8.13 Property Ownership In Australia
8. Property Rights by Doctor Mark Cooray (1995)

The question 'Who owns Australia?' is asked and answered in Issue No 38, March 1985, 'Common Sense' by Viv Forbes. He points out that governments control 72% of the land in Australia, aboriginals 13% and 15% is held in private freehold. The figures are said to be based on the best information available. The reason for this is that governments, which are the biggest landlords in Australia, are very slack in accounting for and utilising the land they control. The figures include leasehold land as government land because the government is the owner and the lessee can be dispossessed at any time by government.

The issue of 'Common Sense' focuses on the effect of government ownership. The following extracts from this issue (which continue to end of chapter) demonstrate the extent to which ultimate government title to leasehold land and government regulation in relation to freehold land stifle development and productive use.

Who owns Australia? (see Who & How)

Leasehold v Freehold

The Three Nations Of Australia

The Attack On Property

The Road ahead

1 Who owns Australia?
A recent article in the Courier Mail 9th February 1985 was entitled "The People Who Own Australia". The article was illustrated by a big greedy hand grasping the continent, and a picture of Malcolm Fraser on "Nareen". A subtitle blared "The Land Barons". The story talked about people like the Falkiners, R.M. Williams, Rupert Murdoch, the Kidmans and Prince Leonard of Hutt. Another story in 'The Australian' 2nd February 1985 devoted a whole page to "the quiet millionaire who has just acquired Victoria River Downs", the biggest cattle property in the world. The stories were eye-catching but, like so much modern journalism, misleading.

Here are some real leads for sensational but accurate journalism. The biggest landlord in Australia is the Department of Lands and Surveys in Perth which owns 211 million hectares (equal to 176 times the area of the giant Victoria River Downs — 176 VRD's). Over in Queensland, a three man unelected Land Commission presides over some 135 million hectares, or 113 VRD's. Down in NSW, the Western Lands Commission is landlord to 1450 properties containing over 30 million hectares or 25 VRD's of land. In ACT, virtually all land is owned by the government, who is thus landlord to every home, office, factory and business in a city of 250,000 people. Even the great VRD itself is leasehold land, owned by the Department of Lands in Darwin whose empire totals 80 million hectares, or 67 VRD's. Table 1 shows that governments own 72% of Australia and another 13% is owned and controlled by governments or quasi-government land councils or trusts on behalf of aboriginal people. These then are the real land barons in Australia. Private freehold land covers no more than 15% of Australia and maybe as low as 10% — surely the lowest proportion of private land ownership outside the comrade societies.

Property rights are the basis of all other rights. With 10% private property in land and virtually 0% private property in minerals, it is obvious that freedom and enterprise in Australia rest on very insecure foundations indeed.

In a country like the United States, where the right to property is placed above the law, where the sole function of the public police force is to safeguard this natural right, each person can in full confidence dedicate his capital and his labor to production. He does not have to fear that his plans and calculations will be upset from one instant to another by the legislature. — Frederic Bastiat (1850)

Table 2 is an estimate of land use in Australia. It shows that only 18% of the land is intensively used, which is slack even by Australian standards of land utilisation. One third of the continent is virtually unused being devoted to recreation and preservation. This table also shows that the productivity of the land parallels the extent of private ownership and control. This is no accident. A private land owner has to consider the capital cost of his land. He is thus pushed towards efficient use of his limited capital resource. Moreover, he has to pay tax on his land. It thus must produce at least enough to cover these costs. The government land barons, however, have so much land that it can be used wastefully without anyone noticing the lost opportunity cost. No one can see the paddock of pasture, the fruit orchard, the housing sub-division or the mining project which never appeared because of the lack of secure title or of government approvals to build.

The role of closer settlement by way of sub-division of pastoral holdings has diminished over recent years, with the emphasis now being on consolidation of grazing units Annual Report, Land Administration Commission Queensland, 1981-82 p 2

2 Leasehold v Freehold
In September 1984, 4 prime cattle stations in the Kimberleys of WA were put up for sale. Their combined area was 1.5 million hectares, or 1.2 VRD's. They had been owned by the pioneering Emmanuel family for 104 years. According to Mr Tim Emmanuel, the family were not prepared to invest $2 million on compulsory TB eradication when the government could give them 90 days notice to quit the leasehold land.

"Although we have leases until the year 2015, there is no security", he said. "The government could take over the land for any reason at any time. The risks for us are too great".Courier Mail, 8th September 1984.

