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Thursday, 13 April 1972
Page: 1595

Mr DAVIES (Braddon) - I wish to raise this morning the question of soldier settlers. At the beginning I refer briefly to an article which appeared in the 'Australian' of 10th March 1972. Under the heading Settlers Win Long Rent Fight' it states:

One hundred soldier-settlers near Greenways in thi south-east of South Australia, will not have to pay $100,000 back rent they owe the Federal Government.

The money was a backlog of payments caused by an increase in rental fees which the Government imposed nine years ago and which the farmers refused to pay, claiming the increases were illegal.

Yesterday a spokesman for the fanners said the Federal Minister for Primary Industry, Mr Sinclair, had told them they did not have to pay the money. "They realised after nine years that the increases were unjust," he said.

It refers to a group of settlers in zone 5 in South Australia. When they went on to these blocks, like other settlers in schemes under Commonwealth control in the 3 agent States, Western Australia, South Australia and Tasmania, they had no commitment to meet for 12 months and they were given a living allowance. In their case the rent was to be fixed within 12 months and this rent was to be adjusted. It was called a provisional rent. There was a ceiling to the rent which could be lowered or raised if any improvements were carried out.

In 1958 Commonwealth and State officers met and changed the method of rental. They fixed it on a dry sheep equivalent, based on budgetary considerations. In 1963 there were blanket increases in rentals in zone 5 and this led to an outburst of protest. The Government set up a committee of inquiry headed by Sir Thomas Eastick. The work of the inquiry resulted in a substantial write down in the rentals, but these were not accepted by the Commonwealth, the reason given by the Commonwealth being that it had not been invited to give evidence. However, I point out that this inquiry, headed by this notable gentleman, Sir Thomas Eastick', found that the rental increases were not legal. The settlers then protested to the then Premier of South Australia, Sir Thomas Playford, and he offered rentals at various rates. This proposal also was not acceptable to the settlers.

The matter then went to court and all attempts were made to throw out the case. The settlers invoked the Petition of Right and finally, after a tremendous amount of work, they were able to bring on the case in the Supreme Court of South Australia - it was the case Heinrich versus Dunsford - to test the legality of the system of determining rents adopted by the Commonwealth Department of Primary Industry in respect of war service land settlement properties in South Australia. The judgment was handed down in September 1970. It indicated that in the opinion of Mr Justice Bright the rents were to be either 2i per cent of productivity valuations or of the cost. The South Australian State Minister, Mr Kneebone, in a statement to the settlers on 25th August last year, referred to the fact that he had obtained legal advice on how to comply with Mr Justice Bright's findings in that Supreme Court case. I quote from Mr Kneebone's statement, because it is important. He said:

This finding, as you know, suggested that rents should be fixed on the basis of either cost or a productivity valuation and the rent was to be 2i per cent of these amounts.

In answer to a question by me yesterday, the Minister for Primary Industry (Mr Sinclair) implied that this correction in the determination of rentals applied only to those settlers in South Australia who had refused to sign their leases. Just in case there is any doubt, and to put the record straight immediately on this matter, I refer to a letter dated 13th October last year from the South Australian Minister of Lands to the settlers. In outlining proposals to reduce rentals the Minister said: 1 had also advised the settlers of the following adjustments with which the Commonwealth was prepared to agree:

I emphasise the phrase 'with which the Commonwealth was prepared to agree'. The Minister continued:

(1)   Settlers still in occupation who had already signed their leases would participate. This arrangement would also apply if a property had passed to the family of a deceased settler.

(2)   No adjustments would be made where a property had been sold outside the scheme.

I emphasise that the reduced rentals were to apply to conform with the judgment handed down by Mr Justice Bright and that the Commonwealth agreed that these proposals would apply also to those settlers who already had signed their leases. I simply point out that if the reduced rentals are to apply also to those who have signed their leases in South Australia there is no reason why the same justice in adjusting valuations and rentals cannot apply to settlers in Western Australia and Tasmania where the Commonwealth has an overriding authority.

I turn now to the position in Tasmania and I ask the Government to accept the 2 main recommendations of the Select Committee of the Legislative Council of Tasmania. I submit that the Government should adopt these recommendations because the methods of determining rentals and option purchase prices in Tasmania are just as invalid and illegal as they were in South Australia. If ever a royal commission of inquiry were required into war service land settlement, it is now. It would justify the stand taken by the National Executive of the Returned Services League a few years ago when it approached Cabinet and asked for the appointment of a royal commission of inquiry only to be turned down. However, the Supreme Court case in South Australia now conclusively shows that the method of determining rentals in South Australia was illegal and wrong. We maintain, and it has been borne out by the Select Committee of inquiry in Tasmania, that the same method adopted by the Commonwealth authorities in Tasmania, is illegal and incorrect. I ask for the implementation of the 2 main recommendations of the committee of inquiry in Tasmania. For the sake of the record I quote those recommendations. The first reads:

That, in all cases where the cost of a holding exceeds the market value at time of allotment, a new option price shall be determined from the capital value of the holding, as assessed by the State Valuation Branch by the nearest valuation prior to date of offer of holding.

The State valuation of structures together wilh advances for improvements at time of allotment shall be deducted from the State valuation to determine trie net option price.

The second recommendation reads:

That all rentals on the above holdings be recalculated at an annual charge of 2i per cent of the new option price determined as above, and that the reduced rentals apply retrospectively to the date of allotment of the holding.

The Select Committee completely justifies the stand that I have taken in this place over many years, namely, that like that in South Australia the method of fixing option of purchase price and rentals in Tasmania was illegal and incorrect. In the third paragraph of the report of that Select Committee appears the following:

Your Committee is convinced that a mistake was made when the new Commonwealth scale was adopted in 1956, and the rents demanded since that time are excessive.

Before 1956 the rentals were fixed on a budgetary basis. The profitability of a farm was looked at and after allowing for a living allowance, operating costs and the repayment of advances the balance of profit was considered to be the amount available for rent. This balance was then capitalised at 21 per cent to give the capital value of the holding. This is the reverse of the method that should have been used. The Act provides for the option price to be the cost of the farm, or the market valuation, with the rent at 2i per cent of that figure. The budgetary method of fixing rents was changed in 1956 and the Committee was very critical of the apparent lack of frankness of the former Commonwealth Director, Mr Colquhoun, in failing to inform the Committee that a change had taken place. It is no wonder a change had taken place because the Payne Committee, whose report was hushed up, found that a dairy farmer would, after allowing for the living allowance and so on, have only S200 left for rent and if that were capitalised at 2i per cent it would mean that the value of the property was only $8,000.

As my time has almost expired I make a plea for the soldier settlers in Tasmania and Western Australia and other soldier settlers in South Australia to be given the benefit of the judgment of Mr Justice Bright. We should have a new set of valuations and the rentals should be fixed at 2i per cent of those valuations.

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