Previous Govt 'overcommitted in housing finance’

Press, Volume CXV, Issue 34026, 15 December 1975, Page 18

Previous Govt 'overcommitted in housing finance’

’.xru- Zealand Press Association)

AUCKLAND, December 14. All evidence available so far confirmed fears that the previous Government had overcommitted itself in the field of housing finance, said the Minister of I lousing (Mr Gair) this evening.

His first task would be to sort out the "very considerable’* financial problems left by the Labour Government, he said in Auckland. He hoped to do this soon, but until then would not comment on which of the Government's housing policies, as set out in its manifesto, would have priority. "1 am still in the process of measuring the size of the problem.” Mr Gandar said. Before anvthme could be ■■

done in the police area, the’ first move would be to find out what the Government had to cope with. He believed the Labour Government had committed itself, or overcommitted itself. ahead of its financial provisions. Mr Gair said. He had expressed this concern several times during the last vear. FEARS CONFIRMED “All evidence confirms that mv fears were well-founded,” he said. He agreed that one of the , areas of

might be in the financing of privately owned sections. Two weeks before the Gen-: eral Election, the Labour Government resumed this previously suspended scheme.; but only by withholding pav-i ments on home and land-, package deals until what, would effectively be the next: financial sear. Maior group; builders had suggested to the Government that payments! be not made until houses] were completed. The question being asked then was whether a National .Government would continue 11he scheme. Mr Gair. as Oppo'sition spokesman on housing.' would only say he accepted, and appreciated that the scheme was important in the field of low-cost housing. ‘‘Obviously, I would have to review the situation aware ofi that fact,” he said then. GOVT’S POLICIES The Government’s housing] policies include: — Providing incentives to get] the private sector back' into the housing finance field. Among inducements was a promise! that the first $3OO inter-] est a year received by an ‘ , individual mortgagee would be tax-free. A second-mortgage support scheme where a mortgagor with a 20 per cent deposit, and raising a first mortgage of up to 65 per cent, would get the remaining 15 per cent from the Government on variable terms. Raising the loan limit on low interest Housing Corporation mortgages to 85 per cent of the purchase price as quickly as economic circumstances would permit. A number of new mortgage proposals aimed at intro-j ducing more flexibility: into lending policies, including a deferred repayment table designed to adjust with the rising level of wages. > Exemption from stamp-duty; taxes on the purchase of first homes or of sections] for building first homes, j Easing the burden of rates, by making rate payments i tax-deductible in stages,] as economic circum-] stances allowed. Allowing an older couple orj a person vacating a family home for smaller accommodation a tax: deduction of up to 50 per] cent on interest earned from first-mortgage money left in the property being sold. Making more flexible the present restriction on, Housing Corporation:, lending on properties] over certain values.