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Tuesday, 11 September 1973
Page: 778


Mr UREN (Reid) ('Minister for Urban and Regional Development) - I do not want to talk about the church. I do not want to talk about the things the honourable member for Calare (Mr England) wanted to talk about. I do not want to talk about those issues that have dominated conservative parties since Queen Victoria's era. I want to 'talk about people and urban living. This Budget has begun the long term process of restructuring the Australian economy and reforming Australian society. Unlike the Budgets of our predecessors, it is not designed for short term political gains. Rather, it begins a process which the Australian people elected us to carry out.

Last November we promised to re-create our nation. In opening the Australian Labor Party's campaign, the Leader of our Party said:

It's time for a new team, a new program, a new drive for equality of opportunities; it's time to create new opportunities for Australians, time for a new vision of what we can achieve in this generation for our nation, and tide region in which we live.

We as a Government are therefore committed to change. This Budget symbolises a first step in that commitment. It begins the long term restructuring that was so clearly necessary to the majority of voters in the last election. It should be seen as a first step in this long term process. Nowhere is this process better demonstrated than in my own area of urban and regional development. Under the heading of 'Cities', the Treasurer (Mr Crean) has announced an allocation of $136m for the next financial year. Most of the programs under this heading are historic for a national government in Australia. This is the first time they have been attempted or for which allocations have been made in a budgetary program such as this.

I do not want to try to deal with the whole range of our program in the short time available to me. Rather, I want to concentrate on our policies relating to land and land commissions. There are 3 great principles which underlie our policies on the cities: Firstly, this Government believes that the national Government must involve itself directly in cities; secondly, this Government believes that we must bring about changes in our cities which will make them more efficient; and, thirdly, this Government believes that we must bring about changes in our cities which will give more equal opportunities for people to enjoy living in them.

In Australia the pattern of urban growth has been determined largely by the accidents of history and the activities of the market-place. The development and growth of our cities has resulted in real income being transferred from the poor to the rich. In recent years, these income transfers have become massive. Only last week I read where it is claimed that Melbourne's land boom has made 30 people millionaires in the past year. This has been achieved through no effort of their own, but simply by being in a position to exploit people's basic need for shelter. An example could be given where this has happened in every State, particularly in the capitals of the States. The faster the population growth, the greater the fortunes amassed. This situation reminds me of a learned parliamentarian who once said:

Unearned increments in land value are not the only form of undeserved profit but they are the principle form and they are derived from processes which are positively detrimental to the general public.

And at last the land becomes ripe for sale, and that means the price becomes too tempting to be resisted any longer.

And then . . . and not until then ... is it sold by the inch or by the yard at 10-50 times its true value.

This evil process strikes at every form of activity.

The more a municipality has improved the area, the more it will have to pay, for any land now required for future improvements.

And no matter where you look or what examples you select, you will see that every form of enterprise, every step in material progress, is only undertaken after the land owner has skimmed the cream off for himself.

And everywhere today the man or the public body who wishes to put the land to its highest use is forced to pay a preliminary fine to the man who is putting it to an inferior use and, in some cases, to no use at all.

And its owner is able to levy toll upon all other forms of wealth and any other form of industry.

Land which is a necessity of human existence, which is 'the urban source of wealth, but is strictly limited in extent, and which is fixed in geographic position, differs from all other forms of property.

A land owner who happens to own a plot of land on the outskirts of a big city, watches the busy population around him making the city larger and more famous every, day and, all the while, he sits still and does nothing.

Roads are made, services are improved and water is brought from reservoirs a hundred miles away.

He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.

The population of the city grows and keeps on growing.

I have heard this learned parliamentarian quoted with great respect by members on the other side of the House. The words are those of Sir Winston Churchill. I ask the honourable members opposite: Do they disagree with this point of view? I believe his remarks are just as relevant in Australia today as when he made them in Britain over 50 years ago.

For those who still question why the Government wants to be involved in urban development, the short answer is that Adam Smith died 183 years ago. The conditions for the success of the old laissez-faire doctrines have long since disappeared. Private enterprise no longer goes unchecked, nor does it go unaided. There is no going back on this. A classically competitive urban land market is inconceivable. The public sector must give leadership. It must play a leading role in determining how a metropolitan area should develop. The whole process of urban development involves location. Therefore land values and land use are key elements. The rapidly rising price of land in our capital cities is something which disturbs this Government and distresses the young people over the length and breadth of this country who are saving for a home.

There is an alternative. That alternative was on show here in Canberra - until the Gorton.McEwen Government destroyed it in 1970 and 1971. Properly managed, we believe that the method of urban development used in Canberra is the most efficient and most equitable available in this nation. This is why the Government is negotiating with each State to establish land commissions which will buy substantial tracts of land needed for urban development. Land acquired by these commissions will be made available fully serviced at a fair price. South Australia and Western Australia have already introduced legislation to create land commissions. Our policies on land form part of our urban policies. What we have to do is to change the rules of the game. Urban development needs to be planned so that it does not take place simply as the consequence of pressure by major landholders for rezoning.

