CHIECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
PRIME MINISTER
SPEECH BY THE PRIME MINISTER TO THE HOUSING INDUSTRY ASSOCIATION
( MANUFACTURING INDUSTRY COUNCIL) DINNER DANCE
12 SEPTEMBER 1983
YOU HAVE ALL SPENT A LONG DAY TAKING A CLOSE LOOK
AT DEVELOPMENTS IN THE HOUSING INDUSTRY, AND THE. ASSOCIATED
OUTLOOK BOTH FOR THE INDUSTRY AS A WHOLE AND FOR YOUR OWN
OPERATIONS-IT MIGHT NOW BE APPROPRIATE FOR ME TO ATTEMPT
TO PROVIDE A BROADER PERSPECTIVE ON YOUR DELIBERATIONSMORE
SPECIFICALLY, I SHOULD LIKE TO RELATE my GOVERNMENT'S
HOUSING INITIATIVES TO OUR MORE GENERAL ECONOMIC POLICY, AND
TO OUR AIMS AS A GOVERNMENT.
THE BUDGET IS STILL THE MAIN FOCUS OF ATTENTION IN
ECONOMIC POLICY-THERE ARE THREE MAJOR STRANDS TO THE
BUDGET STRATEGY THAT THE TREASURER INTRODUCED IN THE
PARLIAMENT THREE WEEKS AGO. THESE ARE: FIRST, TO SET A
FLOOR OF ACTIVITY IN THE ECONOMY WHILE THE PRIVATE SECTOR
REMAINS DEPRESSED; SECONDLY, TO SPREAD MORE EQUITABLY AMONG
THE COMMUNITY, THE BURDEN OF THE RESTRAINT THAT IS NECESSARY
FOR ECONOMIC RECOVERY, AND THIRDLY, TO IMPLEMENT THOSE
REFORMS AND POLICIES NECESSARY TO ENSURE THAT RECOVERY, ONCE
UNDERWAY, IS SUSTAINED, AND NOT CHOKED OFF BY HIGHER
INFLATION AND INTEREST RATES-
THE INITIATIVES WE HAVE TAKEN TOWARDS THE HOUSING
AND CONSTRUCTION INDUSTRIES ARE NOT ONLY ILLUSTRATIVE OF
THIS APPROACH. THEY ARE CRUCIAL TO ITS SUCCESS.
As YOU ALL KNOW OUR HOUSING POLICY WAS DEVELOPED
THROUGH A PROCESS OF INTENSE CONSULTATION. THE HOUSING
INDUSTRY ASSOCIATION WAS INTIMATELY INVOLVED FROM THE
BEGINNING-BILL KIRKBY-JONES AND FRANK FISHER ATTENDED THE
NATIONAL ECONOMIC SUMMIT AND MADE A MAJOR CONTRIBUTION TO
ITS DELIBERATIONS-IMPORTANTLY THE SUMMIT URGED JOB
CREATION THROUGH AN IMPROVEMENT OF THE ECONOMIC
INFRASTRUCTURE. THE HOUSING SECTOR WAS RECOGNISED AS
OFFERING SPECIAL POTENTIALMY
GOVERNMENT HE. EDED THIS SUGGESTION. FOLLOWING
THE SUMMIT, A MINI HOUSING SUMMIT WAS CONVENED. APPROPRIATE
FORMS OF ASSISTANCE WERE IDENTIFIED AND INTRODUCED WITH THE
REFORMS IN THE MAY STATEMENT AND THROUGH THE PREMIERS'
CONFERENCE. ANXIOUS TO GET THINGS MOVING WE CHOSE NOT TO
WAIT UNTIL THE BUDGET IN AUGUST.
