COMMONWEALTH OF AUSTRALIA.
SPEECH BY
Hon. L. H. E. BURY, M. P.
ON
HOMES SAVINGS GRANT BILL 1964
SECOND READING
[ From the Parliamentary Debates," 5th May, 1964.]
Mr. BURY ( Wentworth-Minister for
Housing) [ 8.54.-1 move-
That the bill be now read a second time.
The purpose of this bill is to help young
married couples obtain a home of their own
by authorizing payment to them by the
Commonwealth of tax-free grants to supplement
their own savings. It is designed to
increase the proportion of national resources
vail able for housing purposes by providing
-astrong inducement to young people to save
in ways which provide funds for investment
in housing.
Housing is vital to the welfare and happiness
of individuals and thus to our future
evelopment as a nation. Without proper
housing, the process of marriage and family
formation which are the very essence of
Australia's future must be seriously impaired.
The Government seeks, moreover,
to foster a healthy property-owning democracy
of sturdy independent individuals and
regards home ownership as a basic
ingredient. It is a linchpin of family life.
Our constant quest to expand and develop
Australia demands large-scale immigration,
and more people need more houses. In the
absence of special measures, housing could
become a limiting factor to our population
growth. Most of us are conscious too that.
we shall shortly be moving into a period in
which the marriage rate in our existing
population is likely to rise substantially. We
must be ready to meet this position as it
arises. 5723/ 64. In housing we shall always fall short of
the ideal. We can be proud, however, that
despite all the difficulties we have been
through since World War II., and the present
shortcomings evident to all of us, we
probably have more accommodation available
per head than any other country. It
behoves us to maintain and improve this
record. However good, it is small consolation
to those without a home.
Australia, under the present Government,
is a rapidly developing country of increasing
wealth. By and large, Australians are able
to afford a relatively high standard of housing,,
and it is the wish of almost every
married couple to own a home of their own.
However, in the early years of marriage
there are numerous calls upon savings, and
many couples are compelled to postpone
home ownership. We believe that these
young people should be assisted to attain
this most desirable objective. However, to
merit this assistance, young people, both
before and after marriage, should make
some effort themselves by saving a portion
of their incomes.
The Government has become particularly
concerned with the difficulties facing many
homeseekers in raising sufficient funds for a
deposit large enough to meet the requirements
of lending institutions. This problem
applies particularly to young married persons.
The causes of this situation are complex,
but two factors are worthy of particular
notice-the rising price of land,
especially in the vicinity of our capital cities,
and the availability of funds from lending
institutions. There is little the Commonwealth Government
can do about the price of land.
It has become increasingly scarce relative to
demand and nowadays building blocks often
have to bear the cost of development work
such as water and sewerage, roadmaking and
other charges in their initial price. These
are State matters. The availability of funds
is also highly critical and is subject to Commonwealth
influence. Basically, in a fully
employed economy, additional resources
can only be devoted to housing if less are
applied elsewhere. One cannot eat one's
cake and have it. Overcoming any housing
shortage, therefore, entails some diversion
of funds from other uses to housing finance.
The Prime Minister ( Sir Robert Menzies),
in his policy speech made on 2th November
last, promised a two-pronged attack on
this problem-first, a scheme for home
savings grants for young married persons
up to the age of 35, and secondly, the
establishment of a mortgage-insurance corporation
to insure mortgages up to a high
proportion of the value of a house and
land. This bill represents the first instalment
of the new housing policy. It provides
both for assistance to young married
people seeking a home and for a means
whereby additional savings can be made
available for housing purposes. Its provisions
cover broadly the nature of the
grant, the definition of persons who will
qualify, the homes eligible for the grant,
acceptable savings, the period and amount
of saving, information to be submitted, the
manner and time of payment and the
necessary administrative arrangements.
In the introduction of a new scheme such
as this, certain interim difficulties are
inevitable until its details are widely understood
and people affected have had time
to adjust their affairs to meet its requirements.
The need for interim provisions to
cover savings until they can be put into
one of the permanent forms which will
ultimately be required is particularly
apparent. I have allowed as far as
practicable for the temporary problems
which can already be foreseen, but feel
obliged to ask the House for a wide measure
of administrative discretion until the scheme
has settled down to a routine basis in its
permanent framework. It will be readily recalled by honorable members that the
procedures under our social services legislation-
those most closely akin to thesehave
been refined by practical experience
over 50 years.
