STATE HOUSES

New Zealand Herald, Volume 81, Issue 25052, 16 November 1944, Page 6

STATE HOUSES

. RENTS AND FINANCE DEFENCE BY MR NASH NO CHANGE IN POLICIY (P.A.) WELLINGTON, Wednesday The report on the housing situation and, in particular, the reference to the State housing policy by the conference convened by the Associated Chambers of Commerce should be examined with interest, stated the Minister of Finance, Mr. Nash, this afternoon. His colleague, Mr Seniple, Minister in charge of the construction side of housing, would reply to points raised on construction but there were one or two points upon which further information should be supplied. "The reference to uneconomic rents," said Mr Nash, "required some elaboration, particularly in its relation to the provision of houses for persons in the lower income groups who, it is stated, cannot aiford to pay normal rentals and to whom, it is advocated, the allocation of State rental houses should be confined. Money at Low Interest "Is it reasonable to infer from the report and recommendations that there will always be a section of oui 1 community whose income is such that they will never be able to pay the rental for a reasonably comfortable house P Must we build something less than normal for a section of our community, or should we build houses of good standards that will enable all mothers in all sections of the community to make home and 'family life like unto that which the Government considers to be essential for the foundations of tho future? "The main burden of the report is that the Government is obtaining funds necessary for house constructions from the Reserve Bank at low rates of interest. Up to the present something in excess of £24,000,000 has been so provided for the Housing Account and this money- has been expended in the purchase of land and in payment for house construction. The interest rate on the first £5,000,000 is 1 per cent per annum and on the remainder of the money at li per cent per annum. War Needs and Housing "This policy should be considered in relation to the money position in the Dominion," Mr Nash continued. "With minor exceptions in connection with finance required for essential work, all funds available for investment during the past five years have been required for war, purposes. Accepting the fact that_ houses are required and urgently required, it appears imperative, if they are to be built, that money must be obtained. Assuming that tho other saved funds are required mainly for war purposes money for house construction could have been obtained and could be obtained from the trading banks or tho Reserve Bank. Rent lor Average Dwelling

"The effect on the economy of the Dominion will be exactly the same whether the money is obtained from the Reserve Bank or the trading banks. The Government was, and is, of the opinion that if funds in excess of those subscribed from real savings are required they should be provided from the Reserve Bank, which is owned by the people of the Dominion. "On the evidence of the report it appears that, taking into account the costs of land, and other incidental costs, the cost of construction of the average fully-equipped small house would require a rental of £2 3s 6d a week to be charged. The course followed of borrowing From Reserve Bank has enabled rentals to be charged at lower than this amount. Is it suggested by the promoters of the report that £2 3s 6d a week shall be charged to everyone who required an average small house? The Government has a different mind on this question and houses are being provided at a lesser rental than this sum and the Government proposes to continue its policy to provide them. Sales Tax Issue "The answer to the charge that sales tax has been increased by £52 12s 2d is that the use of certain commodities upon which sales tax is charged is not confined to house construction and while there is a case for reduction of the tax on a portion ,of these commodities that are exclusively used for house construction the technical difficulties in separating the usage are so great that it is not considered advisable at present to alter the present procedure. However, it should be clear to everyone that the sum so pjid for sales tax is used to meet the cost of the war and if money is not available from that source it will have to be provided from other sources. "In suggesting that before the depression the housing needs of the community were being met by the activities of' private enterprise, the promoters of the report have apparently failed to take into account the conditions revealed in the housing survey, a summary of which is published in the 1942 Year Book," stated the Minister, who quoted from the summary. "The facts of the matter," he continued, "are that neither in New . Zealand nor any other country has healthy housing accommodation been made available to the mass of the people at any time without Government action. Minister States. Questions "It is good that the report should have been published and while there are some questions that can be raised later, for the present I think we ought to ask the framers of the report and those who attended the conference the following questions:—(l) Do they advocate that the allocation of State rental houses should be confined to those who. it is stated, cannot afford to pay normal rentals? (2) If so, does this infer that there is always to be a section of the community that cannot pay normal rentals and who, if dependent on their own resources, must live in something below a reasonably-equipped small house? "(3) Should the Government confine its loan policy in connection with housing construction to money that is obtained on the ordinary money market at interest rates charged before the present Government took up the construction of State rental houses? (4) If so, is the Chamber of Commerce willing that the minimum income of all persons shall be fixed at a rate that will enable them to pay rental or in-

terast and maintenance charge ol £2 3s 6d a week, which is the sum mentioned as being required for financing houses under the most advantageous conditions? • , . _ "The policy of-the present Government will be at all times to continue the construction of State rental houses and these houses will consistently be allocated in accord with the particular need of each particular applicant and will not be allocated on a pauper or poverty basis. They will be provided at rentals within the means of all sections of the community. Reserve Bank finance facilities will be used in the future as in the past with whatever safeguards are necessary to ensure to the maximum against the ill-effects of inflation. "The. allocation of State rental houses is carried out by the State Advances Corporation and officers of the corporation are charged to take into account the following facts when considering applications on hand and houses available: What are the existing housing arrangements, the requirements of the applicant, the number in the family, ages, sex and bedroom space necessary. The applicants are then classified according to the degree of urgency based on needs and date of application. "Preference is always given to applicants whose needs are greatest." Mr Nash concluded. "Applicants with high incomes are deferred in favour of those with lower incomes. At least one-half of all houses available .must first be allocated to returned servicemen before civilian needs are considered."