House of Representatives
10 June 1902

1st Parliament · 1st Session



Mr. Speaker took the chair at 2.30p.m., and read prayers.

page 13429

QUESTION

SUSPENSION OF FODDER DUTIES

Mr FULLER:
ILLAWARRA, NEW SOUTH WALES

– I wish to know if the Government have yet arrived at any decision in regard to the suggested suspension of the fodder duties ?

Mr DEAKIN:
BALLAARAT, VICTORIA · PROT; LP from 1910

-The New SouthWales Ministry are still considering the question, and we arc awaiting a communication from them.

page 13429

QUESTION

WAR OFFICE REMOUNTS

Sir LANGDON BONYTHON:
SOUTH AUSTRALIA

– I wish to read a newspaper extract, which I intend to follow with a question. The extract to which I refer is this -

It has just been authoritatively announced that the War Office, asa result of the consideration of the remount question has decided against the proposal to breed their ownhorses, and in favour of a system of registration. The colonies are to supply a certain number of horses annually. Canada has agreed to furnish500 Canadian horses perannum,whichwillbefull-grownandtrained b y the Canadian local troops, at a cost of £20,000 annually. Nothing is said in this official communique about Australia as a source of supply.

It would seem from that extract that energetic action upon the part of the Commonwealth Government might havebeen followed by something to the advantage of Australia. Has the Minister representing the Prime Minister anything to communicate to the House on the subject ?

Mr DEAKIN:
Attorney-General · BALLAARAT, VICTORIA · Protectionist

– No. I hope that the statement of the intention of the War Office is correct, because I feel that if they have any such intention, Australia cannot be overlooked, but the fact that, neither indirectly or directly, have we received by cable or by letter any intimation upon the subject, goes to show that it is a forecast rather than an account of an absolute determination.

page 13429

QUESTION

PUBLIC SERVICE APPOINTMENTS

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– I wish to know from the Minister for Home Affaire if there is any truth in the statement that deputations have waited upon the Public Service Commissioner, to use influence with him to obtain appointments to the public service of the Commonwealth ; and, if so, whether the practice is likely to continue ?

Sir WILLIAM LYNE:
Minister for Home Affairs · HUME, NEW SOUTH WALES · Protectionist

– I am not aware that anything of the kind has taken place. Shortly before I left for Sydney, the Public Service Commissioner told me that some of the officials - in, I think, the Post-office - wanted to wait upon him unofficially, and not as a deputation. Perhaps that is what the honorable member refers to?

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– The newspaper paragraph, from which I got my information, refers to members of the Federal Parliament.

Sir WILLIAM LYNE:

– I am not aware of anything of the kind, but I shall make inquiries.

PAPERS.

Mr. DEAKIN laid upon the Table the following papers : -

Return to an order showing the travelling expenses, travelling allowances, and living expenses paid to officers of the Commonwealth up to 30th April, 1902.

Regulations under the Post and Telegraph Act, 1901.

GOVERNOR-GENERAL.

Mr CROUCH:
CORIO, VICTORIA

– I wish to know from the Minister representing thePrime Minister if any new instructions have been issued under the royal sign manual and signet? My reason for asking is that paragraph 4 of the instructions, dated 20th October, 1900, says : -

Governor-Generals appointed after the first Governor-Generals have taken the oaths of office before the Chief Justice of the High Court, or a Justice of that Court.

If no other instructions have been issued, has the Minister representing the Prime Minister considered the position? If so, how does he propose to get over it, seeing that the High Court is not in existence?

Mr DEAKIN:
Protectionist

– I am not aware that any further instructions have been issued, but the point has not escaped attention.

MILITARY SUPPLIES.

Sir LANGDON BONYTHON:

– Has the Minister representing the Minister of Defence yet made arrangements to meet the wishes of the manufacturers in South Australia in regard totendering for supplies?

Sir WILLIAM LYNE:

– I shall take care that the manufacturers of South Australia have equal opportunities with those of the other State’s of tendering for these supplies. I received a communication late on Saturday night in connexion with the matter, asking for an extension of a fortnight or three weeks ; but, as I did not think that such an extension was justifiable, I replied that I should see the tenders today, and ascertain if the South Australian manufacturers had had an opportunity of tendering upon the same terms as manufacturers in other States ; and, if not, that I would take care that fresh tenders should be invited.

PURCHASE OF MILITARY HORSES.

Mr PAGE:
MARANOA, QUEENSLAND

– Has the attention of the Minister representing the Minister for Defence been directed to the following statement in the Melbourne Argus of the 7 th June last -

Concerning the statement made by Sir William Lyne, in reply to a question by Mr. Page, the acting commandant states that there is no truth in the allegation that some of the contingent horses returned from the Queensland border, on account of being infested with ticks, were afterwords sold for 25s. each, and repurchased for another contingent at £14 or £15 each. The fact is that all the horses so returned, except two, which were injured in the trucks, were taken to South Africa by the company under Captain Echlin. As all the horses purchased were branded Q.G. , they couldnot have been bought back again without the fact being manifest.

Has the Minister received any intimation from Queensland, and, if so, will he give the House the benefit of it?

