five years in a field which requires more money and not less money - where more money is needed to build more homes, and not less money to build fewer homes. In fact, with the rising cost of homes, it means that borrowers have to borrow a lot more per unit to get houses than they did five years ago, so a given sum does not go as far today in building homes as it did five years ago. We need a lot more loan money to meet the increased cost of housing if we are to get the number of houses we need to catch up the lag.

In his speech the Minister quoted the Housing Corporation of Canada primarily, and also referred to the situation in the United States of America. However, the Government has taken one section only of the Canadian housing system and incorporated it in this Bill. If it adopted the Canadian system in its entirety the Labour Party would have supported this legislation 100 per cent.

Mr Bury:

– The High Court would have ruled it out.


– Because this goes far beyond the Minister’s scheme, as he knows. In his scheme he has taken out section 4 of the Canadian Central Mortgage and Housing Corporation scheme. That section provides insurance to banks on loans made for home improvement and guarantees returns from moderate rental housing projects built by life insurance companies and private investors. The Government has expanded that particular section of the Canadian scheme and used it in this Housing Loans Insurance Corporation Bill. Based as it is on the Canadian scheme, this Corporation is only a shadow of the Canadian Central Mortgage and Housing Corporation. The Canadian scheme provides a number of things. First, it makes mortgage loans. It does not only underwrite loans; it provides them to borrowers unable to obtain insured loans from private lenders and makes mortgage loans to limited dividend housing companies on low rental housing projects. Secondly, this Corporation in Canada makes loans to universities to assist in providing dormitory accommodation for resident students. Thirdly, it makes loans available to municipalities or municipal sewerage corporations to assist in the construction of sewerage projects for the control of water and soil pollution. Fourthly, on behalf of the Federal Government it joins with municipalities in the acquisition and clearance of blighted areas for urban development. Fifthly, it undertakes jointly with provincial governments the development of serviced land for residential purposes, the construction of new housing projects and the acquisition of existing buildings in urban renewal areas and their improvement or conversion for public housing. Sixthly, it constructs, owns and manages housing projects on its own account and on behalf of Federal Government departments and agencies.

What a magnificent conception that is. What a sweeping assistance that Corporation is to the people of Canada. I am indebted to my colleague, the honorable member for Hughes (L. R. Johnson) for this information because, as Whip, I have had to come into this debate at the last minute. One of my colleagues had to go home in order to attend a funeral tomorrow. Consequently, I have to rely largely on assistance from the chairman of our housing committee. The honorable member for Hughes provided that very valuable information from the Canadian Act which I have just given to honorable members.

The Canadian scheme is in keeping with the plan of the Australian Labour Party with respect to housing in Australia. I think at this stage that I should read a passage from the last election policy of the Australian Labour Party to show that we have in mind a similar scheme to that followed in Canada. I quote from page 9 of “ Labour’s Policy “-

We plan, quite simply, that Australia will be the best housed nation in the world.

To that end we will -

  1. Establish a Homes Finance Commission to provide finance for home construction, and to guarantee loans from those willing to lend at low interest rates, and on low deposits amounting to no more than from five to ten per cent. of the capital cost.
  2. Provide money to the States at three and three-quarter per cent. to enable them to reduce rentals and repayment on Housing Commission homes.
  3. Increase grants to the States of £20 million for public housing, with emphasis on slum clearance and re-development projects.
  4. Ensure a steady and adequate flow of private finance for home building.

This Bill, of course, is designed to do that -

  1. Hold an inquiry into Australia’s housing needs, as requested by the State Ministers for housing. It is twenty years since the last inquiry was held and that was set up by the Chifley Government.

The House will see that this plan put forward by the Australian Labour Party is along the lines of the fine, all-embracing Canadian scheme which I have just outlined. What a tremendous impetus this Canadian scheme would give to housing if it were applied in Australia. The Bill introduced by the Minister covers such a small section of the Canadian scheme. This Bill is a bill of hopes and visions rather than of successes because I do not think it will achieve what it sets out to do.

One of the greatest blind spots in the Bill is exposed in his speech. The Minister said -

The legislation provides that the Corporation -

He is referring to the Corporation to be set up under this Bill.

  1. . shall charge a premium for insuring a loan, and that the premium rates shall be determined by the Corporation.

We do not know how large or how small that will be or on what basis it will be worked out. The Minister continued -

In fixing these rates, the Corporation will be required to aim over the long term neither to make a profit nor to incur a loss.

That will require a finely balanced plan -

It is expected that the premium to be charged will be in the form of a once-and-for-all payment for insuring a loan up to its maturity date.

The fact is that this premium is a completely unknown quantity in this Bill. He went on -

It is proposed that the premium be collected from the lender -

And that is the savings bank, private bank, building society or the insurance company.

  1. . and that in practice the lender would recover the amount from the borrower.

Would it be the exact amount, I wonder, or would the financial institution load a little more on it for the work it is going to do for the Corporation?


– The financial institution will not do it for nothing.


– That is the point that concerns me when I study that part of the Minister’s speech. The Minister said - in practice the lender would recover the amount from the borrower.

By the word “ amount “ he means the premium. Knowing these lenders of money - and they are all alike; they have not changed since the days of Shylock - they will charge a little bit more for handling this matter on behalf of the Corporation. The Minister continued -

In return for the payment of a relatively small premium, the borrower will receive the benefit of a larger loan at a reasonable rate of interest and for a reasonable period.

I claim quite deliberately that that is a purely problematical statement- We have no guarantee at all that by the underwriting of these premium payments we are going to get a larger loan from a private bank or an insurance company. Then we come back to this doubtful phrase “ a reasonable rate of interest”. What is a reasonable rate of interest? The Government has a different idea about this from that of the Labour Party; the banks may have a different idea from that of the Government; and the Corporation may have a different idea from that of the private lending institutions. So this is a sixty-four dollar question written into this long and rather vaporous Bill and these things write into the Bill large tracts of uncertainty.

I would like to set out now what this Bill does not do. It does not guarantee any particular level of interest, either high or low, because the rates are not stated. Interest rates on first mortgages in this country are among the highest in the world. They go up to 6 or 7 per cent. It is interesting to note that twice in the last 12 months the Government has permitted overdraft rates to rise. They rose in April 1964 and again on the 10th March last. The rate is now up to a record height of 7i per cent. What is the effect of this on the Bill and on loans for housing? Most financial institutions which lend at higher rates - and 10 per cent, flat is not uncommon - will be raising interest rates even higher as a result of the rise in overdraft rates. They are two factors that balance one another all the time and that is what we are afraid of. We are afraid that interest rates will rise. This rise in overdraft rates is designed, in effect, to deter people from borrowing. It is designed to cut the flow of money for housing and other developmental works in Australia and the prospective home owner is the first to be affected. Of course the Bill does nothing to answer the problem of an increased overdraft rate. The lack of any decision on interest rates is really a blind spot in this Bill.

In the concluding portion of my speech I want to quote some figures on the sources of funds for housing. I quote the following from the March 1965 issue of “Your Home”, the official journal of the Federation of Co-operative Housing Societies of Victoria -

During the year ending December, 1964, a total of £12,745,000 was made available to Cooperative Housing Societies.

This was a steady improvement for the 12 months period with finance being made available from the following sources:

The interesting point is that the private enterprise banks and what are called “ other institutions “ - I do not know what that term really means - provided only one-third of the money provided in 1964 to cooperative housing societies in Victoria, and the other two-thirds was provided by government agencies. That is the story all along the line. I do not believe that we are depending on anything very reliable when we depend on private enterprise to provide the extra finance to make this Bill work. Unless private enterprise provides that money, this Bill is a dead duck, and the

Minister knows that. Whether any encouragement or incentive will be given to private enterprise by underwriting these loans is the 64 dollar question. I am sure the Minister realises that, with his experience in the United Nations agency with which he was associated before he came into this Parliament. Private enterprise is a very tough body to deal with.

