Debates Day 2 - Wednesday 1 May 1991
Parliamentary Record 3
Debates for 6th Assembly 1990 - 1994; ParliamentNT; Parliamentary Record; 6th Assembly 1990 - 1994
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Legislative Assembly of the Northern Territory
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Legislative Assembly of the Northern Territory
DEBATES - Wednesday 1 May 1991 techniques to enable the consequences of financial decisions to be predicted instead of flying by the seat by its pants and saying: 'It is all right. Trust us. We are not in trouble at this stage'. That is not the point. We want to know, and we have a right to know, where we are going in terms of our borrowing and future repayments. It is a pretty simple proposition and I cannot put it any more simply. We will keep pushing, Mr Speaker, until we obtain a response. Mr COLLINS (Greatorex): Mr Speaker, the question of debt is of concern to all of us, whether personally or in relation to the public debt of the Territory. The complexities of debt are not easy to understand. We tend to understand our personal situations best. No doubt, much of what has been said today is quite true in relation to the monetary system which we have. I have asked 2 questions in this House in the last couple of days. The first related to when, if ever, the people of the Territory would actually own the new Parliament House. That will depend, of course, on the method of payment. John Maynard Keynes was not the first exponent of deficit funding. In fact, in 1692, the Governor of the Bank of England headed a consortium which lent lm to the British government on the basis that interest would always be received and that the principal would never be paid off. Keynes came about 250 years later. Much has been said on this subject by the Chief Minister and, last night, I had a vigorous exchange with the member for Braitling in relation to spreading payments over time. With deficit funding, the principal is paid off very slowly unless one makes a decision to the contrary. Of course, as years go by, the purchasing power of money decreases and the money supply increases through inflation. The principal decreases and can be paid off, as the Premier of New South Wales did when he finished paying off the Sydney Harbour Bridge a year or so ago. With deficit funding, if the final payment is never made or if it is left to a future government, really you are saying that you will never own the asset. The asset is owned by whoever lends the money, which they created out of thin air. Unless an effort is made to pay off the principal in respect of Northern Territory loans, the people will keep on paying and taxpayers' money will flow constantly into the banks. As I said last night, eventually, all of our buildings, including the new Parliament House, will come to the end of their economic life and may well be knocked to the ground. Unless an effort is made to pay off the principal, people of the Territory could still be paying for buildings which have ended their economic life. I ask the member for Braitling how long he expects people to pay for things. I agree that it is reasonable to spread payments over the period of an asset's economic life but, if it is done by deficit funding, the payments will continue virtually forever. Many times the value of the asset will be paid and the money will go straight into the pockets of the people who lent the money. It may well be worth telling a story at this stage. It is an historical story and I am sure that the member for Araluen would be Interested in it if he has not already heard it. It relates to the island of Guernsey 1n about the year 1817. I can hear the Minister for Primary Industry and Fisheries making perhaps snide remarks. At that time, the island of Guernsey was absolutely run down. The roads were potholed. The sea wall was broken and the sea was ruining the land. A committee was formed to consider the situation. It concluded that there was absolutely no way that taxes on the people of the island could be increased. After debts and interest payments 856
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