I J~, AV~ rRAUtAI
e. OPENING OF THE 17TH NATIONAL HOUSING
CONVNTION OF THE HOUSING INDUSTRY ASSOCIATION
t ~ sgreat ple~ sure to have the opportunlity to open this
V iit~. latinaLHO using COnvention Of the Housing Industry
inusryyou represent is one of vital
Mjorta-zCe to Australia, not only economically, but also
~ ci~ ly.. For housing and shelter is not mearely a basic human
need. ~ ti loa seta nrdient in the naintenance of
a, strong* huma: n society: an essential ingredient in family
stability-which is fundamental to the strength of our society.
At-z& tLIc whn people, and especially families, are faced
p4itll nCrearinq pressures in a complex and dnarngworld,
4-e~&~ tialthat we continuie to maintain acces-s to a home
' within wihfamily liecan develop and be protectecl.
economic contribution thalt the housing industry ntake.
' ce& Qally important. it is, indeed, a Inajor sector tif the
-oy, -u4hraen aloepnn p: rivate dw~ ellings
rersselnting some 30~ t of all private investment; with _ ten~ s
o. Ef thous-and5 of persons5 directly employed, including a large
-proportion of self-employed persons; and with si~ gnifica nt links
, ny--3, ot-her slectors, including mnfcuigindus3try, and
. h e f in daI sc t or. The support which the housing industry,
he .116us-ing. industry -throu'gh the H1A h~ ciiven emin
~ iu~ tof the'Government's economic policies has bee~ l omed
yCabinet-colleagu-es. por A~ has urOr viqi ch hats aCXkt4d3 re
~ 2~_ ongte~ intexestz of tlv econ, -Uan to narrv. shot ta. d-rtss
5-' th-housiq-! ector. ApDc support for the fundameptai princiIes
of the pri: vate enterprise systemi and for policies designeil to
strerigthen that system, is in the-enid support. for building up
~~ L. via nd support for promotion-of the well-being and
p spe r i t of all Australians and all Australian families.
F You will not be surprised to learn that it is about aspects>
of 1ousing policy, about the nature of the Government'S ne
ho slng paock. age, about the contex: t in which that p-ckage was
l~ rfoed;-* an-Jabout some related ispues that I intendl to talk
to _ you today, I have spoken on sei~ reral receitociosoth
chd1l6nges that Australia faces at the prc'sent timie: chai-lenges
ñ~ i~ r~ wover sea s condition-,-, including continuing: uncertainty
. in---he~ wbrld econbriic ouitlook and the worlud-wifde phenomnenon
of. igqh. interest rates; and challencies a7. sing from', i dn, 7e Fti
Con ioris in-lucling wage ancl price pressures, trie
~ industr. 44al diaputcis, aind scrt^ e urv-expe ctations.
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I have aliso spoken of ) how the Government's pol~ icies, of how
our. f iscal. ar. d. monetary policies, our industry assistance
pa. eiesand: our industrial relations poiishv een
c. deignied to meet the challenges, and to respond flexibly
othern_. Above all, oar policies are dedicated to keeping
~~ jj growth going in Australia, to securing the confidence and
ivestment or: which growth depends, to ma; intaining the well-being
~ nd prcasperity of all Australians, and to makingq sure that we are
prepared to take full advantage of world recovery when it
S e-ventually comes.
ThGovernmzent s new housing policy package provides and unmistakable
ekample of outr-willingness and our ability to aiddress the probleitE,
( ndto meet the Concerns, that bad qrowrn up in current circuristances
about Australia's ability to maintain its cherished ideal of
-home ow-nership. It provide5 an unmistakable example of our
P51igess and our ability to bailanceN the requiretments of
responsible overall eco'nomic fraraq enen t, with a Concern for
7 broader socizl objectives and for those in need.
a -believe that in terms of its comprehensiveness, its practicality,
ancl i-ts capacity to give help wheire help is nee~ ded, our package
of"_ assistance is without parallel; an3 it underlines the lo) nctand
. g commitment of this Government, indeed of all Liberal
Go~ erner-s in the post-war periodl, to home ownership. 13a-ck
i n. th late ]. 9dOlr, les5 than 54% of Austr; alian households
VqIIA-d or wer4e buyincg their own home, whereas toaay air-ost 72t
ar&, ai that-, level of hoeonrhpis alm., ost Withoflt
-com-arison in the world. Am-ongc youing aault;-,. the irriprovement--
6 homie owteirShip pros; pects has ba'en ven riore drim-tIic, for
ia the-25-34 year old age gJroup, the Proportion ow'm; g or ) ilr
V tbeai own homis has increeased f romi less tihan 37t in the late
i094-', s. to ove-r 60% today.