In October 1984, the land commissar in Western Australia ordered the forfeiture of another four cattle stations in the Kimberleys with an area of 1.1 VRD's. The forfeiture was ordered because the lessee had not complied with the terms of the lease. (Mainly because he was in financial trouble and unable to raise money on the insecure land titles). The land had been worked for 20 years but the tenants were given 1 year to remove their livestock when the leases and their improvements would then be available to other lessees. It was reported that the government were considering buying the Emmanuel Stations to add to the forfeited leases in order to "restructure the entire Kimberley pastoral industry". They would amalgamate and sub-divide into smaller units which would be made available

"to both pastoralists and aboriginal communities".The Australian, 19th October, 1984.

In 1981, Pioneer Sugar Mills Ltd, a 100 year old Queensland company sold its 6 Queensland cattle properties. The Chairman, Mr J F Leggo said that state legislation did not allow big companies to buy the cattle properties they leased.

"The best security is free-hold",he said. Courier Mail, 30th October 1981.

In 1985, CSR Ltd, another pioneer of Queensland and one of Queensland's biggest pastoralists, decided to sell all its rural properties.

Sell a man an acre of wilderness and he will make a garden out of it. Lease a man an acre of garden and it will become a wilderness.

It is no accident that Victoria is called "The Garden State" over 60% of the state is privately owned — the only freehold state in the Commonwealth. Tasmania, with nearly 40% freehold, is called "the Apple Isle". At the other end of the scale, Northern Territory with no freehold grazing land, has the most undeveloped pastoral industry in Australia. On some properties, operations are little better than wild cattle hunting. Climate alone is not the answer. In USA, the land west of the Mississippi has not been settled much longer than has Australia. It's soils and geology are no more attractive and many parts were desert before they became mineral and agricultural freehold land. Now they produce an abundance of food, fibres, oil and minerals.

On leasehold land however, the grazier has no incentive to maintain or improve the capital value of the land. In fact there is often a disincentive to improve the productivity of leasehold land. It arises because of misguided policies to encourage closer settlement. Under these policies, any grazier who improves his land is likely to have it resumed for sub-division to closer settlement. He may or may not be paid full value for his improvements. His lazy neighbour, however, who merely harvests the land with no improvement to its capital value, is safe from seizure because the poor carrying capacity would not support sub-division. Graziers learn these lessons well, often at great cost. Charles Russell, a great pastoralist, pioneer, developer and patriot from Jimbour in Queensland had this to say:

As a result of my experiences in Queensland and NSW I would say that a lessee is ill-advised to improve leasehold land beyond the requirements laid down at the commencement of the lease. My experience has always been that the more a settler does, and the more successful he is, the less consideration he receives. I have had a great deal of experience in developing terminable lease country and would say that, if I could have my life again, I would not develop it above the bare necessity. — C W Russell, Country Crisis, (Brisbane, 1976).

Even leasehold land varies in its security of tenure. In fact, with the increasing security of some types of leasehold and the increasing erosion of freehold property rights all settlers are dependent on the goodwill of the government land barons. The experience of the Western Lands Commission in the arid lands of NSW shows the close relationship between land and soil conservation, and security of tenure. Western NSW land has always been leasehold, originally short-term leases. There was little pasture protection and poor development of water facilities and fences for better cattle and pasture management. During the droughts and depression of the 1890's the land became overstocked, and was exhausted. Pasture declined which caused more overstocking as graziers attempted to maintain income. The land became progressively degraded until leases-in-perpetuity were introduced in 1932. Since then, there has been a progressive improvement of the lands, according to the Western Lands Commissioner, Mr Richard Condon:

The security of tenure afforded by the lease-in-perpetuity has been a major factor in the recovery of much of the country. The huge scalds and claypans which were a feature of this land have disappeared under a sea of grass, and perennial saltbush and bluebush has returned to areas where it has not been seen for 50 to 80 years. The Western Division of NSW has, over the last 30 years, increased productivity by 17.5% compared with the previous 50 years. The Australian, 14th June 1982.

Owners realise they must conserve land and soil if they are to derive long-term productivity from it. Whenever there is "free" water, open range, public land or national park there is waste, pollution and degradation as men rush in to get their share of the free goods before someone else uses it. No one has an incentive to preserve and conserve values for the future. Private property is the best tool for ensuring conservation of our land resources. Farmers, home-owners and aboriginals are being given freehold title to their land. However grazing properties, which occupy almost half of the continent, are largely leasehold. The land would be better used and cared for if graziers were given similar security of tenure. Tax-payers could then be relieved of much of the cost of their several Departments of Lands.

