‘New homes could create new jobs’

Press, 6 May 1983, Page 23

‘New homes could create new jobs’

PA Wellington Between 5800 and 16,000 new jobs could be created by building an extra 3000 houses a year, and even greater employment effects could follow from ancillary work on new section development and new homeowner purchases of household equipment and furni-

ture, a study has found. The study, into the employment and macro-econo-mic implications of increased house building, was conducted by Business and Economic Research, Ltd, with a six-member team headed by a Wellington economist, Professor Bryan Philpott. The study looked at the effects of an increased level of house building on the budget deficit, inflation, and money supply. it says that up to 16,000 extra jobs per 3000 houses could be created with no harmful effect, if matched with policies aimed at a small reduction in realwage rates and a minimal devaluation.

Without such policies

there would be some deterioration in the overall balance of payments and in the Government deficit, the report says. In that case, it boils down to a trade-off between great social benefits — a fall in unemployment and rectifying inadequate housing conditions — and the cost of some deterioration in the overseas and domestic deficit.

“In B.E.R.L.’s view the grave, socially corrosive effects of continuing unemployment load such a tradeoff in favour of the housing policy proposed.” The study was commissioned by Neil Holdings, Ltd, Auckland, with Universal Homes, Ltd, and Fletcher Residential, Ltd.