This bill, when it becomes law, will
authorize the payment of a Commonwealth
grant of œ 1 for every œ 3 of acceptable
savings for a home by persons aged less
than 36 years. The acceptable savings of
each partner to a marriage will be eligible
for the grant, but the total grant payable
in respect of a home will be œ 250. Th
grant will be an addition to savings mad,_
over a number of years and will be payable
in respect of a home anywhere in Australia.
The bill provides that a person eligible
for the grant must be under 36 years of
age, not only at the date of marriage, bt)
also at the time when one or both of a
married couple sign a contract to buy or
build the home, or commence its construction.
Although a grant will not be
paid to an unmarried person, young people
contemplating marriage may take steps to
acquire a home and become eligible for
the grant when they are married. But if
they do this, they must marry and submit
a claim for the grant within twelve months
of taking steps to acquire the home.
To be eligible, a person must have lived
in Australia and have accumulated accep
table savings in Australia for at least three
years. There is, of course, no maximum
savings period. The sooner saving commences,
the easier it will be to accumulate
maximum acceptable savings of œ 750. A
person need not have been born in Aus
tralia nor have become naturalized. Newcomers
to Australia who have lived here for
at least three years, are married and intend
to continue to live here, are eligible. The
legislation also provides that a temporary
absence from Australia, such as an overseas
holiday of business trip, may be counted
as residence in Australia. Moreover, a
number of young Australian citizens work
or study overseas. These young people,
if they deposit savings in a bank in Australia
for at least three years and live in
Australia during the three months before
taking steps to acquire a home, will be
eligible for the grant. Australian citizens in
the Territory of Papua and New Guinea
and our other external Territories may
save with a branch of an Australian bank
and become eligible for a grant in respect
of a home in Australia.
Once a person has received a home
savings grant, he or she will be ineligible
for a further grant. The marriage partner
of a person who receives a grant, and
subsequently remarries, also will be
ineligible. However, the person with whom
remarriage takes place will be eligible, provided
he or she has not received a grant.
Mr. Whitlam.-The second spouse will
be eligible?
Mr. BURY.-Yes, whatever may be the
,'" ltatus of the person remarrying. A widow
'.. kor example, may marry again.
Before aperson may become eligible he
or his marriage partner must have taken
steps to acquire a home. Home ownership
is the objective of the scheme. To be
jligible a person, or that person's husband,
or both of them jointly, on or after 2nd
December, 1963, the commencement date
of the scheme must-I wish to exphasize
the word must
have entered into a contract in
writing to buy an existing house and
land or the right to occupy a flat or
home unit; or
have entered into a contract in
writing with a building contractor for
the erection of a home on land held
by one or both of them in an approved
form; or
if an owner-builder, have commenced
the construction of a home on
land held by one or both of them in an
approved form.
The husband or the wife or both may be
jeligible persons provided each has saved
for at least three years. Although the
savings of the husband and the wife will be
treated as separate individual savings, the
maximum acceptable savings in respect of
one home will be œ 750, and the maximum
grant to husband or wife of both will be
œ 250. If the husband and wife have deposited
their savings in a joint account in
both their names, half of these savings will
be deemed to be those of the husband and
the other half those of the wife. If only one
of them is eligible, half the joint savings will
be deemed to be those of the eligible
person. I now propose to refer to homes
eligible for the grant. Broadly speaking,
to be eligible a home must be the
first home owrned by either or
both of the married couple upon or after marriage. It may be either
a house or a home unit. By and large,
ownership of a home by either partner at
the time of marriage will exclude both of
them from eligibility for the grant, for the
good reasons that they may either occupy
it as their matrimonial home or sell it and
use the proceeds to buy another home. It
is not, however, our intention to deny payment
of the grant to eligible young people
who buy or build, before they are married,
the home they intend to live in after
marriage. If one or both of a married
couple signed a contract to buy or build
the home, or commenced the construction
of the home prior to marriage, and this
home is occupied as the matrimonial home,
it will be eligible provided one or both of
the couple did not own another home in
Australia upon or after marriage.
For obvious reasons, a building condemned
as unfit for human habitation or
listed for demolition will not be eligible.
If the home is being newly constructed,
the plans must have been approved by the
local authority. The home must also be
built on land of which one or both of the
married couple are, or are entitled to be.
registered as the proprietor, or on land
which one or both of the married couple
holds on lease or as a life interest, and
my department is satisfied that the terms
of the lease or the life interest offer a
reasonable prospect of security of tenure
for a sufficient period of years. In the
case of a home unit, we must, of course,
be satisfied that the purchaser will receive
a title to a particular flat or apartment,
or an assurance of the right to occupy it.
Mr. Duthie.-I reckon about ten people
will qualify for these benefits.
