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Wednesday, 9 November 1910
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Senator DE LARGIE (Western Australia) . - There is scarcely room for debate upon this matter. The clause states that the Lands Acquisition Act shall determine the manner in which an owner shall be compensated for any land which may be resumed by the Government. Now that Act provides that -

In determining the compensation under this Act, regard shall be had (subject to this Act) to the following matters : -

(a)   The value of the land acquired ;

(b)   the damage caused by the severance of the land acquired from other land of the person entitled to compensation.

Surely nothing can be fairer than that.


Senator Vardon - But this provision will override that Act.


Senator DE LARGIE - No. It is strictly in accordance with the provision ia the Lands Acquisition Act.


Senator Vardon - If that were so it would scarcely be inserted in the Bill.


Senator DE LARGIE - In my opinion, it is quite superfluous.


Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel SirAlbert Gould. -Then, why not strike it out?


Senator DE LARGIE - The manner in which compensation shall be paid to landowners for any land which may be resumed by the Government is clearly laid down in the Lands Acquisition Act of 1906.

Senator Lt.-Colonel Sir ALBERTGOULD (New South Wales) [8.44].- What Senator de Largie has quoted in regard to compensation for severance "is perfectly true. That applies, I presume, to any partial resumption which may take place, but the proviso to this clause overrides the Lands Acquisition Act so far as estimating the value is concerned.


Senator de Largie - No.


Senator Lt Colonel Sir ALBERT GOULD - Under that Act an owner receives the value of his land as it exists at the date of resumption. But the proviso to this clause says that no greater value shall be attachable to the land than the value at the time when the Act was passed. If a property were resumed ten years hence, and it had been enhanced in value by 100 per cent, the Government would not be called upon to pay that enhancement, but only the value as ft existed at the date of the passing of the Act. The contention of Senator Vardon and myself is that there should be a limitation to that provision. Senator McGregor has asked, " What can be fairer when you give an Owner the value of his land as it is to-day, and the value of the improvements as they exist at the date of resumption ? " But that is very much like saying to an owner, " 1 shall enter into an agreement to have the right to purchase your land at any timeI see fit at the value which it has to-day."

He cannot dispose of his land at any greater value. The Government may never resume it, but by fixing the price in that way they debar the owner from improving his land. He will naturally say, " What is the use of improving the land when I do not know whether they will ever resume it or not ? I have paid £1 or 10s. an acre for the land, and I know that no matter how much it may increase in value I shall not get 6tl. more for it."


Senator de Largie - If the Government should not resume the land would he not get the value of the improvements?


Senator Lt Colonel Sir ALBERT GOULD - By retaining the land the owner gets the increased value. Suppose that, the honorable senator and myself have a property each, and that the Government say to us, " We may want to buy these estates within the next century, and, therefore, . we will now make a bargain with you that whenever we take them you shall each get the exact value of your estate as it is to-day, but, of course, we shall give you the value of the improvements." Does not the honorable senator see that that will destroy to a great extent the selling value of the land?


Senator McGregor - It only destroys the speculative value.


Senator Lt Colonel Sir ALBERT GOULD - How is the community-created value brought about? By the expenditure of money by Senator de Largie and myself on the properties, together with expenditure by other persons. We increase the value of the properties by our individual exertions, but under this provision each property will be valueless because there will be no use or market for it. You might just as well enact that the Government should have power to resume any land they may see fit in the Commonwealth, so long as they pay the value as it exists today.


Senator Rae - I wish they would. It would be absolutely fair.


Senator Lt Colonel Sir ALBERT GOULD - That would be absolutely unjust towards the community. It would be destructive of the value of property generally. It would be injurious to individual enterprise to enhance the value of lands.


Senator Findley - We have done that now with regard to the Federal Territory.


Senator Lt Colonel Sir ALBERT GOULD - Why? Because it has been generally assumed that the Government intend within a reasonable period to convert: all freehold land into Crown land. Every owner within the Federal Territory was prevented from selling his land to speculators for the purpose of working up big prices against the Commonwealth. But it has never been assumed that the Government are going to leave the freeholds in the hands of the present owners for the next half-century, and then resume them. The idea is that the Government shall acquire them as early as possible. If they intimate that as part of their policy they are going to resume all the land in the Northern Territory within a reasonable time, then there is some force in the argument that they should pay the present values, because they do not want to create speculative values. But where a bond fide value is given to a property by the work of the owner and by the people in the locality, surely it is not intended to hold that up against the individual for all time.


