BENEFITS FELT

Southland Times, Issue 22378, 18 July 1934, Page 8

BENEFITS FELT

BUILDING SUBSIDY REVIVAL OF SCHEME A MODIFIED FORM NEW DWELLING HOUSES (Per United Press Association.) Wellington, July 17. The Hon. A. Hamilton in the House to-night stated that when the building subsidy scheme was initiated a little over a year ago on a wider basis than when it was first introduced in 1932, it resulted in the employment of large numbers of men and was of distinct advantage in reabsorbing many of them in their original trade at ordinary wages. Although it represents our largest industry outside agricultural and pastoral pursuits, said the Minister, the building industry was at the time practically at a standtsill and this almost complete stoppage was certainly not traceable to existing buildings, being sufficient for all requirements. The main criticism that appears to have been directed against the seneme is that certain companies should, and would, have built without, the aid of the subsidy. That may or may not be the position. The subsidy scheme of the previous year (1932), limited to noncommercial buildings, failed to create any activity outside jobs for which the subsidy was granted. By the expenditure of the subsidy which approximated from eight to ten per cent, of the capital cost involved, it was possible last year to stimulate the expenditure in the building industry over £4,000,000. Actual applications received for the subsidy totalled in value over £5,000,000, but a number had to be cancelled owing to inability of the applicants to proceed, even after the subsidy had been approved. In efforts to restart this industry, the Unemployment Board aimed at releasing capital, this being the point to which the blockage could be traced and accordingly the rules of the subsidy scheme were extended to apply to all buildings, commercial or otherwise. Although the board had been criticized because the subsidy applied to buildings for wealthy concerns, . it would have incurred more criticism had it frustrated its efforts to get capital moving by refusing to cooperate with any individuals or any firms that could prove they possessed capital. The board did not receive any practicable alternative suggestions as to the action necessary to be taken at the time when the industry was in such a difficult position. It seems to be not altogether fair when successful results have been achieved to say that matters would have gone on just the same, whether any action had been taken or not. An unbiased examination of the effects produced on the registrations by the building scheme would warrant the conclusion that the considerably reduced numbers of registered unemployed to-day, coupled with the favourable cash position of the employment fund at the end of the financial year, was due largely to the effects of this scheme. New Dwelling Houses. “The building industry is not by any means as dull as it .was when the Unemployment Board introduced the subsidy scheme last year,” continued the Minister, “and in consequence it is proposed to revive the scheme in a somewhat modified form and only in respect of new dwelling houses. The board has received many requests, for a revival of the scheme on the lines of that adopted last year, but most of those who made representations on the subject have suggested limiting assistance to new dwellings. It has been reliably calculated that nominally there is at the moment a shortage of 10,000 houses in the Dominion and there is little room for doubt that many of the existing dwelling houses, particularly in the larger cities, should be replaced. The long period of depressed economic conditions has had the effect of forcing more than one family to share a single house and this prevented to some extent the real shortage of houses from becoming very apparent. With the tendency for economic conditions to improve, the board feels that the time is opportune to offer special encouragement to the building of houses and confidently anticipates general approval for the proposal. “As apart from the question of house shortage, any stimulation in building activity reflects quickly and advantageously on the labour market. Apart from the assistance proposed, dealing as it does with individual applications, the Unemployment Board will readily co-operate with any local authority proposing any scheme for abolishing slum areas and rebuilding on modern lines. This would have the double advantage of providing a substantial amount of work and effecting much desired improvement in some congested city areas. In this case the board will be prepared to consider such applications very favourably. Any other type of house building proposals submitted will also be carefully considered by the board.

“Under the amended scheme, _ the rules covering which will be published within a day or two, the Unemployment Board reserves to itself the right to refuse approval of assistance if the contract price of the dwelling exceeds £lOOO. The board, having now gained much experience in administration of the subsidy schemes, has further simplified the operation of the scheme. The subsidy will be paid in proportion to the covered floor space, namely, 1/per foot, provided that the subsidy shall in no case exceed 8 per cent, of the contract price, nor more than a total of £BO for any single dwelling. It is not proposed in this scheme to make any rules interfering in any way with the ordinary industrial condition. Applications for the subsidy to erect blocks of flats will be considered on their merits. The use of New Zealand materials, where practicable, will be a condition of approval and to avoid misunderstanding, a list of imported materials that may be used without incurring any penalty will be printed on the application forms, whilst provision is being made to impose penalties involving a reduction in the subsidy or cancellation of the subsidy for the use of imported materials beyond those items specified. It is hoped the application forms for those who wish to avail themselves of the subsidy will be in the hands of certifying officers within a week, but no application will be considered if the work has been commenced before approval has been first sought and obtained.”