Sir WILLIAM LYNE:

– I gave instructions, upon the morning after the question was asked, for inquiries to be made in Queensland, but, so far, no reply has reached me. I intend to ascertain the truth in this matter, so far as that is possible. When the honorable member asked me the question before, I stated, not that I knew that what he spoke of had taken place, but that statements had been made to me to that effect.

DRAWBACKS.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

asked the Minis ter for Trade and Customs, upon notice -

  1. If he will definitely declare the policy of the Government with regard to drawbacks of import duty upon goods, or material contained in goods, when exported, as provided by Part IX. of the Customs Act ?
  2. What is the amount paid for such drawbacks respecting sugar contained in manufactures of jam since the imposition of the Commonwealth Tariff, and the amount of claims remaining unpaid up to date for drawbacks on sugar contained in the manufacture of jam ?
  3. Will the Government provide by regulation for the manufacture in bond of goods containing material liable to import duty, in cases where any difficulty is likely to arise respecting the quantity of duty-paid material used ?
Mr KINGSTON:
Minister for Trade and Customs · SOUTH AUSTRALIA, SOUTH AUSTRALIA · Protectionist

– The answers to the honorable member’s questions are as follow : -

  1. This was declared on 21st November, 1901, seeHansard, page 7630. It is the intention of the Government to allow drawbacks, as therein indicated, for the encouragement of the export trade, with a view to enable Australian exporters to compete in foreign markets without being handicapped with a double duty. This course will be given effect to so far as practicable, consistently with the safety of the revenue. Regulations relating to drawbacks were prepared and issued, under the Customs Act, on the 10th

October, 1901 , and under the Excise Act on the 8th January, 1902. Additions will shortly be made. 2, Paid £5851s. 5d. Unpaid, but in course of payment, £3,101. Some delay has been caused, chiefly by the examination of jams in the various States, witha view to ascertain whether a uniform quautity can be safely assumed for the sugar contents in jam in excess of5-12ths of the total weight, but want of uniformity of sugar contents appears to prevent the higher rate in all cases.

  1. The Government are disposed to strongly favour the manufacture in bond of goods for export, and regulations are about to be issued to this end.

page 13431

LOAN BILL

Second Reading

Sir GEORGE TURNER:
Treasurer · Balaclava · Protectionist

– I move -

That the Bill be now read a second time.

This Bill, although a very short one, is of considerable importance, because in considering it the House must determine whether some of our public works are to be paid for with loan moneys, or whether we shall adopt the practice of paying for them all, large or small, out of revenue. The Bill provides for the borrowing of £1,000,000. That sum would be the basis of our inscribed stock, for which provision is made in the Government Inscribed Stock Bill which I intend to introduce almost immediately. Up to the present time the Commonwealth has had no loan funds at its disposal. When certain departments were transferred, works were being proceeded with in most of the States, and were being paid for out of loan funds. As it would be a considerable time before the Commonwealth could make provision for the raising of money by way of loan, I arranged with the State Governments to continue and complete these works, and promised that the amount expended would be taken into consideration when the value of the properties taken over by the Commonwealth was being fixed. That proceeded as far as the State of New South Wales was concerned until December last, when the Government of that State declined to carry out the arrangement any further. They had incurred some considerable liabilities, and, upon my pointing out how unfair it would be not to meet these, they have made the necessary payments. In Queensland considerable liabilities had also been incurred, and as the loan moneys in that State are voted year by year, and the votes lapsed in September last, there are accounts amounting to a considerable sum still unpaid, for which we shall have to provide. Since then I have been proceeding very slowly indeed with loan expenditure, because I have had to find the money out of the Treasurer’s advance vote. So far we have provided £40,000 or £50,000, mostly for the payment of wages and small accounts which we could not verywell avoid meeting. The object of the present Bill is to enable us to raise money out of which we can provide for important works, and honorable members who look through the list of works proposed for the present will, I think, be forced to the conclusion that a very large number of them are absolutely necessary. As a matter of fact, I have had a number of complaints from the States with regard to my action in not providing money for the construction of works which, in my opinion, can only be constructed out of loan money, because they are too large to be charged to the ordinary revenue. Most of the works that are provided for in the schedule are in connexion with the telephone and telegraph systems. I have circulated extracts from a report which has been furnished by the officers of the Post and Telegraph department in the various States. The report itself is very voluminous, and copies have been placed in the various rooms for the use of honorable members who desire to go intothe details, but I have extracted and circulated such portions of the report as I thought would afford honorable members sufficient information regarding its purport. It is evident from the statements made that the present provision with regard to telephones is altogether inadequate for the requirements of the Commonwealth, and that we cannot patch them up, but must have a complete re-organization of the whole of the systems if we are to give satisfaction. The report shows that this cannot be attributed to faulty action on the part of any of the States Governments in the past. They have worked according to the knowledge and information at their command, and it is stated that the large American telephone company - The Bell Company I think it is called - have had to spendimmense sums of money in doing exactly what is now proposed in connexion with our telephone systems. None of our systems are working well, and this to some extent is due to the fact that we now have electric light and power installations with which we had not to contend some years ago and which now interfere to a considerable extent with the proper working of the telephones. Ourswitch-boards are also out of date, and the poles which cany our overhead wires are so full that it is said to be almost impossible to add any more wires. In fact, the report must convince honorable members that our telephone systems are not up to date, and that they should be entirely re-organized.

