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Tuesday, 22 March 1927

Senator ELLIOTT (Victoria) . - I have before me a plan of the latest land subdivision at Canberra. Honorable senators will remember that about six months ago in this Senate I protested against the delay in making available further blocks, and pointed out that the few thrown open caused profiteering on the part of those who had secured leases. In answer to my protest the commission stated there was no demand for a greater number, notwithstanding that I had shown conclusively that high premiums were being paid on blocks which had been leased. However, after a period of twelve months, additional land is being made available. Honorable senators will probably be surprised to know that only twelve blocks are to be offered at the auction.

Senator Sir William Glasgow - The honorable senator refers to business sites.

Senator ELLIOTT - Yes; blocks for retail trading purposes. Evidently the commission thinks that only twelve persons want to secure business sites at Canberra. I invite the attention of the Senate to the upset price fixed by the commission in respect of those blocks. For blocks measuring 20 ft. by 108 ft. the upset price is £1,000.

Senator Ogden - Blocks in the scrub!

Senator ELLIOTT - The upset price represents £20,000 per acre for land which cost the Government about £4 an acre.

Senator Grant - The whole lot of them should be dismissed. They are " crucifying " Canberra.

Senator Sir William Glasgow - Are those blocks at the civic centre ?

Senator ELLIOTT - They are in the business area in the vicinity of the civic centre. I think honorable senators will agree that in obtaining £20,000 per acre for land which cost £4 an acre the Government is making a tremendous profit. It may be said that the land has appreciated in value because of the construction of streets by the commission, but I remind the Senate that twelve months ago land in the same area was sold for £400 a block. It is difficult to see how the commission can justify its action in increasing the upset price by 150 per cent.

Senator Grant - That is done to prevent settlement.

Senator ELLIOTT - It is profiteering on a scale which I have never previously known. Such prices could not be secured had not the commission adopted the policy of doling out the land in quantities altogether insufficient to supply the demand.

Senator Foll - Are private owners asking £1,000 for a block of the size mentioned by the honorable senator?

Senator ELLIOTT - No; that is the upset price fixed by the commission. There is no private land available there; the commission does not allow a re-sale. As a matter of fact, people, in order to realize a profit, are attempting by a subterfuge to get over the commission's interdiction. In place of a straight-out transfer a mortgage of 90 per cent. of the value of a lease is taken, on the understanding that the transfer will be completed as soon as buildings have been erected. The price placed on these new subdivisions represents a premium on former sales, and will make possible a tremendous profit for those who were fortunate enough to buy at the early auction sales. Under the conditions of sale, the purchaser of a block, say, at £1,000, does not put up that amount in cash; he pays only 5 per cent. on the capital value each year.

Senator McLachlan - Does the honorable senator suggest the terms are too easy?

Senator ELLIOTT - No; my contention is that the prices are outrageously high.

Senator McLachlan - If theupset price is too high, will that not be reflected at the auction sale of leases?

Senator ELLIOTT - Not necessarily, because a certain number of people are determined to start business in Canberra, and, if the number of business sites available is limited, they will he forced to pay exorbitant prices. They fear, judging by previous experience, that if they do not buy at the approaching auction sale, they will have to wait another twelve months before further leasesare available. The policy of the commission is worthy of the mostexperienced of land boomers in

Sydney, Melbourne, or elsewhere. Honorable senators should realize what this will mean. High prices for leases must necessarily lead to an increase in the cost of living at Canberra. Imagine a business man, such as a baker, having to pay £50 a year ground rent on blocks in their present rough state. In some cases it is necessary to excavate the overburden to a depth of 4 feet before a. brick can be laid. An investor must get 6 per least on his money. It would be unreasonable to expect any man to be content with less than that.

Senator Sir William Glasgow - It is not necessary for bakers to build in the civic centre. There are other shopping centres.