SUBSTANTIAL INCREASES MADE IN OUR FUNDING OF PUBLIC
HOUSING WILL LIFT ACTIVITY IN THE INDUSTRY. DEPENDING ON
THE AMOUNTS STATES NOMINATE FOR PUBLIC HOUSING FROM THEIR
LOAN COUNCIL PROGRAMS, TOTAL PAYM ENTS TO THE STATES AND
TERRITORIES FOR PUBLIC HOUSING ASSISTANCE MAY BE SOME $ 700
MILLION IN 1983/ 84, up 144 PERCENT ON THE HUM/ 8 LEVEL-
WE HAVE ALSO, AS YOU HEARD EARLIER TODAY,
RESTRUCTURED OUR ASSISTANCE TO INDIVIDUAL HOMESEEKCRS, TO
MAKE HOME OWNERSHIP ACCESSIBLE To AUSTRALIANS WHO WOULD
OTHERWISE HAVE BEEN DENIED THE OPPORTUNITY-BY
CONCENTRATING ASSISTANCE ON PEOPLE FOR WHOM IT WILL MAKE THE
DIFFERENCE BETWEEN HOME OWNERSHIP AND EXCLUSION, THE NEW
PACKAGE WILL DO MUCH MORE TO STIMULATE THE HOUSING iNDUSTRY.
THE FIRST HOME OWNERS' SCHEME, TO START NEXT MONTH,
IS CENTRAL TO THE GOVERNMENT'S POLICIES TO STIMULATE THE
PRIVATE HOUSING SECTOR. DEMAND FOR NEW HOUSES IS LARGELY
FROM YOUNG PEOPLE PURCHASING THEIR FIRST HOMES-IN THE PAST
FEW YEARS, RISING INTEREST RATES AND THE WORSENING ECONOMIC
CONDITIONS HAVE DISCOURAGED MANY YOUNG PEOPLE FROM ENTERING
INTO HOUSING MORTGAGES. THE FIRST HOME OWNERS SCHEME SHOULD
REVERSE THIS. CONFIDENCE WHICH HAS BEEN SO LACKING IN
RECENT YEARS SHOULD BE RESTOREDAPART
FROM PROVIDI'NG ALL ASSISTANCE TO PRIVATE HOME
BUYERS THROUGH A SINGLE PROGRAM, THE FLEXIBILITY INHERENT IN
THE FIRST HOME OWNERS SCHEME WILL MAXIMISE THE VALUE TO EACH
INDIVIDUAL, AND HENCE TO THE INDUSTRY. Too MUCH ASSISTANCE
UNDER PREVIOUS SCHEMES WAS DIRECTED TO THOSE IN NO REAL
NEED, AND HENCE HAD NO REAL IMPACT ON THE LEVEL OF ACTIVITY-
ACTIVITY GENERATED BY THIS SCHEME TOGETHER WITH OUR
DIRECT SPENDING ON PUBLIC HOUSING IS EXPECTED TO CREATE AT
LEAST 30,000 ADDITIONAL jOBS. rHE iMPACT WILL BE SEEN BOTH
IN ON-SITE LABOUR, AND THROUGH THE OPERATION OF SUPPLIERS TO
THE INDUSTRY YOURSELVESWHAT
ABOUT THE MEDIUM TERM, AND OF THE NEED TO
ENSURE THAT RECOVERY IS SUSTAINED? WE ARE WORKING TC AVOID
THE CYCLES OF BOOM AND BUST THAT HAVE SO CHARACTERISED THE
AUSTRALIAN HOUSING INDUSTRY IN' THE PAST.
THE GOVERNMENT'S WIDER POLICIES ARE DIRECTED TO
THIS END. TO GET THE ECONOMY MOVING AGAIN, WE HAVE PROVIDED
IN THIS YEAR'IS BUDGET A SUBSTANTIAL BUT RESPONSIBLE FISCAL
STIMULUS. THIS STIMULUS HAS BEEN CAREFULLY CALCULATED TO
AVOID DISRUPTIVE PRESSURES ON FINANCIAL MARKETS, COSTS AND
PRICES AND THE BALANCE OF PAYMENTS.
