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Wednesday, 6 November 1985
Page: 1649


Senator BOLKUS —My question is directed to the Minister for Finance. I refer the Minister to recent incidents of financial irresponsibility and mismanagement by the Northern Territory Government; in particular to, firstly, its dealings with hotel consortia and, secondly, its expensive campaign against the handover of Ayers Rock. Does the Minister agree that this kind of financial irresponsibility by the economic cowboys who parade as legislators in the Territory should not continue? Will the Minister urgently investigate the use of conditional grants under section 96 of the Australian Constitution as a means of protecting Australian taxpayers' money?


Senator WALSH —I share Senator Bolkus's evident concern about the fiscal irresponsibility of the Northern Territory Government. It was said many times by the previous Chief Minister of the Northern Territory and present member of the House of Representatives, Mr Everingham, that no Territory Government money was at risk in the various commercial projects which have been either expropriated or underwritten by the Territory Government. That is, of course, completely wrong. In the case of Federal Hotels Ltd, which was taken over by legislative fiat of the Territory Government, the Territory Government paid $2.5m as a grant and an extra $2m as a so-called loan without interest, which is not likely to be repaid. In addition, it sacrificed and sunk an enterprise that had paid $2.6m in taxes to the Territory Government in its last year and was on a trend which would have seen it pay $3m in this year.

By contrast, under the new management and owners, the Northern Territory Budget for 1985-86 estimates a contribution to revenue of only $44,000. So apart from throwing away $4.5m of Territory Government money on the expropriation of Federal Hotels, the Territory has also forgone revenue of close to $3m. The Territory Government has attributes that are more compatible with those of a banana republic than a Westminster democracy, particularly in regard to the expropriation of property but with this very important difference: When most banana republics expropriate property they make money out of it. The banana republican Government of the Northern Territory expropriated property and lost money.

Quantitatively far more serious, however, than the Federal Hotels takeover are the guarantees which have been given to the Yulara development and the Sheraton hotels at Alice Springs and Darwin. It is expected that in honouring those guarantees in the next financial year some $19m will be required from the Territory Budget, and the ultimate losses could be as high as $300m; that is, the exposure of public funds because of the actions taken by the Territory Government could be as high as $300m. Given that in recent years the Commonwealth Government has provided between 80 per cent and 85 per cent, in round figures, of the total finances of the Northern Territory, this matter is, of course, of considerable concern to the Commonwealth. An associated matter of very considerable concern is the magnitude of the guarantees which the Territory Government has given and the degree of financial risk to which it has exposed Territorian citizens and taxpayers.

Senator Bolkus's reference to section 96 of the Constitution is a matter for the Treasurer. I will refer that section of his question to the Treasurer. However, as Minister for Finance, I will also ask my Department to investigate what, if anything, can be done to endeavour to make the Territory Government behave in a more disciplined and responsible manner. As for the advertising campaign being conducted by the Northern Territory regarding the handover of Ayers Rock, the Territory Government is spending some $300,000 of taxpayers' funds on it. If that sum were to be converted at the same per capita expenditure into a Commonwealth campaign it would be something in excess of $35m. I can imagine the howls of outrage which would come from the Liberal Party if the Commonwealth Government were to spend $35m on an advertising campaign of that type. But that figure is the per capita equivalent of the advertising campaign the Northern Territory is running.

Apart from the fiscal irresponsibility of that campaign, there is an important moral question. The campaign represents a disgraceful attempt by the Territory Government to incite racial hatred and prejudice in Australia.


The PRESIDENT —Order! The Minister is now debating the issue. I ask him to bring his answer to a conclusion.


Senator WALSH —Predictably, the campaign is supported by the Premier of Queensland who-


The PRESIDENT —Order! I ask the Minister to resume his seat.