APPROPRIATION OF LAND REVENUE.
Land Sales Receipts; not Consolidated Revenue.--Arguments used
in favour of Treating Proceeds as Ordinary Revenue.--Auction
Sales have now Practically Ceased.--Certain Proceeds Payable
into Loan Fund.--Special Sales of Land Act; Appropriation of
Receipts.
The revenue from sales of land for the first quarter-century was
L4,672,659, besides L853,583 representing grants made in consideration
of land orders issued to immigrants but not included in the revenue
and expenditure returns. Nor does it include the sum of L382,346
received in cash for land sold within railway reserves and afterwards
transferred to revenue. The latter amount must, however, be added to
the cash receipts for land sold, which therefore totalled L5,055,005.
The practice of treating proceeds of land sales as ordinary revenue
has already been incidentally alluded to, but it may be well to refer
more fully to the subject. It is held that the taxpayer ought annually
to provide for current expenditure, and that if land is alienated
from the Crown at all the net proceeds, after defraying the cost of
administration, should be applied to the construction of public works
that would otherwise be of a character to justify charging their cost
to the Loan Fund.
This principle in the abstract is unexceptionable; but in a new
country much work is expected to be done by the Government for
posterity in the nature of "invisible improvements"; in fact, it is
so done, and cannot well be provided for by loan. Roads have to be
cleared and formed, and buildings erected for the benefit of posterity
as well as of those who so invest their money.
Moreover, the advent of population enhances the value of both public
and private estates, while the maintenance of great public works like
railways involves in most cases a heavy revenue loss for years after
the lines are open for traffic. Only in very recent times have our
railway earnings approximated, after payment of working charges and
maintenance, to the amount of the interest charge upon the capital
invested in them; but they have immensely benefited the country by
providing facilities for internal transport, and by enhancing the
value of the land, Crown and other, which they intersect and make
accessible. Years ago, when the railway debt of Queensland stood at
about 17 millions, an official estimate showed that, in making good
the annual deficiency of interest and working expenses on the various
open lines, at least as much had been spent by the Treasury as
the entire first cost of their construction. So that contemporary
colonists have still a charge against posterity for public works to
be handed down, even though the first cost remains a liability in the
form of interest upon inscribed stock held by the public creditor.
Further, it has to be said that, since the railways have begun nearly
to defray interest upon capital, the auction sale of Crown land,
except in small areas, has practically ceased. The receipts from
auction sales in 1907-8 totalled only L33,391, and much of that
sum would be absorbed were it charged with its share of the cost of
administration. By the Land Sales Proceeds Act of 1906, all moneys
received in payment for land sold under the authority of Part VI. of
the Land Act of 1897--by auction sales of town, suburban, and country
lands, or of such lands sold by selection after having been so
offered--must be paid into the Loan Fund Account, and be applied to
defraying the cost of such works as Parliament may from time to time
determine shall be executed out of moneys standing to the credit of
that fund. True, receipts for lands sold under the Special Sales of
Land Act of 1901, being applied to the special purpose of retiring
Treasury bills issued to make good revenue deficits, are excluded from
the general law in this respect. But it is satisfactory that, even
though the recognition of the principle that land is capital and not
revenue has been tardy, it has now in Queensland the full force of
statute law.
As to the past, it has been argued with much reason that small areas
alienated were for farming purposes, and soon became far more valuable
than when held for grazing purposes by tenants of the Crown. As to
the future, what Parliament seems determined to guard against by every
possible means is the alienation of large areas of the public domain
to persons who will use the land for speculative purposes, or who by
locking it up will seek to check the wave of closer settlement which
it is obviously in the best interests of the State to foster and
stimulate.
As the Special Sales of Land Act of 1901 still remains upon the
Statute-book a few words in explanation of its provisions and objects
may be useful. The first Act of this kind was passed in 1891--(1) to
provide for maturing Treasury bills for L500,000 authorised but not
issued in 1887; (2) to make provision for meeting Treasury bills for
L500,000 floated to cover a revenue deficit in 1890; (3) to make good
an anticipated deficit of L300,000 for the financial year 1891-2; and
(4) to retire L120,945 worth of Brisbane Bridge debentures--a total
of L1,420,945. Despite any statute to the contrary, country lands, not
within twenty miles of a railway or the permanent survey of one, or of
any navigable stream, were authorised to be sold by auction in areas
of 320 acres to 5,120 acres, at the upset price of 10s. an acre.
Payments might be extended over three years, but the unpaid
instalments must bear 5 per cent. interest. Any land so offered and
unsold would remain open for six months for purchase at the same price
and on the same terms.
The proceeds of these sales were to be applied (1) to payment of the
sums appropriated by Parliament for the service of the financial years
1891-2 and 1892-3 respectively, and (2) to the payment of interest
upon and retirement of the Treasury bills before mentioned. In 1901
the Philp Government were in financial trouble through federal charges
and the unexampled drought, and they passed a Treasury Bills Act and a
Special Sales of Land Act, the former for the sum of L530,000; and the
proceeds of the latter to be applied (1) to making good any revenue
deficiency during the years 1901-2 and 1902-3, and (2) to the payment
of interest upon and retirement of the bills issued under the Treasury
Bills Act. In 1902 another Treasury Bills Act covering L600,000 was
passed by the same Government. The Auditor-General in his report for
1907-8 showed that there were still outstanding L1,130,000 in Treasury
bills issued under the 1901 and 1902 Acts, and maturing in 1912 and
1913 respectively. In the same report the Auditor-General refers to
the sum of L8,148 received from special sales of land during the year,
and appropriated to the payment of interest on Treasury bills. For
some years past these special sales of land have been stopped,
but instalments of payments were received annually until last year
(1907-8), when they amounted to L3,279; but none are now outstanding,
and the Act is practically a dead letter.
[Illustration: HAULING TIMBER, NORTH COAST RAILWAY]
[Illustration: STONY CREEK BRIDGE AND FALLS, CAIRNS RAILWAY]