FOR PRIVATE SECTOR RECOVERY TO BE SUSTAINED, THERE
MUST BE REDUCTIONS IN THE PUBLIC SECTOR DEMANDS IN FINANCIAL
MARKETS AS THE RECOVERY PROCEEDS-WITH THIS YEAR'S FISCAL
POLICY MEASURES, TAKEN IN BOTH THE MAY STATEMENT AND IN THE
BUDGET, WE HAVE LAID THE BASIS FOR A REDUCTION IN THE
STRUCTURAL DEFICIT IN FUTURE YEARS. AN ONGOING PROCESS OF
EXPENDITURE REVIEW WILL BE UNDERTAKEN TO ENSURE THAT THE
BENEFITS OF THIS ARE NOT WASTED, AND THAT THE CURRENT LEVEL
OF FISCAL STIMULUS IS REDUCED AS APPROPRIATE IN RECOVERY,
PRESSURE ON FINANCE AVAILABILITY AND INTERESTr
RATES, WHICH HAVE PROVED SUCH A SCOURGE TO YOUR [ NI) USTRY
IN THE PAST, SHOULD THEREFORE BE ALLEVIATED. IN THIS REGARD
THE DECISION BY WESIPAC AND THE COMMONWEALTH SAVINGS
BANK LAST FRIDAY TO LOWER HOME LOAN INTEREST RATES WAS
W" ELCOME, IT WAS A POSITIVE SIGN THAT THE MARKET HAS
CONFIDENCE IN THE GOVERNMENT'S OVERALL ECONOMIC STRATEGY
AND PARTICULARLY THE 1983-84 BUDGET.
INDUSTRIAL UNREST CAN ALSO THREATEN THE DURABILITY
OF RECOVERY. MY GOVERNMENT ATTACHES SOME IMPORTANCE TO THE
ACHIEVEMENT OF LONG-TERM INDUSTRIAL STABILITY AND PEACE
IN THE BUILDING AND CONSTRUCTION INDUSTRY, OUR PRIORITIES
IN THE HOUSING AREA AND FOR THE ECONOMY MORE GENERALLY
COULD OTHERWISE BE THWARTED.
[ HE MINISTER FOR EMPLOYMENT AND INDUSTRIAL RELATIONS
HAS WORKED HARD IN THIS AREA. HE HAS MET WITH BUILDING
INDUSTRY EMPLOYERS AND UNION REPRESENTATIVES AND HAS CONVENED
THE NATIONAL BUILDING AND CONSTRUCTION INDUSTRY CONFERENCE
UNDER THE CHAIRMANSHIP OF MR ALAN VOSTI, AS A RESULT
THE PARTIES INVOLVED IN THE BLF DEREGISTRATION CASE ARE
NEGOTIATING ON A BASIS FOR WITHDRAWAL FROM THE PROCEEDINGS.
THE CONFERENCE WILL ALSO PROVIDE A FORUM FOR CONTINUING
DISCUSSION BETWEEN EMPLOYERS AND EMPLOYEES ON THE MEANS
TO ACHIEVE STABILITY IN THE INDUSTRY.
THE DIFFICULTIES INVOLVED IN REACHING AGREEMENT ON
SOLUTIONS TO THE COMPLEX AND LONG-S'ANDING PROBLEMS INVOLVED
ARE ENORMOUS. BUT IT IS THROUGH CONSULTATION OF THE K1IND WE
HAVE INITIATED THAT A FIRM BASE FOR FUTURE GROWTH IN THE
BUILDING SECTOR CAN BE ESTABLISHEDBEFORE
CONCLUDING LET ME COMMENT BRIEFLY ON THE NEW
PRESCRIBED PAYMENTS SYSTEM. THIS IS A MATTER UPON WHICH MY
GOVERNMENT RECEIVED STRONG REPRESENTATIONS FROM JOHN GRAHAM
AND BILL KIRKBY-JONES. THESE REPRESENTATIONS, ASSISTED BY
THE FACT THAT THEY WERE MADE REASONABLY, DIRECTLY TO
MINISTERS, RATHER THAN WILDLY IN THE MEDIA, DID INFLUENCE
GOVERNMENT THINKING-IN PARTICULAR THEY ALERTED US TO THE
NEED FOR EASIER TRANSITIONAL ARRANGEMENTS, AND FOR REVIEW OF
THE SYSTEM IN THE FIRST SIX MONTHS OF ITS OPERATIONBUT
DESPITE REPRESENTATIONS BY THE HOUSING INDUSTRY
ASSOCIATION FOR MORE FAR-REACHING MODIFICATIONS, MY
GOVERNMENT EVENTUALLY DECIDED THAT THE NEW SYSTEM OF
COLLECTING INCOME TAX IN THE BUILDING AND SOME OTHER
INDUSTRIES SHOULD PROCEED FROM SEPTEMBER 1.