We on this side of the House believe that this Bill is not the answer to the great housing problems of Australia. The crucial question is the availability of funds, not taking the risk out of lending for housing. We want more money to be provided from these private sources; we do not need to have the risks taken out of lending. The private institutions have been lending and they have not asked the Government to underwrite the loans. In my opinion, this Bill will not provide a solution of the problem.

The honorable member for Gellibrand (Mr. Mclvor), the honorable member for Hughes, the honorable member for Bass (Mr. Barnard) and other members of the Labour Party spend much of their time on housing problems. We on this side of the House all have our specialties, just as honorable members on the Government side have. The honorable member for Gellibrand has always maintained, and we support the plea, that flat rates of interest should be abolished and that simple rates of interest on a sliding scale should be introduced. That would represent the greatest help that we could give to the low income earners. In this Bill we find no answer to the problem of achieving low interest rates. Although we wish the Bill well, Mr. Deputy Speaker, we have grave doubts that private enterprise will come to the party.


.- First, I congratulate my colleague, the honorable member for Parramatta (Mr. Bowen), on his very well reasoned and thoughtful contribution to this debate. The honorable member for Wilmot (Mr. Duthie) quoted from the official journal of the Federation of Co-operative Housing Societies of Victoria; but, as so many of his colleagues have done, in criticising the Government on its housing endeavours in the past, he omitted to refer to this great headline in that journal: “Housing Boom a

Record “. The article under that headline states that the Commonwealth Bureau of Census and Statistics reported that during the 12 months to 31st December last 124,569 new homes and flats with a total value of £433,700,000 were approved. That represented a rise of 23 per cent, on the 1963 figure, and also was well in excess of the figure for the boom year of 1960 when 103,951 dwellings were built. That gives the lie to quite a lot of the carping criticism of the efforts that the Government is making the field of housing.

As we know and as previous speakers have said, this Bill seeks to set up a corporation which will be empowered to insure lenders against any losses which may arise from making loans for housing purposes. The scheme, as it was planned originally, was designed primarily to bridge the socalled deposit gap and so to enable home buyers to purchase properties without the necessity of undertaking costly second mortgages. The Minister for Housing (Mr. Bury) highlighted this point in his second reading speech when he said -

The main purpose of this scheme is to assist people to obtain as a single loan and at a reasonable rate of interest the money they need, and can afford to borrow, to buy or build a home.

The basis of this Bill is that it will encourage lenders to lend beyond their normal limits and also to lend on long terms, and lenders will cover the additional risk arising from those two factors by taking out insurance with the Government against loss by default.

In insurance of this nature the corporation must come up against three main factors: First, the valuation of the property; secondly, the percentage by which the amount of the loan exceeds the normal limit of the approved lender; and thirdly, the capacity of the borrower to repay. The Government’s intention in introducing this Bill is to induce a flow of capital for housing purposes. However, as the Minister has said, it seems unlikely that that result will eventuate to any marked extent in the first period of operation of the scheme.

The traditional lenders for housing are the trading banks, the savings banks, the life assurance societies, the building societies and the private sector. These lenders have limits of lending which vary from 50 to 70 per cent. of the value of the security. The percentages or margins of valuations on which they lend naturally are governed by a couple of other factors. One of those factors is the quality of the valuation. By that I mean whether or not the valuation is a conservative one. Many of the lending institutions have their own valuers and naturally tend to play down the valuation of any given security.

Another factor is the availability of collateral security. As we know, life assurance societies often require the borrower to take out a policy on his life for either the whole or portion of the amount being lent, and that policy becomes collateral security. If a loan is full, banks again may insist on the lodgment of a guarantee. It may be supported by the lodgment of security by a guarantor or it may not. They do this to cover the additional risk. So, I feel that lenders in these circumstances, such as life societies and banks, are not so likely to avail themselves of the Government’s loans insurance scheme. This impells me to believe that the area to which we must look for the greatest contribution would be the private sector. In his second reading speech, the Minister said -

  1. . we must encourage an increased rate of flow of the nation’s savings, especially private savings, into our home building industry.

He also said -

The provision of more funds for housing would be greatly assisted by the establishment in Australia of a market for housing mortgages.

This is the matter to which my colleague from Parramatta who preceded me in this debate gave quite a deal of cover. I feel that, as the Minister has said, before we can induce the private sector of the community to put funds into housing above normal lending margins for long periods, there must be some establishment which will enable them to co-opt out in the case of the death of the lender pending the settlement of his estate or for other reasons such as some particular event as a result of which they do not want to carry on the long term mortgage.

All the Minister did was to express the hope that a market for housing mortgages would be established in Australia. I am not very happy about this because I feel, like my colleague from Parramatta who spoke of the ramifications of what is known as the mortgage market, some definite action should be taken by the Government to establish a discount agency, possibly through the Reserve Bank, on the lines of the American discount authority which operates through America’s federal housing administration scheme. Unless a definite discount establishment is there to deal with these securities, then I feel that the private sector cannot be induced to accept the insurance guarantee service which is to be set up under this legislation.

Under this Bill, the Corporation has very wide powers. These powers include the fixing of limits on the amounts of loans where these are in excess of £2,000 and are for long periods, and are repayable by regular reductions at not more than one year intervals. I take it that the provision for loans under £2,000 will mainly cover the short term loans which are for special purposes such as alterations, additions and improvements to property. I would suggest that it would be very disadvantageous to the intention of this legislation if some definite figure were to be laid down. There has been criticism by honorable members opposite that there has been no definite figure mentioned. I feel we must have flexibility and that the limit must be geared to the merits of each individual case.

I turn now to clause 4 of the Bill. This clause deals with interpretation and states - “ insurance loan “ means a loan . . . made for any one or more of the following purposes, that is to say, of enabling the borrower -

  1. to alter, improve or extend a dwelling-house constructed on land in which the borrower has a prescribed interest

The Minister, in his second reading speech, amplified the terms of “ alter, improve and extend “ by saying -

  1. loans made to alter, improve or extend a dwelling-house. These would include loans for, amongst other things, the permanent provision of water supply, electricity and sewerage, and the conversion of an existing dwelling into two or more dwelling units,

I suggest that without limiting the generality of that part of clause 4 of the Bill which I quoted some addition should be made stating, inter alia, that these specific purposes the Minister has mentioned in his second reading speech are included. Section (v) which follows is most specific and refers to the improvement of roads, kerbing, guttering or footpaths in connection with land in which the borrower has a prescribed interest. Looking at that section, I see no reason why the interpretation of section (iv) by the Minister in his second reading speech should be left out of the Bill. Policy under this Bill can be varied by the Minister of the day. I would suggest that the Minister’s interpretation be included in the Bill to make the matter more clearly defined.