Senator Henderson - Surely the honorable senator will admit that that portion of the value which was created by the other residents belongs to the public.


Senator Lt Colonel Sir ALBERT GOULD - I admit that each individual member of the community helped to create the value of the land. If every honorable senator owned a block of land in the city, and each improved his holding very highly, those lands would increase materially in value in consequence of the aggregation of people as well as the improvements we had made. We should have brought trade to the place, and by that means developed values. Surely that is not a reason why everything should be taken away from us by the State. Let me now go a step further. It has been pointed out that seventy or eighty years ago the land on which Melbourne stands was cut up into allotments and sold, and that allotments

Which then realized £10, .£20, £30, or £40, are worth as many thousand pounds to-day. Would it have been just for the Government at that time to have said, "We shall pass a law under which, while we sell these blocks at the present time, we shall have the right if this place should ever become a great city, to say to the owner of a block at any time, " You gave £10 for this block; true, it is worth ,£100,000 today, but we are going to take it because we have that right. It was our property originally, and its present value has been given to it by the community generally." Would not such a thing be looked upon as a monstrous injustice?


Senator de Largie - This clause does not give any such power.


Senator Lt Colonel Sir ALBERT GOULD - It does. Let us assume, for the sake of argument, that at Port Darwin there is a struggling town at present, and that, in consequence of the Government taking over the town and adopting "a vigorous policy to develop the whole of the Northern Territory, a large export and import trade should grow up in the town. A large number of persons would go there to reside, and by that means create, eventually, a great city, perhaps as great as Melbourne is to-day. The value of an allotment in Port Darwin to-day may be about £10 ; but twenty years hence it may be worth £10,000. Suppose that the Government should then come down and say, " We intend to resume this land, and will only give you £10, because it is provided in a section of the Northern Territory (Administration) Act that - in determining the compensation to which the owner is entitled under that Act, the value of (he land shall be taken not to exceed .the unimproved value of the land, or the interest therein of the owner, at the date of the passing of this Act together with the value of the improvements on the land.

Would not honorable senators say that that would be an injustice? It would be an injustice to the individuals through whose enterprise and energy, and through the expenditure of whose money that value had been created.


Senator Rae - Public money?


Senator Lt Colonel Sir ALBERT GOULD - No; it would be their own money which had brought about the large import and export trade. Under this provision, honorable senators want to put the Government in a position to say to an owner that, no matter what value may be added to his land, it is all to be for the benefit of the Commonwealth.


Senator Henderson - Of course, any value which he has not created rightly belongs to the Commonwealth Government.


Senator Lt Colonel Sir ALBERT GOULD - The value is created, not by the Government alone, but largely by individuals. Let me proceed a step further. In Victoria, we find two cities in close contiguity. At one time, it was thought that Geelong was going to be the great port and the chief city of Victoria. What has been its history? We find that, although Geelong started with .great hopes and aspirations, Melbourne was established, and has taken the trade and become the chief city of Victoria ; while Geelong, whatever its position may be to-day, is infinitely inferior, from the stand-point of land values, to Melbourne.


Senator Guthrie - Because there was not the same expenditure of public money at Geelong as at Melbourne.


Senator Lt Colonel Sir ALBERT GOULD - The two cities have enjoyed the advantage of the same government ; first, the government of New South Wales, and second, the government of Victoria. They have had exactly the same advantages in that regard.


Senator E J RUSSELL (VICTORIA) - No.


Senator Lt Colonel Sir ALBERT GOULD - They have had the same general advantages from a settled form of government, and a proper system of administration. Both these cities having been established practically contemporaneously, one has forged ahead much more than has the other. Land in one has become of much more valuethan land in the other. The population in one has become much larger than that in the other. If you were to go to Geelong and buy half-an-acre of land in the middle of that city, the price you would pay would be infinitesimal compared with the price which you would pay for a similar area in Melbourne. We have got to a certain extent on exact lines.


Senator E J RUSSELL (VICTORIA) - Not exact lines, when a ship cannot get into Corio Bay, owing to a sand-bar.


