Greymouth Evening Star. TUESDAY, OCTOBER 12, 1948. Helping To Pay State House Rents

Greymouth Evening Star, 12 October 1948, Page 4

Greymouth Evening Star. TUESDAY, OCTOBER 12, 1948. Helping To Pay State House Rents

’THE disclosure in the annual report of * the State Advances Corporation, that the working loss on State houses last year was double that in the previous 12 months, will surprise no one with a knowledge of the shaky financial basis of the Government’s housing programme. The loss for last year, was £116,224, compared with £58,833 in 1946-47. This means that the people generally will have to bear the burden, by providing £ll6,224'towards the cost of homes for tenants of the State. The State Advances Corporation’s report attributes the increased, rate of loss to the steady rise in building costs over recent years, which has resulted in higher charges a unit for interest, depreciation, insurance and maintenance. The Corporation makes no reference to any move to offset the losses from new houses constructed at higher costs. As the position is, the people are called upon to subsidise the rents of one section of the community — a section that is likely to increase in numbers as the Government expands its rental housing programme. As the State Advances Corporation has pointed out, the working loss will tend to increase as more houses are built at present prices, and the burden on the community is certain to grow. . . . It is instructive, in view of the position flint has now been reached, to recall the Government’s original undertaking. At the opening of the Builders’ Conference in 1936. the then Minister of Labour (Mr Armstrong) said that houses were urgently needed, and should be erected for £7OO each 1n'1937 the Government proposed to provide 5000 at £6OO each—£loo cheaper than the amount mentioned by Mr Armstrong a year before. In 1938, z when speaking during the financial debate in the House of Representatives, Mr Broadfoot reminded Mr Nash that the people were told this in his 1937 Bridget, but he pointed out that in his next Budget Mr Nash was silent on the question of costs. A month later, in 1938, Mr J. A. Lee, then Under-Secretary for Housing, admitted that the average cost of the bare houses in the original contracts at Lower Hutt was £9Bl. This was £3Bl more than that envisaged by Mr Nash only a year before and it provided nothing for the cost of the section and for extras. And now, in 1948, there recently came a statement by the Minister of Rehabilitation. Air Skinner, that “the Government realised that the £l5OO rehabilitation loan would not build a house today.” As in many other aspects of national life* the Government has failed to match promise with performance. Included in the charges against the State housing rental is depreciation at a rate sufficient to write off the construction cost ip 60 years. That is a long terra. The adequacy of the present allowance for maintenance, which is at the rate of 1-} per cent, on the cost of improvements, has to be measured against the sharp rise in general costs, and it is likely that the bill in this connection will be a steep one as the years proceed. Apart altogether from the aspect of its unfairness, the financial basis of the Government’s housing programme is such as to give cause for serious concern.