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Tuesday, 20 September 1960

Mr BIRD (Batman) . - I want to refer again to the marked reluctance of the Government to do the fair thing by municipal councils in the payment of rates on government properties. This is not the first time that I have raised this matter, and I assure the committee that it will not be the last. I intend to raise it on every possible occasion, as long as I am here.

It can be accurately said that, under the Constitution, the Government is not compelled to pay rates on Commonwealth properties. However, it has gone part of the way and in certain instances makes ex gratia payments. These concessions are very valuable, in that they establish a principle, but they only touch the fringe of the problem. It is a problem, and I want to tell the committee what happens in the City of Melbourne. In the area under the jurisdiction of the City of Melbourne Corporation, there are more than 60 buildings owned by the Commonwealth. These buildings have a net annual value of £668,000. On this amount, the present rate of 2s. lid. in the £1 would yield £97,512 to the council, if rates were paid. This amount is lost to the council because of the Government's policy. It is estimated that the reluctance of the Government to act fairly in the payment of rates is depriving local government authorities of £650,000 a year. That is a very large sum, and if any one branch of governmental services is working on very meagre rations, it is local government. Therefore, I ask the Government most sincerely to give serious consideration to this matter. The payment of rates on Commonwealth properties could be justified on the grounds of equity and justice.

A moment ago, I said that the Commonwealth makes ex gratia payments in relation to certain properties. Frankly, I cannot understand why these payments should be made on some properties and not on others. For instance, payment is made for services rendered by rating authorities, such as water, sewerage, electricity, sanitary and garbage services. That is all right as far as it goes. Rates are also paid on war service homes and on properties acquired by the Commonwealth where residential or business premises are erected on the land and the buildings are occupied by persons other than the Commonwealth. That is fair. In addition with leased Commonwealth property, if the lessee or tenant pays to the Commonwealth, either as a separate amount or within his rental, the equivalent of rates, the Commonwealth pays that amount to the rating authority as an ex gratia payment. Further, a Commonwealth instrumentality engaged in private enterprise in competition with private firms or organizations and which either owns property or leases property from the Commonwealth, pays an amount equivalent to the rates assessed on the property to the local governing body. An amount equivalent to the rates assessed on houses erected on Commonwealth property and used solely for domestic purposes, is paid to the local governing body by the Commonwealth. No payment is made when the residence forms part of a building used for official purposes - for example, a post office.

Despite the fact that, constitutionally, the Commonwealth is not required to pay anything to municipal authorities, it has recognized that, in the instances I have mentioned, valid reason exists for some payment to be made to the municipal authority for services that are rendered. However, I suggest that the Commonwealth should go further. This problem will become more pronounced as the Commonwealth acquires more properties. In Melbourne, during the regime of the Chifley Government, the Commonwealth acquired the area bounded by Latrobe, Lonsdale, Spring and Exhibition streets for the purpose of erecting Commonwealth buildings. At present, only a small portion of the area has been used for this purpose. Only one building has been erected, but I understand that another four buildings, covering half the block, are contemplated. Commercial enterprises occupy buildings in this area, and under the present system of ex gratia payments, the City of Melbourne receives payments in lieu of rates. However, as soon as Commonwealth buildings are erected, the City of Melbourne will lose payments which now amount to about £35,000. A similar position obtains in Sydney in relation to properties acquired by the Commonwealth in the vicinity of Phillip-street. We find that the policy of the Commonwealth is to build commodious premises for its departments in the various capital cities, and this is quite right.

Mr Makin - Except Adelaide.

Mr BIRD - The honorable member for Bonython says that this does not apply to Adelaide. However, I am sure that the Commonwealth will include Adelaide, because the honorable member has been pressing for this for some time.

