Page 867 - Week 06 - Tuesday, 25 July 1989
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people wanting to rent instead of purchasing a home. Therefore, demand in the rental market will increase, resulting in higher rents. This will severely disadvantage low income earners who will be pushed out of the market, and this in turn will see the welfare housing trust, already overburdened, faced with more clients banging at its doors.
Is it any sort of policy that sees an increase in public housing when home ownership should be the aim of all governments? This problem will be exacerbated for the real estate industry, with a 30 per cent drop in inquiries for first homes. Obviously, real estate agents are selling less to first home buyers. However, the investment market is rife with investors, especially from Sydney, buying at the top end of the market. Rental prices will be pushed through the roof once again, driving low income earners out of the market and stressing the ACT Housing Trust.
The ACT building, finance and associated industries will also suffer from the debilitating interest rates imposed by the Labor Government. These industries, combined with the multiplier effect, are a major source of employment in the ACT. At present, 1,500 jobs within the industry are at risk. As each job in the construction industry creates 0.8 of another job through the multiplier effect, the resulting unemployment problem will have damning effects on the ACT economy. These industries are being doubly squeezed by record high interest rates - firstly, from reduced demand due to higher home interest rates and, secondly, from higher operating costs due to increased commercial interest rates.
Home lending, business commencements and housing sales have all decreased dramatically over the past few months. The number of houses being built in Canberra this year, for example, will be reduced from 2,900 to 2,200. The difference of 700 houses represents $50m to the construction industry. Can the ACT afford the large loss of revenue and associated benefit it would bring? Retail sales have also decreased, and a continued downturn in these industries in the ACT will be devastating for the ACT community as a whole. Already the building and construction industries are beginning to slow. They will slow even further tomorrow, Mr Speaker, when they have the compulsory stop-work meeting to protest about three pieces of legislation before this Assembly - surely not a time for such action when we have the crisis we have present in that industry.
The building industry, as Mike Crowe of the Housing Industry Association has said, will be the first to go in a major recession. It is already experiencing hard times. Apprentices are already out of work or at risk of losing their positions, and young people's opportunities to move into the building industry are severely limited. The Master Builders Association of the ACT is in fear at present that it may not be able to maintain its group
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