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Parliamentary Paper No. 151/1976

The Parliament of the Commonwealth of Australia

COMMISSION OF INQUIRY INTO LAND TENURES

Final Report

February 1976

Presented by com m and 26 M ay 1976 Ordered to be printed 4 June 1976

the Government Printer of Australia Canberra 1976

24 March 1976

Your Excellency,

In accordance with Letters Patent dated 4 May 1973, I have the

honour to present to you the Final Report of the Commission of

Inquiry into Land Tenures.

Yours sincerely,

R. ELSE-MITCHELL. Chairman

His Excellency the Honourable Sir John Kerr, K.C.M.G., K.St.J. Governor-General and Commander-in-Chief Government House Canberra, A.C.T. 2600

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Commission of Inquiry into Land Tenures

The Honourable Mr. Justice Rae Else-Mitchell Chairman Grants Commission

Professor Russell Lloyd Mathews Professor of Accounting and Public Finance The Australian National University

Mr. Gerardus Jozef Dusseldorp Chairman of Directors Lend Lease Corporation Limited

Chairman

Commissioner

Commissioner

Mr. D. F. Hoban Secretary

Contents

Page

SUMMARY OF FINAL RECOMMENDATIONS 1

I. INTRODUCTION 5

II. NATIONAL AND URBAN LAND POLICIES 10

Tenure and land policy 10

Objectives of a national land policy 11

Urban land policies 13

Reservation of development rights 16

Legislation on development (or new use) rights 22

III. NATIONAL LAND MANAGEMENT 25

The need for suitable planning institutions 25

Land management and tenure 25

Local variations 25

The role of State and local governments 25

Private and public activity 29

Organisational structure 30

A national land use council 30

Australian Government level 31

State level 31

Regional level: the regional commission 32

Local councils 36

IV. LAND USE PLANNING 37

Project evaluation or statutory zoning 37

Transition 39

Forward planning 40

Public development 41

Financial control 44

Covenants on title 45

Proposal for covenants in gross 51

V. DEVELOPMENT PROCEDURES 54

Development proposals 54

Land acquisition 54

Draft development scheme 56

Exhibition and objection 57

Development order 57

Public hearing: regional planning tribunal 57

Implementation: payment for new use rights 59 Enforcement 60

VI. COMPENSATION 63

Compulsory acquisition of interests in land 63

Deficiencies in present legislation 64

A removal solatium 67

Interest on compensation payments 69

Costs of claiming compensation 69

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Page

Relevance of compulsory acquisition provisions 70 Features of a desirable system 70

The compensation and valuation tribunal 72

Other persons injuriously affected 73

Other financial matters 75

VII. VALUATION AND RATING 76

Rating and regular revaluation 76

An alternative rating system 76

Effect on valuation procedures of reservation of new use rights 78

VIII. LAND DISPOSAL ARRANGEMENTS IN THE TERRITORIES AND IN GROWTH CENTRES 80 Land tenure systems 80

Clarification of tenure proposals 81

Improvement conditions in relation to residential land grants 82

Development leases 84

Planning control and non-residential land 85

Pollution control and industrial land 85

Government lands 86

Administration of leases 87

IX. LAND DEVELOPMENT ACCOUNTING AND THE TREATMENT OF LAND REVENUES 89

Recording land transactions 90

The land development accounting structure 95

Land development economic activity accounts 95 Valuation of transactions 98

Financial objectives, profit and pricing policies 98 Conclusion 103

X. SUMMARY OF RECOMMENDATIONS RELATIVE TO PARTICULAR TERMS OF REFERENCE 104

APPENDIX A 109

Dates of public hearings 109

Organisations or persons from whom submissions were received prior to the preparation of the First Report 109

List of Witnesses 113

APPENDIX B 119

Organisations or persons from whom submissions were received following preparation of the First Report 119

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Summary of Final Recommendations

1. There is need in Australia to formulate national and urban land policies, based on criteria of economic efficiency, the preservation of environmental quality, and social equity.

2. Such policies should be devised and implemented by a structure of planning institutions, including: (a) A national land use council consisting of the relevant Federal and State Ministers, supported by a skilled secretariat, a standing committee of

public servants representing the several Governments and a citizens’ advisory committee. (b) An Australian Government agency to consider land use issues falling directly within the constitutional responsibility of that Government. (c) At State or Territorial level a small, expert organisation to advise on

major land use matters, collaborate with the national land use council and supervise regional planning commissions. (d) Within each region or metropolitan sub-region, a regional commission (partly elective, partly appointed) responsible for planning regional devel­

opment on the basis of State guidelines, formulation of guidelines for local authorities, implementation of particular regional projects and administration of the development process (including land acquisition and development) and leasehold estate management. The regional commission

will thus be the authority with major responsibility for land use planning and development. (e) Local authorities, responsible for formulating local planning guidelines and standards (consistent with those formulated at regional level), con­

sidering draft development schemes and supervising the implementation of confirmed development orders. 3. Urban land policies should take account of the desirability of: (a) government agencies assuming responsibility for land use planning and

control through all stages of the development cycle; (b) using the construction skills, efficiency and market knowledge of private enterprise as much as possible, but eliminating private gains and losses associated with decisions to permit changes in land use;

(c) reducing land speculation and minimising the cost of making land avail­ able for different purposes; (d) obtaining for the community the capital increment resulting from permit­ ted changes in land use;

(e) preventing premature development and wasteful or uneconomic forms of land use; (f) substituting for statutory zoning a system of project evaluation, in which all development proposals will be evaluated on their merits by reference

to formulated standards and guidelines; (g) allowing a wide right of objection to particular development proposals, with determination by multi-member, independent, expert tribunals after public hearings;

(h) applying to government projects the same rules and considerations as to private proposals, subject to the government’s reserve power to override a tribunal’s finding by means of a special order.

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4. To achieve these goals, legislation is required: (a) to reserve for the community, as from a designated base date, the develop­ ment or new use rights associated with permitted future changes in the nature or intensity of land use; (b) to provide that, upon compulsory acquisition of land by a public author­

ity after the base date, compensation will be calculated as the higher of the market valuation at the base date (adjusted to allow for the effects of inflation) and the value under existing permissible use at the date of acquisition; (c) to provide that future changes in permissible uses will be achieved by the

issuance of development orders by regional commissions, which will override existing statutory controls; (d) to provide that development orders will be based on consideration of draft development schemes at the regional level, following notification to

councils and affected landowners and providing for a right of objection to, and review by, independent regional planning tribunals; (e) to provide for implementation, either by public acquisition of the land (on the basis set out above) or by the imposition of development conditions

designed to recover for the community the value of the new use rights; (f) to provide for covenants in gross in favour of public authorities, and for certificates of proposed grant, to enable development restrictions and im­ provement conditions on freehold land to be enforced.

5. Compensation procedures should be reviewed to include the following: (a) notice of proposed acquisition to be required in all cases, compensation being payable for any loss sustained by a withdrawn notice; (b) a statutory right of objection to be provided in relation to any proposed

compulsory acquisition of land; (c) a statutory requirement to be imposed on resuming authorities to provide prompt notification of value; (d) an obligation to be imposed on acquiring authorities to pay promptly

at least 90 per cent of their assessment of value; (e) provision to be made for determination of compensation before an in­ dependent compensation and valuation tribunal; (f) the substantive law of compensation to be amended so as to:

(i) limit compensation in respect of development potential to that set out above (the higher of adjusted base date value and exist­ ing use value); (ii) provide for reinstatement of owners of dwelling houses or vacant

residential lots; (iii) provide a ‘removal solatium’ for resident owners; (iv) include the cost of expert advice in respect of valuation and the preparation of claims;

(v) provide interest at current bank overdraft rates; (vi) improve the rules regarding costs of actions to recover com­ pensation. 6. Valuation procedures should be simplified to avoid the need for frequent revaluations of rateable (or taxable) land. The reservation of new use (or develop­ ment) rights will in any case simplify valuation procedures and, by making it possible for rateable (or taxable) value to reflect existing use value, remove pres­ sures for premature development which have hitherto been associated with the rating system.

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7. If the above recommendations are adopted, the major outstanding issue in relation to land tenure is the question of reserving for the community the un­ earned value increments attributable to community growth and inflation. We consider that these increments should be reserved in the case of non-residential

lands but not in the case of residential lands.

8. Residential lands should, therefore, be granted by regional commissions as residential freeholds, that is under fee simple titles subject to improvement condi­ tions and the reservation of new use (or development) rights. Residential freeholds should be purchased by capital sums which may be payable by instalments over

a term of years.

9. Commercial land should be leased by regional commissions for a term of years, reserving an economic rent subject to periodic re-appraisal. For purposes of rent review, the initial site rent should be related to the initial market rental value of the whole property (land and buildings), in order to establish a fixed

proportion to be applied to the current market rental value at the time of each rental review.

10. Land designated for industrial purposes should be leased by regional com­ missions for a term of years, in return for a capital premium representing market value but normally approximating the cost of the serviced land- Industrial leases should enable regional commissions to enforce appropriate anti-pollution measures

in accordance with the recommendations of specialist pollution control authorities.

11. Land disposed of for community purposes should be leased by regional commissions for a term of years. Charges for such leases might be nominal and should not exceed the cost of the serviced land.

12. Land required for streets, parks, etc., should be dedicated in fee simple as at present. Land required for government administrative, commercial, industrial or community purposes should be leased on the same basis as equivalent privately used land.

13. Recommendations relating to the reservation of new use (or development) rights, the introduction of planning and development procedures, and forms and conditions of land tenure should apply generally, in so far as they are applicable, to both the Australian Capital Territory and the Northern Territory.

14. Residential land in the Australian Capital Territory should be held under perpetual leases, subject to the reservation of new use (or development) rights and to the payment of capital premiums on allocation, but not to rental oblig­ ations.

15. Residential land in the Northern Territory should be granted under fee simple title subject to improvement conditions and the reservation of new use (or devel­ opment) rights, and existing residential leases should be converted to such titles.

16. Non-residential urban land in the Australian Capital Territory and the Northern Territory should be leased for fixed terms in return for economic rents on commercial leases and capital premiums on industrial leases. Encouragement should be given to convert existing non-residential leases and fee simple estates

to the new forms of leasehold tenure.

17. The right to convert non-residential leasehold land in the Northern Territory to fee simple tenure should be abolished.

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18. In respect of land development accounting and the treatment of land reven­ ues:

(a) it is essential that, both for the Australian Capital Territory and for development areas generally, comprehensive Land Development Accounts be established which will record all land transactions, including those involving governments; (b) the land development accounting structure should differentiate between

different kinds of land development activity, such as land acquisition and site development, leasehold management, capital accumulation and capital financing; (c) as far as possible, transactions should be recorded in the Land Develop­ ment Accounts in terms of their current values, but unnecessary amort­ isation, and cost and revenue allocation, procedures should be avoided; (d) the choice of profit objective in relation to land development activity will depend on a government’s policy goals in relation to such matters as in­ come distribution, urban development, and population growth and dis­ persion; (e) land development profits may be used to subsidise particular forms of land development (e.g. residential land for low-cost housing), to finance further land acquisition and development, to benefit the regional or local community in which the land development activity is taking place, or to augment the Consolidated Revenue of the Australian Government or a State and thus benefit taxpayers generally; (f) insofar as the system of land tenure which we have proposed makes it possible for land development profits (including the value of new use rights) to accrue to the public sector, we believe that such profits may reasonably be used for any or all of these purposes.

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COM M ISSION O F INQ U IRY IN TO LA N D TEN U R E

Final Report

To His Excellency the Honourable SIR JOHN ROBERT KERR, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, Governor-General and Commander-in-Chief in and over the Commonwealth of Australia,

MAY IT PLEASE YOUR EXCELLENCY

I IN TR O D U CTIO N

1.1 We were appointed by Letters Patent under the Great Seal of the Common­ wealth of Australia, bearing date the fourth day of May, 1973, to inquire into and report upon the following matters, namely:

(1) The most appropriate methods of leasehold administration and manage­ ment of land for urban purposes, consistent with the private rights of lessees and the public interest in the land, being land in the Australian Capital Territory and the Northern Territory and land acquired by or for

the purpose of a Land Commission which may be set up in any Aus­ tralian State to which the Parliament may grant financial assistance on terms and conditions relating to the acquisition, development and use of land for urban purposes.

(2) Without in any way derogating from the generality of the last preceding paragraph, the following particular matters: (a) the principles and practices currently being applied in the leasing of land by public authorities for urban purposes, including the oper­

ation of the leasehold land system in the Australian Capital Terri­ tory and, to the extent necessary, the administration of leasehold lands in other parts of Australia and in other countries; (b) what are the essential characteristics of leasehold tenure as it could

be used in an urban land system; (c) the most appropriate term of years for land leased for residential, commercial, industrial, public and community purposes, and the advantages, if any, of a reduction in the commonly used 99-year

lease period; (d) the purposes of land rent and the appropriate methods for arriving at the annual land rent payable for different classes of land use and

the intervals at which the rentals should be subject to reappraisal; (e) the appropriate mechanisms for allocation of leases, indicating the conditions under which auction systems, ballots and direct allocations (needs basis, etc.) are appropriate for different circumstances and

types of leases; (f) the criteria under which the collection of any land rentals might be deferred or rebated for lessees of land used for purposes which do

not produce income and who would suffer hardship if required to meet normal land rent charges;

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(g) the conditions, including methods of arriving at land rentals, under which leases might be made available to non-profit making com­ munity bodies and for uses such as schools, churches, clubs, com­ munity centres; (h) equitable arrangements for lessee rights at the expiration of the lease

period and in the event of the lease being terminated before the ex­ piration of the lease term; (i) the procedures that should be followed when lessees seek a change in the conditions of lease; (j) the procedures that should be followed in the event that the lease

conditions are varied and the means of arriving at the appropriate charges on the land by way of reassessment of any land rent or the imposition of any other payment in the event of such variation; (k) the rights that neighbouring leaseholders should have in the event

of a change in the conditions of a lease especially a change in the purpose clause; (l) the use of the lease purpose clause as a land use control measure for town planning purposes; (m) the manner in which any revenues raised by any lease allocation

system should be reflected in any land development account, for example, whether these should be regarded as the disposal of a capi­ tal asset and/or profit by the land authority; (n) the appropriate nature, structure and powers of an appeal body to

receive and determine complaints about the level of rent re-appraisal, conditions of lease renewal, compensation in cases of termination of leases, changes in lease purpose clauses and any other lease matters about which the Commission considers that leaseholders and other interested parties should have the opportunity for the redress of grievances; (o) existing revenue arrangements for leasehold lands in the Australian

Capital Territory and Northern Territory and any desirable changes that should be made; (p) as a matter for a separate report, the problems associated with the leasehold system in the Northern Territory including the conversion

process from urban leasehold to freehold; (q) such other matters within the general scope of the inquiry as may be referred to the Commission by the Minister for Urban and Regional Development, the Minister for the Capital Territory and the Min­

ister for the Northern Territory acting jointly.

1.2 Subsequently, in the light of concern that our Terms of Reference might preclude us from receiving and considering certain evidence, the Minister for Urban and Regional Development and the Minister for Northern Development, acting for and on behalf of the Minister for the Capital Territory and the Min­ ister for the Northern Territory, directed by instrument in writing dated the twenty ninth day of June, 1973 that we should also inquire into and report

upon the following additional matters, namely: The existing systems of land tenure and the features, including the advantages and disadvantages, of each system that relate to the acquisition, disposal, development, management and redevelopment of land for urban purposes.

1.3 Public notice of our appointment and of the Terms of Reference of our Inquiry was given in the major newspapers in all States and Territories on or

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about the 12th day of May, 1973. Public notice of the additional Term of Refer­ ence was given in the same newspapers on or about the 18th day of July, 1973.

1.4 Following publication of the Terms of Reference, the Secretary wrote direct­ ly to some 450 individuals or organisations whom it was thought might be inter­ ested in the Terms of Reference, inviting them to lodge submissions with the Commission and to give oral evidence. These same individuals and organisations were subsequently advised of the additional Term of Reference and were provided with a list of questions to which they might address themselves and which gave

an indication of the broad range of issues thought to be relevant to the matters for consideration.

1.5 A preliminary public sitting was held in Sydney on the 7th day of May, 1973, at which Mr Murray Wilcox of Counsel, instructed by the Commonwealth Crown Solicitor, announced his appearance to assist the Inquiry. No applications for leave to appear on behalf of any interested persons or organisations were made.

Thereupon the Commission fixed the 18th day of June, 1973 as the date for the first public hearings for the submission of evidence and adjourned until that date.

1.6 The first public hearings were held in Canberra and we subsequently visited all State capital cities, Darwin and Alice Springs in order to receive submissions and hear evidence from persons and organisations in those cities and places. Prior to the preparation of the First Report we held public sittings on 22 days, during which we received 199 submissions and heard oral evidence from 121 witnesses. Details of the dates and places of public sittings, the persons and organisations from whom submissions were received and the witnesses who gave oral evidence

are set out in Appendix A.

1.7 The Letters Patent issued to us required us to present a Report within six months from the commencement of our inquiry. Consequently, on the 29th day of November, 1973 we presented a First Report to the then Governor-General and Commander-in-Chief, His Excellency the Right Honourable Sir Paul Hasluck, K.C.M.G., G.C.V.O., K.St.J. On the 4th day of December, 1973, that Report was tabled in Parliament and was thereafter printed by the Australian Govern­ ment Publishing Service and widely distributed.

1.8 On the 6th day of August, 1974, the Prime Minister (the Honourable E. G. Whitlam) announced that the Australian Government had considered the First Report and supported its recommendations that any future capital profits arising from a change of land use should be retained by public authorities rather than

by individuals, and that land for private urban business use in growth areas and in Government territories should be available only on some form of leasehold. However, the Prime Minister indicated that Cabinet did not accept the need for development corporations to have a continuing role in the case of existing stabil­

ised urban areas, as proposed by the Commission.

1.9 We stated in the First Report (paragraph 1.8) that that report was con­ ceived as being ‘a report on the main matters of principle covered by the Terms of Reference’. It was hoped that the First Report would generate public interest and discussion and lead to further submissions, which we could take into

account in formulating our final recommendations.

1.10 We are pleased to be able to report that this hope has been fulfilled. We understand that public demand for the First Report has been high and that some 7 000 copies have been distributed to date. In addition, a number of uni­ versity departments, in conjunction with other groups, convened conferences of

interested persons for purposes of considering and commenting upon the First

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Report. Full day conferences were held in Sydney, Perth, Brisbane, Melbourne and Adelaide. These were each attended by about 200 persons and occasioned lively debate. The proceedings of the Sydney, Brisbane, Melbourne, Adelaide and Perth conferences have been published, received by us and considered as further submissions.1

1.11 Since preparation of the First Report a further 103 submissions have been received by us. Most of these have contained comment, sometimes in considerable detail, on the recommendations in the First Report. A list of these further sub­ missions is set out in Appendix B hereto.

1.12 The public discussion on the First Report and the further submissions have been of great assistance to us in forming our final recommendations. We have found, among disinterested commentators, a substantial measure of agree­ ment with the basic principles we enunciated in the First Report. At the same time there have been significant criticisms of some of the detailed proposals which we made. These criticisms have persuaded us that the recommendations set out in the First Report should be modified and clarified in certain respects. They have also assisted us in elaborating on our previous proposals, so as to achieve more detailed recommendations which we believe will have a wide degree of community acceptance. Those recommendations are set out in the following chapters. As with our First Report, this Report is not structured in a manner directly linked to each of the Terms of Reference. The various items in the Terms of Reference are so inter-related that they do not lend themselves to discrete treatment. We have preferred to collect together related aspects of the matters raised by the Terms of Reference and to set out our proposals thereon. Hov/ever, a summary is included in Chapter X below to indicate where particular Terms of Reference are discussed in the body of the Report.

1.13 One further introductory comment should be made. As we pointed out in the First Report (paragraph 1.7), the matters with which we have been concerned are, except for the Australian Capital Territory and the Northern Territory, mostly within the constitutional powers of State legislatures. Whilst the features and problems of the major urban areas within Australia are surprisingly similar, significant differences do occur as between States and even within a single State. These differences are particularly apparent in existing population levels and rates of population growth, land values, and the nature of existing land legislation and administrative institutions. We believe it to be a generally desirable principle that change should be evolutionary, adapting existing institutions to desired ends. This in itself means that the details of a desirable administrative system will differ as between States and probably as between parts of a single State. More­ over, no administrative system is better than the persons controlling it, and skilled persons in the fields of land use planning, development control and land valu­ ation are in short supply in most areas of Australia. For all of these reasons it is unrealistic, and indeed undesirable, to expect any uniformity of legislation throughout Australia or to nominate a common date, applicable to the whole of the nation, for a change to a new system. What is realistic and desirable, in our opinion, is that goals, principles and methods of achieving those goals and principles be formulated at both national and State levels. Priorities need to be 1

1. G. D . Sheather ( E d .) , R eform of L and Tenure System s, Planning Research C entre, University of Syd­

ney, Sydney, 1974; Brisbane Conference on L a n d Tenures, June 1974, A ustralian G overnm ent Publish­ ing Service, C anberra, 1974; M elbourne C onference on L and Tenures, July 1974, A ustralian G overnm ent Publishing Service, C anberra, 1974; A d elaide Conference on L and Tenures, A ugust 1974, A ustralian G overnm ent Publishing Service, C anberra, 1974; A Sem inar on the First Report o f the E lse-M itchell In q u iry into L and Tenures, published by the L and and H ousing C o-ordinating Com m ittee, Perth, 1974.

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established so that the system of land tenure can be adapted to local needs within particular areas and implemented as resources (particularly manpower) and other circumstances permit.

1.14 The suggestions made in our two Reports are, to a significant extent, novel. We have been concerned that the concepts be properly understood. For that reason we have attempted to explain our ideas and to indicate how a system which adopts them might work. If by so doing we have made our concepts clear,

we will have achieved our purpose. Terminology, timing and procedure are en­ tirely matters for particular legislatures which consider changes along the lines we suggest. We have not attempted to formulate the particular legislation which would be appropriate in any State or Territory.

1.15 In determining the form of this Final Report, we have decided against reproducing in full the discussion and recommendations contained in the First Report. Instead we have chosen to refer to that Report only where it is relevant to the issues discussed in this Report, in the hope that both Reports will be read together. Essentially this Report is intended to deal with matters omitted from the First Report and to modify and clarify the suggestions previously made in

the light of subsequent comment and events.

1.16 The work of the Commission, especially the organisation of hearings, dis­ cussion, and the large volume of submissions and correspondence, necessitated the establishment of a small secretariat. The presentation of this Report com­ pletes the Commission’s task. It is therefore appropriate that we record our ap­

preciation of the conscientious and enthusiastic efforts of Mr S. G. Litchfield and Mr D. Hoban, who successively served the Commission as Secretary, and of the members of their staff. We also record our special debt to Counsel (Mr Murray Wilcox) for so effectively leading discussion at the hearings, contributing in a

major way to our deliberations and preparing the initial draft of most of this Final Report. Finally, we thank all those who helped to formulate and give substance to our ideas by making written submissions or giving oral evidence.

The assistance of Dr. G. M. Neutze should be especially mentioned in this regard. We are also particularly grateful to those who helped to organise and report on the Conferences which were convened to facilitate discussion of the First Report.

1.17 Various causes have militated against the earlier completion and presenta­ tion of this Final Report, the text of which was completed in October 1975. In particular there has been an unavoidable delay in printing. It should therefore be understood that the Report does not take account of any events or circum­

stances occurring after 21 October 1975.

II N A TIO N A L A N D URBAN LA N D PO LIC IE S

Tenure and Land Policy 2.1 In Chapters II and III of the First Report, we discussed national and urban land policies and sought to enunciate desirable goals and strategies to enable

those goals to be reached. We have been criticised for so doing, the complaint being that in discussing land policies and the reservation of development rights we stepped outside our Terms of Reference. We do not believe this to be so. The third Term of Reference required us to report upon ‘the existing systems of land tenure and the features, including the advantages and disadvantages, of each system that relate to the acquisition, disposal, development, management

and redevelopment of land for urban purposes’. Such a Term directs attention, in the most general terms, to the ways in which present land-holding systems are operating, and to their advantages and disadvantages. An inquiry can hardly begin to evaluate advantages or disadvantages without adopting criteria for judgment; it is not possible to examine features of present systems without being struck by the dominating influence, on both private and public decisions, of the development rights issue. 2.2 Further, it seems to us that issues such as these were inherent in the

original Terms of Reference. Term 1 directed attention to ‘the most appropriate methods of leasehold administration and management of land for urban purposes’, while Term 2 required consideration of particular matters arising under a system of leasehold administration. It is true that neither of the original Terms specifical­ ly indicated that we were to evaluate leasehold systems from the viewpoint of their advantages and limitations relative to those of other systems. But the role of leasehold in relation to the reservation of development value is well known. As long ago as 1946, the Rural Reconstruction Commission in its Ninth Report on Rural Land Tenure and Valuation discussed the topic ‘State Participation in

increments to Unimproved Value’ in these terms: ‘Another important problem is the question of the ownership of the increments which accrue to the unimproved value of land. This question has exercised the minds of land administrators for many years and a strong belief prevails that this increment, when it is not due to any conscious effort on the part of the land holder, should accrue to the State. It has been argued that all increments to unimproved value are the result of community growth or of community expenditure or development. Among those who believe that the unearned increment

belongs to the State opinion is divided, however, as to whether the State should take the whole or only a part thereof, leaving some portion to accrue as capital increment for the benefit of the landholder. ‘The advocates of the view that the State should appropriate the whole or some part of the increment are divided as to the means of achieving the objective. Some advocate retention by the State of ownership of the land and the granting of titles under leasehold; by this means the increments would, through rent, automatically accrue to the State as the owner of the land. Others do not dispute the granting to the individual of full property rights in land, but would extract the increment for the State by means of tax.

. The theory of State rights to the increment of land value has so far been used as the main justification for the perpetual leasehold system. Other reasons are advanced, but the primary justification of the leasehold system is that, because it retains the property for the Crown, it also retains for the Crown the increments of value which accrue to the land. A leasehold premium represents the capitalisation, for the unexpired period of the lease, of the difference between the rental payable to the Crown and full economic rental . .

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2.3 In the modern urban context, the other main feature of leasehold tenure is the opportunity it provides to control the actual use of land, through land use covenants in the leases themselves and without the necessity to resort to statutory zoning. The classic case is, of course, the present practice in the Australian

Capital Territory.

2.4 It follows that any consideration of leasehold systems must inevitably in­ volve the postulation of community goals in relation to desirable urban land policies. In particular, it is necessary to consider squarely the questions of dis­ posal of unearned value increments and the most desirable form of land use control. Those matters, which loom so large in consideration of any leasehold system, can hardly be ignored when the focus of attention is changed to a free­ hold tenure system. Only when the basic goals and policy criteria have been established is it possible to proceed logically to consider the most suitable admin­

istrative and legal system to achieve those goals and effect those policies. Only then, is it possible to make confident recommendations on tenure, the bundle of rights and obligations governing the holding of land.

Objectives of a National Land Policy 2.5 In these circumstances, we make no apology for returning early in our Final Report to the basic questions which demand answer before all others: what are our national and urban land goals? what criteria does the community adopt in

evaluating land policies?

2.6 In our First Report (paragraph 2.3), we made the following observation about the need for a national land policy: ‘Formulation of a land policy is not only important for the purposes of determin­ ing appropriate forms of land tenure, but is an essential link in a chain of policies

directed towards protecting the natural environment, improving the quality of urban life, facilitating economic management and controlling the forces of growth. In its most general sense, a national land policy may be seen as a means of responding appropriately to the pressure of population growth and

development, especially in urban areas. The keystone of government policy must be a recognition that land is both a basic national resource of limited or finite extent and a necessity of life for all Australians.’ 2.7 We then (paragraph 2.4) suggested two general criteria for evaluating par­ ticular land policies, namely economic efficiency and equity. Economic efficiency was interpreted broadly as making the best use of scarce land resources, while

equity was interpreted as facilitating a socially acceptable distribution of income and wealth, in the sense both of reducing inequalities and of helping to ensure that persons in similar circumstances are treated similarly.

2.8 In paragraphs 2.6 and 2.7 of the First Report, we set out more specific criteria within the broad categories of efficiency and equity. They were as follows: Efficiency ‘(a) Land policy must be geared to the requirements of community growth by

helping to ensure that land is made available where and when it is wanted, for the purposes for which it is wanted, at a price which reflects its value in use and thereby excludes any speculative element. (b) Because unfettered development has proved so destructive of environmental

and aesthetic qualities, development must be viewed not as an end in itself but as a means of achieving more fundamental goals of society, including improvements in the quality of urban living and in social relationships. Land development, use and re-development must therefore be controlled in

the public interest.

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(c) Land policy must support and not conflict with other urban policies directed towards accommodating growth and improving living conditions in the cities. (d) Land policy must encourage and not stifle productive enterprise; but

initiatives for development and re-development must depend on the prospect of gains from more efficient land use and not on gains which accrue to the private sector from permitted changes in land use. (e) Decisions on land use must be taken, in both the private and public

sectors of the economy, with full regard to their social consequences, and not merely by reference to their effects on the profitability of individual landholders or the budgets of public authorities. (f) Land policy must treat land as a scarce resource by ensuring that it is

used effectively and not held idle for purposes of speculative gain. . . . (g) Land must be made available for any given purpose at a minimal cost in terms of labour and other resources. . . . (h) The use of the market as a resource allocating device must be reconciled

with the application of social controls intended as far as possible to prevent the market from being exploited or manipulated by sectional interests. (i) Land policies cannot meet the efficiency criterion unless they are politically acceptable. . . .’ Equity ‘(a) A general objective must be to balance the rights and obligations of different

individuals and groups in relation to land use. This involves a recognition of the fact that private rights and obligations over land need to be set against those of neighbours and of the community generally. (b) Also of over-riding importance is the need for land policy to contribute

towards the task of providing all members of the community with acceptable standards of housing on terms which are both just and within their capacity to pay. . . .

(c) The equitable distribution of land requires appropriate provision of land for purposes of social housing, public services generally and the preservation and improvement of the public domain. (d) Equitable arrangements for the distribution of land must also extend to

commercial, industrial and non-profit organisations. In each of these user categories the aim must be to make the price of land reflect its social cost in terms of the resources needed to justify its continuing use for the purpose in question. . . . (e) Inflationary increases in land prices must be minimised. Government policy

must seek to stabilise land prices because rising prices benefit some members of the community at the expense of others, for example existing landowners at the expense of potential landowners or tenants, and speculators at the expense of land users. . . . (f) Land policy must be directed towards ensuring that landholders are

restricted to gains from the development or use of land and are excluded from gains associated merely with the passive holding of land. This involves action to leave individuals and organisations in the private sector with the fruits of their enterprise while reserving for the whole community the benefits which flow from public authority decisions over land use.’

2.9 Save in two respects, the policy goals and criteria we specified have escaped criticism by those who have commented upon the First Report. The first criticism concerned what was said to be our failure to emphasise environmental consider­ ations. It was suggested that a third general criterion, the maintenance of environ­ mental quality, should have been added to the list of desirable objectives. We accept the view that this is, or should be, a basic objective of any land policy. We thought that we had made it clear that our notion of economic efficiency included environmental considerations, not merely the maximisation of profit.

12

The efficiency criteria (b), (c) and (e) restated in paragraph 2.8 above thus all have environmental implications. Furthermore, the proposals we made in the First Report for disposing of industrial land were directed especially to ‘the paramount need to protect the community from environmental deterioration and abuse’ (para­

graph 7.62). But so that there can be no further misunderstanding we now re­ state our view that the maintenance of environmental quality should be a major objective of land policy.

2.10 The second criticism of our criteria related to the question of speculative gains which accrue either generally or as financial increments associated with per­ mitted changes in land use (rezoning). Any proponent of the present ‘lottery’ system, under which rezoning gains are retained in private hands while rezoning

losses are privately suffered, necessarily quarrels with some of our nominated specific criteria. We recognise that there are such persons in the community, though they have been in a distinct minority both in the witness box and in the various conference discussions. As far as financially disinterested commentators

are concerned, the main hesitation in relation to this matter stems from concern on practical and procedural matters, not opposition in principle. To those who support the retention of the speculative system in principle we acknowledge a fundamental policy disagreement. We have considered it necessary to discuss this particular criterion again at some length; this is done in paragraphs 2.18 to 2.34

below.

2.11 However, on the basic policy goals and on the other specific criteria there appears to be virtual unanimity, so that it is unnecessary for us to debate them further. Rather the task is to devise a system which can achieve the goals and meet the criteria. The submissions received and the conferences held since the

First Report have strongly supported the view expressed therein (paragraph 2.12) that in Australia ‘there is a growing recognition that there must be a radical re-appraisal of the rights and obligations which attach to land’.

Urban Land Policies 2.12 Our discussion of urban land policies, issues and strategies in Chapter III of the First Report has likewise met with general agreement. However, some adjustment of population estimates is necessary as a result of the recent publi­

cation of the First Report of the National Population Inquiry (the ‘Borrie Report’).1 This Report projected a lower population growth rate than had pre­ viously been generally assumed. The Report suggests that, on current fertility trends and with no immigration, natural increase will lift the Australian popu­

lation to 15.9 million by the end of the century. Assumptions of annual net im­ migration of 50 000, 75 000 or 100 000 persons raise this projection to 17.6 million, 18.5 million or 19.3 million respectively, compared with the present figure of about 13.3 million. As it seems unlikely that immigration will wither away, or

even decline significantly from present levels, the assumption must be made that within the next 25 years our society will grow by some 4 to 6 million people. Whilst this figure is less than the increase of 7 to 10 million assumed in our First Report, it is nonetheless substantial and still represents an increase ranging

from about one-third to nearly one-half in a single generation. At its upper limit, the projection is for an absolute population growth similar to that which has occurred in the last 25 years (about 6.1 million). The urban problem discussed in paragraphs 3.2 to 3.6 of the First Report remains with us. It may possibly

1. A ustralian G overnm ent P ublishing Service, C anberra, 1975.

13

be a little more manageable than was earlier believed but it still presents a for­ midable challenge to the nation.

2.13 Should we then discard or modify any of the goals, policy guidelines or strategies which we postulated in the First Report? For convenience they are listed again:

Urban Goals (paragraph 3.7)

‘(a) the provision of residential accommodation and related services for all persons as a matter of right, at cost within their means; (b) the need to provide this accommodation in a variety of forms consistent with the desires of the people for different kinds of life styles and social

relationships; (c) the provision of adequate employment opportunities, transport and com­ munication facilities, social services and recreational facilities; (d) the effective integration of residential accommodation with all other urban

facilities and functions in order to optimise the relationship between living, working and recreation; and (e) the achievement of better balance between urban living and the use which is made of the environment, for example, by creating new cities to relieve

the pressure on metropolitan regions and by rejuvenating the blighted areas of existing cities.’ Policy Guidelines (paragraph 3.11)

‘. . . there will be a preference on the part of the community for urban land policies which have the effect of: (a) increasing the supply of land for urban purposes for a given cost; (b) reducing the cost of making land available for a given purpose;

(c) allocating land in accordance with relative needs at prices which reflect both the needs of users and their capacities to pay; (d) stabilising the price of land: (e) eliminating the socially undesirable activities of land speculators;

(f) avoiding premature development and re-development; (g) preserving buildings of historic or intrinsic merit; (h) protecting the environment; (i) preventing wasteful or uneconomic forms of land use;

(j) permitting public discussion and participation in land use decisions; (k) providing maximum security of tenure for users; (l) eliminating windfall gains and losses as a result of decisions to permit changes in land use; and (m) minimising costs of administration and compliance with controls.’

2.14 It has been said by some of our critics that the choice of goals and guide­ lines involves value judgments, so that the strategies derived therefrom are them­ selves affected by the values adopted. Of course this is so; it is simply not pos­ sible to demonstrate by logical process that, for example, residential accom­ modation should be available for all persons at a cost within their means or that social services and recreational facilities should be adequate. In earlier days, as in some other countries even today, neither of these goals could be regarded as self-evident or generally acceptable, but we consider that most Australians would now so regard them. Nor is it possible logically to demonstrate the desir­ ability of stabilising the price of land, preserving buildings of historic or intrinsic merit or permitting public discussion and participation in land use decisions. Never­ theless, we adhere to our view that these are desirable objectives for most people in the community today. 2.15 Our own value judgments are, of course, quite unimportant; those of the community are of overwhelming importance. We have stated what we believe to

14

be the community’s values in order to explain the reasons for the strategies we have proposed. The implementation of the strategies is a matter for democratic­ ally elected governments and parliaments. If our understanding of community

values is faulty, the strategies will not be adopted; to the extent that our judg­ ments reflect community views the proposed strategies deserve serious consider­ ation.

2.16 In the submissions that have been received and the discussions that have taken place since the First Report, there has been nothing to cause us seriously to doubt the existence of general community support for the goals and policy guidelines which we have enunciated. Except for the matter, discussed below, of ‘eliminating windfall gains and losses as a result of decisions to permit changes in land use’ (paragraph 3.11 (e)), none of the goals and policy guidelines has

been attacked.

2.17 In the light of the further submissions and discussions, we have concluded that the strategies which we outlined in the First Report (paragraphs 3.13 to 3.19) are still appropriate. We therefore reaffirm our adherence to them and, because

they represent the philosophic base on which our major recommendations rest, we restate them in summary form:

(a) Government agencies must assume responsibility for land use planning and control through all stages of the development cycle, so as to ensure prompt and orderly initial assembly and development of land for urban purposes, effective continuing utilisation of land and buildings, avoidance of premature degradation or decay, co-ordinated re-development when renewal becomes

necessary and the avoidance of speculative profit.

(b) Private initiatives must be encouraged in those areas where the private sector is likely to respond most effectively to the needs of users, particularly in those sequences in the development process which lend themselves to in­ novation in design and efficiency in construction and marketing. Re-develop­

ment initiatives should not depend on the prospect of private capital gains arising out of changes in permitted use. If re-development is unprofitable in the absence of such gains, it is premature and it is against the public interest to permit it to take place at that stage.

