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Commonwealth Government Records about the Northern Territory

Payne–Fletcher Board of Inquiry, 1937

With the failure of the chartered company proposal still fresh, and with the effects of the Great Depression beginning to wane, on 15 May 1936 a delegation of pastoralists met Thomas Paterson, who became the Minister responsible for the Northern Territory in late 1934. They stressed the need for a 'developmental plan for the Territory for the next 25 to 50 years be laid down'. They said that despite numerous inquiries 'there appears to be no such thing as a long term plan of development'.47 The delegates suggested the formation of an inquiry that would undertake a general survey of the resources of the Territory, and draw up a scheme of development for the government's consideration. The group recommended William Payne (then a member of Queensland's Land Administration Board), as an ideal candidate to chair the inquiry, and said he should be assisted by a person with practical experience in the pastoral industry.

Paterson agreed to the request and subsequently took a submission to Cabinet in July 1936, seeking its support. He told Cabinet that when land policy for the Territory had been determined earlier it was anticipated that there would be a steady demand for pastoral leases, and it was seen as desirable that provision be made for the gradual break-up of large estates to provide for new settlers. Those expectations, however, were unrealised and it was appropriate that the Government have the advice of an expert in land administration to develop a new land policy.48 Payne readily agreed to chair the inquiry and suggested John Fletcher, a pastoralist from Bonus Downs in western Queensland, as the person to assist him.

Paterson advised Parliament of the Government's intentions, saying that 'with regard to conditions of land tenure in the territory, considerable doubt exists at present as to whether our present ordinance is the best that can be devised'. He went on to say that the Government had procured the services of William Payne 'to investigate this matter and to make recommendations as to what might be done by the Commonwealth to improve land tenure conditions in the territory'.49 The inquiry would commence work in early 1937, after the end of the wet season.

Payne offered to draft the inquiry's terms of reference for Paterson's consideration. He suggested that the inquiry report on existing land tenures and conditions of settlement, and methods for better utilisation of Territory lands to encourage the investment of capital. He advised that it prepare a development plan for the Territory's land industries over the next 25 years. The terms were endorsed by Cabinet on 9 February 1937.50

The Payne–Fletcher Inquiry began its work by compiling a list of questions for pastoralists, much as the Shepherd Pastoral Lands Investigation Committee had done before them. The questionnaire included the length of time lessees had been on their properties, the size of their properties, stock and stock improvements, property improvements, water facilities, and staff located on each property. One noteworthy omission was any reference to absentee landlords; it had been included in the Shepherd Committee's list of matters to be discussed.51

The Inquiry held hearings in every State except Tasmania, travelled over 10,000 miles, and took evidence from 150 witnesses. Its report was delivered in late November 1937 (although it had already been leaked by several newspapers), and was tabled in Parliament on 8 December 1937.52

The report summarised activities since the Commonwealth's administration of the Northern Territory had commenced in 1911. While expenditure to date had exceeded £15 million, production costs did not pay those responsible for it. Nearly all enterprises – both government and private – railways, pastoral and mining, were not making profits but merely breaking even or more frequently accumulating losses. The result was that 'the Northern Territory as it exists today is a national problem, a national obligation, a challenge to other nations, and a detriment to ourselves'. The report concluded that 'the Territory is a heavy liability to Australia'.53

With respect to the pastoral industry, the Territory's principal industry at that time, the report was critical of both the Commonwealth and pastoralists. While acknowledging the Commonwealth's contributions, for example, the construction of railways, and the provision of water on stock routes, it said that the outlook of land administration was wrong, being steeped in old traditions of Australian land history. The protection of future public interests, through closer settlement and land resumptions, had become an obsession and prevented reasonable business terms being given to pastoralists. In the past, a few lessees had been granted very generous terms in respect of large areas, and this had since brought a reaction by the Commonwealth in the opposite direction.

Encouragement was best given by the elimination of government charges which should not be exacted on a pioneering community. Accordingly Payne–Fletcher recommended the abolition of federal income tax, petrol tax, and the suspension of all tariffs.54

Like the Shepherd Committee before them, Payne–Fletcher were critical of pastoralists in the Victoria River District, asserting that most stations were too large for effective handling, insufficiently improved for efficient management, and steeped in methods that would never produce creditable results. The report noted the poor quality stock produced on many properties and put the view that smaller properties would ensure more efficient control and management, and give better financial results.

The report chastised the Commonwealth for its pursuance of closer settlement, alleging that there were four factors against it: lack of regular rainfall, limit of good soil, absence of markets and difficulties in attracting good agriculturalists. It suggested encouragement should be given to settlers already in the Territory, rather than seeking new settlers. The Commonwealth should not resume land from smaller properties, neither should it resume from larger properties if substantial improvements were made.

The authors devoted considerable attention to the Territory's administration. They noted delays and confusion in matters involving pastoral leases and recommended that greater powers be given to the Administrator. They noted that administrative officers, particularly those in Darwin, were unhelpful to pastoralists, and they suggested a series of 12 maxims by which such officers could improve their performance.55 The authors recommended the appointment of two field officers to ensure that property improvements were made (there were none at that time). They recommended the creation of a Land Tribunal to hear pastoralists' appeals against decisions made by the Administrator, and recommended the abolition of the Land Board (created in 1931), noting that the Administrator could perform the Board's duties.56

The report was a comprehensive document yet not everyone was impressed. The Northern Standard newspaper said, 'There should be no tears spilt when the Payne report is buried in the archives'. The newspaper felt that the report failed to address the issue of the empty north, which it too called the 'Achilles heel' of Australia's defence, nor had it considered the completion of the railway from Darwin to Adelaide.57 The report was never 'buried' in the Archives; it was published in Parliamentary Papers; unlike the report of the Shepherd Committee which was not made public, and was not transferred to the National Archives until 1980.