Senator ELLIOTT - According to the commission's arrangements for the forthcoming auction, they will be unable to get business sites elsewhere. Does the Minister suggest that bakers and other business men must not conduct business in the civic centre? Is that particular area to be reserved for banks and insurance companies ?

Senator Sir William Glasgow - No; but it is not necessary for bakers and that class of people to set up business in the civic centre. As a matter of fact, there is a baker at Canberra now, and he is not in the civic centre.

Senator ELLIOTT - Possibly that was because he could not get there. The policy of the commission must inevitably mean an increase in the cost of living at Canberra; eveninsurance companies and banking institutions must conduct their operations on business lines, and, if they have to pay exorbitant prices for their leases, they naturally will put up their rates.

Senator Cox - Is it not a fact that certain of thebanks paid over £2,000 for land there?

Senator ELLIOTT - Yes. The Commonwealth Bank, ina fitof madness, paid £7,000 for a small leasehold, approximating, I think, 70 feetsquare.

Senator Foll -Isit not awise provision not to encourage the erection ofmore shops than arerequired for the needs of thepeople ?

Senator ELLIOTT - That is another matter altogether. I amcom plaining about the upset price of the blocks about to be offered, and also because only a limited number will be offered. Apparently business men are to be herded in one particular locality. Because other blocks are not to be made available, it is a case of take it or leave it. Every one knows the position of the Commonwealth Bank. A free site was reserved for that institution, but the building conditions required the erection of premises that would cost about £500,000, and the banking chamber, according to one of the officials, would be so large that, to put it in his words, the bank could not afford to warm it, so all the officials would have to freeze in the winter. To get over the difficulty, the Commonwealth Bank bid at auction against the Australian Mutual Provident Society for another lease, and the price went to £7,000.When the Australian Mutual Provident Society's representative learned who had secured the lease he said he would have given up the contest much earlier if he had known he was up against the resources of the Commonwealth Bank.

Senator Cox - What is the position of the other banks?

Senator ELLIOTT - Some were fortunate enough to obtain leases at the upset price ; but in one case an ambitious squatter, who was anxious to get a particular site, ran the priceup to £3,000. All this competition would have been prevented if, instead of allowing only a limited number of blocks to be sold in one civic centre, more had been made available at the time. Obviously it has been the policy of the commission to stimulate competition for the limited number of leases that are offered from time to time. I should have had nothing to say if private speculators had been operating on their own account;but I protest against the Federal Capital Commission adopting the policy of the land monopolist. It has control of the entire area. Beforea man can puta pick in the groundhe mustgocap in hand to the commission for permission to build. I shall have pleasure later in introducing a bill to compel every member of Parliament to buy a. lease in Canberra. They will then begin to appreciate the pin pricks on the principle that the toad beneaththe harrow knows where every separate tooth point goes.

SenatorOgden. - I would not have a block as a gift under the conditions imposed by the commission.

Senator ELLIOTT - It is the duty of members of the Senate to protect the people from the unfair tactics of the Federal Capital Commission. This plan of subdivision for the next sale of leases only reached me to-day, so that I have not had time to carefully study it; but a glance at the upset prices fixed for the small number of sites to be offered convinces me that the Government would be well advised if it went carefully into the matter with a valuator from Sydney or Melbourne to ascertain if the prices fixed are fair and reasonable. It is not a fair policy that the commission should limit the number of blocks to be offered.

Senator Grant - The commission is doing that to inflate prices.

Senator ELLIOTT - Of course it is. As only a few business leases are to be auctioned, it is a case of take it or leave it.

Senator Grant - The commission is really crucifying Canberra.

Senator ELLIOTT - No doubt the commission is between the devil and the deep sea. It has a huge army of workmen, and is seeking to make the best showing possible. When I was there recently, the place reminded me of the Somme battlefield, with trenches, ditches, and holes everywhere. The commission must be incurring enormous expenditure, and to present a favorable balance-sheet it is exacting exorbitant prices from those who wish to secure building leases.

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