IT IS UNFORTUNATE THAT THE NEW SYSTEM HAS OFTEN
BEEN REPRESENTED IN THE MEDIA AS A NEW TAX-WHAT WE HAVE
ESTABLISHED IS A METHOD OF SECURING THE PAYMENT OF INCOME
TAX FALLING DUE UNDER PRESENT LAW-OUR AIM IS TO STAMP OUT
7.
EVASION OF TAX. As SUCH, APART FROM EFFECTS ON CASH FLOW
THROUGH THE YEAR, AND A SMALL ADMINISTRATIVE REQUIREMENT, IT
DOES NOT SUBSTANTIALLY ADD TO THE COST OF PRODUCTION.
CERTAINLY IT SHOULD NOT, AS SOME HAVE CLAIMED, ADD 10
PER CENT TO THE COST OF A NEW HOUSE.
THE PREVIOUS GOVERNMENT ANNOUNCED THE SYSTEM IN ITS
BUDGET LAST YEAR, TO COME INTO EFFECT ON 1 JULY 1983. ON
COMING INTO OFFICE, WE EXAMINED THE SITUATION CLOSELY AND
CONSULTED CLOSELY WITH ALL INTERESTED PARTIES, INCLUDING THE
HOUSING INDUSTRY ASSOCIATION. WE DECIDED THAT A SYSTEM OF
THE KIND NOW INTRODUCED WAS NECESSARY TO STEM THE EXTENSIVE
EVASION OF TAX THROUGH NON-REPORTING OF INCOME IN A NUMBER
OF INDUSTRIES. IN CERTAIN INDUSTRIES LITTLE MORE THAN HALF
OF THE TAX LIABILITY WAS BEING PAID.
THOSE WHO HAVE BEEN. CHEATING ON THEIR TAXES WILL BE
ADVERSELY AFFECTED BY THE NEW SYSTEM. BUT THE REST OF THE
COMMUNITY CAN ONLY BENEFIT IF THOSE NOW GETTING OFF
" SCOT-FREE" ARE FORCED TO PAY THEIR TAXES.
IT IS GROSSLY UNFAIR THAT SOME MEMBERS OF THE
COMMUNITY CAN SHIFT THE BURDEN ONTO OTHERS BY EVASION OF
THEIR TAX LIABILITY. ADDITIONALLY, SUCH EVASION CONFERS AN
UNFAIR COMPETITIVE ADVANTAGE ON EVADERS OVER BUILDERS AND
SUB-CONTRACTORS WHO ABIDE BY THE LAW. EQUITY IN THE
TAXATION SYSTEM IS IN THE INTERESTS OF US ALL-
I APPRECIATE THE ANXiETY WITHIN THE INDUSTRY A
MONTH OR SO AGO ABOUT DIFFICULTIES OF OBTAINING EXEMPTION
AND VARIATION CERTIFICATES-I AM PLEASED THAT THIS HAS NOT
PROVEN TO BE A BIG PROBLEM IN PRACTISE, PARTLY BECAUSE OF
TRANSITIONAL ARRANGEMENTS ANNOUNCED A FEW WEEKS AGO.