(c) It is the responsibility of governments to ensure that land is made available for residential purposes on a scale which will meet the demand for such land when it is priced at cost including a reasonable return on capital. For this purpose, cost means the cost of acquiring broad acres in their rural

state, exclusive of any change in value associated with the intended change in use, together with the cost of providing roads and services. Land made available for income-producing purposes should be disposed of in such a way as to retain for the Crown the capitalised benefits derived from location.

(d) Land use planning and control must be carried out in such a way as to encourage the use rather than the hoarding of land, use being interpreted to include public as well as private productive purposes.

(e) Land use decisions by government agencies must not only serve the public interest; they must be neutral in their effects on private individuals or firms, so that those who are affected by public land use decisions do not enjoy windfall gains or suffer windfall losses.

15

Ο ^

Reservation of Development Rights 2.18 We indicated in paragraph 2.10 above that the only matter of principle in the First Report which has been criticised to any extent has been the proposed reservation of development rights. Having regard to the fact that this would

involve a significant departure from current Australian practice, we believe that the number of critics has been remarkably small. For example, almost all of the 57 witnesses who appeared before us in our sittings at Adelaide, Melbourne and Sydney were asked to comment on this issue of principle. Only one of these witnesses expressed a firm view in favour of the present system, while some half-dozen reserved their position on the matter. The remainder expressed sup­ port for the idea that the community should benefit from (or bear the cost of) rezoning decisions involving changes in permitted use. This support was given either unreservedly or subject to the proviso that some administratively practic­ able manner of achieving this result could be devised. In the other cities in which public sittings were held, a greater proportion of the witnesses favoured reten­ tion of the present financial system, but overall those of that opinion were in a very small minority. Unequivocal support for the principle of reservation of development rights, as proposed by the Commission in the First Report, has also been expressed in reports by other committees of inquiry concerned with land use, such as the Australian Advisory Committee on the Environment (the Walsh Committee)2, the Australian Government Committee on Land Disposal Techniques

(the Coughlan Committee)3, and the Australian Institute of Urban Studies Task Force on Vital Cities for Australia.4 The Commission further notes that the land tenure arrangements adopted by the Albury-Wodonga Ministerial Council for Albury-Wodonga have been based on the Commission’s recommendations for

residential fee simple tenure subject to the reservation of development rights and for commercial and industrial leasehold tenure5. The principle of reservation of development rights has also been incorporated in legislation brought down recent­ ly in the United Kingdom, whereby all development land is to be brought into community ownership and, after a transitional period, compensation for develop­ ment land compulsorily acquired will be related to its current use value excluding development potential6.

2.19 In paragraphs 4.1 to 4.6 of the First Report, we distinguished between the ‘use value’ of land (the capitalised value of the future benefits, less expected costs, from using land for its present purpose) and its ‘development value’ (the capitalised value of future benefits, less expected costs, of holding land in ex­

pectation of a change in use). We argued that, in the long term, the difference between the two values should accrue to, or be borne by, the community rather than the particular landowner. We nominated five main reasons for this view (paragraphs 4.15 to 4.19): (a) Elimination of private gains and losses from planning decisions is desirable

as a matter of social equity. All land cannot be developed to like intensity and relatively arbitrary decisions have to be made as to which land is to be developed to a high degree of intensity, which land is to be developed to a lesser intensity or for a less valuable purpose and which land is to be reserved

2. D epartm ent of the Environm ent and Conservation, L a n d Use in Australia, R eport No. 4, D ecem ber

1974, A ustralian G overnm ent Publishing Service, C anberra, 1975, p. 35. R eported in th e Australian Financial R eview , 5 Septem ber 1974. A ustralian In stitu te of U rban Studies, V ita l C ities fo r Australia, A n Evaluation, AIUS P ublication

No. 45, C anberra, 1974, pp. 5, 35.

5. A lbury-W odonga M inisterial Council: C om m unique, 24 A pril 1974. 6. C om m unity L a n d A c t 1975; see also C o m m u n ity L and Bill: Explanatory and F inancial M em orandum , H .M .S.O ., London, 1975.

16

for some public purpose. Millions of dollars presently turn on those decisions and, as a matter of social equity, this is wrong. (b) Reservation of development rights will improve the planning process. Once the prospect of private profit or loss is removed, a landowner has no financial

interest in rezoning decisions. Pressures for self-interested planning decisions will no longer be exerted and the need for planning secrecy will disappear. Plans may be the object of public discussion at all stages of formulation; planning decisions may be made on the basis of public needs, not private interests. (c) Removal of speculation is likely to reduce costs and prices, because the

financial tribute imposed by speculators on the end user will no longer need to be paid. (d) Appropriation by the Crown of the development value increments will bene­ fit government finances, thereby providing funds to offset the immense de­

mands on public revenues which are imposed by community growth. (e) Premature development will be eliminated or at least substantially reduced. The developer’s profit will depend on his ability to detect and satisfy market demands and on his design, construction, financing and marketing efficiency.

It will not be affected by any advantageous increase (or unforeseen decrease) in land value resulting from the land use decision. The developer will bear the full cost of acquiring the site on the basis of its development value but his development rights will then be secure.

2.20 Our recommendation regarding reservation of development rights has been opposed by three main groups. First, there are those (both numerous and vocal at some of the university conferences) who are themselves speculative land deal­ ers. They may not have appreciated that the recommendations we made in the First Report explicitly provided for compensation to be paid for development value that had accrued prior to the time the new policy was implemented. Thus we said in paragraph 4.21:

‘We have said that a new attitude is necessary but we cannot overlook the fact that many people have invested considerable sums in properties on the basis of existing laws and attitudes. We have seen that, as a result of expectations about future changes in permitted land use, current market values may already

incorporate increments in development value. The investments may have been speculative and undertaken at risk but it would be inequitable not to acknowledge current market values at the time the new policy is implemented. What is essential is that subsequent increments in development value be reserved for the

public.’

Our detailed recommendations to achieve this end followed in paragraphs 4.28 to 4.35. To the extent that these critics do understand our proposals but continue to oppose them, this should cause little surprise; we are, after all, proposing to deprive them of a system they have found highly profitable.

2.21 The second group, small in number but with sincere views worthy of respect and careful consideration, consists of those who disinterestedly argue that the reservation of development rights is wrong in principle, on the grounds that it represents an expropriation of private property and that is an unjustifiable

interference with the ‘free enterprise’ system. To those arguments a number of replies may be offered.

2.22 First, there is no longer a ‘free enterprise’ market in urban land. All urban land in Australia is controlled, in one way or another, by limitations on use im­ posed by government agencies. Those limitations have arisen because of the

17

unique nature of land—its finite extent, its intrinsic community importance and its propensity in use to affect the utility or enjoyment of other land. Planning limitations, in one form or another, are here to stay: in every Australian State successive governments, of diverse political complexions, have maintained and

progressively tightened the controls. The limitations attaching to particular land flow not from the market but from political decisions based on perceived com­ munity needs. The market, on the other hand, will respond quickly to any change in the limitations imposed on land use. In other words, the market reflects par­ ticular zoning limitations and land prices adjust to the relative harshness of those limitations. If these facts are conceded, then it follows that the imposition of one more limitation, relating to development rights and the benefits of rezoning decisions, will not affect the operation of the market. Land will continue to be bought and sold with values reflecting that extra limitation.

2.23 Secondly, we believe that the reservation of future increments in develop­ ment value on behalf of the community can hardly be termed an expropriation of any existing benefit. All that a particular land owner has, at the commence­ ment of the new system, will be preserved to him; he will merely be deprived of the opportunity of making windfall gains as a result of zoning decisions based

on perceived community needs.

2.24 Finally, we point to the serious interference with productive enterprise and efficiency which results from the imperfections of the present system. Because of the need to limit market manipulation, to prevent exploitation of uninformed landowners and to reduce planning pressure for private financial ends, most plan­ ning is currently carried out in secret. It is true that planning schemes, by-laws and interim development orders may be publicly exhibited, perhaps with right of formal objection, prior to their proclamation. But at that stage the planners have made fairly firm decisions and it is difficult in practice for ordinary individuals to achieve substantial modifications. Moreover, many people have difficulty in relating land use patterns on a plan to particular forms of develop­ ment on individual sites. They do not understand the significance of the plan­ ning schemes until detailed development proposals and three-dimensional plans become available. As a consequence of these factors, the development which results from zoning decisions often meets strong objections from neighbouring

landowners. Sometimes councils yield to those objections, thus depriving the developer of the potential for which he has paid. Sometimes the objections are so great that the statutory planning controls are tightened, thereby imposing a substantial loss on the developer who has bought his land in one market and finds himself holding it in another. Sometimes councils and governments stand

firm, so that the planning controls are retained and planning consent is granted, but the community opposition is so great that a ‘green ban’ is imposed and the development cannot proceed. Those who support private enterprise and who value productive efficiency and basic fairness must regard these situations with dismay, yet they are part and parcel of the existing planning system. How much better it would be if the financial pressures could be removed and decisions taken about the desirability of development proposals before developers pay for development rights.

2.25 As a variant of the ‘free enterprise’ argument, some people in the second group contend that it is only proper that those who have used the land for one purpose should benefit from the accretion in value that will result from its more intensive use; they commonly have in mind farmers whose land is required for urban purposes.

18

2.26 There are three objections to this contention. In the first place, the propor­ tion of farming land required for urban purposes in the foreseeable future is minute. Most farmers have worked their land for many years, perhaps even for generations, but they cannot possibly benefit from urban rezoning because

their farms are not adjacent to potential urban areas. Even within a proposed urban area the intensity and value of alternative uses will vary enormously, from the prime commercial and industrial sites at one extreme to open space on the other. Thus the distribution of benefits will vary greatly and will not reflect the

comparative claims or length of ownership of different landowners.

2.27 Secondly, it is extremely doubtful that, under the present system, the original farmers obtain the principal benefits of the value increments associated with the prospect of rezoning. It is unlikely that genuine working farmers can afford to hold their land in the critical period between the time when it becomes

obvious that it will be needed for urban purposes and the time v/hen it is actually rezoned. Increasing rates and taxes usually bear too heavily to be supported from rural production. We know of no study on the distribution of the value incre­ ment, but in a recent article an experienced valuer and qualified town planner

(Mr J. W. Wynyard) discussed the ‘value creep’ associated with the urbanisation of rural lands7. The article contained a table which illustrated the process of conversion from farmland to residential allotments. This table is reproduced below with the kind permission of the author (see Table 2-1).

2.28 The example shows that the genuine farmer sells his 100 acres for $1 000 per acre to a ‘Pitt Street’ farmer, for whom productive potential is relatively unimportant, and that the final sale prior to actual subdivision realises $20 000 per acre. The difference between the original farmer’s return of $100 000 and

the final cost to an actual developer of $2 000 000 has gone mainly to so-called investors/entrepreneurs/dealers. The example cited is a hypothetical one, related no doubt to New South Wales experience, but we believe that the sequence of events which is postulated is not uncommon.

2.29 The Commission obtained evidence relating to the magnitude of the value increments associated with changes from rural to urban use in a number of fringe metropolitan areas. Whilst we have no way of determining whether the figures are representative of the price changes which occurred in all areas, we

believe that they are indicative of the value increments which have been associ­ ated with permitted changes in land use during recent years. In each case, the figures refer to land on which no subdivisional costs have been incurred; that is to say, the value increments reflect only expectations or decisions about changes

in permitted use.

2.30 The following examples are illustrative of the value changes which oc­ curred. A Liverpool (New South Wales) site without improvements, which had been sold by a farmer for $15 000 per hectare in 1970, was sold for $42 000 per hectare in October 1972, four months after a zoning change designating the

land as a residential site. A Penrith (New South Wales) site without improve­ ments, which had been sold by its rural owner for $20 000 per hectare in December 1970, was sold for $155 000 per hectare in March 1972, six months after it had been zoned as residential. A Whittlesea (Victoria) property without

improvements, which had been sold by a farmer for $2 750 per hectare in Decem­ ber 1969, was rezoned in February 1970 and sold for $13 000 per hectare in August 1972. A Tea Tree Gully (South Australia) property, which had been sold

7. ‘Some Complexities in E n Globo Subdivision V aluations’, The Valuer, April 1975, Vol. X X III, p. 410.

19

by its rural user for $1 500 per hectare in December 1967, was rezoned as resi­ dential in August 1969 and sold for $17 000 per hectare in November 1972. A Wanneroo (Western Australia) property, which had been sold by its rural owner for $130 per hectare in October 1963, was rezoned as an urban growth corridor in 1970 and sold for $3 200 per hectare in December 1971.

2.31 Thirdly, the argument that farmers should benefit from value increments overlooks the adverse cost consequences of speculative activity. If urban rezoning is expected to take place within a given area, speculators will immediately descend

upon it. Being unaware of the pattern of land use which will be designated for the area, they will buy up available land which might be rezoned at prices below full urban value but significantly above rural value. Their activities involve sub­ stantially more land than is eventually converted to urban use, so that land which

remains in rural use will have recorded sales at prices above farm value. In due course all surviving farm land will be revalued for rating and taxation purposes, the valuer being obliged to set values based on sales of comparable land. In so doing he must necessarily take account of the speculative sales, thereby assess­ ing values generally throughout the area at figures higher than rural productive value. Long after the speculative buyers have moved on, the farming commun­ ity is left bearing rates and taxes inflated by their activity. It is a logical corollary of our proposals for the reservation of development rights that rates and taxes must be based on the value of land in its existing use. This problem will therefore not arise if our recommendations are adopted.

2.32 The third group of critics, most numerous of all, comprises those who accept the desirability of reserving development rights in principle but who see practical difficulties in achieving this end. This aspect has troubled us in our deliberations and, as will appear in Chapter III, we have modified our earlier ideas as to the desirable administrative system. We believe that the legislation suggested below and the planning and development procedures set out in Chapters IV and V will capture the development increment for the community, with fair­ ness to both the original landowner and the developer and without undue admin­ istrative complexity. There may be other or better methods, but we believe that we have demonstrated that, if the principle is acceptable, there is no practical difficulty in implementation.

2.33 We do not accept one aspect of the criticisms by this third group, where­ by they have argued that the adoption of our recommendations will stifle develop­ ment initiatives. In the first place, we consider that the existing system encour­ ages premature development. This is partly because development value incre­ ments associated with changes in land use are now used to subsidise development, which would not be profitable if developers had to pay for the full development value of the land in its new use. Premature development also results from the present system of rating and taxing land by reference to market values which reflect development potential. The unplanned and mindless desolation of our inner city areas and the conversion of large areas of productive farmland into idle wasteland graphically illustrate the tendency for the existing system to promote premature development. We believe that our proposals will remove this bias, helping to ensure that future development proposals will be justified in terms of their true economic cost, their environmental effects and their contribution to social or community goals (as opposed to their ability to generate private land profits as under the present system).

2.34 Secondly, we believe that development initiatives should come from those responsible for the development, rather than from landowners who seek to make

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HYPOTHETICAL LAND CONVERSION HISTORY CHART

Stage Units Size

(A c r e s )

Buyer/Activity Agent Price/Acre Unit Price Total Value

1 1 100 Farmer $ 100 $10 000 $ 10 000

2 2 50 Intensive Farmer $ 200 $10 000 $ 20 000

3 4 25 ‘Pitt St.’ Farmer $ 1 000 $25 000 $ 100 000

4 20 5 Country Homesite $ 4 000 $20 000 $ 400 000

5 20 5 Investor/Entrepreneur/

Dealer

$ 5 000 $25 000 $ 500 000

6 20 5 Investor/Entrepreneur/

Dealer

$10 000 $50 000 $1 000 000

7 20 5 Investor/Entrepreneur/

Dealer

$12 000 $60 000 $1 200 000

8 20 5 Investor/Entrepreneur/

Dealer

$15 000 $75 000 $1 500 000

9 20 5 Subdivider/Joint Venturer $20 000 $100 000 $2 000 000

10 400 1/5 Builder/Buyer/ $75 000 $15 000 $6 000 000

Investor $25 000 $ 5 000 $2 000 000

$50 000 $10 000 $4 000 000

Source: J. W. Wynyard, The Valuer, op.cit., p. 413.

Remarks

Value related to production of farm. Value still related to production of farm.

Productive capacity relatively unimportant. Growth apparent. Rumors of zoning change. Rezoning announced for future. Rezoned.

Subdivision approved in principle. Engineering plans approved.

Subdivision commenced.

Total new value. Less: Land servicing, etc., costs.

Land Content.

capital profits merely by obtaining planning approval for changes in the use of their land. It was put to us that residential landowners should be able to benefit in this way. We believe that most residential landowners are concerned to preserve the enjoyment of their land in its existing use, and that the present system makes it only too easy for them to be disturbed in that use by neigh­ bours or speculators seeking unearned development increments. The compen­ sation provisions of the present system also operate to the detriment of residential landowners when their land is compulsorily acquired. We believe that the pro­ posals we make in Chapters V' and VI, regarding development procedures and compensation, will fully protect the rights of residential landowners, without either stifling development initiatives or providing unwarranted subsidies for development.

Legislation on Development (or New Use) Rights

2.35 Our proposal is that legislation be enacted within a particular State or Territory: (a) to reserve to the Crown the development or ‘new use’ rights in all land within the State or Territory as from the ‘base date’ designated for such

land;

(b) to provide that, upon compulsory acquisition by any public authority after the base date, compensation will be calculated as the higher of the market valuation at the base date (adjusted to allow for the effects of inflation) or the ‘existing use’ valuation calculated at the date of acquisition; (c) to provide that, in determining compensation based on existing use value,

no regard will be paid to the price obtained on sale of other land unless the proposed Compensation and Valuation Tribunal is first satisfied that, at the time of such sale, there was no expectation of any change in the value of such land by reason of a possible change in the use to which that land might lawfully be put.

2.36 The above paragraph contains three terms whose meaning must be clearly stated. In the First Report (paragraph 4.12), we defined development (or urban­ isation) rights as ‘rights to convert land from rural to urban use or from one urban use (or intensity of use) to another’. Development rights are thus synony­ mous with what may be called ‘new use’ rights. We now propose to employ the term new use rights to remove the possibility of misunderstanding. It was never intended by us that the Crown should take back development rights which had already been granted, either actually or conditionally on grant of consent in a particular case. The rights to be reserved could, under a statutory zoning system, be accurately called ‘rezoning increment rights’. This term is not appropriate if formal zoning is to be abandoned, as we suggest in paragraphs 4.1 to 4.6 below. The rights to which we refer are the rights to change the use of land which are conferred by the new system of development orders that we recommend in

Chapter V below. A new use right is thus the right to use land in a manner different from, or more intensively than, the manner in which it could have been lawfully used at the base date in accordance with relevant planning restrictions. The manner in which it was actually used at that date is not relevant. Thus if an existing building could lawfully have been extended or rebuilt at the base date, either with or without the necessity for planning consent, no new use

right is involved, no development order is necessary and no occasion for pay­ ment arises. Similarly, if a change in use was specifically authorised by a

22

planning scheme, zoning by-law or interim development order (or was capable of being authorised by a development control authority without changing the planning scheme, by-law or order), no new use right arises. Although the changed use is contingent on consent, it is a right which the Crown has already bestowed

by authorising the new use subject to the permission of a council or other statu­ tory body. It will be seen, therefore, that necessity for a development order and payment for the new use right arises only in those circumstances where, under a statutory zoning system, a rezoning would occur.

2.37 If this is appreciated, it will be seen that in terms of geographic area the application of the new procedure will be very limited. The proportion of land likely to be rezoned during the remainder of this century is small. An over­ whelming proportion of non-urban land will remain in rural use and will be completely unaffected by our proposals. Even within urban areas, it is likely

that only a small proportion of land will be affected. It is precisely because the benefits and burdens of rezoning are so selective that there is need for the system we propose; it is because the geographic area is limited that the system is practicable.

2.38 The term ‘base date’ is used to indicate the date upon which, in a particular region or part of a State or Territory, the new system begins to apply. Even if our proposals are accepted in principle, they will probably not be implemented im­ mediately throughout the whole of a State or Territory. Time will be needed to set up the appropriate administrative structures, employ suitable professional

staff at regional level, devise guidelines at the State level and the like. We envisage that State governments or Territorial administrations will concentrate at­ tention initially on those regions where development pressures are heaviest, and that the new system will be extended to other areas as opportunity permits. The

concept of the base date will facilitate this kind of approach. An appropriate base date, referable to a particular region, will thus be proclaimed to coincide with the date when the new system is to commence in that region. The new use right will vest in the Crown from the base date, but otherwise values will

be maintained and existing statutory controls (with existing planning discretions) will continue until over-ridden, in relation to particular land, by a development order approved under the new procedure. Meanwhile, regional and local author­

ities will be encouraged to set about the process of gathering information and formulating guidelines, as suggested in paragraphs 4.10 and 4.11 below, so that data will be available for consideration with draft development schemes. That very process will, of course, itself reveal the necessity for particular development

orders to vary the continuing statutory restraints. 2.39 The ‘existing use’ value is the value of the land calculated by reference to the purpose for which it may be lawfully used. If its actual use differs from its permitted use at the base date, the existing use value at that date includes any

potential value it may have under the statutory restrictions then in force. Exist­ ing use value could thus be called ‘existing zoning value’ to indicate that it in­ cludes any development value that has been conferred by zoning prior to the base

date.

2.40 The concept of existing use value may be made clearer by citing two examples:

(a) By reason of its rezoning potential, a parcel of 80 hectares of farmland near an expanding urban area, still used for farming, has an actual market value at the base date of $7 500 per hectare. That value will then be the base date value. Used for agriculture the land is worth only

23

$1 000 per hectare, but the land has a presently lawful, but unrealised, potential for sub-division into 10 hectare hobby farms. This gives it a value of $2 500 per hectare as its existing use value at the base date. Five years later the land is acquired for urban development. By this time the hobby farm potential has increased its existing use value to $5 000 per hectare. The owner is entitled to the higher of (a) the base date value, adjusted upwards at a specified rate of interest, and (b) the existing use value at the date of acquisition. If the adjusted base date value is, say, $10 000 per hectare, this will be the higher value and thus the measure of compensation. Under the present system the increasing likelihood of

a rezoning decision during the five-year period would have pushed the value up steeply to, say, $25 000 per hectare. The public purse will there­ fore benefit by more than $15 000 per hectare (or $1 200 000 in total), which would otherwise have gone to the lucky owner.

(b) Under a planning scheme, a large residential allotment containing a single dwelling house is included in an area where residential flats are per­ missible with the consent of the council. As such it has a base date existing use value of $100 000 though its value as a dwelling house and site is only $50 000. The planning scheme continues in force after the base date, pending the preparation and approval of draft development schemes for the area. The land continues to be potentially available for residential flat development and its existing use value creeps up to $150 000 by the time when, three years later, a development order is issued. Under that order the land is included in a riverside foreshore park.

It is acquired by the development authority at its existing use value of $150 000, because this exceeds the adjusted base date value of, say, $120 000.

2.41 It should be noted that, in the second example in the preceding paragraph, it makes no difference to the compensation payment whether the new use is for a park, with only nominal land value, or for an industrial estate with a value of $200 000. Each new use requires a development order and the ultimate use is a matter of financial indifference to the owner. This may be contrasted with the present system, under which the owner may be expected to resist the park

proposal so as to secure a rezoning which will result in a higher development value and compensation payment. It may also be noted from this example that the determination of existing use value depends critically on the fact that resi­ dential flat development is lawful at the base date. By contrast, take the same case but assume that the use for flats has been prohibited under the scheme in force at the base date. Assume further that it is expected at that time that the land will some day be rezoned for flats. In this case the existing use value will be based on the lawful existing use, that is a dwelling house, and will be $50 000. The expectation of rezoning supplies a base date value of, say, $90 000 and this figure, as adjusted, will be the acquisition figure. In such a case, any heightened potential for rezoning after the base date will not benefit the owner.

24

I ll N A T IO N A L LA N D M A N A G EM EN T

The Need for Suitable Planning Institutions

3.1 In Chapter II of our First Report, we stressed the need for a national land policy as a means of responding effectively to the pressures of population growth and development, especially in urban areas. Institutions must be established capable of responding appropriately, sensitively and promptly to human and economic needs. Decision by confrontation is a reproach to any planning system.

3.2 Within a country such as Australia, planning decisions must necessarily be made at a number of different levels. This is partly because Australia is a fed­ eration in which the States have most of the constitutional responsibility for land use decisions, partly because of the size and geographic diversity of the country. The task is to devise a hierarchy or structure of planning institutions capable

of accepting responsibility for decisions at the several levels.

Land Management and Tenure

3.3 We have considered how far this Commission should concern itself with the task of devising such a hierarchy of planning systems. From one point of view this is a matter of administration, divorced from land tenure and entirely within the province of the governments concerned. But there is another view. Land

tenure embraces all the rights and obligations attaching to the holding of land, including rights to use and restrictions on use. Those rights and restrictions must necessarily be specified so as to permit changes to be made from time to time as circumstances demand. It follows that consideration of land tenure necessarily involves consideration of planning systems and of the administrative structure

necessary to create and control the systems. It therefore seems to us that the third Term of Reference, which requires us to inquire into ‘the existing systems of land tenure and the features . . . that relate to the . . . development (and) management . . . of land for urban purposes’, necessarily involves some consideration of plan­

ning institutions.

3.4 In offering comment on a possible management structure we make three preliminary comments, each of which is concerned with some aspect of the role of government in relation to the control of land development.

Local Variations

3.5 First, as noted in paragraph 1.13 above, circumstances and existing institu­ tions vary significantly between the various States and even within the borders of a single State. A planning system suitable in one area may not be suitable in another. Consequently the scheme we suggest below is intended merely to provide

a conceptual framework, within which the development control process discussed in Chapter IV may operate. It v/ill require adaptation, perhaps to a major extent, to suit any particular area.

The Role of State and Local Governments 3.6 Secondly, we regard it as desirable to adapt existing institutions rather than to impose a radical new approach. In particular, the system of development control which is adopted must recognise the responsibilities of the States in this

area and the actions which they have taken to establish suitable planning machin­ ery. If this is accepted by the Australian Government, its actions are likely to be

25

feasible and administratively less disruptive. Our final recommendations have therefore been significantly influenced by recent developments in the States and, in relation to Canberra, in the Commonwealth Parliament. Every State has now legislated to establish regional divisions in the State for administrative purposes. The forms of the regional organisations and their functions vary from State to State, but the trend is clear. It has been considered necessary in each State to inter­ pose some organisation, which may have executive or merely advisory powers, between the centra! agencies of the State government and those who make decisions at the local level. It has thus been recognised that some decisions need to be taken or considered at a regional level.

3.7 In the planning field there have been similar moves to establish regional organisations. In a discussion paper issued recently by the New South Wales Minister for Planning and the Environment (Sir John Fuller, M.L.C.)1, the possi­ bility of regional planning organisations is discussed in the following terms:

‘Possible regional structures Regional responsibility for planning may be structured in a number of ways. Special bodies, similar to county councils, could be formed for regions or sub­ regions. Such “planning councils” would consist of elected representatives of the region’s local councils and may be linked by cross-membership to the advisory councils. In some regions there may be one, in others two or three such “planning councils”.

An alternative would be to form regional “planning councils” with mainly local government representation, and reconstitute the advisory councils with mainly citizen representation. Each body could have some of its members on the other to constitute a link. Some government representation would be necessary on the “planning council”. Another possibility would be to reconstitute the regional advisory councils making them into statutory planning bodies. They would then become similar to county councils, although they could have some appointed members as well as local government representation. The idea of one body fulfilling both planning and advisory functions could be extended, and consideration could be given to a major multi-purpose regional authority which would also supply public utility services. Since different regions have different problems and prospects, their planning needs differ and the scale of regional organisation for them may also vary.

No regional organisation exists for the Sydney Metropolitan Area although some local councils have at times formed themselves into consultative groups. The metropolitan area (with about two-thirds of the State’s population) cannot be treated in quite the same way as the State’s other regions. Metropolitan government for Sydney has been proposed many times since the beginning

of this century, but each time the proposal has been abandoned because of opposition from State government or local government or both. Even the most recent proposal for a reduction of metropolitan local government areas from 45 to 20 districts has run into heavy opposition.

The Cumberland County Council, formed in 1945, was constituted in an attempt to concentrate Sydney’s metropolitan planning functions into one body. The County of Cumberland Planning Scheme was in fact an early version of a ‘regional plan’ in that it concentrated on the County’s broad physical structure and relied on local schemes for filling in the details. (One indictment of the present planning system is that 23 years after the County Scheme’s prescription

some of the details have not been filled in.) Although the Cumberland County Council was not metropolitan government, it ran into conflict with State and local government and was dissolved in 1964. 1

1. Tow ards a N ew Planning System for N ew South W ales, F irst R eport, G overnm ent Inform ation and Sales C entre, Sydney, N ovem ber 1974.

26

Therefore, it appears from experience that neither metropolitan government, nor one single planning body for the whole Sydney Metropolitan Area, nor the amalgamation of local government units is likely to prove acceptable. However, it may be possible to group some or all of the planning functions of metropolitan local councils into bodies which are similar to county councils but which are smaller than metropolitan in size. This would mean that groups of metropolitan local councils forming sub-regions of Sydney, would pool their planning resources.

It may be said in support of this proposal that major decisions affecting the whole region are in any case likely to be of State significance and are best made by the Government. The Sydney Region Outline Plan, now being success­ fully implemented, was born of a high degree of co-ordination between State

departments. However, between the State planning level and local councils, there is need for an intermediate level of responsibility which may be provided by sub-regional “planning councils”.’2

As this Report was being drafted the Minister published a further booklet, Proposals jor a New Environmental Planning System for New South Wales, setting out firm proposals for overhaul of the New South Wales planning system. These proposals have been formulated after public discussion of the first discussion

paper. We are heartened to see the very considerable degree of compatibility be­ tween the suggestions we make and those now proposed for New South Wales. The major difference between the two approaches is that the New South Wales proposals do not, as yet, include any suggestions for overcoming the ‘rezoning

lottery’ problem.

3.8 The Joint Committee on the Australian Capital Territory (an ail-party com­ mittee representing both Houses of the Commonwealth Parliament) recently con­ sidered the question of land administration in the Australian Capital Territory. Its Report3 deals in paragraphs 105 to 115 with the question whether land admin­

istration should be placed under the control of the Legislative Assembly or of a development corporation. The recommendations of the Joint Committee on this matter are reproduced below:

“The Committee recommends that Parliament legislate to establish a National Capital Development Corporation with the following functions: • To undertake and carry out the continued development and construction of the city of Canberra as the national capital of Australia.

® To manage on behalf of the Australian Government all aspects of land policy, land administration, land co-ordination, lease sales and manage­ ment, transport, planning and co-ordination. The Corporation would be responsible to a Minister of the Australian Government and be managed by a Board of five members. The Board would consist of three full-time paid Commissioners, one of whom would be the

Chairman, and two members of the Assembly nominated by the Assembly as its representatives on the Board. The Committee recommends also that the Assembly and the National Capital Development Corporation negotiate to determine specific instances in which the

Corporation might ultimately delegate aspects of its functions to the Assembly or to representative community institutions recognised by the Assembly.”

3.9 The Australian Capital Territory is, of course, unique in many respects. Because Canberra is the national capital, land use decisions there have a national aspect which is absent in other cities. Secondly, it is a city-state, in the sense that the city contains almost the entire population of the Territory. Finally, it has

2. Ibid., pp . 14-15.

3. Self-governm ent and Public Finance in the Australian Capital Territory, A ustralian G overnm ent Publish­ ing Service, C anberra, 1975.

27

no existing local government institutions and no tradition of local control of land use decisions. 3.10 At its present stage of development, the Territory may be thought of as a region. We have seen that the Parliamentary Joint Committee has recommended that an independent Corporation be established to administer land administration within that region. Because of the special circumstances of the Australian Capital Territory mentioned above, the suggested structure of the Corporation differs in some respects from the form we recommend for development authorities in general. However, the Joint Committee’s approach is an endorsement of the concept of administration at the regional level, free from day-to-day government control. 3.11 In the First Report (paragraph 5.4), we pointed to the difficulties experienced by local government authorities in carrying out detailed land use planning and in exercising development control. We proposed (paragraphs 5.21 to 5.24) that local government should be divested of its primary planning role, being left to discharge only those development control functions which were delegated to it by a Development Corporation. We indicated that local government could be represented on the boards of Development Corporations and that local authorities should be consulted about decisions affecting their particular areas. This proposal evoked widespread opposition, both in the further submissions we received and at the various conferences. We have therefore decided that it would be unrealistic and counter-productive to press this idea. Many commentators were critical of the past performance of local government in the planning field but insisted that, with ail their faults, local councils were likely to interpret local sentiment on planning issues more satisfactorily than other, more remote, organisations. This community judgment we must accept. 3.12 Moreover, since the publication of our First Report two changes in attitudes have become noticeable. The first is that, mainly for financial reasons (and despite the Sydney reaction referred to in the discussion paper quoted in paragraph 3.7 above), there has been an increasing willingness in local govern­ ment circles to consider the enlargement of areas by amalgamation of councils.

A large council has a much better chance of securing and retaining the services of competent professional staff than a small council, and the skill and experience of that staff are then available to a larger geographical area and to a larger num­ ber of people. It seems inevitable that the trend will be towards amalgamation of local government areas and that, as a consequence of this development, local government will perform more satisfactorily in the planning field in the future than in the past. Secondly, the enactment of the Grants Commission Act 1973, which makes provision for regional groups of councils to apply for financial assistance from the Australian Government, has required councils to think and act as constituents of regional organisations, not merely as self-sufficient entities. Other Australian Government grants programs, such as the regional organisations assistance program and the area improvement program, have had a similar effect. 3.13 The views expressed and the trends mentioned have persuaded us to make significant amendments to our earlier proposals. We adhere to the view that many planning issues need to be considered on a level below that of a State govern­ ment or Territorial administration but above the level of a single local council. We also remain convinced that it is undesirable for local councils to make the final decisions on controversial development proposals. But we recognise that there is a major role for local government in developing non-statutory guidelines against which particular proposals may be judged. Our ideas are spelt out more fully in paragraph 4.11 below.

28

Private and Public Activity 3.14 Our third preliminary comment relates to the respective spheres of opera­ tion of public control and enterprise on the one hand, and private enterprise on the other. This question, which was referred to in a number of submissions, in­

volves political judgments about which opinions will naturally differ. Any govern­ ment or planning body will need to decide from time to time whether particular activities are to be carried out by the public or the private sector. No general demarcation principle can be stated as universally acceptable.

3.15 Nonetheless, we think it desirable to make three observations. First, public planning and public ownership of development rights need not result in a reduc­ tion of private development activity. We certainly contemplate that private persons and companies will no longer be able to take the financial benefit consequential

upon a permitted change in land use. However, the opportunity of profiting from efficient development or re-development need not be diminished: governments and planning authorities may still leave to private enterprise that proportion of the total development market which they choose. Indeed, it seems to us that oppor­

tunities for development profit will be increased by public ownership of develop­ ment rights combined with the adoption of acceptable processes for determining what development will proceed. At present, a developer must undertake the task of site acquisition and consolidation without public assistance and at risk as to

the eventual development which he will be permitted to undertake. Even when permission is officially given, he may be frustrated or delayed by resident or union action opposing that development. Moreover, his development will be limited by the site which he has succeeded in consolidating, and this may be less

than the economic or design optimum. Because development rights are privately owned under the existing system, planning authorities need to devise statutory and code controls which will prevent over-exploitation of sites. These greatly restrict the developer’s opportunity to exercise design initiative and to satisfy

market demands. By contrast, we propose a system whereby major development or re-development activity will only take place over a suitably large area and after public debate as to the wisdom of the project. If the development proceeds, only essential planning constraints will be imposed, thus encouraging maximum design

initiative. The developer will then stand or fall on his ability to serve the market efficiently; this is of the essence of private enterprise.

3.16 Our second observation is that, at all levels and in relation to all planning decisions, there should be conscious decisions based on criteria such as equity and efficiency as to the respective roles to be played by the public and private sectors. The question arises, for example, as to how services such as water, sewer­

age and electricity are to be provided to development estates. The practice differs in different parts of Australia. This may be inevitable or desirable, but we believe that the present differences stem less from conscious decisions than from differing traditions. It should be a matter of continuing concern to planning authorities to

determine in what manner such services may be most expeditiously and cheaply provided. A choice between public and private provision needs to be made by planning authorities in relation to each project and each stage of a major project.

3.17 Thirdly, each of the sectors may be expected to have continuing important role·’ in urban development. Necessarily, public institutions will make the basic planning decisions as they do now, thereby determining the appropriate use of land and the appropriate time for development. If our recommendations regarding

development or new use rights are adopted, these public institutions will obtain for the community the financial benefit from changes in land use. On the other

29

hand, \νε envisage that the private sector will continue to be responsible for the major portion of actual design and construction work, selling to private buyers. The private sector is likely to remain more responsive to market demands than public officials. Within acceptable planning parameters, it is therefore desirable that maximum flexibility be left to the private sector. For example, a decision may be taken that a substantial area of land is to be developed for residential pur­ poses. Under such circumstances, it may only be necessary for a planning authority to specify such matters as maximum building dimensions, maximum total popu­ lation, minimum open space provision and vehicular access arrangements. The developer can be left with the task of selecting the building mix and detailed lay-out in accordance with his assessment of market demands. The enterprise of the private sector will then be directed to its most useful function, the satis­ faction of the market.

Organisational Structure 3.18 We turn now to the structure of planning institutions which we consider necessary to formulate and implement land use policies at the several levels of government.

