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Tuesday, 4 December 1973
Page: 2425

Senator LITTLE (Victoria) -The Australian Democratic Labor Party is opposed to the Constitution Alteration (Local Government Bodies) Bill. It admits that the principles sound very attractive. Indeed, struggling local government councils seeking desperately a way out of the dilemma in which the financial policies of successive previous governments and this Government have placed them are bound to find the overall proposition apparently attractive. But if one is a practical politician- every senator ought to be if he is not- one has to remember that only just recently, at the time of the Parramatta by-election, there was a sudden decision to build a $8m hospital in the area because it was necessary to win votes.

Without castigating the present Government very much at all but simply looking at practical politics and practical politicians, I wonder just what would be the circumstances of the Federal Government going into local government council areas with an open cheque book and saying: 'We will look after you'. I wonder what would be the position in relation to, say, the inner Melbourne suburb of Collingwood which forms part of a blue ribbon Labor seat. The Labor Government would not have to worry about the local council at Collingwood because it could not lose the seat. But what would happen in the outer suburban areas which are in borderline seats?

Senator Devitt The y would get sewerag

Senator LITTLE (Victoria) Those would be the councils that would be looked after. They would all be sewered. They would all be in a position today to pay their way as they did for a long time. They could do this if they were not paying today 3 times the interest rate that they used to pay on all moneys that they borrow. Local councils 25 years ago were not in the situation that they are in today. The situation in which they are placed has been brought about because they cannot borrow money because they owe too much interest on the money they have already borrowed. If a council pays interest over 10 years on an amount borrowed and at the end of 10 years still owes the principal, it knows darn well that it cannot borrow money. This is the old story of financial policy by means of which this Government is wrecking local councils, and doing it more decisively than the previous Government. Whereas the previous Government increased interest rates by a half of one per cent, this Government has increased them by 2 per cent. It wrecked every local council the moment that it did so. The Government knows darn well that this is what local councils cannot afford to do. Of course, they could borrow money at 3 per cent and pay their way. But they cannot borrow it at 10 per cent.

Senator Devitt - How would you know?

Senator LITTLE (Victoria) I would know because probably I have been paying rates a lot longer than the honourable senator. Let us take the situation as it has existed in our own experience. This may not apply to Tasmania which wtil not have Albury-Wodonga complex. But let us consider the risks that are being run in the guise of decentralisation— thi s new vision splendid. Let us see how it has worked out for the people in the areas adjacent to Albury-Wodonga which I have recently visited. Local councils in those areas have done much to help decentralisation in their towns and have attracted industries. Just because they are 5 miles outside the Albury-Wodonga complex, such industries will continue to pay the current telephone rates. But if the factories which the local councils have attracted to their areas shift over into the complex area they will benefit from a big reduction in telephone rates.

The local councils are beginning to see now, that this is not just a matter of decentralising the population of this country from Melbourne and Sydney to inner areas like Albury and Wodonga. They are beginning to realise that there is a great possibility that population will be attracted from Castlemaine, Benalla and other towns, and so will industry. Industry that needed constant telephonic communication with Melbourne or Sydney would be foolish to stay 10, 15 or 25 rnties outside the Albury-Wodonga area. The telephone concessions alone that will be made available to these selected areas will be sufficient to attract development, not only at the expense of the 2 great metropolises I have mentioned, but also at the expense of the adjoining already decentralised cities. I make no aspersions against the purposes of Dr J. F. Cairns who has directed a great deal of regional development into the area that he happens to represent in the Parliament.

Senator Webster - Is that where his son is?

Senator LITTLE (Victoria) His son is employed by the authority concerned. But that is only in accordance with the common practice of jobs for the boys. I am not dealing with that aspect of the position at the moment. Dr J. F. Cairns probably realises the necessity that exists in his area which in my life time has been one of the fastest developing outer areas of Melbourne without any assistance at all. But this development no doubt has highlighted many shortcomings.