The next question I would like to deal with is that of the payment of the premium. We have heard quite a few remarks during this debate on the question of what the rale is going to be. The Bill clearly states that the rate will be adjusted to the risk. For example, a loan of 90 per cent, of valuation would naturally attract a much higher premium than a 75 per cent. loan. So, you will have a rate which will fluctuate to a marked extent, but once it is assessed it will be charged as a lump sum to the lender. Now, the lender will collect that amount from the borrower. Whether he does so by a direct collection at the time or whether it is added to the amount of the mortgage does not matter as long as the borrower becomes liable to repay to the lender the amount charged. Personally, I resent very much indeed some of the innuendoes and charges made by the last speaker on the Opposition side, the honorable member for Wilmot, who was supported in this regard by some of his colleagues, that the banks and other bodies concerned would add something on to this premium to make a profit out of it. I think that was paltry and mean. This is what will be done: An amount will be assessed; it will be set out in the document; and the borrower will know exactly what premium he is paying in respect of the insurance of his loan.

The Bill provides also that the Corporation may refuse to insure under certain circumstances. One of those circumstances arises if the Corporation considers that the dwelling is not of a suitable standard of construction. I find this laudable, but rather an unusual thing to bring in to a Corporation which of necessity will not commence its operations with a very large staff. Who is going to decide what officers will be employed to assess whether a building is up to standard? Will the Corporation take a certificate from the lender as to the standard of the house or will it send somebody out to see that the house had been built to specifications and in a correct manner?

There is one other matter in connection with the staffing of this Corporation which has me wondering a little. I refer to the quality of valuations, which will be a very important factor. Will valuations be tested by the Corporation or will it simply accept the valuations given? What happens if somebody puts in an inflated valuation for a special purpose? The valuations will have to be checked, and it would seem to me that the staff of the Corporation would need to include competent valuers for this purpose. Even though this scheme has started in perhaps a quite modest way, it can be seen that there are ramifications in connection with its operations which could well have a snowballing effect on staff numbers.

Let me now pass on to one part of the Bill which I would like the Minister to explain at some future time. He has stated that the Corporation may be permitted to approve the insurance of a straight out second mortgage, with the first mortgage in somebody’s else’s hands, and also any type of security which will charge the borrower’s interest. This could be a lien, an equitable mortgage, or any type of writing which charges, well down the line, the interest of a borrower. The borrower could have a first and second mortgage on his property, and if he gave some sort of lien or something of that nature following those two mortgages, it could perhaps be guaranteed. I am a little frightened of this provision, although I feel that it will possibly be confined to the short-term loans under £2,000 for the specific purposes I have previously mentioned. However, I would like this to be made clear.

I would now like to turn to clause 24 of the Bill. The effect of this clause is to authorise the Corporation to pay a claim in circumstances in which the lender has put the property up for auction, sold it as a mortgagee, but has not pursued his civil rights to have recourse against the borrower under the personal covenant contained in the mortgage. This appears to me to be a little out of step in certain respects because this provision in the Bill states that the Corporation may make good the deficiency after the sale of a property but does not say that it shall do so. I feel that it should be mandatory. Why should the Corporation, having accepted a premium and a contractual liability to make good any default on a transaction which was based on the value of the property in question and the ability of the borrower to pay, then welch on paying out the money because either there was some collateral security in the hands of the lender, or the borrower himself or his wife may have come into a bit of money or be found to have had some other outside assets? I think that in this case it would be much clearer and cleaner if the provision was made mandatory so that the corporation would have to pay claims where there was a clear cut deficiency. It should not be allowed to make its own decision as to whether it should pay out. The responsibility should be on the Corporation whether the lender has taken his civil rights recourse under the personal covenant contained in the mortgage or whether he has not. I would like the Minister to clarify this point if he would be good enough to do so.

I realise that this has been a most difficult piece of legislation to prepare, and my comments and criticism have been intended to be constructive and helpful. I know that it is not easy to get this kind of a scheme off the ground to a flying start. The honorable member for Wilmot (Mr. Duthie) spoke of the Canadian scheme. He told us what a great scheme it was and outlined the ramifications of it. We would like, as everybody would like, to see a similar kind of scheme in operation here, but we have to crawl before we can walk, and the use of the insurance part of the scheme as set out in this Bill is a start. It is a step in the right direction. It should provide very solid groundwork for supplementation and facilitation with a new and better style of scheme which will assist the housing programme in Australia in the future.

There are particular aspects of this legislation which should provide some great advantages. The first point that occurs to me is that there will be or should be a liberalisation of mortgage finance for existing homes, the older types of homes. The policy of lenders in the past of insisting on the money lent being used for the purchase of new or nearly new homes has placed a great burden on State Governments and on local government authorities in providing services such as roads, electricity, sewerage and transport to the burgeoning areas usually situated well away from the metropolitan areas. Another point that occurs to me is that it will enable the older homes, which were originally quite soundly constructed and have simply fallen into disrepair and have become old-fashioned, to be renovated and modernised and made into decent living accommodation for people who wish to stay in close proximity to the inner areas of capital cities.

There is a third advantage that I can see. I think it has already been remarked upon by another speaker in this debate. There are many large rambling homes of the older type in some of the earlier settled areas of our cities. I am not speaking of the mansion types of places but of the eight or ten roomed brick homes in grounds measuring about 80 ft. by 160 ft., the homes that are found in some of our older inner suburbs. These can be converted, if money is available through the scheme at reasonable interest rates, into decent living units for people who wish to stay in those suburban areas.

Finally let me mention one other advantage. I refer to the small investors, who have been mentioned before, who put their moneys into permanent building societies and organisations of that kind. When they know that such societies can take some of the risk out of their lending they will be more confident in placing their small savings at the disposal of these societies to be lent for housing purposes.

If the capital flows in the scheme can go a long way towards dealing with some of the matters to which I have referred. The scheme is a good one. It is not a very large one in its concept, but it is one which I think that we, on this side of the House, wish well. I trust that it will prosper. Perhaps I can apply to this legislation the motto of the city of Melbourne: “ Vires acquirit eundo “, which means: “ It shall gather strength as it goes “. [Quorum formed.]


.- Mr. Deputy Speaker, I think that the Minister for Housing (Mr. Bury) would concede, as I am sure would many Opposition members, that the honorable member for Maribyrnong (Mr. Stokes) speaks, if not with complete authority on this subject, at least with a great deal of enthusiasm. I listened to the honorable member for the greater part of his speech, and although I do not agree with everything that he said in relation to the Bill, I am sure that he has given it very careful consideration. He spoke with the authority that he normally displays when dealing with housing legislation in this House.

The first thing that should be said about the Bill is that it is one of the few Bills dealing with housing to be introduced into the Parliament by the present Minister for Housing or by any other Minister who has been responsible for the administration of housing. The Minister’s second reading speech was one of the few to deal extensively with the subject that we now have before us. If I may say so, the Minister did make an attempt to provide an analysis of the housing situation. I have said before in this Parliament, and I want to say it again during this debate, that on too few occasions have members of this Parliament, had made available to them statistics in relation to housing throughout the whole of Australia.

Every department that deals with housing in the various States is obliged to furnish an annual report. One would think that the Commonwealth Parliament at this stage should be in a position to be able to provide a reliable report and statistics for the benefit of all honorable members in this House. It is to be hoped that the Minister will consider this question.

He will no doubt agree that in many debates that take place in the Parliament on housing and subjects related to housing, statistics which come from sources that cannot always be regarded as reliable, are used. If I remember correctly, the last report on housing was presented to this Parliament by the then Minister for National Development in 1955. Since then no report dealing with housing has been presented to it.

I want to make some comments that I feel are relevant to the Bill and of interest to a great many people who have considered the Minister’s second reading speech. I have already indicated to the House that the Opposition regards the Minister’s second reading speech as being a most comprehensive one. It certainly gives a good explanation of the Bill. But we join issue with the Minister because we believe that many matters which ought to be in a Bill dealing with the responsible subject of housing, have been left out. Certainly it is a very important departure from other Bills relating to housing that have been debated in the Parliament. It stems from the promise that was made by the Prime Minister (Sir Robert Menzies) during an election campaign almost two years ago.