A National Land Use Council 3.19 Implementation of a national land policy necessarily requires the co-operation of all governments in Australia. Such co-operation is likely to be obtained more readily if the various governments have all had some voice in the determination of the policy. In a recent report4 to the Minister of the Environment and Conser­ vation, the Australian Advisory Committee on the Environment suggested the establishment of a Ministerial Council consisting of relevant Federal and State Ministers to develop a national land use policy. It was proposed that the Council be serviced by a Secretariat offering multi-disciplinary technical skills, and that it be assisted by a Standing Committee of relevant public servants and a Land Use Advisory Committee to permit citizen participation in the development of policies. 3.20 We see much merit in this proposal. Such a Council, which could be called the National Land Use Council, could be given responsibility for tasks such as:

(a) the preparation and continuing review of a national land policy and land use strategy; (b) consideration of broad planning postulates such as the optimal popu­ lation for Australia, the desirable rate of population growth and rate of

urbanisation, the scope for achieving decentralisation and methods avail­ able for this purpose; (c) consideration of broad strategic land use issues, such as the location of major new urban areas or major industrial facilities, a new steel complex

or a new port; fd) consideration of partnership or co-operative arrangements involving speci­ fic purpose payments from the Australian Government to the States in fields such as public transport, growth centres, scenic protection areas

and roads; and (e) the provision of assistance to the several States and Territories to encour­ age them to establish appropriate land management institutions and pro­ cedures.

4. L a n d Use in Australia, A ustralian G overnm ent P ublishing Service, C anberra, D ecem ber 1974, paragraph 7. 2. 4.

30

3.21 The National Land Use Council and its supporting agencies should be regarded as fulfilling a general planning role at the national level. The Council should concern itself only with the formulation of national policies and general guidelines. If it were to become involved in questions of State, regional or local concern or in detailed implementation, its attention would be diverted from the more basic tasks which it should perform.

Australian Government Level 3.22 It will also be necessary for some organ of the Australian Government to consider the agreed national land use policy and to advise the Australian Govern­ ment upon specific land use questions which fall v/ithin that Government’s direct

constitutional responsibility. These will include questions relating to public development, such as the location of airports and defence installations, and as­ pects of private development requiring Australian Government approval because of exchange control, export licensing and the like. In addition, Australian Govern­ ment agencies will need to arrange the provision of funds to the States for spend­

ing in accordance with the national policy, to implement Australian Government controls on its own projects and to consider policy initiatives for submission to the Australian Government and the National Land Use Council.

State Level 3.23 There is need, in each State or Territory, for a small, expert organisation to advise the State government or Territorial administration on major land use matters and to be responsible for general supervision of private development.

We see three main roles: (a) Advising the relevant State government or Territorial administration on matters of major land use importance. We have in mind such questions as proposals for the development of a new city or growth centre, for

the opening of a new port, for the construction of an inter-regional rail­ way line, for the creation of a new national park or State forest, for the control of major scenic areas such as the Great Barrier Reef, the Blue Mountains, the Dandenong Ranges or the Adelaide Hills, and for the establishment of new industries. Necessarily this role will involve continu­

ing and active liaison with the National Land Use Council and with the numerous State or Territorial departments and instrumentalities involved in such decisions. It will be the planning agency’s responsibility to ensure that decisions reflect not only the specialised needs of individual State departments or instrumentalities but also planning requirements and the interests of the State or Territory population considered as a whole. Where there are conflicting interests, the planning agency will need to

advise the State government or Territorial administration about methods of resolving the conflicts. (b) Liaison with the National Land Use Council and with the Australian Government in relation to any Australian Government assistance, finan­

cial or otherwise, which may be needed by the State or Territory to enable it to discharge its land use responsibilities. (c) The supervision of organisations to be established at regional level so as to ensure that the regional organisations act in accordance with strategic

planning decisions taken at State level. The State planning agency should not attempt to take upon itself the task of making or enforcing decisions of merely regional or local importance. Like the National Land Use Council, it should be a relatively small, highly professional body con­

31

cerned with the formulation of major decisions and policies, not with detailed implementation. Its control should be exercised by the issue of guideline instructions specifying objects to be attained by the regional organisations. It will also be able to influence decisions at the regional level through its representation on regional planning bodies.

Regional Level: The Regional Commission 3.24 To a large extent the need to provide a regional planning body is linked with the question of local authority size. We have already mentioned a trend towards amalgamation of local government areas. If amalgamation were to proceed to the stage where a single local authority controlled the whole of a country region or metropolitan sub-region, there would be no need to create a separate regional planning authority; the regional function could be performed by the enlarged local authority. This is the present situation in the City of Brisbane, which embraces virtually the whole of the Brisbane metropolitan area. In such circumstances, it might nevertheless be desirable to establish (or retain) small local advisory organisations, so that local community views are adequately represented to the regional-local authority.

3.25 However, we assume that it is most unlikely that, in the foreseeable future, amalgamation on such a scale will occur to any significant extent. The position in New South Wales, the State in which amalgamation has been most widely discussed, is instructive. In 1973, the New South Wales Government published the Report of the Committee of Inquiry into Local Government Areas and Admin­ istration in New South Wales (the Barnett Committee)5. This Report proposed the amalgamation of the State’s 223 local government areas to form 97 enlarged local government districts, 20 within the County of Cumberland (the Sydney metropolitan area) and 77 in the remainder of the State. The Barnett Committee’s proposals may be placed in perspective by noting that New South Wales is divided for administrative purposes into eleven regions under the Regional Organi­ sation Act 1972; the whole of the Sydney metropolitan area is included in a single region. We concede that, for planning purposes, sub-regional administra­ tion within the Sydney metropolitan area would be preferable to a single regional authority, each sub-region being defined to contain a population (existing or foreseeable) of about 200 000 to 300 000. This would result in a total of about ten to twelve sub-regional authorities in Sydney.

3.26 Strenuous opposition has been expressed to the proposals of the Barnett Report. Most opponents have conceded the need for some rationalisation of boundaries and some amalgamation of areas, but have claimed that the amalgam­ ations recommended were excessive. The New South Wales Minister for Local Government has announced that the Government will not implement the proposals as recommended, but that it will undertake a detailed review of all local govern­ ment areas to consider desirable changes by reference to individual councils. The Local Government Boundaries Commission was required to operate on a full time basis and is now well advanced on that review. It seems probable that some specific amalgamations will be recommended but that the changes will not reduce

the number of councils to anything like the extent contemplated by the Barnett Committee. In other States which have recently established committees or com-

5. R eport of the C om m ittee of Inquiry into Local G overnm ent Areas and A dm inistration in N ew South

W ales, New South W ales G overnm ent Printer, Sydney, D ecem ber 1973.

32

missions to review local government boundaries6, the story is much the same. The inquiries usually result in recommendations that the size of local government units be increased by amalgamation, but the States prove reluctant to act on these recommendations because of political opposition at the local government

level.

3.27 The desirable size of local government units is a matter outside our present concern. We therefore express no view on this question; it raises many issues in addition to the optimal size for land use planning purposes. However, in discussing an administrative planning system some assumption as to local author­

ity size must be made. We believe that the New South Wales experience gives some guidance as to probable changes and as to the assumption which it is appropriate for us to make. We think it likely that local government areas

will be increased in size, but not to the extent which would be necessary for a single local authority to have control over a region or metropolitan sub-region. Some people, accepting that assumption, may contend that there is no necessity for a regional organisation because State and local authorities between them can perform the necessary planning tasks. The introduction of an additional

tier of planning control, these people may claim, is an unnecessary complication and expense. We have considerable sympathy for this view but we do not share it.

3.28 The fact is that many land use problems are of regional rather than State or local importance. We especially have in mind problems which affect an area smaller than a State but larger than a local government area. In attempting to deal with such problems, it is necessary for decisions to be made in such a way

as to recognise the impact of the decisions on the region considered as an organic entity. By way of example, we cite land use projects involving the location of an expressway or university, the development of a regional commercial centre or the preservation of regional open space. From time to time attention is

directed to the unfortunate effects of divided land use control over a single natural feature, such as a major river valley. The establishment of regional planning authorities would obviate that type of problem.

3.29 Regional planning bodies could also play a major role in fostering decen­ tralisation and economic development. The concept of and need for decentralis­ ation are now generally accepted. But its implementation has been delayed be­ cause of political problems, perceived at State level, associated with the fact that all country towns seek development assistance. As a result, decentralisation efforts have been fragmented and few centres have been able to generate growth

on the scale necessary to offset the attraction exerted by the metropolitan area. This issue could be tackled by a regional body, which would be responsible for justifying its choice of major new urban areas and considering how each part of the region could contribute to, and benefit from, selective decentralisation within the region. As the Canberra experience has shown, selective decentralisation

provides benefits which cannot be achieved by continuing to develop metro­ politan areas (especially avoidance of congestion costs) or by fragmenting growth

6. V ictoria: Report o f the Local G overnm ent A dvisory Board, G overnm ent P rinter, M elbourne, 1974 (th e V oum ard R eport). Tasm ania: M unicipal Commission of T asm ania, Report on M atters Relating to Local G overnm ent,

G overnm ent Printer, H obart, 1974 (th e B rettingham -M oore R ep o rt). South A ustralia: First and Second Reports of the Royal C om mission into Local G overnm ent Areas

(th e W ard C om m ission), G overnm ent Printer, A delaide, 1973 and 1974. W estern A ustralia: Local G overnm ent Boundaries Commission (th e H eron C om m ission), Report on M etropolitan M unicipal Boundaries 1972, G overnm ent Printer, P erth, 1972. Royal Commission on M etro­ politan M unicipal D istrict B oundaries (th e Johnston C om m ission), Report, Governm ent Printer, Perth,

1974.

33

in numerous small urban centres (especially the economical provision of com­ mercial, community and cultural services on a reasonable scale and the capacity to generate self-sustaining growth). Regional planning bodies are ideally suited

to promote their regions and thereby facilitate decentralisation.

3.30 If there is no regional authority, the regional functions we have described must be discharged at either the State or the local level. Neither is really appropri­ ate. A State government is too remote from local sentiment and control and should, in any case, be left to concentrate on its important State-wide functions. The local level is inappropriate because the area affected by a regional problem extends beyond local government boundaries. Councillors and aldermen elected from a local area will naturally put the interests of that local area first, often to the exclusion of any wider interest. Decisions which benefit local communities may therefore be taken without regard to the effects of those decisions on neigh­

bouring communities. A council may thus permit unrestricted development in order to give the town in its area a commercial advantage over other towns in the region. Such decisions may have cumulative undesirable effects by interfering with traffic efficiency, causing unnecessary congestion, destroying the amenities of residential areas, and sacrificing scenic areas or parkland (particularly in coastal areas which are susceptible to uncontrolled shack development, subdivision for high density residential use and industrial or mining development). While such activities may seem to be justified on economic or other grounds, in determining their location and scale it is necessary' to balance the interests of a particular locality against those of the wider community. By its nature, a local council is ill-fitted for that task. A regional authority, conversant with local needs and aspir­ ations but free from local domination, can be expected to prove more effective in designing guidelines to protect the larger community. 3.31 For these reasons, we propose the establishment in each region and metropolitan sub-region of a small, professional organisation charged with per­ forming the following tasks:

(a) planning regional development on the basis of guidelines and standards prescribed by the relevant State or Territorial planning authority; (b) in consultation with the relevant local authority, preparing development guidelines for each local area in the region which will ensure that local

planning observes desirable minimum standards and takes account of specific regional policies and objectives; (c) planning and implementing public development projects of regional signi­ ficance; (d) buying and disposing of land for development, by sale or lease, and

otherwise performing the financial functions of development authorities described in Chapter IX; (e) considering draft development proposals and, after the conditions des­ cribed in Chapter V have been satisfied, issuing development orders; and (f) managing leasehold estates.

3.32 In the First Report (paragraphs 5.9 to 5.11), we used the term ‘development corporation’ to describe the development authority which we proposed as the instrument of regional development control. This is the term which has been used in legislation relating to new growth centres, such as Albury-Wodonga. We indicated that we envisaged that development corporations would be modelled on the National Capital Development Commission, but that they would control all development in the region (including public projects); that they would, by issuing development orders, receive payment for development rights; and that

34

they would take over the primary planning functions of local government. As indicated in paragraph 3.11 above, we have modified that proposal. Although we adhere to the view that regional development authorities must retain impor­ tant responsibilities in relation to development control, these will be exercised by

prescribing guidelines for local councils and issuing development orders, the im­ plementation of which will be administered and controlled by local authorities. In view of the change in concept, we think that the regional development author­ ity may be more appropriately described as a regional commission than as a

development corporation. In the Australian Capital Territory, we have it in mind that the National Capital Development Commission wiH be reconstituted as a regional commission in accordance with the proposals in this Chapter.

3.33 In considering the representative and organisational structure of a regional commission, we have in mind two principles. It is first desirable that the com­ mission be constituted so that it reflects the interests of and is responsible to the regional community. A commission consisting entirely of appointed members

may not respond to community needs or it may be felt to be unresponsive. At the same time, it is desirable to make provision for appointed members who can represent and consult the statutory authorities involved in planning decisions. In consequence, we recommend that the commission be composed partly of elected members and partly of appointed members, with elected members constituting the

majority. The number of members and the method of selection may need to vary according to circumstances, but the commission should be small enough to operate effectively as an executive body. We suggest as a desirable principle that every local government authority within a region be entitled to nominate one

member of the commission. That member will be a direct link between the council and the commission. We further suggest that a number of persons (being not less than the number of members nominated by councils and possibly more) be directly elected by all the voters in the region. An election of this nature

could take place simultaneously with local government elections and would in­ volve little extra expense. Such a course would have the advantage of providing representatives who were not preoccupied with local government affairs. It should also attract persons who are interested in serving the community in a planning

role, but who do not wish to become involved in the other functions of local government. In addition to the elected members, there could be appointed mem­ bers representing particular relevant statutory authorities, the State or Territorial

regional planning organisation and the major public utility or development agen­ cies. The task of the appointed representatives would be to ensure that there is effective liaison between the commission and the specialist agencies or departments and to provide the commission with information and advice needed for policy

co-ordination.

3.34 We note that the regional structure we have proposed is similar to the regional planning council suggested as a possible form of regional structure by the New South Wales Minister for Planning and Environment, in the booklets Towards a New Planning System for New South Wales and Proposals for a New Environmental Planning System for New South Wales referred to in paragraph

3.7 above.

3.35 A regional commission will, of course, require a supporting staff. One of the advantages of regional organisations is that specialist services may be used more effectively at that level than at the local level. While councils will continue to require, and should be encouraged to employ, qualified town planning and

engineering staff, it is unlikely that they will be able to afford or will require

35

some of the other planning specialists needed for regional and urban develop­ ment. Accordingly, we suggest that regional commissions should build up a small but highly qualified team of professional officers, such as town planners, traffic and transport experts, architects, landscape designers, sociologists, financial administrators and the like.

Local Councils 3.36 It will be apparent from the foregoing that we envisage no major change in the nature or function of local government authorities. As at the present time, local councils will be bound in their forward planning by planning constraints imposed from above. This we regard as essential in order to avoid the conflicts of purpose and the uncertainties which may be expected to result if planning stand­ ards and policies can be changed simply by resolution of a local council.

3.37 At the present time the planning constraints are imposed at State govern­ ment level. Although decisions are usually preceded by consultation with local councils, the latter have no direct voice in the final planning decisions. They must accept planning decisions made by government departments or agencies, which

may be geographically remote from their local areas and which may be thought, rightly or wrongly, to lack appreciation of local issues and aspirations. Under the scheme we propose, the major constraints on councils will result from actions of a regional commission, on which each council will be directly represented and which will be controlled by elected representatives from the region. Policy initiatives will be generated from below, instead of being imposed from above. This should ensure that local needs and views are well understood in the formu­ lation of planning standards, while avoiding the possibility of major planning changes by resolution of an individual council.

3.38 Under existing statutory controls, local councils do not have an effective role in positive planning; statutory controls are imposed, and varied, at State level. Even on matters of essentially local concern, such as the zoning of a particu­ lar site or the appropriate plot ratio in a particular locality, the council is con­ trolled by constraints imposed from another level. We believe that the forward planning role of councils can be expanded under our proposals, by enabling them to adopt guidelines indicating requirements for development in their areas, while denying them the right to spoil amenities by granting consents not subject to appeal.

3.39 As we have already explained, we envisage that the regional commission will be staffed by a small but highly qualified body of officers. It is inconsistent with that concept to expect the regional commission to engage in detailed de­ cisions on local issues, or to bear responsibility for supervision of the erection of particular buildings, or to carry out development or enforce planning prohib­ itions and restrictions under development orders. At present, these are functions of local councils responsible for relatively small areas and supported by suitably qualified staff. So as to avoid involving regional commissions in detailed admin­ istration, we propose that local councils continue to be responsible for all such matters.

36

IV LA N D USE PLA N N IN G

Project Evaluation or Statutory Zoning 4.1 In the First Report (paragraph 5.6) we suggested that zoning is unsatis­ factory as a means of land use control. A number of criticisms may be made:

(a) Zoning is negative or permissive rather than positive or compulsive. It can prevent particular forms of undesirable use but it cannot ensure that land is developed and used in some particular manner perceived to be in the public interest. When land use zones are designated, some attempt

is made to calculate how much land is likely to be required for a par­ ticular purpose; but this calculation may be upset by the unwillingness or inability of particular owners to turn their land to that purpose within a reasonable time. (b) Zones are determined only after a lengthy period of consideration, exhib­

ition of planning schemes and the hearing of objections. As a result, the zoning is frequently out of date by the the time the plan comes into effect so that some extraordinary step, normally Ministerial intervention, is required. This step cannot await the lengthy procedures of exhibition

and objection, with the result that the carefully contrived but cumber­ some statutory procedures are immediately negated, not infrequently with considerable protest, charges of favouritism and the like. (c) Zoning is inflexible and legalistic. Under statutory planning, many appeals

are fought on the legal question whether a particular proposal falls within a predefined land use table rather than on whether its relevant features, including its particular scale and design, are appropriate in the circum­ stances. This may give rise to anomalies, for example where the developer

of high rise residential flats, in an area without ready access to shops, is unable to locate a ‘corner shop’ type kiosk in the building to provide daily food needs because the planning scheme prohibits commercial devel­ opment. The general prohibition may have been intended to prevent an

owner from developing a major shopping centre but the restriction would doubtless be interpreted literally on appeal. (d) Zoning is not well understood by the public. It is commonplace in plan­ ning appeals for even intelligent, well-informed objectors to admit that

they had known of the existence of a planning scheme and of its general provisions for their area at the time when objections were being received, but that they did not object. The stated reason is often: Ί did not realise that this sort of development would come to the area’.

4.2 When the Australian States first enacted town planning legislation, they each took as their model the United Kingdom legislation. For most of them the United Kingdom legislation then in force was the Town and Country Planning Act 1932, which provided for the preparation of planning schemes by local

authorities, and the Town and Country Planning (Interim Development) A ct 1943 and the Town and Country Planning Act 1944, which together extended the obliga­ tion to prepare schemes to all local authorities in England, Scotland and Wales and which provided stringent enforcement remedies. The legislation thus provided

for a rigid statutory system with numerous specific permissions and prohibitions.

4.3 In 1947, the earlier British legislation was repealed and replaced by the Town and Country Planning Act 1947, which substituted so-called ‘development plans’ for planning schemes. That change in concept has been developed in sub-37

sequent legislation so that under the current statute, the Town and Country Plan­ ning A ct 1971, quite detailed provision is made for development plans. The position under that Act is described as follows in an explanatory publication Town and Country Planning in Britainx:

‘Development Plans Broadly speaking, a development plan consists of a series of documents — including a written statement and maps — containing a local planning authority’s main objectives for land use in its area over a period of years. The plan itself does not directly control the development or acquisition of land, but it sets out policies guiding future land use. It allocates land for various uses — for example, residential, industrial, shopping or business; it shows the planning

authority’s proposals for roads, public buildings, parks, open spaces and other public uses, as well as existing uses which it is proposed to retain; it may define areas for comprehensive redevelopment and it shows green belts sur­ rounding urban areas and indicates areas where existing uses of land are intended to remain generally unchanged. . . .

The new type of development plan, like its predecessor, is based on a survey of the area — the county, large town or conurbation — instituted by the local planning authority or group of authorities working together. Outside consultants can be employed to help with the work. The survey takes into account the main physical and economic characteristics of the area (including the principal purposes for which land is used); the size, composition and distribution of the population; the communications, transport system and traffic; and any other important con­ siderations (including any prescribed by the appropriate Minister). With the planning survey as a basis, the development plan contains two parts—a ‘structure plan’, which must be approved by the appropriate Minister, and one or more ‘local’ plans, which do not normally require Ministerial approval (although the Minister concerned always receives a copy of them). The structure plan consists of a written statement, illustrated diagrammatically and setting out policies and general proposals for the future use of land in the local planning authority’s area, including measures for the improvement of the physical environment and the management of traffic. The proposals must be set in their regional context — showing, for example, the implications for investment and employment — and must indicate any “action areas” where comprehensive development or improve­ ment is expected to start within a specified period. . . .

Control of Development With certain exceptions, all “development” (which in planning law includes most forms of construction, engineering and mining and any material change in the use of land or existing buildings) requires the prior consent (‘planning permission’) of the local planning authority. When determining an application for planning permission, the authority must keep in mind the provisions of the development plan for the area concerned and any other relevant con­ siderations — for example, the effect of the proposal on road safety, the appearance of the surroundings, all public services such as drainage and water supply. The development plan is. however, only a broad strategic framework; it does not go into precise detail or show exactly what development will or will not be allowed. If proposals for development do not accord with the plan the local planning authority can give its consent if it believes that they do not involve a substantial departure from the plan or affect the whole of the neighbour­ hood. In the case of other departures from the plan, the authority must (if it proposes to permit the development) give public notice of the application, asking for representations, and must send a copy of the application to the appropriate Minister. The Minister does not normally intervene unless it appears that 1

1. London, 1972, pp. 5-8; revised edition 1975, C entral Office of Inform ation, London, pp. 5-7.

38

important planning principles or issues of more than local significance are involved, but he has powers to ‘call in’ the application to make his own decision, or to direct that planning permission be refused, or leave it for decision by the local planning authority.’

4.4 A similar change has been suggested for New South Wales, whose existing system is firmly anchored in the United Kingdom Act of 1932. In the booklet issued by the Minister for Planning and Environment to which we have previously referred2, the following passage occurs: ‘Development Control

One major aim of planning is to create a pleasing visual environment. At present control of the visual aspects of development is through planning schemes, interim development orders, regulations and local codes. Most controls specify minimum standards and tend to dictate the form of development, leaving little discretion to the designer. The application of restrictive development controls has engendered an atmosphere in which the administrators and

those wanting to develop are on opposite sides of the fence, viewing each other with suspicion rather than joining together to achieve better development. The planning system can encourage high quality, but it cannot ensure it, because good environment depends finally on good design. One way towards

good design is by increased emphasis on detailed plans which can deal with important elements of the visual environment, such as building form, materials, paving, street furniture and landscaping. In a two-tier planning system, where regional plans will deal with major issues, local plans are likely to concentrate

more on matters of detail than has been possible in the past. However, detailed planning will need to be used selectively, because it is very time-consuming and cannot be applied everywhere. The best hope for encouraging good design generally lies in a gradual move

away from the present negative form of control. Development proposals now tend to be judged according to whether they conform to minimum requirements. A more positive approach would specify the character and scale for an area together with certain desirable attributes for development. Proposals could be

evaluated by the extent to which they fulfil these aims. This more discretionary control has the added advantage that new ideas can be readily implemented under it, whereas control by regulation suppresses innovation. The new planning system should encourage a move away from control by restriction towards

control by guidance.’

4.5 In our view, there should be a move away from statutory zoning and towards a system of project evaluation, based on prepared development plans or guide­ lines and on non-statutory, flexible but comprehensive master plans.

Transition 4.6 As implied in paragraphs 2.35 to 2.39 above, we do not contemplate the immediate, wholesale abandonment of statutory zoning controls. This would invite chaos. We have it in mind that existing statutory controls will be main­

tained after the base date applicable to an area until they are superseded for land in that area by development orders.

4.7 However, there is a case for applying to existing zonings two of the changes we recommend. These are: (a) the requirement that planning applications be be made by public authorities; and (b) in those States and Territories where such a right does not already exist, the right of objection before an independent tri­

bunal by those opposed to particular proposals. We believe that these reforms are

2. Tow ards a N ew Planning System for N ew *outh W ales, op. cit., p. 17.

39

so important that they should be applied immediately to all land without pre­ judice to vested property rights.

Forward Planning 4.8 It is implicit in our proposals that there will be a continuing need for forward planning. Indeed, forward planning will need to be more comprehensive than preparation of statutory planning schemes. Each planning level should collect information relevant to the kinds of decisions it must make and issue guidelines to the level below. We are not planners and do not presume to instruct the plan­ ners as to how they should perform their professional duties. However, by way of illustration we offer some examples of the types of information which we believe each level might require and the matters which the guidelines might specify.

4.9 The requirements at State level might include: (a) Information as to national decisions affecting population growth and location, and national or industry decisions expected to result in expan­ sion or contraction of particular major industries. (b) Guidelines to regional authorities as to:

(i) the general location of major new urban areas, major new public transport and main road systems and national parks; (ii) minimum acceptable standards for designated forms of development (ocean or harbour foreshores, sites abutting main roads, etc.) and

objectives to be attained by permitted private development; (iii) standards for open space, with special reference to amount, type and general distribution.

4.10 The requirements at regional level will include: (a) Information as to: (i) State guidelines referable to the region; (ii) present characteristics of the region (physical, land use, population, transport, etc); (iii) present economic trends and reasons therefor, with projections of

future changes. (b) Guidelines to local authorities as to: (i) location of regionally significant new urban areas; (ii) regional facilities (aerodromes, universities, major commercial and industrial areas, main

roads, open space areas, etc.); (iii) minimum standards for development within local areas and objectives to be satisfied.

4.11 The requirements at local level might include: (a) Information derived from regional surveys of present characteristics of, and economic trends in, the local area, supplemented if necessary by more detailed local surveys. (b) Guidelines for evaluation of particular projects as to: (i) location of new

local roads, local open space, schools, hospitals, local commercial and industrial areas, etc.; (ii) nominated re-development areas; (iii) minimum standards for particular types of development within different parts of local areas and community objectives to be achieved by that development.

4.12 Such forward planning is, of course, compatible with statutory planning, but it is simultaneously both stronger and more flexible. It is stronger because it specifies positive requirements and particular objectives including, if desired, the time when development shall occur. It is more flexible because maximum scope

is given to the developer. Not only can he formulate a design to achieve the specified objectives rather than merely satisfy a negative code, but he also has the opportunity to produce and justify a proposal which goes beyond the planner’s

40

conceptions. If the developer can show that his scheme will meet the community’s requirements and if it successfully runs the gauntlet of any public hearing, then the development may proceed. Merit, not legalism, will be the test.

4.13 A criticism frequently made of the present statutory planning system is the lack of public participation in planning decisions. As we have already noted, planning has traditionally been carried out in secret. This has doubtless been con­ sidered necessary to avoid speculation in land and to prevent expectations about increments in development value from generating pressure for changes in land

use. However, the result has been that plans frequently fail to satisfy the persons for whom they are ostensibly created—the public generally and the persons living or working in the affected area in particular.

4.14 One of the major advantages of our proposal to restrict new use rights is that this will make planning secrecy unnecessary. This advantage must be fully exploited in the formulation of guidelines. Procedures for public involvement in the planning processes will vary from case to case, but efforts must be made

to ensure maximum interchange of ideas between planners and the public at all stages of the evolution of the guidelines. Exhibitions of tentative proposals can be arranged, discussion groups convened, ad hoc committees of affected persons formed to advise and so on. Planners have professional training, experience and

access to greater information than ordinary members of the public, but they cannot know what the public wants unless they ask, and ask often.

Public Development 4.15 In Australia, public sector development has been traditionally controlled in a different way from private development. Development by the Australian Government or by its statutory instrumentalities simply need not comply with

State planning laws. Even if provisions of the State legislation would otherwise apply, there would be an inconsistency between the Federal enabling legislation and the State planning legislation, so that under section 109 of the Australian Constitution the Federal legislation would override that of the State. Although

successive Australian Governments have usually had some regard to State plan­ ning legislation and local planning schemes, there have been occasions when they have taken advantage of their position to impose their own developments and standards.

4.16 Insofar as development by a State government or Territorial administration is concerned, the problem is not a constitutional or legal one. It is merely a political question whether government departments and statutory authorities are prepared to justify their development proposals publicly, before an independent

tribunal. In theory, all States now subject public sector development to planning control. However, in practice public authorities have the benefit of special rules which greatly reduce the comprehensiveness of that control. In New South Wales, planning scheme ordinances thus invariably contain a schedule of public activities,

of wide-ranging importance, which are expressly exempted from the operation of the scheme. In addition a clause is included stating that the council ‘shall not refuse to grant any application for permission to carry out development made to it under this ordinance by the Crown or a public utility undertaking or statu­

tory authority or attach conditions to its consent to any such application except with the concurrence of the Minister’. In South Australia, section 36(3) of the Planning and Development Act 1966-1975 provides that planning regulations shall bind the Crown and Crown instrumentalities unless the contrary intention

is expressed or implied in the regulations. The Victorian Town and Country

41

Planning Act 1961-1970 provides (in section 35 (d)) that ‘unless the Governor in Council on the recommendation of the Minister otherwise directs in relation to any part of the order or scheme, the order or scheme shall be binding upon every public authority and every municipality’. Under the Town Planning and Develop­ ment Act 1928-1972 of Western Australia, there is provision in section 7A(9) for reference to the Minister ‘where a public authority or a local authority desires to carry out within an area to which a current interim development order relates

any work or undertaking which is not exempted by the provisions of the order but which in the opinion of the Authority would not be in conformity with the proposed town planning scheme’. The scheme prescribed for the Perth Metro­ politan Region reserves certain land for public purposes, and empowers a public authority to use land vested in it for the purpose for which it is reserved under the scheme without making any planning application. In the Australian Capital Territory, there is of course no statutory planning scheme, with the result that development for public purposes depends entirely upon the decisions of public authorities.

4.17 The result of these provisions is that public sector development is, for all practical purposes, free of planning control. This freedom extends not only to traditional activities of government such as the construction of defence install­ ations, schools and public hospitals, but also to a multitude of land uses indis­ tinguishable in kind from private development: office buildings, TAB premises, welfare housing units, migrant accommodation flats, post office buildings, bus depots, egg-packing plants, State forests, and many others.

4.18 We make four comments on this situation. First, it seems likely that the role of the public sector will expand in Australia, both in the Federal and State spheres. The number of government departments and statutory authorities and the range of matters with which they are concerned are likely to expand rather than contract, thereby creating an ever-increasing gap in the planning structure. Secondly, the performance of public authorities in observing the spirit of planning controls is uneven. Some authorities have been punctilious in this regard; others pay no attention to planning considerations. It is hardly to be expected that

government agencies, which have been established to provide specialised services in particular fields, can evaluate all aspects of their development proposals objec­ tively. Most departmental construction is planned by engineers trained to achieve

the most economical result. But economy may be achieved only by sacrificing other planning requirements, and any cost advantage associated with a particular form of development needs to be publicly balanced against other criteria before

that development can be regarded as acceptable. Thirdly, the absence of overall planning control of public sector development raises the possibility of intergovern­ mental or interdepartmental conflict over particular projects. The resolution of such conflicts may depend not on land use planning considerations but on the relative power of particular ministers and senior public servants. Independent review of the particular projects is more likely to result in dispassionate decisions. Fourthly, public development has occasioned some bitter controversies and con­ frontations in recent years, such as the arguments over Lake Pedder, the Black Mountain telecommunications tower in Canberra, the expressway program in Sydney and the Newport Power Station in Melbourne.

4.19 There is a growing appreciation within government circles of the need to provide greater scrutiny of public development. Most State governments have thus made administrative arrangements requiring departments and authorities to prepare environmental impact statements when they make development propos-42

als. The practice varies as to public access to such documents, the right of objection to the proposed developments and the methods to be used to evaluate the proposals. But usually it is the proposing department or some other govern­

ment body which sits in judgment on objections, not always in public and not always with a requirement that it state the reasons for its decisions. Even if objec­ tions are justifiably dismissed as unfounded, such a system is hardly designed to provide satisfaction that the decisions are correct.

4.20 Recently the Australian Parliament enacted the Environment Protection (Impact of Proposals) Act 1974. This legislation provides for inquiry into the environmental aspects of a wide range of proposed public developments by a Commissioner appointed by the Minister for the Environment. The legislation ensures that any hearings on development proposals will be independently con­

ducted and that findings will be publicly announced, but we consider that it contains two weaknesses. In the first place, the legislation only applies to such cases as the Minister for the Environment determines; some public development will therefore escape its ambit. Secondly, the public hearings and findings will

generally be the responsibility of a single Commissioner, who will normally be a public servant. However able such a Commissioner may be, he can hardly achieve the width of knowledge and experience that would be encompassed in

a well-balanced, multi-member board. However intellectually honest and independ­ ent the Commissioner may be in fact, as a public servant he will not appear to be independent to the public.

4.21 The Environment Protection (Impact of Proposals) Act 1974 provides that an adverse finding at an environmental inquiry will not necessarily mean that the project must be abandoned. But it requires that the finding be published so that, if the Government decides to proceed with the proposal notwithstanding the

finding, it will be seen to take the responsibility for so doing. Under these circum­ stances, the Government will no doubt emphasise the policy reasons for its decision. The public can then form its own view as to the validity of the Govern­ ment’s action. A political sanction, the only sanction which is realistic in respect

of government decisions, thus applies.

4.22 A major difference between public and private development is that the motive for private development is frankly commercial, whereas in the case of public development it will often be claimed that the public benefits of the develop­ ment will more than offset any adverse planning or environmental effects. If only

one proposal is offered, the choice is limited to either denying permission for the development, with resulting social or economic disadvantages to the com­ munity, or suffering a development which is objectionable from a planning or environmental viewpoint. This dilemma can only be overcome by requiring public authorities to propose alternative methods of achieving the goals, so that all con­

siderations—environmental and other—may be fully weighed.

4.23 We believe that the proper principle is to require public development to be proclaimed in the same manner as private development. The development proposals should then be considered at all relevant levels of administration. There is a special need for evaluation at the regional level, where elected and appointed

members together have the task of reconciling competing views and the interests of both the public and the private sectors. Thereafter public development pro­ posals should be subject to the same right of objection as private development, with consideration at public hearings before a multi-member tribunal representing

a range of interests and disciplines. The findings of the tribunal should be public­ ly announced. Only in two respects would we make a distinction between public

43

and private development. In the first place, we would require public investment proposals to include consideration of alternative methods of carrying out proposed development. We are not, of course, ruling out the possibility that private develop­ ment proposals may also include consideration of alternative methods of develop­ ment; but we do not consider that such action needs to be obligatory. Secondly, we would recognise the right of a government to override a tribunal’s finding

by means of a special order if, for policy reasons, it sees fit.

Financial Control 4.24 In paragraphs 2.18 to 2.34 above and in Chapter IV of the First Report, we suggested that development gains and losses associated with changes in per­ mitted land use should accrue to or be borne by the public. It will be necessary for a public authority to be charged with financial responsibility for land acquis­ ition and disposal, the reservation of new use (or development) rights, and com­

pensation payments. We also proposed in the First Report (paragraphs 7.30 to 7.68) and we reaffirm below (paragraph 8.7) that certain land acquired for development should be leased rather than sold. This includes land within the Australian Capital Territory and the Northern Territory, and non-residential land being acquired or developed with finance provided by the Australian Govern­ ment. The administration of such leases, including the collection of rentals, will be a further financial task for a public authority.

4.25 We recognise that these duties may be discharged at any level of admin­ istration and that the actual destination of the revenues earned need not corres­ pond with the level at which collection takes place. The treatment of land reven­ ues is discussed in Chapter IX, but we note that the distribution of revenues is a matter of policy determination in any State or Territory which might give effect to our recommendations.

4.26 However, it is necessary for us to consider the most appropriate level for financial administration under our proposals, generally in regard to the operation of planning schemes and particularly in relation to the administration of leases. This question is also considered in Chapter IX, but here we make the general

observation that financial administration will need to be associated with, and indeed form an integral part of, the procedures adopted for purposes of develop­ ment control. We therefore envisage that financial administration will be the responsibility of the development authorities which are established to undertake different kinds of land development activity.

4.27 Land commissions (or their equivalents) have now been established in five States, and receive financial assistance from the Australian Government for purposes of land acquisition and development. These land commissions will be responsible for administering, at the State level, transactions involving land acquis­

itions and sales. Depending on the pricing policies which they adopt in making land available to regional (or local) development authorities, the land commissions will thus be in a position to make development gains or losses. The treatment of such gains or losses is discussed in Chapter IX.

4.28 For reasons explained in paragraphs 3.24 to 3.35 above, we envisage that the main responsibility for development control and leasehold administration will devolve on regional commissions. State bodies are likely to be too centralised and too remote to control development activity and administer leasehold estates effectively. We believe that State bodies should not involve themselves in such matters of detail.

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4.29 Although local authorities are capable of accepting responsibility for development control, leasehold management and the associated tasks of financial administration, we have indicated above (paragraphs 3.30 to 3.39) that we consider it desirable for these tasks to be entrusted to regional commissions rather than

to local authorities. 4.30 Insofar as financial administration is concerned, our reasons are twofold: First, in any local government area the volume of financial administration will be comparatively small. Even in the Territories and the new growth centres,

where all non-residential land will be disposed of by leasehold, the number of leases negotiated or renewed in any particular year will be modest. Information provided by the Department of the Capital Territory indicates that in the Terri­ tory the administration of non-residential leases (including allocation, documen­

tation, variation, enforcement and valuation) is currently handled by 18 officers. The number of properties in a local area likely to be affected by development orders will vary from time to time and from place to place. The number is likely to be high in areas undergoing transformation from rural to urban use or ex­

periencing significant re-development, but in most developed areas it will be insignificant. For most local councils, the administrative work would be insuffici­ ent to warrant the employment of specialist staff. Nevertheless, the tasks of finan­ cial administration and leasehold management are specialist tasks requiring train­

ed and experienced officers. We consider that, as with other specialists, they should be employed at the regional level, making their skills available in all parts of the region. 4.31 Secondly, there is an inherent danger in entrusting the administration of

a leasehold system to an elected organisation in close contact with the lessee- electors. This was one of the reasons why, in the First Report (paragraph 7.18), we rejected proposals for residential leasehold tenure. Because of the smaller number of lessees involved, the problem in relation to non-residential leasehold

is less acute. However, in many local areas commercial lessees are likely to be extremely influential in the affairs of the local councils. Many of them, indeed, will be members of local councils, and desirably so. Under circumstances where the local councils have financial responsibility for the leasehold system, there is a

distinct possibility that the councils will be persuaded to grant unwarranted con­ cessions to lessees at the expense of the public.

