Greymouth Evening Star. WEDNESDAY, AUGUST 7, 1946. Home Ownership

Greymouth Evening Star, 7 August 1946, Page 6

Greymouth Evening Star. WEDNESDAY, AUGUST 7, 1946. Home Ownership

*pilE Government lias decided that

blocks of sections in areas taken over for State housing purposes are in future to be reserved for sale to individuals who desire to build their own homes. This is a most interesting decision. It is also remarkable in that the Government has in ■the past not been disposed to encourage the ordinary man to own his own home.

Another interesting decision was that made by the Labour Government in New South Wales when it announced that it would offer half the houses built by the State Housing Commission for sale on easy terms. It is one to which the Government of this country could well give its close attention, despite the fact that when such a proposal was made by the Leader of the Opposition, Mr. Holland, it was described by Ministers of the Crown as a retrograde step. It may well be, of course, that the loaders of the Government,. although they may have recognised the merits of Mr. Holland’s plan, decided on that occasion that it would be politic to take up the attitude they did, lest they should arouse misgivings in the ranks of their more zealous followers. This is election year, however, and Labour no doubt hopes that any sign of a softening of its policy, no matter how meagre, will inevitably react to its benefit among that section of the people given to sane thinking. . Threat of Inflation.

There will be few who will deny that home-ownership is a most desirable thing. Besides its general value in creating stable conditions and giving fibre to a nation, a home-ownership policy, if given State encouragement, would in the present circumstances in. the Dominion result in an improvement of the economic position. There are millions of pounds lying idle in the savings and trading banks. The devising of means to hold the gates against the inflationary flood which these huge accumulated funds threaten has given the Government an almost constant headache. If the occupiers of State houses were enabled to buy their homes, and in the process were required to pay a reasonable deposit and to provide for a reduction of liability, the financial position generally would be improved. Such a policy—provided it is safeguarded by restrictions to curb speculation —coupled with the encouragement of home purchase and home building generally and steps to make available for purchase houses built by the State in the future, would provide a natural check to inflationary trends and give added stability to national life.

Mr. Leslie Lefeaux, the former governor of the Reserve Bank, macle a very significant statement prior to his departure from New Zealand. Speaking of the Dominion’s economic position, he said: ‘ The real cause of the trouble was the adoption of a fundamentally unsound financial, policy. I refer to the financing of the State housing scheme and public works etc. by means of advances from the Reserve Bank, which was really the same as turning on’the printing press for the purpose.” Reserve Bank Credits.

Now the Government did not like Mr. Lefeaux’s administration of the Reserve Bank. It is a remarkable fact, however, that speaking in the House of Representatives some years ago, the Minister of Finance, Mr. Nash, made a statement which in the light of later events provides support for Mr. Lefeaux’s criticism. The Minister said: —

I say that even the building of houses creates economic difficulties if we build them on Reserve Bank credits. I think we should build them in spite of the fact that we create economic difficulties, and if we do build houses . . . we put into the purchasing pool millions of pounds. ... Of course, the capital assets are there, but the return from those capital assets is deferred. In spending £10,700,000’0n houses we have put the money into the purchasing-pool and that has increased the demand for consumable goods without creating consumable goods. Until we increase consumable goods we create difficulties in spending money even on permanent assets. The result of the Minister’s policy, everybody now knows. As he predicted, the Government by its financial policy threw willy-nilly into the purchasing pool millions of pounds. The economic structure was immediately unbalanced and drastic measures —import licensing, exchange control etc. —became necessary. Since Mr. Nash made his statement, many more millions of pounds of credits have been created through the Reserve Bank for housing purposes. In the meantime building costs have soared, largely because of the effects of the Government’s policy. It is a well-known fact that, on present-day costs, many State houses are being let on uneconomic rentals and that as a result those people who in recent times have become tenants of the Government arc, in effect, being subsidised by everyone else in the community. If the Government were to set about adopting a policy calculated to i educe building costs and to encouiage home ownership it would be doing much to prove that its aim is to. advance the welfare of the country as a whole.