ALTHOUGH A LARGE NUMBER OF APPLICATIONS HAVE BEEN RECEIVEDABOUT
60,000 BY 1 SEPTEMBER STEPS WERE TAKEN TO ENSURE
THAT APPLICATIONS WERE PROCESSED EXPEDITIOUSLY. THOSE STEPS
INCLUDED THE REDEPLOYMENT OF SOME STAFF. AS A RESULT THE
GREAT BULK OF APPLICATIONS, MORE THAN 92 PERCENT, WERE
PROCESSED BY 1 SEPTEMBER. LESS THAN 3 PERCENT OF THOSE
APPLICATIONS WERE REFUSED-STEPS WERE ALSO TAKEN TO ENSURE
THAT TAXPAYERS WOULD NOT BE DISADVANTAGED WHERE THE TAX
OFFICE OR TAX AGENTS WERE UNABLE TO FULLY PROCESS
APPLICATIONS BY 1 SEPTEMBER. ALL SUCH TAXPAYERS WERE ISSUED
WITH INTERIM CERTIFICATES FOR PERIODS OF UP TO TWO MONTHSFINAL
CERTIFICATES WILL BE ISSUED WHEN THE COMMISSIONER'S
INVESTIGATIONS HAVE BEEN COMPLETED.
WE RECOGNISE THAT THE SYSTEM IS A MAJOR CHANGE IN
THE METHOD OF APPLYING TAX FOR MANY AND THAT THERE MAY BE A
NEED TO MAKE ADJUSTMENTS IN THE LIGHT OF EXPERIENCE. THIS
IS THE REASON WHY WE DECIDED TO REVIEW THE SYSTEM AFTER SIX
MONTHS. THAT REVIEW WILL BE UNDERTAKEN IN CONSULTATION WITH
YOUR ASSOCIATION-IT WILL EXAMINE, FOR EXAMPLE, HOW THE
SYSTEM WILL AFFECT CONTRACT BUILDERS VIS-A-VIS
9.
OWNER-BUILDERS AND THE ADMINISTRATIVE LOAD ON PAYEES, PAYERS
AND THE TAX OFFICE. ALREADY THE COMMISSIONER FOR TAXATION
HAS SUGGESTED THAT A MINOR ASPECT OF THE SYSTEM MAY NEED TO
BE CHANGED TO CUT DOWN ON THE AMOUNT OF PAPERWORK REQUIRED
TO BE FILED WITH THE TAX RETURNS OF A LIMITED NUMBER OF
LARGE FIRMS WHO HAVE EXEMPTION CERTIFICATES-UNDERSTAND
THAT THE COMMISSIONER IS ALREADY WELL ADVANCED IN LOOKING AT
THAT QUESTION-WE HAVE ALSO SUPPORTED AN INQUIR-Y INTO THE
SYSTEM BY THE SENATE FINANCE AND GOVERNMENT OPERATIONS
COMMITTEE, TO WHICH YOUR ASSOCIATION IS ALSO MAKING
SUBMISSIONSLADIES AND GENTLEMEN, I HAVE TAKEN UP SOME OF YOUR
EVENING DISCUSSING A FEW MATTERS THAT I THINK ARE OF
IMPORTANCE TO THE HOUSING AND RELATED INDUSTRIES.-HOPE
THAT YOU AGREE WITH ME ABOUT THAT IMPORTANCE, AND ABOUT THE
NEED FOR CONTINUED CONSULTATION IF WE ARE TO ENSURE THAT
CORRECT POLICIES ARE ADOPTED-PERSONALLY APPRECIATE VERY
MUCH THE WAY THE HOUSING INDUSTRY ASSOCIATION HAS PUT ITS
VIEWS TO THE GOVERNMENT. YOUR ATTENDANCE AT TODAY'S SEMINAR
HAS DEMONSTRATED YOUR BELIEF THAT AN UNDERSTANDING BY THE
INDUSTRY OF GOVERNMENT ACTION IS NECESSARY. FOR MY PART I
BELIEVE THAT UNDERSTANDING BY THE GOVERNMENT OF THE
INDUSTRY'IS VIEWS IS EQUALLY VITAL. TOGETHER I AM SURE WE
WILL GET IT RIGHT-