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Thursday, 8 December 1938

Mr McEWEN (Indi) (Minister for the Interior) . -by leave - Honorable members will recall that the Government decided to defer consideration of the recommendations made in the report on the Northern Territory submitted by

Messrs. Payne and Fletcher until I had visited the territory and studied conditions on the spot. Since my return from the territory, 1 have submitted to the Government my recommendations on the general policy of development that I considered should be adopted, and am now in a position to advise honorable members of the Government's decisions.

The Payne-Fletcher Committee, in their recommendations, have taken a broad view of the development of the Northern Territory. They have made some most important recommendations with regard to a general policy to be applied by the Government, and have made others in relation to particular projects of high importance. They have dealt separately with the various fairly well-defined zones into which the territory may be divided, and have offered suggestions as to the general and particular form of assistance which should be given by the Government to individuals and companies in the territory. In addition, they have suggested what they believe should be the general attitude of mind of the Government towards the territory, and the attitude of mind of the local Administration in the exercise of its functions, and have offered suggestions on staff and administration matters.

The general picture is of a vast area, one-sixth of the area of Australia, not richly endowed with agricultural or pastoral possibilities and, while widely mineralized with a great diversity of minerals, as yet without any spectacular mining discovery or wide development of a mining industry. No one has ever suggested that there is any opportunity for the development of secondary industries in this area; and its population is so sparse that there are few, if any, opportunities for the development of those primary industries, such as market gardening, horticulture, fishing and dairying, which spring up around centres of population. That is a fair picture of the limitations of the Northern Territory.

Yet here is an area of more than 500,000 square miles in extent, some hundreds of thousands of square miles of which is sufficiently well grassed or provided with edible herbage to make it definitely capable, in the aggregate, of vast pastoral production. The rainfall varies from a short heavy regular tropical fall in the north, to a light and irregular precipitation in the south, but in the fodders of the south, nature has adapted itself to these conditions. Permanent waters are plentiful in the north, diminishing in frequency, as one travels south, to extreme rarity; but over almost the whole area, with comparatively few exceptions, underground supplies of water are to be obtained by boring to depths which seldom exceed 300 feet. The lag in development of these pastoral opportunities has been due to several conditions. The first is the remoteness of the territory from the centres of population, which are also the centres of finance and of consumption. Secondly, there has been by comparison with the States, very little developmental work done by the governments which have been responsible for this area. Thirdly, owing to the remoteness of the territory, and its vast interior distances, costs of transport have always been of such staggering proportions as to impose a load of expense upon development and operation, which, with few exceptions, has proved fatal to profitable private enterprise.

With this picture in mind, it is evident that government policy should provide for developmental projects, such as roads, stock routes, water supplies, perhaps railways or other transport services, and also a necessary degree of direct Government assistance to individuals who are willing to take up and occupy th'is country and develop it. It is with n recognition of these facts that the Government's policy has been framed. The policy provides for a vigorous plan of road construction, and for the location of stock routes and their proper equipment with water supplies. There are areas of thousands of square miles of quite useful pastoral country, to which there is no road or track of access, and from which, if taken up and developed, no stock could be travelled, because there is no stock route with water supplies. A definite five-year plan of such road and stock route development is one of the fundamentals of the Government's policy. Another is the introduction of a system of . Government advances to settlers to assist in the development of the holdings. A third is the introduction of a system of co-ordinated sea, rail and road transport services, which will, to a remarkable degree, reduce the costs of transport in the area to be served. Reductions have been made of freight charges on goods and live-stock on the two Commonwealth railways which serve this area. There lias already been, for instance, a reduction by 25 per cent, of the freight on cattle trucked from Alice Springs to the Adelaide market.

I shall now deal with the details of policy upon which the Government has decided. The Government gave the most serious, consideration to the recommendation of Messrs. Payne and Fletcher that two railways should be built into the Northern Territory, one from Dajarra, in Queensland, to Rankine, on the Barkly Tableland, and the other from "Wyndham to Mistake Creek, in the Northern Territory. Messrs. Payne and Fletcher said in their report that these lines could not be justified unless a substantial portion of the area served was converted from cattle to sheep raising, and that a return of interest on capital could not be expected. A preliminary estimate of their cost is £4,000,000. The Government has decided to conduct an aerial survey of the country in the immediate vicinity of the proposed routes, and further consideration will be given at a later date to the proposed railway construction. The cattle industry is, and, in my opinion, will, as far ahead as we can see, remain, the principal industry in the territory, but there is no doubt that certain areas at present used for cattle raising are suitable for conversion to sheep. There is equally no doubt that in suitable country, and under suitable conditions, such a conversion would be of advantage. The country potentially capable of carrying sheep has comparatively few natural waters, and the process of development necessary to prepare tt for sheep involves the sinking of bores and their equipment with windmills, storage tanks and troughing, or, in some cases, the sinking of wells or the construction of surface dams. Fencing, drafting yards and shearing sheds must also be provided.