Covenants on Title 4.32 We have proposed that residential land be allocated by freehold grant, subject to improvement conditions and the reservation of new use (or develop­ ment) rights (see First Report, paragraph 7.27, and paragraphs 8.10 to 8.19 below).

This raises the question of enforcement. Leasehold covenants, whether positive or negative, run with the title and are enforceable against subsequent lessees. The same proposition does not hold in relation to covenants on a freehold title. It is therefore necessary to consider the present legal position within Australia, and

to ask whether any changes need to be made to the law relating to freehold covenants. 4.33 At law, the term ‘restrictive covenant’ refers to an obligation entered into by a grantee or transferee of freehold land in relation to the land itself. It is a

burden upon the land, not merely a personal obligation, and confers an interest in land upon the covenantee. As between the original parties to the covenant, no problem of enforcement arises; each has his usual contractual rights. The legal problem arises where a change of title occurs, whereby the land subject to the

covenant passes to a new owner. There is no privity of contract between the 45

covenantee and the new owner, and the covenant is enforceable only to the extent that the obligations in the covenant run with title.

4.34 The common law has imposed the following limitations upon enforce­ ability: (a) No covenant will be enforced except between the original covenantor and the original covenantee, unless it is for the protection of land or an

interest in land. Where the covenant affects freehold land, then a plain­ tiff seeking enforcement against the original covenantor must be the original covenantee, or must have land capable of benefiting from the covenant. A plaintiff seeking enforcement against a successor of the original covenantee must have land capable of benefiting from the coven­ ant3. (b) No covenant will be enforced, except as between the original parties,

unless it is negative in substance. No covenant which is positive, or which requires the expenditure of money or the doing of an act, can ever run v/ith the land4.

4.35 The consequence of the first limitation is significantly to restrict the ability of public authorities to enforce obligations required for public purposes. The facts in London County Council v. Allen afford a typical example of the situation which may arise. Allen applied for permission to open two new streets. The council approved the application conditionally upon Allen covenanting not to erect any building upon two designated plots of land. Allen entered into the re­ quired deed, the covenant being expressed to be ‘for himself, his heirs and assigns and the other persons claiming under him, and so far as practicable to bind the land . . . into whosoever hands the same may come’. He then mortgaged one plot with other land to secure a loan. Three years later the mortgage was dis­ charged and the mortgagee, with the concurrence of Allen, re-conveyed the land to Allen’s wife, who took the land with notice of the covenant. She com­ menced to erect three houses on the plot. A suit by the council to restrain the development failed, because the council was not the owner of land for the benefit of which the covenant was made. The fact that the council was the planning authority charged with protecting the public interest by retaining open space was immaterial.

4.36 Ingenious attempts have been made to overcome the limitations imposed by this rule. If the covenantee has happened to own land in close proximity, the covenant has sometimes been annexed to that land. In the case of covenants with councils, the covenants have even been attached to public roads. However, such action will normally be ineffective, because it is not easy to demonstrate that a limitation on the use of particular land will benefit a particular roadway.

4.37 Two New South Wales cases illustrate the problem. In Lane Cove Muni­ cipal Council v. H. W. Hurdis Ply. Limited,5 the Minister had allowed a planning appeal by Hurdis, who sought permission to erect a shed and office for use in connection with his timber business, conditionally upon his entering into a deed in favour of the council by which he covenanted to discontinue the use of the timber yard at the expiration of five years. A deed in that form was duly execu­ ted, the benefit of the deed being made appurtenant to the two public streets (vested in the council) adjoining the covenantor’s land. The shed and office were then erected. The covenantor formed a company which took over the business.

3. London C ounty C ouncil v. A llen (1 9 1 4 ) 3 K.B., 642.

4. A usterberry v. O ldham Corporation (1 8 8 5 ) 29 Ch. D ., 7 50; and Zetland v. D river (1 9 3 9 ) Ch. 1 a t p. 8.

5. (1 9 5 5 ) 55 S.R. (N .S .W .), 434.

The use was not discontinued at the expiration of five years, whereupon the council sought an injunction to restrain breach of the covenant. The suit failed because, as a matter of fact, it did not benefit the whole of both streets.

4.38 In the second case6, the land to which the benefit was attached was more limited. The Commissioner for Main Roads had, over a lengthy period, acquired land for a relocation of a portion of a main road. In due course the new road was opened and its site was thereby vested in the council under section 232 of the Local Government Act 1919, the Commissioner being left with some small

residue parcels. One of these he sold but, wishing to prevent a ribbon develop­ ment, he placed it under a restrictive covenant whereby the transferee company for itself, its successor and assigns covenanted with the Commissioner not to use

the land or any building erected thereon for other than residential purposes. The land to which the benefit was annexed was the land which the Commissioner had previously acquired, less the land the subject of the transfer. Certain of this land now formed the road which was vested in the council, and the remainder comprised two small triangles still owned by the Commissioner. The purchaser

resold the land and it came into the hands of the respondent company, which proposed to erect a service station. A suit by the Commissioner to restrain breach of the covenant failed for reasons summarised by Mr Justice Walsh as follows:

‘The first is that at the time of the taking of the covenant the appellant had not and has not thereafter had the title to the major part of the land to which the benefit was expressed to be appurtenant, that is the land upon which runs the road. Secondly, such rights as the appellant still had and has as a statutory

authority in relation to the said land are not such as to fulfil the requirement for the enforcement of such a covenant, that the land benefited should ‘belong to’ the plaintiff. Thirdly, in respect of the two small pieces of land which the appellant did and does retain, which were included in the lands expressed to

be benefited, the covenant was not capable of providing a relevant benefit to those lands or to the use and enjoyment of them by the appellant or by any successors in title who might acquire them.’7 4.39 It is interesting to note the comment, made by the presiding Judge and endorsed by each of the other members of the Court, as to the need for some change in the law:

Ί would take the opportunity to repeat what Hardie, J., said in the judgment under appeal: “The outcome of the litigation in that case [viz. Lane Cove Municipal Council v. H. W. Hurdis Pty. Limited] and the litigation in the instant case should alert the legislature to the need for modern legislation permitting

of public bodies and authorities, who are disposing of surplus lands, imposing restrictions on user which are fair and reasonable to the purchaser and subsequent owners, having regard to the price paid and operate in the public interest in

accordance with the intention of the parties to the sale transaction.” Here there is a covenant upon the title capable of being discovered on search by a purchaser which this Court has held it has no power to enforce. It is an anomalous state of affairs that the statutory body charged with the con­

struction and maintenance of main roads in a period when death and injury of persons using main roads is a daily incident of life in our society, should lack power to impose covenants to enable this death and bloodshed to be minimised. It is for the Courts to enforce the law as it is but I would respectfully suggest

that the matters involved in this litigation and restrictive covenants particularly require earnest legislative consideration.’8

6. Com missioner for Main Roads t>. B.P. Australia L im ited (1 9 6 4 ) 65 S.R. (N .S .W .) 233.

7. Thid., p. 257.

8. Ibid., p. 238.

47

4.40 In New South Wales, the practice has developed of requiring persons covenanting as to some future use of land to covenant in addition: (a) not to alienate the land except to a person who has first entered into a deed in favour of the relevant authority in similar terms;

(b) to permit the public authority to lodge and maintain a caveat against the title to the land claiming an estate or interest therein; (c) to concede the validity of any such caveat.

4.41 So far as we are aware, there has been no judicial determination of the effect of such covenants; in the absence of such a decision it is enough for us to point out that their validity is open to serious question. In particular, it is difficult to see that the type of covenant usually taken creates a caveatable inter­ est or that the concession on that matter is irrevocable. However, putting aside any legal problems, the course adopted is objectionable on a number of prac­ tical grounds. First, it is not fool-proof. If a covenantor does in fact dispose of his land without first requiring the new deed, or if this is done by someone else, such as a mortgagee, then the purchaser will not be bound by the earlier deed or obliged to execute a new deed. The public authority might obtain nominal damages but rarely more, since it would be unlikely to show any pecuniary loss to itself. Secondly, the practice affronts the basic concept of the Torrens system that, so far as possible, all information regarding the land should be noted on the register and be discoverable by search. Any necessity to seek out information by having to inspect unregistered deeds made by other parties is to be deplored. Thirdly, the procedure is highly inconvenient. If a caveat is lodged against the title, consent must be granted by the caveator to the registration of any dealing, however remote from the covenant. The solicitor acting for a public authority which has taken any significant number of covenants will find himself constantly troubled by requests to consent to mortgages, discharges of mortgages, leases and so on. Furthermore, on every transfer of the fee simple he will be required to prepare, have executed and stamp a new deed and register a new caveat.

4.42 In South Australia, an attempt has been made to overcome the problem by using the device of a Memorandum of Encumbrance. This takes the form of an encumbrance of the title with a debt involving an annual rent charge of ten cents in perpetuity (if demanded), subject to a proviso that the charge will not be

demanded if certain covenants (both positive and negative in form) are observed. The encumbrance is registrable on the title and avoids the inconveniences in­ volved in maintaining a caveat, but the legal efficacy of a perpetual rent charge is open to challenge.

4.43 The second limitation noted in paragraph 4.34 is that the covenant must be negative in substance. The leading case of Austerberry v. Oldham Corporation9 demonstrates the position. A landowner conveyed land to trustees by a deed of settlement, under which they agreed to open the land to the public for use as a toll road and to maintain the road. The landowner sold his adjoining land to the plaintiff and the trustees sold the road to the defendant corporation, each of the purchasers being cognisant of the covenant to maintain. A suit to compel the corporation to maintain the road failed, because the covenant was a positive one and incapable of running with the title to the land.

4.44 What public benefit is conferred by the limitation we have mentioned? None is known to us. In each of the cases to which we have referred (and many others could be added) the only result of the rule has been to allow persons

9. C ited in paragraph 4.34 above.

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taking land subject to a covenant voluntarily made, with knowledge of the coven­ ant, to ignore the covenant at will. The common law rules were developed in England under conditions very different from those in modern Australia. There was little planning or building control; little appreciation of the public importance

of effective land-use law; an emphasis on private property rights, especially in land; and a system of title dependent on a multitude of prior dealings (the Tor­ rens system providing for a single document of title was unknown). In such cir­

cumstances, it is perhaps understandable that Judges were disinclined to afford protection to covenants, perhaps contained in other documents, which cut down property rights in favour of persons not themselves landowners.

4.45 The limitations of the present law under current conditions is best illustrated by a few examples:

(a) A council has some land which it desires to be developed as a neigh­ bourhood shopping centre. Each allotment is to be separately owned but it is important, both to the public and to other purchasers, that development occur within a defined time so that the centre will be quickly established. The council does not have the funds to build the shops itself,

or does not wish to do so. It merely seeks to dispose of each site with planning approval attached. How does it ensure that each building will be completed within the required time? The obligation is a positive one and will not run with a freehold title. If the land is resold the purchaser will be free to disregard his predecessor’s commitment. (b) A council (or an historic buildings authority or a National Trust) pur­

chases an old building and restores it. It is useful for private purposes and it is desirable that it be resold to permit such use and to recoup the capital outlay. It is also desirable to ensure that the building is not demolished or externally altered, at least without permission. The pur­

chaser is willing to so covenant but the problem is how to make this binding on his successors in title. No other land of the covenantee is affected by the covenant. (c) A person owns a farm which he desires to sell. On the farm is an

historic homestead, in which the owner wishes to continue to reside and which he proposes, upon his death, to leave to a public authority for public enjoyment. To do this a subdivision is required, but the land

area is such that it would not normally be permitted. The planning authority is willing to allow the subdivision if it can be sure that this is the true purpose, and not merely a device to procure subdivisional

approval. The problem is how to ensure that, after subdivision, the owner or his executors will not renege on the arrangement and sell the homestead lot. (d) An industrialist has an existing factory in an area designated for eventual

residential development. By reason of technical changes in his industry, or increasing demand for his products, he will need to move to new premises within about ten years, but at present such a move would be premature. In the meantime, he wishes to make some small extensions to improve the factory’s efficiency. If this is agreed he is prepared to coven­ ant to demolish the factory at the end of ten years. The planning authority

has no objection to the extension provided that it will not further en­ trench the industrial use. The problem is how to ensure that the indus­ trial use will be discontinued and the factory demolished at the end

of ten years.

49

(e) In a major city there is an historic building which the council wishes to preserve. The owner is willing to retain it, and to maintain it in good order, provided that the council will allow him to transfer to another site the floor space entitlement for the historic building site. The problem is how to ensure that, after the other building is approved, the owner will indeed retain and maintain the historic building.

4.46 As with covenants, the common law imposed a requirement of a dominant tenement, land having benefit, in the case of easements. In all States except South Australia, this requirement has been relaxed so as to permit the creation

of easements in favour of public authorities. The form used substantially follows that introduced in 1930 into the New South Wales Conveyancing Act 191910:

‘Section 88A (1) It shall be, and shall be deemed always to have been, possible— (a) to create in favour of the Crown or of any public or local authority con­ stituted by Act of Parliament an easement without a dominant tenement;

(aa) to assure to the Crown or any public or local authority constituted by Act of Parliament any easement created in pursuance of the provisions of paragraph (a) of this subsection; (b) to make appurtenant or to annex to an easement another easement or

the benefit of a restriction as to the user of land.’ 4.47 Despite the comments made by the Supreme Court of New South Wales eleven years ago (noted in paragraph 4.39 above), no general change of the kind proposed has occurred in any State in respect of the law relating to restrictive covenants. In this respect Australia lags behind the United Kingdom. As early

as 1937, the English National Trust succeeded in having a provision inserted into its Act to validate a restrictive covenant made in favour of the Trust, without any requirement that the Trust own land to be benefited thereby. As a result, it has been able to obtain valid covenants ensuring the preservation of numerous buildings and of some of England’s finest countryside. The provision was extended to local authorities in the Green Belt (London and Counties) Act 1938, the Housing A ct 1957 and the Town and Country Planning Act 1962.

4.48 The New South Wales Conveyancing A ct was amended in 1972 to empower the Governor, by notice in the Gazette, to restrict the user of land vested in the Crown or a public authority and to provide for registration on the title of such restriction. However, this does not meet the problem we have described or provide a method of dealing with any of the examples we have quoted. What is required is extension of the provision to privately-owned land. The current planning legis­ lation, the Town and Country Planning Act 1971, contains a general provision

(s.52) empowering local planning authorities to enter into an agreement with any person interested in land in their area for the purpose of restricting or regulating the development or use of the land, either permanently or during such period as may be prescribed by the agreement. Such an agreement is enforceable by the authority against successors in title as if the local authority were possessed of adjacent land having the benefit of such agreement.

4.49 So far as we are aware, the only Australian legislation which makes provision for covenants in gross, that is covenants without a dominant tenement, is the Western Australian National Trust of Australia Act 1964, as amended.

10. T he relevant statutes in other States are: V ictoria — M elbourne and M etropolitan Board of W orks A ct 1958, as am ended, S.232A; Q ueensland — Real Property A c t 1861, as am ended, s .5 1 ( 2 ) ; W estern A ustralia — Public W orks A c t 1902, as am ended, S.33A; Tasm ania — C onveyancing and L aw of

Property A c t 1884, as am ended, S.90A.

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In 1970 the Western Australian Parliament added S.21A to that Act so as to empower the Trust to accept a covenant ‘in like manner and to the like extent as if the Trust were possessed of or entitled to or interested in adjacent land and as if the covenant had been and had been expressed to be entered into for the benefit of that adjacent land’. Provision was made for the registration of such covenants and the section went on to provide that such a covenant shall, unless

a contrary intention is expressed, be deemed to be made by the covenantor on behalf of himself, his successors in title and the persons deriving title under him or them.

4.50 As in the case of the United Kingdom legislation, the special Western Australian provision made for the National Trust has shown the way, but to date Australian Parliaments have not taken the second step of permitting covenants in gross in favour of public authorities. Moreover the Western Australian pro­ vision does not provide for positive covenants.

4.51 Even the United Kingdom legislation does not displace the common law rule against positive covenants. Is there any objection in principle to such coven­ ants? Perhaps so if title depends on earlier deeds which may be lost, because a

purchaser may unwittingly acquire some obligation. Another possible objection is that the original purpose of the obligation may cease to be relevant and it then becomes an unnecessary burden. Under modern conditions these objections dis­ appear. Legislation already provides jurisdiction to the Courts to modify or extin­

guish obligations under obsolete covenants. The Torrens system provides a single document upon which relevant covenants may be endorsed, and which is retained in a public register. Search will readily disclose incidents of ownership, positive or negative. Moreover, contemporary landowners are familiar with the notion that

acquisition of land brings with it positive obligations, both public (payment of rates and taxes, liability to keep down noxious weeds and animals) and private (liability for dividing fences, duties as occupiers, etc.). It is difficult to see any reason why a purchaser should not be obliged to accept, with the land, a positive contractual obligation voluntarily accepted by his predecessor; after all, he does

not have to buy.

Proposal for Covenants in Gross

4.52 In paragraph 7.27 of the First Report, we recommended that land disposed of for residential purposes should be granted on the basis of fee simple titles subject to improvement conditions and the reservation of development (or new use) rights. We suggested that such grants be designated residential grants or residential freeholds. If this recommendation is adopted, it will be necessary to ensure that the development restrictions imposed on such grants can be enforced.

Quite apart from this requirement, however, it will be clear from the foregoing discussion that we believe that legislation is needed to provide for covenants in gross on Torrens title land, if made in favour of a public authority and whether positive or negative in substance. The drafting of such a provision should cause

little difficulty. The following form, which closely follows the legislation on ease­ ments in gross referred to above, would suffice:

(1) It shall be, and shall be deemed always to have been, possible to create by covenant, contained in a registered dealing in favour of a prescribed authority, an enforceable obligation or restriction relating to the land referred to in such dealing notwithstanding:

(a) that there be no land benefited by the said obligation or restriction or that the prescribed authority has no interest in any land benefited thereby;

51

(b) that the obligation or restriction requires the doing of some positive act or acts. (2) Any such obligation or restriction shall be endorsed upon the Certificate of Title of the said land and shall be enforceable by the prescribed authority against the registered proprietor for the time being of the said land as if made between the prescribed authority and the registered proprietor. (3) In this section the term ‘prescribed authority’ means the Crown, any statutory body representing the Crown, any public authority constituted by Act of Parlia­ ment and any local authority. (4) This section applies and shall be deemed always to apply to the land under the provisions of the Real Property Act, etc. [as the case may be], 4.53 Two further comments may be made in respect of the above proposal. First, it may be considered appropriate to enlarge the definition of ‘prescribed authority’, so as to include organisations constituted by statute within the particu­ lar State or Territory and charged with the duty of protecting and preserving lands, buildings, etc. We have in mind organisations such as the relevant division of the National Trust. Secondly, it will be desirable to amend the relevant valuation legislation so as to ensure that, in valuing land for rating and taxing purposes, regard is had to the limitations imposed by such covenants. At present, restrictive covenants are disregarded in valuations of the fee simple interest. This is probably justifiable in relation to private covenants, because rates could otherwise be saved by agreements made between neighbours revocable at their convenience. However, there is no justification for ignoring a covenant made with

a public authority, taken in the perceived public interest and potentially diminish­ ing the value of the land. The English experience indicates that many owners will enter into a binding obligation with a public authority, to achieve some planning goal but with retention of private ownership, if they are thereby able

to ease the burden of their rates and taxes.

4.54 If the legislation suggested above were to be enacted, it would remove any legal difficulty about the concept of restrictive residential freehold embodied in our proposals for residential freehold titles. The restriction on use suggested in paragraph 8.19 below would be enforceable, notwithstanding the absence of any land benefited thereby.

4.55 We have sought to show that legislation to permit positive covenants is desirable even under present circumstances. The legislation could also be used to support improvement covenants after grant of freehold title to residential land. In fact, our recommendation in this regard, at paragraphs 8.16 to 8.18 below, is for a different procedure. That recommendation stems from the peculiar prac­ tical difficulty of enforcing a covenant to erect a house against an ordinary home builder. Damages would clearly be inappropriate and an injunction would prob­ ably be refused on discretionary grounds, because of the burden it would throw upon the defendant. If the defendant simply had no money then no injunction could achieve compliance with the covenant. Certainly a positive covenant could require resale of the land, but this would have implications for a mortgagee and the development authority which has disposed of the land. In this special case, therefore, we suggest a procedure which will withhold the actual grant of title until

after completion of improvements.

4.56 Similar considerations may affect the use of positive covenants in other cases, but not to such an extent as to render the proposed reform unnecessary. Under the current devices of deeds (paragraphs 4.40 to 4.41) and encumbrances (paragraph 4.42), positive obligations are undertaken, sometimes supported by bonds. Leases normally include major positive obligations. If there is no diffi-

52

eulty occasioned by lack of privity of contract, these obligations are readily enforceable. There is therefore no reason to doubt the ability of the Courts to mould orders to the requirements of particular cases, outside the category of private home builders, once the common law limitations on covenants are

removed. Whilst we accept that positive covenants will need to be carefully drafted, their validation will be a desirable step in achieving flexible land use control.

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V D E V E L O PM E N T PR O CED U R ES

Development Proposals

5.1 Development initiatives may come from either public authorities or private interests. As indicated in Chapter IV, we believe it to be a proper principle that, regardless of the source of an initiative, the process of planning consider­ ation should be the same. In the case of a public initiative, the proposal may be for development of a public service nature, such as a new road, a new sewer­ age farm or a new post office; it may be for some facility intended for private use or exploitation whose need has been recognised or determined by research or planning. The proposal may come from the Australian Government, a State government or Territorial administration, a regional commission, a local council or some statutory body. Similarly, a private initiative may come from some

person or organisation desiring to profit from the development or recognising a need in the area for some additional facility.

5.2 As indicated in Chapter III, we envisage that land use planning at the national and State levels will be exercised by formulating strategic plans and specifying guidelines which will become the basis for consideration of specific development proposals at the regional level. We have it in mind that all develop­

ment proposals, including proposals for public development by a government or local council, will be submitted to and processed by a regional commission. The regional commission may itself acquire land and either undertake develop­ ment directly or make the land available for private development. But all development proposals, including those made by public authorities and by the regional commission itself, should be required to obtain planning approval in accordance with the procedures described below (see paragraphs 5.11 to 5.21). We have it in mind that all development proposals will need to be consistent with the spirit of regional land use plans, which themselves will be drawn up by regional commissions in accordance with guidelines laid down by State or Territorial planning authorities (and which will presumably require approval

by those authorities). Public development proposals may relate either to existing public land or to land which it is proposed the regional commission will acquire following the issuance of a development order (see paragraph 5.22 below). Private development proposals may relate either to land which is already owned by the developer (or which he proposes to acquire from private owners) or to land which the regional commission will acquire and make available for private

development in the manner described in the following paragraphs.

Land Acquisition

5.3 It will be the responsibility of the regional commission to decide whether it will acquire land in advance of development. In many cases this will be the preferred course, particularly where a number of separate ownerships are involved or where some existing owners are known to be unwilling to negotiate for the direct sale of their land to a developer. In paragraph 5.26 of the First Report, we listed a number of circumstances relevant in determining whether public acquisi­ tion is desirable. These include:

(a) the phase of the development cycle; (b) the location and scale of the area for development;

54

(c) the number of landowners whose land is affected by the development; (d) the purpose of the development; (e) the availability of finance; (f) the level of demand relative to supply of particular categories of serviced

land in the area; (g) the stability of land prices; (h) the comparative advantages of public and private development initiatives from the point of view of such factors as quality of design, costs, expedi­

tion, efficiency and control. 5.4 In the First Report (paragraphs 5.28 to 5.29), we predicated those situations where large-scale acquisition is likely to be preferable. We suggested that, where rural land is being assembled from many owners for conversion to urban use

in a new growth centre, and where finances permit, direct acquisition is generally likely to be advantageous. There are three major reasons for this view: (a) The number of separate ownerships involved will make private develop­ ment under a development order unwieldy.

(b) The lands to be used for non-residential purposes must, under our recom­ mendations, be retained under public ownership and leased. Acquisition of the freehold of those lands is therefore necessary in any case. (c) Ownership of the freehold enables the performance of a developer to be

controlled more effectively, in relation to the time of development and the price of developed lots or residential units, than is possible under a private development order. In a growth centre, where a continuous supply of reasonably priced lots and residential units is essential to success, this

element may be of critical importance. 5.5 We have previously suggested that public acquisition of land may not be necessary or desirable in the re-development of existing cities. Adherence to a particular time schedule is, in such cases, less critical and the financial outlay

for land acquisition, relative to area, so much greater. 5.6 Since the First Report was published, the scale of public acquisition for new urban areas has greatly increased. Land commissions or urban land councils are now operating in all States except Queensland, and we understand that an agreement to establish a similar body in Queensland is imminent1. The State governments have apparently accepted the principle that rural land required for major urban development (whether public or private) should first be publicly acquired. This understanding and the absence of submissions criticising our earlier view make us believe that the need for public acquisition in these circumstances

is now widely accepted. We consider that this course will invariably be adopted in future whenever any significant tract of rural land is proposed for urban use. 5.7 Where a land commission (or its equivalent) is operating at the State level, public land acquisition may be undertaken in the first place by the land com­

mission. Under these circumstances, land may be acquired by the regional com­ mission from the land commission at prices determined in accordance with the policy of the State government (see paragraphs 9.39 to 9.54 below). 5.8 If it is decided that the freehold of privately owned land should be publicly

acquired by the regional commission prior to private development, the com­ mission should acquire at the higher of adjusted base date or existing use value, that is at the same price as will be paid for land required for public use or development.

1. 1975-76 B udget Papers No. 1, Budget Speech 1975-76, Australian G overnm ent Publishing Service, C an­ berra, 1975, p. 60.

55

5.9 The fact that the land has been publicly acquired does not mean that it must be publicly developed. On the contrary, as explained in paragraphs 3.14 to 3.17 above, we believe that in the overwhelming majority of cases actual development can best be left to the private sector. The role of the regional com­ mission should be to make available suitable sites for development in accordance with the procedures suggested in the next section. But by buying land at current acquisition value (adjusted base date or existing use value) and making it avail­ able on the basis of its new use value, the regional commission will collect for the public the increment in value associated with the change in land use.

5.10 The actual mechanics of disposal will depend upon circumstances. The most satisfactory course will usually be for the regional commission to put the land out to auction. In the case of non-residential land, a lease will be offered. This should comply with the requirements set out in paragraphs 7.30 to 7.67 of the First Report, as clarified in paragraphs 8.20 to 8.39 below. Residential land should be offered on the restricted freehold basis we recommend in paragraph 7.27 of the First Report, subject to the safeguards set out in paragraphs 8.10 to 8.19 below. As the regional development authority, the regional commission will itself initiate many development proposals, especially in the new urban and regional growth centres. It will do this by preparing and publishing draft develop­ ment schemes. In other cases it will make land available to public and private developers, who may also submit development proposals relating to land which they already own or which they propose to acquire.

Draft Development Scheme 5.11 All development proposals by public authorities or private interests should be submitted to the regional commission in the form of draft development schemes. A draft development scheme should include reference to:

(a) a description of the nature, location and intensity of development (it is not necessary to give the design of particular buildings but parameters, that is maximum building dimensions, plot ratios, population densities, traffic arrangements, etc. need to be specified); (b) the period within which the development will be commenced; (c) whether land has been acquired from the regional commission with new

use rights and, if not, the state of the title and the interest of the

applicant in the land (if any); (d) any proposed contribution to public facilities (not being a usual develop­ ment requirement) as an offset against the value of new use rights; (e) in the case of proposed public works, the purpose of the development

and the alternative methods available for achieving that purpose; and (f) such other relevant planning matters as may be considered necessary for purposes of evaluation of that scheme.

5.12 We envisage that a draft development scheme may relate to a particular site but that in general it should not; it should relate to an area which, for development or re-development purposes, may fairly be regarded as a planning unit. There should be consultation between the regional commission and the public or private developer at the drafting stage, that is before the draft develop­ ment scheme is finally submitted. This will help to ensure that mutually accept­ able modifications are incorporated in the scheme and thereby obviate the need for public hearings (see paragraph 5.17 below) in circumstances where disagree­

ments between the commission and the developer are capable of being resolved without reference to the regional planning tribunal. We envisage that, if agree-56

ment cannot be reached in this way, the developer will submit his scheme in accordance with paragraph 5.11 and the regional commission will record an objection as indicated in paragraph 5.15 below.

5.13 Upon receipt of a draft development scheme, the regional commission should consider it first to ensure that it is in the proper form and second to nominate the planning conditions it intends to specify if the draft scheme is approved. At this stage, only the normal planning conditions should be specified.

Where the land has not already been acquired from the regional commission for a payment which reflects its development value, assessment of the value of new use rights should be left until the final form of the development is determined.

Exhibition and Objection 5.14 The draft development scheme and draft planning conditions should then be publicly exhibited by the regional commission, written notification being supplied to the State or Territorial planning authority, the local council and

owners of all land within a specified distance from the subject site. This notifi­ cation should draw attention to the draft scheme and the place of public exhi­ bition. In addition, the regional commission should be required to advertise publicly the existence of the draft scheme and its place of exhibition.

5.15 Legislation should give any interested person or organisation the right to object to a draft development scheme or to the associated draft planning conditions within, say, one month. If, for example, the applicant is dissatisfied with the draft planning conditions he may object. If some person, private organ­ isation or public authority (including the local council) opposes either the draft scheme or some aspect of the conditions, then that party may object. It is a fundamental feature of our proposals that the regional commission will itself evaluate every draft planning scheme which it does not initiate itself, and that it

will record an objection if it is dissatisfied about any aspect of the scheme as finally submitted (see also paragraph 5.12 above).

Development Order 5.16 If no objection is received, then the regional commission should be em­ powered to approve the draft scheme and confirm the draft planning conditions without the necessity of a public hearing. The approval and confirmation should

be notified by issuing a development order.

Public Hearing: Regional Planning Tribunal 5.17 If any objection is received, then the regional commission should be re­ quired to refer the matter to public hearing before an independent regional plan­

ning tribunal. The tribunal’s decision should be final, subject to a right of appeal to the Supreme Court of the relevant State or Territory on any significant ques­ tion of law.

5.18 We envisage that the tribunal constituted to hear such objections will be similar in form to the tribunals or boards currently existing in most States to determine planning appeals. Indeed, we assume that such tribunals or boards will be adapted to this enlarged role. Those bodies generally include a legally quali­

fied chairman, a qualified town planner member and another member qualified in a particular discipline relevant to the nature of the development, such members being selected from panels nominated by relevant professional institutes. For example, in the case of a development proposal involving the erection of build­

57

ings, the third member may be an architect; in the case of a new road or bridge he may be a civil engineer. Perhaps it will be necessary to take cognisance of the enlarged role of the tribunal by providing for additional panels, representative of a wider range of disciplines and interests. This will be a matter for the par­ ticular State government or Territorial administration.

5.19 Legislation should instruct the tribunal to hear and consider all objections to the draft development scheme and draft planning conditions, and all sub­ missions as to the desirability of any alternative proposals, by reference to speci­ fied planning criteria. If the tribunal concludes that the development should proceed, it should be empowered to approve the draft development scheme and confirm the draft planning conditions, with such amendments as it considers proper. The regional commission will then issue a development order to give effect

to the tribunal’s decision. If the tribunal is of the opinion that the draft develop­ ment scheme should not be implemented, then it should disallow the scheme. Thereafter the applicant will be precluded from proceeding with the development.

But after the lapse of a prescribed time interval he will be free to present a different proposal or even to revive the rejected draft development scheme, if a change of circumstances warrants such action at a later date.

5.20 As indicated in paragraph 4.23 above, we envisage an exception from the above principle in the case of development proposed by the Australian Government, a State government or a Territorial administration. In such a case legislation might provide that, by some formal means such as notice in the Government Gazette, the regional commission could be required to issue a devel­ opment order, notwithstanding disallowance of the draft development scheme

by the tribunal. However, we believe that, in such cases, the legislation should require publication of the tribunal’s decision and its reasons.

5.21 There are three major differences between the public hearings we have proposed and existing proceedings. In the first place, in the majority of States and Territories it is only the disappointed developer who may appeal. Persons or organisations opposing a development proposal (if they succeed in learning about it in time) must rely upon the planning authority accepting their view. If the planning authority grants a consent there is no legal remedy available to them; it is no doubt this which has given rise to ‘green bans’ or ‘black bans’ and other forms of confrontation. Secondly, the procedure we have recommended requires governments and public authorities to submit their proposals to the same scrutiny as private developers. Public development proposals may still be adopted in the face of objections, but we think it likely that the proposals will be better prepared, and buildings and works more thoughtfully designed, if it is known that they must run the gauntlet of public criticism and objection. In the private sector, experience shows that buildings are better designed where the developer thinks it likely that consent may be refused by the planning author­ ity and that an appeal may be necessary. The same human characteristics may be expected to induce designers of public developments to exert similar care and effort. Thirdly, our proposal differs from the present system in requiring and encouraging active consideration of alternative locations or forms of public development. Without this, it is impossible for a tribunal to make a rational decision. If, for example, a proposal is made for a new airport or a new express­ way, and evidence is presented that the facility is necessary in the national or regional interest, then the tribunal will be able to weigh the alternatives so as to balance the community advantage in selecting a particular site, form or intensity of development against local disadvantage. We accept that in cases

58

of major planning significance this will mean a wide-ranging inquiry. In these circumstances, we regard a wide-ranging inquiry as being not only acceptable but desirable. If regional planning guidelines have been formulated carefully following public discussion, proposals which meet the guidelines should rarely

encounter opposition. We do not think we are unduly optimistic in suggesting that the total number of hearings may be less than the present number of planning appeals.

Implementation: Payment for New Use Rights 5.22 Once a draft development scheme has been made the subject of a develop­ ment order by the regional commission, the question of implementation will arise. If the proposed development is a public project on land not already under

public ownership, the regional commission will acquire the land on the basis set out in paragraph 2.35 above (that is by paying the higher of the adjusted base date value and the existing use value) and lease it to the developing author­ ity. In paragraphs 8.32 to 8.39 below, we suggest the basis upon which this should

be done.

5.23 If the development order relates to proposed private development on land which has not already been acquired by the regional commission and made avail­ able to the private developer, it will be necessary for the regional commission to

decide whether to acquire the land or merely to require payment for the new use rights. If it is decided that public acquisition is unnecessary, the present owner should be allowed either to develop the land himself in accordance with the development order or to sell to a developer. If the owner decides to develop

the land himself, he must pay to the regional commission, acting on behalf of the community, the value of the new use rights, that is, the difference between the value of the land with the rights and obligations attached by the development order and the value of the land on an acquisition basis (the higher of the adjusted

base date and existing use values). Alternatively, the owner may freely negotiate with the developer and sell on such basis as he chooses, subject to two important principles. First, regardless of the price which the developer pays to the owner, the developer must pay to the regional commission the value of the new use

rights. This obligation will deter the developer from offering the landowner significantly more than the acquisition value; otherwise, he will be paying twice for the development potential. Secondly, it will be essential for the regional commission to be prepared to use compulsory acquisition powers so as to

prevent a landowner, in such a case, holding out for a figure which in fact represents portion of the development value of the land. Previous attempts to collect the ‘betterment value’ associated with planning changes have foundered on the failure of governments to support developers in acquisition. If a govern­

ment levies betterment, in whatever form, but leaves it to developers to negotiate for the land on the open market, the situation inevitably arises that the existing owners demand from developer-purchasers a sum equal to any betterment tax they have to pay. Because the landowners are in a monopolistic position and

because the developers must have the land, the developers have no option but to agree to these terms. If, on the other hand, it is known that a public authority will step in and acquire the land at its value without betterment indemnity, then landowners have no choice but to sell on that basis.

5.24 We suggest that, whenever a regional commission decides that public acquis­ ition is not inherently necessary prior to development, a planning condition should be included in the development order with the purpose of ensuring that the

59

development value accrues to the public sector. This condition could take the form of a requirement that the owner either satisfies the commission that he intends to develop the land himself or sells the land within a designated period to a developer who is able to satisfy the commission to the same effect. The commission should reserve the right, if this condition is not met, to reverse its earlier intention and publicly acquire. We consider that knowledge that this step will be taken will prevent attempts by owners to demand prices significantly in excess of acquisition value.

5.25 We emphasise that it is essential that proper provision be made for ade­ quate compensation to be paid to owners whose land is compulsorily acquired. If existing compensation law is not substantially amended, public acquisition will often be inequitable and, if it is for a purpose which will ultimately confer private commercial advantage, politically unacceptable. Because of this, we be­ lieve that compensation should err on the side of generosity; we take up this question at some length in Chapter VI. If the proposals we make there are adopted, we believe that there will be no unfairness in publicly acquiring land needed for development, public or private.

5.26 As noted in paragraph 5.23, if private ownership is to continue it will be necessary for the regional commission to secure payment for the new use right. Payment need not be required in cash, but it must be adequately secured before the developer becomes entitled to proceed. We suggest that legislation be enacted to provide for the regional commission to receive either payment or security for payment before gazetting the development order. The specification of non-cash benefits is likely to present a number of problems, which can only

be overcome by suitable covenants on the title; these problems were discussed in Chapter IV above. 5.27 Once a development order has been confirmed and gazetted, the regional commission should notify the local council of the terms of the order and the conditions imposed. It should then be the responsibility of the local council to ensure that the development takes place as designated, to check the plans sub­ mitted to ensure compliance with the conditions specified in the development order, and to supervise the construction or work. The regional commission should not be involved in these detailed matters.

