The Housing Shortage By Ken Grundy

Hon David Pocock

Dear Senator

The three essential ingredients for life are food, clothing and shelter.  Australia fortunately has the first two but has a severe lack of housing.

Blind Freddy can see at an instant that a high level of immigration is a major cause which needs attention.

The remaining problem could be dealt with common-sense if we stand back and examine the reality before us.  We have the assets at hand in most cases for building more homes.  We have adequate supplies of timber, steel, concrete, bricks as well as the expertise and labour to fashion these raw materials into suitable form to build homes.

I concede there would be a need to increase the output of some of the processing plants to meet the extra demand but in essence, we have everything necessary  -  the only thing missing is the money!

Compare this situation with a household with a garden overflowing with ripe tomatoes.  The housewife has all the utensils to deal with the fruit; she has all the ingredients; the bottles for sauce; the cooking facility and the willing labour.  There would be no hesitation to make the sauce.  Turning a mixture of resources into a desired product simply happens.   Then why does this attitude not apply to housing?  Again, we are told we don’t have the money.

Your effort and those of other Senators are attempting to find a way but the money matter will mean there are no homes for a year or more.

I appeal to you to do some research into how the original Commonwealth Bank provided finance for not only World War 1, but also to enable an oil refinery; a coastal freight shipping line and support for some agricultural industries etc.  These very useful schemes were beneficial to the economy from around 1914 to the early 1920’s.  The finance was introduced to the economy as a credit.  As the money was spent into providing the asset and services through to consumers, it eventually found its way back to the banking system to be cancelled.

Today, it would require the Government (NOT the RBA) to give direction to the banking system.  It would enable the upgraded production and new homes much sooner and at a lower cost.

You probably agree that current RBA policy of increased interest rates have caused hardship as the ‘problem’ inflationary prices we had, has only got worse.   Do you see a good chance for a repeat of successful policies from previous times?

Yours faithfully

Ken Grundy

Ken,
Around the late 1950’s in Victoria we had ‘building Societies’.
The Societies were managed by volunteer groups in each town.
The Building Society (BS) was funded by the government with enough money to build half a dozen houses to a certain standard. It was not a speculative adventure!
People were encouraged to take out debentures of $100 (£50) each in the Society, this accrued interest for them.
This was to demonstrate thrift and intention.
Around this time a new house cost around $10,000 (less than £5,000 with the land).
If you had minimum debentures then you could apply to build a new house on YOUR block.
The repayment of the loan was tailored to the debenture holder’s affluence.
The repayment money went to the BS to re-invest further.
I think there was a time limit for the scheme of something like ten years and then closed with unspent money going back to the government.
It was a great scheme!
Decentralised development was encouraged along the way BUT it had to be in a gazetted ‘town area’.
I have not mentioned the ‘source’ of money but noting how the scheme physically operated.
It encouraged decentralised home building and communities took it from there.