In the areas at present being used for sheep raising, wild dogs are a serious menace, but this is typical of most of the outback sheep country of Australia used for sheep raising. The erection of vermin proof fences is necessary in many parts. The advantages to be derived, in increased population and development, from converting suitable areas from cattle to sheep are clear. To enable cattle country to be converted to sheep, and to improve country that is suitable only for cattle, it is necessary to put into operation some scheme of advances to settlers, such as have been adopted in the States. Up to the present, settlers in the territory have been assisted by way of subsidies. In future, the policy of the Government will be to introduce a system of advances, the details of which will be worked out at the earliest possible date. Advances will be made only to approved settlers, and in such amounts as will not over-capitalize the properties. The existing scheme of subsidies will be discontinued as from the 31st December next, with the exception of reductions of freight rates on the North Australia Railway, and wharfage dues at Darwin, and the payment of half freight on stud stock and stallions.

The Government has decided that a definite policy of resumptions will be laid down, and that officers of the administration should commence at once a survey of all leases with a view to submitting recommendations as to the areas to be resumed, so that in 1945, when the next resumption period, in the majority of the leases, falls due, the provisions of the ordinance can be immediately, and to the best advantage to the territory, put into force. In areas suitable for conversion from cattle to sheep, the resumptions will be decided so as to divide the parts suitable for sheep from those which are suitable for cattle only, having regard to the maintenance of adequate living areas. In cases where the resumable area is not large enough for a man to make a living from it, and there are adjoining leases, the area to be resumed will be that portion which, when added to the resumable area of the adjoining lease, will make a living area for a new lessee. The Government recognizes that this is a country where the areas of holdings must necessarily always be large. My reference to resumptions is not to be construed as meaning that the Government has any intention of embarking upon a policy of subdivision of leases into comparatively small holdings. However, as there are to-day very many leases of several thousand square miles in area, and more than one in excess of 10,000 square miles, there is obviously some opportunity for exercising, with advantage to the community and without unfairness to the lessees affected, some of the rights of resumption embodied in the terms of the leases. The criterion in this matter will be that the maximum public benefit shall accrue from the use to which the land is put. What action will secure the most people occupying the country on a decent standard of living, and producing the maximum production will be the principal factor in deciding resumptions.

Since the depression there has been a 25 per cent, reduction of the rents of pastoral leases, and a 40 per cent, reduction in respect of those leases in the Gulf district, where the cattle are affected by the buffalo-fly. It has been decided that the reduction of 25 per cent, shall not be continued beyond the 30th June, 1939, but that the 40- per cent, reduction in the case of leases affected by the buffalo-fly shall continue until such time as the Queensland restrictions are lifted.

The outstanding obstructions to the development of the Northern Territory hitherto have been its remoteness from markets and from industrial and financial centres, and ' the very high costs of transport, which have resulted in ^ exceptionally heavy operating and production costs. During my visit to the territory, and since, .this matter has received my most earnest consideration. As the result, I have evolved a plan under which most of the territory will be served 'by a co-ordinated ship, rail and road transport service. Subsidies to shipping services, which hitherto have been provided by two small vessels serving a portion of the coast along the Gulf of Carpentaria, and west of Darwin to the Victoria River district, will be discontinued, and a road transport service will be inaugurated. The Government's dieselengined road train will maintain a regular scheduled service during the dry season, and will serve all stations on the Barkly Tableland, in the Victoria River district, and in the northern portions of the territory. Under this plan it will be possible for the first .time for a stationowner to order goods in the eastern States or in Western Australia, and, without further concern, have them delivered to a time-table at the station property at costs which will represent a tremendous reduction on the costs hitherto prevailing. This will be effected by the coordination of the shipping service to Darwin, the Commonwealth railways from Darwin to Birdum, and the roadtrain service referred to. Special low freights will be provided for developmental materials.