Th, e could hardly be a clearer c;* zarple of the 1way in which r is ing
XiVirig standaFrds ana the capacity for early achievemnent ., c
9. been promoted; under, Liberal qoverrirrents over thle last 30 years.
An-it is not. only thle ability to : achieve hom11e otnerFship that
-~ nas-been mark,, edly improved. The standardIs of housing thac-t people
axi aspire toct, and the range and quality of euiplanft they c-an
ex'_-PCt to have in their homies, could barely have been iroacini-d
3gao~. O Inceed so great has bsen thle r atc of Tllprovem-ent
inhbusig 8tandaras, that expectation--may Xr3S . Ing too fast..
An ~. iile. w_-want the beast possiblc houses for AuStrallia f Mii-es,
i~. flOny behrtful to encourage ex~ pectatoSwihms
solW 11l-, not bc*. able to affo r 0
-A! chievemnent of the goal of home, orFrhip ha nev e) cifl easy.
? o. the great: mnajority of poople, itinvolves the bigg( es-t
trans.. ction they miake; it involves taving for a deposit and fcr
r. uriiture, it. involves complox dealjinqs tqith banks or buildinr_ 1
soieties.. ag~ ent_,! adSolicitor! s, and it drvolveS2 aCo trt
cp. pend the equivalent of several yeajrs of their annuatl il
= nd to miake Fsub. tantial rorthly iel ayr-,, ents, of ten at-a timco
. Other-demarld. s on the famindly s inconc: a-E als; o at th e ir grae-s.
Pepleare prepared to do all of this bracause they O! U Lt
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they are not only acquiring an asset of great value in itself,
ridnt only acq-uiring a Share in AuStr' lia's growing wealth, but
ialso . providirig for themselves and their families a basis of
S> -secur ity and stability.
Tire difficultdeB, and the sacrifices which have alway5 confronted
thel intendincr homte buyer have intensified in the last few years,
ifl large~ part: for reasons that are unqutestionably related to the
brodereconomic challenges and problems that I mentioned
Searlier, espe-cially the wage and price pressures that are being
felt in Australia, and the hiqh interest rates that are being
faced throug-. out the Industrialised wyorld. Although much
ttention haa been focussed on the interest rate issue, rising
hou-se prices particularly in Sydney -have played an imporLatt
.0part. To put.-the point into perspective, for anyone who bought
Cr: -e years aco the burden of mieeting their
metree had eclnedsignificantly in-relation to their income
the increases in interest rates that have subsequently
-hoze who have bought. meore recently, and those noW seeking to
buiy. a home, are being faced not only with hioher interes ratecs,
but'also by substanti ally jinflated house prices which have led-_
to increnaeing difficulties for people, especially those wi4th
nde't* incomes, in i-ectingj deposit reguiierents, arid cre-ated
Cnre-5incjly demanding repayr,, enit burdens, particularly in the
~ atl-Years of loans, arid particul. arly under the conventional.
( credit foncic. r) loan arrangement5. At the samne time
the t_" aditional home lenfdingc iljz-titutionrs, cons trxa ined ill the
'~'~. rters~ a-tes they Can offer on deposjtp, and f actilln increased.
CO~ paeti tion" from other Anncial institutions, have been unable
tomaintain the flow of funds into housing loans, and this has
foredi teida-iny borowrsto seek funds fromn higher
Cost secondar'lnigsucs if they can obtain a loan at all.
: 1t was these " front-end" problemns. getting the "' vnds, getting
into a hmand -artann r epaynents in the early years that
Were identifi-: ed in the Government's reviewi of housing policy as
the-critical fcosgvnrieto the intens concerns
exp ! ssed throughout the community. In the long run, it is by
bringing wage and price pressures under control, anid by getting
'' nterest zatet; doyrn, that the difficulties faced by the hof:, I
buyer can be cLelleverl in a lasting way, and the broad thrust
4' our economic policies is directed towards that end.
The Governin-ient'> policies of expe: nditure restraint, of
w~ ng back the deficit arnd of firm mioncy Supply control________
mad a significant contribution to winding-do; wn vage
and price iic-reases9 fromi th.-damaging levels that wcOI'O
being-expierienced in A triain 1974 and 1975. And in the
a~ ce of renewed wdges pressures we are deterimined to n:. aintain
K ur approach of restraint, to achive a1 grwt in thIup
noney adequate to llwcojntinued_, expansion of activity in the
e-. conomy,. but not such as to accom ,-odate an inflatioza-y wag-ce!
7: j ut unless st: ate governments are also prepared to restrain their
spending and their borrowing requirements, and unless all.
governhientB and all empl. oyers are prepared to take a firm stand
against unreasonable demands for wiage increases and shorter houirs,
our . ability 1: o prevent the emecrgence of a vicious circle of
% jwage and price increases leading to declining activity and
increasing unemployment would bc limited indeed, Reducing
Sinflationary pressures, and inflationary cxoectations is equally
.: important to reducing pressures on interest rates.
