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Wednesday, 21 November 1973
Page: 3604

Mr UREN (Reid) (Minister for Urban and Regional Development) - I move:

That the Bill be now read a second time.

The purpose of this Bill is to appropriate $30m in 1973-74 for the Land Commissions program as allocated in the Budget. The rapidly rising price of land in our capital cities is something which disturbs this Government and distresses the young people saving for a home. Our policies on land form part of our urban policies. No-one can deny the need to change the haphazard system of urban development which has been carried out over the past 23 years. Urban development needs to be planned so that it does not take place simply as the consequence of .pressure by major landholders for rezoning. Australia's cities have grown tremendously in the past 20 years. Escalating land prices, inadequate urban services and transport facilities, poor urban design and under-privileged communities have all been the products of urban development of the post-war years. The Australian people face major expenditures to overcome the backlog in urban services in our major cities. In short, too often the product is poor, the price is too high and the bills have not been met.

Let me give some figures with regard to Sydney in the period September 1970 to March 1973. The increase of the consumer price index in all groups was 18.2 per cent. Average weekly earnings rose 29.5 per cent. The wholesale price of building materials for houses rose 21.4 per cent. However, the minimum price for home sites in urban fringe areas in Sydney rose an astounding 157 per cent. What is happening in Sydney today and what will happen there in the remainder of this year is what will happen next year in Melbourne and in other capital cities. It is occurring already in the south eastern corridor of Melbourne. This is a national disgrace. It points to the need for action by the State governments as well as by the Australian Government. Might I add that the State governments have had the power in the past to carry out this action, if financial arrangements had been made. The first requirement was for the States to have the will to do this. The second need was for them to enter into financial arrangements wim the Federal Government. The State governments in the past did not act- in this direction; nor did the Federal Government. That is why we face this crisis situation now.

Yet, throughout the whole development process of the last 2 decades, a number of individuals have amassed large fortunes from increases in the value of land. The investment of public funds in services and facilities such as highways, sewers, schools and hospitals increases the value of land, but the people as a whole recover little or none of the increases. Rezoning can, overnight, cause large increases in the value of land owned by those whose property lies within the path of urban development. Sometimes individual owners and, of course, speculators who are sitting on large tracts of land, withhold their land from the market in the hope of further land price increases. The result is many families today are unable to afford a house on their own block of land.

One of the chief characteristics of the growth of our cities is that often the sequence of development is private initiative for profit followed by a harried and strained public investment in basic infrastructure. So, there is a great need for governments to be able to co-ordinate the provision of services to developing areas. In order to get an efficient co-ordination and provision of services, governments ought to be able to identify specific areas for development. These areas must then be acquired at prices which have not been forced up by the announcement of intended urban development. The present planning system is a blueprint for speculators. This is one major reason why we must change the rules of the game. Public acquisition defeats speculators who withhold large parcels of land from the market. Land Commissions and the legislation to enable acquisition at fair prices which we are encouraging the States to implement are essential if better co-ordination and better planning are to be achieved. Ultimately, they are the means by which we will enable young people to enter the land market at a cheaper price. Let there be no mistake about this: The present Australian Government believes that excessive profits have been made in land speculation and this should not continue. We need the co-operation of the States to stop this. If there is co-operation between the Australian Government and the State governments, this state of affairs can be stopped. Honourable members should have no doubt about that.

There are three major objectives underlying the operations of the Land Commission structures. Firstly, we want to allow areas to be comprehensively planned and developed; secondly, we want to make land available at fair prices; thirdly, we want to retain, for the benefit of the whole community, some of the increase in value which results from the process of urban development. This Government believes that a great majority of Australians accept and welcome these objectives. Therefore, the Australian Government has encouraged the States to set up Land Commissions or to reorganise their existing structures so that these objectives can be achieved.

The financial assistance offered to the States is subject to two main types of condition. The first type deals with the usual range of conditions on terms of finance. I will deal with these more fully in a moment when I am considering specific parts of the Bill. The second main type might broadly be called performance conditions.

There are two major performance conditions: Firstly, each State should carry out its land acquisition programme through an organisation structure agreeable to the Australian Government; and secondly, the State should implement legislation to acquire the land at prices unaffected by announcements of intended urban development.

Honourable members should know that the aim is not to freeze land prices. I hope that that really sinks into the minds of honourable members opposite. I repeat for their benefit those words: Honourable members should know that the aim is not to freeze land prices. Nor is the aim to reduce the capital value of the asset. Rather, the aim is to ensure that any inflation caused by the announcement of any government is not borne by the purchasers. I hope that this is perfectly clear to honourable members. There has been too much hysteria on the question of the stabilisation of land prices. We are not freezing land. We are trying to stabilise the price of land. There have also been some misunderstandings in regard to the question of land tenure. Let me make clear the process of urban development as we envisage it. Firstly, there is a decision by governments that a city will expand in a certain area. Secondly, and as soon as possible, there is an announcement that the price paid for land acquired in the general will set aside increases deriving solely from the Government decision. Thirdly, after studies have been carried out with full public knowledge and involvement, a decision is made on the exact area to be zoned urban. Fourthly, the land commission authority acquires that part of the new urban area where it is to supervise development. Fifthly, the area is physically developed. This operation would usually be undertaken by developers in accordance with reasonable conditions agreed upon with the Government. Sixthly, the land is disposed of to individuals, groups, companies and government authorities - for houses, flats, factories, shops, offices, schools, parks, roads and all the things which go to make up an attractive and complete community. I think we can draw on the experience of the development of new suburbs in Canberra.