We now have the Bill before us, but I submit that it is not in the precise terms that were outlined by the Prime Minister during his policy speech. We have not been given all that was promised on that occasion. I want to point out, in the time that is available to me, that under the terms of the legislation which we now have before us there will be very few people who will in point of fact have the opportunity of obtaining assistance in order to secure a home. I think that the Minister must be aware of those circumstances. I hope to be able to demonstrate shortly that there is a large section of the Australian community which is already committed under Commonwealth legislation and which will not be able to benefit in any way from this legislation. I assume that the Minister already realises that I am referring to those who build or buy homes through the War Service Homes Division, but I shall return to that question in a few moments. I hope that the Minister will be able to provide a satisfactory reply to me and to the interested organisations outside the Parliament, which are responsible for the welfare of the people.

The Bill, of course, is one of three Bills dealing with housing that will be brought down in the Parliament, if not in this sessional period, at least at some time during the year. The Minister has already foreshadowed some amendments to the Home Savings Grants Act, which was passed by the Parliament last year. I understand, on the assurance of the Minister, that those amendments will be dealt with some time during this sessional period or, at least, at some time during the year.

Towards the end of this year the Commonwealth and State Housing Agreement must again come before the Parliament for consideration. If I understand the position correctly, this is the last year in which the present agreement between the Commonwealth and the States will remain in force. A new agreement will be necessary after this year. So it is conceded at once that there will be ample opportunity to discuss the question of housing. From the Minister’s second reading speech one would have though that the Bill now before us would correct the unsatisfactory housing situation that exists in this country. Of course it will do nothing of the sort.

At this stage I am prepared to concede - as I am sure most honorable members on this side of the House would concede - that there has been a distinct improvement in the housing position in Australia during the last two years, after recovery from the effects of the recession of 1960. The large number of houses under construction and the number of houses and flats that have been completed have certainly improved on the position of two or three years ago. But there was need for improvement, as 1 am sure the Minister will agree. When we take account of the natural increase and the influx of migrants each year, we understand at once that the number of homes now being completed annually is still insufficient to meet the demand. So, although the Minister may submit that this measure will improve the situation, it will not do so and, in the view of the Opposition, an unsatisfactory housing situation will still exist. Many of the features of this Bill are commendable and most of them have been referred to by honorable members on this side of the House, and certainly by honorable members opposite.

We acknowledge that this measure is a departure. It will be a new practice. It is obvious that some people will benefit as the result of this legislation, but the Opposition does not believe that the Bill goes far enough. We believe it will reach too few people. In its present terms, it will assist only those who are already in sound financial circumstances. This has never been the Opposition’s approach to this question. We on this side have frequently pointed out in this House - and we must continue to make this point - that in recent years interest rates have been far too high and the cost of homes has risen beyond the reach of most of the young people. Certainly the margin of security required by the Government’s own instrumentality, the

War Service Homes Division, and by other lending institutions such as the co-operative building societies, housing societies, the Commonwealth Bank, and the private banks is beyond the reach of most people who desire either to build or purchase homes of their own.

The Minister must appreciate that this Bill will do nothing to relieve that situation. As I have pointed out to the House, the measure will help those who are already in circumstances that would enable them normally to secure homes. In his second reading speech the Minister suggested that this measure may be a means of reducing the interest rate. We hope it is because we have pointed out to this House time and time again that the interest rate has been one of the factors which have resticted home ownership. If the Bill will reduce the interest rate, in that respect it deserves all the credit that this Parliament can give to it.

The Minister is talking about reducing interest rates at the very time when his own Treasurer has already agreed to and announced increased interest rates. Could there by anything more futile in this Parliament than to have a Minister talking about reducing interest rates while his Treasurer and the Government to which he belongs are agreeing to an increase in interest rates? It is very doubtful therefore, whether we could expect the Minister for Housing to encourage a reduction in interest rates.

I am not sure - I know that my colleagues on this side of the House are not sure - that this legislation will do anything to bring about a reduction in interest rates. They will not come down as a result of this legislation. The only way they will be reduced is by some action on the part of the Government. But instead of the Government taking action to force a reduction in interest rates, it is at this stage actually agreeing to and approving an increase. Although, as I have already indicated, there are some very commendable features in this Bill, the Opposition is of the opinion that it will reach only a limited number of people in the community. It will not necessarily mean more houses. It will certainly mean some better houses, probably more expensive houses, but it will not necessarily mean more houses or cheaper houses. 1 do not think the Minister can deny the truth of that statement.

If this Bill is to succeed it must provide to prospective builders or purchasers of new or existing homes the means of securing them with a minimum of difficulty. This Bill merely gives a certain protection to those people who will make the finance available. If one carefully studies the Minister’s attitude as illustrated by this Bill I think one must agree immediately that it bears out the point that I have made throughout my speech, namely, that the Bill will assist only a limited number of people.

My interpretation of the Minister’s second-reading speech is that any loan which may be approved will not be greater than the equivalent of approximately three times the borrower’s annual income. I hope I am right in that interpretation. The Minister later went on to state the average cost of a home as £5,800. I do not know where the Minister obtained that figure. Did he merely take the average cost of a home in the six Australian States or did he include also the Australian Capital Territory and the Northern Territory. If he were to take as his authority the War Service Homes Division, which comes within his administration, I think he would find the average cost to be higher than the £5,000 he mentioned. However, I am quite prepared to accept £5,000 as the average cost of a home in Australia. Therefore, if the amount of an approved loan is to be equivalent to three times the salary of the applicant, a worker in our community would need to have an income of about £32 a week. A person would need an income of £32 a week, or about £1,600 a year, to qualify for a loan equivalent to 95 per cent, of the valuation of a home, if, as the Minister has said, the average value of a new home is £5,000.

Surely the Minister does not believe that £32 represents the average weekly income. This figure is far in excess of the true average weekly income, which probably would be nearer £23. An income of £23 a week is equivalent to approximately £1,300 a year. Three times this sum would give a maximum loan of about £3,900. If the Minister’s figure of £5,000 for the average value of a new home is correct, and, under the terms of this measure, a person on the average income ot £23 a week cannot obtain a loan exceeding £3,90.0, it can be seen immediately that the prospective purchaser or builder of a home would be obliged to find a deposit of no less than £1,100. Does this indicate that we are reaching a stage at which we shall be able to reduce the deposit gap? On the contrary, this will do nothing to reduce the deposit gap. I suggest that the Minister, if this Bill is to succeed, will have to examine carefully this question of the maximum loan that may be made to a borrower under the terms of this measure.

I want now to turn to one other important matter concerning which there is a serious omission in the Bill. Only a few moments ago, Mr. Deputy Speaker, I mentioned war service homes and pointed out that they are not provided for under the terms of this measure. Nor is any provision made to meet the needs of people who have purchased homes from the various State housing authorities. They will not be considered under the terms of this Bill. The Minister, in his second reading speech, said -

It is the usual practice of governments themselves to carry their own risks of loss.

Clause 4 clearly indicates that, with the possible exception of New South Wales, people who own homes purchased from State housing authorities will not be provided for in this Bill. As the Minister will be aware, most of the money for Housing Commission homes in New South Wales is provided through the banking system. So it is possible that in that State people who own Housing Commission homes will be provided for in this measure. This is my interpretation of the Bill, at any rate. However, in the other States, where the funds for State housing authority homes are provided by the State Government, the tenants of those homes will not be provided for in this Bill. This situation shows that there has been a very serious omission from the provisions of this measure. On the other hand, it must be acknowledged that although interest rates are high - these, of course, are prescribed by the Commonwealth Government - the deposits required for State housing authority homes in the various States normally are low. This means that there is at least one source of housing available to people who belong to the low income groups.

