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Wednesday, 27 February 1980
Page: 459

Mr KEVIN CAIRNS (Lilley) -I am not as pessimistic about this matter as is the honourable member for Melbourne (Mr Innes). I am delighted that the Commonwealth Grants Commission has been given some work to do in respect of the Australian Capital Territory. I have looked through the second reading speech made by the Minister for Administrative Services (Mr McLeay). I can appreciate that some of the terms of that speech may be rather narrow but I am encouraged, in looking at the history of the Commission, to remember that it has built up expertise through experience and, in a sense, through the application of case experience in evaluating economic relationships. Having noted what the Commonwealth Grants Commission has been doing since 1933, once it has investigated certain features of the Australian Capital Territory I am confident that it will be doing more in the future rather than less. For example, one could look at a particular paragraph of the Minister's second reading speech and say that it was drawn very narrowly. The paragraph to which I refer reads:

Residents of the Australian Capital Territory are required to pay municipal rates and State-like taxes in a manner similar to residents ofthe rest ofthe nation. The Commonwealth, in determining the recovery of costs incurred- (Quorum formed). Apparently the honourable member for Reid (Mr Uren) wanted to announce the fact that he had returned to the House. I note that he is now leaving it again. The body which is to carry out these investigations has over the years developed a great deal of expertise, expertise that has been quite particular to the functions that it has served. It has also pursued flexibility in what it has done. That was manifest in 1974 when, under continued pressure from States, fuelled often by a deliberate misunderstanding of what it was doing, it changed its whole procedures in such a way that it would not be liable to endemic and consistent misunderstandings. I am confident that when such a body begins to investigate matters in the Australian Capital Territory those investigations, given its expertise, will not simply end there. After all, the Commission comprises people such as Professor Mathews, Mr Lane of the University of Queensland and Mr Justice Else-Mitchell, with whom I have clashed in the past. They have developed great expertise and I do not believe that it ought to be ignored.

One or two questions ought to be asked and I hope that the Minister for the Capital Territory (Mr Ellicott) will be in a position to answer them. To what extent will this body, in investigating the references to it on the Territory, just accept the market in the Territory as it is. To what extent will it make judgments as to the market which supports the standard of living? I know that all of these questions will be answered when the Minister for the Capital Territory winds up the debate. He has been sitting at the table agog with excitement and interest, noting every word that has passed across this chamber. (Quorum formed).

In light of the principles which the Commission will bring to its task I ask: Will its investigation of a particular service in the Territory represent just a cost-benefit analysis of that service or will it merely look at the service in terms of the principles of cost recovery? They can be very different, as is the case with a number of Commonwealth instrumentalities. The honourable member for Canning (Mr Bungey) is an expert in the cost recovery process for airline operations in Australia, for example. To what extent will a judgment be made as to the effect of the enormous differences between household incomes in the Territory and those of the rest of Australia. The differences can be so enormous that they cannot be simply wished away. For example, household income in the Territory is often 20 per cent and more above that obtaining in other States of Australia. Under those circumstances, to apply principles of cost recovery, without bearing in mind the very different levels of household income would be to miss a great deal. I know that the Minister would be reluctant to give instructions to the Commission, or make precise requests in terms of those principles, but in conversation with its members I hope that he will ask that they be borne in mind. There will undoubtedly be a number of matters of judgment which ought to be considered and not put aside.

I ask further: To whom are the charges made? Why ought the charges to be made in respect of the units that would utilise the service? Which generations will bear the charges made? For example, if there were in the Territory a national project which had enormous local spin-off effects, how would the cost recovery process be assessed? I know that it is often said that if there is a national project in the Territory it must be regarded as such, and the spin-off effects which benefit the people of the Territory ought to be totally ignored. To do so would be to be unjust to the people of the rest of Australia and of the Territory itself. Both of those matters should be considered and the Commonwealth Grants Commission- especially the one that will be asked to do this work- being such an excellent body, will be able to make judgments and the appropriate calculations.

If a service which assists private enterprise in the Territory is required and it is made available, how will judgments be made concerning it? For example, some of the Bureau of Statistics services have a particular application to the Territory and can be localised for the benefit of business. That is a service which, in a State, one could never accomplish. For example, an examination of retail trade in an area of a couple of hundred thousand people could never be achieved in Victoria or elsewhere. If a charge is to be made in respect of that, it ought not to be ignored. I have spoken for sufficient time. I merely say in other words that because a decision here is not made only because the Australian Capital Territory has a local authority but is made because it is a national capital, that ought to enter into the calculation as well. I refer the Minister for the Capital Territory to the fourth line of proposed new sub-section 16B (2) which states, in part: by the Commonwealth or an authority of the Commonwealth that are of a similar kind to works and services provided, in respect of a State, by the State or an authority of the State, or, in respect of a part of a State . . .

To what extent is that restrictive and to what extent would that exclude many of the works and services which exist in the Australian Capital

Territory and which also benefit the people? I finish by saying that I am an optimist concerning this matter. I am pleased that the Commonwealth Grants Commission is considering the Australian Capital Territory. I do not know whether its consideration will be as narrow as the Bill intends it to be, but once it has got into the area I hope that its work will be expanded. To that extent it would be to the benefit of Australia. After all, in its consideration of the standard of living and the provision of services in any part of Australia it might accept the market as it is or it might make judgments as to the value of increased production which supports a market. If its consideration is on the former basis it can be very narrow, because the market which supports a standard of living can be very artificial. If it is on the latter basis and if the latter basis is investigated, it would be to the advantage of this House and of the Australian Capital Territory.

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