Page 874 - Week 06 - Tuesday, 25 July 1989
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There are many other proposals which the Government is considering to assist home buyers facing financial difficulty. We are investigating the current practice of the imposing of mortgage payout fees. Members may be aware that some banks charge up to three months' interest if a borrower pays out a loan rather than letting it run its course. This practice acts as a market distortion and prevents borrowers from taking advantage of more competitive offers from other lenders.
But the effect of high mortgage interest rates is not simply on home buyers. We are now starting to feel the effects on the ACT housing construction industry. Figures now coming to light suggest that housing construction is slowing significantly. In the March quarter of 1989, dwelling approvals were 17 per cent below those of last year, whereas nationally they increased by 13 per cent.
I should add that the ACT and Tasmania were the only States or territories to record a fall in approvals over this period. Further statistical data relating to the December quarter 1988 for residential, as opposed to non-residential, construction activity illustrated that the increase in the value of residential activity in the ACT was less than half the rate of increase for Australia as a whole. Nationally the value of new dwellings increased by 47 per cent and other dwellings by 24 per cent, as opposed to the figures for the ACT of 20 per cent and 10 per cent respectively. These indicators are of great concern to the Government.
This industry alone is a significant employer of both skilled and unskilled workers, making up some 40 per cent of total ACT construction employment, and it accounts for approximately 30 per cent of the value of construction work in the Territory. A significant decline in the industry, therefore, will have a substantial effect on the ACT economy, particularly on the ability of our young people to gain apprenticeships and for unskilled youth to find gainful employment.
I believe that the capital work program for 1989-90, announced this afternoon by the Chief Minister, will go a long way towards stabilising the construction industry. Of particular relevance here is the fact that we are proposing to increase spending on public housing from $34.6m last year to $46.3m in 1989-90, an increase of 33 per cent. A major component of this expenditure is our proposal to replace the Melba flats. This project by itself is estimated to create 550 jobs over the next four years. Overall, ACT government expenditure on construction is expected to increase by 10.8 per cent in 1989-90.
Mr Speaker, it will be the challenge of our Government and indeed the Assembly as a whole to ensure that we are able to address adequately the economic difficulties facing the ACT in a progressive and equitable manner.
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