The Press WEDNESDAY, JANUARY 22, 1958. State House Rentals

Press, Volume XCVII, Issue 28491, 22 January 1958, Page 10

The Press WEDNESDAY, JANUARY 22, 1958. State House Rentals

The Government’s hesitancy about raising the rental of certain State houses is not surprising. It follows from the strange argument of leading members of the Labour Party in 1955 when the National Party Government introduced legislation permitting rentals, some of them fixed 20 years ago, to be reviewed from January 1. 1958. In the second reading debate, both Mr Nash and Mr Skinner said they were not satisfied that there was a loss on State house rentals. It was quite extraordinary for Mr Nash to say then there was “ no evidence anywhere that “ the construction and letting of “ State rental houses up to the “ present time shows a loss ” The 1955 report of the State Advances Corporation said that “from time to time the atten- " tion of the Government of the “ day has been drawn to the “ gradually worsening position “ of the revenue account in re- “ spect of the letting of new “ State rental houses ”. The corporation gave a table fcr the financial years from 1946 to 1955 inclusive. This showed that the annual loss had risen over the 10-year period from £19,291 in 1946 t<* £303.435 in 1955. The 1956 report showed that the loss had reached £314,368, making a total for the 11 years, 1946-1956, of £2,039,689. These losses were incurred although the housing account had been charged in-

terest on the first £ 5,000 000 of loan capital at 1 per cent, and on the balance of the capital at 1J per cent. From 1956, interest was charged at 4 per cent, and though an effect of this was to reduce the amount allocated to the depreciation account from £752,186 for 1955-56 to £191,332 for 1956-57 the year’s outgoings in 1956-57 exceeded the rents by £1,665,946. Had there been no change in the interest rate the loss would have been £354,384. The State Advances Corporation has surely established that State house rentals do not meet outgoings. Indeed, the result could scarcely be otherwise when the tenants of about 17,000 State rental houses pay rents fixed in 1937. Homeowners know very well how much their costs have increased since then. What it amounts to is that a large number of persons are enjoying rentals subsidised by the community, which is entitled to object. The opinion of one objector may be taken from evidence given to the Monetary Commission in 1955. He said: “I do believe “from a nation’s point of view “ that it is essential that homes “ should be built, and I do want “ to say this, too, now, that they “ should pay an economic rent “ for them. I should not be “taxed or other workers taxed “to pay their rent. I will be “ quite frank on that ”. The objector was Mr F. P. Walsh.