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Wednesday, 16 February 2000
Page: 11838

Senator MACKAY (11:42 AM) —I wish to make some comments with regard to the Australian Capital Territory (Planning and Land Management) Amendment Bill 1999, which has been considered at great length by various levels of government and also by a number of committees. I think it would be useful to go through some of the history in relation to this. Before I do that, I wish to make some preliminary comments in relation to Canberra, obviously.

As our nation's capital, Australia's founders were determined to see, correctly so, that effective planning and land management would ensure that Canberra would be and would remain a national asset to be used for the benefit of the whole nation. This bill, in seeking to extend the maximum term of a lease in the ACT from 99 years to 999 years, we believe, attacks one of the central pillars put in place by the founders to fulfil the intentions with regard to our national capital.

At the time of Federation, land speculation was rampant in Australia. Large tracts of land were alienated and there was much speculation in land in anticipation of unearned gains from its potential use and development. Australia's founders were determined to see that such rampant speculation of land was not repeated with regard to the development of the national capital. At the time of Federation, public ownership and leasehold tenure was seen as a way of passing on unearned increases in the value of land to the whole community rather than individual land-holders. The principle of public ownership of land was given expression in section 125 of the Constitution, which states:

The seat of Government of the Commonwealth shall be determined by the Parliament, and shall be within territory which shall have been granted to or acquired by the Commonwealth, and shall be vested in and belong to the Commonwealth ... Such territory shall contain an area of not less than one hundred square miles, and such portion thereof as shall consist of Crown lands shall be granted to the Commonwealth ...

This constitutional decree, that land for the national capital be vested in and held by the Crown as Crown land, is further enacted by section 9 of the Seat of Government (Administration) Act 1910, which states in part:

No crown lands in the Territory shall be sold or disposed of, for any estate of freehold ...

This captures the essence of what has become subsequently the unique status of the national capital and is what has led to the adoption of fixed term leases of no more than 99 years.

There are three principal reasons behind the adoption of the leasehold system that operates in Canberra currently. Firstly, the leasing of land was seen as a way of ensuring orderly development by placing conditions on the granting of leases. By leasing the land, the Commonwealth government could provide sites at low capital cost for housing and for public and community services as well as for commercial services.

Secondly, leasehold provides a means of planning the city so that it is developed in a predictable fashion. Leasehold could prevent speculation in allotments by requiring building within a specified period, thus establishing stability and predictability of land use. This issue was picked up by one of the plethora of inquiries that have been made into the leasehold system in the ACT—the 1988 Report on the Canberra Leasehold System prepared by a joint subcommittee of the Senate Standing Committee on Transport, Communications and Infrastructure of that time. The joint subcommittee concluded:

Canberra land is a national heritage to be safeguarded and used for the benefit of the nation and its capital. Leasehold tenure ensures that ownership of the land remains in the public domain for the benefit of all Australians. Not only does the leasehold system serve the Territory's National Capital and Seat of Government characteristics but it serves the interests of the local Canberra community by ensuring orderly development in a predictable fashion and by preventing speculation.

This bill today seeks to extend the maximum term of a lease in the ACT from 99 years to 999 years. This idea has been floated on numerous occasions in the past. In fact in the last 25 years, the leasehold system in the ACT has been reviewed 13 times. Each of these reviews has in some way or another focused on the future of the leasehold system.

Of the four most recent reviews, three rejected a move to leases in perpetuity or freehold, while the most recent review by the Senate Rural and Regional Affairs and Transport Legislation Committee saw government senators on the committee conclude that a change was needed, while Labor senators rejected this idea. The bill that comes before us today, in the wake of so many reviews that have already looked at this issue closely, is less about the real value of the leasehold system in the national capital and, in our view, more about political opportunism by the government.

Before the last election in the territory, the then Deputy Chief Minister, Mr Humphries, made clear his party's intention to move towards 999-year leases if they returned to office. In the subsequent inquiry into this bill by the Senate Rural and Regional Affairs and Transport Legislation Committee in April 1998, the ACT government submission into the inquiry sited the need to encourage business investment as the driving force behind this bill.

This bill actually, however, from our perspective, is an ill-prepared and ill-understood proposal that was used during the election to take advantage of an apparent perception that business investment in the ACT is discouraged because of the 99-year lease arrangement. However, on questioning by the committee during this most recent Senate inquiry, the ACT government could provide no examples or illustrations to support their argument. In fact, evidence heard by the committee from Ms Gaylor, Assistant Secretary of the ACT Liaison Unit at the time, indicated that `there is no definitive research that has been used to establish this position'. Evidence provided to the committee by Professor Neutze in fact contradicted this argument. He submitted:

There is ample evidence from my studies of the operation of the leasehold system in Canberra and other places that leases of less than 100 years do not cause insecurity which inhibits investment.

The present relatively low levels [of investment] result from a shortage of demand not from the limited terms of the leases.

What the territory government and its federal counterpart should be concentrating on, if there is a genuine interest in addressing any apparent perception in the community that investment in the territory is suffering, is ideas of substance that will attract business and investment that comes with it to the territory. Yet what we have seen in recent times is the Prime Minister delivering another significant blow to the future of Canberra.

Two years ago the Prime Minister decided that Canberra as the capital of Australia would be the perfect location to host CHOGM during the Centenary of Federation. For the first time, from our perspective, the Prime Minister was showing signs of an attitudinal change to his approach to the ACT. This is the same Prime Minister who refuses to live in the official residence of the Prime Minister, the Lodge, because it is in Canberra, and who prefers to live in Kirribilli. He seemed to have had a rethink. In the weeks before the ACT election, the Prime Minister announced that Canberra was to host CHOGM. Fifty-five heads of state and their entourage would be coming to Canberra. This would obviously provide an ideal opportunity for the ACT to showcase Australia and its capital. Canberra's hotels and businesses began to prepare, and bookings were made. It was going to be a good event and very important in relation to the economic future and development of the territory. As we all now know, the rest is history: the carpet was pulled out from under the ACT and it was dismissed as an appropriate venue for CHOGM.

