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Thursday, 11 October 1956

Mr McMAHON (Lowe:) (Minister for Primary Industry) . - 1 move -

That the bill be now read a second time.

This bill provides for the raising for war service land settlement of loan moneys amounting to £8,500,000 for capital expenditure. Financial assistance to all States for non-capital expenditure under the scheme, for example, living allowances for settlers, interest and rent remissions, writing down of the cost of holdings, &c, estimated at £2,200,000 for the present financial year, will be met by the Commonwealth from Consolidated Revenue.

Land settlement is constitutionally a prerogative of the States. In order to include this type of rehabilitation within the repatriation benefits for ex-servicemen, the Commonwealth and States .entered into an agreement. This was reached at a conference in 1945 between the then Prime Minister and Premiers and was given legal standing by this Parliament and the several State parliaments passing legislation which included, as schedules to the various acts, the terms of agreement between the Commonwealth and the individual State. The agreements with the States of New South Wales, Queensland and Victoria, which are referred to as principal States, were identical but varied from those consistently applicable to the other States, the so-called agent States.

The scheme operated under these various cts until the High Court, by its judgment in the Maginnis case, ruled the Commonwealth act invalid because it referred in the first schedule to 1942 values for land as a basis of acquisition. The Commonwealth now operates under the States Grants (War Service Land Settlement) Act, under which funds are made available on conditions determined by the Minister. These conditions largely correspond with the terms of the original agreements. The principal States provide the capital funds necessary for the acquisition and development of suitable land and the provision of credit facilities to the allottees who are exservicemen deemed eligible and qualified by State authorities to undertake farming of the type designated for the holding. The States retain all payments made by settlers.

The Commonwealth provides the cost of training applicants for land, grants a nonrepayable living allowance during the first year of occupation - the assistance period - and shares on a 50/50 basis with the State, the loss of revenue incurred by remitting the rent and interest due during the assistance period. The Commonwealth also contributes to the State half the amount by which costs of acquisition and development exceed the valuations agreed upon by the Commonwealth and State and half the losses on advances to settlers. The Commonwealth also makes available to the States of New South Wales and Victoria repayable loans to the extent of £1 for each £2 spent by the State from its own resources on war service land settlement. The maximum loan in any one year is £2,000,000 for each State. In the other States - South Australia, Tasmania and Western Australia - the Commonwealth provides all the costs of the scheme except part of the costs of State administration. Rent, interest and principal are paid by the settler to State authorities, who remit the collections to the Commonwealth. All the training and assistance period benefits are provided by the Commonwealth. The States contribute 40 per cent, of any write-down incurred due to excess of cost over valuation.

Originally, Victoria was the only State with tenure other than perpetual lease for holdings allotted under the scheme. This Government has, with the concurrence of the three agent States, included a condition which gives settlers an option to freehold the land allotted to them after it has been held for a period on lease. This period is ten years in South Australia and Western Australia and six years in Tasmania. The pattern of settlement has varied within the States. In New South Wales it has been mainly the subdivision of large estates, to some of which irrigation facilities have been made available. There have also been many single unit farm purchases under the promotion scheme but this method of settlement has recently been suspended by the State. In Victoria, a somewhat similar plan has been followed with large irrigation schemes in the Murray Valley. Recently, clearing of virgin scrub has been undertaken in the Otway and Wilson's Promontory areas. It is regretted that settlement in Queensland has been terminated prematurely by the Government of that State, where a large proportion of those settled were placed on sugar or tobacco farms.

In the agent States, the emphasis has been on bringing into production tracts of virgin country with the resultant increase in national production. This has been made possible by the extensive use of heavy machinery. Tractors; draw through the scrub lengths of heavy-gauge anchor chain attached to a large steel ball or a heavy log. This flattens all but the largest trees in its path and breaks it to form trash for a good clearing fire, after which sturdy disc ploughs prepare the soil for sowing with pasture. Examples of this scheme in Western Australia are mainly in the south-west of the State. The Rocky Gully project will provide 170 fat-lamb farms from 285,000 acres of virgin forest. There are 48 wheat and sheep holdings from 125,000 acres at Jerramungup and 40 farms for fat lambs at Mount Many Peaks, near Albany. Currently, up to 100 farms are being developed from selected parts within an area of half a million acres north of Bremer Bay.