Mr Henry Willis:

– What about the switch-board in Sydney ?

Sir GEORGE TURNER:

– That has been in use for eighteen months or two years and has been condemned as one which ought not to have been constructed and which will have to be replaced by what is called the common battery switch-board. This is recommended not only for Sydney, but for every place wherea large number of subscribers have to be attended to. Although the expenditure proposed may seem to be large, it will ultimately result in a saving to the Commonwealth, because if we attempt to carry on with the old switch-boards, or to duplicate them - some of them are practically full, and would have to be duplicated - a large expenditure would have to be incurred in attending to the two boards, and possibly in connecting them. It is therefore absolutely necessary to adopt a new system. This will involve a very large expenditure during the next three years, aggregating between £500,000 and £600,000. That would be in addition to the ordinary expenditure in the constructionand extension of our telephone and telegraph systems. Of course, in Victoria the extensions are not so large as in the States, such as New South Wales and Queensland, where they have a very large territory to cover. To my mind it would be unreasonable to say that the revenue of the present year, or of the few following years should bear the whole of this heavy extraordinary expenditure, because futureyears will undoubtedly receive the advantage of the increased revenue which the States will derive from the works proposed. Whilst there is no doubt at the present time a strong feeling against borrowing, we must not be led into saying that we are not justified in borrowing for any purpose whatever. I think we should all like, if we could, to avoid borrowing and to provide for the whole of these works out of revenue. Ministers would like to do so, if possible, but when we consider the amount of money that has to be expended and the position of the various States we are forced to the conclusion that it will be impossible to carry out the whole of the works, and to provide for them wholly out of the revenue for the next few years. At the same time I am quite in accord with those who say that there should be no excessive borrowing, and that we should not borrow money in order to carry out whatmay be looked upon as nonproductive works.With regard to these works, however, Parliament will have the fullest control, because the details of the proposed expenditure will have to be brought forward annually, and I think we may rest assured that Parliament will take very good care that there is no extravagant expenditure of loan moneys. We have already shown a desire to go as far as we could in the construction of works out of ordinary revenue, because last week we voted nearly £120,000 for buildings and various other works which, in most of the States, would in the ordinary course have been constructed out of loan funds. I have carefully revised the list of works to be provided for out of loan money, as submitted in another Bill. I have gone through it with responsible officers with a view to ascertain if there were any works which could not be legitimately charged against loan votes. Still it will be within the province of the House, if they consider that any of the works suggested ought not to be constructed out of loan moneys, and ought to be providedfor out of revenue, to say that such works shall be eliminated from the schedule. The list is made up principally of works in the department to which I have referred, and in connexion with the completion of one or two large buildings which it would be rather unfair to provide for out of revenue in any particular year. If we regarded this matter purely from the Commonwealth point of view we mighthave little difficulty in disposing of it. We might say simply that, so far as the Commonwealth is concerned, the amounts that we are entitled to charge against the States would enable us to pay for the whole of the works out of revenue as it comes in. We are entitled under the Constitution to spend one-fourth of the net amount collected through the customs and excise, and at the present time we have not availed ourselves of thatmoney to the full extent. In considering this matter, however, I must ask honorable members not to deal with totals only. Unfortunately, we are in the habit of looking at the aggregate expenditure, and of insisting, because the amount collected throughout the Commonwealth is more than enough for our purposes, that we are entitled to expend it. I have always felt, however, thai we must also consider the fact that a large portion of this amount really goes back to two out of the six States, and that whilst there might be no hardship to these States in our expending the money, the other States would undoubtedly feel the pressure. In addition to that, we must regard this, as it is, as new expenditure, which is to be charged on a population basis against all the States, no matter in which State the money may be expended. If this were transferred expenditure there would be no difficulty with regard to the two States which will get back more than the amount required for their own purposes. We could go on expending the money required in those States, and allow the works in the other States to remain in abeyance, although that would be hardly fair to the States which are worst off for revenue. This expenditure is to be charged against all the States, on a population basis, and therefore we could not allow the works to remain in abeyance in the poorer States whilst proceeding with those required in the States which are in a better position. We have the constitutional right to take one-fourth of the total revenue derived from customs and excise, but I feel very strongly that we are trustees for the States with regard to the whole of the revenue that is collected, and that we are bound to act in such a manner as to protect the States. During the federal electoral campaign I always said that it would be the duty of the Commonwealth Parliament to protect the financial interests of the States, and not to take any step that would be prejudicial to them, because any tiling that would injure one of the States would undoubtedly re-act upon the whole of the Commonwealth. -Eventually we shall probably have a different system, and, instead of following out the bookkeeping plan, adopt the course of distributing the revenue which will confer advantages on some of the States. In the meantime, however, for the first few years we have to bear in mind that the money has to be returned as it is collected, and I wish to impress upon honorable members that we must not deal with the totals only, but take into consideration the positions of the various States. As far as New South Wales is concerned there will be no difficulty, because she- will have ample means to meet all her reasonable requirements. Western Australia also undoubtedly has a very large revenue at present, but it must be remembered that, as the sliding scale comes into operation, the revenue will be largely reduced. As soon as the duties now levied upon imports from the other States are reduced, there will be a large increase in the importations from the States, and a corresponding decrease in the imports from outside Australia. In two or three years, . therefore, the revenue will shrink very considerably, and the State having a very large territory will undoubtedly require to spend a considerable amount of money in the development of its resources. Now we come to the State of Victoria, with whose finances I am more particularly acquainted. This State will probably this year show excess of expenditure over revenue to the extent of £400,000. That is a very large amount, which will have to be provided for, and if we look forward to the next year or two we can see that it will be very hard for the Victorian Government to make both ends meet. There will be a considerable falling off in the railway receipts, in consequence of the want of wool to carry and the scarcity of back loading, and owing to other causes. Victoria has also received this year a considerable amount of revenue from sugar which has been imported from abroad instead Qf being obtained from Queensland. Next year our revenue from that source will probably fall off very considerably. Owing to the action of this Parliament in remitting the duties upon tea and kerosene, we shall also suffer a heavy loss. In South Australia, too, there will probably be a largely diminished income. The same remark is applicable to Queensland ; and we know the bad time through which that State is passing. I mention these facts to impress upon honorable members the necessity for being careful to take no steps which will prejudice the position of those States. During the next year or two they will probably experience bad times, and therefore we should avoid taking any action which will impose additional burdens upon them. Moreover, in any action that we take we must guard against forcing the States Governments to impose taxation upon the people on account of expenditure incurred by the Commonwealth. If - as will probably happen in a .few years - the revenue were distributed upon a population basis, things would not be so bad in some of the States, but if we adopt the practice which has been suggested of providing these large sums from revenue, I am perfectly certain that we shall leave the States in a difficult position - a position which will compel them to levy extra taxation. In view of their present condition, it would be exceedingly unwise for us to take any such step. Then, if we are to take other obligations upon ourselves - as has been suggested - the expenditure will no doubt increase year by year. For example, if we carry out the proposal of the State Premiers, and pay for lie buildings which have been transferred to the Commonwealth by establishing a sinking fund and paying interest upon their cost, or by taking over a portion of the State loans, we shall go very near to doing away altogether with the difference between the amount which we are entitled to expend and that which we actually spend.

