Insurance firms criticised

Press, Volume CXI, Issue 32661, 17 July 1971, Page 2

Insurance firms criticised

The national housing convention in Christchurch of the Master Builders’ Federation yesterday sent a telegram to the Minister of Finance (Mr Muldoon) asking him to increase the amount of money insurance companies must invest in Government stock, and to reduce the investment required of trustee savings banks.

Insurance companies were accused at the convention of not play* ing their part in the housing industry, and of seeking investments with large returns while policy holders had to look elsewhere for house finance. An Auckland delegate said

that representatives of some insurance firms were perpetrating “a form of confidence trick 1 ’ by selling young people insurance on the understanding that they would be given favourable consideration for house loans after two years. More often than not the young people were’ turned away with the excuse that

no' money was available for building.

i The Auckland delegate said , the insurance companies made an “often-repeated ’ claim that they already had I to invest much money in Gov- ' eminent stock.” But this did , not stop many of them from "getting hold of large slices” 'of commercial real estate. ' “Look at A.M.P. Street in ' Auckland. In Queen Street, the A.M.P. Society is buying and accumulating property,” Ihe said.

The convention carried a motion that the. Government be asked to consider varying requirements so that the amount of funds required to be invested by trustee savings banks in Government stock be reduced by 10 per cent and insurance investments in Government stock be increased by 5 per cent.

The convention said the Government would increase

total investment in Government stock by doing this. An amendment. seeking abolition of the requirement that building societies invest 12$ per cent of their funds in Government stock was lost.

Yesterday, the convention spent the day considering the report of the Commission of Inquiry into Housing in New Zealand. The chairman of the housing committee of the Master Builders’ Federation (Mr R. M. White) said the building industry was in its most frustrating position for many years.

Although the demand for housing was greater than it had been for a decade, builders were unable to assist most home-seekers because of inadequate finance, he said. In the main centres, the housing problems created by the post-war birth boom, now causing a record marriage rate, were becoming socially significant. “Unable to assist” “People are paying as much as $5O a week for rental housing, but despite this market situation which normally would be great news to builders, we are unable to assist the bulk of these people.” House building slowly was running down when it ought to be gearing up to meet .unprecedented demand, he said.

The uncertainty in a "stopgo” industry had resulted in the Joss of many skilled tradesmen and the inability to replace them with new recruits. Mr White said the recommendation of the Commission of Inquiry that 300,000 houses be built during the next decade had to be achieved by an industry which at present was retrenching. In 1967, the industry employed 19,619 carpenters and joiners. The number dropped last year to 17,557. The in: take of apprentices had dropped from 5755 to 4920, in the same period, he added. If the industry were to. meet the demand for 30,000 houses a year for the next decade, some drastic changes would have to be made. Policy blamed Mr White criticised the Government policy of using the building industry as a fiscal tool to control the economy. “If we are going to build 300,000 dwellings in the next decade we had better get on with the job, because the community as a whole expects us to come-up with the answers. "Would-be home owners have no collective voice and are waiting for us to advise the Government what is needed,” he said.