As the Commonwealth erects more and more buildings, the position will become worse. The Commonwealth should recognize the difficulty and treat the humble municipal councils fairly. There are very good reasons for it to do so. For instance, the range of local government services has widened considerably in recent years. I mention parking areas. The City of Melbourne is being urged by many people, including influential people, to acquire more property in the city and to convert it into parking areas. If this is done, Commonwealth employees occupying Commonwealth buildings will use these parking areas. In this way, an additional service will be given to the Commonwealth. Many instances can be given of municipal services provided for citizens being used by the Commonwealth. I do not know of any valid reason why the Commonwealth should not pay for these services just, as others pay for them. Why should the all-powerful Commonwealth Government say to councils, " We will not give you anything but we insist upon receiving the services that are provided for ratepayers "? That is the position in a nutshell. The additional demands made on local government authorities have placed them in a grave financial position, and it ill becomes a wealthy body like the Commonwealth Government to shelter behind a provision in the Constitution and refuse to pay its fair share of the costs of municipal authorities. All Australian local government bodies have been forced to increase rates beyond the capacity of the ratepayer to pay. It is easy to say that local authorities must increase the rates, but they have now almost reached the danger point. As the Commonwealth acquires more private citizens' property and erects government buildings on it, the responsibility for raising the necessary finance for local authorities will rest on few and fewer shoulders. To-day, local government is performing numerous public duties which are local in character but which are nevertheless the obligation of the whole community; and sooner or later there will have to be public recognition of the obligation on the community as a whole to pay for these services.

I suggest that the Commonwealth Government has an implied moral obligation - if not a legal one - to pay its share of the cost of these services. Local government authorities are asking, not that the Commonwealth Government pay more than its share, but that it pay its share, as the humblest citizen and even the old age pensioner who receives the munificent sum of £5 per week are expected to pay their share.

In support of the arguments I am putting, there is another question to which I submit the Government should give very serious consideration. I refer to the implementation of Federal Government policy making the financial burdens of councils much heavier.

No one will seriously suggest that the Commonwealth immigration policy has not given serious headaches to the controllers of local government. The immigration policy, as implemented, means the expenditure of more money on roads, health services and all the other services with which local government deals. But while the Commonwealth Government is taking the credit for the success of its immigration policy and is boasting that it is building up a great nation, it is disregarding the obligations that have been foisted on to local government by such policies.

In addition to that, under the Commonwealth Government's credit policy, local government to-day - I can speak from experience gained from service on a council in Melbourne - is finding that municipal loans are extraordinarily hard to raise. It is easy for the Government or the Treasurer (Mr. Harold Holt) to say from time to time that the Australian Loan Council has declared that various local governments can raise sums of £80,000, £100,000 or £120,000. It is one thing to say that a council has power to raise money and another thing to find financial institutions which are willing to lend the money to the council concerned. The Government just says, " You can raise so much ", and leaves it to the council to raise the money as best it can. I can assure honorable members that, as the result of the credit squeeze, it is hard for local governments to raise, in Melbourne to-day, the money which the Government says they may raise.

It will readily be seen that as the result of Commonwealth policy municipal councils are finding it extraordinarily hard to carry on their ordinary services. What of some of the buildings used by the Commonwealth for the public service and for which it pays practically nothing by way of rates? What of munitions factories, military camps, naval dockyards, migrant hostels, post offices and other government offices and buildings too numerous to mention? The Commonwealth is paying in respect of them for only a fraction of the services they receive. Payment is certainly made for garbage collection, but the buildings have the benefit of all the other services that local government is expected to finance. The Commonwealth Government pays nothing for them although it expects them to be provided1 by the municipal councils. From the point of view of equity and of moral decency I suggest there is an obligation on the Commonwealth Government to say, " At long last we recognize that because of changes in the times, the added responsibility placed on local government and the extra services we are expecting as a result of the increased number of government buildings being erected all over Australia, we have an obligation to local government and are prepared to make ex gratia payments in lieu of rates ". This should be done on the same basis as in the six or seven special cases that I mentioned earlier in my speech. It would involve only £665,000, and what would that be in a Budget of £1,800,000,000 or £1,900,000,000 in order to give justice to a hard-working body of citizens who readily give their services free in the interests of the people and the community on the local government front? I suggest that the Commonwealth Government should do the right thing and at the earliest opportunity decide to pay this £665,000 and thereby meet its fair share of the financing of services for which it is at present very hard for local governing authorities to find the money. While the Commonwealth Government can shelter behind the provisions of the Constitution, the way out is to make this ex gratia payment. The Government should go the whole way and1 do the decent thing for the municipal authorities.

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