What an enormous temptation it must be for members of Federal Cabinets who can help the industries in their area by the direction of funds from the Commonwealth directly into their own electorates. I am a very sophisticated politician. I would not trust the members of this Government with that power and I would not trust the members ofthe Opposition with it. The only people who I would trust with such power would be the members of the Australian Democratic Labor Party. I have no doubt that the members of all other poUtical parties have exactly the same phUosophy. I say this: It is obvious how power is used. During all the time that poor old Parramatta could have received a hospital, it was not until there was a vital by-election to be conducted in the area that the Commonwealth rushed in with $8m for the construction of a hospital. Now, it is suggested that it would be wonderful if it could rush into any local councti area. The idea would be to shoot your sitting member of ParUament and create a by-election if your area were short of something and it would have a chance of getting Commonwealth funds poured into the area by the Government to try to win the election.

Senator Cavanagh - That is a good suggestion.

Senator LITTLE (Victoria) That is how politics works. The Minister for Aboriginal Affairs (Senator Cavanagh) who 'interjects does so because he realises that this is how it works. I do not believe that the Parliament should lend itself to that sort of development. It is true that our local councUs have a great financial problem. But I think that we should look at the real causes of it. As I said before, the real cause has not been that in the past the councUs have not been able to borrow money or that during the present State loan situation they were not able to get the money. The local councUs have always been a 100 per cent safe bet for anyone who wanted to lend money because they have the power to rate the citizens in the area and to raise the money. What they cannot do is repay it at an interest rate of 10 per cent, no more than can anyone else. The Government wtil not reaUse that. It says that the solution to the problems of local councils is to let the Commonwealth raise the money for them at lower rates of interest. Probably, it wtil give the money to them at a half of one per cent less than the current bond rate. The current bond rate would send even a pawnbroker broke. Pawnbrokers never used to charge these sorts of interest rates. They have been governed by laws over the centuries to prevent them from doing this. Such practices would have been described as 'usery and in more unpleasant days pawnbrokers would have been executed for charging the rates of interest that the Commonwealth Government has just made apphcable to the bonds of the Commonwealth to the detriment of everybody.

Senator Wilkinson (WESTERN AUSTRALIA) - What about hire purchase?

Senator LITTLE (Victoria) What about hire purchase? Only 15 years ago the Democratic Labor Party was leading a fight to try to stop the unlimited development of hire purchase—th e pouring of funds into companies which charged high rates of interest. Do honourable senators know what they were charging then? They were charging the shocking rate of 8 per cent. It shocked everybody. Now, everybody is paying 10 per cent. This Government came to power as the workers' Government that would do something for the worker. It did them, aU right. It did them proud. It wrecked their hopes with one decision to increase the interest rates by 2 per cent because under those sorts of interest rates there is only one possible economic result. The rich get richer and the poor get poorer. Whatever is done, that is how the position finishes up, and that is how it finishes up with local councUs. They are the poor relation and they wiU go on getting poorer whtist these interest rates of 10 per cent apply.

The Government's pious referendum to enable the Commonwealth to borrow money for them and to charge them interest at a little lower than the bond rate will not lower the cost of their money to below their labour costs. The local councils today spend more in paying interest on the money they owe than on all the staffs they employ to keep the cities clean and for all other purposes. They cannot afford to go on doing that. That is where the solution to the problem lies. It does not lie in coming to the Parliament and saying: 'Let us have a referendum. Look at the poor old local councils'. They managed; they did reasonably well; they served the community; they borrowed money, built roads and footpaths and provided the services of libraries. When the interest rates were at 3 per cent and 4 per cent they were never in the shocking trouble or involved in the problems in which they are involved today. If honourable senators look at the real reasons for the trouble they wtil find that we do not have to be wasting the time of the Parliament with a proposition such as this giving a phoney solution to the problem for which the solution is obvious.

We do not want to see the already great powers ofthe Commonwealth to decide to butid hospitals in electorates where there are byelections expanded still further to give it the power to go into an electorate and offer to butid roads in an area when there is a political reason for wanting to do so. For that reason we are opposed to this proposition.

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