Mr McCay:

– Do the Government propose to agree to the proposal of the State Premiers without consulting the House?

Sir GEORGE TURNER:

– Certainly not. The matter will have to be dealt with by the introduction of a Bill. “We thought that our proposal was a reasonable one, but as we have taken over certain buildings, the Premiers think it is only fair that we should take over a portion of their loans. That is a course to which we have not yet. agreed, though we may have to agree to it eventually.

Mr Watson:

– How much does the Treasurer propose to spend this year ‘

Sir GEORGE TURNER:

– We expect to spend about £600,000.

Mr Watson:

– But is not that expenditure to be spread over a period of three years 1

Sir GEORGE TURNER:

– No. I pointed out that we proposed an expenditure of between £500,000 and £600,000, which would be spread over three years. But the ordinary expenditure would make up the difference. The total amount which it is proposed to spend is about £660,000.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I presume that the Treasurer expects to spend that money next year 1 I

Sir GEORGE TURNER:

– We cannot spend it this year. The amounts which we provide will practically have to be devoted to next year. I am not going to say that we should be entirely guided by the practice of the States in regard to this expenditure, but we know that for several years past it has been the practice of the States to construct large works out of loan moneys, for the reason that, in the majority of them, the revenue could not possibly have carried the burden. While, perhaps, our action ought not to be determined by the practice which has hitherto been followed, we cannot altogether disregard that factor in considering whether we are justified in borrowing money for the particular purposes proposed. Of course, the interest will be charged against the individual States in which the work is done. If a certain amount is spent in one State, and, as a consequence, that State derives an increased revenue from its post-office, it would be manifestly unfair to ask the other States to bear a portion of the interest upon the capital cost. While the sinking fund to repay the capital would be a charge upon the basis of population, the interest upon the money expended would be a fair debit to the particular States benefitted, either by way of rental upon their buildings or of a charge for the use of the telegraph or telephone lines, which are constructed out of the borrowed money. During the first few years we can undoubtedly afford to provide a sinking fund to the extent of 2 per cent, upon the amount borrowed. The utilization of that amount in a way that I shall explain in connexion with another Bill would greatly reduce the interest which we have to pay. But I specially wish honorable members to look at the expenditure which we are forcing upon the States. I propose first to deal with next year’s expenditure. I think that we may fairly reckon the ordinary new expenditure, independently of buildings, at £260,000. This year it was between £230,000 and £240,000.- Then we have determined to construct buildings which will necessitate an expenditure of about £120,000. There are a number of works which I have not approved in connexion with the present Estimates, such as defence works, which will have to be provided for out of revenue. These, in themselves, are comparatively small matters. Therefore, I estimate that next year our total expenditure in connexion with works and buildings will represent about £180,000. That amount will have to be provided out of revenue. There is thus a sum of £260,000, and a further amount of £180,000 or a total of £440,000, which will be chargeable against the revenues of the various States. That sum will have to be paid out of the revenue collected for next year. Then the proposed expenditure out of loan represents about £660,000. I ask honorable members to consider whether it is possible for the States to bear this extra burden, and whether we can take the step which many would like us to take, of refusingto borrow? For example, under our proposal New South Wales will have to pay £158,000 out of revenue, and £238,000 out of loan, or a total of £396,000. Similarly, Victoria will contribute £140,000 out of revenue, and £212,000 out of loan, a total of £352,000. Queensland will have to pay £57,000 out of revenue, and £86,000 out of loan, a total of £143,000; whilst South Australia will contribute £44,000 out of revenue, and £66,000 out of loan, or a total of £110,000.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– Does that expenditure refer to works in connexion with the three transferred departments solely ?