In November 1937 John McEwen was appointed as the Territory's Minister. Prior to implementing Payne–Fletcher's recommendations, McEwen visited the Territory in August 1938 in order to see conditions for himself. Upon his return he prepared a lengthy Cabinet submission in which he said he was greatly disappointed with rural industries generally and particularly the pastoral industry; many properties were much too large to be efficiently managed.He endorsed Payne–Fletcher's criticisms of pastoralists in the Victoria River District, and elsewhere.

One property which he did not name (although notes kept by his private secretary, Roy Rowe, reveal that it was Alexandria58), was prepared to face the loss of large numbers of cattle rather than incur the comparatively small expenditure of providing a regular water supply for its stock. The company's lack of concern over the welfare of its stock would have grieved McEwen, himself a Victorian farmer. He wrote:

I have the most firm conviction that the Northern Territory will never be developed without the provision of substantial sums of money by the Commonwealth for developmental works and advances to settlers. I am equally emphatic that advances to settlers should be confined to advances for permanent improvements only, and almost exclusively for fencing and water, and that these improvements should be erected under supervision and to an approved specification.59

While keen to follow the Commonwealth's long-held principle of closer settlement, which involved the break-up of large pastoral estates in favour of smaller resident settlers, McEwen signalled a shift in emphasis from uncontrolled financial subsidies, to support for specific, permanent improvements, where the work would be closely monitored.

McEwen also dealt with the matter of resumptions due to take place in 1945. Mindful of the issues that had occurred with the 1935 resumptions, he said that the Government should determine a course of action, and officers of the Administration should be instructed to commence an immediate survey of all leases with a view to submitting recommendations, so that in 1945 there would be no doubt as to which areas would be resumed.

Cabinet approved McEwen's recommendations on 18 October 1938. In the ensuing weeks it approved other submissions dealing with Payne–Fletcher's recommendations culminating in a policy statement which McEwen presented to Parliament under the banner Government Policy for the Northern Territory.60 The essential elements of the proposed policy included a five–year plan of road construction, stock route development and the provision of water along those routes; advances to settlers to assist them in the development of their holdings; provision of a coordinated transport system of sea, rail and roads in order to reduce freight costs; the formulation of a definite policy of resumptions, the governing criterion being that the maximum public benefit should accrue from the use to which the land was put; Federal and Territory income taxes would be abolished for 10 years (although Payne–Fletcher had recommended 20 years); as much authority as possible would be vested in the local Administration, and particularly the Administrator, with Canberra's control limited to matters involving policy and major issues of finance; field officers would be appointed; and an independent land tribunal would be constituted.

McEwen's closing words to the launch of his policy in December 1938 included a reference to the Government's commitment to defence, and prophetically indicated that this might limit its ability to fund development in the Territory. With war looming, in August 1939 Treasury sought 'drastic cuts' from all Commonwealth departments, and funding intended for the Territory was withdrawn.61 The onset of World War II meant that few of Payne–Fletcher's recommendations were put into effect. The Administrator's report of 1939–40 noted that 'the development of the Territory along lines suggested by the Payne Committee and planned by the Government has been checked'.62

Records relating to the Payne–Fletcher Board of Inquiry
National Archives, Canberra
Appointment of a committee to review land policy – Northern Territory, 1927–39 A659, 1943/1/7032 part 1
Committee to review Land Policy – Northern Territory – W L Payne report, 1938–53 A659, 1943/1/7032 part 2
Board of Inquiry appointed to Inquire into the Land and Land Industries of the Northern Territory Report, Commonwealth Parliamentary Papers (1937–40), volume III, pp. 813–925


Chapter notes | All notes

47 NAA: A659, 1943/1/7032 part 1, Committee to review Land Policy – Northern Territory – W L Payne report, 1938–53.

48 NAA Canberra: A2694, volume 16, part 1, submission 1828, Land policy in the Northern Territory, 9 July 1936. Cabinet approved Paterson's request on 10 July 1936.

49 Commonwealth Parliamentary Debates, House of Representatives, volume 151, 24 September 1936, p.500.

50 NAA: A2694, volume 17, part 1, submission 1828, Northern Territory land committee.

51 NAA: A659, 1943/1/7032 part 1, Op cit.

52 Australia. Report of the Board of Inquiry appointed to Inquire into the Land and Land Industries of the Northern Territory of Australia; Commonwealth Parliamentary Papers (1937–40), volume III, pp. 813–925.

53 ibid, p. xi.

54 Primary producers in the Territory had been exempt from State income tax since 1923.

55 The maxims were published opposite page 66 of the report.

56 The Board was established in 1931, after the demise of the North Australia Commission, to classify vacant Crown lands prior to leasing, approve applications for leases, determine lease rents, and monitor leaseholders' compliance with the terms of their leases.

57 'The Payne report', Northern Standard, 22 February 1938, p. 6.

58 NAA: A1, 1938/4963, Deputation to Minister by Pastoral Lessees Association re Northern Territory investigation committee report.

59 NAA: A2694, volume 18, part 5, submission 477, Pastoral industry, October 1938.

60 Commonwealth Parliamentary Debates, volume 158, House of Representatives, 8 December 1938, pp. 2979–2987.

61 NAA: A659, 1940/1/424, Boring for water in the Northern Territory, 17 August 1939.

62 Report on the Administration of the Northern Territory for Year 1939–40, p. 3. This report was not published as part of the consolidated set of Parliamentary Papers due to wartime restrictions. Copies are held by the National Archives of Australia in Darwin and the Northern Territory Archives Service.


Chapter 3
George Pearce and Development of the North, 1921–37