I shall give two examples of the value of this service. The first relates to loading to Wave Hill, in the Victoria River district. Prior to 1936, the total cost of landing materials at Wave Hill from eastern ports was £25 18s. 9d. a ton. During 1936 certain alterations were made which reduced this cost to £24 2s. Id. a ton. Under the new scheme, the cost will be £11 9s. 6d. a ton.

The second example refers to the reduced charges on fencing material for developmental work landed for a resident on, say, a new lease near Anthony's Lagoon, which would be about the middle of the Barkly Tableland. It is the intention of the Government to give every encouragement and, on occasion, preference to resident lessees. Prior to 1936, the freight on such material to this area was £17 17s. a ton. Since 1936, the Government has been carrying half the total sea, rail and road freight under a subsidy which obviously could not be continued indefinitely. Under the present proposals, the direct freight charge will be reduced to £6 6s. 4d. a ton.

Honorable members will appreciate the tremendous significance of these revolutionary reductions of freight charges upon the cost of living and cost of development of these areas.

To assist primary producers in the territory, the Government has agreed that income from primary production, mining and fisheries shall be exempted from both Commonwealth and Northern Territory income tax for a period of ten years.

The Government recognizes the necessity to reduce the cost of production and also the cost of living in the territory to the lowest possible figures, to enable thi* remote country to be developed, and to provide persons who settle in it, to enjoy, as far as possible, the amenities of life which are regarded as usual for people in the more populous centres. The PayneFletcher Committee recommended that the petrol tax should be abolished in tho Northern Territory. The Government has decided not to act upon this recommendation, but it has approved of an arrangement under which a sum equal to the estimated amount derived from the collection of the petrol tax upon all petrol used in the Northern Territory, shall be used as a subsidy on the freight on petrol, in such a manner as will reduce the price of petrol to users in the interior of the Northern Territory to a degree at least equal to the benefit which they would enjoy by the abolition of the petrol tax. The Government intends to make a further examination of the incidence of customs duties upon costs in the territory.

The Payne-Fletcher Committee did not report in any detail on the mining industry, but the Government has obtained a report on the administrative aspects of the subject and also on the mining ordinances, by the Under-Secretary for Mines, "Western Australia. Just prior to my visit to the territory, I appointed Mr. Hughes as Director of Mines in the territory. This gentleman had previously occupied the position of mining inspector in the Government mining service of Western Australia. He has had wide experience in that State, not only in the Government service, but also in mine management. He will take charge of the Northern Territory mining service equipped with all the knowledge and experience of the gold-mining revival of Western Australia. On the foundation of the report by the Under-Secretary of Mines, Western Australia, a very comprehensive revision of the Northern Territory mining ordinances is being undertaken by the new director. New ordinances which will bring the mining laws of the Northern Territory into lino with those of the States will be made in the near future. There appears to be no doubt that the prospects are bright for considerable advancement in the mining industry if a policy based on sound lines is adopted. The policy of direct assistance to mining which has been adopted by th

To encourage prospecting, parties of, say, ten men will be allocated to certain districts. Each party will be under the direct control of the Inspector of Mines of the district. The prospectors will be expected to re-imburse the Government for the assistance received if, later, they have profitable crushings. The existing system of cheap battery charges and cyaniding treatment at Government batteries will be continued. A system of subsidies for the cartage of ore to the Government batteries will be introduced, similar to that in Western Australia. The Government diamond drill will be made available to the companies and syndicates on the payment of the cost of drilling. Under the new director, and with this new policy of assistance in operation under the revised mining laws, it is confidently expected that a stable mining industry of worth-while magnitude will be maintained in the territory, with the hope and possibility of more spectacular developments.

The experience which I gained in the territory confirms the opinion that I have held ever since I assumed office as Minister for the Interior, that it is highly desirable that as much authority as possible shall be vested in the local administration. Considerable additional authority has recently been vested in the Administrator, but his authority and that of the heads of branches of departments, can be extended in many other directions, with advantage both to the Administrator and to the Department of the Interior; and this will be done.