Enforcement 5.28 Legislation providing for statutory planning commonly contains penalty provisions. Any contravention of an ordinance, by-law or interim development order, including failure to comply with a condition of consent, is an offence punishable by fine. 5.29 In the case of illegal land use, such a remedy may be quite inadequate; it will often pay an occupier to bear the fine, however often imposed, and to continue profitably to exploit the land. To meet such cases the Equity Courts have developed the remedy of injunction, which takes the form of a specific

order to a defendant to do or to refrain from doing some act. Failure to comply with such an order involves contempt of Court, which may give rise to attach­ ment (arrest) of an individual or sequestration of the assets of a company. In practice, an injunction is very rarely disobeyed. 5.30 The common law imposes strict limits on the persons who may approach the Court for an injunction. The Attorney-General of the relevant State may do so as representative of the Crown, either of his own motion or on the relation of a private individual. The decision of the Attorney-General to sue or to permit

60

the suit, or the contrary, may be influenced by political motives2. There is no procedure for review of the manner in which the Attorney-General exercises his discretion3, and no legal obligation upon him to furnish his reasons. In any case where the actions of his government or its statutory authorities are impugned, an Attorney-General displays a high degree of public spirit and political integrity

if he allows a suit to proceed.

5.31 Unless there is some other express statutory provision, a suit by any other plaintiff is competent only if that plaintiff can show special damage. He must show either that the interference with the public right is such that some private right of his own is simultaneously affected; or that, although no private

right has been infringed, he has suffered special damage peculiar to himself from the interference with the public right4. A person who simply wishes to see a public reserve protected, a river unpolluted or a Crown forest retained does not qualify under this rule.

5.32 This limitation binds even public authorities. Thus, in the absence of some special legislation, a council has no more standing to restrain a breach of planning legislation than anyone else. Special legislation has been enacted in some States to place councils in the same position as the Attorney-General,

relative to enforcement of planning restrictions5.

5.33 It is necessary to ensure that an effective remedy is available, by way of injunction, for breach of the conditions of a development order (paragraph 5.27 above) or for breach of a restrictive covenant in gross (paragraph 4.51). The primary enforcement authority should be the local council but, to meet situations

of regional importance or where the local council fails to act, legislation should also grant standing to regional commissions.

5.34 A question arises as to the utility of the general rule limiting the standing of plaintiffs to seek an injunction restraining a breach of the law. The wider issue, applicable to legislation of all types, is beyond our immediate concern, but it is necessary for us to consider the matter insofar as it relates to legal

objections relating to land use. This is because we are concerned with the management of land for urban purposes and are required to consider the rights of neighbours.

5.35 The rule as to standing referred to in paragraph 5.31 is subject to a further limitation. Even if a plaintiff can show that a breach of the law by the defend­ ant occasions him special damage, he may not obtain an injunction unless the Court first determines that the statute confers rights on individuals, as distinct from merely imposing a public duty. Planning legislation is normally of the

latter category, thereby preventing action even by especially damaged persons. For this reason the Victorian Supreme Court refused, in a suit by a company against a competitor, to restrain an admitted breach of an interim development order6.

5.36 What useful purpose is served by such restrictive rules? Prima facie the law should be enforced; it is difficult to see virtue in a rule limiting the juris­ diction of the Courts to secure observance of the law. Two possible justifications

2. Cf. H elicopter Utilities Pty. L im ited v. Australian N ational Airlines C om mission (1 9 6 1 ) 80 W .N . (N .S .W ) 48. This was a case w here the Com m onw ealth A ttorney-G eneral refused his fiat for a suit to restrain the Commission, the operator of Trans-A ustralia Airlines, from exceeding its statutory powers. 3. See L ondon County C ouncil v. A ttorney General (1 9 0 2 ) A.C. 165 at p. 168.

4. See B oyce v Paddington Borough Council (1 9 0 3 ) 1 Ch. 109. 5. See, for example, the N ew South W ales Local G overnm ent A c t 1919, s.587, and the V ictorian Tow n

and C ountry Planning A c t 1961, s.49. 6. See Grand Central Car Park Pty. L td . v. Tivoli Freeholders Pty. L td . (1 9 6 8 ), 18 L.G .R.A., 40.

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may be argued: the possibility of frivolous or trivial complaints; and the ex­ posure of persons to actions by others, who are perhaps stirred by ulterior or malicious motives and are impecunious and unable to meet an order for costs made against them.

5.37 The first of these justifications has little merit. There is clear authority for the Courts to retain a discretion, even if a breach of the law is proved, as to whether an injunction shall be granted and as to the form it shall take7. Any frivolous suit or complaint of trivial breach will get short shrift, with costs against the plaintiff.

5.38 The second objection, relating to a plaintiff’s motive and possible impecuni- osity, requires fuller consideration. It cannot be denied that, if accorded a remedy, business competitors may seek to restrain a breach of the law from selfish motives. Occasionally a suit might spring from disinterested malice. However, it is difficult

to see that motive is important. Either there is a significant breach of the law or there is not. If there is, it should be restrained regardless of the motive of the person moving the Court. In any event, a businessman who is himself obser­ ving the law might justifiably seek to have his competitor follow his example.

If there is no breach of the law then the suit will fail, with costs against the malicious plaintiff.

5.39 It follows that, if a defendant can be fully protected as to costs, there is no injustice in allowing unrestricted standing to a possible plaintiff. This should present little difficulty, even under existing legislation and Court rules. However, if the present law is to be changed we suggest that, in any action by a person seeking enforcement of a public obligation as distinct from a private right, special provisions be made as follows. First, the Court should be able to require the plaintiff to provide security for the defendant’s costs at an early stage of the action and, secondly, the Court should be able to order the taxation of costs on a solicitor-client basis, thereby providing a complete indemnity.

5.40 If these safeguards are adopted the present limitations on private suits may be abolished, thereby enabling concerned persons to ensure that land use laws are in fact observed by private individuals and public authorities alike.

7. See Cooney v. Ku-ring-gai M unicipal Council (1 9 6 3 ) 114 C.L.R., 582; and Associated M inerals v.

Wxjong Shire Council (1 9 7 4 ) 48 A .L.J.R., 465.

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VI CO M PEN SA TIO N

Compulsory Acquisition of Interests in Land 6.1 The power to acquire land, if necessary by compulsory process, has long been recognised as an inherent and necessary function of government. While the English common law protected property owners from arbitrary dispossession, it was recognised that compulsory dispossession might be effected by appropriate legislation. Thus Magna Carta 1215, c.29, guaranteed that ‘no free man shall be

. . . disseised of his freehold or liberties or free customs . . . but . . . by the law of the land’. Thereafter the Parliament of England or of the United Kingdom from time to time passed legislation authorising the compulsory acquisition of particular land for specified purposes. In 1765 in his Commentaries, Blackstone

summarised the then English law in the following terms1:

‘So great moreover is the regard of the law for private property, that it will not authorise the least violation of it; no, not even for the general good of the whole community. If a new road for instance were to be made through the grounds of a private person, it might perhaps be extensively beneficial to the

public; but the law permits no man, or set of men, to do this without the consent of the owner of the land. In vain it may be urged that the good of the individual ought to yield to that of the community; for it would be dangerous to allow any private man,

or even any public tribunal, to be the judge of this common good, and to decide whether it be expedient or no. . . . In this and similar cases the legislature alone can, and indeed frequently does, interpose, and compel the individual to acquiesce. But how does it interpose and compel? Not by absolutely stripping the subject of his property in an arbitrary manner; but by giving him a full indemnification and equivalent for the injury

thereby sustained. The public is now considered as an individual, treating with an individual for an exchange. All that the legislature does is to oblige the owner to alienate his possession for a reasonable price, and even this is an exertion of

power, which the legislature indulges with caution and which nothing but the legislature can perform.’ 6.2 In 1845 the United Kingdom Parliament enacted the Land Clauses Act, which specified uniform procedures for the acquisition of land and assessment

of compensation. This legislation was of fundamental importance in the develop­ ment of English law and, because of its adoption in each of the various Colonies, it also had special significance within Australia. Even in most of the Australian States today, the relevant legislation dealing with the compulsory acquisition of land is closely akin to the Land Clauses Act 1845 in the scope of the rights

conferred.

6.3 We see no useful purpose in setting out the legislative history of compulsory acquisition enactments within Australia. However, it may be useful to list the existing legislation which empowers compulsory acquisition by the Australian Government and each of the State governments:

(a) By section 51(xxxi) of the Australian Constitution, the Australian Parlia­ ment is empowered to make laws with respect to ‘the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws’. The current legislation made under this placitum is the Lands Acquisition Act 1955.

1. C om mentaries I, p. 139.

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This legislation applies to acquisition by the Australian Government for a Commonwealth purpose within a State or for the purpose of the government of the Australian Capital Territory or the Northern Territory; it both authorises acquisitions and governs the assessment of compensation. (b) In New South Wales, the major legislation is the Public Works A ct 1912,

as amended. This statute serves the dual purpose of conferring power of compulsory acquisition on certain persons and instrumentalities and of providing for the making of claims for, and assessment of, compen­ sation generally. In addition, there are certain other Acts giving power of compulsory acquisition. Certain of those Acts contain a separate com­ plete code for determination of compensation (e.g. Public Roads Act

1902), while others adapt and apply the provisions of the Public Works A ct (e.g. Local Government A ct 1919). (c) The present Victorian statute is the Lands Compensation Act 1958. This legislation is procedural only, dealing with the making and determination

of compensation claims, and does not confer rights of acquisition. These rights are to be found in other legislation. (d) The present Queensland Act is the Acquisition of Land Act 1967, which both empowers the compulsory acquisition of land and determines com­

pensation arrangements. (e) In South Australia, also, the legislation governing compensation is divor­ ced from that conferring powers of compulsory acquisition. The current statute is the Land Acquisition Act 1969 which, in a number of impor­

tant respects, gives individual rights not found in the legislation operating in other jurisdictions. (f) In Western Australia the Public Works Act 1902, as amended, both empowers the acquisition of land and governs compensation claims. (g) Tasmania has two major acquisition statutes. These are the Lands Re­

sumption Act 1957, which deals with acquisition of land by the Crown, and the Public Authorities Land Acquisition Act 1949. In each case the legislation both confers the right of acquisition and governs proceed­ ings for compensation.

Deficiencies in Present Legislation 6.4 We do not propose to give detailed consideration to the existing legislation, its features or deficiencies. A comparative discussion of the legislation is avail­ able2. However, several deficiencies are common to most if not all of the various

statutes and these, in our view, make the statutes inefficient in securing for the deprived landowner the ‘full indemnification’ of which Blackstone spoke.

6.5 First, in no jurisdiction is there any procedure for independent review of the decision to acquire the land. The Queensland Act requires service of a notice of intention to take land and provides for objections to be lodged. By his objec­ tion, an objector may indicate a desire to be heard by a delegate of the con­ structing authority, but the matters advanced in the objection and at the oral hearing are then determined by the constructing authority itself3. In South Aus­ tralia and Western Australia, the legislation merely provides for written objections to be made to the acquiring authority, without provision for any oral hearings,

2. D . Brown, L a n d Acquisition, Butterw orth and Co., 1972; see also The Valuer, January 1974, Vol. 23,

p. 2.

3. A cquisition o f L and A c t 1967, ss. 7, 8.

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and for determinations by the authority itself thereon4. In the case of acquisition by the Australian, New South Wales, Victorian or Tasmanian Governments or by one of their instrumentalities, no provision at all is made for objection. Not infrequently, the affected landowner is unaware of the resumption proposal

until he is deprived of title to his land. We consider that this is an intolerable situation which causes frequent, deeply-felt and justifiable resentment. However adequate or generous compensation rights may be, there will be cases where compulsory acquisition imposes substantial inconvenience, or even hardship, on the affected owner. Any legislation designed to safeguard individual rights should therefore ensure that an affected owner has an opportunity of putting his case

to an independent tribunal before any formal step is taken to acquire his land. This comment is fortified, we believe, by the restricted role of the Courts in supervising compulsory acquisition. Under present law, a Court can only interfere to invalidate a notification of acquisition where it is satisfied that the acquiring

authority lacks statutory power to effect the acquisition, or that it has acted in bad faith in relation thereto (that is, with some ulterior motive). Modern legisla­ tion generally confers acquisition powers in wide terms and provides a wide specification of purpose. Thus in Tinker Taylor Pty Limited v. Commissioner for Main Roads (I960)5, the High Court of Australia held valid a notification of resumption by the New South Wales Commissioner for Main Roads which simply stated that the resumption was made ‘for the purposes of the Main Roads

Act’. The relevant land happened to contain the historic home ‘St Malo’ which the Commissioner proposed to demolish, but this was not a matter about which the Court could be properly concerned. Similarly, bad faith is rarely established. This is partly because acquiring authorities generally have a genuine intention to devote the land to a purpose within their power, whatever the wisdom of that land use decision, and partly because it is difficult to prove an ulterior motive, especially where a wide specification of purpose is permissible. For

practical purposes, the Courts are able to do little more than ensure that neces­ sary formalities have been observed.

6.6 The second weakness in existing legislation is that it often fails to ensure that a disseised owner will receive immediate payment for that portion of value which is undisputed. In the majority of cases, the compensation dispute re­ lates to a comparatively small portion of the claim. As from the date of acquisi­

tion the acquiring authority has title to, and right of possession of, the acquired land, but in most cases the former owner has no title to, or right of possession of, any compensation until determination of the total amount. This will certainly take months, and in some cases years; the unavailability of this money may itself cause substantial loss to the claimant. Some legislative recognition of this inequity has recently been made. Thus the New South Wales Growth Centres (Land

Acquisition) Act 1974 empowers an acquiring authority to advance to a claimant 80 per cent of its offer (s.9). However, the section merely confers a power on the authority, not a right on the claimant. In Victoria, a right to obtain an advance of 90 per cent of the acquiring authority’s valuation is confered by the Lands Compensation Act 1973 (s.llD ). A similar provision with a right to obtain up to 100 per cent is contained in the Queensland Acquisition of Land Act 1967

(s.23). In our opinion, only in these two States is the situation satisfactory in this respect. In South Australia the Land Acquisition Act 1969 requires the acquiring authority to pay into Court, within seven days after publication of

4. South Australian Land A cquisition A c t 1969, s. 12; W estern A ustralian Public W orks A c t 1902, s. 17. 5. 105 C.L.R. 334.

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the notice of acquisition, the total amount of the compensation assessed by it (s.20). Those moneys may then be invested by an officer of the Court for the benefit of the person ultimately entitled, and the Court has jurisdiction to direct disbursement of moneys to discharge encumbrances, purchase other land or pay persons absolutely entitled. The South Australian Act goes a long way towards meeting the deficiency we have identified, but we do not believe that it goes far enough. Once title has been established, payment of the undisputed compensation or a very substantial portion of it should be regarded as a right, rather than an act of grace or an exercise of discretion. Especially where the determination of compensation is delayed for any reason, the mere retention of money in Court with interest may not be sufficient to safeguard the affected owner.

6.7 The third deficiency in existing Australian legislation is its failure in all cases to provide a right of reinstatement to dispossessed home owners. In the case of commercial land users, existing principles permit the assessment of compensation on a reinstatement basis where reinstatement will cause less loss than the destruction of the business. However, because a home owner has no business to be preserved, compensation in his case is invariably assessed purely by reference to the market value of the acquired property at the date of acquis­ ition. In times of rapidly rising house and land prices, assessment of compen­ sation by reference to fair market value at the date of acquisition may occasion substantial loss. Even with the most diligent attention on both sides and without disagreement as to the amount of compensation, it is likely to be three to six months between the date of acquisition and the date of payment of compen­ sation. Where there is delay or litigation the elapsed time can extend to years. In such cases, an owner may find that compensation which was appropriate

at the date of resumption is completely inadequate to enable him to buy a com­ parable home or vacant block of land when he finally receives payment. We regard this as unfair and consider that the principle should be that, if a home or site for a home is compulsorily acquired, the owner should receive compen­ sation sufficient to enable him to provide for himself a reasonably comparable home or site.

6.8 In this regard, also, there have been recent, but still inadequate, indications of legislative recognition of the inequity. In 1972, the South Australian Parlia­ ment thus amended the Land Acquisition A ct 1969 to provide for the creation of a so-called ‘rehousing committee’. Where land constituting or including a dwelling house is compulsorily acquired, a person residing in that dwelling house is now entitled to apply to the committee for assistance. The committee may then make arrangements with a government department for the rehousing of the applicant or, alternatively, recommend to the acquiring authority that a grant of financial assistance be made to the applicant for the purpose of enabling him to obtain accommodation. In 1973 Victoria amended its Lands Compensation Act 1968 to provide interest-free loans to disseised owners. Such

a loan is available only to an owner resident for not less than two years in the acquired house, where the market value of the property does not exceed $35 000 and where the amount of compensation payable is insufficient to enable the owner to purchase comparable accommodation. The amount of the loan is not to exceed the difference between the market value and $35 0006.

6.9 Welcome as these amendments are, we believe that they fall well short of what is required. We are quite opposed to the notion that if the community,

6. L ands C om pensation A c t 1973, s. 11C.

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for its own purposes, deprives a person of his home, that person must become a suppliant to a government committee for assistance, as in South Australia, or be required to borrow, on a limited scale and in restricted circumstances, the money which he needs to reinstate himself elsewhere. We consider that equity demands that, if the community requires a person’s home or land intend­ ed as a site for his home, it should provide such funds as will enable him, as a matter of right rather than grace, to make reasonably comparable alternative provision.

6.10 As far as we are aware, the only legislation which adopts this principle is the Expropriations Act 1969 of the Canadian Province of Ontario7. This provides that the relevant compensation Board shall ‘after fixing the market value of lands used for residential purposes of the owner . . . award such addi­

tional amount of compensation as, in the opinion of the board, is necessary to enable the owner to relocate his residence in accommodation that is at least equivalent to the accommodation expropriated’. This has been interpreted as requiring the Board to consider the amount of compensation necessary for re­

location at the date of determination of compensation, thus ensuring that an owner will have the financial capacity to purchase comparable accommodation in the market at that time. We recommend that such provision be incorporated in all legislation governing the assessment of compensation after compulsory

acquisition, and that it be supplemented by two explicit additions. The first should extend the principle to include land which, though vacant, is at the date of acquisition lawfully able to be used for the construction of a single dwelling, where the owner does not already own a dwelling. This would take care of those situations where a public authority acquires a vacant dwelling house site which the owner cannot replace at the compensation value. The

second addition needed to give effect to the reinstatement principle is an explicit provision that the relocation sum is to include all expenses reasonably incurred in moving, such as legal expenses and charges on purchase of the new home, removalists’ charges, etc.

A Removal Solatium

6.11 We have considered whether there should be a further extension of the compensation principle, whereby a ‘removal solatium’ would be awarded to com­ pensate a dispossessed home owner for the numerous but largely intangible losses

and inconveniences caused by resumption of his home. These may include the necessity to change his children’s school, dislocation of existing social, sporting and recreational associations and so on; the particular details will vary with each case. These factors are not presently taken into account, they would not be taken into account under the Ontario legislation and they are almost unquanti-

fiable in money terms; but they are real costs to the owner and his family and should be considered.

6.12 In a context where public acquisition is increasing, and is likely to increase further, we feel it would be reasonable for legislation to provide that, in addi­ tion to all other compensation, a dispossessed resident owner should receive a ‘removal solatium’ to compensate for these intangibles. This could take the form

of a fixed lump sum, of say $5000 to $10 000, or it could be calculated as a figure equal to, say, 10 per cent to 20 per cent of the market value of the home, assessed at its existing use value.

7. Section 15. See The Valuer, January 1974, Vol. 23, p. 2.

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6.13 Of the two alternatives, we think that the lump sum is likely to be more equitable. This is because the type of loss we have in mind occurs simply because of disruption of the home. Particular family circumstances will vary but the dislocation problems are likely to be independent of the value and style of the home (except that wealthy people, who tend to live in more expensive homes, are likely to be better placed to overcome the problems of relocation than poorer people). Secondly, a fixed sum requirement will facilitate the advance calculation of compensation by the development authority; it will simply be necessary to count the number of affected homes. Thirdly, it will sometimes happen under our proposals that compensation for the value of the land itself is calculated on an adjusted base date value rather than existing use value. It is probably anom­ alous that a landowner receiving adjusted base date value should receive a removal solatium, because realisation on the market of something more than existing use value would probably encourage him to move voluntarily. This anomaly may be accepted for the sake of avoiding unnecessary complexity and dispute as to whether he would have otherwise moved, but the anomaly would be compounded by allowing a solatium calculated as a percentage of the adjusted base date value. But if, in such cases, the percentage was related to the existing use value there would need to be a further, otherwise unnecessary, valuation. Further complications would arise in circumstances where existing use did not coincide with permitted use under zoning restrictions in force at the base date (see paragraph 2.36). (We recognise that even an existing use value could have as an inherent consequence the dispossession of the owner, as for example when a home site was valued by reference to its potential for statutorily permissible

residential flat development.) 6.14 We conclude by emphasising three points in relation to the proposed removal solatium. First, whatever figure or formula is adopted, we consider that it would be a serious mistake, and at variance with the fundamental prin­ ciple that new use rights should be reserved to the Crown, to allow the owner to be compensated by reference to the difference between acquisition value (exist­ ing use or adjusted base date value) and value after the development order has been issued. As we pointed out in paragraph 8.18 of the First Report, this has been the effective basis of compensation in the Australian Capital Territory.

There the lessee, on achieving a change in the purpose clause of his lease, has been required to pay the Crown half the increase in value less $1 500. The lessee thus appropriates the balance of the development increment. The result has been to create exactly the same problems as have been experienced in the States, where owners have been able to profit from the full increment on rezoning. Disturbing evidence was presented to us of redevelopment pressures in Canberra, specific examples being cited of land which had been prematurely and excessive­ ly redeveloped, without site consolidation, after individual lessees had succeeded in achieving changes of purpose from dwelling house to more lucrative uses. This evidence incidentally demonstrates quite graphically that the problem of piecemeal and premature redevelopment has little to do with the issue of freehold or leasehold tenure, and that it has everything to do with the financial benefit to be obtained from rezoning or changes in permitted use. To share the develop­ ment increment with the landowner destroys the principle that land use decisions must be neutral in their effects. It creates pressure for premature redevelopment and it immediately discriminates between the owner whose land is rezoned for commercial development and the owner whose land is needed for a park. 6.15 Secondly, we believe it would be proper to restrict the removal solatium to the persons who acquired their homes before public notification of the

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relevant draft development schemes. The solatium is intended to compensate for the loss of long-term associations, not to provide a windfall gain to newcomers. The latter will be adequately protected by the compensation provisions, including reinstatement, which we have already suggested. Those provisions will help to ensure that the vendor’s market is not adversely affected during the period when a draft development scheme is under consideration.

6.16 Thirdly, if the solatium takes the form of a lump sum it will require regular review in the light of changes in money value.

Interest on Compensation Payments

6.17 The right to interest on compensation between the date of acquisition of the land and the date of payment varies in accordance with Australian and State legislation. In most cases it is quite inadequate by modern standards. In New South Wales, the rate is only 4 per cent, in Tasmania and Victoria

it is 5 per cent. Until 1973, the rate payable under the Commonwealth Act was only 3 per cent for the first two years and thereafter 4 \ per cent. In 1973 the rate was amended to equal the short-term bond rate for payments made within less than three years, and the long-term bond rate for other payments. The theory

of assessment of compensation after compulsory acquisition is that the interest in land is converted to an interest in money. It is therefore important that the value of the interest in money be maintained by securing a market return on it. Compensation should thus include interest at current bank overdraft rates. Even

so, no allowance is made for the purchasing-power loss which results from inflation.

Costs of Claiming Compensation

6.18 Dispossessed owners are not usually able to recover the whole of the costs they incur in making and prosecuting their claims to compensation. Advice is essential to an owner as a direct consequence of the acquisition. The valuation advice may require considerable investigation, not only by a valuer but by other

experts such as surveyors, engineers, agricultural advisers, architects, etc., depend­ ing on the nature of the acquired land. In our view, legislation should provide for an addition to assessed compensation of a sum representing the reasonable cost of making necessary investigations and taking advice regarding the amount

and lodgment of the claim. We note that a number of relevant statutes effectively prevent the claimant from recovering portion of his costs, even if the compen­ sation awarded exceeds the acquiring authority’s valuation. Thus in New South Wales and Victoria the claimant’s entitlement to recover his costs directly re­

flects the amount of his initial claim (often made without proper advice and at a time of some emotion after the notification of acquisition)8. In Queensland, the Land Court is given a discretion as to costs but the Court may not grant costs to the claimant where the compensation determined is closer to the valu­

ation finally put in evidence by the constructing authority than to the final claim of the claimant9. The effect of these provisions is that a claimant, though re­ covering significantly more than the acquiring authority’s offer, may be pre­ cluded from recovering the bulk of the costs incurred by him and, at least in

Queensland, may even be ordered to pay the authority’s costs.

8. See N ew South W ales Public W orks A c t 1912, s. 106; Victorian Valuation of L and A ct 1960-1973,

s. 29.

9. Acquisition of L and A c t 1967, s. 27.

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Relevance of Compulsory Acquisition Provisions 6.19 The matters set out above have an importance which is independent of the specific matters falling within our Terms of Reference. However, they have particular relevance in relation to the questions we have been asked to consider and the programs currently being undertaken by the Australian and some State governments. One of our Terms of Reference specifically directs attention to

“land acquired by or for a purpose of a Land Commission which may be set up in any Australian State to which the Parliament may grant financial assist­ ance on terms and conditions relating to the acquisition, development and use of land for urban purposes” (Term 1). Term (2)(n) directs attention to ‘the appro­ priate nature, structure and powers of an appeal body to receive and determine complaints about the level of rent reappraisal, conditions of lease renewal, com­ pensation in cases of termination of leases . . and Term (3) requires us to inquire into and report on the ‘advantages and disadvantages of each system (of land tenure) that relate to the acquisition, disposal, development, management and redevelopment of land for urban purposes’.

6.20 Arrangements for large-scale land development under the auspices of the Australian and State governments are therefore central to our whole inquiry. In the First Report (paragraphs 5.11, 5.12), we expressed the opinion that devel­ opment authorities do not need to acquire all land destined for development or redevelopment, provided that the development (new use) rights to land have been acquired in accordance with our recommendations. It is nevertheless clear that, particularly in areas passing from rural to urban use, there will be planning advantages in development authorities acquiring the land intended for develop­ ment. During recent years the scale of public land acquisition has increased remarkably. Having regard to the needs to which we referred in the First Report (paragraphs 3.2 to 3.4), we believe that public acquisition on a large scale will continue, much of it by compulsory process. We have already indicated that an owner whose land is acquired should not benefit from any accrual of development value beyond the base date. It is equally necessary that he should not be disadvantaged by receiving less than adequate compensation for his property on an existing use value. In the words of the First Report (paragraph 3.18), ‘land use decisions by government agencies must not only serve the public interest’ but ‘must also be neutral in their effects on private individuals and firms’. This requirement will only be met if adequate compensation is awarded. Similarly,

the substantial program of public acquisition which is necessary for new urban development and redevelopment will only be publicly and politically acceptable if it is made on just terms. Consequently, we see the reform of existing com­ pulsory acquisition legislation as an essential part of an urban land policy.

Features of a Desirable System 6.21 For constitutional reasons, the overwhelming majority of publicly acquired land has been purchased by State governments under State legislation. This situation is likely to continue. It follows, first, that the Australian Government is not able directly to determine the form of compulsory acquisition legislation and, secondly, that the needs and preferences of individual States have to be ac­ commodated to any recommended scheme. There would be considerable merit in an attempt by the Australian and State governments to evolve uniform legis­ lation for compulsory acquisition, to be separately enacted in each jurisdiction. Such an approach would make interchangeable and useful the decisions of Courts in other jurisdictions, and thus simplify problems for the Courts, legal advisers,

70

valuers and the parties. But whether or not the several governments adopt such an approach, we believe that it is essential that the relevant legislation include the features which we summarise in the following paragraphs.

6.22 If our recommendations as to the development process (paragraphs 5.11 to 5.21) are adopted, no public development may be effected until after proper notice and, if any objection is received, completion of a public hearing. The compulsory acquisition legislation should prohibit acquisition until the issuance

of a development order or gazettal (if necessary following completion of a hear­ ing). This will reduce the extent to which a public authority can argue that, irrespective of its planning merit, a scheme must proceed because of the public investment already made (as was done in the case of the controversial proposals

for a telecommunications tower on Black Mountain in Canberra and a power station at Newport in Victoria). It will also prevent the degradation of buildings or whole neighbourhoods which occurs when acquisition takes place in advance of a public commitment to the desired development. This has occurred in Sydney

in relation to: land acquired for expressways by the Department of Main Roads; the historic building ‘Lyndhurst’ in Glebe; and neighbourhoods at Woolloo- mooloo. Finally and most important, the chronological process we have proposed will allow effective objection by the persons most affected by a public develop­

ment, that is by those to be dispossessed. Under our proposals, they will be entitled to participate in an inquiry regarding the desirability of the proposal, its manner of implementation and possible alternatives. At that stage a right of objection means something, whereas a right of formal objection to an authority

mentally or politically committed to a particular proposal is unlikely to achieve much result.

6.23 It may be argued that it is necessary for public authorities to acquire land at an early date in order to forestall price increases consequent upon the planning decision. This is often true under present conditions. But if, as we recommend, the increment in value consequent upon a change in use is reserved to the public,

knowledge of a change in use will not increase values to the cost of an acquiring authority. It is, of course, an important advantage of our proposals that the acquiring authority will not need to invest funds in land for which it has no immediate use. In the case of land which is rendered more valuable in its existing

use by the public project, present legislation provides for the consequent enhance­ ment to be offset against compensation. Such provisions should be continued.

6.24 After a draft public development scheme has been determined by lack of objection, by the regional planning tribunal’s decision following a public hear­ ing, or by gazettal, the relevant public authority will be free to proceed with acquisition of the land. Legislation should require the authority to serve upon

each person interested in the land a notice of intention to acquire, specifying the purpose of the acquisition with reference to the particular approval, a des­ cription of the land to be acquired and information as to the owner’s right of objection. We envisage that an objection at this stage will be limited in scope.

It would not be appropriate to allow an affected owner to re-open the merits of the planning proposal, because his right to dispute that matter has been protected by the earlier procedure we have recommended. Neither should the objection deal with the quantum of financial compensation, because separate provision

must necessarily be made for that. Nevertheless, it may be possible for a par­ ticular owner to demonstrate that, consistent with the implementation of the development scheme, it is not necessary for his particular parcel of land, or part of it, or a particular interest in his land to be acquired. We recommend that he

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retain a right to object on this single ground within a nominated period of, say, thirty days.

6.25 If an objection is lodged in accordance with the previous paragraph and it is not upheld by the acquiring authority, the landowner should be entitled to refer the objection to the regional planning tribunal (constituted as indicated in paragraph 5.18) for determination.

6.26 Within a specified time of the service of notice of intention to acquire or, if an objection is lodged, determination of the objection, the acquiring authority should be obliged to acquire the land by notification in the appropriate Govern­ ment Gazette. It should further be required to serve on each person known

to have an interest in the land, within, say, fourteen days of the Gazette noti­ fication, a copy of the notification, the authority’s valuation of that person’s interest and a summary, in a prescribed form, of the rights of that person.

6.27. The South Australian Land Acquisition Act 1969 provides in respect of land not under the provisions of the Real Property Act that, where a notice of intention to acquire land has been served upon any person, that person shall not enter into any transaction in respect of that land without first disclosing the fact that the notice of intention to acquire has been served upon him (s. 13). If he does not so disclose, any contract or agreement is voidable at the option of the person to whom disclosure should have been made. The Act further provides for compensation to be paid to a person on whom a notice has been served, in respect of any disturbance or loss occasioned by such notice, where the acquiring authority does not proceed with the acquisition (s. 15). We believe there is merit in both provisions. It cannot be denied that an acquisition proposal may adversely affect the landowner even if the land is never acquired. It is desirable to protect purchasers of land subject to a notice of intention to acquire, and equally necessary to ensure that existing landowners are not adversely affected because of notices served and withdrawn.

The Compensation and Valuation Tribunal 6.28 Legislation should require the acquiring authority to pay, within fourteen days of demand by any person having an interest in the land, at least 90 per cent of its valuation of that person’s interest. The payment should be made:

(a) where title has been made out to the acquiring authority’s satisfaction, to the claimant; or (b) otherwise to a fund under the control of the compensation and valuation tribunal (referred to in paragraph 6.30 below) for investment and dis­

position in accordance with the order of that tribunal.

6.29 Within a stipulated time, say sixty days, the claimant should be required to indicate the amount of his claim. If no agreement is reached within thirty days thereafter, the claimant should have the right to refer the matter to the compensation and valuation tribunal, which will determine the amount of com­

pensation.

6.30 Within each State and Territory there are at the present time Courts or tribunals designed to deal with matters relating to the valuation of land and the assessment of compensation on compulsory acquisition. In keeping with our view that, so far as possible, the changes we recommend should be related to existing arrangements reflecting the preferences of each State and Territory, we believe that it would be appropriate for the tribunal which determines claims for com­ pensation after compulsory acquisition to be an existing Court or tribunal, or

72

a modification thereof. We describe the tribunal as a compensation and valuation tribunal. Having regard to the likely volume and importance of claims, we suggest that the tribunal be presided over by a Judge, preferably of Supreme Court status. There may be merit in providing for the Judge to sit with two

part-time assessors, being valuers selected from a panel nominated by the Commonwealth Institute of Valuers or a similar professional organisation. Such assessors should, of course, be quite independent of the parties and should be free from any professional association with the property which is the subject of

the claim. If the tribunal is to include two assessors, it would be desirable to provide that one of them be a valuer in private practice, while the other be in

the full-time service of a public authority. This should avoid any suggestion that the assessors will be biased in one or other direction by reason of their normal professional activities and associations. We envisage that the tribunal, if multi- membered, should have jurisdiction to determine the amount of compensation

by majority vote, but that any matter of law should be decided by the Chairman. It would be both possible and desirable for the tribunal so constituted to have directed to it other matters, such as objections to rating, etc., so that it will build up a substantial reputation and expertise in dealing with matters related to valu­

ation.

6.31 Provision should be made for an appeal to the Supreme Court of the relevant State or Territory on any question of law arising before the compen­ sation and valuation tribunal.

6.32 The determination of compensation is essentially a matter of expert assess­ ment having regard to market factors. We see no need for any major change in the substantive law governing the assessment of compensation, but suggest that provision should be made in respect of the following matters:

(a) Compensation in respect of the development potential of land should be limited in accordance with the recommendations set out in paragraph 2.35 of this Report. (b) Provision should be made for reinstatement of owners of dwelling houses

(or sites suitable for the construction of dwelling houses) along the lines of the Ontario legislation, with the additions suggested by us in paragraph 6. 10. (c) Provision should be made for a lump sum ‘removal solatium’ as set out

in paragraphs 6.11 to 6.16 above. (d) There should be specific provision that compensation shall include such sum as may be determined by the tribunal as reasonable in the circum­ stances towards the cost of obtaining expert advice in respect of the

valuation and preparation of the claim. (e) Compensation should include interest at current bank overdraft rates on the amount outstanding from time to time from the date of acquis­ ition of the land until payment.

(f) Costs of the action for compensation should be in the discretion of the tribunal but, prima facie, a claimant recovering more than the acquiring authority’s offer should recover his costs of the compensation action.

Other Persons Injuriously Affected 6.33 We have given much thought to the question whether compensation should be provided for persons whose land is not acquired but who are injuriously affect­ ed, in financial terms, by some development. Present law gives no such right. Com­

pulsory acquisition legislation commonly provides that, if part of a person’s land

73

is acquired for a public project, the claim for compensation on compulsory acquis­ ition may include any loss of value to the remainder of his land resulting from the use to which the acquired land is put10 1 1 . But if no land is acquired, no such claim may be made.

6.34 The present law is anomalous in many respects, as is well illustrated in the English case Edwards v. Minister for Transport (1964)11. The claimant owned some 4 \ acres containing a home. The Minister compulsorily acquired, for the purpose of constructing a trunk road, two small triangular pieces of land con­ taining 302 and 38 square yards respectively. The claimant sought compensation,

not only for the value of the land taken but also for the loss of value to the balance of his land, by reason of the construction of the road and the noise nuisance likely to be suffered. The Lands Tribunal, in assessing compensation, determined that the diminution in value occasioned by the road was £4 000, but that, if account could be taken only of the diminution in value occasioned by the use of the road on the two small triangles, the loss was £1 600. That latter figure, derived according to Lord Justice Harman ‘by some alchemy which I do not understand at all’ was held to be the appropriate amount recoverable for injurious affection. Of course, if no triangles had been taken then the claimant,

however badly affected, would have received nothing.

6.35 We consider that there is much to be said for the view that compensation rights should be enlarged so as to enable affected landowners to recover the injurious affection sustained by them from public (and even private) development, notwithstanding that no land is taken from them, in principle, this is equitable; in practice it would require any developer to pay the true cost of his development, offsetting the advantage gained by the development against the losses thereby

occasioned.

6.36 However, we do not feel able to make any firm recommendation on this matter. The ramifications of such a change are immense. For example, the loca­ tion of a new airport, with a consequential increase in aircraft activity, would give rise to a multitude of claims involving property over a very wide area. Likewise, the opening of a new main road would bring claims, on the one hand, from residents near the road and, on the other, from shopkeepers now by-passed.

Plainly, some limit has to be fixed which will give rights to people seriously affected by a development, while avoiding a great number of claims involving massive payments of compensation.