Sir GEORGE TURNER:

– With the exception of three buildings the whole of the works are connected with the telegraph and telephone systems.

Mr Higgins:

– Has the Treasurer attempted to distribute the expenditure of the several States according to population ?

Sir GEORGE TURNER:

– I have not. Tasmania will be required to pay £18,000 out of revenue, and £26,000 out of loan, a total of £44,000. Of course honorable members will realise thatthe whole of this amount may not be expended. But even if we make a liberal discount, are we not asking too much from the States if we insist upon the whole of these works being constructed out of revenue 1 By so doing we should place a strain upon the finances of some of the States, which, in their present unfortunate position, would be unfair and unjust. As trustees of the money which we collect, we are not justified in expending it upon works the construction of which might leave the States in a very embarrassed position. That being the case we have to consider whether we are justified in adopting the suggestion which has been made of refraining from borrowing. If we construct these works out of revenue, in addition to the burden of £440,000 which we impose upon the States, we shall levy upon them a further burden of £660,000. All who have any knowledge of the finances of the various States must be forced to the conclusion that it would be utterly impossible to undertake these works purely out of revenue.

Mr Henry Willis:

– How long would it take a sinking fund to redeem the bonds ?

Sir GEORGE TURNER:

– At 2 per cent. the redemption would occupy about 30 years. The works would have to be maintained, and would last for that period.

Mr Watson:

– The switchboard in Sydney lasted only two years

Sir GEORGE TURNER:

– That could not be avoided. The telegraph poles will not last 30 years, but undoubtedly they will be replaced out of the maintenance funds. Iron poles would probably last 30 years. I hold that we are perfectly justified in constructing new works out of loan money, but when we attempt to undertake their maintenance, or even to effect large repairs by means of borrowed capital, our action is absolutely unjustifiable. That being so, I have been extremely , careful in going through the Government proposals to assure myself that the construction of these works out of loan money can be justified. In future it will rest with the House to see that any further loan expenditure is devoted only to the construction of new works, and not to maintenance or repairs. That being so, it would be unjustifiable to take the money and expend it on maintenance, and so relieve the revenue. For a few years I think it will be necessary for the Commonwealth to borrow, say to the extent of about £500,000 a year.

Mr Henry Willis:

– Will the bonds be redeemable in thirty years?

Sir GEORGE TURNER:

– I shall explain that in dealing with the next Bill on the notice-paper. We are faced with the position that all or nearly all these works are absolutely necessary. After giving the matter the most careful consideration, with the desire, if it were possible, to do the work out of the revenue, I have been forced to the conclusion that, in justice and fairness to the States, we cannot utilize in this way money which they require for ordinary revenue purposes. We have gone as far as we ought in declaring that certain minor works and brick buildings ought to be constructed out of revenue. By doing that we have placed a considerable burden on the States, and if we go further and say that works, which we know ought to be carried out in re-organizing the telephone system and extending telephones and telegraphs, must be done out of revenue, the burden will become unjustifiable. If the House determines that there shall be no borrowing for these purposes, the only course I can see is to allow the works to remain undone for a year or two, when we shall have gained experience and know exactly how the Tariff will operate after the various alterations which have been made. There is one other course we might pursue, but I am not prepared at present to recommend this to the House. In Canada the banks were compelled to hold a certain amount of their reserve funds in Dominion notes. When we come to deal with the banking laws generally we shall have to give grave and careful consideration to this matter. While such a plan may work well in Canada, it does not follow that it would work equally well in Australia, separated as we are by such a long distance from the place where gold can, if necessary, be obtained. This is not a simple question. If we adopted the Canadian plan the monies obtained from that source might well, I think, be utilized for the large expenditure which will be necessary when we have to construct our federal capital.

Mr McCay:

– The Canadian system only means loan money in another form.