3 The Three Nations Of Australia

Aboriginal Land Councils now control around 13% of Australia. In many cases, they are being given inalienable freehold title to surface and mineral rights. This is not private freehold, but collective ownership. We are seeing, in effect, the creation of new nations within Australia. This is clearly indicated by a letter received from the Director of the Land Administration Branch replying to a query on land tenure in NT. A table attached to the letter states it in this way —

Total area 1347 sq km
Aboriginal freehold 4,400 sq km
Land Administered 4,947 sq km

Exploitation Of Sacred Sites
It is clear from this table that freehold land owned by private individuals or groups, black or white, is administered by the Lands Department but aboriginal freehold is not. It is separate territory. Aboriginal groups are using the sacred site strategy to expand black national land. The Lands Minister of NT has claimed that Alice Springs was rapidly developing into "A minefield of sacred sites". He said 90 sacred sites had been recorded in and around the town.

"Often when a major development is proposed a sacred site is identified which affects the project".

To date 12 major projects had been held up. (The Australian, 9th August 1984.)

In a submission to the Seaman Inquiry into Aboriginal Land Rights in WA, the State Museum proposed that more than 750,000 acres within the state be registered as Aboriginal Sites. The acting director of the Museum, Mr Peter Randolph, said the equivalent of 20 sacred sites should be registered for each aborigine. (The Australian, 3rd March 1984.)

Under the arrangements contemplated after the Seaman enquiry in WA, all unalienated crown land in WA (40% of the state) would have been available for land claims and aboriginals would be allowed to convert any pastoral leases or other land purchased into inalienable freehold. The State government has not accepted this, despite federal pressure. ( B P Webb "Access to Land and the Future of the Australian Mineral Industry" Johnny Greens Journal, July 1984.)

The Victorian Parliament proposed a bill which would have given aboriginals the right to claim crown land in Victoria, on the basis of need (again about 40% of the state). The public outcry was such that the bill was withdrawn (probably until after the state election).

No one should object to aboriginals having the same property rights as other Australians. But to grant aboriginal groups special inalienable titles vested in collectives is a divisive road to travel. If current trends continue, we will see the emergence of three nations in Australia:—

4 The attack on property
Socialists and Marxists will argue that property interests have failed to provide the economic, emotional and political security necessary for the functioning of democracy, instead becoming an instrument of repression. This is a false argument. All factors are relative. If the failure of property rights is viewed in the context of absolute or near absolute values it will necessarily fail to provide what is expected of it in this sense. However the right to private property provides scope for individual freedom and the exercise of democratic and other rights. If it has failed, it has failed because of the increasing tide of government regulation. The cause for the failure is increasing government regulation. The size of government relative to the private sector has grown by 50% in the last thirty years and 30% in the last ten years. The critics who are responsible for the failure of property rights to achieve what it could, ignore the central issue.

A judge of the High Court in a judicial decision referred to the emphasis on property rights as belonging to the values of a bygone era. This is a perspective which is shared by many Ministers and bureaucrats in Commonwealth and State Governments in Australia. However the irony is that many of those who denigrate property rights are themselves substantial owners of property. Judges, politicians and bureaucrats can expect substantial superannuation payments which they will speedily convert into property assets when they retire. This attack on property rights of others by government officials goes hand in hand with concern for an accumulation of their private property. The hypocrisy and double standards involved scarcely ever receives a mention.

The attacks on private property are to a great extent generated by envy. Many socialists and most certainly Karl Marx are and were moved more by a metaphysical envy and hatred of wealth, success and achievement than by a genuine concern for injustice, the poor and the underprivileged. Hatred and envy of wealth and achievement often masquerade in the guise of concern for the poor and the underprivileged. See further LJM Cooray and J Carlton 'Socialism in Australia', (Sydney, 1985) pp 13-16.

5 The road ahead
This study of land tenure in Australia reveals a many-pronged ideological assault upon the concept of property rights in land. We have a nation where over 85% of the land area is owned by governments or quasi-government bodies and controlled by their officials. These absentee landlords are not content to merely own the land. They are active in the purchase, confiscation and sale of land and also demand the right to plan, control, direct and manage its use.