-a'~ i~ ny factors underlie the level of interest rates prevailing
iax -AUstrali a today. Despite the great progress that we have m ad e
,~ yn ' inrding back-the Commtonwealth's dermaMson capital inarkets,
the-previous Labor Goverrnments' irrecsponsible levels of deficit
Inancing continue tohave an ef fect both through the leyacy
of inflation generated by their monetary and fiscal exces. 3es,
d1_ id through 1: he need for thir be rold v r ' Lolnr,
the . derniands placed on the coapital market by state governments,
in p. art to f: nnenecessary infrastruoture investment, remain
relation to. GDP; the demand for funds to'meet the capiltal
Xreguirements of the private sector in Pustralia remains strong;
Wnd in particular high interest ratcs overseas, which have
6risen in lai-ge p Art f rom a policy mismatch of larger budget
ticiht monetary, controls, hLave JInev-itably & IffectiEd
Ih'e Govern~ merlt Carnnot dete minle. iliterest. rates ill Austrz'lia
b-de-ree. To attem pt to clo so wc-juld simply cause a ra-pid
-bIeline in funds, available for activities, in1cluding hoursing, amd
1ood -of money would leave this count.-y. Wh ileC interest
. rates elsewhere reain~ high, there is no simple rotite to lower
ñ nterest rates in Australia, the Government cian onlIy contin u
to -follow thy! hard road of reducing, the public sector's call1 ea
rdsourcas, and of bringing all the pressure it can' on winding
*. back inf lation.
But iAn the meantime we have to face the s3ituation aS it Tlo
-as it is affecting families now, we h-ad to mecet the cu'rrent.
coneerns about housing, even at so. mC totfBdet and
the conseguerit nteed for the Government to re-order its spend. 0ng
P iorities ini other areas. The problemz-were corimplex, andr as
ay . result the solutionjs we have offered in the for Of 01r
hot~ Sing plackaige are necessarily complex too, but they represent
I1 belleve, both a realistic an. ae~~ e-SQ-~
h11rough our new doposit assistan1rce schemet, which will hell) 0':
.40,000 home buyers each year, increased, and more timely a3s3.
~ 1 i be iven to people with modest incoz. mes savin obu hi
lirst home. 61oreovc-r, ove-r 1~, f30() hoe uyr can e~') Cct to
roaC ive a benefit under our new, -family ho;' e, tax rbt cee
which will give five years of assistance in etigthe br2
otrepaiyTnents to all people w. ho) critcr hoIe ownsh i f orte
irst time in at least the next-:~ -er~,~ devln
a-ai8tance, d, panding on when they first took LIP
fpr all those who first entered home ownership in the la,-t
five years. And, unde() r mdatchingj grant anrangeamonts bin wor.
P. 4 N
.' ut with the states and the Northern, Territory, the Cojm-nonwealti,
" Goprrovintngs$ 20 million a year to assist low
1: ncome hoine buyers and piivatc renters who are facing hardli.
in-meeting their housing costs.
~ nh aionllyoperating banks and savings banks, in the
contextt of tui agreE--nt wor) ked out with the Government, are also
ma}' ing a signifiicant direct contribution. Those banks have
agreed, in the first place, to provide an extra $ 400 million
for bousing loans on top of their normal lending oer the next
twe~ ve-onths, and to provide, where appropriate, some increase
in The si-ze of loans. This will make available upwards oY
12000additional houising loans, and will redUCe the need for
' people t. tDre ; ort to more expensive secondary sources of finance.
-Theb nke hZ44s~ r very importantly, ac. reed that they will
Ceevelo peilaragmet0 including low start mortg ages-S
fThrther m~ s tt new home buyers in the critical early years
heeagreemsnts were worked3 out in recognition of thle
iaeal problems: that borrot era have been facing, cn nrcga~
of. th e fact that an increase in thle saviings banik r~ ate for homre
lfdn2was reed-d to allow~ the banks.-to coinoete more effectivaly
fork ois However, even at it7s new level of IA'* the
savi~ ngs bank housging interest rate isnohhethnht
chrgeon hcua; ing loans of $ 30,000 or nore by buildinig Societies
aGreed thaatv _ a, kl~ la nt, hdoimsal obwuyeerr s thwahno tionkmouto st. hAonudi ntqih e lboaannk : s nh avhe
j-:-Jast-t-o yeaxs will be offered the option of deferring for
years U) Pe consequential inc-rease in their repaymen F, an
arrange ent . whichi will be available to some 160,000 bo rrowers,
~ ove~ gab out 46% of all loans outstanding fx* lte aig
k-ariks. agreeing to undertake these initiatives, the bankFs and
ngs bank-s have re-affirmed their acceptanceofa
K -rhortant social oblig3ation to assist home ownership, an d
the Government will be carefully 10onito--ing inplemen tat i on of
: all aapects of the agreementEs. While the nature offincl
-mreshas certainly changed sicmnificantly in recent years,
anawhile the change iay have riet. unfilled neecls, n/ rpo~
the efficiency of the financial sys tem, I believe that the
I fulndamental social rol~ e of the financial sysctemi must continu-: e
to b'e given clue rega; rd. Fo~ r although the banks, the Savillil
bans ndothier financial instittutions mray be constrainted an
the-ir oper-ations in various ways, those constrainS, often
~-sxv8 -mportant social purposcs, and the instit-utionslP reCeiVC!
