DEFENCE: PRICE FIXING CONTROL OF RENTS IN WARTIME: CONNECTION WITH DEFENCE
The Acting Attorney-General's opinion of 30 June last(1), having been considered by the Cabinet, has been resubmitted for advice as to how and in what manner the desire of the Cabinet re the inflation of rents can be achieved.
The clearer the relation can be made between the measure and the successful prosecution of the war, the greater will be the probability of its being held to be within the defence power of the Commonwealth Parliament.
Any modification therefore which will help to make the measure less arbitrary, and more indicative of the principle of preventing an inflation of the standard of rent values, will help.
I would suggest, therefore, that the measure might be framed to forbid the charging of a rent, for any dwelling-house, in excess of the rent for which it was last let before the commencement of the war, except-
- to the extent of 10% on any additional capital expenditure on the house since such letting, over and above what was necessary to prevent depreciation; or
- to the extent to which the pre-war rent fell short of 10% of the pre-war capital value (e.g. municipal assessment); or
- to the extent which the Rents Board thinks justified by the increase of the site value of the house or of the locality generally.
These modifications would, I think, help to bring the maximum rent, in the case of each individual dwelling-house, more into conformity with a logical standard, and to diminish the element of arbitrariness which results from adopting as the basis the rent which happened to be charged at the beginning of the war.
[Vol. 14, p. 414]