One of the chief characteristics of the growth of our cities is that often the sequence of development is private initiative for profit followed by a harried and strained public investment in basic infrastructure. If the honourable member who has been interjecting wants an example of this, he should look at the Gold Coast of Queensland. In the Gold Coast, there is private affluence and public squalor. Over 84 per cent of that area is unsewered, yet private speculation still runs rife. So, there is a great need for governments to be able to co-ordinate the provision of services to developing areas. In order to get an efficient co-ordination and provision of services, governments ought to be able to identify specific areas for development.

Before these areas are publicly identified, the price of land should be stabilised. Under the freehold system the present planning system is a blueprint for speculation. This is one of the major reasons why we in the Australian Government must change the rules of the game. Land commissions and the land price stabilisation legislation which we are encouraging the States to pass are the means by which we can achieve better co-ordination and better planning. Ultimately, they are the means by which we will enable young people to enter the land market at a cheaper price. This Government does not believe that speculative profits are just.

The whole problem of land prices is one in which the States have the power to provide some of the solutions. Until now they have not chosen to do so. The Australian Government has no power to freeze land prices or even to stabilise land prices. However, the States have the power to do both. The Aus tralian Government is not asking the States to freeze land prices. The land price stabilisation legislation which we are urging the States to adopt should set out a formula for the price to be paid for land which is acquired within a designated site.

There are 2 essential components of the acquisition price. The first component is the base value', that is, the value of the land at the date of the initial proclamation. Secondly there is a value increase factor which can be expressed as a percentage of the base value and should be tied to an index of inflation. The aim of land price stabilisation legislation therefore is to identify general areas where urban growth is being considered by a State government, apply land price stabilisation legislation for a specified period, conduct a study of the area and if the study is successful proclaim a designated site. This of course is being done in the Albury-Wodonga area and we hope that it is also being done in the Bathurst-Orange area by co-operation between the Australian Government and the governments of New South Wales and Victoria in the first instance, and co-operation between the Australian and New South Wales governments in the second instance.

In this way we hope to reduce the high level of speculation which occurs in possible future growth areas. If this can be done, the average home seeker will have a much better chance of buying a block of land at a fair price. The land commissions program and the new cities program are joint Australian and State government programs. They are programs to provide the States with funds for land acquisition which they have never had before. This is the first Budget allocation to the States for this requirement. They now have no excuse to avoid taking positive action. In addition, there is much the State governments could have done towards meeting the problem of the high price of land for housing. If the States are really serious about the problem of inflation, if they are really serious about the problem of young people trying to buy a home, these are the sorts of policies they could adopt. Not only that, they could do it within a few months.

Firstly, they should show what is happening in the land market. They can do this by simply publishing the appropriate statistics on land prices, on the rezoning of land and the subdivision of land. Secondly, they should identify to what extent the present inflation is caused by a real shortage of housing land relative to the volume of new housing commencements and to what extent the inflation is caused by excessive demand through land speculation. Thirdly, where the land price inflation is caused by a real shortage in housing land, the governments could adopt a number of measures to increase the effective supply of land. They can do this by streamlining their present machinery of planning, thereby reducing delays in the development process. They can do it by encouraging the land owners sitting on land suitable for subdivision actually to subdivide it and sell. Fourthly, . the States can assist in reducing the amount of trading in blocks of land. For example, one public-spirited developer has suggested curtailing the transfer of subdivided blocks until a home has been built on it.

These are all examples of policies which the States could adopt where land price inflation is caused by a real shortage of housing land. These are State powers. They are not Federal powers. We do not possess them, but the States have ample powers to take such action. They are measures which any State which is serious about its concern for land price inflation can quickly bring to bear on the market. Where land price inflation is being caused by excessive demand through land speculation the State governments should adopt land price stabilisation legislation.

Mr Speaker,I have outlined the principles behind the policies which this Budget has set in train. Altogether the Budget provides for up to $8 8m for land acquisition alone in the current financial year. Through our negotiations with the States we are seeking a better way to develop our cities, old and new. We are also allocating $62m to catch up on the backlog of sewerage services, and improve urban public transport. The Australian Government seeks the co-operation of the States to work as a partnership in order to achieve a more efficient allocation of resources, and to achieve a more equitable form of urban development. It is the States which can make a real contribution. The States could do it in their own right. We, however, regard the problem as so serious and so urgent that we consider the best way of dealing with it is a partnership between the Australian Government and the State governments.

Through the process of co-operative federalism the Australian and State governments together can solve these problems. Together, the Australian and State governments can achieve what all Australians would want them to achieve - to give Australian families access to land and housing at fair prices. The financial allocations of this Budget demonstrate the willingness of the Government to achieve this goal. What is now necessary is that State leaders act for people, not land developers. They must take an enlightened approach to the problem. The crisis we face in land prices requires that all responsible political leaders try to break down barriers of distrust and work together so that young people may have an opportunity to acquire a block of land on which to construct a home.

The State governments have the opportunity of joining with the Australian Government in setting up land commissions and in the development of our new cities. There are no immediate solutions to the land crisis in Australia. The mishandling of 23 years cannot be corrected in 5 minutes. There are no 'instant coffee' solutions to any of our urban problems. But the land commissions and new cities programs are only a beginning. They are an alternative. There is another way. Let us begin through this Budget the other way - the way that is more efficient and fairer for all the people of our land.







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