Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

No, I have indicated the chair is being very fair in her guidance in presiding over this committee debate. Thank you for your question, Senator Milne. I acknowledge that you raised these issues yesterday and that there was some response from me. I have been discussing a working example to illustrate what may occur in the context of the housing purchases. Firstly, regarding your question relating to the percentage set for existing or partly completed stock: there is no percentage set. Overwhelmingly, I am advised, it will be new houses, new blocks of land and houses to be built, but the government envisages circumstances that I will illustrate by this example. You could have a developer or builder who is developing a 10- or 20-block estate. They may have completed a house. They may have partly completed another one or two houses. It may be that they are unable to proceed further with the completion of the development. In the current context of the financial crisis and its impact, it is harder for moneys to be raised and investment made into the housing sector. We know that is an impact.

There will undoubtedly be developers and builders who find it more difficult to raise finance, and there will undoubtedly be—and we have regrettably seen many examples of this over the last year—property investment trusts that also find it difficult. I think it is well known now that property investment trusts have had a significant degree of difficulty in attracting any new funding. They have also had situations where they have obtained funding and have needed to roll that over to secure new funding. That has impacted on the commercial and residential property sector. There is no doubt that that impact will continue. We can envisage in that context—but as I stress, the overwhelming focus of the program is new, start-up, block houses et cetera—that it would be appropriate for the state governments to take on partially completed developments. That will not be the focus of the package, but it seems reasonable that, in the example I have given of a 10- or 20-block development that is partly completed, where the builder or developer says, ‘I cannot obtain finance at all through the mechanisms established through the state housing authorities,’ they may well say, ‘Finance can be provided for you to complete this particular development.’ That seems to me to be reasonable.

As I say, we do not believe the number of such instances would be significant, but it may occur. And it would be common sense because, if you have got partway through the development of 10 or 20 blocks, to some degree I think it would be very reasonable, given, for example, that you would have existing approvals for that development to be completed and you would have a workforce continuing to move through that development, to ensure that in some of these cases—you certainly could not do it in all cases—those developments underway should be brought to completion. But I am assured by the official that, were this to occur, it would be a very small part of the 20,000 figure.