Mr. BURY.-If that is the honorable
member's view I invite him to meet the
cost of this legislation. There are, however,
certain classes of dwellings which,
when purchased, will not be eligible for
the grant. As honorable members know,
the Commonwealth is already providing
significant assistance to people seeking a
home. We are currently subsidizing the
interest payable for more than fifty years
on some œ 50,000,000 per annum of loan
money available to the States for home
building under the Commonwealth and
State Housing Agreement. The Commonwcalth
is also building a large number of
homes in the Australian Capital Territory
and the Northern Territory. These are
usually offered to tenants at less than an
economic rental, or for sale on a deposit
as low as 5 per cent. of the total purchase
price with the assistance of a long-term
loan from the Commonwealth at a relatively
favorable rate of interest. If purchasers of
these homes were to receive the grant, we
would, in effect, be paying them a double
subsidy. We do not believe that most
Australians would wish us to do this.
A home built by a State housing authority
and paid for with money made available
under the Commonwealth and State Housing
Agreement will not be eligible for the grant,
where it is sold by a State housing authority,
or is being purchased with the assistance
of a loan by a State or State authority
out of moneys made available under the
Commonwealth and State Housing Agreement.
We consider that subsidized homes
built by the States with funds provided
uinder the Commonwealth and State Housing
Agreement ought to be reserved for those
with very small means and on low incomes.
This housing is made available at below
its true economic cost for social reasons.
In some States there are long waiting lists
for these housing commission houses largely
because they are relatively so cheap. It
would be wrong to inflate these lists and
disadvantage the most needy elements of
the community by adding those who can
better afford to look after themselves. The
homes savings grant scheme is designed
to help those who help themselves by saving
appreciable sums. Likewise, a home built
by the Commonwealth or a Commonwealth
authority in one of the Territories will be
ineligible when it is first sold or when its
purchase is being financed by a loan by
the Commonwealth or a Commonwealth
authority. However, the many homes being
built by young people in Canberra with
the assistance of a loan of Commonwealth
moneys from the Commissioner for Housing
will be eligible for the grant.
Houses built through co-operative societies
which receive moneys under Commonwealth
and State Housing Agreement in
the States or direct from the Commonwealth
in Canberra or the Northern Territory will
be eligible. It will be realized that these
homes bear the cost of administrative
charges imposed by the States and borne
by the societies and involve a substantial
deposit which the owner has to find. Homes acquired with the assistance of War
Service Homes loans will be eligible even
though these loans are offered on exceptionally
favourable terms and conditions.
The reason for this decision-I am sure
it is one with which all honorable members
will agree-is that Commonwealth financial
assistance to ex-servicemen in home ownership
is a repatriation benefit in the nature
of a post hoc payment for services rendered
to the nation.
Mr. Cope.-How many ex-servicemer",
are under 36 years of age? About two; J.
I would think.
Mr. BURY.-The honorable member
would be surprised. Apparently honorable
members opposite think that Australian
servicemen have not been in action since
1945. A War Service Home loan is not
a social welfare payment and should not
debar its recipient from social welfare
benefits available to young persons throughout
the community.
The homes savings grant is aimed at
assisting those who need and merit financial
aid in acquiring a home. Those acquiring
expensive homes stand in less need of
assistance from the taxpayer whose interests
must also be weighed. For this reason
a home which, together with the land, costs
more than œ 7,000, will be ineligible for
the grant. It is intended that the scheme
should apply equally to homes in rural
and urban areas. If the œ 7,000 limit were
to ipply to the cost of the whole of the
land and all improvements, many people
living on rural holdings would be ineligible
for the grant, because the value of their
land-their main business asset-would
usually exceed œ 7,000. We will therefore
take into account for purposes of the œ 7,000
limit only the cost of the home and of the
land immediately appropriate to the home.
For purposes of the scheme, the cost of
that portion of the farm on which the
dwelling has been, or is being, built will
be the value of half an acre of the land
at the average value per acre of the farm.
There are also other cases where, if we
were to take as the cost of the land and
the house the value of the land and all
improvements on it, such as a shop or a
surgery, the couple owning the land would
be ineligible for the grant. Where the
overall cost of the land and all the building
improvements will exceed œ 7,000, it is proposed
that my department be given a discretionary
power to identify the home
and to have regard only to its assessed
value in applying the œ 7,000 limit.
As honorable members would expect,' a
great deal of thought has been given to
determining the acceptable forms of savings,
bearing in mind the purposes of the scheme.
The forms chosen are in aggregate those
in which the great bulk of personal savings
ra home is accumulated. Moreover,
he institutions chosen are those which
provide a very large proportion of the
finance for private home building. The
reasons for this will be clear from my
opening remarks.
