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Wednesday, 5 December 1973
Page: 4313

Mr GORTON (Higgins) - I propose to speak only for a few minutes before asking leave to continue my remarks at a later stage. There are 2 or 3 comments which I would like to make on the Bill which has been presented to the House. The first is that we have no objection at all to the purposes of this Bill. Indeed I congratulate the Minister for Urban and Regional Development (Mr Uren) on bringing this Bill forward. But I do have some comments to make on the method by which the money is to be made available. In the first place, I do not see why the Government is continuing to insist on charging interest on money provided for the purposes set out in this legislation. If the money is originally borrowed then I can understand the necessity for a government to charge interest in order that it can repay the interest to the people from whom it had originally borrowed the money.

I believe that it would be borne out by examination that a great deal of the money that is being provided under this Bill is in fact not money which has been borrowed at all but is revenue money which has been raised by the Commonwealth Government. It is to be given to these authorities under the guise of loan funds. But they are not loan funds because there is no interest to be paid by the Commonwealth Government. This is not something new. I am not attacking the Government for doing something that is new. This practice has been continuing for a long time.

Mr Uren - Surely you are aware that the Commonwealth has a deficit Budget?

Mr GORTON - I do not interject when the honourable member is making a statement so he should not interject when I am making a statement. The excuse which the Minister seeks to make for the necessity to charge interest on money which has not been borrowed and on which the Commonwealth does not have to pay interest is that the Commonwealth has a deficit Budget. I cannot see that that has any bearing on this because the Commonwealth does not have to pay interest on the money which it is providing for the purposes set out in the Bill. Therefore there is no reason why the Commonwealth should charge interest on this money. I hope that we will get away from what previous governments have done and what this Government is continuing to do in this regard because it makes an enormous difference to the States and municipalities concerned whether the money is provided by way of a grant which in my contention it should be if the money comes from revenue or whether it is provided by way of a loan which bears interest over 40 years and therefore costs twice as much in the end as the amount borrowed in the beginning. But the excuse made by the Minister in his second reading speech as to the reason for charging interest is along the lines that the sewerage authorities are considered to be business undertakings which should generally rely on loan funds. I cannot for the life of me imagine why a sewerage authority should be regarded as a business undertaking. I have never heard of sewerage authorities selling the end product which is what happens in all the business undertakings about which I know. For example, those involved in generating electricity, supplying gas or providing water. To regard a sewerage authority as a business undertaking and to put this forward as an excuse for charging interest is something which I am sure if the Minister had had real time to consider he would have eliminated from his speech because it really is a rather absurd proposition.

The second excuse which has been presented is that the present Australian. Government does not intend to bail out the sewerage authorities without conducting a proper analysis of their indebtedness. By all means let us have a proper analysis of their indebtedness so as to ascertain whether something should be done about their existing indebtedness. That is what bailing out means. But do not add additional indebtedness on top of their present indebtedness on the ground that this Government does not know what the present indebtedness is and that it does not know whether it should bail them out. I would like to see this Parliament really examine the question of the provision of funds to States and to other authorities. By all means charge interest on money when interest is required, that is, when the money has been borrowed originally, but do not charge interest on funds which come from revenue money. If we do that then we will turn back the clock. We will be reversing what a previous government did when, for the very reasons I have just put before this House, it relieved the States of the requirement to pay interest on so-called loan money because in the past that loan money had been provided from revenue funds. That was a proper path to follow. I hope we will be able to continue to follow it. I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

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