I turn now to the question of war service homes. This is entirely the Government’s responsibility. The Minister for Housing is in charge of the administration of the War Service Homes Act. Not one person qualified for a loan from the War Service Homes Division will be eligible for the benefits of this legislation. Let us look at the facts. The Minister has said that under this legislation it will be possible to secure a loan up to 95 per cent, of the value or the cost of a home. However, the maximum advance under the War Service Homes Act is only £3,500. The Minister has said that the average cost of a dwelling is £5,000. This means that an ex-serviceman eligible for a loan under the War Service Homes Act must find the difference between the maximum advance of £3,500 and the cost of a home, which, according to the Minister, is £5,000. That is a difference of £1,500. But we are told that these ex-servicemen are not eligible under this Bill.

I believe, and I am sure that my colleagues on this side of the House believe, that this is a very serious omission. The Minister should explain to the House why those people who are eligible under the War Service Homes Act are not able to qualify for the benefits of this legislation. The Minister should explain the reason for this very serious omission. I know that the Returned Servicemen’s League and other responsible bodies who represent exservicemen will want the Minister to explain why it will be possible for people who qualify under this legislation to obtain loans up to 95 per cent, of the cost of the home, with the loan protected by this legislation, whilst it is not possible for the purchaser of a war service home to obtain a loan exceeding about 60 per cent, of the cost of the home. I suggest to the Minister that an explanation is due on this aspect.

Towards the end of the last sessional period, I asked the Minister a question about loans for existing properties. This is a matter I have pursued consistently in the Parliament. I have asked the Minister why ex-servicemen who qualify for a loan are not able to purchase an existing home or are not able to have the mortgage on an existing home transferred to the War Service Homes Division. I do not have the terms of the Minister’s reply with me, but

I know when I last asked him such a question he replied, “ We want more homes to be built and therefore we are not prepared to approve of the transfer of an existing mortgage”. If we examine very carefully the legislation that is now before us, we will see that it covers not only homes that are to be built but also homes that have been built. When the Minister replies to the various points that have been raised in this debate, perhaps he will explain to me and to ex-servicemen why he is not prepared to change the present position so that an existing mortgage can be transferred. I point out that the refusal to allow existing mortgages to be transferred is the result of a ministerial direction. The Minister for Housing knows that this Ministerial direction was given when the War Service Homes Division was being administered by the Minister for National Development. All that is needed now is for the Minister to approve of the transfer of existing mortgages. But the Government is not prepared to do this, though it is prepared to approve of the transfer of existing mortgages under the Bill that is now before us. This is discrimination against ex-servicemen. In that respect the Minister has a charge to answer.

In the limited time at my disposal I hav: dealt with the legislation generally. I have not been able to cover all the points that I wanted to deal with, but I believe that I have dealt satisfactorily with a number of them. Earlier in my speech on this subject I referred to commendable features of the Bill and said that it represents a departure from the usual housing legislation that has been introduced in this Parliament. These unusual features have already been referred to by honorable members on both sides of the House and there is no need for me to recapitulate them. I merely say in respect of the last two points I made that the Minister has a case to answer. I hope that he will provide that answer at the earliest possible opportunity.


– I congratulate the Government and the Minister for Housing (Mr. Bury) on introducing this Bill. It encompasses all phases of securing home ownership, including the erection, purchase, addition to, repair and improvement of homes. In addition - and I consider that this is perhaps the most important of all the purposes of the Bill - for the first years of its operation it will provide for the refinancing of existing mortgages on homes.

I disagree with the honorable member for Bass (Mr. Barnard). It is a most admirable state of affairs if we can assist young people who are paying usurers’ rates of interest. One would have thought that the honorable member would have been wholeheartedly behind this scheme. It is a blot on our society that young people who are buying their homes are required to pay from 14 per cent, to 19 per cent, to the fringe banking corporations. If the Minister can obtain sufficient money to assist these unfortunate people to escape from the bondage of these institutions he will be doing a wonderful job. By insuring a lender against loss of capital and income it will be possible for home seekers to secure a larger loan than otherwise would have been obtainable from the traditional sources. I recommend to the Minister that he give consideration to evolving a scheme whereby a person with a small amount of capital, sufficient to finance one transaction - say, up to £4,000 or £5,000- -will be encouraged to lend through the Housing Loans Insurance Corporation. This would be advantageous both to the lender and to the borrower. It would provide a guarantee to the lender that his small capital would be safe and that there would be no possible risk of loss either of capital or income, yet would provide him with a regular income at a reasonably good interest rate.

In obtaining the maximum loan for the prospective home owner it is the first duty of those concerned to ensure that the purchaser gets a fair go. First, the price that he pays for the home must be fair and just. This is where the Corporation could play an important part in refusing to guarantee or insure a loan where the price for the home was too high or the purchaser was being exploited. I have known of lending authorities who could not care less about the price that the purchaser paid for his home. All they were worried about was their own equity. When I have remonstrated with such people, they have said that it was none of their business. To my mind, that is a very poor way in which to do business.

In the boom years round about 1953-54 project builders were making from £600 to £800 on each house they sold. Any lending authority who finances such a proposition is not fair to his customer or to the institution to which he belongs. I have knowledge of this sort of thing, because I have had customers who have adopted exactly the same technique in building their homes; they have built exactly the same type of home by the sub-contract method. Consequently, I know that the project builder was receiving, as I have said, a net profit of from £600 to £800 on each house. The Housing Loans Insurance Corporation will be able to exert its influence for good, because it will be able to advise prospective purchasers to look further afield and not to be exploited. It should be the aim and desire of every lending authority to be the borrower’s best friend and to ensure, first, that he buys at a just and reasonable price and, secondly, that he does not over-commit himself but is able to meet his regular instalments. One good aspect of the proposed scheme is that the insurance charge and the local government charges will be included in the periodic payments to the lending authority.

The proposal for the establishment of a market for housing mortgages, which was outlined by the Minister in his second reading speech, is a masterpiece. The Minister is to be congratulated upon his vision and imagination. This will engender further confidence on the part of the individual private lender and encourage him to make his capital available for home building. Control of the mortgage market should be one of the functions of the Corporation. The Bill provides for the granting of a loan in respect of a home of which a shop, surgery or office forms part.

The Bill has been drafted in broad terms, because housing loan insurance is an innovation in Australia. Because of unforeseen circumstances, there will be difficulties and problems to be overcome. Difficulties have had to be overcome in the administration of the Homes Savings Grant Act, but the Minister has had prepared a bill to adjust the anomalies that have arisen under that legislation. Likewise, he will be big enough and game enough when the time arrives to rectify any anomalies that may arise under the legislation we are now considering.

The Minister stated in his second reading speech -

Clause 4 defines insurable loans to include-

loans made for the purpose of acquiring land and constructing, or completing the construction of, a dwelling on the land. However, clause 22 makes it quite clear that the Corporation may not insure a loan made solely for the acquisition of land - we do not wish to encourage the land speculator;

loans made to construct a dwelling or complete the construction of a dwelling on land owned or leased by the borrower;

loans made to purchase an existing dwelling;

loans made to alter, improve or extend a dwelling house. These would include loans for, among other things, the permanent provision of water supply, electricity and sewerage, and the conversion of an existing dwelling into two or more dwelling units;

loans made to meet expenses on roads, curbing or footpaths, in connection with land which the borrower owns; and

loans made for the discharge of an existing mortgage over land on which a dwelling house has been, or is being, erected and which is owned or leased by the borrower.