D The acceptable forms of savings for the
purposes of the scheme are-
Moneys deposited in a home savings
account with a savings bank. These
will include moneys placed on fixed
deposit and moneys invested in deposit
stock issued by some savings banks,
provided the account is designated a
home savings account. An eligible
person may have home savings
accounts with more than one bank;
Oma ot rnaedyisn g plbaacnekd, oprno vfidixeedd sduecpho sdiet powsiitths
are designated a home savings account.
Mr. Reynolds.-Will that hove to operate
for three years?
Mr. BURY.-If you will be patient you
will see the picture as it emerges.
SMr. Webb.-It is a bit difficult.
Mr. BURY.-I know it is, for you.
Other acceptable forms of savings for the
purposes of the scheme are-
Moneys deposited with a building or cooperative
housing society registered
uinder a law of a State or Territory.
Moneys paid to a building or co-operative
housing society as subscriptions towards
the purchase of shares in such a
society, provided the shares are not
quoted on any stock exchange.
Moneys paid for the purchase or lease
of land on which the eligible home
is being. or is to be. built.
I wish -to stress that on and after I st
January, 1965, these will be the only
acceptable forms of new-let me repeat, new-savings for purposes of the grant
scheme. However, in view of the fact
that most existing savings were made
without fore-knowledge of the new scheme,
special provisions will apply to savings
made up till the end of this year, and also
for savings made in certain institutions not
eligible in the long run to be kept in their
present form up till the end of 1967.
Because many young people have been, and
are, depositing savings for a. home in a
variety of other forms, my department, if
satisfied that these people have been saving
to acquire a home, will for a period regard
these savings as acceptable. Accordingly
the bill proposes that, up to the 31st
December, 1967, moneys deposited in the
following ways on or before 31st December,
1964, will also be treated as acceptable
savings. They are-
Moneys deposited in any savings bank
account, not being a home savings
account.
Moneys deposited in a current account
or on fixed deposit with a trading
bank.
Moneys deposited with a friendly society
or credit union registered or incorporated
under a law of a State or a
Territory.
However, savings in these forms up to
31st December next, to remain acceptable
after that date, must either be maintained
in -the form in which they are held at
the end of this year or be transferred to
one or more of the forms in which acceptable
new savings must be made from 1st
January next.
Mr. Cope-That will be easy to explain
to my constituents.
Mr. BURY.-Yes, it will. It is surprising
how bright some of them are. After all,
the people to benefit will not be more than
36 years of age.
Mr. Hansen.-What about savings in
Commonwealth bonds?
Mr. BURY-This will include savings in
any form, as I mentioned. It will include
savings in Commonwealth bonds. This
means that any moneys saved and deposited
in any bank account up to the end of this
year will be acceptable up to 31st December,
1967, if they are maintained in their
present form and after 31st December,
1967, if before that date they are transferred
into one of the acceptable forms
ot new saving. The same conditions will
apply to savings deposited with a friendly
society or credit union. They may be left
with the society or union and be -acceptable
up to 3 1st December, 1967.
I have had a number of discussions with
representatives of friendly societies and
credit unions, some of whom have expressed
their interest in registering associated building
or housing societies in conjunction with
their other activities. Many of them have
funds now applied for a variety of purposes
not connected with housing. There is no
time limit on the acceptability of savings
placed with any registered building society.
The above provision will give friendly
societies and credit unions ample time to
adjust their affairs to fit in with the new
scheme without disturbing their existing
resources. Credit unions are growing fast
and play a very constructive part in collecting
and channelling savings to fruitful
purposes for the benefit of their members
and in fostering a sense of financial
responsibility. The further harnessing of
their activities to the housing field would
be a most welcome development.
It is desirable at this stage to make it
quite clear that the bill now before the
House, which defines savings deposited with
building and co-operative housing societies,
friendly societies and credit unions as
acceptable savings, is in no way intended
to imply that the Commonwealth is, or will
be, responsible for the financial soundness
and solvency of iany of these institutions.
Because until now there has been no
definitive statement of acceptable forms of
saving, we are also proposing that money
saved and accumulated in any form for
home purchase uip to the end of this year
will be acceptable, provided the savings are
deposited or invested before then in any of
the approved forms of saving. Home
savings accounts will not be blocked accounts
in the sense that the owner of the account
may not withdraw money for any purpose.
However, a withdrawal will in most cases
reduce the amount of acceptable savings.