This is the end of the first phase of urban development. The question then to be answered is what form of tenure should be adopted for this disposal. There have been discussions with the States on this question and the Government is awaiting the report of the royal commission inquiry into land tenures. The Government is not dogmatic on this question of residential land tenure. I stress that I believe that all State governments understand this and that detailed questions of land tenure are not a barrier to commencing the process of land acquisition and development I have just described.

I turn now to the detailed provisions of this Bill. The Bill provides in clause 4 for the Minister to approve programs of land acquisition and, in consultation with the Treasurer, to agree upon the amount and terms of financial assistance to be provided to carry out the program of land acquisition. In each case, negotiations will be with the appropriate Minister of the State defined in clause 3. This is a general Bill which allows for flexibility in the determination of programs of land acquisition and setting the terms of finance. Clause 15 of the Bill provides for the financial agreements to be tabled. Dealing first with the programs of land acquisition, clause 4 provides that the programs are for purposes connected with urban expansion. Clause 3 defines urban expansion to include redevelopment, and setting aside land in or near urban areas for public recreation purposes or for conservation. Subclause (1) of clause 4 requires that the programs be carried out by an approved authority. Clause 3 defines an approved authority as either the land commission of a particular State or an authority of that State approved by the Minister with the concurrence of the Treasurer. Under sub-clause (2) of clause 4, the land to be acquired will be specified as intended either for urban use or alternatively, for public recreation space, for buffer zones or for conservation areas.

These latter areas of land will be large tracts returning relatively little income.

Clause 11 provides that in these cases Australian Government assistance will be nonrepayable grants subject to a matching grant provision. Where land is intended for urban use, and this includes not only land for houses, offices and factories, but also land for schools, community facilities, transportation routes and urban parks, Australian Goverment assistance will be in the form of interest bearing loans. Clause 10 provides for these loans to be repayable over 30 years. Interest is to be payable half-yearly on the outstanding balance. The interest rate is to be the long-term bond rate or such lower rate as the

Treasurer with my concurrence determines. I will return to the question of interest rates in a moment. Sub-clause (3) of clause 10 provides for a period of deferment of up to 10 years. This will be agreed with the State before payments in respect of a particular program commence. The deferment period is a period during which there are no repayments of principal or payments of interest. The outstanding principal will compound on half-yearly rests during the deferment period. After the deferment period, the principal and accrued interest are treated as a principal sum which is then repaid with interest over the balance of 30 years. The deferment period is offered so that States accepting financial assistance can ensure that the process of development of the land generates funds to service loan requirements.

There will be a period after acquisition when the land is not returning any income to the approved authority which carried out the acquisition. The deferment period will allow the States to plan the cash flow for each project so that funds are available to service borrowings as required. The Australian Government has also decided that there will be a review of interest rates. I will propose to the States that the review should be carried out within 5 years and, in any event, before the end of the deferment period. The review will take into account the cash flows for each project or group of projects so that they can be self-financing as far as possible. The flexibility in the terms of finance allowed by the Bill will permit the Australian Government to tailor a program of urban development to suit conditions in each State and region.

In describing the type of land involved in this program, I have referred to some of the terms and conditions under which financial assistance will be provided. As I said earlier, there are two types of conditions involved. There are the performance conditions relating to the operation of land commission structures and land price stabilisation legislation. There are also the conditions as to interest, terms and repayments and so forth which are set out in the Bill. The Bill contains other machinery conditions. There are provisions in clauses 6, 8 and 13 requiring the supply of information and in clause 14 there is a provision that the Australian Government's consent is to be given to any major change of land use. The clause in the Bill which connects the two types of conditions is clause 9. That clause provides that advances are to be subject to conditions set out in the Bill and to such other conditions as the Treasurer and I determine. Through that clause, the conditions relating to land commission structures and land price stabilisation legislation will be made effective.

This Bill provides for $30m to be spent this financial year under our land commissions program. It is a first step in a continuing involvement by the Australian Government in order to provide more attractive and better planned communities. Land commissions are one part of an interconnected package of programs in urban and regional development. This Government recognises that the various investments which the Australian Government has made in the past coupled with the initiatives we are now taking are all inter-connected. These investments range over the whole field - land, housing, roads, sewerage, transport. These investments must increasingly be seen as an inter-connected parcel of policies, not as isolated programs. The Australian Government seeks the co-operation of the States to work as a partnership in this venture. Already the South Australian Government has established a Land Commission. Western Australia has introduced a Bill to establish a Land Commission. I have 'been engaged in detailed discussions with the Victorian Minister for Local Government for some months. Discussions are continuing with Ministers and officials in other States, particularly Queensland. We seek the co-operation of the States.

Together the Australian and State governments can achieve a more efficient allocation of resources. Together the Australian and State governments can achieve a more equitable form of urban development. Together the Australian and State governments can achieve what all Australians would want them to achieve - to give Australian families access to land and housing at fair prices. There are no immediate solutions to our urban problems. There are no 'instant coffee' solutions to the land crisis. But the .Land Commissions are a beginning. They are an alternative. They provide an alternative method which will enable Australians to receive the benefits of more efficient and more equitable urban development. I commend the Bill to the House.

Debate (on motion by Mr Fairbairn) adjourned.


Approval of Work - Public Works Committee Act

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