The honorable member for East Sydney (Mr. Devine) misunderstands the Bill. The Housing Loans Insurance Corporation itself will not make loans. As its name implies, it will provide housing loans insurance. The £100,000 referred to by the honorable member is for carry on expenses and to meet any contingencies under the provisions of the measure. The honorable member also referred to the fact that the Bill does not cover loans granted by the Commonwealth or by a State authority. I remind him that it is the usual practice for governments themselves to carry risks of loss.

Another function of the Corporation is to improve the standard of buildings, in regard to both design and methods. It can use its influence to reduce extraneous costs that add to the high price of homes, such as those incurred by delays in approval for erection and delays in transfers and registrations. These all add to the cost of a building. The Bill is designed to reduce the cost of a home to those people who now have to resort to second mortgage finance. It will dispense with high legal costs and high interest charges.

The honorable member for Wilmot(Mr. Duthie) spoke disparagingly of the part that private enterprise has played in making money available for home building. Let me assure the honorable member that but for the action of the free private trading banks in making large sums of money available in 1934 and 1935 to the then new building societies, the building industry would have taken several years to extricate itself from the doldrums. To the everlasting credit of the Bank of New South Wales, it supplied, I think, an amount of £3 million. When the private trading banks approached the Commonwealth Bank and the other Government banks to enter the scheme, the answer was a blunt refusal. But after the building trade had been brought out of the depression and home building was progressing fairly rapidly, the Commonwealth Bank and the other government banks jumped on the band wagon. So I assure the honorable member for Wilmot that the private trading banks played a very big and important part in relieving distress and bringing the industries concerned out of the doldrums in the 1934-35 era.

I congratulate the Minister on bringing this Bill forward. He will find that anomalies occur, but with his broad vision they will be overcome. It is to the everlasting credit of the Government that it has introduced this legislation. People who are now unable to purchase a home will be placed in the very happy position very shortly that they will be able so to do.

Debate (on motion by Mr. Coutts) adjourned.

page 190


Motion (by Mr. Bury) agreed to -

That the House, at its rising, adjourn until Tuesday next at 3 p.m.

page 190


General Election in New South WalesBushfires in Victoria - Alleged Dumping of Textiles.

Motion (by Mr. Bury) proposed -

That the House do now adjourn.


.- The matter to which I wish to refer tonight is related to a question I directed yesterday to the Prime Minister (Sir Robert Menzies). To refresh the minds of honorable members

I shall read the question and answer. I asked -

Is the right honorable gentleman aware that the Sydney “Sun” newspaper of 5th March stated that the Federal Government had decided to underwrite the Askin policy of promises for the forthcoming New South Wales general election? Is this true?

The Prime Minister replied -

If it were true it would be the first true statement I had ever read in the Sydney “Sun”.

The answer given by the Prime Minister is quite easily understood. It means, in effect, that the Federal Government will not underwrite any promises made by the Leader of the Liberal Party in New South Wales, Mr. Askin, in the forthcoming New South Wales general election. In addition, it gives the lie direct to the article published in the Sydney “ Sun “ of 5th March last.

Let us examine the motive of the Sydney “Sun” in publishing the article. First, I should like to make it perfectly clear that I support the view that any citizen, organisation or newspaper has the right to criticise any government or political party on matters of public interest. As honorable members are fully aware, the newspapers of Australia are pro-Liberal and very much anti-Labour. This situation is to be expected because almost without exception the major Australian newspapers are owned and controlled by wealthy monopolistic supporters of the Liberal Party, some of whom have been knighted for services rendered. As a consequence, the Labour Party has had to contend against vicious campaigns of deception and bias. This practice has persisted for the past 50 years. For example, when a Federal Labour government introduced legislation to establish that magnificent institution, the Commonwealth Bank, the Press labelled it a waste of public money and a burden on the taxpayer. The Press said: “ The bank is doomed to failure “. In the mid 1920’s when a New South Wales Labour government introduced child endowment, widows’ pensions, workers’ compensation and the 44-hour week, the newspapers moaned and groaned. They said: “We can’t afford it. It will bankrupt the State “.

During the 24 years’ reign of Labour governments in New South Wales since 1941, we have seen the introduction of the 40-hour week, long service leave, three weeks’ annual leave and amendments to the

Workers’ Compensation Act making it equal or superior to comparable legislation of any other country. On each occasion this progressive legislation was bitterly opposed by the Press of New South Wales. If the Australian Labour Party had been deterred by these criticisms, we would still be living in the “ good old days “, when wages were at bedrock and the living standards of the majority of the people were very low. The Labour Party has become accustomed to violent opposition from the Press, particularly during election campaigns. However, I am sure that all Australians who believe in a fair go will be appalled and disgusted by the publication in a newspaper of a deliberately false article, designed to obtain votes for the Liberal Party. This kind of false propaganda is a disgrace to the ethics of Australian journalism.

Any person with average commonsense realises that no Federal Government could underwrite the promises made by a State leader just because he belongs to the political party to which Government supporters belong. This is evidenced by the fact that in the 1959 New South Wales elections the Prime Minister, when speaking on the same platform as Mr. Morton, who was then the Liberal Party leader in New South Wales, said that he would not underwrite any promises made during a State election campaign. If the Prime Minister were to underwrite the promises made by Mr. Askin we can well imagine the reaction of the Premiers, particularly Mr. Bolte.

In an article which appeared in the “ Sun “ on Wednesday 24th February Mr. Askin is reported to have said that he will seek a cut in local government rates, that he will appeal to the Commonwealth for more money for local government activities so that rates may be reduced. Surely Mr. Askin is aware that the six Premiers and the Opposition in this Parliament have been endeavouring to do this for many years. Mr. Mainerd, who is an anti-Labour man and Secretary of the Australian Council of Local Government Associations, has appeared regularly on television during the last three or four years campaigning for the very thing that Mr. Askin now seeks. The Opposition in this Parliament has made repeated requests in the last five years for more money to be provided for local government. Supporters of this Government have made the same request. All appeals have fallen on deaf ears. What does Mr. Askin have that Mr. Bolte does not have? What does Mr. Askin have that no other Premier has? What does Mr. Askin have that no member of this House has?

It is a disgrace to see this tripe in the newspapers, proclaiming in prominent headlines what Mr. Askin will do at the expense of the Commonwealth Treasury. One would imagine that the people of New South Wales will be induced to vote for Mr. Askin because they think the Prime Minister (Sir Robert Menzies) will underwrite all his promises. Imagine what the honorable member for Mallee (Mr. Turnbull) would say about Victoria being starved at the expense of New South Wales. Imagine what the Postmaster-General (Mr. Hulme) would say about Queensland being starved at the expense of New South Wales. I take exception to newspaper articles of this kind. I emphasise that any newspaper is entitled to criticise a political party. We believe in criticism. We have taken a lot of it in the last SO years. But when a newspaper stoops to publishing false articles in order to obtain votes for the political party that it supports one must be appalled and disgusted. As I said earlier, this practice is a disgrace to the ethics of Australian journalism.


