TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays MONDAY, 8th MAY, 1944 HOUSING AND COSTS

Te Awamutu Courier, Volume 68, Issue 5943, 15 May 1944, Page 2

TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays MONDAY, 8th MAY, 1944 HOUSING AND COSTS

AFTER surveying the Government’s State housing programme during the last two years the acting Prime Minister now makes the comment that “ the situation regarding man-power and materials still presents very great problems.” Such a statement is, of course, understandable, but it is nevertheless deserving of some investigation, especially by those who have hitherto supposed that New Zealand could regulate and supply its own needs. Particularly is this aspect perplexing when consideration is given to other factors which, in the case of private building, are equally if not more restrictive —cost of building and legislative interference. The latter is by no means a war condition but associates directly in the pre-war policy of the Government, and it is by now well established that housing has been removed entirely from the sphere of private enterprise and investment. Therefore, in terms of Government policy, the State accepts the full responsibility of providing rental houses for the people, leaving to the Government the solution of the problems which, as the Minister states mainly centre around the supply of man-power and materials. Both of these, however, are reflected in the determining factor of cost, and in this can be discerned the evidence of many follies arising out of pre-war policy in which there has originated an inflationary movement of values. It can be admitted that we have most of the basic materials at our command; bv re-afforestation we have increased

our timber resources in recent years, and there is no natural occasion for any scarcity of clays, or shingle, or cdhrent. Moreover, in the more pressing days of the war emergency, the Government claimed an increase in our factory capacity capable of fulfilling the needs in other directions. It is equally true to say that there has been some mis-direction of manpower and that it is competent now for the Government to correct this shortcoming. Yet another factor is that as the war theatre steadily moves away from the Dominion the opportunity arises for a swing back of men and materials from war purpose building to the provision of homes. Generally, then, the changing circumstances make possible a steady renewal of house building, but there remains the crippling cost factor to curtail individual action and hamper the Government in its State housing plans, for i. not be forgotten that to-day's costings when shaped into a building now will become stabilised over a normal financing period—say, for the next twenty-five years. Therefore, if it be assessed that £l5OO is a to-day’s average building cost for a service life of twenty-five years, the weekly charge would, based upon the current rate of 41 per cent, be £9l 17s 6d. To this should be added an allowance for depreciation, rates, and insurance—a total of from £2 8s to £2 10s per w T eek; and that, it is apparent, is not an economic cost for what, at least, can be called a cottage. Just at what point these high costs arise may be entirely a matter of political view, but it is certain that nature has not hindered or restricted the supply of the basic materials, and it is the logical conclusion that somewhere, and within our politically devised economy, the real trouble reposes. It means, simply, that we have written into our working code—either in the form of a standard of hours or working conditions or wage rates—the factor which starfds between our natural resources and the Government in the economic supply of homes. Or, in another way, a code has been devised for a high standard of living which, in its operation, blocks the channels of supply for what is the essential of any living standard—the home. It would seem, therefore, that our standard is badly based and that, some other device must be attempted to provide a balance; that the Government will require by some means of an equalisation fund to subsidise home building in a manner restoring costs to a relationship with spending power; or, alternately, to correct the influences which have forced the costs

upward. In this surely a real and deep-seated problem arises, for it is deep-seated in other aspects of Government policy—sales tax, wages tax, and other devises which have all had such a direct bearing upon the costing barometer. Very certainly there is a serious and accumulating depreciation in housing which will have to be put right if the country is to save its diminishing asset in private buildings, and for this there should be a speedy adjustment of the priority schedules. Much of the crippling restriction in the sweeping clauses of theoretically inspired legislation could very well be repealed so that private enterprise may readily co-operate in overtaking a pressing national need for homes. But, above all, the Government’s greatest dilemma is to offset the costing factors which, if written in terms of to-day’s finance, will continue as a disturbing influence in any more balanced economy of the future.