Obviously, any moneys borrowed-not
saved-will not be treated as acceptable
savings. We have considered at length when the
period of acceptable savings of an eligible
person should cease. The scheme is aimed at encouraging personal saving by young
people before they enter into a commitment
to acquire their own home. The bill therefore
proposes that the period of saving will
conclude on the day one or both of the
married couple, or a person intending to
marry, signs a contract to buy the home,
or signs a contract to build the home, provided
this is not later than the day construction
commences, or, in the case of an
owner-builder, the day on which construction
commences. As soon as the contracthas
been entered into or construction of'
the home commenced, the period of acceptable
savings concludes for both the husband
and wife, and for both partners of an
intended marriage. This significant date is
described in the bill as the " prescribeddate
As the grant is intended to be a reward
for continuous saving over a period of
years, not for the deposit of a single lump
sum and no further saving, there should
obviously be a limit on the amount of
acceptable saving in a year. To give effect
to this, it is necessary to define years of
saving. The years of saving of an eligible
person will be the twelve months' periods
dating back from the day on which the
period of acceptable savings concluded.
May I make this clear by quoting a
hypothetical example. Suppose Mr. Smith
signed a contract to buy or build, or commenced
the construction of his home on
20th February, 1964. The years of saving
of Mr. and Mrs. Smith would be 21st
February, 1963, to 20th February, 1964;
21st February, 1962. to 20th February.
1963; 21st February, 1961. to 20th February,
1962; and so on into the past; but
information will not be sought beyond seven
years. In respect of savings periods that
conclude after 31st December next, the
savings of each eligible person in any year
of saving will be acceptable uip to œ 250.
1 now wish to explain briefly the manner
in which we propose to calculate acceptable
savings, as it is set out in the bill. The
amount of acceptable savings of an eligible
person during any year of saving will be the
amount by which his or her total savings
at the end of the year exceeded savings at
the beginning of the year. Total savings
will include, in addition to balances held
in an acceptable form with a bank, building
society, friendly society and credit union,
the amount of any payment or payments
made to purchase the land on which the
home is being, or is to be built. If, however,
the total of an eligible person's acceptable
savings at the end of the year is less
than the total at the beginning of the year,
the acceptable savings at the beginning of
the year will be reduced hy the amount of
the decrease during the year.
If a person, whose savings period concludes
after 31st December next, saves more
than œ 250 in a year, the excess will not be
7aicsc espatvabinlge, s ienx caenpyt tyheaatr, iffo llao wpeinrsgo na ryeedaur ceisn
-which he had excess savings, the amount of
the reduction will be treated first as a
withdrawal of excess savings and only if
the reduction in savings exceeds the amount
of excess savings will the total acceptable
7savings in earlier years -be reduced.
As the grant is a reward for saving to
acquire a home, we must be reasonably sure
that the young people will obtain the home
and will live in it. It is proposed to pay
the grant as soon as my department is
satisfied that the home will be bought or
built and lived in by the married couple.
We appreciate that there will be many
young people who will wish to know in
advance of entering into a commitment
to acquire a home whether they are
eligible for the grant and, if so, the
Qapproximate amount of the grant they may
expect to receive. It is my intention to
arrange Australia-wide distributiion of a
pamphlet that will answer most questions
on who is eligible, what homes are eligible,
,--> what are acceptable savings and tiow the
grant will be calculated, and give advice on how to complete the application form.
Officers of my department will also be
instructed to supply the maximum feasible
amount of information in response to enquiries.
However, as honorable members
will understand, it will be impracticable
to determine the amount of acceptable
savings and of the grant payable to an
eligible person in advance of entry into
a contract to buy or build the home or
the commencement of its construction.
Offices are being established in each capital
city under the charge of regional directors.
I wish to add that it is my intention
that the scheme be administered as sympathetically
as the bill permits. I do not
pretend that, in the time we have had to
examine the ramifications of the -scheme, we
may not have overlooked some minor
aspects. Partly to cover the unforeseen
but also to permit the sympathetic treatment
of unusual cases, the bill, as already
mentioned, has been drafted to give substantial
discretionary powers to the secretary
of my department and his delegates
in administering the scheme. I am quite
satisfied that these discretionary powers,
similar in most respects to those of the
director-general and his delegates under the
Social Services Act, are necessary to permit
the smooth and effective introduction of
the scheme. I believe this bill will encourage
young people to save and so make
a useful contribution to assisting young
married persons to acquire a home of their
own. Accordingly, I commend it to the
House. Debate ( on motion by Mr. Whitlam)
adjourned.
BY AUTHORITY. A. J. ARTHUR. COMMONWEALTH GOVERNMENT PRINTER, CANBERRA.