In future, the Administrator will come to Canberra once a year, when . the Estimates are being prepared, for conference on Northern Territory matters, generally including finance, with the Minister and the permanent head of the department. The Government has also decided that in the future the Administrator shall make decisions upon many ordinary matters of routine administration, which hitherto have been decided in

Canberra. The exercise of control of the Northern Territory administration from Canberra will be limited to matters involving policy and major issues of finance.

In future the greatest measure of cooperation will be practised between the Administrator and officers in charge of branches of Commonwealth departments in Darwin, and the Administrator will be given authority to report to the Government, through the Minister for the Interior, on any matters affecting works and governmental administration in the Territory. In the carrying out of all works connected with the pastoral industry, such as stock routes, the sinking of bores for water, and the equipment of such bores with windmills and tanks, the District Engineer, who has hitherto worked under the Department of the Interior, Canberra, will work under the direct control of the Administrator.

The Government has decided that the Northern Territory medical service shall in future be controlled by the DirectorGeneral of Health as a branch of his department. The head of this service will be responsible to the Director-General in regard to all technical matters, but will work in close collaboration with the Administrator. This will enable an interchange of officers to be effected from time to time between the branches of the Health Department in the States and in the Northern Territory, and will place at the disposal of the people of the Northern Territory the whole of the resources of the Commonwealth Department of Health. Arrangements have been made with the Australian Aerial Medical Services for a flying-doctor service to be established at Alice Springs. The Australian Aerial Medical Services will provide the aeroplane, pilot and wireless sets, and the Northern Territory administration will supply the medical officer and hospital facilities. The work will be controlled by the Northern Territory Medical Service in the closest cooperation with the Australian Aerial Medical Services.

The Public Service of the Northern Territory is qui te distinct from the Public Service of the Commonwealth but the conditions of service and scales of salary are mainly based on those prevailing iri the Commonwealth ser- vice. Special conditions have been laid down in connexion with appointments to the police force and to professional and technical services, and officers, such as doctors, nurses, surveyors, draftsmen, etc., are appointed having due regard to their qualifications for their particular profession or calling. There is, however, no prescribed examination which must be passed by persons entering the clerical division. The number of officers is comparatively small and consequently the prospects of promotion are slight. The climate of Darwin, where the majority of the officers are stationed, militates against a continuance of efficiency for any lengthy period. Officers of Commonwealth departments with branches in Darwin are drawn from the departments in the south, and are stationed for three or more years in the territory, when they are relieved and returned to their departments. It is believed that if a similar arrangement could be made in respect of the administrative staff of the territory, the efficiency of the Northern Territory Service would be increased considerably. Consideration is being given to the possibility of arranging for officers of the Northern Territory Service to be appointed under the Commonwealth Public Service Act. This would give them the opportunity of promotion and would enable a periodic interchange to be made. The Commonwealth Public Service Board will investigate the scheme and report as to whether some scheme can be evolved to improve the present position.

The police force of the territory is recruited by calling for applications from men complying with certain specified standards. Successful applicants are sent to Darwin, where they receive their training. It is the intention of the Government that all new appointees to the police force of the territory shall be sent to one of the State training depots before taking up duty in the territory.

The existing Lands and Survey Branch of the Northern Territory Service will be subdivided. The Chief Surveyor will be responsible for surveys, and a man experienced in the pastoral industry will be placed under the control of the Lands branch. Steps are being taken to appoint a field officer, as recommended by the Payne-Fletcher Committee, whose duty will, be to maintain contact "with lessees, report to the Administrator, and make recommendations in connexion with advances, resumptions, renewals of land, and so on. It is the intention of the Government to seek the part-time services of a person highly experienced in pastoral matters or land administration, when major matters of land policy are under consideration.

Mr Curtin -Will he be an officer of a State government, or a person in the employ of pastoral interests?

Mr McEWEN - In all probability a State officer, as Mr. Payne is.

Upon the recommendations of the Payne-Fletcher Committee, the Land Titles Office has been transferred from Canberra to Darwin.

The matter of industrial arbitration in the Northern Territory has been the subject of the most serious consideration. The Government has decided that industrial awards in the Northern Territory shall continue to be made by the Commonwealth Arbitration Court. The possibility of having plaints and disputes heard and decided in the territory is being examined.

Oil other matters in respect of which the Payne-Fletcher Committee made recommendations, the Government has decided as follows: -

1.   The present provision of the Crown Lands Ordinance, whereby the Government must pay for improvements on a pastoral lease at the expiration of the term, or on areas resumed, shall be repealed and provision made whereby the lessee may obtain the value of his improvements from the incoming lessee.