Senator Lt Colonel Sir ALBERT GOULD - An enormous sum has been spent in deepening and straightening the Yarra so as to make it navigable by larger ships than could enter it in its primitive state. But why have you spent all this money in different places? It may be that you have spent many thousand pounds more in Melbourne than in Geelong; but the population of the former has been very much larger than the population of the latter. If you take the population and ascertain how much . per head has been expended in Melbourne and Geelong respectively, you may find that there is not a very great difference. Then you want to see where lies the difference between the two great cities.


Senator E J RUSSELL (VICTORIA) - The difference is that whereas Melbourne had fresh water Geelong had not.


Senator Lt Colonel Sir ALBERT GOULD .- It is not merely that. The population began to settle in one place because they thought it was a more suitable site for establishing a greatport than was the other. Having spent their money and enterprise in creating this place, would it be fair to enact that land may be resumed by the Government at cost price in 1840 in each case? That would be penalizing the men of enterprise who came to Melbourne in those early days. Honorable senators have tried to shelter themselves behind the statement that it is the community-created value which they seek to obtain. But that is not the case. It is not the State alone which has created the unearned increment. It has been due to the work of individuals in the city. If you want to make a place a great city, you ought to bear in mind that the land-owners are entitled to some of the value and some of the profits.


Senator Findley - And they are getting their share.


Senator Lt Colonel Sir ALBERT GOULD - If Port Darwin should ever become a great city like Melbourne, where land can be reckoned as worth £1,000 or . £1,500, or, in some of the more favoured places, £2,000 per foot, that result will not be due solely to the Commonwealth Government, but largely to individual enterprise and the expenditure of public money.


Senator Long - To the collective enterprise, surely ?


Senator Lt Colonel Sir ALBERT GOULD - We are all joined together, and collectively we create the value. If I go to a place and spend my money in making improvements and bring trade to it, and another man goes to the place and follows my example, he gives me a bit of a lift just as I gave him a start in the first instance; and so it goes round. It is unfair to enact that the whole of that value shall pass into the hands of the Government.


Senator Rae - The Government are the community.


Senator Lt Colonel Sir ALBERT GOULD - Would the honorable senator justify the Government in resuming blocks of land which were sold at £10 or £20 each seventy years ago, and only paying that value for them, plus the value of the improvements ?


Senator Rae - That would be retrospective; but this Bill is not.


Senator Lt Colonel Sir ALBERT GOULD .- I know that.


Senator Rae - But if the Government made that proposal at the time the land was sold, it would be perfectly fair. It is a pity they did not.


Senator Lt Colonel Sir ALBERT GOULD - Where would have been the incentive then to men to push this place ahead? When the Government induced men to buy bits of land covered with scrub, and in a miserable-looking place into the bargain, why did they come here? Because they thought there was a possibility of creating a great city, and reaping some reward for their enterprise. As far as you take from an individual all the incentive to enterprise and the promise of reaping a reward, you will find that men of the type we desire to attract will not be ready to come here. Australia is not the whole world. There are plenty of other places to which men can go and spend their money with the expectation of securing the reward to which they are entitled.


Senator E J RUSSELL (VICTORIA) - Is' it not a fact that the reason why many men came to this country was that bad land laws drove them from their own country ?


Senator Lt Colonel Sir ALBERT GOULD - Many men came to this country in very poor circumstances ; but they were men of considerable grit, enterprise, and energy, and they saw a prospect of prospering in a new land. Why does any man go from one part of the world to another, except to better himself? When a man goes to a new country, he believes that there are opportunities there which he cannot find in his own country, and many a man who has been poor in the land of his birth has shown, under fresh circumstances, that he is capable of building up a considerable fortune. It is men of that character who have made Australia what she is to-day. It is not a fair thing to take away from individuals that incentive which induces them to better themselves, and at the same time to confer great advantages upon their country. It is not fair, in order to prevent the possibility of speculative values being placed on land, to say, " We will take the right to resume this land at any time at its original value." I do earnestly protest against legislation of this character, which will place obstacles in the way of energetic individuals deriving legitimate gain through the expenditure of their own enterprise and ability. If we are going to legislate on these lines, we might as well forthwith" pass a law saying that any lands in the Northern Territory may be resumed at any time at the value which they have to-day.

Senator NEEDHAM(Western Austra follow would be to strike out the proviso to the clause. We know perfectly well that there are men in the Northern Territory to-day owning land, not by the acre, but by the thousands of square miles.


Senator Findley - Not owning, leasing.







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