Page 876 - Week 06 - Tuesday, 25 July 1989
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decreased. Why have they decreased? It is because of high interest rates. Where does this leave the builders? It leaves them nowhere. This is already evidenced by the diminishing willingness of banks to maintain the credit line for builders. The effects will be significant, as 12 per cent of Canberra's work force is dependent on the construction industry for its employment.
Indicators suggest that interest rates are going to significantly affect real estate sales. In Canberra, as elsewhere, property titles have to be searched before properties can be sold. To do this, more than 60 firms of solicitors use a system known as Dial-a-search. Because Dial-a-search is so widely used, it perhaps can be given as a strong measure of real estate activity in the ACT. In June there was a 13 per cent decline in property title searches through Dial-a-search when compared with the level in May. This demonstrates that the real estate market is slowing.
But, Mr Speaker, aside from the immediate effects of high interest rates in regard to builders, home buyers and home owners, there will be other problems. As a result of the downturn in building activity, jobs will be lost. Already there are fears that the employment of more than 100 apprentices in the ACT building industry may be lost.
Because interest rates will cause financial failure, there will be increased pressure on our already overburdened court, health and welfare systems. This will increase substantially the demand for public housing and Housing Trust assistance such as rent and mortgage relief, and there will be added pressures on the family structure for both established and planned families. Already it has been quoted that nationally 20 per cent of all home mortgages are now behind in their repayments.
Mr Speaker, obviously the question is: What can we do about it? What can we do about the problems derived from the Federal Labor Government's insistence on high interest rates? The ACT Labor Government should do all within its power to persuade the Federal Government to change its economic direction, but at present it is not applying this pressure. At present the Federal Government is not being pushed by the ACT Government to reduce interest rates and provide greater assistance to those in need. This is because the ACT Government does not want to upset its mates in the Federal sphere. In doing this, it is not adequately representing the people of the ACT.
Nevertheless, I am sure that this Assembly will at least examine the possibility of implementing a short-term relief program. Such programs exist in all States in Australia, and they are designed to assist those who have been unfortunate enough to be caught in the interest rate hike. This Government would not have to reinvent the wheel; other schemes are in place in other States. The schemes offered by State governments provide mortgage relief in the
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