2.   Crown rights of resumption shall not attach to comparatively small holdings, provided that the holdings are reasonably improved.

3.   Provision shall be made that crown resumption rights on larger holdings may be waived if substantial improvements and developmental work are undertaken.

4.   Lessees may be assisted by the Government to locate the boundaries of their leases.

5.   Government mortgages may be taken over holdings and improvements' and not over the stock.

6.   Lessees shall be allowed to surrender for new settlement or for subdivision and may sell those portions of their leases which they cannot adequately improve.

7.   Pastoral development leases, on the lines suggested in the appendix of the committee's report, may be granted for terms up to 50 years.

8.   When lessees agree on a boundary, official recognition may be given to the agreement.

9.   An ordinance will be passed confirming existing rents, exclusive of the temporary reductions granted by the Minister, during the whole of the present assessment period from the 1st July, 1935, to the 30th June, 1945.

10.   An independent land tribunal, to which lessees may appeal against the Administrator's decisions, will be constituted.

11.   In any case where the holder of a miscellaneous lease has effected substantial improvements and the land is not required for public purposes, he will be granted a new lease for 20 or 30 years.

I summarize the decisions of the Government as follows: -

A vigorous land-settlement policy, backed up by the provision of direct government assistance to settlers, has been decided upon, and an adequate, experienced and trained land administrative staff will be provided.

A vigorous developmental programme of road and stock route construction will be put in hand.

Railway proposals will be further considered.

Laud transport charges will be tremendously reduced by the co-ordinated sea, rail and road service.

Stock rail freights have been substantially reduced.

The conversion of suitable country from cattle to sheep raising will be adequately assisted.

The administration of the territory will be from within the territory.

Major mattersonly of finance and policy will be decided at Canberra.

The mining laws will be brought into conformity with the most modern State mining laws, with a competent and vigorous mining administration and reasonable direct assistance to the industry.

Freedom will be given for ten years from federal and territorial taxation on income from primary production.

An arrangement will be made which will be of advantage to petrol-users in the inland areas of the territory to a degree equivalent to that which would be enjoyed by the abolition of the petrol tax.

These and the other steps which I have mentioned will, I feel sure, establish a new confidence in industry in the. territory. A new and very much lower scale of cost of living and production will be established. It is hoped - in fact, I feel confident - that these decisions of policy will presage a new era of settlement and ; development in the north.

The extremely heavy commitments of the Government for defence render it necessary that the expenditure to implement the new Northern Territory policy will, like all other items of expenditure, be kept under review in the light of the current budgetary position.

The pace at which the Government will proceed with 'the roads and stock routes policy and also the degree to which the Government will be able to proceed with its policy of advances to lessees may, therefore, be affected by our financial position.

I take this opportunity to express the very great appreciation of the Government of the most valuable report of Messrs. Payne and Fletcher and trust that their work may lay the foundation of better times for the territory. I wish also to say that for my own work I found that a most valuable foundation had been laid by my predecessor in office, the honorable member for Gippsland (Mr. Paterson). It was he who arranged for the appointment of the Payne-Fletcher Committee upon whose report this revision of policy is founded. The honorable member for Gippsland also took the preliminary steps in connexion with mining matters, assistance to lessees, freight reductions, improved medical services and developmental roads and stock routes to which I have referred.

I appreciate the very valuable work and co-operation of the officers of my department and of the Northern Territory Service, and I refer particularly to Mr. Carrodus, the permanent head of the department, Mr. Gahan, the Commissioner of Commonwealth Railways, and Mr. Abbott, the Administrator of the Northern Territory. I have also had the benefit of the advice and experience of honorable members of this Parliament who have paid visits to the territory. I have been greatly helped by the advice of Senator Cooper, the honorable members for Hume (Mr. Collins), Bendigo (Mr. Rankin), Wannon (Mr.Scholfield), Forrest (Mr. Prowse) and Grey (Mr. Badman), as well as the always helpful advice of the honorable member for the Northern Territory (Mr. Blain).

I lay on the table the following paper : - '

Northern Territory - Policy of Development -Ministerial Statement, and move-

That the paper be printed.

Debate (on motion by Mr. Curtin) adjourned.

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