Money too dear — Mr Rowling

Press, 14 August 1978, Page 13

Money too dear — Mr Rowling

PA Wellington The single biggest factor in i the near-collapse of the building industry in the last two years had been the cost of money, said the Leader of the (Mr Rowling). ' “One of the immediate priorities of the incoming Labour Government will be to use the power of the Reserve Bank Act to control and gradually peg back the prime interest rate,” he said in a speech to the Concrete Masonry Association’s annual conference at Wellington. Mr Rowling said he bei lieved the prime interest rate i should be brought back to levels in force in 1975. “Money is the tool of a government, not an end in itself,” he said. Under a Labour government the Housing Corpora-

lion would offer 80 per cent] mortgages as a start, more I flexible mortgage repay- i ments, and offer those who! qualified for a loan the option of buying a new or existing. home. A Labour government \ would also play a much' greater role in land purchase; and subdivision development, he said. “We feel that one of the main ways in which housing, and land costs can be con-’ trolled is for the State to! move in and buy key areas of land ahead of the surge of < development,” Mr Rowling j said. Much greater emphasis j would also be given to homej : improvement loans. “I can give the strongest i possible assurance to thosej' in the building industry that 11

| the change will be phased in, lin stages, and that the i effects on forward building I demands and on employment within the industry will be . very carefully watched,” he i said. Mr Rowling said building! ■ targets at present were' i “totally unrealistic.” Labour aimed to get back to the target of the 1971 report of the Housing Corrunisi sion of Inquiry that indicated I New Zealand needed to pro-1 I vide 300.000 additional homes over the ensuing j decade, he said. But it would be by a “step by step programme,” Mr Rowling said. “We learnt i many lessons in the 1972-75 period about trying to move| /oo quickly with limited rei sources.”