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Tuesday, 18 March 1980
Page: 729


Senator GIETZELT (New South Wales) - In the second reading speech of the Minister for Special Trade Representations (Senator Scott) he stated that the Bill has a specific purpose. When one looks at the Bill itself one finds it difficult to appreciate whether, in fact, this Bill will realise the objectives which the Government claims it is seeking. Ever since the Commonwealth became the principal tax gatherer in Australia, of course, there have been areas of conflict between the States about a proper disposition of federal funds. The establishment of a Grants Commission, as amended in more recent years, in the post-war years was designed to provide a formula by which the States would get a share of Commonwealth revenue. It was designed also to top up where necessary the inadequacies of the formula, taking into account the level of development in the States and the geographical differences that exist between the States. So the purpose of the Grants Commission was to have somewhat of a levelling objective in relation to Commonwealth funds to the States and the Territories. The Commonwealth grants legislation became the instrument for realising certain social objectives within the Australian financial system.

However, the Opposition submits that this is a sloppy piece of legislation. It does not clearly set out the aims of the Bill. It does not say what it means and it does not mean what it says. To that extent, we believe that the debate opens the way for the Government to take whatever decision it wants without reference to the legislation which we are now debating. According to the Government spokesman, the purpose of the Bill is to give the Commonwealth Grants Commission a reference to inquire into aspects of public financing within the Australian Capital Territory. We believe that that objective is not realised. The Bill contains only two important paragraphs, the remainder being consequential or machinery amendments. It would seem that even the legality of those two paragraphs which the Bill seeks to establish is open to question. We submit that amendments to an Act must be within the ambit of the original or principal Act. That ambit is defined or determined by the title of the Act itself. The title of the Commonwealth Grants Commission Act 1973 as amended reads as follows:

An Act to establish a Commonwealth Grants Commission to make Recommendations concerning the Granting of Financial Assistance to the States and to the Northern Territory in certain circumstances.

I emphasise that the title refers to the States and to the Northern Territory. The title does not mention the Australian Capital Territory or any of the other Commonwealth Territories. I also make the point that when the amending Bill relating to the Nothern Territory was introduced by this Government the words 'Northern Territory' were introduced and were included in the long title. I understand that there is a difference in terms of what might well be the local authority, in terms of local government and the status of the authority in the Northern Territory visavis the authority in the Australian Capital Territory. However, it would appear that some argument could be raised about what is in the Australian Capital Territory definition and about some restrictions in carrying out the functions spelt out in this Bill.

The Bill we are debating specifically concerns inquiries into public financing of the Australian Capital Territory. Such inquiries are clearly not within the province of the Commonwealth Grants Commission. Nowhere in the original Act, in the debates thereon or in practice has there been any precedent for the Commonwealth Grants Commission's carrying out the function which it is proposed it should carry out in respect of public financing of works and services in the Australian Capital Territory. To that degree we feel that there are deficiencies in the Bill. I notice that the Minister for Special Trade Representations is at the table and I appreciate the difficulties he has. I am not sure, owing to the multi-purpose roles that our Ministers in the Senate are currently carrying out, whether in fact he is representing the Minister for the Capital Territory (Mr Ellicott), whether he is the Minister in charge of the Bill or whether, in fact, he is the Minister responsible as designated in the recent ministerial re-arrangements. Nevertheless, whichever Minister is going to handle this Bill, I ask him to reply in this debate as to whether we of the Opposition can be assured that what we are saying is not correct. The amendment that the Opposition moved in the House of Representatives and which I propose to move at the Committee stage of this Bill will then not be necessary.

The Act appears to restrict the ambit of the Commission in carrying out its functions vis-a-vis the Australian Capital Territory. If that is correct, the Opposition would have some criticism of the way in which the legislation was drafted. If this is not the case, perhaps we can be satisfied by an explanation from the Minister. We also think that the Bill is inadequate not only in substance but also in spirit, for the Bill proposes that the Commission upon reference to it by the Minister be empowered to inquire into matters relating to the financing of works and services in the Capital Territory with the rider that these works and services must be similar to those provided in the States by State or local government bodies and semi-government authorities. I submit that it is a very wide franchise to give the Minister that interpretation. One could argue, for example, that the current works programs in respect of road construction in Canberra might in some respects be similar to works carried out by the local government authorities, say, in New South Wales. But one could argue and have a case put to the High Court of Australia that the Bill goes far beyond what would be regarded as the responsibility of a local authority in one of the States as distinct from the works that are being carried out currently by the National Capital Development Commission. So that rider or that authority that the Minister has is pretty farreaching in terms of whether it comes within the ambit of this piece of legislation.