6.37 We are aware that this question has been considered in at least one State. The South Australian Land Acquisition (Legislation Review) Committee came to the conclusion that losses occasioned to owners by public works should not be compensated pursuant to land acquisition legislation, but that the solution should be sought ‘in administrative action or in legislation of a social nature specifically directed to the social problems involved’12.

6.38 To some extent, administrative action can alleviate the problem. Indeed, two of our recommendations are designed to do just that. The first is the sug­ gestion that draft development schemes and development orders should generally relate to areas which can reasonably be considered to be planning units, rather

than to single sites (paragraph 5.12 above). This will reduce the problem as be­ tween allotments. The second is the provision for objections to all development,

10. See The C om m onw ealth u. Morison (1 9 7 2 ) 46 A .L.J.R., 543. 11. 2 Q.B., 134. 12. See South A ustralia, Parliamentary D ehates 1969 ( 3 ) 3086.

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including public development (paragraphs 4.15 to 4.23, 5.15, 5.21 above). A further possibility is that, either by government policy decision or by a condition imposed in a development order, the developer be made to acquire any property significantly affected by the development if the owner so requests within a specified

time, even though such acquisition is not essential to the project itself. This would result in the development absorbing any loss of value prior to resale.

6.39 Despite such steps, uncompensated losses will remain. Their degree will depend upon the extent to which our recommended procedure is implemented. Once that is known, policy decisions will be required in each State or Territory as to whether, and to what extent, compensation rights should be expanded.

Other Financial Matters 6.40 There are other possible financial conflicts which might readily be deter­ mined by the proposed compensation and valuation tribunal. These include: (a) Review of the reasonableness of development orders issued by develop­

ment authorities in respect of financial burdens, as distinct from the plan­ ning decisions relating to the development itself. (b) Objection to rental reviews of leased properties (see paragraph 7.38 to 7.42 of the First Report). (c) Disputes relating to the renewal of leases from development authorities

and compensation for improvements on termination of leases (see para­ graph 7.50 of the First Report). (d) Determination of disputes between development authorities and lessees in respect of matters arising under leases.

(e) Review of valuations for rating purposes (see paragraph 7.5).

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V II V A LU A TIO N A N D RA TIN G

Rating and Regular Revaluation 7.1 At present, most States use unimproved values, either wholly or partly, for rating purposes. This necessarily requires regular revaluation of all rateable land and, for that purpose, the maintenance of a Valuer-General’s Department at significant cost. More fundamentally, it is probable that regular general re­ valuations, accompanied as they are by direct notification to landowners of the market value of their land, assist to heighten public awareness and expecta­ tion of increasing values, thereby creating an atmosphere in which higher prices are more likely to be demanded and paid. Market values quickly adjust to the highest-priced sales in an area. Of course, psychological factors are not the only factor; price essentially depends on the cost of creating serviced land and on the

relative balance of supply and demand. Nevertheless, we think it would be con­ ducive to stability in the land market if, in the long term, some substitute could be found for the present system of rating on unimproved values with regular revaluations. 7.2 Any fundamental change would necessarily have consequences for local government rates and State land taxes, these being the revenues which the valu­ ation system is designed to support. Although such revenue questions are outside our Terms of Reference, the exaction of revenues from landowners is an im­ portant incident of present land tenure. On the assumption that rates and land taxes will continue to be raised under any new system, the effects of our proposals

upon administration and on the valuation system demand some attention.

7.3 The only purpose of fixing valuations for individual properties is to deter­ mine the share of the total revenue burden which each owner will bear. The sum of the individual values is not especially significant in relation to a State or local government’s revenue-raising decision, although it may influence the government’s judgment about the capacity of landowners to pay taxes. After a general revaluation increases property values in an area, the council usually

reduces its rate in the dollar so as to yield total revenues which may be only marginally greater than those obtained in the previous year, when a higher rate was applied to lower values. Particularly in the case of residential land, it is doubtful whether the incidence of the burden varies significantly from one re­ valuation to another; dwelling sites retain their same comparative advantages

and disadvantages whatever the nominal values attached to them.

An Alternative Rating System 7.4 These considerations lead us to the view that there may be merit in an alternative system of fixing comparative revenue burdens. Under legislation per­ taining in some States for strata title or own-your-own units, the distribution of maintenance charges among the owners of units is determined, once and for all, at the time of registration of the plan. Irrespective of the level of total main­ tenance charges in future years, the relative burdens are thereafter fixed without the need for revaluation of particular units. Although we appreciate that the problem is much more complex in the case of services provided for a local government area, perhaps a similar approach could be adopted for the financing of those services. An area could thus be divided into sections, of which each would represent a land use that was substantially homogeneous in character (for example low-density residential, high-density residential, commercial and

76

industrial). Within each section a careful appraisal could be made of the relative advantages of individual allotments. Each allotment could be awarded a relative value (or index number) on a scale of 100, depending on its comparative market­ able advantages. That relative value would continue to be attributed to the site

until its comparative advantages were changed, for example by the opening of a new road, by a development order changing the permitted use of the land, or by a nearby development activity which had the effect of adding or sub­ tracting amenity. At that time it would be reassessed and allocated a new relative value, which would reflect the relative value previously determined for similar land.

7.5 A similar assessment would be made of comparative advantages as be­ tween land use sections, so as to fix a multiplication factor. If, say, low-density residential land was to be adopted as the standard for the purpose of applying the multiplication factor, it would have a value of 1.0 for this purpose and the multiplication factor of other land would depend on its average market value

relative to that of low-density residential land. Then, if market values in Section A (low-density residential) averaged about $30 per square metre, while they averaged $90 per square metre in Section B (industrial), the multiplication factor

of Section B land would be 3.0. The relative value attributed to each site in Section B for a particular rating period would then be multiplied by three. In order to fix a rate, the council would simply (a) add the relative values of all allotments in a section and multiply the sum by that section’s multiplication

factor, (b) add the section total values and (c) fix a total rate revenue. Each landowner would be liable for that portion of the total rate revenue requirement which was equal to the proportion which (a) the product of his relative value and the relevant multiplication factor bore to (b) the aggregate section total

values. Provision would need to be made for multiplication factors to be adjusted from time to time because, for example, commercial land might appreciate more quickly than residential land (or vice versa) . The council could do this by making special valuations of a number of typical lots in each section, say every three years, and using those valuations to establish new multiplication factors. The

sample valuations could be published and the opportunity afforded to any land­ owner to challenge the valuations, or the factors derived therefrom, in the com­ pensation and valuation tribunal. The probability is that challenges would be rare. Alternatively, the multiplication factors could be fixed from time to time

by direct decisions of the council, in much the same way as urban farm rates and other discriminatory imposts are presently fixed.

7.6 The suggestion made in the preceding paragraphs is but one possible means of simplifying valuation procedures and avoiding the need for the frequent revaluation of all rateable land. The same valuation procedures could be used for the purpose of assessing liability for land taxes. We recognise that there

may be better ways of achieving the same results. But we emphasise that the implementation of our proposal for the reservation of development rights will remove the need for frequent revaluations to take account of increases in develop­ ment value, because market values used for rating purposes will no longer reflect

changes in land use or development potential. However, the exclusion of devel­ opment value increments from value for rating purposes will not only facilitate the valuation process. It will also remove the relentless pressures for premature development or re-development which have occurred in some areas, as a result

of the creep in development value and the increases in rateable values which result from expectations about land use changes. The tendency for irrational

77

or speculative fluctuations in market values will thereby be reduced. We elaborate on this point in the following section.

Effect on Valuation Procedures of Reservation of New Use Rights 7.7 So long as the existing system of valuation continues to be employed, it is necessary to consider how our proposal for the reservation of new use rights is likely to affect valuation procedures. This is a matter of considerable impor­

tance, in relation to both public administration and private interests. 7.8 In determining either unimproved or improved value under the present system, it is necessary for a valuer to consider the potential of the site for new or more intensive development. The valuer bases his assessment on sales of com­ parable land, but in determining comparability he must be satisfied that the potential is the same. The valuer may need to make a judgment about what type of development is likely to be permitted under existing statutory controls and to what degree; and about the possibility of a change of zoning, the probable new zoning, the scale of permissible development thereunder and the date when the zoning change will occur. The valuer’s position was described in the following terms by Mr Justice Hardie of the Land and Valuation Court of New South Wales1:

‘It will be apparent from this judgment that the ascertainment of improved capital value and unimproved capital value, particularly the latter, since the commencement of the County of Cumberland Planning Scheme Ordinance, involves an artificial and most elusive enquiry. The valuer’s role, which before the Ordinance was difficult, is probably now an almost impossible one. He and/or some other expert must now, it would appear, assume the role of a forecaster as at a particular date of the uses to which the responsible authority, or the Court on appeal, would be likely to consent. The making of such forecasts, if limited to a consideration of decisions of the Court, would be essentially a matter for a lawyer who was a specialist in the particular field. However, the making of forecasts as to the decisions of a responsible authority whose decisions are not reported and whose consents are not appealable, involves problems of even greater difficulty. The ascertainment of unimproved capital value has from time to time been described in the decisions as a most artificial and unreal enquiry. With the advent of the town planning provisions of the County of Cumberland Planning Scheme Ordinance and the imminence of local planning schemes the position is, and must become still more, unreal and artificial.’ 7.9 We have set out in paragraphs 2.35 to 2.41 above the legislation we recom­ mend to secure for the public the value of the new use rights. If this recom­ mendation is adopted, it will be inequitable to rate on one basis and to com­ pensate on another; in any case market values of land will no longer reflect development potential. It would therefore be appropriate for a State or Territory which adopted our recommendations to amend its valuation legislation so as to provide that, after the base date, unimproved and improved value will both

be determined at the higher of the existing use and adjusted base date values. By this means, rateable value will eventually come to reflect existing use value.

7.10 It will be a major advantage of our recommendations that on only one occasion, the base date, will a detailed appraisal of rezoning or development potential of all land be required. By contrast, an appraisal is now supposedly undertaken at the time of every revaluation. Certainly the base date valuation will be of considerable importance and it must be undertaken carefully. If staggered base dates are used this should be possible. Thereafter, the valuer

1. W u n d e r l i c h L i m i t e d v . V a lu e r G e n e r a l (1 9 5 9 ) 5 L.G .R.A., 50 at pp. 65-66.

will not need to consider development potential at all in his general revaluation. All he will need to do is compare the base date value with existing use value and record whichever is the higher.

7.11 It is true that our proposals will require an assessment of the change in value resulting from a development order. This assessment will not be re­ quired on all land; it will involve only the relatively small proportion which is subject to a permitted change in use and which is not proposed for public acquis­ ition. Two figures will be required. The value prior to the issuance of the develop­

ment order will be ascertained by reference to either the known adjusted base date value or the existing use value. The value after the issuance of the develop­ ment order will require an estimate of future net returns, but this will be on the basis of a known use and a known development date. In essence, the valuation exercise will be the same as that performed by valuers daily in making feasibility

studies of projects.

7.12 In the light of the foregoing considerations, we believe that it may be claimed that the adoption of our proposals will simplify valuation procedures, with consequential savings in administrative costs, private inequities and litiga­ tion. During the transition period (while statutory zoning continues to apply to

land in an area), a valuer will need to determine the existing use value for un­ committed land by reference to the possibility of a planning consent being granted under the surviving statutory controls. But even under these circumstances, he will have the advantage of being able to look at sales of land similarly zoned,

without having to decide whether there is any difference in rezoning potential.

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V III LA ND DISPOSAL A R R A N G EM EN TS IN T H E T E R R IT O R IE S AND IN G R O W TH CEN TRES

Land Tenure Systems 8.1 In Chapter VI of the First Report, the Commission sought to analyse the theoretical differences between freehold and leasehold tenure systems. We con­ cluded, in paragraph 6.9, that the differences were now in nomenclature only and that:

\ . . the main issues are to decide what restrictions are to be placed on land titles in the public interest and what value is to be attributed to land subject to these restrictions. . . . More positively, we see our task as being, not to assign a name to a system of tenure or to state a preference for a particular system which is presently known to the law, but rather to attempt a specification of the rights and obligations which should be incorporated in a system of land tenure in order to serve both private and public interests. For this purpose, it is necessary to determine the objectives which a system of land tenure should achieve and to specify the rights and obligations to be incorporated in particular forms of tenure.’ 8.2 In paragraph 6.12 of the First Report, we set out seven specific objectives against which any particular land tenure system might be judged:

‘(a) security of title and ease of transferability; (b) security for financing; (c) security during development phase; fd) security of designated use; (e) the reconciliation of legal, political and administrative certainty with

effective land use controls; (f) the provision of cheap land for residential purposes; and (g) the appropriation by the public sector of unearned value increments.’ 8.3 We concluded that the first six of these objectives, all of which were widely supported, were readily achievable under either a freehold or leasehold system, but that in relation to the fifth objective it was important to ensure that an administrative system existed which would provide for proper land use planning, for supervision of restrictions on use and for the protection of neighbours’ inter­ ests. Because we have felt the inadequacy of existing planning structures and systems, and because we have recognised the need to develop structures and systems that will be consistent with our recommendations, we have presented in this Final Report our ideas about the attributes of a desirable system. However, that system is logically independent of the issue whether particular land should be freehold or leasehold; it can adapt to either form of tenure.

8.4 The final objective referred to in paragraph 8.2 is more controversial and is, in our opinion, the critical question in making a choice between freehold and leasehold tenure for particular types of land. As we have sought to show, the value increment associated with changes in land use may be captured under

a freehold system, as it certainly may under leasehold. However, under a free­ hold system it is much more difficult to capture the value increment flowing from general community growth, improvement of neighbourhoods or individual properties, or general inflation. We have taken the view that it is inappropriate to seek to capture that increment in the case of residential land, but that it is desirable and necessary to do so in the case of non-residential land. In the First Report (paragraph 7.27), we therefore recommended that, in the new metro­

80

politan and regional growth centres, residential land be granted in fee simple, subject to the specification of the purpose for which the land is to be used, enforcement of improvement conditions prior to issue of title and the reservation of development rights. We recommended that non-residential land, on the other hand, should be leased. In Chapters VII and VIII of the First Report, we

specified in some detail the terms of fee simple grants and of leases.

8.5 Having regard to the comments which have been received following the publication of the First Report, we have given close consideration to our pre­ vious recommendations, first to determine whether they should be varied in any way and, secondly, to consider whether they need to be spelt out in greater detail.

8.6 The submissions received since the First Report have contained little criti­ cism of the recommendations in Chapters VII and VIII, nor were they the subject of significant comment at the various conferences convened to discuss that Report. Moreover, we understand that the basic distinction which we pro­

posed, involving residential freehold tenure on the one hand and non-residential leasehold tenure on the other, has been adopted by the Australian and State governments for certain growth centre projects which are the subject of Australian

Government financial assistance (see paragraph 2.18).

8.7 In these circumstances, it seems unnecessary for us to repeat or defend our earlier recommendations on disposal and tenure; we adhere to the views which were expressed in the First Report, subject to certain modifications or clarifi­

cations set out below. In particular, except to the extent that we have indicated a change in our views we reaffirm our proposals relating to: methods of disposing of land for residential, commercial, industrial, community and public purposes; forms of tenure for different uses; and land tenure arrangements in the Australian

Capital Territory and the Northern Territory. We believe that, if our recom­ mendations relating to methods of disposal and forms of tenure had been more generally adopted in the Australian Capital Territory since publication of the First Report, many of the reported difficulties which have been encountered in

disposing of serviced land for residential and commercial purposes would have been avoided. 8.8 For the most part, we likewise do not feel that detailed elaboration of our earlier proposals is desirable or necessary. We have interpreted our task as

one involving consideration of principles, concepts and general procedures. We recognise that precise implementation will vary according to particular circum­ stances. In some cases, we have judged that more detailed explanation is desirable in order to facilitate understanding of our basic recommendations. But we do

not believe that it is appropriate for us to stray into the area of detailed manage­ ment.

Clarification of Tenure Proposals 8.9 There are several respects in which v/e have been made to realise that our earlier recommendations about tenure may usefully be clarified. We list them as follows:

(a) in relation to residential land, the use of covenants to ensure development within a designated time and to control permitted use (see also para­ graph 4.52 above); (b) the use of development leases; (c) in relation to non-residential land, the method of planning control;

(d) in relation to industrial land, the use of lease covenants for pollution control;

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(e) the position of government lands in relation to the obligation to pay rent and other outgoings; (f) the administration of leases.

Improvement Conditions in Relation to Residential Land Grants 8.10 In paragraph 7.27 of the First Report, we recommended that: ‘all grants of residential land in the new metropolitan and regional growth centres be made on the basis of fee simple title, subject to the specification of

the purpose for which the land is to be used, the enforcement of improvement conditions prior to the issue of a title and the reservation of development rights. If general legislation is enacted . . . to vest all future development rights in the Crown, the form of tenure in the new cities will be the same as that in existing cities and grants may continue to be described as grants in fee simple. Until such time as general legislation . . . is passed in a State . . . grants of land

[should] be issued under a new title, such as “residential grant” or “residential freehold”.’ 8.11 We thus specified the need for an improvement condition to be enforced prior to the issue of freehold title on residential land. The imposition of an obligation to develop, to a specified minimum cost and within a specified period, is not new in Australia. Such a condition has frequently been imposed on Crown Grants, dating back to the earliest settlement. Under the Crown Lands

legislation of most, if not all, of the States such a condition may be, and we understand frequently is, imposed1. In the Territories, the practice has been to impose such an obligation by means of lease conditions.

8.12 It is easy to justify the imposition of an improvement condition in prin­ ciple. Few people deny the desirability of ensuring that new residential lots are fully serviced before they are disposed of to home builders. Under normal con­ ditions, it has been difficult for the supply of services to keep pace with demand.

In an attempt to improve the supply of services and ensure that residential lots do not lack basic facilities such as water supply, sewerage and roads, vast sums have been spent by public authorities in recent years. Under these circum­ stances, it is imperative that serviced lots available for housing be used for their designated purpose. They should not be held by speculators seeking capital gains while genuine home-seekers are forced to acquire land in less desirable areas

or are compelled to wait until additional land is developed.

8.13 Two aspects of improvement conditions require consideration. They are the improvement time to be allowed and the mechanics of issue of title.

8.14 We do not consider it appropriate, or indeed possible, for us to specify an improvement time of general application. Much will depend upon local cir­ cumstances, including availability of finance and the relative stability of land prices. We consider that the time allowed to genuine home builders should be

a generous one, say two or three years rather than six or twelve months. While the shorter period is doubtless sufficient for a purchaser to plan and commence, if not complete, the building of his home, it cannot be safely assumed that at the time of purchase he is ready and able to build. There is a long tradition in Australia whereby persons who are genuine home builders borrow to acquire their land or purchase it by means of instalment payments. They are usually not in a position to finance the construction of a house until the land is free of debt. That tradition is likely to continue, especially in conditions of rapidly

1. See for exam ple s. 47A of the New South W ales C rown L ands Consolidation A c t 1913, w hich imposes

a statutory condition th a t the lessee shall erect a dw elling.

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escalating land prices and restricted or expensive finance. We do not believe that an improvement condition should prevent land acquisition on this basis, especially as it would mainly affect those on low incomes.

8.15 Whatever period is selected, it will be desirable to guard against specu­ lative purchases by providing that the land may not be resold prior to satis­ faction of the improvement condition, but may only be surrendered to the dis­ posing authority in return for a refund of purchase money together with, say, interest on purchase money at the bank rate and the actual value at date of surrender of any improvements which have been constructed.

8.16 We have suggested (paragraph 8.10) that title should not issue until after satisfaction of the improvement condition. One reason for this suggestion is that it will be difficult to enforce the condition after title has been granted. Pro­ vision could be made for forfeiture of the grant but this would itself involve complications. This is because third party interests (particularly of mortgagees)

could be affected, and because the disposing authority would undoubtedly be subject to pressure, both justified and unjustified, not to forfeit. It is undesirable that the disposing authority should be placed in the position of having to adjudi­ cate upon the adequacy of reasons for non-compliance with the improvement

conditions. It is even more undesirable that titles should be issued which are capable of being forfeited to the prejudice of third parties. The availability of finance would be seriously affected by any such system.

8.17 We therefore suggest that, upon completion of the contract to purchase an unimproved residential lot, the disposing authority should issue a new type of document — a Certificate of Proposed Grant. This Certificate should specify particulars of the land (in the same way as a Crown Grant), the consideration

paid, the date of payment and the terms (including improvement conditions) of the Proposed Grant. Provision should be made for the registration of such Certificates under the relevant Torrens Title legislation and for the registration upon such Certificates of mortgages, notices of death, etc. (but not transfers).

A mortgagee could safely provide finance for the purchase of the land or for the erection of a building, provided that he ensured: (a) that he was registered as mortgagee on the title and was thereby entitled to first claim on a refund or surrender; (b) that the mortgage document specified circumstances in which

the mortgagee could exercise the right of surrender; and (c) that the total debt was less than the refundable amount. In the event of the purchaser failing to complete the building as required (or failing to adhere to his mortgage payments), the mortgagee could himself exercise the right of surrender and obtain from

the disposing authority such part of the refundable amount as was required to pay out the debt; the balance could then be paid to subsequent encumbrancers or to the purchaser.

8.18 Upon satisfaction of the improvement condition, a Grant should be made by the disposing authority with the effect of superseding the Certificate of Pro­ posed Grant. This would be in the form of the usual Torrens system Certificate of Title and would be endorsed, prior to issue, with notice of the conditions

(other than improvement conditions) and encumbrances shown on the Certificate of Proposed Grant. Mortgages would automatically continue without need for fresh registration. Once the Certificate of Title issued the land would be freely transferable.

8.19 We have said that the grant should be made subject to the specification of the purpose for which the land is to be used and to the reservation of develop­ ment rights. These conditions are only necessary until general legislation is en­

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acted to implement our recommendations relating to the arrangements for com­ pulsory acquisition and the system to be followed after a development order has been issued (see paragraphs 2.35 to 2.41, 5.8 to 5.10, and 5.23 to 5.27). The statement of reservation on the Grant is seen primarily as a statement of principle so that purchasers and mortgagees will be aware of the situation; in law the more important limitation will be the covenant as to user. This coven­

ant will necessarily be a covenant in gross, that is it will not attach to the sub­ ject land for the benefit of other particular land. As noted in paragraphs 4.32 to 4.50 above, it will otherwise be ineffective under common law. Statutory author­ ity, which is not presently available in most States, will be necessary to enforce a covenant in gross and we assume that legislation will be enacted in accordance with the recommendation made in Chapter IV. If this is done, the Grant will simply include a covenant by the grantee ‘not to use the land hereby granted except for the purpose of a single-dwelling house’, or ‘except for the purpose of a residential flat building containing a maximum of twenty separate residential

units’ or to similar effect depending on the designated use. We emphasise that we envisage the continuing application of a system of town planning controls. The proposed reservation and covenant in the grant are designed merely to protect the public interest in the development rights until that interest is pro­ tected by general legislation.

Development Leases 8.20 We advocated in paragraphs 3.14 to 3.17 above that the fullest opportunity be taken to exploit the skills and initiatives of private developers. The question then arises as to how this may be arranged in relation to land for residential purposes. A fee simple grant prior to the development is inappropriate but such a grant must be available to the ultimate purchaser. 8.21 We suggest the use of development leases, granted at whatever stage private development is to be undertaken. There may be a lease of broad acres pursuant to which the lessee is obliged to build roads, provide services, construct com­ munal facilities and the like. If it is intended that undeveloped lots will then be put on the market, the regional commission (as lessor) may covenant to issue a Certificate of Proposed Grant to persons nominated by the lessee-developer when the lease obligations have been discharged. The lessee will sell at his own price subject to payment having been made to the commission for the new use value of the land (including development rights). He will therefore take the risks of the market and the benefits of his efficiency in fulfilling his lease obligations. Alternatively, conditions of the kind proposed in paragraphs 5.32 and 5.33 of the First Report may be imposed in lieu of cash payment for new use rights. If it is intended that the lessee will construct buildings, then the lessor-commission will covenant to issue Grants to nominated purchasers after this has been done. The lessee may desire to sell a mixture of vacant lots and developed lots. If so, the lease may appropriately provide. 8.22 As another possibility, a lessee may take a tract of serviced land with the the intention of constructing residential units for sale. In such a case the com­ mission may issue a series of Certificates of Proposed Grant. However, this would involve payment of the whole of the purchase price and would not be as effective as a lease in providing direct control over timing. The parties may therefore prefer to have a development lease, whereby the lessee is obliged to develop units which meet certain standards within a given time, while the lessor agrees to issue Grants in favour of purchasers upon payment by the developer of the new use land value attributable to such Grants.

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8.23 In the case of non-residential land, leases will be required in any case. However, if a developer wishes to develop a number of sites and then sell, the same technique of a development lease may be preferable to the issuance of a lease with a series of sub-leases.

Planning Control and Non-residential Land 8.24 In the First Report, we indicated that under leasehold tenure it is relatively easy to control the actual use of land. In the Australian Capital Territory statu­

tory planning has been unnecessary, land use control being achieved by the purpose clauses included in all leases.

8.25 We contemplate that, in new metropolitan and regional growth centres and in the Australian Capital Territory and Northern Territory, non-residential land will be granted by lease. To facilitate planning control and protect the public entitlement to new use rights, it will be necessary for each lease to contain a

purpose covenant limiting use to that proposed under the relevant development order. However, we believe that planning should be a public act, not a matter of private negotiation between lessor and lessee. Consequently, all of our sug­

gestions as to the planning system (Chapter IV above) and development pro­ cedures (Chapter V) are intended to apply equally to leasehold land for which a change in use is proposed. When a development order is issued in respect of leasehold land, the regional commission will either acquire the lessee’s interests

and pay compensation for any unexpired term or, alternatively, allow the lessee to pay for the development rights and privately undertake the new use. In the latter case, the existing lease will need to be surrendered and a new lease issued in conformity with the development order.

Pollution Control and Industrial Land 8.26 In paragraphs 7.58 to 7.60 of the First Report, we indicated the advantages, in terms of pollution control, offered by leasehold tenure of industrial land. In particular, we suggested that public authorities often now grant development

approvals without due regard to the environmental implications of their decisions, and that specialist government agencies only later become aware of the prob­ lems which have thereby been created.

8.27 In the First Report, we therefore suggested that ‘the powers of a public landowner to control the uses to which leased land is initially or subsequently put are inherently much stronger and much more effective than present public powers in relation to land under fee simple tenure’. In making this observation,

we did not intend to imply that development authorities should themselves be pollution control authorities. We agree that this would be quite inappropriate; pollution control is a highly specialised activity in which it would be impossible for regional commissions or other development authorities to develop the neces­

sary expertise. 8.28 To some extent, the development procedures recommended in Chapter V will assist in the identification and regulation of pollution problems. The extensive provisions as to public notification and objection will assist persons likely to be

adversely affected, in their living or working environment, by a new polluting industry. The need for the regional commission to formulate draft planning conditions prior to notification of a draft development scheme will mean that the commission (in consultation with the local council) must give attention to the

question of pollution at that early stage. It will have the opportunity to obtain specialist advice on the problem and on the conditions necessary to mitigate it.

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8.29 Notwithstanding such precautions, environmental problems will no doubt remain, arising perhaps from insufficient consideration or from changes in materials used, products, technical processes or other circumstances. A widely framed lease clause will enable the regional commission to deal with those prob­ lems. We have in mind a clause along the following lines:

‘It shall be lawful for the lessor, in accordance with the report and recom­ mendation of any authority empowered or charged under statute with respon­ sibility for pollution control, to serve upon the lessee from time to time a

Pollution Control Notice. Such Notice may specify steps to be taken by the lessee to remove or abate any pollution occasioned by the use of the demised land and the time within which such steps are to be completed or to take effect. Thereupon the lessee shall fully, and within the time specified, comply with such Notice.’ 8.30 It may be appropriate for a right of appeal against the provisions of the notice to be conferred on the lessee. The regional planning tribunal proposed in paragraph 5.17 above could be used for this purpose. If this is done it will be necessary to make appropriate provision in the clause suggested in paragraph 8.29.

8.31 The consequence of the proposed control clause would be that a regional commission could only issue a notice if a relevant statutory authority considered such a step necessary. However, if the notice were issued and disobeyed the lease could be forfeited, a remedy which is not available to public authorities

under fee simple tenure.

Government Lands 8.32 We suggested in Chapters IV and V that public development should be subject to the same scrutiny and challenge as private development. We believe it to be a proper principle that, as far as possible, government land use be sub­ jected to the same restraints as private land.

8.33 In paragraph 7.67 of the First Report, we left open for further consider­ ation ‘the terms on which [government] bodies acquire and hold land’. Acquis­ ition has been discussed above (paragraphs 2.35, 5.22) but so far we have not considered the basis on which public land should be held.

8.34 Public land may be divided into two categories, namely, land which is used by the public as of right (such as streets, parks, etc.) and land which is used by public agencies for the purpose of providing administrative or economic facilities (such as government buildings, power stations, etc.).

8.35 Land in the first category is usually dedicated or reserved, in fee simple, for public use. We see no virtue in departing from this practice, both because it is conducive to public certainty as to rights and because it is administratively convenient. The proportion of such land to total land does not vary significantly

from one local area to another, so that the financial burden associated with the provision of such land is not likely to differ as between local authorities. We therefore consider that responsibility for providing this land should rest with either the regional commission or the local council depending, perhaps, on the

distribution of the benefits of new use rights.

8.36 However, the situation is quite different in relation to the second category. The incidence of government lands and buildings does vary significantly from one local area to another. Moreover, the lands are public only in an indirect sense and do not necessarily benefit the local community. A government office or defence training area is restricted to ordinary members of the public in the

same way as a private office or factory. At present, those local councils which

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-

have a disproportionate share of government lands complain that they, through their rate revenue forgone, subsidise taxpayers in areas not occupied by govern­ ment agencies. We see considerable force in this complaint, but we do not pursue the matter because the rating system is not a matter upon which we are required

to report.

8.37 However, we are obliged to consider lease rentals in new metropolitan or regional growth centres and in the two Territories. We are of the opinion that inequity would be compounded in those areas if regional commissions were re­ quired to make land available free of cost to governments for administrative or

quasi-commercial purposes. Moreover, we believe that, as a matter of principle, particular departments or authorities should be required to bear the true cost of their activities, so that their utility may be evaluated in terms of resources used rather than cash costs (which fail to include indirect subsidies).

8.38 Consequently, we suggest that leases should be granted by regional com­ missions to government departments, local and statutory authorities on the same basis as to private lessees. Lands intended for government administration should be treated as commercial lands, leased at economic rents with periodical review

according to changes in market rental value (see First Report, paragraphs 7.30 to 7.50). Lands used for government industrial or quasi-industrial purposes (trans­ port depots, workshops, research centres, film studios, defence establishments and the like) should be treated as industrial lands and leased on the basis of capital

premiums representing market value (see First Report, paragraphs 7.61 to 7.64). As with private leases, the terms of the leases should be determined by reference to the anticipated life of the improvements (see First Report, paragraph 7.50).

8.39 There are in-between uses, related to traditional functions of government but involving a substantial element of direct community benefit (such as schools, hospitals, community centres, public libraries and the like). The question of rent for these uses is less important from the viewpoint of regional or local author­

ities, because they are likely to be fairly evenly distributed between regions and local areas according to population. However, on the principle of apportioning cost and establishing accountability for the use of resources, we favour a re­ quirement that authorities acquiring land for these purposes make capital pay­

ments to the regional commission to recoup the cost of providing the land. The position will then be similar to the present situation when land is acquired from private owners, except that lessee-authorities will obtain the benefit of the cost saving afforded by the public appropriation of the development rights.

Administration of Leases 8.40 Although we have reaffirmed the general principles relating to leases as set out in Chapter VII of the First Report, our position is qualified by our change of view regarding development corporations. As indicated in paragraphs

3.11 to 3.13 above, we have decided that the recommendation as to development corporations should be abandoned and replaced by our proposals for regional commissions, structured as indicated in paragraphs 3.31 to 3.35. For the reasons

expounded in paragraphs 4.24 to 4.31, we consider that such commissions should be entrusted with the task of leasehold management in the growth centres and the two Territories. 8.41 We make one final comment on disposal techniques. Just as public par­

ticipation is desirable in relation to the planning of land use, so it has a place in the consideration of disposal techniques and land management. However skilled its officers may be, no regional commission can expect to know all the problems

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or find all the answers. The decisions taken as to the methods and terms of land disposal must be practicable and fair to both sides. Abundant assistance is available to commissions, through professional and trade organisations of

legal advisers, developers, builders, financiers, etc., to ensure that procedures and requirements are satisfactory. We suggest that there should be regular confer­ ences betv/een officers of regional commissions and representatives of these organ­ isations for the purpose of reviewing procedures, requirements and documents. Having heard comments, the regional commission may decide to stand firm upon a particular requirement in the public interest. But in the absence of regular consultation of this kind, management decisions may impose inconvenience and additional expense on affected parties unnecessarily and without any conscious decision to do so. This will be to the ultimate cost of the consuming public.

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IX LAND DEVELOPMENT ACCOUNTING AND THE TREATMENT OF LAND REVENUES

9.1 One of the matters on which the Commission is required to report is ‘the manner in which any revenues raised by the lease allocation system should be reflected in any land development account, for example, whether these should

be regarded as the disposal of a capital asset and/or profit by the land authority’ (Term of Reference (2)(m)). In the First Report we referred only briefly to this problem. While indicating that we proposed to defer detailed consideration of the question until this Report, we made the following general observation (para­

graph 5.20): ‘Irrespective of the formal organisation which is adopted for purposes of land acquisition and development control, it is essential that appropriate financial guidelines be specified for pricing and profit policies and that, for purposes of

financial control, appropriate methods of land development accounting be instituted.’ 9.2 The Commission received relatively few submissions on land development accounting and the treatment of land revenues. However, the financing, pricing and accounting arrangements which are made in relation to land development have obvious significance both for land use policy and for the structure and financing of general government. Land development accounting procedures are therefore relevant to the operations of the planning authorities which we have proposed for all levels of government (the national land use council, Australian and State government planning agencies, regional commissions and local author­ ities). The financing, pricing and profit policies which are adopted may also affect the operations and finances of general government at the Federal, State, regional or local levels.

9.3 The treatment of land revenues was one of the matters considered by the Parliamentary Joint Committee on the Australian Capital Territory in its Report on Self-government and Public Finance in the Australian Capital Territory1. The Joint Committee recommended that, for the Australian Capital Territory, the

land administration function should not pass to Territorial control and that all aspects of the planning and development, construction and land administration should be managed on behalf of the Australian Government by a single authority, which it called the National Capital Development Corporation. After discussing

alternative methods of treating land revenues, the Joint Committee indicated that it believed that the National Capital Development Commission’s proposal for a comprehensive land development account merited consideration. (The notion of a comprehensive land development account is discussed below.) The

Joint Committee noted, however, that the Commission of Inquiry into Land Ten­ ures was examining aspects of the concept in the context of its inquiry and recom­ mended that a final decision should await the results of the Commission’s examin­ ation.

9.4 The main issues which were raised in submissions or hearings, or which appear to the Commission to be relevant to a consideration of the treatment of land revenues, relate to: (a) the accounting structure which is needed to record land development

transactions;

1. Australian G overnm ent Publishing Service, C anberra, 1975.

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(b) the valuation of transactions and the basis of measuring the relationship between costs and revenues; and (c) the financing, pricing and profit policies which are appropriate to the forms of land tenure arrangements which we have recommended. These questions are not necessarily mutually exclusive.

Recording Land Transactions 9.5 Evidence placed before the Commission suggested that there are three principal methods of recording land transactions:

(a) passing all transactions through Consolidated Revenue; (b) setting up a system of accounts of the kind which a private developer would use, in which the land or development authority would record only market transactions related to the authority’s land acquisition,

development and management activities; (c) establishing a comprehensive land development accounting system, in which the land or development authority would record, in addition to the market transactions referred to in (b), such notional costs and revenues

as might be relevant to the problem of providing the authority with information needed for the purposes of planning, pricing and other policy decisions, and exercising control over land development and administra­ tion.

9.6 The first method is the one which has been used in the Australian Capital Territory. All funds for land acquisition and development are appropriated an­ nually by the Australian Government and all revenues are paid into the Con­ solidated Revenue Fund.

9.7 Although the Australian Treasury did not make a submission to the Com­ mission, we have had access to the Treasury’s submission to the Parliamentary Joint Committee on the A.C.T. referred to above. In that submission, the

Treasury rejected the concept of a land development account for the Australian Capital Territory in favour of the present approach whereby all receipts and outlays relating to land transactions are passed through Consolidated Revenue. Having regard to the terms of reference of the Joint Committee, the Treasury

submission proceeded to propose a system of public finance for the A.C.T. which it said would place the citizens of the Territory in the same position as the citizens of the States. Under this system, it would be necessary ‘to calculate the taxes and charges which Territory residents should bear by taking [taxes and] charges equivalent to those levied in the States and then adding (or subtracting) appropriate amounts to take account of any higher (or lower) standards of services or facilities’. It is not clear from the Treasury document who would make these calculations or how the measurement of differences in standards of services would be isolated from the effects of differences in costs of providing comparable standards of services or of differences in efficiency. But the clear implication of the proposed procedure is that Australian taxpayers in general, and not the A.C.T. community, should bear the full costs of land development in the Territory and reap any financial benefits which flow from that develop­ ment.

9.8 Insofar as this Report is concerned, a major objection to the Treasury proposal is that it would prevent the adoption of accounting procedures designed to facilitate managerial efficiency and financial control, in relation to such matters as the planning and control of land acquisition and development, the formulation

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of effective financial and pricing policies, financial control and the evaluation of the performance of the land development authority. We therefore reject the Treasury proposal in favour of a system of land development accounting.

