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Tuesday, 18 April 1972
Page: 1152

Senator Sir KENNETH ANDERSON (New South Wales) (Minister for Health) (4.37)- I move-

That the Bill be now read a second time.

The purpose of this Bill is to increase by $9.3m the capital grants payable to the States in 1971-72 as part of the works and bousing programmes for the year. This measure arises from the decisions agreed upon at the Premiers Conference on 14th February which, taken together, will increase the funds available to the States in 1971-72 by $85.8m. In his opening statement at the Premiers Conference, the Prime Minister (Mr McMahon) said that, in the light of the Government's overall objectives, including maintaining the momentum of economic growth and hence of employment, we believed there was a case for an increase in both the works and housing and the semi-government programmes of the States.

Within the overall picture of rather stronger growth in public sector expenditure this year than last year, total public authority capital expenditures were growing more slowly than were current expenditures. Moreover, despite considerable special assistance from the Commonwealth, rapidly escalating wage costs had meant that in 1970- 71 a number of important State works had had to be deferred. Similarly, the works activities of certain of the State semi-government and local authorites had also had to be curtailed. It was also notable that the loan raising programmes of public authorities had been very successful so far this financial year.

The conference subsequently agreed that, firstly, the works and housing programmes of the States should be increased by $32m, bringing the total for 1971-72 to $892m and secondly, the semi-government borrowing programmes of the States should be increased by $10m, bringing the total for 1971- 72 to $436.7m. These increases were formally approved by the Australian Loan Council. It was agreed that $30m of the increase in the works and housing programmes would be on the same basis as the existing programmes - that is, approximately one-quarter would be interest-free capital grant and the remainder loan money - with the remaining $2m being entirely by way of interest-free capital grant. This additional $2m interest-free capital grant was to be provided by the Commonwealth having regard to the continuing costs in which the States would be involved in administering the conversion to the metric system.

The States agreed that, with the assistance, which will be reflected in and will escalate with the interest-free capital grant component of works and housing programmes in the future years, they would meet these costs from their own resources.

The increased loan funds and capital grants will be distributed between the States in the same proportions as the existing programmes. They will have a direct impact in increasing employment and will permit the carrying out of additional worthwhile public works, particularly in urban areas, such as hospitals, schools, water and sewerage projects and the like. The Commonwealth also gave an undertaking to the States that the level of the works and housing and the semi-government borrowing programmes it will be prepared to support for 1972-73 will not be less than the total programmes in 1971-72 as decided at the February meeting.

In agreeing to the Commonwealth proposal to increase the borrowing programmes, the Premiers gave their assurance that the additional funds will, so far as is practicable without loss of efficiency and effectiveness, be utilised quickly, having in mind the desirability of producing an early impact on employment.

I now turn to the specific provisions of this Bill. Clause 3 increases the authority to borrow by $9.3m so that, if it were judged practicable and desirable, the Commonwealth could borrow sufficient funds to cover the total amounts of the capital grants to the States. Clause 4 repeals the schedule to the principal Act and inserts a new schedule. Only the second and fourth columns of the former schedule have been changed. The second column lists the amount of the grant payable to each State in 1971-72. The amounts in the schedule to the principal Act have been increased as follows:


The fourth column in the new schedule, as in the schedule to the principal Act, shows amounts equal to half the corresponding amount in the second column. The amounts in the fourth column represent the maximum advances which may be made in the first half of 1972-73 pending the passage of legislation to authorise the capital grants in 1972-73. The provisions of this Bill form part of a series of measures that were designed to produce an early impact on employment, and will permit the carrying out of additional worthwhile works projects. They have been warmly welcomed by all the Premiers. I commend the Bill to the Senate.

Debate (on motion by Senator O'Byrne) adjourned.

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