There is a much more restrictive form of wording than that which empowers the Grants Commission to examine State or Northern Territory finances. I recollect, for example, that when the Commonwealth Grants Commission Act of 1973 was being debated and there was some suggestion that the Commonwealth Grants Commission should have some jurisdiction over what funds should be allocated to the States all hell broke loose. There was a tremendous outcry from the States righters that we were interfering with what was regarded as the normal function of the State jurisdictions and that we had no authority to inquire into whether they were spending their funds in a satisfactory fashion, whether the funds were being applied in such a way as to suit the whims of certain members in certain regions for the purpose of their reelection to public office, whether the funds were being misapplied and whether financial resources were being properly distributed or otherwise. So one finds it somewhat difficult when one sees this sort of thing creeping into this piece of legislation in a backdoor way. We accept that the right to examine State or Northern Territory finances is largely a necessary result of the fact that the Australian Capital Territory is being regarded as a non-self-governing body. Canberra's total finances are gathered together in a purely notional accounts system. The Australian Capital Territory has no separate budget as such and the elected representatives of the Territory do not control the purse-strings, so that many of the decisions which are made in respect of works and services are carried out by the bureaucracy. Perhaps that would be the best way to describe it. I do not say that in any way detrimental to those who are charged with that responsibility.

The Opposition does not accept the proposition that any Grants Commission inquiry into Canberra's financial affairs should examine only aspects of that financing relating to what are normally State or local government functions. The Australian Capital Territory has a unique, proper and respected place in Australia, containing as it does the national capital. 1 think it speaks volumes for governments over many years that Canberra has developed in such a favourable way, providing its inhabitants with works and services which have no parallel in Australia. That objective has been achieved in the ACT by many millions of dollars being spent by government to enable this national capital to fulfil its national functions. I make no criticism of that. Therefore, to look at local and State government activities only, without examining Commonwealth responsibilities towards Canberra as distinct from the functions that are carried out at local government level, is a somewhat futile exercise. Surely all are parts of the whole. I cannot imagine any Government senator disagreeing with that. Should one section not be examined, the remainder cannot be seen in perspective. We need to look at the total picture if we are to carry out a proper examination of the situation in Canberra.

Let me give a specific example. The Commonwealth Government and its authorities do not pay rates as such within the Australian Capital Territory. That is a sore point and a bone of great contention in the States. Those of us who have served in local government know that it is a very big bone of contention that the Commonwealth Government does not see fit to pay rates, particularly in areas where there are large Commonwealth instrumentalities. In recent years we have seen some statutory bodies making ex gratia payments. The Commonwealth Bank is one that comes immediately to mind because it is a trading organisation. I can assure honourable senators that there is still a lot of feeling that other ratepayers are in fact subsidising many areas in which there are large Commonwealth Government operations or instrumentalities. Canberra is a case in point. It has a special relationship to what I have been saying. The Commonwealth Government and its authorities make a contribution to the municipal accounts for general services, water and sewerage services, because of the peculiar way in which Canberra operates. But these contributions have never been anything but voluntary, and remain unchecked insofar as being fair or otherwise in the circumstances is concerned. Perhaps the time has arrived for that situation to be more regularised rather than being seen as a purely voluntary contribution. If that situation were to change, I am sure we would have the masses of

Canberra marching on Parliament House. If that voluntary act, as a principle, were to be changed at the whim of some government- perhaps Senator Knight would not be able to prevail upon his Government in those circumstances -we would have an entirely new political ball game in the national capital.

The Government pays no general rates for municipal services on its millions of dollars worth of property in Canberra. In lieu thereof the Commonwealth contributes $2. 9m towards expenditure on municipal services- again a matter on which there is no clear definition. That is only 1 1.9 per cent of the estimated expenditure on municipal services. Until this year the Government's contribution was just $2m, which was only 9.3 per cent of the estimated expenditure. It is questionable in the extreme whether the Government owns only 1 1.9 per cent of the rateable value of land in the Australian Capital Territory and whether it receives merely 1 1.9 per cent of the worth of the municipal services that are provided in Canberra. Of course, that principle applies to both the water and sewerage rates. We are dealing with some important principles.