9.9 The second method of recording land transactions seems to be the method proposed by the Department of the Capital Territory. In arguing that a detailed land development account is necessary to measure the efficiency of the land operation, the Department said:

‘The continuing debate about the Canberra leasehold system in past years suggests an absolute need for precise land development accounting in any lease­ hold system. ‘The community must have a continuing accurate and frank account of the

financial performance of the leasehold system. This should include an itemised accounting of all costs and revenues. In the absence of such accounts, few areas of public effort and investment are more open to myth, mis-statement and misconception. Audited accounts can put the issues into objective perspective.’

9.10 The Department of the Capital Territory indicated that it was in the process of preparing a land development account for Canberra, and presented tables recording detailed revenue and expenditure figures for each year from 1910-11. Since 1969-70, the Department has been drawing up notional Municipal

Accounts for Canberra, consisting of a municipal services account, a sewerage account and a water supply account. Since 1971-72, the Department has also published a Tentative Territorial Account, which is intended to record revenue and expenditure transactions of the kind which are engaged in by State govern­

ments. Land transactions would be recorded not in these accounts but in the proposed land development account.

9.11 In considering the treatment of land revenues in relation to land develop­ ment accounting, the Department said:

‘Normally, revenues raised by any leasehold land allocation system might be expected to be entered in a Land Development Account and treated as recoup­ ment of funds invested in the acquisition and servicing of land. Such revenues would not normally be regarded as receipts from the disposal of an asset. Moneys

received in excess of full recoupment of costs might be regarded as a profit created by the land development authority and available for reinvestment in further land development. . .

9.12 The evolution of land development accounting procedures seems to have been associated historically with the approach of the New Town development corporations in the United Kingdom and private development estates in the U.S.A., whereby all land acquisition and development activities in a new town

are undertaken by a single authority. Under the so-called New Town philosophy, the development authority is able to use the revenues it receives, from the sale or lease of building sites at development value, to recoup costs and finance further land acquisition and development. But the employment of land develop­

ment accounting is not dependent on the adoption of any particular view about the treatment or disposal of land revenues. A land development accounting system is essentially an information system designed to facilitate managerial and financial planning and control.

9.13 This point was emphasised in the submissions which the Commission re­ ceived from the National Capital Development Commission (N.C.D.C.) and the Cities Commission, which both proposed the adoption of the third method of recording land transactions distinguished in paragraph 9.5 above, namely a

comprehensive land development accounting system. After arguing that the

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accounting system should facilitate the management and decision-making pro­ cesses, demonstrate accountability, reflect the Australian Government’s respon­ sibility for the development of the A.C.T., and facilitate the co-ordinated develop­ ment of Canberra, the N.C.D.C. made the following observations:

‘A business-like approach would be to bring these related expenditures and revenues together in a single Public Leasehold Land Development and Manage­ ment Account (in brief — the Land Development Account) to show the nation at large, the A.C.T. community and the Commission itself the financial results and economic viability of this unique and comprehensive public land development and management function in the A.C.T.

‘The Land Development Account would provide the Commission, as the land developer, with an important management tool to monitor its land development programme and to use the results to facilitate financially and economically viable forward planning, and compare the results with other new developments in the new towns and where possible with those in the older cities.’ 9.14 In its submission to the Commission, the N.C.D.C. repeated the following recommendations on land development accounting which it had made to the Parliamentary Joint Committee on the A.C.T.:

(a) ‘That a comprehensive land development account be adopted, to acknowledge the Australian Government’s land ownership, comprehensive land develop­ ment, and land management functions in the A.C.T.’

(b) ‘That this account be charged with the costs associated with the use, develop­ ment (including the provision of related headworks) and management of the land, and credited with the land revenues.’ 9.15 In a supplementary submission to the Joint Parliamentary Committee, the N.C.D.C. presented a tentative Comprehensive Canberra Land Development Account. This Account, which contained estimated figures for the period 1 Jan­ uary 1971 to 30 June 1973, consisted of a cash flow statement (more accurately a capital transactions account) and a statement of income and expenditure (or operating account). In each statement, separate figures were presented for trans­ actions involving the private sector and the public sector, the private sector figures being sub-divided into residential and commercial, and the public sector being sub-divided into residential and educational (figures for public sector commercial sites were not available). The capital transactions account recorded capital receipts on the one hand and land sub-division capital payments and a share of capital headworks payments on the other. The operating account re­ corded operating income on the one hand and debt charges and administrative expenditures on the other. It was explained that the Account had been pre­

pared on the basis of the following assumptions:

(a) development works were deemed to be financed from loans repayable at long-term bond rates over 60 years; (b) the Account was charged for the use of raw land at long-term bond rates; (c) annual land rents received from the private sector, and estimated actual

and notional revenues from the public sector on land used for govern­ ment purposes, were credited to the Account; and (d) land rents paid in advance (in the form of premiums or lump sum pay­ ments) were amortised over the term of each lease, both for the private

and the public sectors.

9.16 In a subsequent supplementary submission to this Commission, the N.C.D.C. presented a number of land development accounting, financing and pricing studies which modified the approach suggested to the Parliamentary Joint Committee.

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Following what was described as the traditional historical record accounting approach, the Comprehensive Land Development Account was first presented in the form of three statements, namely a statement of income and expenditure, a statement of assets and liabilities and a statement of receipts and payments.

Further studies showed how valuation adjustments could be made to enable the Comprehensive Land Development Account to report on the effects of price changes.

9.17 In its submission, the Cities Commission described the function of develop­ ment corporations in the new cities in the following terms: ‘Although each new city development corporation will be undertaking some building development and providing municipal facilities and services pending

the introduction of municipal self-government, it will be mainly operating as a large scale land developer and leasehold estate manager. It will acquire the designated site area through the proposed State Land Commission and pay the Land

Commission for the site, probably an annual land rent. It will plan the land use and undertake the land development and servicing works (particularly the water, sewerage, drainage and road works and open space) and sell the lease­ hold sites for private and government building development, and then manage

the leasehold estate. The corporation will generally finance its land development works and the associated design and administrative overhead costs from long term loans carrying the appropriate market rate of interest. The corporation will look to its leasehold land revenues, both land rent and premiums, to

recover its land, land development and interest charge outlays and to meet its estate management costs. The cash premium receipts will reduce its dependence on loan fund financing.’ 9.18 To record these transactions, the Cities Commission proposed a compre­ hensive leasehold Land Development and Investment Account, which it described in the following terms:

‘This Account will bring together the corporation’s leasehold land revenues and the costs to the corporation of producing the serviced building sites and managing the leasehold estate. As well as recording the corporation’s performance in normal business accounting terms the account will provide the base for

preparing a financial management model for use in assessing the financial con­ sequences of alternative development strategies. ‘The Land Development and Investment Account for the new city will also show the lessees the uses to which the leasehold land premiums and rents have been put.

‘The cost side of the account will include the outlays on water, sewerage and drainage headworks as well as main roads. Although these headwork items are usually carried out as water and sewerage utility and municipal works and charged to the water and sewerage and municipal accounts, they are also

increasingly being carried out as part of a large scale land development project . . .’ 9.19 The Australian Treasury, in its submission to the Parliamentary Joint Committee, commented critically on a number of aspects of the N.C.D.C.’s

proposal for a Comprehensive Land Development Account for the A.C.T. Some of its criticisms were concerned with financial implications and with availability or reliability of data, but three issues were raised which have a bearing on the transactions to be recorded in a system of land development accounting. These

concerned the N.C.D.C.’s exclusion of past development costs from the Land Development Account, the inclusion of water and sewerage headwork and main road costs in the Land Development Account, and the inclusion of notional land revenues in respect of land made available for public purposes.

9.20 The main issue in relation to past development costs is the extent to which existing residents of the A.C.T. should be required to accept responsibility for

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past decisions over which they had no control. The Parliamentary Joint Com­ mittee concluded that it did not seem possible for all past development costs to be recovered from existing leaseholders in the A.C.T., but it was reluctant to recommend that past costs be simply written off. It recommended that the matter be considered further by the Australian Government and the Legislative Assembly, for example in the course of negotiations ‘to determine the basis upon which existing assets are to be transferred to the Assembly under self­ government, the level of any annual charge to be levied by the National Capital Development Corporation, or the level of any special national capital grant that might be paid by the Australian Government to the Assembly’.

9.21 We agree with the Joint Committee that it would not be appropriate to write off the whole of past development costs, and with the suggestion that was made to us that the opening notional loan debt to be recorded in the land devel­ opment accounts should be assessed by reference to the value of assets taken over by the development authority when the land development accounting system is formally established. Insofar as new cities generally are concerned, it is

possible—perhaps even likely—that deficits will be incurred during the early stages of a city’s growth; the extent to which this happens will depend on the financial and pricing policies which are adopted and on the success of the city in attracting investment activity and achieving population growth. Whether such deficits should be accumulated in the expectation that it will be possible for them to be written off against future surpluses, or whether they should be written off by appropriations from general revenue before the city becomes fin­ ancially viable, will depend on the circumstances of each case and on the financial, pricing and profit policies which are adopted (these are discussed below).

9.22 On balance, we agree with the Australian Treasury that the Land Develop­ ment Account should not record water and sewerage headwork and main road costs. Expenditure on these items, which is sometimes called general development expenditure, is charged to land development in the United Kingdom New Towns. Private estates are also sometimes required to bear headwork costs in return for planning approval. The reason for treating headwork costs in this way seems to be that such expenditure is a necessary pre-requisite for development. Function­ ally, however, these expenditures seem to be more closely related to the provision of water and sewerage services, and road services. We are therefore not persuaded

that land revenues, rather than charges for water or sewerage services and rates or property taxes, should carry the burden of financing such costs, especially if the land revenues are derived in the form of lump sum payments rather than periodic rentals. This is because, in the words of the Treasury, there is no reason why the present should pay for the future. But we accept that this must be a government policy decision that will depend, among other things, on the relative profitability of the land development operations in a particular area and on the availability of other sources of finance to meet headwork costs.

9.23 The proposal that all public sector land transactions be recorded is funda­ mental to the notion of land development accounting. In the absence of such action, the purposes of land development accounting cannot be achieved. This is because vital information necessary for purposes of managerial and financial planning and control will not be available to the development authority or to those who wish to evaluate the performance of the development authority. We therefore reject this criticism by the Australian Treasury. Decision-makers in the public sector must be encouraged to treat land as a scarce resource which should be used efficiently and economically, and land development authorities must be

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able to take public as well as private land use into account in meeting whatever planning and financial requirements are imposed on them. We therefore consider that it is essential that, both for the A.C.T. and for development areas generally, comprehensive Land Development Accounts be established which will record all

land transactions, including those involving governments.

9.24 The adoption of such an approach does not necessarily imply that cash transfers take place between the development authority and the governments concerned; notional book entries may achieve the same purpose. The Australian

Treasury is therefore misleading when it says that the ‘idea of the Common­ wealth buying leases of its own land has a novel twist’. The same is true of the Treasury’s statement that a ‘logical consequence of this proposal could be that the Commonwealth, having bought its sites for office blocks, and so on, at

assessed values, would now also be liable, as a leaseholder of its own land, for payment of general rates to the notional local government authority in Canberra. The Commonwealth, of course, is not constitutionally liable to pay general muni­

cipal rates anywhere in Australia.’ In any case, we do not believe that such a statement of the Australian Government’s legal liability with respect to local rates disposes of the question whether in principle the Government should pay rates. There may well be good grounds, based on considerations of equity and

efficiency, for suggesting that the Australian and State governments should make ex gratia payments in lieu of rates on government property, at least to the extent that such property benefits from local government services (see paragraph 8.36). But this question lies outside our terms of reference.

The Land Development Accounting Structure 9.25 Turning now to the structure of the Land Development Account, we consider that this must have regard to the requirements of the accounting system to provide information needed for purposes of long-term physical and financial planning, short-term forecasting and decision-making, financial control,

performance evaluation and managerial control. The accounting system must therefore be perceived as a budget as well as an historical record. Because the land development authority must meet profitability, liquidity and stewardship requirements, it is also necessary that the accounting system provide budgets and

reports on profit performance, cash flows, and assets and financial obligations.

Land Development Economic Activity Accounts 9.26 As we pointed out in the First Report (paragraph 5.20), the land develop­ ment accounting structure needs to differentiate between land development activi­ ties, leasehold activities and financing activities. The essentials of a land develop­

ment accounting system may be illustrated by a set of economic activity accounts for a development authority, corresponding to what are sometimes described as flow-of-funds accounts in national economic accounting or funds statements in business accounting (see Table 9-1).

9.27 The four accounts in Table 9-1, which together form a fully integrated set of double-entry accounts, classify the transactions of a development authority during a particular period into four types of economic activity—land development, leasehold management, capital accumulation and capital financing. The Site

Development Account and the Leasehold Management Account are both oper­ ating accounts, each of which records operating revenues and expenses and measures operating surplus (or deficit) as a balancing item. If the development authority engages in building and construction activity as well as site develop­

95

ment, and if it leases buildings as well as sites, two additional accounts may be added to the system. These may be called a Building Construction Account and a Building Leasehold Account respectively. Further variations are possible, for example by having separate accounts for government housing and other govern­ ment properties. A development authority in an existing city where re-develop­ ment is taking place may likewise extend the system illustrated in Table 9-1 by adding a Re-development Construction Account and a Re-development Lease­ hold Account. Where land acquisition is undertaken by a land commission and land development by a regional authority, the Site Development Account illus­ trated in Table 9-1 must be subdivided into a Land Acquisition Account (cor­ responding to the financial accounts of the land commission) and a Site Develop­ ment Account (corresponding to the financial accounts of the development author­ ity).

Table 9-1

LAND DEVELOPMENT ACCOUNTING — ECONOMIC ACTIVITY ACCOUNTS

Site Development Account

Land acquisition costs . . . X Sales of land . . . . . X

Site preparation costs . . . X Sale of development rights . . X

Administrative expenses . . . X Developed leasehold sites—·

Depreciation of capital assets . . X Private leases . . . . X

Interest . . . . . . X Government properties . . X

Site development surplus . . . X Government grants and subsidies . X

X X

Leasehold Management Account

Administrative expenses . . . X Site rentals—

Depreciation of capital assets . . X Private leases . . . . X

Interest .................................. . X Government properties . . X

Leasehold management surplus . . X

X X

Capital Accumulation Account

Developed leasehold sites . . X Site development surplus . . . X

Purchases of operating assets . . X Leasehold management surplus . X

Sales of operating assets . . . X

Depreciation allowances . . . X

X

Net change in indebtedness . . X

X

Capital Financing Account

Net change in indebtedness . . X Borrowing . . . . . X

Lending . . . . . . X Reduction in cash balances . . X

Repayment of amounts borrowed . X Repayment of amounts lent . . X

X X

9.28 The Site Development Account records sales of land (including disposal on the basis of residential freehold tenure), the value of any development or

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new use rights conferred by the development authority (as proposed in paragraph 4.31 of the First Report and paragraph 2.35 of this Report), and the value of developed sites made available for leasehold (including sites made available for public purposes). Because the transfer of developed leasehold sites to the author­ ity’s Capital Accumulation Account is in the nature of an internal rather than a market transaction, the transfer value must be notional (or imputed) rather than actual. In the case of both private leases and land for public purposes, the transfer price may be determined by reference to a reserve price related to cost, a market value reflecting lease premiums (or lump sum payments) and the capitalised value of expected rental payments, or some intermediate value. The Site Development Account will also record any grants or subsidies received by the development authority as a contribution to its operations (e.g. road grants). The other side of the Site Development Account records costs of land acquisition

(including all compensation and reinstatement costs), site preparation, adminis­ tration, depreciation and interest. If headwork costs (or general development expenditures) are to be financed from land development, they will be charged to this account. The charge for interest, like the debt to which it is related, may be

wholly or partly imputed. The balance of the Site Development Account represents the surplus or deficit (profit or loss) resulting from the site development activity.

9.29 The Leasehold Management Account records, on the revenue side, site rentals received from private lessees and notional (or imputed) rentals on govern­ ment properties. After charges for administration, depreciation and interest are offset against site rentals, the balance represents the leasehold management surplus

or deficit (profit or loss).

9.30 In the illustration, it is assumed that the whole of any site development or leasehold management surplus (or deficit) is transferred to the Capital Accumu­ lation Account, in effect contributing to saving (or dissaving) and thus to a

change in the development authority’s net indebtedness. Depending on the finan­ cial and profit objectives which are specified for the development authority by the government, provision may be made for the payment of taxes or dividends to the government; such payments would be recorded as separate items in the

Site Development Account and the Leasehold Management Account.

9.31 The Capital Accumulation Account is in the nature of a savings and in­ vestment account. On the one side it records savings (that is undistributed sur­ pluses) and depreciation allowances provided by the site development and lease­

hold management activities. On the other side it records capital investment, representing mainly the value of leasehold sites transferred from the Site Develop­ ment Account. After sales and purchases of operating assets (including changes in stocks) have been recorded, the balance of the Capital Accumulation Account

represents the net change in indebtedness of the development authority during the period covered by the economic activity accounts.

9.32 The Capital Financing Account shows how this change in net indebtedness has been reflected in particular forms of borrowing or lending activity, inclu­ ding repayments and changes in cash balances. The net effect of both market and notional (or imputed) transactions in the other accounts is reflected in changes

in cash balances or in borrowing and lending items in the Capital Financing Account. Some of the borrowing or lending transactions may thus themselves be notional. 9.33 The economic activity accounts illustrated in Table 9-1 summarise the

transactions which need to be recorded in considerable detail in the ordinary financial accounts of the development authority if the land development account­

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ing system is to provide information for purposes of planning, financial control, performance evaluation and managerial control. Separate accounts will be needed for the different sections of the land market (that is, land for residential, com­ mercial, industrial, public and community purposes). The two economic activity

accounts which have been described as operating accounts (the Site Development Account and the Leasehold Management Account) correspond to the income and expenditure accounts that will be derived from the financial accounts of the development authority, while the changes in assets and liabilities which are re­ corded in the Capital Accumulation Account and the Capital Financing Account will be reflected in the development authority’s balance sheet (or statement of assets and liabilities). As has already been noted, the four activity accounts taken together correspond to the funds statement which may be derived from the financial accounts, while those transactions in the activity accounts which are in the nature of cash transactions correspond to the cash flow statement which may be derived from the financial accounts.

9.34 In the course of our investigations, we have had the opportunity of exam­ ining the detailed pro forma accounts which have been provisionally drawn up by the Department of Urban and Regional Development to facilitate manage­ ment accounting in the Department’s land commission and growth centre pro­ grams, and to apply the concept of an urban and regional budget to the develop­ ment of a set of public sector accounts for Canberra. The structure of accounts illustrated in Table 9-1 is, in general, consistent with the detailed accounts drawn up by the Department for these purposes. It is also consistent with the general approach being adopted by the National Capital Development Com­

mission in Canberra and by the Department of the Environment in the United Kingdom in devising a system of management accounts for new towns.

Valuation of Transactions 9.35 In a supplementary submission to the Commission, the National Capital Development Commission suggested that the time was opportune to develop and implement more advanced land development accounting techniques incor­ porating a system of current value accounting. The N.C.D.C. argued that, in determining financial objectives and pricing policy, it is important to consider ‘the question of cost allocation and recovery between the present and the future’. The submission went on to say:

‘Inflation distorts this cost allocation and leads to inequities in cost recovery; however, accounting techniques are being developed to overcome this problem. Their acceptance would introduce a degree of temporal equity, which is not possible under the traditional accounting and financing methods currently in use. In addition, the use of more advanced accounting methods might also facilitate a more efficient allocation of resources.’ 9.36 As noted in paragraph 9.16, the N.C.D.C. included in its supplementary sub­ mission a number of land development accounting, financing and pricing policy studies intended to show how land development accounting could be adapted to a current value basis. It said that the basic philosophy underlying this approach was

as follows: ‘. . . the assets and liabilities of the land development authority are periodically revalued . . . Annual charges on the land users are adjusted on the basis of these new values and a more equitable distribution of costs is achieved’. 9.37 The Commission is sympathetic towards the N.C.D.C.’s aims and agrees that current values provide more relevant information for purposes of pricing and other policy decisions than costs recorded on an historical record basis. As we understand it, the current value system proposed by the N.C.D.C. is based

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on an approach whereby land acquisition and development costs are assumed to be amortised over the period of the leases, and the amortisation charges are subject to current value adjustments in order to determine periodic rental payments. Such an approach seems to us to be unnecessarily complicated. The

process of amortising site acquisition and development costs, and the problem of making current value adjustments by reference to price changes affecting trans­ actions which may have taken place many years earlier, may be largely avoided by malting the distinction between site development and leasehold management

which underlies the land development accounting system illustrated in Table 9-1.

9.38 Except for relatively small items such as depreciation, stocks and work- in-progress carried forward from one accounting period to another (which we agree could be the subject of current value adjustments) most items recorded in the Site Development Account and the Leasehold Management Account are

already valued in terms of current prices. The rental values of developed lease­ hold sites made available for commercial and industrial use may be determined by reference to market values in the manner indicated in paragraphs 7.37 to 7.39 and 7.63 of the First Report. The rental value of land made available for

public purposes is a notional or imputed value, but it likewise may be determined by reference to its estimated market value. Although we suggested in the First Report that some residential land and land made available for community pur­ poses should be valued by reference to cost (see paragraphs 5.32, 5.33, 5.40 and

7.65 of the First Report), our proposals are unlikely to present any difficulty in ensuring that cost for this purpose is expressed in current value terms. This is because we have suggested that residential land and land made available for community purposes be allocated in return for lump sum payments or capital

premiums. The costs of site development which are taken into account in deter­ mining reserve prices for (or otherwise pricing) such land are therefore pre­ dominantly current costs, except to the extent that minor current value adjust­ ments may be considered necessary as indicated above.

Financial Objectives, Profit and Pricing Policies 9.39 The major issues to be considered in relation to financial, profit and pricing policies are concerned with:

(a) the way in which a development authority’s financing requirements are to be met; (b) the overall level of surplus or profit which is sought from land develop­ ment activity, that is profit objectives generally (including consideration

of the possibility that the planned level of profit may be zero or neg­ ative); (c) the contributions which different sections of the land market are expected to make towards the aggregate level of profit which it is aimed to

achieve (including consideration of the possibility that some sections may be subsidised by others); and (d) the distribution of any surplus or profit that may be earned from land development operations (including consideration of the financial relation­

ship between land development authorities and the governments to which they are responsible).

9.40 A development authority’s financing requirements may be met from advances made by the government which established the authority, from loans raised in the capital market, from operating surpluses retained by the authority or from government grants and subsidies. The main issues raised in submissions

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concern the method of financing headwork costs—this has been discussed in paragraph 9.22 above—and the choice between premiums (or lump sum payments) and periodical rental payments as the method of charging for residential and leasehold sites. The recommendations we have made regarding payment for the different types of land use will, if adopted, determine the extent to which land development operations are financed from premiums and rental payments res­ pectively.

9.41 There are several ways in which a profit objective may be specified. The land development authority may thus be required to achieve a designated rate of return on the funds with which it is provided, or to pay taxes and

dividends to the governments which provide it with funds, or to break even in its overall operations. Under certain circumstances, for example in the case of a new growth centre, there may even be an explicit decision that the develop­ ment authority should be subsidised to the extent of the difference between the costs of development and the revenues which are earned from whatever pricing policies are specified. It should be noted that a break-even requirement needs to be made unambiguous by clearly specifying the authority’s obligations in relation to interest, debt redemption and depreciation. A requirement that the authority break even while meeting interest charges at the long-term bond rate is thus equivalent to a requirement that it achieve a rate of return on funds

employed equal to that rate. The profit objective may be implicit in the pricing guidelines to which the development authority is required to conform. If, for example, its costs are given and it is required to dispose of some developed sites at cost and others for what they will fetch in the market, its profit objective has been effectively determined.

9.42 The choice of profit objective will depend on a government’s policy goals in relation to such matters as income distribution, urban development, and popu­ lation growth and dispersion. Although we believe that the expropriation of development rights should make all land development operations inherently profit­ able for governments, and thus capable of making a contribution to general government revenue (at one level or another) in the long run, we concede that new growth centres may need to be subsidised from general revenue in their early stages of development.

9.43 It needs to be recognised, in any case, that an operating surplus or deficit recorded by a development authority in its Land Development Account is not necessarily an accurate measure of the net social benefit or cost which the com­ munity derives from its activities. To the extent that a new growth centre reduces the costs of providing facilities and services in existing cities, or enhances the quality of life in those cities, it is providing social and economic benefits which will not be reflected in its development authority’s financial accounts. Such bene­ fits (and any offsetting costs of a similar nature) need to be considered by governments when they make investment, financial and pricing decisions affecting

the development authority.

9.44 This consideration was raised by the Department of Urban and Regional Development in its submission. After suggesting that, as a matter of general principle, lease rents should be related to market value, the Department said that this general principle ‘could admit of exceptions in order to achieve particu­ lar goals of social and economic policy. For example, in the early years of a new city, while fixing lease rents according to their rental values, the leasing authority may defer or allow remissions of rents if concessions were needed to attract population and promote investment by private enterprise.’ It could no

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doubt be argued that if rental values properly reflect market values no such deferments or remissions would be necessary, but this could still leave the develop­ ment authority with operating deficits if its costs exceeded its land revenues. 9.45 In its submission, the National Capital Development Commission proposed

that the pricing policy adopted by a development authority in leasing land should aim to break even in the long run: ‘The management of urban development and redevelopment should be conducted on a business-like basis. A pricing policy should be adopted for the leasing of

land aimed at the land development operation breaking even in the long run. Welfare programmes and subsidies should be clearly identified and accounted for . . .

‘For owner-occupied leases, pricing should aim to recover development costs plus an allowance towards maintaining and augmenting local urban facilities. For income-producing leases, the land rent should be set at a percentage of the income-producing capacity of the lease.’ 9.46 The Cities Commission considered land revenues in relation to the prob­ lem which a development corporation is likely to face in financing land develop­ ment. It said (see also paragraph 9.17 above):

‘The corporation will generally finance its land development works and the associated design and administrative overhead costs from long term loans carrying the appropriate market rate of interest. The corporation will look to its leasehold land revenues, both land rent and premiums, to recover its land, land development

and interest charge outlays and to meet its estate management costs. The cash premium receipts will reduce its dependence on loan fund financing. ‘The reserve price to be charged as the minimum sale price for all sites, for both private and government development, will allow the corporation to recover

its land and land servicing and subdivision outlays. It will look to its premium revenues over and above land rent revenues to recover its other land development outlays on the water, sewerage, and drainage headworks and on main roads. However, it is proposed that the funding arrangements for each development

corporation should enable it to offer serviced sites at a reserve price which is economically sound and viable vis-a-vis the cost and price of serviced sites in other urban areas. Thus, it may be appropriate to provide it with grant funding, in recognition of the normal funding of some urban highways by

the Commonwealth Aid Roads grants.’ 9.47 The contributions of different sections of the land market towards the overall level of profit will be determined by the disposal methods and pricing policies which are adopted for residential, commercial, industrial, public and

community land, and by market conditions in the different sections. The Com­ mission’s proposals regarding disposal methods and pricing policies have been discussed in Chapter VII of the First Report. Here we note the possibility that, as a matter of social or economic policy, the government may wish to

subsidise one section of the market (for example, residential land for low-cost housing) at the expense of another (for example, land for commercial use). If, say, profits from commercial land are used to reduce the price of residential land below cost, the development authority is in effect adopting a distribution policy whereby profits are distributed to residential land users rather than to other

community groups. If, on the other hand, profits from commercial land are used to subsidise the costs of land used for government purposes, profits in effect are being distributed to the taxpayers who would otherwise have to meet those costs.

9.48 The use of profits for this kind of cross-subsidisation is thus one distribution policy option available to a government in determining profit distribution guide­ lines for a development authority. The other principal options involve:

1 01

(a) the ploughing back of profits into further land acquisition and develop­ ment; (b) the distribution of profits for the benefit of the regional or local com­ munity in which the land development is taking place; and (c) the distribution of profits for the benefit of the population (or the tax­

payers) of a State or of the whole of Australia.

9.49 The first of these options is derived from the New Town philosophy des­ cribed in paragraph 9.12 above. In one sense, it may be regarded as the disposal of land development profits to future generations. However, to the extent that it relieves taxpayers of the present generation from the necessity of financing land development operations, it may be regarded as having distributional implications for the present as well as for the future.

9.50 The Commission received several submissions from development agencies which suggested that land development profits should be ploughed back into further development, and not used for purposes of general government. The De­ partment of Urban and Regional Development thus said:

‘The revenue from lease rents and any initial capital payments should be used to meet the costs of development and the payment of compensation for redevelop­ ment. It is important that this use should be identified in public accounts and in the mind of the public. Revenue from the leasehold system should not be absorbed into municipal revenues or any consolidated account.’ 9.51 The National Capital Development Commission, in arguing for a policy of breaking even on land development operations, seemed to envisage a similar process of revolving finance when it recommended that:

‘A land revenue system be established to provide a continuing source of revenue for the recovery (in as far as this is not already done at the point of lease sale) of expenditure incurred in the augmentation, replacement, betterment, redevelop­ ment and management of urban land.’ 9.52 As we have already noted (see paragraph 9.11), the Department of the Capital Territory also argued that ‘Moneys received in excess of full recoupment of costs might be regarded as a profit created by the land development authority and available for reinvestment in further land development’.

9.53 By contrast, the Australian Treasury’s approach, discussed in paragraph 9.7 above in relation to Canberra, would have the effect of absorbing all land development profits into the Consolidated Revenue of the Australian Government or a State government. In this way, taxpayers in general (rather than the members of the community living in the development area) would obtain the benefit of any profits earned from land development activity.

9.54 In making a decision about the disposition of land profits, a government will no doubt have regard to a wide range of social and economic considerations, including such matters as the income distribution effects of its decision and its implications for urban development generally. In making a value judgment in relation to this question, we consider that neither of the extreme positions (of ploughing back all profits into further land development or of transferring all profits to Consolidated Revenue) is likely to be equitable or conducive to effici­ ent urban growth. Insofar as the system of land tenure which we have proposed makes it possible for land development profits to accrue to the public sector, such profits may reasonably be used partly to finance continuing land develop­ ment, partly to make a contribution (by way of dividend or tax payment) to the Consolidated Revenue of the Australian Government (in relation to a Territory) or of a State, and partly to make a contribution to the general revenue of the region-

102

al or local authority in the development area in which the profits have been earned.

Conclusion 9.55 We conclude by summarising our views on land development accounting and the treatment of land revenues:

(a) It is essential that, both for the Australian Capital Territory and for development areas generally, comprehensive Land Development Accounts be established which will record all land transactions, including those involving governments. (b) The land development accounting structure must differentiate between

different kinds of land development activity, such as land acquisition and site development, leasehold management, capital accumulation and capital financing. (c) As far as possible, transactions should be recorded in the Land Develop­

ment Accounts in terms of their current values, but unnecessary amortis­ ation, and cost and revenue allocation, procedures should be avoided. (d) The choice of profit objective in relation to land development activity will depend on a government’s policy goals in relation to such matters as

income distribution, urban development, and population growth and dis­ persion. (e) Land development profits may be used to subsidise particular forms of land development (e.g. residential land for low-cost housing), to finance

further land acquisition and development, to benefit the regional or local community in which the land development activity is taking place, or to augment the Consolidated Revenue of the Australian Government or a State and thus benefit taxpayers generally. (f) Insofar as the system of land tenure which we have proposed makes

it possible for land development profits (including the value of new use rights) to accrue to the public sector, we believe that such profits may reasonably be used for any or all of these purposes.

103

X SUMMARY OF RECOMMENDATIONS RELATIVE TO PARTICULAR TERMS OF REFERENCE

10.1 As we stated in the Introduction to this Report (paragraph 1.12), we found the particular matters mentioned in the Terms of Reference to be so inter­ related that we considered separate discussion of each to be inappropriate. Rather, it seemed to be desirable, in both Reports, to discuss at some length the problems and issues that have been identified in relation to land tenures and to offer some solutions. Nonetheless, it is desirable that there be a summary, relative to each of the Terms of Reference, as a convenient means of locating our views and recommendations on each issue.

10.2 Terms (1) and (3) are couched in very wide terms. It will be recalled that they read as follows: (1) The most appropriate methods of leasehold administration and management of land for urban purposes, consistent with the private rights of lessees and

the public interest in the land, being land in the Australian Capital Territory and the Northern Territory and land acquired by or for the purpose of a Land Commission which may be set up in any Australian State to which the Parliament may grant financial assistance on terms and conditions relating to the acquisition, development and use of land for urban purposes. (3) The existing systems of land tenure and the features, including the advantages

and the disadvantages, of each system that relate to the acquisition, disposal, development, management and redevelopment of land for urban purposes. 10.3 Those terms really require examination of, and report upon, the whole cycle of land acquisition, development, disposal, management and redevelopment. The two Reports have attempted to analyse the deficiencies in current practice in relation to that cycle and to suggest alternatives. A summary of our final recommendations is provided at the commencement of this Report.

10.4 The second Term of Reference directs attention to a number of particular aspects of land tenure but with particular mention of a leasehold land system. As stated in the First Report and reaffirmed herein (paragraphs 8.4-8.7), we have rejected the view that leasehold is the appropriate form of tenure for resi­ dential land. Nonetheless, it was plainly desirable that, in considering the alter­ native, we examine that alternative (to the extent relevant) with reference to each of the matters enumerated in the second Term of Reference. This summary therefore refers to those matters in relation to both leasehold lands and, where relevant, residential freehold lands.

10.5 We now refer briefly to each of the matters in the second Term: ‘(a) the principles and practices currently being applied in the leasing of land by public authorities for urban purposes, including the operation of the leasehold land system in the Australian Capital Territory and the Northern

Territory and, to the extent necessary, the administration of leasehold lands in other parts of Australia and in other countries;’ Although vast areas of Australia are leased by the Crown for private rural use, only in the Australian Capital Territory and in the Northern Territory is land leased by public authorities for urban purposes on a significant scale. The past and present leasing practices in these two Territories are discussed in Chapter VIII of the First Report (paragraphs 8.6-8.30 for the Australian Capital Territory and paragraphs 8.31-8.39 for the Northern Territory). The Commission also made enquiries as to leasing systems overseas, particularly in the United Kingdom, Denmark, Sweden and the Netherlands. However, as mentioned in paragraph

104

7.20 of the First Report, conditions in those countries are different from those in Australia. In particular, the predominant practice in each of those countries is for the Government or some intermediary (such as a church, a property trust or a municipality) to construct housing and to lease both land and buildings or parts

of buildings to residents; the Canberra and Darwin practice of leasing a resi­ dential block of land is practically unknown. In our view, this reduces the usefulness of overseas comparisons. For the same reason the experience of wel­ fare housing authorities, in leasing houses not land, seems to us to be of little

relevance to our inquiry.

10.6 ‘(b) what are the essential characteristics of leasehold tenure as it could be used in an urban land system;’ In Chapter VI of the First Report, we analyse the essential characteristics of both leasehold and freehold tenure and assess their respective abilities to meet the objectives of an urban land tenure system.

10.7 ‘(c) the most appropriate term of years for land leased for residential, com­ mercial, industrial, public and community purposes, and the advantages, if any, of a reduction in the commonly used 99-year lease period;’ These matters are dealt with in Chapter VII of the First Report. Our recom­ mendations are that, in the case of residential land, grants be of “residential freehold” (First Report, paragraph 7.27) except in the Australian Capital Teritory

where, for legal reasons, perpetual leasehold is recommended (First Report, para­ graph 8.23); and that, in the case of non-residential land, the term of the lease be related to the anticipated life of the improvements (see First Report, para­ graphs 7.50, 7.64, 7.66, and this Report paragraph 8.38).

10.8 ‘(d) the purposes of land rent and the appropriate methods for arriving at the annual land rent payable for different classes of land use and the intervals at which the rentals should be subject to reappraisal;’

The concept of rent and the policy purposes behind collection of an economic rent are discussed in Chapters VI and VII of the First Report. Our recom­ mendations as to the manner of calculating rentals for particular types of land are to be found in the First Report, paragraphs 7.32 to 7.42 (commercial land),

paragraphs 7.61 to 7.62 (industrial land), paragraph 7.65 (land for community purposes) and this Report, paragraphs 8.32 to 8.39 (government land). 10.9 ‘(e) the appropriate mechanisms for allocation of leases, indicating the con­ ditions under which auction systems, ballots and direct allocations (needs

basis, etc.) are appropriate for different circumstances and types of leases;’ This Term seems primarily to be directed towards residential leases. Even though we have recommended in favour of residential freehold, the same allocation problems arise. They have been discussed in the First Report in paragraphs 5.34

to 5.40 and 8.24 to 8.28. The allocation of non-residential leases is discussed in paragraphs 7.37 (commercial land), 7.63 (industrial land), 7.65 (land for com­ munity purposes) of the First Report, and in paragraphs 5.22 and 8.32 to 8.39 (government land) of this Report.

10.10 ‘(f) the criteria under which the collection of any land rentals might be deferred or rebated for lessees of land used for purposes which do not produce income and who would suffer hardship if required to meet normal land rent charges;’ To the extent that this Term refers to non-residential land, we see no case for any general policy of deferral or rebate. The only non-income producing land

in this category will be government land or land leased for community purposes. We anticipate no problem about rental payments for the former; in respect of the

105

latter we recommend (First Report, paragraph 7.65) that leases be granted on the basis of capital premiums not exceeding cost or nominal rents. If instalment terms were granted, any default would be a matter of normal estate management.

Partly for this very reason of potential hardship, we do not recommend leasehold tenure for residential land; see the discussion in paragraphs 7.12 to 7.15 of the First Report. 10.11 ‘(g) the conditions, including methods of arriving at land rentals, under which

leases might be made available to non-profit making community bodies and for uses such as schools, churches, clubs, community centres;’ This is discussed in the First Report, paragraphs 7.65 to 7.66. 10.12 ‘(h) equitable arrangements for lessee rights at the expiration of the lease period and in the event of the lease being terminated before the expiration of the lease term;’ In paragraph 7.50 of the First Report we set out our view that, in respect of commercial leases, lessees should normally have the right of renewal and should be paid compensation for the residual value of improvements. Although we did not then so state, we regard this principle as being equally applicable to other types of leases. Where a leasehold interest is acquired before the expiration of the lease term, or where a freehold interest is acquired, then compensation must be paid. In that respect we draw attention to our comments in Chapter VI of this Report.