In South Australia, over a quarter of a million ueres of scrublands are being developed on Kangaroo Island to form more than 170 fat-lamb holdings and a number of smaller projects in the drained areas of the south-east of the State are nearing completion. On the Murray River, at Loxton, Cooltong and Loveday 328 blocks, together with the extensive ancillary irrigation headworks, have been developed for the production of horticultural crops under irrigation.

In Tasmania, 13.000 acres of a densely timbered swamp at Montagu have been drained and are being developed to provide up to 100 dairy farms. On King Island, in Bass Strait, 90 farms have been occupied and a further 74 are nearing completion. On another Bass Strait island, Flinders, 128 farms are being prepared from virgin scrub to provide fat lamb and beef cattle units. It appears that farms in these areas will be in excess of the number required for Tasmanian applicants. They will be made available for qualified ex-servicemen from other States. The development of all these and sundry smaller areas has been made possible by the ingenuity of men in their use of power machinery and the application of scientific investigation into problems of pasture development, chief among which are the use of suitable plant varieties and trace elements such as copper, molybdenum and zinc in conjunction with ample supplies of superphosphate. Nature can be assisted but not hastened, and developing pastures must be given time to consolidate to 'he stage where they are capable of supporting enough stock for a settler to pay his way and earn a living; but farms derived from these large projects are becoming available in steady numbers.

National undertakings of this magnitude are costly and it is the purpose of this bill to provide for the capital expenditure to be incurred in the continuation of the scheme during the current financial year. The cost of the scheme for the last financial year and since its inception, including funds from Consolidated Revenue, together with . the numbers of farms allotted, is shown in a table which 1 have here, and with the concurrence of honorable members I incorporate it in " Hansard ". It is as follows: -

As well as the farms actually allotted in the agent States there are many holdings occupied under various forms of tenure pending the properties reaching the necessary level of production for allotment.

Previous loan acts have authorized the raising and spending on war service land settlement in South Australia, Tasmania and Western Australia, and for making the repayable advances to New South Wales and Victoria - initiated during the last financial year - of loan moneys amounting to £36,125,000. Gross expenditure on capital items to 30th June, 1956, was £38,531,000, of which £8,029,000 was met from repayments. Loan moneys used, therefore, total £30,502,000, leaving a balance of £5,623,000 at the beginning of this financial year. Expenditure from this source during the financial year 1955-56 in South Australia, Tasmania and Western Australia was £5,975,000, of which £4,442,000 was new money and £1,533,000 was the reexpenditure of repayments received during the year of amounts expended in previous years.

The amount provided for repayable advances to New South Wales and Victoria during 1955-56 was £3,900,000, but, despite estimates by the States that this provision would be fully utilized, the actual amount used was £3,180,000, of which £1,570,000 went to New South Wales and £1,610,000 to Victoria. Of the £8,500,000 to be provided this year, £5,000,000 will be advanced, under approved conditions, to the States of South Australia, Western Australia and Tasmania, to be used by those States for the acquisition, development and improvement of land for subdivision and allotment to classified ex-servicemen and for providing those ex-servicemen with working capital and finance for purchasing structural improvements, stock, plant and equipment.

This proposed appropriation for South Australia. Western Australia and Tasmania is required to meet an estimated expenditure this financial year on war service land settlement of £8,375,000, of which it is estimated £3,375,000 will be met by repayments to be received during the year. The increase over last year's expenditure is to meet the requirements for credit facilities to settlers to be allotted farms from the large-scale developmental projects already mentioned. There will be £3,500.000 for advancing to New South Wales and Victoria, the amount to each State depending on the allocation made by the States from their own funds. On information available to date the Commonwealth provision will be adequate to meet the States' requirements.

Let me again emphasize that this scheme is one where the Commonwealth and States must co-operate. The States have the responsibility of submitting projects for inclusion in the scheme, the Commonwealth approving their suitability for settlement in terms of the general agreement. The allotments are made by the individual States under the relative State legislation and the terms of allotment are matters between the settler and the State, the Commonwealth having been satisfied that the general terms comply with the conditions under which funds are made available by it tor the scheme.

One of these conditions is that lack of capital shall not be a bar to eligible and qualified persons receiving allotments. The farm must therefore be capable of sufficient production to carry 100 per cent, credit at the time of allotment and at the same timeprovide a living. This has necessitated standards somewhat higher than those normally accepted as home maintenance areas under civilian settlement. The relatively few failures to date and the low proportion of settlers who are in arrears with their payments vindicates this general approach. This bill is to provide finance for the continuation of the scheme, andI commend it tohonorable members.

Debate Con motion by Mr. Chambers) adjourned.

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