Estimated expenditure and receipts on water and sewerage services are calculated, and the Commonwealth contributes 15 per cent and 14.4 per cent respectively of the expenditure on each budget. Once again, no independent check has been applied to determine whether these ersatz rating procedures are adequate or accurate. I do not know how they were plucked out of the air. I have heard some criticism of Mr Justice Staples about plucking something out of the air. It seems to me that these figures have been plucked out of the air in a similar way. In fact, procedures are so poorly organised and dominated by the Federal Government that on the same day as the Minister for Home Affairs and Minister for the Capital Territory (Mr Ellicott) announced that there would be a Grants Committee inquiry into these matters he also announced that rates in the Australian Capital Territory would rise on average by 14 per cent, which I understand means an increase on average of something like $43 for each ratepayer in the Australian Capital Territory.

There has been some criticism of the decision of the New South Wales Government, in its desire to keep charges down and maintain some impact on the rate of inflation and costs, to limit local government rate increases in New South Wales to 10 per cent per annum. Any council which finds that it has to go beyond that requires the special consent of the Minister for Local Government to do so. This represents a 40 per cent increase in rates above what is regarded as a maximum in New South Wales. That has occurred at a time when property values in Canberra are stagnant or falling alarmingly. Anyone who knows about the property market in the national capital will know this. I suppose there would be many estate agents and property valuers, as well as ordinary citizens who are wishing to dispose of their homes, who would attest to the fact that the bottom has fallen out of the property market in Canberra. At a time when property values are falling drastically, and the value of property is the basis upon which rates are established, we find a higher than average increase being made in the rates to be paid by the citizens of Canberra. It is an increase which is considerably higher than the acknowledged rate of inflation about which this Government claims to be concerned and which this Government wants to keep under double figures. It is close to 40 to 50 per cent above the normal inflation rate. That has come about primarily as a result of this Government making decisions about its own contributions towards the various functions that are carried out by the Commonwealth and by the local authority, the Legislative Assembly, in Canberra.

Under the proposed Bill, it does not appear that there will be a true evaluation of Canberra 's accounts. The Bill does not give the Grants Commission specific powers to examine Commonwealth finances within the Australian Capital Territory or, indeed, powers to examine Government charges and imposts such as those represented by municipal rates. Similarly, the Commonwealth refuses to add to the notional Australian Capital Territory municipal accounts the 1.75 per cent of income tax receipts which is available throughout the remainder of the nation for local government purposes. Of course, honourable senators heard Senator Carrick refer to this matter at great length from time to time when he was the Minister Assisting the Prime Minister in Federal Affairs and was involved in Commonwealth-State relations. Senator Carrick was very eloquent about what a contribution this would be to local government finances.

Of course, honourable senators know that it was the Whitlam Government which, for the first time in Australian history, made direct contributions to local government out of general revenue. That was a very important breakthrough for local government in all States of the Commonwealth. It was something that had been fought for by local government since 1949 when it became apparent that it was wrong to expect the average citizen, who was becoming a property owner and ratepayer, to bear the whole financial burden of providing community facilities at the local government level. These facilities were enjoyed by the population at large and therefore the population at large had to make a contribution through taxation revenue. In 1949 that became the policy of the Australian Council of Local Government Associations and it was not until 1973, in the Whitlam Government's first Budget, that a direct contribution was made to local government. That situation was continued in the 1 974-75 Budget and the present Government has seen fit by legislation to make contributions based upon a percentage ratio of 1.75 per cent.

There is no reference to that aspect of the matter in this legislation. Surely that factor ought to be a part of the consideration of the Parliament. Are we saying that the people in Canberra are different from the people anywhere else in Australia? Of course, they are not. That is another one of the deficiencies of the legislation. Clearly, what I am saying is that the public funding of the Australian Capital Territory deserves a full and proper inquiry, not a restricted inquiry as is suggested by those who support this legislation. The Parliamentary Joint Committee on the Australian Capital Territory called for a Grants Commission inquiry as long ago as 1973. Seven years later- showing that the wheels of industry grind ever so slowly- we have finally a piece of legislation that goes only one part of the way; it only takes a very tentative step towards what was the recommendation of that Parliamentary Joint Committee.

For many years the principal newspaper in Canberra, the Canberra Times, has been editorialising for just such an inquiry. There has been a lot of public debate about it and there have been many requests from the elected representatives of the people in Canberra. For many years people have been pushing for an inquiry so that we know clearly, precisely and definitely the reasons funds are made available for the proper functioning of our national capital. An inquiry should not be restricted in the sense that it will not deal with the whole ambit of costs to the citizens within the Australian Capital Territory. In fact, the citizens of the Territory are entitled to know what are the cost factors and funds, and what they are called upon to pay.

