The Evening Star SATURDAY, AUGUST 15, 1025. HOUSING ADVANCES.

Evening Star, Issue 19020, 15 August 1925, Page 6

The Evening Star SATURDAY, AUGUST 15, 1025. HOUSING ADVANCES.

Possibly the most important contribution to the second reading debate on tho Housing Amendment Bill on Thursday was that of the Minister of Lands. He admitted the evils associated with tho system of State lending, and expressed his conviction that before long the whole system would have to bo reviewed. The - Advances to Settlors scheme has played a great part in tho development of the country. It was a necessary corollary to the land settlement consequent on the breaking up of large estates by compulsory acquisition. Capital to work the land is almost as groat a necessity to the new settler as the land itself. Internal supplies of money were not sufficient to cope with the extraordinary demand, and tho Government introduced large amounts borrowed outside. Money was then cheap, and the State’s client was well treated without the State being denied some profit on tho transaction. From that beginning tho system has extended. On behalf of tho town-

duellers demands were made and conceded for similar treatment. There was not the same economic justification, for in the original case the loans were made to promote increased production and the swelling of the country’s income from exports; whereas loans for the purpose of building dwellings cannot be put in the same classification. As Mr M‘Leod says, originally the idea of the State lending was to aid settlers in making improvements; but that stage of lending has been passed, and the State has now become a huge mortgaging institution. And it is very questionable indeed whether the State’s more recent extensions in the moneylending sphere are self-supporting, let alone remunerative. Nominally the rate of interest payable by its clients under the housing scheme is 6 per cent., but this is reducible to 4} per cent, by prompt payment as the instalments become due. This is cheaper than the Government has been able to borrow the money at. When depreciation of the houses which are loft on the State’s hands is taken into account, together with the salaries of the Civil servants engaged in the administration of this now extensive branch, the objection that great extension of the system of State money-lending must bring in sight the insolvency of the State finances cannot bo ignored. This aspect of the matter was probably in Mr M'Leod’s mind when ho said that it would not be long before the whole system now in vogue would be reviewed, though ho included in the reasons for the need of review certain “ evils which were to some extent associated with the system of State lending.” One of those evils is that the State’s philanthropy is snapped up by those for whom it was not designed. The Labor members’ contributions to Thursday’s debate emphasised that aspect. Mr Armstrong declared that the Bill “ removed the last little bit of legislation which brought homes within the reach of the workers, and delivered the whole position into the hands of speculators.” Apparently all his colleagues who spoke took the same view, and the Labor Party as a party opposes the Bill, apparently in the belief that some sinister influences are behind it, and that, not the State’s clients, hut “ the class of people who make a living out of this sort of traffic ” scent possibilities of profiting by its proposals. Nevertheless, there seems every justification for the Ministerial contention that the Bill will not exaggerate the evils associated with this system of State lending. It simply proposes to remove an anomaly in the standing of those who became clients of the State

before and after a certain date in 1D23. The earlier clients could not effect a transfer of their property, even though they had paid tho purchase money in full, until after ten years’ occupancy, and then only after satisfying the board that the prospective purchaser was, like themselves, a genuine worker (as defined by the Act) in of not more than £.300 a year. Tho only restriction on tho later clients is that there cun be no transfer until the loan is repaid and tho mortgage discharged. The Bill proposes to make these latter conditions applicable to all. It appears to bo the only way to secure equitable treatment for the State’s clients all round, and this consideration must outweigh other objections. The Labor members’appear to have been under a •misapprehension man* the necessity for payment in full before transfer, otherwise they ‘would not have raised the cry of traffic in State mortgages. Maybe they realised this during the discussion, since they did not call for a division on the .second reading of tho Bill. If that supposition is incorrect, they must have merely seized an opportunity to do a little electioneering.