BRIGHTER TONE

Southland Times, Issue 22042, 15 June 1933, Page 8

BRIGHTER TONE

BUILDING TRADE BENEFIT OF THE NEW SUBSIDY POSITION IN CITY “It is difficult to express an opinion on the amended building subsidy scheme put forward by the Unemployment Board at the present time, because we have very little information,” a builder in the city said when interviewed yesterday. “On the face of it more building should be done, and it is evident that there is a brighter tone in the building trade already.” It might not be generally known, the builder said, that the building industry in the past had paid out more wages than any other industry in New Zealand. It had been hit harder than any other industry by the slump, and a very large percentage of carpenters and others connected with the building trade were out of work. “It is difficult to judge just how many men benefit by building,” he said. “We are working on a job now that employs 29 men, but that is by no means the total number of men employed through the building. The men I have mentioned are actually on the job, and I should think there will be about five men working in the factory that supplies us with joinery, and of course there are plumbers and others doing work towards the job. I expect the working men of Invercargill will get about £2500 out of this job in wages.” That showed how important building was to the working man, he added, and if the Unemployment Board could stimulate building it would be doing a great deal towards taking men off relief works. The stigma of being on relief would be removed; the men would be working at tasks they understood, and more value would be received for the money expended. Nearly 20 Per Cent. So far as he knew the former No. 10 Scheme had not gone very far, the builder said. His firm had only one job under it, but as far as he could see the amended scheme should be responsible for a considerable amount of building. He estimated that £2OO would be absorbed in wages on a £6OO house, and as such a house would receive a 50 per cent, subsidy under the scheme the owner would be saved £lOO, or nearly 20 per cent. “When the scheme was in operation last year people were inclined to think that materials would fall further in price and were not inclined to risk building,” he said, “but material is not likely to drop further now and with a 20 per cent, reduction offered through the subsidy I am sure there are many people who will build. Then there is the question of interest. There is no doubt about it that the reduction in the interest rate will release money for investment, and, apart from the low rate ruling on fixed deposit driving money into other investments, the lower rate offered to a man who wants to build a home will encourage him' to build.” Builders generally would be in favour of the scheme, he continued, _ because they were anxious to see their trade, which was a very important one to a young countiy, reinstated, and they were also anxious to keep their men in work, but he thought property owners would be against it. A house that cost £lOOO to build in 1927 could probably be built now for £750, and if the subsidy were secured the cost would be brought down to about £6OO. That would mean that the man who had built six years ago would have a property which had decreased very considerably in value, partly because of the slump and partly because of the liberal subsidy. The secretary of the Carpenters’ and Joiners’ Union, Mr C. Provan, said there had been a number of inquiries about the scheme, and a big advance in building was indicated at the present time. A move in the building trade was badly needed because about 80 per cent, of the men concerned in the trade were unemployed. About 200 carpenters were on relief works in Southland alone. If the men could be got back into their trades it would be a big step towards restoring confidence, because when men had to go on to works they did not understand and did not like, a bad psychological effect was produced. Effect on Values. A business man who was asked to express an opinion on the subsidy said that it would be a good thing for the building trade and the men employed in it, but he was afraid it would lead to other difficulties. He knew of certain works that had been held up and would now be gone on with if the subsidy were granted. That would be a good thing for the city, but it might put those who had built when prices were high in a difficult position. House property was a risky proposition at best, and if the scheme were adopted to any extent for all classes of building the man who could afford to build would be able to under let or under sell the man who had built a few years ago, and would consequently be the means of bringing values down to where they might cause hardship to a certain section of the community.

The scheme had been restricted previously, he added, and the restrictions had made it fairly safe, but as far as he could gather at the present time those restrictions had been removed The subsidy appeared to be a direct gift to the man who could afford to build, and there might be some with money who would build in anticipation of selling at an advanced price in a year or two if good times returned. “When the subsidy is given,” he said, “it should be given subject to some restriction. The subsidy could be given to the owner of the building as a loan free of interest, with the proviso that if he sold the building at more than a certain profit he must repay the subsidy. I suppose that would need an Act of Parliament,” he concluded, “because there would have to be pow'er to punish the man who tried to dodge paying up.”