Many people in Australia believe that the people of Canberra have been mollycoddled or featherbedded in respect of the facilities they have. Canberra, the national capital, is entitled to special attention, special funding and special arrangements, and it ought to be recognised that its function has shown the value of a planning authority, the advantages of having land previously publicly owned and of being able to determine the rate of planned development in such a way as to avoid a lot of the speculative procedures which have characterised the development of Australia 's major cities. However, I must admit that in more recent times conservative governments, which from time to time have made decisions on these matters in Canberra, have to some extent lifted the veil on that and have tended to retreat to the old market forces principle which has been to the detriment of many of the citizens of this great national capital.

The citizens of Canberra should know all about the financing of their city. In every local government area in Australia every ratepayer receives in his rate notices each year an estimate of income and expenditure and of what the councils' projects will be for the following year. Rate payers can have freely available to them the accounts and the system by which the municipal authority, or the city council as it is known in some States, operates. There are no ifs and buts or qualms about it; it is a public issue or debate and the documents are available. It is a system that ought to be available to the citizens of Canberra. The national capital ought not to be treated differently. If in its wisdom the Commonwealth wants to make funds available beyond the norm, we ought to be able to say so and be able to defend that in the belief that it is part of an objective strategy that is suitable for our national capital. Yet, the Governments stops short of doing just that. The Government appears to be hamstringing the only possibility for such a full inquiry. Without the amendment that the Opposition wishes to move, that inquiry will fall far short of the objectives that I have suggested are desirable.

The possibility of having an inquiry should not be put at risk by restricting its terms of reference. I believe that the legislation now before the Senate ought to be withdrawn and redrafted specifically to allow such a widespread inquiry and also to remedy the omission of the Australian Capital Territory from the title of the Act. The legislation proposes that a reference to the Grants Commission may be provided only by the Minister for Administrative Services. That comes as somewhat of a surprise. Given the nonselfgoverning nature of the Australian Capital Territory, this seems to be an unfortunate but perhaps unavoidable state of affairs. The Opposition accepts that it is at this time that that problem exists. However, it is only at the whim of the Minister that any inquiry will be wide-ranging, or that there will be any inquiry at all. I hope that in reply to the assertions I have made the Minister for Special Trade" Representations will answer some of the questions that I have posed on the ambit of the terms of reference contained in 'the Bill.

I ask the Minister also to repeat the statement that was made last August by one of his colleagues, that there would be a Grants Commission inquiry into the public financing of the Australian Capital Territory, and to give an assurance that such an inquiry will have the widest possible terms of reference. I believe that that statement, which the Opposition would have, been glad to support, is not realised in this legislation. I would like the Minister to assure honourable senators that the inquiry will be all embracing and that it will report to the Senate before the Parliament considers the next Budget. Before the inquiry is convened, its proposed terms of reference should be circulated to enable public debate. Surely the Government would have no objection to consulting the State authority in Canberra- I prefer to call it a State authority- on what it considers the terms of reference should be. In my opinion, the terms of reference should permit the fullest possible analysis of Commonwealth financing under the Commonwealth Grants Commission Act.

If that suggestion were accepted, we would have no qualms about this piece of legislation and the Government would have the support of the Opposition. But, on the basis of the debate on this legislation which took place in the other House, one can conclude only that the Government is not prepared to consider any suggestions made by the Opposition on how best this procedure ought to be undertaken. To that extent, we are forced to take the step of moving at the Committee stage such amendments as would permit the carrying out of a full public examination of all public financing in the Australian Capital Territory. After all, the people of the Australian Capital Territory are substantially Public Service orientated and are therefore capable of evaluating their self-management responsibilities. These matters ought to be looked at a bit more carefully by the Government. They ought not to be pushed aside, as tended to happen in the House of Representatives with the large majority the Government has in that chamber.

It is claimed that the Senate is a States House. For fewer than half a dozen years the Australian Capital Territory has been represented in this chamber. We ought to give to this House of review an opportunity to review this type of legislation in a manner which would provide the widest possible type of information and opportunity for public debate on the manner in which Canberra is administered by the Commonwealth and the manner in which its finances are arranged with contributions from the ratepayers and the Commonwealth. If we were to inquire into the financing of all the works and services in the Australian Capital Territory in that way, I am sure a bipartisan approach would be adopted in this place on what should be the proper functioning of all the works and services in the Australian Capital Territory. I ask the Minister in his reply to answer some of the points of contention which we have with the Government, many of which we believe arise from deficiencies in the Bill and many of which arouse considerable concern in the Canberra community about aspects of this legislation which go only part of the way towards enabling a proper evaluation of the administration of the city of Canberra to be undertaken.







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