Sir GEORGE TURNER:

– It is loan money ; a kind of forced loan without interest. So far as the principle is conerned, there is very little difference between constructing works out of money obtained under the Canadian system and constructing them out of loan ; the only point is that interest is saved. These are the facts which I ask honorable members to bear in mind when we are dealing with the question whether or not we are to borrow. As I have said, the Government would be very glad, if they could possibly see their way, to have all works constructed out of revenue ; but looking at the fact that many of the States will get back no more, or very little more, than they were collecting at the time federation took place, and also having regard to the fact that we are imposing a considerable burden onthe States’ revenue, we are not justified in taking that further step. Under the circumstances, I trust that honorable members will give favourable consideration to the proposals which the Government have submitted. The onequestion is - Borrowing ornoborrowing? If honorable members carefully consider the whole question, I think it will be forced on them, as it has been forced on me that, in fairness and justice to the States, we are bound to expend a reasonable amount each year out of loan funds. We must be careful, however, to spend the money on works which will be fairly reproductive, and not on mere maintenance and repairs. I submit the Bill to honorable members for their favorable consideration.

Debate (on motion by Mr. Thomson) adjourned.

page 13436

LOAN APPROPRIATION BILL

secondreading.

Sir GEORGE TURNER:
BalaclavaTreasurer · Protectionist

– I move -

That the Bill be now read a second time.

This Bill shows the appropriation of the money which it is proposed to raise if the House should affirm the principle that we are to borrow. The total provided for is £650,000, and that amount, or the greater portion, at all events, will probably be expended during the next financial year. I have circulated for the information of honorable members full details with regard to every item, and therefore I do not propose to weary honorable members by dealing minutely with the measure, which unquestionably is one for consideration in committee. Some of the expenditure is for completing the post-offices at Sydney and Newcastle, and the only other item relating to building, is for post-oftice accommodation, which, from information received from the department and elsewhere, is necessary in Brisbane.

Mr McCay:

– Had the Queensland Government contemplated this expenditure ?

Sir GEORGE TURNER:

– The State Government had had plans prepared and made provisions for carrying out the work. The other items are for the purpose of placing the telephone system in a proper condition and for necessary additions which have to be made in the various States. One item well worthy of consideration is that of £50,000 for connecting Melbourne and Sydney by telephone, in order that we may be placed on an equality with other countries, where there are long distance telephones, which seem to pay very well. The figures on this subject which have been supplied to honorable members, and the extracts from reports, show that a telephone line between Melbourne and Sydney will, in all probability, be a paying one, or, at all events, will not show a heavy loss. Even if there be a small loss it will, I think, be justified by the benefits derived by the trading and commercial community.

Mr Conroy:

– What charge is proposed to be made ?

Sir GEORGE TURNER:

– The charge, I think, will be 6s. 6d. for three minutes’ conversation. It is proposed to supply a new system of switchboards in Melbourne, Sydney and Adelaide, and also to provide additional switchboards in the other States. A very large expenditure will have to be incurred in Victoria, where it is necessary to almost entirely remodel the telephone system. Honorable members who have looked at the Melbourne streets, particularly the narrow streets, and have seen the enormous number of wires and cables overhead, must have come to the conclusion that in a very short time the wires,is in other places, must be put underground. I shall not take honorable members through the list of items, because to do so would simply weary them. I trust, however, that honorable members will take an opportunity of considering the explanations and extracts from reports which have been circulated. When in committee it will be quite competent tor honorable members to say that some of these works are not of sufficient urgency to be carried out at the present moment, and that they ought to be postponed for a year or two. It will be also open to honorable members to decide that some of the works should be constructed out of revenue. This is entirely a committee Bill, and, considering that the full facts are set forth in the papers which have been circulated, I shall no longer detain honorable members.

Debate (on motion by Mr. Thomson) adjourned.

page 13437

GOVERNMENT INSCRIBED STOCK BILL

Second Reading

Sir GEORGE TURNER (Balaclava-

Treasurer). - I move -

That the Bill be now read a second time.

This is a machinery Bill, for the purpose of managing inscribed stock, should the House in its wisdom determine that a loan is to be raised. The Bill provides for the creation of capital stock for the purpose of raising, by way of loan, any money, the authority to borrow which is granted under any Act. This Bill does not in itself provide for the raising of any money, but. leaves it to Parliament from time to time to determine how much shall be borrowed. The rate of interest is fixed at what appears to be the ruling rate, namely, 3 per cent. It is wiser, it seems to me, to have a fixed rate, than a rate which may be changed from time to time as stock is issued, - that it is better to have one uniform stock, than several stocks with varying rates of interest-

Sir GEORGE TURNER:
Protectionist

– All loans floated within the Commonwealth are under this Bill, which does not apply to loans raised outside. There is no attempt at present to provide for floating loans outside the Commonwealth. The loan is necessarily made a charge on the consolidated revenue, and stock is to be issued as may be directed by the Order in Council authorizing the raising of the stock. It is provided that there may be two classes of stock, one of which is interminable. I do not think, however, that there is much likelihood of that class of stock being adopted. Some years ago, when in the State Government, I made inquiries in Great Britain on this point, and was advised very strongly that interminable stock would be looked on with grave displeasure in the London market.

Mr Higgins:

– There is such stock in England, with option to pay off.

