Tuesday, April 9, 2013

Commentary: Hansard doesn't lie - What Manning said in 2006 about low interest housing

The opposition People's National Movement (PNM) reaction to the government's announcement of low interest, no down payment for housing is that it is not an original idea. 

In posts on the Internet the PNM is claiming that the policy was in place under the PNM since 2006 and that then PM Patrick Manning spoke of it in the 2005/2006 Budget Statement. The policy was implemented in 2006, the party has said.

For the records, this is what Prime Minister Kamla Persad-Bissessar announced Monday night.

"Your cabinet has decided to make it possible for citizens earning less than $8,000 a month, to buy their first home, with zero down payment and at a 2% interest rate for homes up to $450,000... 

"It means affordable housing for the first time as home owners. It means that that every individual that has a dream of owning a home for their family can now be realised." 

The Hansard record of Manning's statement shows the PNM was offering the same two per cent interest but other than that, detail the two policies are not the same.

This is what Patrick Manning proposed as recored in Hansard Wednesday, September 28, 2005, pages 50 and 51:

"My Government fully understands that a proper home means a more settled family whereby members can devote themselves to other worthwhile pursuits, including education, the pursuit of suitable careers, the maintenance of a stable and cohesive family unit and the making of a greater contribution to community and national life.

"But there are many in this country who face real challenges to home ownership. The inability to access mortgages because of income constraints; the high cost of land combined with the high cost of construction just takes this dream beyond the reach of many, particularly females earning less than $3,000 per month.

"This Government’s strategy is to make acceptable housing available through major construction and upgrading programmes while simultaneously addressing the issue of affordability. The Government has agreed on a strategy designed to give effect to the affordability of housing and the strategy essentially involves:

  • A subsidized interest rate of two per cent for Government low income housing; [Desk thumping]
  • Longer repayment terms;
  • Standardization of the mortgage instrument;
  • Rent-to-own policy
"These measures will result in reduced cost associated with the purchase of property, with the transferability of mortgages, further impacting on reduced interest cost.

"In other words, if I am 50 years old today and I go for a mortgage, I will still get a 30-year mortgage, which has implications for my repayment rate. If I die at age 60, then the beneficiary of my estate will have that mortgage transferred to him or her and the house remains in the family and whoever remains in the family just continues the payment until such time as the mortgage comes to an end.

"Mr. Speaker, the introduction of that new policy will go a very long way in treating with a problem that has recently emerged as we stimulated our housing construction and as we have moved to distribute houses to eligible beneficiaries. These measures will result in a reduced cost associated with the purchase of property."

Here's the link:

The official records don't lie. Compare the two policies and you'll see the difference:

  • No mention of an $8,000 ceiling
  • No mention of maximum income qualification of $8,000
  • No mention of first time home buyers
  • The plan was for government housing
The present government has not yet provided the details of this policy and how it would work so it is premature to be making judgments on what the PM announced Monday night.

But here's a question. Supposing the government did in fact use the identical PNM policy to help low income earners. What is wrong with that? Everyone who cares about the poor and less fortunate in our society should be happy that the government of the day is doing something to help.

In a democracy, continuity is an important factor when there is a change of government. The new administration does not throw everything out the door. Indeed if you look at what the present government has done and is doing you would see that it is continuing many projects that the Manning administration had planned or started.

When a policy is a good one it makes sense to keep it. In fact a responsible opposition would even support programmes and policies that are not its own if they are good for the development of a society.

In this case, the present government has chosen to develop a policy that might have been prompted by the two per cent factor. And the beneficiaries are low income earners. We should all be happy that the government has chosen to do that and we should be happy for all those who can now stop dreaming and borrow to own a home.

Jai Parasram

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Jai & Sero

Jai & Sero

Our family at home in Toronto 2008

Our family at home in Toronto 2008
Amit, Heather, Fuzz, Aj, Jiv, Shiva, Rampa, Sero, Jai