PROPERTY CONTROLS

Te Awamutu Courier, Volume 73, Issue 6283, 20 September 1946, Page 5

PROPERTY CONTROLS

INEFFECTIVE? REGULATION SIMILAR EXPERIENCES OVERSEAS In Parliament Mr W. S. Goosman, M.P. for Waikato, and other members of the Opposition have strongly criticised tha Government’s methods and machinery for price controls. Apparently they are not alone in their condemnation of Government agencies of this sort, as from Australia comes the word that the Property Owners’ Association of Victoria has claimed that the Treasury control of property values was out of date, and was being “easily and extensively evaded.’ ’

This statement claimed that the reason repeatedly given by the Federal Treasurer during the last two years for his refusal to lift this control (as at February, 1942, value) has been his fear of inflation. It adds: “The dictionary describes inflation as a puffing-up, as in the case of a balloon. You imagine that this refers to a non-permanent state, and you anticipate the pricking of the balloon and its complete deflation. “But dealing with the buildings only, and disregarding any increase in land values, the present cost of building has very largely come to stay—it is 85 per cent permanent. Labour, direct and indirect, accounts for about three-quarters of the cost of a house. “Once wages rise, they never fall back as far as they have risen—a fall in the cost of living will be almost the only adjustment which will affect wages.

“During the war the disclosed Australian cost of living increase (apart from subsidies) was 23 per cent, and even the most incurable optimist does not believe that it will fall by more than one-third. So present building costs can be expected to fall by not more than 15 per cent, and a highly qualified Melbourne opinion says only 10 per cent. “This system of control is being easily and extensively evaded, and is almost impossible to police. For instance, when the Treasury refuses permission for a sale at more than £l3OO, and the owner will not take less than £l7OO, then the purchaser gladly offers £4OO for, say, a picture worth half-a-crown, and the vendor signs on the dotted line for £l3OO, and everyone is happy, including the Department of Control. “The Treasury cannot tell how far its system is effective, although it does know that the few sales made by trustee companies on behalf of importunate beneficiaries are genuine, which is unfortunate for the beneficiaries. “Actually, as things stand, the result of the loyal adherence, by a scrupulous vendor, to this control, merely results in a handsome present being made to the lucky purchaser, who has done nothing to deserve it, and he is aware that he could not replace the buildings on the property for the price he has paid, without taking into account the value of the land.”