LAND ACQUISITION (AMENDMENT NO. 2) BILL

3.33 p.m.

The Prime Minister: Sir, I beg to introduce a Bill intituled "An Ordinance to amend the Land Acquisition Ordinance (Chapter 248 of the Revised Edition)."

Mr Speaker: The Prime Minister has not signified the recommendation from His Excellency.

The Prime Minister: Sir,I have His Excellency's recommendation to proceed with this Bill and I beg to introduce it. It is intituled "An Ordinance to amend the Land Acquisition Ordinance."

Bill read the First time.

Second Reading

Mr Speaker: Second Reading, what day?

The Prime Minister: Now. Sir,I lay upon the Table a Certificate of Urgency signed by the Yang di-Pertuan Negara in respect of the Land Acquisition (Amendment No. 2) Bill.

Certificate of Urgency handed in.

Mr Speaker: The Certificate is in order. Are copies of the Bill available for Members?

The Prime Minister: Yes.

Typed copies of the Bill handed in to the Clerk and distributed to hon. Members.

Mr Speaker: Please proceed.

The Prime Minister: Mr Speaker, Sir, copies of this Bill have already been circulated last week to Members of this Assembly in order to give them time to peruse it before the Second Reading. I do not propose to take this Bill through to three Readings. The purpose of the Certificate of Urgency is in order that the Bill can be committed to a Select Committee after the Second Reading.

Sir, last year, on the 24th of July, in the previous Assembly, we introduced the Land Acquisition (Temporary Provisions) Bill which sought, amongst other things, to peg the value of land to be acquired for public purposes to that prevailing on the 1st of January, 1961. Unfortunately, it was blocked and it lapsed with the Assembly's dissolution. Consequent on the establishment of Malaysia, it is necessary to reconsider the entire question, having regard to the constitutional provisions applicable throughout Malaysia.

In the debate on the 16th of December last year on the Development Estimates for 1964, when debating the question of increased land values and the cost of land acquisition, I stated two broad principles which would guide the Government in amending legislation on the acquisition of land, namely, first, that no private landowner should benefit from development which had taken place at public expense: and, secondly, that the price paid on the acquisition for public purposes should not be higher than what the land would have been worth had the Government not contemplated development generally in the area. I said then that I would introduce legislation which would help to ensure that increases in land values, because of public development, should not benefit the landowner, but should benefit the community at large. Land is a fixed commodity, and with mounting pressure on land as a result of population expansion and development, land values tend inevitably to rise. But for public purposes of acquisition, we attempt in this Bill to exclude the landowner from windfall gains in increases of land values as a result, first, of either public expenditure already incurred in the area, or speculative increases in the price of land in an area which has been earmarked for development.

Sir, this No. 2 Amendment Bill includes provisions which embody these two principles. The opportunity has also been taken to make other changes in procedural matters and in the manner of assessing compensation by the Collector of land acquired for public purposes. The Bill proposes substantial alterations in the law and it is intended now to refer the Bill to a Select Com mittee where it can be considered in greater detail and where public representations on it can be received.

The Explanatory Statement of the Bill sets out the contents of the Bill Section 5 of the principal Ordinance which provided for the acquisition of land for public purposes has been redrafted to define specifically and enlarge the meaning of "public purposes". This redraft, which is more specific, follows the Federal Land Acquisition Act and is considered desirable in view of the increasing tempo of public development and the need to acquire land for a variety of public purposes, including residential development by the Housing and Development Board, industrial development by the Economic Development Board, as well as urban renewal of the City as envisaged in the next few years.

The Ordinance has also provided for a more expeditious procedure of taking possession of lands in cases of urgency. For example, in the case of areas devastated by fire, the provisions will enable immediate possession of such lands to be taken.

A major alteration is made in respect of appeals. Under the existing Ordinance, any person dissatisfied with an award of the Collector may ask the Collector to refer the matter to Court. All the consequential administrative-work devolves on the Land Office and then a single Judge of the High Court sitting with two assessors decides on the compensation payable in cases where the award is not less than $5,000. The amending Bill now provides for an Appeals Board to be presided over by a Commissioner of Appeals. The Commissioner will be assisted in certain cases by two assessors drawn from a panel. This Board will deal with ap peals on acquisition awards. Appeals to the High Court against the decision of the Board will only be on points of law. These new appeal provisions follow the precedents which have been set in the United Kingdom and in Australia of placing questions of this nature involving specialist evaluations before administrative tribunals rather than the courts of law.

The provisions of the law in regard to the assessment of compensation have also been redrafted. The Bill provides that when the value of land has been increased by reason of development of the neighbourhood by provision of roads, drains, electricity, water, gas, sewerage, social, educational or recreational facilities by any public or statutory authorities within live years preceding the date of the acquisition, such increase shall not be taken into account.

Mr Speaker, we put in provisionally the figure of five years prior to date of acquisition, but I would like to state here that it may well be that, after hearing representations from interested parties and representations from the Economic Development Board and other development organs of the Government, the preceding number of years may he increased to anywhere between live and 10 years.

Sir, it is also specifically provided that decreases in value due to encumbrances such as occupation by squatters and so on, shall be taken into account in fixing the award. Again, the Bill makes it clear that restrictions imposed under the Planning Ordinance which affects the market value of the land shall be taken into account. Another major change is that a ceiling to market value has been placed to ensure that the award will not exceed the most recent value declared and accepted for the purposes of assessing tax or duty payable where such declaration has been made within two years of acquisition, or in other cases a consideration of purchase price on its last sale or transfer if within two years of the acquisition. I think all practising solicitors are aware that for quite a long time now, valuation for revenue purposes has always been different from valuation for compensation on acquisition, with the result that there is a disparity between what the State gets and what the State has to pay. This provision will ensure that when estate duty is paid or other assessments are made for revenue purposes, a price more approximate to that of the market value of the land will be entered in the estimates. The peril will be that if it were not so done, then it is open to the Crown to acquire such land within two years of such declaration at the price at which it has been declared for revenue purposes.

Another change proposed is that interest payable on the difference between the Collector's award and the award ultimately to be decided upon by the Board shall be at the rate of six per cent and not as at present - eight per cent. This follows the rate payable under the Federation Land Acquisition Act.

There are a number of minor amendments considered desirable from the administrative point of view. They have also been included as well as transitional provisions with regard to declarations of acquisition of land and references to Court made before the coming into operation of this Land Acquisition (Amendment No. 2) Bill.

Mr Speaker, Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Select Committee consisting of Mr Speaker as Chairman and six other Members to be nominated by the Committee of Selection. -[The Prime Minister].