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Tuesday, 20 November 1973
Page: 3554


Mr ERWIN (Ballaarat) - Mr Chairman,I ask you to bear with me for a moment at the opening of my remarks as I wish to congratulate the Minister for Tourism and Recreation (Mr Stewart) on the work that he is doing. I did not get the chance to do this earlier. I believe that the Minister has done an excellent job in a new area. I guess that his main problems will hinge on the very small allocation of money to his Department. But, when proper consideration is given to this allocation, it will be seen that it is certainly the right and proper policy in a period of inflation and shortages. However, I hope that in future years the Minister will be able to attract a considerably larger appropriation.

The move by the Minister for grants to be made for the preservation of historical sites and buildings is a departure from what one might call the norm, but it is a sound and wise move. This is the only way in which our old historical buildings can be preserved and restored. As I am personally involved in such a venture as the restoration of an historical building, I am closely familiar with the costs involved. It is only when one is faced with such a task that one realises why so much of our history is being destroyed. In many cases the expenditure of large sums of money is not justifiable economically. What the Minister for Tourism and Recreation now intends to do will ensure for the future the preservation of our grand old buildings. But I repeat my hope that, in future years, the appropriation for his Department will be considerably larger. I thank you, Mr Chairman, for bearing with me while I placed those comments on record.

The Committee is discussing now the estimates for the Department of Urban and Regional Development. I completely and wholeheartedly support plans for the dispersement of our people throughout Australia. However, I do wish to offer certain criticisms. Firstly, the major criticism of the allocation of $93m for the new cities program is the impact that it will have on the current inflationary situation. The bulk of funds being made available will be devoted to land acquisition and there will be a concentration of expenditure in small regions. This, of itself, can be expected to cause inflation through the injection of excess funds to these areas. It should be stated that, if State governments fail to pass necessary land price stabilisation legislation, no funds will be made available for land acquisitions by land commissions. It appears that the land to be acquired is likely to be that which is presently zoned as rural but which is suitable for subdivision for urban purposes within any designated growth centre. This is the same type of land which has put large amounts of money into the hands of developers in both Sydney and Melbourne, and to a lesser extent in other areas.

However, a policy directed only at land on the urban fringe will short-sightedly neglect the boom that will occur in land in designated growth centres within the present town boundaries. Values of both residential and commercial land within present town boundaries can be expected to escalate rapidly in this circumstance. Examples of this second type of boom abound on the fringe of present cities, the chief examples of the phenomenon being 40 acre weekend farms'. It is doubtful whether price stabilisation will work, and it is possible that an abatement of the land price boom is more likely to be achieved by increasing the supply of subdivided building blocks in the short term. A further criticism of the policy of land acquisition can be directed at the terms on which money is lent to the commissions. At present, the terms being discussed are for money to be made available at the long-term bond rate, with interest repayments being deferred for 10 years and then capitalised into the moneys to be repaid. With the recent upward movement of the bond rate of 8.5 per cent, the capitalisation of interest repayment* for 10 years will have the effect of more than doubling the initial amount of the loan before repayments begin. In this case, the high repayment costs coupled with the cost of developing the blocks - that is, surveying, connection of electricity, gas, water and sewerage service and roads, etc - will result in high land rents being paid by eventual lessees, if a true leasehold system is to obtain. A third criticism of the proposals is that of the selection of a suitable indicator of inflation in calculating the annual increase from the base price of any land the price of which is stabilised. No indicator has yet been selected. If one is chosen which reflects the increase in similar rural land in other centres throughout a particular State, the effect may well be to increase the price of frozen land rather than to leave it stable at constant prices, that is, increased annually only in line with inflation as measured by the consumer price index.

The proposal to provide $30m in 1973-74 to help overcome the backlog in sewerage services can also be regarded as being inflationary in view of the current labour shortages throughout the economy and particularly in the construction industry. This shortage will be worsened if new subdivisions are to be sewered as they are developed rather than being added to the backlog. From the foregoing it appears that moneys to be expended by the new Department of Urban and Regional Development are likely to be inflationary in their effect on particular regions. More importantly, sums of money are being apportioned without any clear indication that much thought has been given to how policies of land price stabilisation will operate and whether they are, in fact, likely to be effective in halting rising land prices. An examination of the structures of the various Government departments leads one to the conclusion that the Department of Urban and Regional Development in the most top heavy or, in the words of the Minister for Labour (Mr Clyde Cameron), it has a greater proportion of fat cats than any other. Using the information supplied in the Estimates of Receipts and Summary of Estimated Expenditure for 1973- 74, a ratio can be determined of Second Division, that is, executive officers, to Third Division, that is, professional and skilled clerical staff. For the Department of Urban and Regional Development this ratio is slightly less than 1:5. Comparable ratios for the administrative section of other departments having a similar co-ordinating function or profession base are: Prime Minister's 1:7, Special Minister of State 1:9; Attorney-Generals 1:10, Foreign Affairs 1:20, Treasury 1:19, Education 1:49. In view of the expected growth of the Public Service wage bill in 1973-74, such a high proportion of executive staff as will exist in the Department of Urban and Regional Development appears unwarranted. The total appropriation for this very new and young Department in its first year of operation is about $208m. So far as the Minister for this new Department is concerned, does this not follow the old saying of putting a beggar on horseback and he will ride to hell'? How can this very large amount of money be efficiently and economically expended at a time when inflation is at its worst in our history, and manpower and materials are in such short supply?







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