Almost two years after the original announcement, after reservations had been made and business had begun gearing up for the event, the Prime Minister decided that Canberra—our capital which has hosted presidential parties and international delegations—would not be able to accommodate the CHOGM meeting. From our perspective, if the Prime Minister believed that, then he really should have made that announcement earlier before these preparations were made, not leaving businesses in Canberra out on a limb with regard to the siting of CHOGM and with regard to an appropriate assessment of facilities that were available for CHOGM.

We know that there are now more accommodation facilities in Canberra than there was two years ago when the announcement was made. In the weeks before and after the announcement, no-one suggested that Canberra would not be able to accommodate the meeting. The point we are trying to make here is that if there was a problem why was it not raised earlier and why were the expectations not put in an appropriate context earlier, rather than after the election in the ACT?

One of the consequences of withdrawing CHOGM from Canberra at this late stage has been that this apparent perception of Canberra as unable to attract business and long-term investment has been reinforced by the Prime Minister, wittingly or unwittingly. If the federal government and the Carnell government in the ACT are serious about confronting any apparent perception in the community that is affecting Canberra's business and ability to grow, then really it would be appropriate to stop detracting from this issue by wasting everybody's time, the time of this chamber and so on with what is really an empty and unsubstantiated proposal relating to the leasehold system in the ACT and to start getting some real action with regard to focusing on events and ways of bringing investment into Canberra.

If the Prime Minister thinks Canberra is inadequate to host such a meeting, if he thinks its airport is too small—as was suggested—and its Convention Centre undersized, then really he should have thought very carefully before he made the commitment to the Canberra community with regard to CHOGM. Many businesses spent time and money in planning and in turning away other business in order to prepare the space and facilities to ensure that Canberra was available for that meeting. These businesses had a vital boost to their industries taken away; and they must be compensated for the further loss resulting from turning away real business in anticipation of and in reliance on the Prime Minister's public undertaking.

In terms of downgrading Canberra as the nation's capital, I understand it is the view of the people in Canberra that this is a greater insult than the fact that the Prime Minister refuses to live here and lives instead in Sydney. Their view—and I think correctly so—is that his refusal to live in Canberra is, wittingly or unwittingly, a public display of lack of confidence in the nation's capital. Further, we now have an indication that—again, wittingly or unwittingly—he has sent a clear message to the international community about Canberra's ability to hold national meetings and conventions, something which, I suspect, will take the territory some time to recover from.

The bill before us today has in its sights the wrong target. Almost every report that has looked into the leasehold system in the ACT in the past 25 years has concluded that any perceived negative effect on business is unsubstantiated. The Whyte report in 1983 rejected perpetual leasehold as unnecessary, unjustified and inconsistent with the Commonwealth's ownership of land. The Langmore report of 1998 rejected leases in perpetuity as being fraught with contractual difficulties and as weakening the government's control over the use of land in the national capital. The Stein report of 1995 rejected conversion to a system of leases in perpetuity or freehold because of the control associated with leasehold in terms of planning and development in the ACT, a central tenet of the management of land in our Capital Territory. The Stein report concluded that there was no evidence that leasehold tenure inhibits investment in the ACT. No evidence was produced for the review that investment was not occurring in the territory as a sole consequence of the leasehold system.

This was also the case in relation to the most recent inquiry by the Senate Rural and Regional Affairs and Transport Legislation Committee in April 1998. No evidence was presented to the committee to support the ACT government's assertion that the leasehold system in the ACT was having a detrimental effect on business. Paradoxically, the committee in fact had evidence presented to it that a change to leases may cause a reduction in investment and development in the ACT. This would be a result of land values being artificially increased due to the changed lease arrangements. This was the evidence that the committee had before it. This would ultimately represent an increase in cost to new businesses established in Canberra.

Senator Ian Macdonald —Who gave that evidence?

Senator MACKAY —You will have your chance, Senator Macdonald.

Senator Ian Macdonald —I said, `Who gave the evidence?' I am simply asking who gave it.

Senator MACKAY —Nine-hundred and ninety-nine-year leases may facilitate unrealistic increases in land prices giving rise to instability in land management and planning system—and so undermining the unique structures in place in Canberra to ensure that this public land is to remain a national asset to be used for the benefit of the whole nation.

This federal government and the Carnell government in the ACT should stop wasting the time of the Australian people in pursuing a change for which they have produced no evidence whatsoever that the desired effect will be achieved. Further, this is a change that may indeed have a detrimental effect on businesses coming into Canberra—added to, I might say, by the debacle with regard to CHOGM. More significantly, it undermines and devalues the unique status Canberra has been given as the nation's capital. It is our national asset. It is there for all Australians to enjoy and for all Australians to be proud of. This is guaranteed through the planning and land management system that operates here.

If the federal government and the ACT government really want to attract business to Canberra, they should focus on the damage that the Prime Minister has recently caused and continually reinforces by the contempt he displays for the national capital. The Carnell government should be channelling its energy into ensuring that events like CHOGM do in fact end up at the nation's capital and that the Prime Minister's commitments are worthy of being honoured. The Carnell government should be up here lobbying the Prime Minister instead of wasting this chamber's time in putting forward an empty proposal that does not address the substantive issues to hand and for which there is no empirical supportive evidence at all. We do not support the bill.