.- -I feel that I cannot allow the opportunity to pass in this first week of the sittings of the Parliament without placing on record my impressions of the recent disastrous fires in Gippsland. The damage in the area has not been fully estimated but I have heard the figure of £250,000 mentioned as the first estimate of damage to private property adjoining a large area of forest - probably hundreds of square miles - that has been burned to the ground. The estimate does not include damage sustained by the PostmasterGeneral’s Department, the State Electricity Commission, the Country Roads Board and shire councils, which lost many bridges throughout Gippsland. 1 must place on record the appreciation of the people of Gippsland of the many organisations and individuals who assisted to fight the fires. I have in mind the Country Fire Authority, the Foresty Commission, the crews of Australian Paper Manufacturers

Ltd. and the rural fire brigades. On Friday of last week 110 tankers and 2,000 men were fighting fires in the East Gippsland area, and all of the men in the towns were on stand-toy. I also must say a special word of appreciation for the work of the Red Cross members and other voluntary workers who assisted the men who were fighting the fires. In the Lucknow Hall in the Bairnsdale area on one day women working round the clock served over 3,000 meals. This is certainly no mean effort.

I should also like to thank the Commonwealth Government for the immediate offer by the Prime Minister (Sir Robert Menzies) of a matching grant of £1 for every £1 provided by the State for the assistance of those who suffered as a result of the fires. I thank the Army for sending 400 men to assist and the Royal Australian Air Force for making an aircraft available for fire spotting and also for sending men to the fire area. Special thanks and congratulations must go to the Postmaster-General’s Department and its staff for keeping the lines of communication open under terribly difficult circumstances. The chief of the Country Fire Authority told me that never at any time during the outbreak, even right at the height of the fires, /ere telephone communications broken for more than 15 minutes. Indeed, it is true to say that the staff of the Department, like many other men who fought the fires, served beyond the call of duty. Let me cite one example: The telephone staff even put telephone lines on a wheelbarrow, wheeled them through the burning forest after the main fire had passed, and hooked up the wires so that communications could come in. It was as a result of efforts like these that losses were kept to a bare minimum. Control points had telephone communications open all the time and were able to warn people in the areas ahead that the fires were coming. This enabled people to be moved from their homes and stock to be moved, which was one of the saving graces of the situation. I think it is true to say that all of those persons and organisations which assisted pulled together magnificently. Congratulations must go to the organisations that worked at the fire front.

I have written to the Prime Minister, requesting that the Commonwealth Government should try to find more modern means of tackling the fire fighting problem. I have suggested that perhaps a unit of aircraft might be formed to carry fire fighting material to put fires out at the first outbreak. Experiments could be carried out along lines already followed in the United States of America and Canada. I should like to see the Commonwealth Scientific and Industrial Research Organisation given an opportunity to try these methods in Australia. The Gippsland fires commenced on 12th February in an area quite remote in the forest and ground crews took some hours to reach the fire front. I envisage that an aircraft could go in and spray or bomb such a fire at the first sign of smoke. In this way the fire could possibly be contained until the ground crew reached it and such terrible devastation as we have experienced would be avoided. I can only hope that the Prime Minister will consider allowing such experiments to proceed in an attempt to find more modern means of fighting fires.


– I want to make a plea to the honorable member for Watson (Mr. Cope) in regard to what he said a moment ago in this House. I ask him to remember that he is n New South Welshman and not for purposes of party political gain to say things in this House which are directed towards hurting his State. What he did was to incite people in this chamber to see that New South Wales was victimised. His party is panic stricken and knows that it is being called to account in the State sphere on 1st May. He is so terrified at this that he is not thinking of the damage he is doing to his State. All he can think of is endeavouring to save his party from the consequences of its sins of omission and commission. He got up here and said things which were deliberately directed towards sabotaging the chances of New South Wales to get more money, and he said them in a way which he thought would help the State Government. How low can you get?

Here is a man who is prepared to sell his State out for base party political purposes, and I think it is a shame that he should do that. I appeal to him. I do not think he realised what he was doing. I believe he was just thinking of his own selfish party political motives and that he had forgotten the general good of the Stale of which he is one of the representatives. I appeal to him to think in terms nf New South Wales and to forget these party political considerations.

What has he said? He has said that New South Wales must not get any more money from the Federal Government. He knows very well that, owing to the continued negligence of the Labour Government which has represented New South Wales at meetings of the Australian Loan Council for some 24 years now, our share of the loan pool, which was a fair share when Labour came to office, has since become an unfair share. This is not due to any fault of the Fed,ra Government. The New South Wales Government has had the power to veto all the time at Loan Council meetings, but has unanimously consented to the victimisation of the State. This has been going on during the whole of the term of the Labour Government. If there is anything in the present formula which restricts the loan funds of New South Wales, that is due only to the sins of omission which the Labour Government has committed at the Loan Council meetings over the past 24 years. Do not blame the Federal Government. Blame the New South Wales Labour Government.

Furthermore, the honorable member says nothing can be done. Take the big transport mess in Sydney which is costing tens of millions of pounds every year. Cannot some forward plan be prepared to correct this mess? Of course it can. Why has Labour sat on the treasury bench for all these years and allowed this kind of tangle to come into existence? It is because the Labour Party is an incompetent party. It has sold out the interests of New South Wales, and the incoming Askin Government will undoubtedly clear up this transport mess. From this one source alone - this is not the only source, and perhaps it may not be the most important source of funds - the Askin Government will undoubtedly clean up the mess. Without imposing any additional tax on the people of New South Wales, and without imposing any additional strain on Federal grants, but, simply by bringing efficiency back to our State, the Askin Government will be able to finance things which the Labour Government has not been able to finance because it has frittered away its resources in opera houses, traffic tangles, and what have you. These things can be done. The Askin Government will do them. It is time we had a change in New South Wales. It is indeed. Take the housing mess. Half the housing shortage - I beg your pardon - much more than half the housing shortage in Australia is in New South Wales, and this in spite of the fact that the population of New South Wales has not grown as fast as has the population of other States. How is it, for example, that South Australia, whose population pressures have been much greater than those of New South Wales, has had no housing shortage? That is because it has had a good government. Unfortunately New South Wales has been victimised and to some extent made to stagnate by its present Government.

I believe in New South Wales. It is the great State of the Commonwealth, but it has been hobbled and hamstrung by the Government which it has had for 24 years. We will get rid of that Government and Mr. Askin will be able to do the things which he has promised to do. He will be able to get the finance that is required. 1 conclude as 1 started, by appealing to the honorable member to forget his base party political motives, to act as a New South Welshman, and to try to further the interests of his State. One of the reasons that New South Wales has not progressed is that its Government has looked to party political advantage instead of to the interests of the State as a whole. Although the honorable member for Watson may not have realised what he was doing, tonight he was infected by that same pernicious philosophy. There will be a change when the Askin Government comes into power on 1st May.

Mr Cope:

– I wish to make a personal explanation.


– Does the honorable member claim to have been misrepresented?

Mr Cope:

– Yes. I have been misrepresented by the honorable member for Mackellar. He said that I had stated that the New South Wales Government was unfairly treated in relation to moneys allocated to it. I said nothing of the sort. I said that New South Wales could not be favoured under any political party at the expense of other States, or words to that effect. In addition I should like to reply to the criticism that money has been spent on the Opera House-


– Order!

Mr Cope:

– The fact is that your government has made attacks-


– Order!

Leader of the Opposition · Melbourne

– After his performance tonight I understand that the honorable member for Mackellar (Mr. Wentworth) is to be invited by Mr. Askin, if he becomes Premier of New South Wales, to open the Opera House. If the honorable member for Mackellar would only appear on television in support of Mr. Askin I am sure that Mr. Renshaw would remain Premier of New South Wales for a long time.