They are involved in rural reconstruction and closer settlement, lease amalgamation and sub-division, preservation and land development, nature conservation and forestry, pasture protection and plant destruction, irrigation and reclamation. They encourage young farmers with subsidies, reward foolish farmers with drought relief and punish prudent and successful graziers with taxes or seizure and sub-division of their land. In Queensland, they encourage the clearing of land whereas in South Australia they prohibit it. In many states, the farmer needs a licence to produce and government monopolies forcibly acquire his production. They are involved in the building and operation of tourist projects, cultural centres, industrial estates, research stations, games centres, casinos, Expo sites, showgrounds, race courses, housing estates, abattoirs, sale yards, technology parks, museums, ports, harbours and water and irrigation projects.

Not content with ownership and total control of the 85% of leasehold Australia, they are now planning to destroy the concept of freehold property using "land use planning","soil conservation", "foreign land grabs" or "the national interest" as the Trojan horses. Exploiting a genuine community concern over the sad plight of many aboriginal people, they have set in train a process which threatens to create a series of black homelands in Australia where land ownership rests not with individual aboriginal people, but with collectives, land councils and communes with sovereign powers. Another decade of such developments will see the loss of all private property rights in land, to be replaced by a new land feudalism.

The coming rural serfdom will be more pervasive and more oppressive than the feudalism of old. Despite cases of cruelty, extortion and conscription, the feudal barons were at least visible, accessible and directly responsible for the welfare and protection of their serfs. And, at least in England, the common law provided protection against the worst excesses of arbitrariness. The modern land barons are largely invisible, inaccessible and not directly dependent on the welfare of their tenants. Their statute law has given them sweeping arbitrary power. And using the respectable shields of "the public interest", "the national estate", or "the will of the people" they are largely secure against the threat of a peasant revolt. Every generation is remembered for the freedoms they lost, or successfully defended. Whether we realise it or not, this generation is engaged in a crucial battle about land rights and the outlook is bleak. Should we lose, the concept of "free enterprise" will exist only in political speeches and in the literature of the Small Business Development Corporation. Moreover, this fight is not just for the benefit of a few farmers and graziers. Its outcome will affect the future for every Australian.

Property is the only power that can act as a counterweight to the state . . . State power is the kind of power that absorbs everything else into it. If it is allowed to take its own way, all individuality will quickly disappear, swallowed up by the collectivity, and society will sink into communism.
Property, on the contrary, is a decentralising force ... it is anti-despotic and anti-unitary. It is the basis of any system of federation. —Proudhun.
1 — Who Owns Australia?
Government Aboriginals Private/FreeholdTOTAL
STATEmillion hectares%million hectares%million hectares%million hectares
WA 2118422919 7252
Qld135783 2 35 20 173
NT 80 60 5540 0 0135
SA 65 66 18 19 15 15 98
NSW16433 26 33 80
Vic 9 38 _ _ 14 62 23
Tas 4 62 _ _ 3 38 7
ACT .2 100 _ _ _ 0 _
Total 555 72 101 13 112 15 768

1. This table is an attempt to present land ownership in Australia in 1985, although some states have not reported such figures since 1980. The figures were compiled from a number of sources and cannot be claimed as accurate, but no better figures are known to exist.

Sources consulted include—

In all cases except Victoria, it was impossible to get a complete up-to-date set of figures. It is especially difficult to find out how much land has been granted to aboriginals and how much is owned or leased by government authorities. Park and conservation reserves also come under a multitude of names. It is clear that the biggest landlords in Australia are very slack in accounting for and utilising the land they control.

This table is the best compromise that appears to fit most of the known information into the total area of each state. It will be updated as better figures are obtained. Information from readers would be welcomed.

2. Includes leasehold land, crown reserves and vacant crown land.

3. Includes freehold, leasehold and reserve land granted to or recommended for granting to aboriginal trusts, land councils or other collectives. It does not include leasehold or freehold land held under ordinary titles by individual aboriginals.

4. Includes freehold land and land in the process of freeholding. It also includes freehold land owned by federal, state and local government authorities and land purchased with public money by Departments of Aboriginal Affairs.

2 — How Is Australian Land Used?
IndustryUseOwnership million
Intensive Homes and Farms Private Freehold 11215
Roads and Streets Crown 40.5
Other (incl. govt) Private Leasehold and crown142
Mining Private Leasehold 0.60.08
ModerateGrazingPrivate Leasehold 37048
Road Reserves & Stock Routes Crown Reserves40.5
Total 37448.5
Slight Forestry Reserves Crown Reserves 40.5
Aboriginal Land Collectives 10113
National Parks Crown Reserves486
NoneVacant Land Crown 10614
Total Australia 768 100