etrnu a variety of privileges and forn s of protection Ithat3
the6y ralue highjly. The balance btencon-tr iflts ad
privileges need;-alwayis to be borne ii ttind.
. With, the Contribution to be mae by ths barnks and by thle
-_--Coa'nonwealth Goverpnent, the most critical. of the curre:-nt e
to tl-e housing industry and to home oinershi phaebn ur. 2
,6 onfror~ ted. In saying this, I amnnot suggesting that nothing
ir,-Jeft to be done, or that the problems of attaining h om e
one~. sipare solved for all time. Indeed, our decision to
inco'rporate sunslet clauses into legislation imparnenting tle
housing package involvea a recognition that our measures ought
to -e reViewed in the light of changing needs and circistanceg.
noOr~ ~ ecro~ onl: t rol ' of aalll l reinspstointusitbioilnitsy , afcotirn gh ouass mnga~ pLoLr s; hoou1_ rcuSeisn g ofcosts,
houingfinance, resides with the Coirruonwealth Government.
Teeis certainly scope for state goveraments and their local
authorities to consider their own policies in the housing area.
-ex. m. 1e, the costs of laiid, the costs of servicinig that lznd,
and the -costs; imposed by bui lding. regulations have all made
a rial contribut1ion to risiing prices of new hoxies. Obviouscly
tlw carcity of raw land in close proximity to the inner city
-areas has had an influence, but Y~ a1aa_ 1_ 1edxtjd t-ht de-veloped
ladcosts hi-ve been significantly influenced by len'gthy delays
~: intdevelopmnt approvals, by great vari-ations in 3: egulations
, bete~ nareas, and by requirements imposed on land deve1operc.
to. -prov-ide services and amenities of a sort, and of a quality
t imoose c2: subatiAntial cozt burden on current purchasers
To -the extent. that this is so, new home 1
to pay at the: baginning of: hometP h~ tr.~ iijeo
COMMUnit servic-2s wh1ich in the past were spread over . any year
'-irilocal. rati3, and to do so at the very point at ~ hihthey
are rady facing mna~ ii-iu~ financial strain. State and local
govs, entB h ave a real responsibi lity to exa-mine t-ei r poicies
te~ erespscts* where they add to the ultimaite cost of
' houS i ngq
hav-also mnentioned on Previous occasions the large -and
appare ntly-increasirng proportion of goc. ty fund s
th-~ tare lent-for purpo3es other th-nonrocpi-huig
Sarivolving 1e. dLng approvals of over $ 150 mill-ion in 1M31, in
Il ' dme a~ ae tht muh of t-it lenJd-, j. for " ot-her pz. 3~' 1
ts-e .1.1-portz D 1-to t'he housing industry, includingj for builder
~ 2. ane,-P-nd may help in a szmall way to keep down intere~ t rateEs
-by' home buyeis, even arn extra $ 1.0 Million released -For
Co.. nar-occupiel hoLuising wiould -gencrate ov-r 300 vre-ie
hungloans each year, anal again a reviewa of th i area byl
sta~ tn mnt w; uld seem to be juti~ h2Ol~
Industry itself niight also make a contribution, for one thing
perhapzi by considerin-, whether its n practices rrdnud cd
re Oiabllqg Ldeciuate housingi to be produced at afford. le ric.
~ u til -aelyth e biggest. contribution t-he ilidustry can~ raki*
is to ensurie that the houses do get built,
The challe-hge of housing Australia's fainilies, of e! suri-ng that
0u child., en will havse som: weete ~ r~ t ie ~ a
ckialleng e indced. The Co:: uonwcalth Go t n tfl
to* dsSia_ 4t it) mee'ting thazt calrg has been de nrstr~ td c~
arid again-, zirrl has recently been reaifin-ied in tlhre tnOst p~ tci
* yy ' sible, I t is no,, p o isn. indst, to t ia 0
new. opportuni tiea, the new deal i t has beens giv, aI to r" 2
the places for our Children to i ve. oeyu dsusci
ovenro :: tI -i ew ay' wil ontribute Significantly O
-ability to do so, 0--