However, I have no worries about New South Wales at the present time. What I want to bring to the notice of the House is the dumping of material on the Australian market. I wish to read a letter in connection with this matter. My correspondent is a man named M. Wainberg, who is Managing Director of Jeannette Underwear Mills Pty. Ltd. in Sydney. In a letter dated 16th March 1965 he wrote -

In the Fashion Week Edition dated 15th March 196S I read an article with interest, where you are intending to bring up the matter of dumping of ready-made articles into Australia. For this reason, I take the opportunity of giving you some more information which affects the trade enormously.

Early in 1964, I went myself to Hong Kong to investigate the position regarding importing of knitted shirts and tee shirts. I have purchased about 24 dozen of these garments for sample purposes and the total amount was rendered.

I interpolate here that £60 was paid for 24 dozen of these articles. That means that they were being purchased for a few shillings each and dumped in Australia. Mr. Wainberg continued -

We cannot produce such a garment ourselves under 14s. 3d. each. We have already lost about one-third of our stuff and probably will lose more now.

To give you a clearer picture, I wish to state that two years ago, we sold to Woolworths 5,080 dozen knitted shirts, last year 2,911 dozen knitted shirts and this year we are getting only 480 dozen. I understand this is only to keep the “ door open “ as they do not want to entirely sever the connection with Australian manufacturers.

To try to get the business we even went so far as to reduce the prices. Then wages, etc., went up and consequently we lost money because even with reduced prices, we could not get support from shopkeepers.

They are, as you are aware, buying from the cheaper market and telling us - “we are not competitive “ - and this is correct.

We are the largest knitted shirt manufacturer in Australia and also a large ladies underwear manufacturer and if no relief is given in this matter we will be compelled to close down the knitted shirt section.

I interpolate again to say that this is of far more importance to Australia and to employment than some of the matters that are raised in this House. The letter continues

The “ charity “ orders which we are now getting from our customers make this section of our business uneconomical. For example, Waltons, Palmers and Grace Bros. did not buy from us last year where, in the past, they have been valuable accounts.

The Hon. R. H. Erskine, M.L.C. brought this matter up in the Legislative Council, Mr. A. D. Bridges, M.L.C. also made representations to the Minister on our behalf and also we had a visit from the Department of Trade and Industry regarding this matter and to date we have received no further advice.

We wish you every success on the raising of the matter in the House and hope, at the same time, to clear up the matter whether we are to be manufacturers or importers.

We are also enclosing samples of the imported goods along with copies of invoices. If you care to look at the garments you will notice some are branded where they were made up and some are not. They should all be branded with the origin of the country, and when the public buy these goods they do not know whether the garments are Chinese, Japanese or Australian. We realise it is impossible to have every garment examined by inspectors.

The garments look all right. They are produced for less than 4s. each and are dumped on the Australian market. I am told that no Australian manufacturer can produce these goods for less than 14s. 3d. If this position continues, obviously we will not have any knitwear manufacturers in Australia at all. I ask that some Minister, probably the Minister for Trade and Industry (Mr. McEwen), take some action in the matter in order to protect the living of many Australians and in order to protect the employment of many Australians. This is a situation which should not exist and I hope it will soon be remedied.

Question resolved in the affirmative.

House adjourned at 11.3 p.m.

page 196


The following answers to questions upon notice were circulated -

Television. (Question No. 387.)

Mr Collard:

d asked the PostmasterGeneral, upon notice -

  1. What was the actual, or is the estimated, cost of establishing each of the national television stations in country areas of Australia, including those in Phase 4?
  2. What has been, or is expected to be, the annual (a) maintenance and operating cost and (b) interest and depreciation cost of each station?
  3. What has been, or is estimated to be, the annual revenue from each station?
Mr Hulme:

– The answers to the honorable member’s questions are as follows -

  1. I presume that the honorable member is seeking details of the revenue expected to be derived from viewers’ licence fees in the country areas in which national television stations have been, or are to be, established. It is not practicable to provide reliable estimates of this. The annual revenue which will ultimately be derived from viewers’ licence fees in the areas in question will not be known for some time; it will depend on the level of receiver saturation which is eventually reached.

The rate of growth of receiver saturation from year to year is difficult to estimate; it is affected by a number of factors and varies from area to area.

Telephone Services. (Question No. 787.)

Mr Whitlam:

m asked the Postmaster-

General, upon notice -

  1. How many telephone applications were received in 1963-64 and what percentage of them was received from (a) the metropolitan and (b) country areas of each State?
  2. How many telephone installations were made in 1963-64 and what percentage of them was made in (a) the metropolitan and (b) the country areas of each State?
  3. How many telephone applications were deferred at 30th June 1964, and what percentage of them was deferred in (a) metropolitan and (b) the country areas of each State?
  4. How many telephone applications does his department expect to receive in 1964-65 and what percentage of them does it expect to receive from (a) the metropolitan and (b) the country areas of each State?
  5. How many telephone installations does his department expect to make in 1964-65 and what percentage of them does it expect to make in (a) the metropolitan and (b) the country areas of each State?
  6. How many telephone applications does his Department expect will still be deferred at 30th June 1965, and what percentage of them does it expect there will be in (a) the metropolitan and (b) the country areas of each State,
  7. What amount was spent in installing telephones in 1963-64 and what percentage of this amount was spent in (a) the metropolitan and (b) the country areas of each State?
  8. What amount will be spent in installing telephones in 1964-65 and what percentage of this amount will be spent in (a) the metropolitan and (b) the country areas of each State?
Mr Hulme:

– The answers to the honorable member’s questions are as follows -

  1. Gross connections in 1963-64 -
  1. Deferred applications as at 30th June 1964 -
  1. It is expected that the number of applications for telephone service in 1964-65 will not exceed those received in 1963-64. It is difficult to estimate the possible variation in demand, or the difference in demand between metropolitan and country areas, at this stage.
  2. Targets for the connection of services are not classified into metropolitan and country areas. The number of connections achieved is related to the areas of demand, and the facilities available to meet that demand. It is expected that the number of gross connections in 1964-65 will approximate -
  1. The number of deferred applications at 30th June 1965, will, of course, depend on the level of demand experienced during the financial year. The present indications are that the telephone connections during 1964-65 could result in some reduction in the number of deferred applications.
  2. Amount spent in installing telephones in 1963-64-

In New South Wales, about 40 per cent. of the expenditure shown as Country relates to Canberra, Newcastle and Wollongong.

  1. Amount which will be spent in installing telephones in 1964-65 -

The final division of expenditure between metropolitan and country areas could vary with the relative levels of demand for telephone services. It is unlikely that the proportions of expenditure in country areas will vary substantially from those for 1963-64.

Electoral: Enrolment of Aborigines. (Question No. 786.)

Mr Whitlam:

m asked the Minister for the Interior, upon notice -

How many Aborigines (a) reside and (b) are enrolled in each electoral division in Western Australia, Queensland, South Australia and New South Wales?

Mr Anthony:

– The answer to the honorable member’s question is as follows -

  1. The only information collected by the Bureau of Census and Statistics of the number of full-blood Australian Aborigines comes from the Commonwealth censuses. The numbers of fullblood aborigines so enumerated in Census Divisions in Western Australia, Queensland, South Australia and New South Wales at 30th June 1961, are shown in the following table. Census Divisions closely approximate Federal Electoral Divisions and are designated with the same names.
  1. The Electoral Branch records do not distinguish between Aborigines and other electors and accordingly it is impossible to say with any degree of accuracy how many Aborigines ars enrolled.

Cite as: Australia, House of Representatives, Debates, 18 March 1965, viewed 22 October 2017, <>.