Sir GEORGE TURNER:

– That is not interminable stock. The other stock provided for in the Bill is payable at a fixed date. It probably would be made payable in 50 years, and a right taken after 30 years to pay it off on giving certain notice. Interminable stock can be paid off at the option of the borrower; and for that reason it is not looked on with favour by those who have to advance the money in the old country. In the Bill power is taken to redeem the stock after a fixed date. In some of the old loans floated by the States, stock was made payable at a certain date, and the State had to provide the money on that date ; no matter how adverse the money market might be the State had to borrow. Of later years, however, a wiser policy has been adopted of fixing a date on which the State can be called upon to pay, and an earlier date on which the State has a right to pay on giving certain notice.

Mr Henry Willis:

– What notice do you propose to give ?

SirG EORGE TURNER. - That will be provided for by regulation ; probably six months.

Mr Henry Willis:

– After 30 years ?

Sir GEORGE TURNER:

– Yes, but I hope to see the loans redeemed during the 30 years’ period. Interest on the stock will cease upon the giving of the notice. The amount raised is to be placed to the credit of the loan fund, and will be applicable by virtue of Acts similar to that which I have just introduced. Stock is declared to be “personal property,” so that the courts may have power to decide any questions which may arise in regard to it between persons who are interested in it. I understand that South Australia is the only State which has interminable stock, but I believe that she has the right to pay off that stock after giving five years’ notice. We provide that our stock may be issued in any of the States, and that a register shall be kept at the federal capital, when we have one, and also at the capitals of the several States. In the meantime the Governor-General will have power to declare which shall be the principal register. We also provide for the opening of a register in London. I was informed some time ago that many persons would purchase the stock which we float locally, if it could be dealt with in a London register, and, while it is not probable that the small loans that we are likely to place on the market in the immediate furture will create a large demand for our stock outside the Commonwealth, it is wise to provide for it being used for mercantile purposes, and thus make it beneficial to the commercial communitywithout any loss to the Commonwealth. The stock will be inscribed in the registers, and a certificate, which is to be primâ facie evidence of ownership, will be given if asked for, but the entries in the stock ledger will be the absolute proof of ownership, and the persons whose names are mentioned in the ledgers will be regarded as the owners. We do not in any way recognise trusts, but, as

I have said, the stock will be personal property, and equitable interests in it will be preserved, so that the courts may deal with it as they think fit, and make any orders in connexion with it that may be necessary. We take power to transfer the stock from one register to another. A person holding stock in New South Wales might be anxious to move to Victoria, or to some other State, and the Bill provides that such stock may be transferred from one register to another. Stock will be transferred from one person to anotherbydeed, which can beregistered in the stock registers, and provision is made for the registration of new holders in the case of death or insolvency. The fourth division of the Bill is a very important one. There has been considerable discussion in regard to the relative advantages of issuing debentures and of issuing stock. Many persons prefer to have debentures, but trustees and others prefer stock, because while debentures may be stolen, and are negotiable, stock can be dealt with only by deed properly executed and attested, and registered in our books. “We propose to issue inscribed stock, for which we give a simple certificate, but if any person who is the owner of stock so desires, he can get what is called a “ certificate to bearer,” when inscription in the book ceases. The “ certificate to bearer “ will contain a certain number of coupons, and, in reality, will be a debenture for a limited period. It will be renewable from time to time as the coupons run out, and will pass by delivery. It may be brought in and cancelled, and the stock inscribed, and, if the name of any person is inserted in it, will cease to be payable to bearer.

Mr Henry Willis:

– Will the coupons be for 30 years ?

Sir GEORGE TURNER:

– No, for a limited period - for five or ten years. We have endeavoured to give to those who desire it the absolute safety of inscribed stock, and to those who so desire a negotiable instrument. It will be at the option of holders of stock to take which they please, and they can change from one to the other as they think fit, unless they happen to be trustees, who will not be able to hold anything but inscribed stock. Then we come to deal with the sinking funds. I think we shall determine wisely if we decide to establish sinking fundsin connexion with our loans as we float them. We should take care that these sinking funds will be genuine, and will not be at the mercy of the Treasurer of the day if he should become short of money, though there is not much likelihoodof that happening, because the Commonwealth Treasurer will probably always have a good surplus to pay back to the States.

Mr Henry Willis:

– It has happened in New South Wales.

Sir GEORGE TURNER:

– Yes, and in other States. The money set apart for the sinking fundhas been hoarded up to meet a liability when it became due, and has formed a portion of the State trust funds, but impecunious Treasurers have used these trust funds, and the sinking funds have vanished. We should do all we can to prevent that happening in connexion with the Commonwealth administration. The Bill provides that not less than 1 per cent. per annum shall be paid into these sinking funds. In the early days of our borrowing we can well afford to contribute 2 per cent., but the Bill makes the minimum 1 percent., payable half-yearly on the quarter days upon which no interest falls due.

Mr Henry Willis:

– With a sinking fund of 1 per cent. per annum, the principal cannot be paid off in 30 years.

Sir GEORGE TURNER:

– No ; but I should determine, in connexion with any loan with which I was connected, that the contributions to the sinking fund should be 2 per cent.

Mr Hughes:

– One per cent. will be regarded in practice as the minimum.

Sir GEORGE TURNER:

– It will be for the committee to say whether the contribution shall be 1 per cent. or 2 per cent. Personally, I should not be averse to making it 2 per cent.