10.13 ‘(i) the procedures that should be followed when lessees seek a change in the conditions of lease;’ The Term opens up the whole question of land use planning and development control. Because planning and control procedures are so important in the con­

text of the Inquiry they are discussed at length in this Report, particularly in Chapters IV and V. The application of those procedures to leasehold land is discussed in paragraph 8.25. 10.14 ‘(j) the procedures that should be followed in the event that the lease con­

ditions are varied and the means of arriving at the appropriate charges on the land by way of re-assessment of any land rent or the imposition of any other payment in the event of such variation;’ This Term raises the question of the development rights and the financial gain from a change in permitted use, which has so dominated the evidence and which is of basic importance under either a freehold or a leasehold system. The ques­

tion is discussed in the First Report in Chapter IV and in this Report in para­ graphs 2.18 to 2.41. The practical procedures we recommend, applicable equally to freehold and leasehold titles, are set out in paragraphs 5.11 to 5.27 above.

10.15 ‘(k) the rights that neighbouring leaseholders should have in the event of a change in the conditions of a lease especially a change in the purpose clause;’ In view of our recommendation in favour of residential freehold, we have treated this Term as requiring consideration of the interests of neighbours in relation to both leasehold and freehold. As such, it is a matter of considerable impor­ tance. Our recommendations are set out in Chapter III above as to planning institutions likely to minimise conflict; in Chapter IV above as to planning pro­ cedures; and in Chapter V as to the development control process, with particular reference to notification of draft development schemes, objections by interested persons or organisations, and public hearings (see paragraphs 5.14 to 5.22).

Finally, in paragraphs 6.33 to 6.39 we discuss the question of financial compen­ sation to persons adversely affected by a change in the use of land.

106

10.16 ‘(1) the use of the lease purpose clause as a land use control measure for town planning purposes;’

This question overlaps (i) above but is separately discussed in the First Report (paragraphs 6.21 to 6.24) and in this Report (paragraphs 8.24 to 8.25). As we there indicate, purpose clauses should be retained to facilitate planning control and to protect the public sector’s entitlement to new use rights; but the plan­

ning process should be open to public scrutiny and control, as envisaged in Chapters III, IV and V hereof.

10.17 ‘(m) the manner in which any revenues raised by any lease allocation system should be reflected in any land development account, for example, whether these should be regarded as the disposal of a capital asset and/or profit by the land authority;’

This matter is discussed in Chapter IX above.

10.18 ‘(n) the appropriate nature, structure and powers of an appeal body to receive and determine complaints about the level of rent reappraisal, conditions of lease renewal, compensation in cases of termination of leases, changes in lease purpose clauses and any other lease matters about which the

Commission considers that leaseholders and other interested parties should have the opportunity for the redress of grievances;’

The question assumes that a single appeal body is appropriate to handle all of these matters. That is not our view. We see a basic distinction between issues of purely financial interest (rent, compensation, etc.) and those of planning im­ portance (changes in purpose clauses), from which arises a need for differently constituted tribunals. We have suggested that existing institutions be adapted to

constitute each form of appeal tribunal, but have set out our views as to the role and composition of the tribunals in paragraphs 5.17 to 5.20 in respect of the regional planning tribunal and in paragraphs 6.28 to 6.30 and 6.40 in respect of the compensation and valuation tribunal.

10.19 ‘(o) existing revenue arrangements for leasehold lands in the Australian Capital Territory and Northern Territory and any desirable changes that should be made;’

These arrangements are discussed in Chapter VIII of the First Report. The discussion in Chapter IX of this Report is also relevant to this issue.

10.20 ‘(p) as a matter for a separate report, the problems associated with the lease­ hold system in the Northern Territory, including the conversion process from urban leasehold to freehold;’

The history of land tenure in the Northern Territory is set out in the First Report, paragraphs 8.31 to 8.36. As explained in paragraphs 8.38 and 8.39, we see no justification for distinguishing between the system desirable in the Northern Territory and that appropriate in the other areas with which our inquiry is

concerned. Thus we have recommended that residential land should be con­ verted to fee simple title with development rights reserved and that new grants for residential purposes should be made on the same basis, subject to improve­ ment conditions and the payment of capital premiums (with provision for pay­

ment by instalments). We have also suggested that the right to convert non- residential leases to freehold should be abolished, and that all new non-residential leases should be for fixed terms and subject to rental or premium payments in accordance with the principles set out in Chapter VII of the First Report. We

reaffirm those recommendations, emphasising that the further recommendations set out in this Report are intended to apply equally to the Northern Territory.

107

10.21 ‘(q) such other matters within the general scope of the inquiry as may be referred to the Commission by the Minister for Urban and Regional Development, the Minister for the Capital Territory and the Minister for the Northern Territory acting jointly;' As mentioned at paragraph 1.2 above, a third Term of Reference was referred to us. That Term is discussed in paragraph 10.3 above.

We therefore have the honour to present this, our Final Report, in accordance with our Letters Patent.

DATED this sixth day of February 1976.

R. ELSE-MITCHELL

R. L. MATHEWS

G. J. DUSSELDORP

108

APPENDIX A

A preliminary public hearing was held in Sydney on 7 May 1973.

D a t e s O f P u b l i c H e a r i n g s

preliminary public hearing was held in Sydney oi Subsequently public hearings were held as follows:

O r g a n i s a t i o n s o r P e r s o n s f r o m w h o m S u b m i s s i o n s w e r e r e c e i v e d p r i o r

TO THE PREPARATION OF THE FIRST REPORT

Name of Organisation or Person Exhibit Number

A.C.T. Border Landholders’ Association, Queanbeyan, N.S.W. . 154 A.C.T. Trades and Labour Council, Canberra, A.C.T. . . 195

A. V. Jennings Australia Limited, Melbourne, Vic. . . . 174

Action Real Estate Pty Ltd, Darwin, N.T......................................81

Administrative and Clerical Officers’ Association, Commonwealth Public Service — A.C.T. Branch . . . . . 141

Alan Hiclcinbotham Pty Ltd, Adelaide, S.A. . . . . 163

Apps, Dr P. F., Sydney, N.S.W. . . . . . . 164

Archer, Mr R., Lyons, A.C.T. . . . . . . 7, 8

Australia Party, Sydney, N.S.W........................................................ 99

Australian Bankers’ Association, Melbourne, Vic. . . . 98

Australian Capital Territory Rural Lessees’ Association, Canberra, A.C.T........................................................................................................138

Australian Farmers’ Federation, Canberra, A.C.T. . . . 193

Australian Finance Conference, Sydney, N.S.W. . . . 170

Australian Government — Department of the Capital Territory, Canberra, A.C.T. . 2, 3 Department of the Northern Territory, Darwin, N.T. . 69, 159 Department of Urban and Regional Development, Canberra,

A.C.T..................................................................................... l

National Capital Development Commission, Canberra, A.C.T. 42, 43, 6 Valuer-General for the Northern Territory, Darwin, N.T. . 70 Banks, Mr B. S., Ulverstone, Tas. . . . . . . 90

Bard, Mr J. W., Latham, A.C.T. . . . . . . 122

Barden, Mr R. S., Darwin, N.T. . . . . . . 77

Bell, Mr T. A., M.L.C., Darwin, N.T. . . . . . 72

Bergin, Mr J. L., Melbourne, Vic. . . . . . . 55

Bolton, Mr T. H., Henley Beach, S.A. . . . . . 131

Bond Corporation Pty Ltd, Perth, W.A. . . . . . 9, 176

Border Council of Labor Party Branches, Albury-Wodonga . 101 Brennan, Mr F., Canberra, A.C.T............................................ . 6

Bruer, Vogt and Hignett, Parkside, S.A. . . . . . 35

E x h ib it N u m b e r

Budd, Mr R. A., Canberra, A.C.T..................................................143

Building Owners and Managers Association of Australia Limited — N.S.W. Division, Sydney, N.S.W. . . . . . 68

Canberra Chamber of Commerce, Canberra, A.C.T. . . . 120 Chamber of Commerce and Industry South Australia Inc., Adelaide, S.A............................................................................ 125

Church of England Property Trust, Diocese of Sydney, Sydney, N.S.W.........................................................................................149

City Building Society, Fremantle, W.A. . . . . . 140

Collier, Duncan & Partners, Sydney, N.S.W. . . . . 95

Collins, Mr C. A., Wodonga, Vic................................................... 106

Commonwealth Bank Officers’ Association, Sydney, N.S.W. . 38 Commonwealth Institute of Valuers — A.C.T. Branch . . . . . . . . . 166, 189

N.S.W. Division, Sydney, N.S.W........................................... 40

Victorian Division, Melbourne, Vic. . . . . . 148

Commonwealth Scientific and Industrial Research Organization— 47 Division of Building Research, Melbourne, Vic. . . . Corporation of the Municipality of Alice Springs, N.T. . . 199 Cottman, Mr N. H., Stawell, Vic. . . . . . . 49, 185

Country Party of Australia — Parliamentary Committee on the Australian Capital Territory and Northern Territory . 171, 172 Development Underwriters (W-A.) Pty Ltd., East Perth, W.A. . 23 Donohue, Mr J. D., Canberra, A.C.T. . . . . . 117

Dowling, Mr P., Canberra, A.C.T. . . . . . . 119

Downs Projects Pty Ltd, Subiaco, W.A. . . . . . 22

Doyle, Mr J. J., Darwin, N.T............................... ........ . . 75

Drury, Mr L., Hackham, S.A. . . . . . . . 34

Eastick, Dr B. C., Leader of the Opposition, S.A. . . . 33

Ellis, Mr, Winnellie, N.T. . . . . . . . . 146

Fletcher, Mr H. R., Joondanna, W.A. . . . . . 179

Fogg, Mr A. S., University of Queensland, Brisbane, Qld. . . 192 Forbes & Fitzhardinge, Perth, W.A. . . . . . . 18

Geoffrey Mill Pty Ltd, Townsville, Qld. . . . . . 62

Gilchrist, Mr S. S., Roseville, N.S.W...........................................147

Glebe Social Welfare Committee, Glebe, N.S.W. . . . 39

Gorman, Dr R. F., Darwin, N.T. . . . . . . 74

Graham, Mrs. F., Mount Gravatt East, Qld. . . . . 63

Graham James Group of Companies, Underdale, S.A. . . 26 Griffiths, Mr M. J., Pearce, A.C.T. .............................................158

Harris, Mr P., Queanbeyan, N.S.W. . . . . . . 116

Harrison, Mr P., Canberra, A.C.T. . . . . . . 169, 191

Heathcote, Dr R. L., Bedford Park, S.A. . . . . . 24

Herps, Mr M. W., Wahroonga, N.S.W. . . . . . 94

Hindmarsh Building Society, Adelaide, S.A..................................128

Home Building Society (N.T.), Darwin, N.T. . . . . 71

Hooker Corporation Limited, Sydney, N.S.W. . . . . 91

Housing Industry Association — National Office, Melbourne, Vic. 51, 186 W.A. Division, Perth, W.A. . . . . . . 19

Howard Homes Pty Ltd, Albury, N.S.W. . . . . . 103

Hume Permanent Building Society Ltd, Albury, N.S.W. . . 105 Institution of Surveyors Australia — Queensland Division, Brisbane, Qld. . . . . . 58

Tasmanian Division, Hobart, Tas. . . . . . 89

Victorian Division, Melbourne, Vic. . . . . . 126

Western Australian Division, Perth, W.A. . . . . 136, 188

N a m e o f O rg a n is a tio n o r P e rs o n

110

James, Mr A. G., Darwin, N.T. . . . . . . 79

Jones, Lang & Wootton, Melbourne, Vic. . . . . 52

Kilgariff, Mr B. F„ M.L.C., Alice Springs, N.T. . . . 83

Land Legislation Study Group, Perth, W.A. . . . . 121

Land Values Research Group, Melbourne, Vic. . . . . 45, 183

Law Society of Tasmania, Hobart, Tas.......................................... 86

Lean, Mr Η. K., Hackett, A.C.T................................................... 123

Liberal Party — Western Australian Division, Perth, W.A. . 156 Liberal Party of Australia — Queensland Division, Brisbane, Qld. 196 Lovibond, Valentine, Roach & Thiessen, Hobart, Tas. . . 155 McAlpine, Mr R. J., North Carlton, Vic. . . . . . 56

McCuaig and Collier, Sydney, N.S.W...........................................44

MAI Limited, Sydney, N.S.W. . . . . . . . 37

Martin, Mr B. F., Alice Springs, N.T............................................ 84

Mason, Mr W. R., Pearce, A.C.T. . . . . . . 127

Master Builders’ Association of Tasmania, Hobart, Tas. . . 93 Master Builders’ Association of the Australian Capital Territory, Canberra, A.C.T. . . . . . . . . 4, 175

Milner and Company Pty Ltd, Perth, W.A. . . . . 20, 21

Moore, Mr A. P., Adelaide, S.A................................................... 28

National Aboriginal Consultative Council, Melbourne, Vic. . . 134 New South Wales Government — Department of Conservation . . . . . . I l l

Department of Lands . . . . . . . 108

Department of Public Works . . . . . . 114

Department of Valuer G e n e ra l............................................ 115

Housing Commission of New South Wales . . . 109

Public Transport Commission . . . . . . 112

Registrar General . . . . . . . . 110

Western Lands Commission . . . . . . 113

N.S.W. Permanent Building Society Limited, Sydney, N.S.W. 124 Neutze, Dr M., Canberra, A.C.T. . . . . . . 14, 162, 177

Northern Farmers’ Association, Noonamah, N.T. . . . 80

O’Brien, Mr R. F., Crawley, W.A. . . . . . . 146

Oliver, Prof. J., Townsville, Qld................................................... 64

Padgham-Purich, Mrs C. N., Darwin, N.T..................................76

Pearsall, Mr D., Albury, N.S.W................................................... 107

Permanent Building Societies Association Limited, Sydney, N.S.W. 133 Practising Surveyors’ Association of S.A., Adelaide . . . 27 Queensland Government — Land Administration Commission . 61 Queensland Master Builders’ Association, Brisbane, Qld. . . 60

Queensland Law Society Incorporated, Brisbane, Qld. . . 65 Real Estate Agents’ Association of Victoria, Melbourne, Victoria 132 Real Estate Institute of the Northern Territory . . . . 78

Real Estate and Stock Institute of Australia . . . . 161

Real Estate and Stock Institute of Victoria . . . . 52

Reid, Alan Jnr., Canberra, A.C.T. . . . . . . 160

Returned Services League of Australia—A.C.T. Branch, Canberra, A.C.T........................................................................................ 130

Royal Australian Institute of Architects — Federal Secretariat, Canberra, A.C.T. . . . . 165

Victoria Chapter, Melbourne, Vic. . . . . . 50

Royal Australian Planning Institute — Australian Capital Territory Division, Canberra, A.C.T. . 100 South Australian Division, Adelaide, S.A. . . . . 129

Western Australian Division, Perth, W.A. . . . 17

N a m e o f O r g a n is a tio n o r P e rs o n E x h ib it N u m b e r

111

N a m e o f O rg a n is a tio n o r P e rs o n E x h ib it N u m b e r

Savas, Mr G., Watson, A.C.T. . . . . . .

South Australian Government — Department of Lands . . . . . .

Land Tenure Research Group . . . . .

South Australian Housing Trust . . . . .

South Australian Valuer General . . . .

State Bank of South Australia . . . . .

Steele, Mr C. M., Wollongong, N.S.W................................

Stephenson, Emeritus Professor G., Perth W.A. . . Stocks & Holdings (Canberra) Pty Ltd, Canberra, A.C.T. . Tamar Regional Planning Authority, Launceston, Tas. . Tasmanian Government — Department of Lands . . The Association for Good Government, Sydney, N.S.W. . The Australian Chamber of Commerce, Canberra, A.C.T. . The Canberra Times, Canberra, A.C.T. . . . .

The Country Shire Councils’ Association of W.A., Perth, W.A The Henry George League, Melbourne, Vic. . . .

The Henry George League of W.A., Perth, W.A. . . The Graziers’ Association of New South Wales, Sydney, N.S.W The Law Society of New South Wales, Sydney, N.S.W. . The Law Society of Western Australia, Perth, W.A. . . The Local Government Association of Western Australia (Inc.)

Perth, W.A. . . . . . . . .

The Melbourne Chamber of Commerce, Melbourne, Vic. . The Real Estate Institute of Queensland, Brisbane, Qld. . Tomac Real Estate Pty Ltd, Alice Springs, N.T. . . Toms, Mr K. N., Hobart, Tas. . . . . . .

Town & Country Planning Association of Victoria, Nunawading Vic....................................................................................

Tucker, Mr K. A., Canberra, A.C.T. . . . .

Tully, Mr E. D., Canberra, A.C.T. . . . . .

Turner Corporation, Perth, W.A...........................................

United Properties of Australia Co-operative Limited, Adelaide S.A....................................................................................

Urban Development Institute of Australia, Brisbane, Qld. Victorian Building Societies Association, Melbourne, Vic. Village Olympus Management Co. Pty Ltd, Balmain, N.S.W. W.A. Chamber of Manufactures Inc., Perth, W.A. . . Webster, Mr R. H., Canberra, A.C.T. . . . .

Western Australian Government . . . . .

Whitaker, Mr J. P., Cottesloe, W.A. . . . . .

Wildlife Preservation Society of Queensland —- Maryborough Branch . . . . . . . . .

Wigmore, Mr N. A., Melbourne, Vic. . . . .

Williamson, Mr F. H., Sydney, N.S.W. . . . . .

Wilshire, Hodges, Weyland & Rourke, Sydney, N.S.W. . . Withnall, Mr ^R. J., M.L.C., Darwin, N.T..................................

Worthington, Mr J. E., South Bentley, W.A. . . . .

Wodonga Co-operative Housing Society, Wodonga, Vic. . . Wodonga Rural Ratepayers’ Association, Wodonga, Vic. . .

150

31 32 29, 30 25 36 41

13 5 92 87

167 197 194 12 46

137 152 153 157

11 57 66 85 88

54 139 168, 190 180

142 59 53 135

151 97 15, 178 118, 119

67 48, 184 82

144 73 10 102

198

112

L i s t o f W i t n e s s e s

Witness Occupation, Organisation, Exhibit Nos. etc., Represented Evidence Pages

Mr C. P. Adams President, Queensland Master Builders’ Assoc. 60 986-1001

Mr D. Andrew Executive Director, Master Builders’ Assoc, of the A.C.T. 4 185-197

Mr J. Andrews Surveying Dept., The Institu­ tion of Surveyors, Australia, Queensland Division 58 957-967

Mr R. Archer Economist, Lyons, A.C.T. 7, 8A-8E 238-263

796-847

Mr D. A. Baines Chairman, Australian Finance Conference (Victoria) 170 1594-1610

Mr B. S. Banks Surveyor, Tasmania 90 1391-1400

Mr R. S. Barden Pharmacist, Darwin 77 1264-1272

Mr P. F. Barrington Vice-President, Building Owners & Managers’ Assoc, of Australia, N.S.W.68 1062-1080 Division 1524-1539

Mr P. G. Beckwith Managing Director, Yanchep Estate Pty. Ltd. 9 268-294A

Mr T. A. Bell Member for McMillan,

Legislative Council for the N.T. 72 1172-1186

Mr M. J. Bennett Finance Branch, Dept, of the N.T. 69A & 69B 1082-1143

Mr A. Bond Executive Chairman, Bond

Corporation Pty Ltd 9 268-294A

Mr M. L. W. Bowering Senior Solicitor, Crown Law Dept, Adelaide — 561-580

Mr Frank Brennan A.C.T. 6 204-237

Mr G. D. Bridge Assistant Secretary (Urban Economics) National Capital Development Commission 42 & 43 659-747 Dr F. J. Bromilow Senior Principal Research

Scientist, Division of Build­ ing Research, C.S.I.R.O., Melbourne 47 790-795

Mr T. Brooks Director (Urban Develop­

ment & Town Planning), Dept, of the Northern 1082-1143

Territory 69 A & 69B 1247-1263A

Mr S. E. Calder Australian Country Party

Parliamentary Committee on the A.C.T. & N.T. 171, 172, 173 1610-1621 Mr W. B. Caldwell Director of Lands, Lands Dept, Hobart 87 1352-1372

Mr G. J. Callister Director, The Graham James Group of Companies 26 459-466

113

Witness

Mr M. R. Coleman

Mr R. Collier Mr J. M. Collins

Mr Η. V. Commence

Mr R. J. Corrigan

Mr N. H. Cottman

Mr J. I. Crockett

Mr J. E. Cummings

Mr T. A. Dalton

Mr C. H. C. Davis

Mr L. D. Diercks

Mr J. J. Doyle Mr A. J. Edwards

Mr J. B. Fitzhardinge

Mr H. R. Fletcher Mr A. Furniss

Mr G. A. Forster

Mr A. J. Gallagher

Mr J. T. C. Glasscock

Mr J. A. Goodwin

Dr R. F. Gorman Mr R. E. Grouse

Mr P. Harrison

Supervising Valuer, Valuer- General for the

O c c u p a tio n , O rg a n is a tio n , E x h ib it N o s . E v id e n c e P a g e s

e tc ., R e p re s e n te d

Northern Territory 70 1143 A-1164

Collier, Duncan & Partners95 1431-1434

Executive Officer, National Capital Development Commission 96 1435-1456

Manager, Action Real Estate Pty Ltd 81 1296-1304

Assistant Secretary (Lands Administration), Dept, of the Capital Territory 2, 3A-3E 95-184

Shire Engineer, Shire of Stawell 49 858-864

The Real Estate & Stock 382-418

Institute of Vic. 52 910-930

Milner & Co Pty Ltd, Perth, W.A. 20 382-418

Executive Director, Hooker Corporation Ltd 91 1401-1411

First Assistant Secretary (Lands & Transport Policy), Dept, of the Capital Territory 2, 3A-3E 95-184

Chairman, State Lands Board, S.A. Department of Lands 31 542-546

Darwin 75 1209-1221

Treasurer, Land Values Research Group, Victoria 45A, 45B 749-777 Forbes and Fitzhardinge, West Perth 18 371-377

Joondana, W.A. 16 343-352

Association for Good Government 167 1570-1577

President, Henry George League 46 778-789

Chairman, Australian Bankers’ Association 98 1487-1492

Institution of Surveyors, Qld. Division 58 957-967

Acting State Assessor, Land Administration Commission, Qld. 61 1003-1036

Darwin 74 1206-1209

Royal Australian Institute of Architects, Victorian ChapterSO 864-877 Urban Research Unit, Australian National University 169 1581-1593

114

Witness Occupation, Organisation, Exhibit Nos. etc., Represented Evidence Pages

Mr C. Hawkins Vice-President, Real Estate & Stock Institute of S.A. — 581-592

Dr R. L. Heathcote Dept, of Geography, Flinders University 24 431-437

Mr B. HeSernan Chairman, Land Administra­ tion Commission, Qld. 61 1003-1036

Mr M. D. Herps Valuer, Wahroonga, NSW 94A, 94B 1413-1430 Mr R. J. Hogan Executive Director, Stocks & Holdings (Canberra) Pty Ltd 5 197-204

Mr D. K. Holman Commonwealth Institute of Valuers, A.C.T. Branch 116 1554-1569

Mr J. A. Howard President, A.C.T. Branch Commonwealth Institute of Valuers 116 1554-1569

Mr H. C. D. Hunter Officer-in-Charge, Land Development Branch, Dept, of Lands, Qld. 61 1003-1036

Mr R. J. Hunt Chairman, Australian

Country Party Parliamentary Committee on the A.C.T. & N.T. 171, 172, 173 1610-1621

Mr A. R. Hutchinson Hon. Research Director, Land Values Research Group 45A, 45B 749-777

Mrs M. A. Hutchinson Secretary, Henry George League 46 778-789

Mr A. G. James Barrister, Darwin 79 1277-1288

Mr B. J. Johnson Member, Australia Party Policy Committee on Housing & Land 99 1494-1517

Alderman C. Jones Lord Mayor of Brisbane — 934-957

Mr N. M. Kanair Managing Director, Downs Projects Pty Ltd, W.A. 22 419-424

Mr B. F. Kilgariff Member for Alice Springs, Legislative Council 83 1307-1319

Mr R. J. King Consultant, Australia Party

Policy Committee on Housing & Land 99 1494-1517

Mr J. T. Lang Senior Vice-President, Real

Estate & Stock Institute of S.A. — 581-592

Mr R. B. Lansdown Secretary, Development of Urban & Regional Develop­ ment 1 27-94

Mr W. E. Lawrence Assistant Secretary (Public Finance), Dept, of the Capital Territory 2, 3A-3E 95-184

Mr R. D. Lester Director, Milner & Co Pty

Ltd, W.A. 20 382-418

Witness

Mr N. B. Lewis

Mr J. O. Llewellyn

Mr J. D. Lugg

Mrs M. MacLean Mr R. B. MacKenzie

Mr A. J. MacMichael Mr J. MacNamee Mr J. A. McDonald

Mr D. S. McGlashan

Mr A. A. McLellan

Mr A. S. McLeod

Mr B. F. Martin Mr A. P. Moore

Mr I. W. Morison

Mr L. P. Nelson

Mr V. T. O’Brien

Mr P. O’Clery

Mrs C. N. Padgham- Purich Mr A. C. Peacock

Mr W. L. Persse

Mr S. H. Pearse

Mr J. P. Petherick

116

Royal Australian Institute of Architects, Victorian

O c c u p a tio n , O rg a n is a tio n , E x h ib it N o s . E v id e n c e P a g e s

e tc ., R e p re s e n te d

Chapter 50 864-877

Executive Director, Austra-lian Finance Conference, Sydney 170 1594-1609

President, Northern Farmers’ Association, N.T. 80 1288-1296

Darwin — 1229-1235

General Manager & Com-missioner, State Housing Commission, W.A. 378-379

Real Estate, N.T. — 1334-1343

Darwin — 1235-1242

Valuer-General for the N.T. 70 1143A-116

Royal Australian Institute of Architects, Victorian Chapter 50 864-877

Chairman, Legislation Review Committee, Com­ monwealth Institute of Valuers, N.S.W. 40 638-655

National Capital Develop­ 659-747

ment Commission 42, 43, 96 1435-1456

Legal Practitioner, N.T. Lecturer in Property & 84 1319-1333

Environmental Law, Uni­ versity of Adelaide 28 472-483

Royal Australian Planning Institute, A.C.T. Division 100 1518-1524 Marketing Controller, Home Building Society (N.T.)

Acting Director, Lands 71 1164-1171

Division, Dept, of the Northern Territory 69A, 69B 1082-1143

Assistant Secretary (Lands Policy), Dept, of the Capital Territory 2, 3A-3E 95-184

Darwin 76 1223-1229

President, Institution of Surveyors of Australia Tasmanian Division 89 1384-1390

A.C.T. Chairman, Australian Finance Conference 170 1594-1609

Surveying Dept, The Institu-tion of Surveyors, Australia, Qld. Division 58 957-967

S.A. Valuer-General 25 438-459

Witness Occupation, Organisation, Exhibit Nos. etc., Represented Evidence Pages

Mr J. F. Pilbeam National Executive Director, Housing Industry Assoc, of Vic. 51 878-909

Mr G. Postle President, Real Estate

Institute of Queensland 66 1037-1052

Mr V. J. Ralph Vice-President, Association for Good Government 167 1507-1577

Mr A. M. Ramsay General Manager, S.A. Housing Trust 29 484-511

Mr L. F. Robertson Royal Australian Institute Institute of Architects, N.S.W. 165 1541-1553

Mr G. P. Roe Assistant Director, S.A.

Lands Department 31 513-542

Mr L. E. Rowell A. V. Jennings Industries Aust. Pty Ltd 174 1622-1626

Mr L. A. Scott Assistant Director of Lands,

Dept, of the Northern 1082-1143

Territory 69A, 69B 1247-1263A

Mr G. F. Seaman Chairman, State Bank of S.A. 36 592-596

Mr J. Sinclair Honorary Secretary, Wildlife. Preservation Society of Qld., Maryborough- Moonaboola Branch 67 1053/1054-1

Mr J. C. Slaughter Urban Development Institute of Australia, Queensland Division 59 969-985

Mr L. J. Small Commonwealth Institute of

Valuers, A.C.T. Branch 116 1554-1569

Mr P. A. Smith Committee Member, Practis­ ing Surveyors' Assoc, of S.A. 27 467-471 Emeritus Prof. G. Stephenson Perth 13 327-339

Mr R. Y. Stringer Royal Australian Institute of Architects. NSW 165 1541-1553

Mr D. A. Speechley Deputy Director of Planning, State Planning Authority, S.A. 32 548-561

Mr J. Taylor Darwin — 1242-1247

Mr K. N. Toms Head of Dept, of Surveying,

Tasmanian College of Advanced Education 88 1373-1382

Mr J. A. D. Treloar State President, Royal Australian Planning Institute of W.A. 17 353-371

Mr E. Tully Urban Research Unit,

Australian National University 168 1578-1581

Mr S. Turnbull Chairman, MAI Limited, N.S.W. 37 599-617

117

Witness Occupation, Organisation, etc., Represented Exhibit Nos. Evidence

Mr K. L. Turner Managing Director, Turner Corporation Pty Ltd, W.A. — 425-428

Mr A. Van Vugt National Capital Develop­ 659-747

ment Commission 42, 43, 96 1435-1456

Mr D. W. Veal Committee Member,

Northern Farmers’ Assoc. 80 1288-1296

Mr P. B. Walker Councillor and Treasurer of the Law Society of Tasmania 86 1345-1351

Mr K. Walsh Assistant Federal Secretary,

Commonwealth Bank Officers’ Assoc. 38 617-632

Mr R. H. Webster Director, L. J. Hooker Ltd, Canberra 97 1457-1487

Mr H. L. Westerman Associate Commissioner, National Capital Develop­ 42, 43, 96 657-747 ment Commission 1435-1456

Mr A. E. White Secretary, Local Government Assoc, of W.A. 11, 12 318-326

Mr N. A. Wigmore Surveyor and Valuer 48 849-857

Mrs E. F. Wiltshire Darwin — 1187-1190

Mr R. J. Withnall Member for Port Darwin 73 1190-1205

Mr J. E. Worthington Dept, of Secretarial Administration, W.A. Institute of Technology 10 294A-317

Alderman D. Young Glebe Social Welfare Committee 39 632-637A

Mr K. Young Vice-Chairman, Real Estate

Institute of the N.T. 78 1272-1277

118

APPENDIX B

O r g a n i s a t i o n s o r P e r s o n s f r o m w h o m S u b m i s s i o n s w e r e r e c e i v e d

F O L L O W IN G PR EPA R A T IO N O F T H E F IR S T R E P O R T

Names of Organisation or Person Exhibit Number

Albury-Wodonga Growth Centre Landholders’ Association, Wodonga, Vic. . . . . . . . . . 212

Atherton Shire Council, Atherton, Qld.........................................241

Austral and District Landholders’ Association, Austral, N.S.W. 296 Australian Association of Permanent Building Societies Limited, Canberra, A.C.T. . . . . . . . . 206

Australian Bankers’ Association, Melbourne, Vic. . . . 258 Australian Capital Cities Secretariat, Melbourne, Vic. . . 281 Australian Finance Conference, Sydney, N.S.W. . . . 278

Australian Government — Cities C o m m is s io n .............................................................. 209

Department of the Capital T e rrito ry ....................................287

Department of the Northern Territory . . . . 263

Department of Services and Property . . . . 245

Department of Urban and Regional Development . 290 Bell, Mr T. A., M.L.C., Darwin, N.T. . . . . . 219

Benjafield, Prof. D. G., Sydney, N.S.W........................................ 216

Bergin, Mr J. L., West Brunswick, Vic. . . . . . 259

Bolton, Mr T. H., Fulham Gardens, S.A........................................ 271

Building Owners and Managers Association of Australia Limited— A.C.T. Division, Canberra, A.C.T. . . . . . 250

N.S.W. Division, Sydney, N.S.W. . . 249

Brickwood, Mr G., Armadale, W.A. . . . . . 254

Cambridge Credit Corporation Limited, Sydney, N.S.W. . . 223 Canberra Chamber of Commerce, Canberra, A.C.T. . . 274 City of Adelaide, Adelaide, S.A.................................................... 279, 280, 291

City of Camberwell, Camberwell, Vic............................................ 273

City of Glenelg, Glenelg, S.A............................................................ 272

City of Melbourne, Melbourne, Vic. . . . . . 267

City of Port Adelaide, Port Adelaide, S.A. . . . . 288

City of Sydney, Sydney, N.S.W.................................................... 276, 277

City of Unley, Unley, S.A............................................................ 275

City of Wagga Wagga, Wagga Wagga, N.S.W............................... 260

City of West Torrens, Hilton, S.A. . . . . . . 297

Clark, Dr C., Clayton, Vic............................................................ 200

Collier, Duncan & Partners, Sydney, N.S.W................................224

Commonwealth Institute of Valuers — N.S.W. Division, Sydney, N.S.W................................................................................................ 264

Comport, Mr A. L., Adelaide, S.A.................................................289

Conservation Council of South Australia Inc., Adelaide, S.A. . 292 Corporation of the Town of Hindmarsh, Hindmarsh, S.A. . 270 Council of the City of Grafton, Grafton, N.S.W. . . . 236

Fletcher, Mr H. R., Joondanna, W.A.................................................. 221

Fogg, Mr A. S., Brisbane, Qld. . . . . . . . 251

Gilchrist, Mr S. S., Roseville, N.S.W. . . . . . 262

Hooker Corporation Limited, Sydney, N.S.W. . . . . 230

Housing Industry Association, Melbourne, Vic...............................256

Institution of Surveyors — Tasmanian Division, Hobart, Tas. 225

119

Jennings Industries Limited, Melbourne, Vic. . . . . 265

John Paterson Urban Systems, North Melbourne, Vic. . . 247 Land Values Research Group, Melbourne, Vic. . . . 217, 231

Law, Mr J. A. C., Hartleys Creek, Qld.........................................204

Law Society of South Australia Incorporated, Adelaide, S.A. . 202 Liberal Party of Australia — A.C.T. Electoral Conference, Canberra, A.C.T. . . . . . . . . 227

McAlpine, Mr R., North Carlton, Vic. . . . . . 228, 301

MAI Limited, Sydney, N.S.W. . . . . . . . 246

Manning, Mr H. J., Canberra, A.C.T. . . . . . 214

Menzies, Mr C., Chippendale, N.S.W. . . . . . 300

Mount Lofty Ranges Association Inc., Aldgate, S.A. . . 298 National Trust of Australia (Victoria), Melbourne, Vic. . . 215 Neutze, Dr M., Canberra, A.C.T. . . . . . . 237

O’Brien, Mr J. R., Crawley, W.A................................................... 235

Permanent Building Societies Association Limited, Sydney, N.S.W. 205 Read, Mr J. R., Mt. Kuring-gai, N.S.W. . . . . . 201

Royal Australian Planning Institute — Federal Secretariat, St. Lucia, Qld. . . . . . 207

New South Wales Division, Sydney, N.S.W. . . . 226

Victorian Division, East Melbourne, Vic. . . . . 268

Seminar on First Report — Adelaide, 9 August, 1974 . . . . . . 286

Brisbane, 19 June, 1974 . . . . . . . 284

Melbourne, 19 July, 1974 . . . . . . . 285

Perth, 21 April, 1974 ........................................................ 283

Sydney, 30th March, 1974 . . . . . . 282

Steele, Mr C. M., Wollongong, N.S.W. . . . . . 255

Stokes, Mr A. N., O’Connor, A . C . T . ............................................266

The Associated Chambers of Manufactures of Australia, Canberra, A.C.T. . . . . . . . . 269

The Association for Good Government, Sydney, N.S.W. . . 253 The Chamber of Manufactures of New South Wales, Sydney, N.S.W.................................................................................................210

The Country Shire Councils’ Association of W.A., Perth, W.A. 257 The Henry George League, Melbourne, Vic. . . . . 220

The Henry George League of W.A., Perth, W.A. . . . 229

The Law Society of New South Wales, Sydney, N.S.W. . . 233 The Law Society of the Australian Capital Territory, Canberra, A.C.T................................................................................... 203

The Life Officers’ Association of Australia, Melbourne, Vic. . 239 The Local Government Association of W.A. (Inc.), Perth, W.A. 222 The Nature Society of South Australia (Inc.), Blackwood, S.A. 293 The Real Estate and Stock Institute of Australia — National

Secretariat, Canberra, A.C.T............................................. 243

The Real Estate and Stock Institute of Victoria, Melbourne, Vic. 242, 299 Town & Country Planning Association (S.A.) Inc., Adelaide, S.A. 294 Urban Development Institute of Australia—-Federal Secretariat, Sydney, N.S.W........................................ 234, 295

Western Australian Division, Perth, W.A. . . . . 211

Victorian Farmers’ Union—Wodonga District Council, Wodonga, Vic.............................................................................................213

Victorian Government . . . . . . . . 208

Victorian Public Interest Research Group Ltd, Clayton, Vic. . 244 Village Olympus Management Corporation Pty Ltd, Balmain, N.S.W....................................................................................... 252

N a m e s o f O rg a n is a tio n o r P e rs o n E x h ib it N u m b e r

120

E x h ib it N u m b e r

Whitaker, Mr J. P., Cottesloe, W.A. . . . . . . 218

Wildlife Preservation Society of Queensland Inc.—Maryborough Branch, Maryborough, Qld......................................................248

Wyong Shire Council, Wyong, N.S.W. . . . . . 240

N a m e s o f O rg a n is a tio n o r P e rs o n

R75/909

121