Mr Henry Willis:

– Would the right honorable gentleman agree to make it 3 per cent. ?

Sir GEORGE TURNER:

– That is a matter for the consideration of the committee. The amount we shall have to provide each half-year will not be very large at first, because, until the federal capital is established, no Treasurer will be able to undertake any very large schemes. We may hereafter have to borrow considerable sums in connexion with such works as the transcontinental railway or river navigability, but in fixing the sinking fund all the circumstances of the case must be taken into consideration. I have left it to the Government of the day to say at what rate contributions to thesinking fund for any loan shall be made. They need not be uniform Parliament may say that there shall be contributions of 2 per cent. towards the sinking fund for a loan for one class of a work, and of 1 per cent. for a loan for another class, according to the nature of the undertaking. But we desire to make the sinking funds absolutely safe, and, therefore, we provide that they must be kept in a separate account in the bank, under the Stock Redemption Fund, and can be operated upon only by cheques signed by the Treasurer, the President of the Senate, and the Speaker of the House of Representatives, and countersigned by the Auditor-General.

Mr Thomson:

– Suppose the Treasurer does not put aside the money ?

Sir GEORGE TURNER:

– The Act calls upon him to do so. If a Treasurer says that he will not do it, he must justify his action to Parliament. I do not think that we need have any fear upon that score.

Mr Watson:

– So far, none of the State sinking funds have been safe.

Sir GEORGE TURNER:

– That is because the States have got into a position in which this Commonwealth is never likely to be. We shall always have more than the amount required for ordinary expenditure ; at all events within the immediate future. The sinking fund can be utilized only for the redemption of stock. What I should do in regard to a sinking fund would be what I did in connexion with a Victorian State loan which was lately floated in London. As soon as the financial year commenced, and money was available for the purpose, I sent home the½ per cent. contribution to the sinking fund, and bought up the stock in the London market at 94 or 96. The practice I should adopt in regard to a Commonwealth loan would be that, as soon as money was available in the sinking fund, I should go into the market, not openly, but by means of a broker, and buy up what stock could be obtained for the sum available. It may be objected that there might not be stock for sale. But the Commonwealth will from time to time be selling stock over the counter, and we can purchase that stock if no other stock is available in the open market.

Mr Watson:

– Then if the right honorable gentleman wanted to get rid of a sinking fund he would issue stock over the counter, and buy it from himself?

Sir GEORGE TURNER:

– We can either buy back stock already issued in the open market, or redeem stock about to be issued.

Mr Watson:

– In that way we should take money out of one pocket and put it into the other.

Sir GEORGE TURNER:

– If we have £5,000 in the Stock Redemption Fund, and are issuing stock to the public from time to time, or over the counter, as required, what difference is there between redeeming the stock in the open market and purchasing £5,000 from the Treasury ? We set apart money out of revenue funds, and use it either to buy back stock in the open market, or, instead of selling stock to the public, sell it to ourselves.

Mr O’Malley:

– That is a bankrupt method of finance.

Sir GEORGE TURNER:

– The stock thus purchased cannot be re-issued, and the money used for the purpose is money which , has been taken from the revenue.

Mr Higgins:

– The liability of the Commonwealth will be the same in either case 1

Sir GEORGE TURNER:

– No, the amount will not be the same. If my honorable friend buys £5,000 worth of our stock, interest will have to be paid. If, however, the Treasurer buys the stock, the bonds will be cancelled and the interest will cease, and the position therefore will be entirely different. It is provided that those who are entitled to invest money in the Government securities of any State or of the Commonwealth shall be at liberty to purchase our stock, and that any trust funds in the hands of the Treasurer may be invested in the purchase of Commonwealth stock. The Auditor-General is to have the right to examine our books once a month, and it is provided that each registrar shall keep lists of persons upon whose stock interest is unclaimed for ten years, for the inspection of such persons as may be anxious to see them. It is also provided that a full statement of all transactions in connexion with our stock, of the moneys received, and of the purposes to which they have been applied, shall be laid before Parliament each year by the Treasurer. These are the machinery clauses of the Bill, our object being to float our loans upon as good- terms as possible, and to make the’ best provision that our loans shall be redeemed within the 30 years’ period. If the scheme I have outlined for purchasing back our stock is followed up, there will be no necessity to invest our sinking funds, and it will not be open for any Treasurer to lay his hand upon the moneys and misapply them. As the money is paid into the trust funds year by yeal-, it will be applied to the purchase of stock, and thus our liability will be gradually reduced.

Mr Higgins:

– Supposing that the stock cannot be re-purchased, how will the moneys in hand be invested 1

Sir GEORGE TURNER:

– There is a provision that if stock cannot be repurchased, the money shall be invested in Government securities until an opportunity occurs for buying stock. Then the Government securities will be sold, and the inscribed stock purchased. There is, however, no fear that ample opportunities will not be afforded for buying back our own stock. Having briefly explained the provisions of the Bill, 1 now commend it to the consideration of honorable members.

Debate (on motion by Mr. Thomson) adjourned.

page 13440

QUESTION

SUPPLY

In Committee -

Consideration resumed from 5th June (vide page 13,373).

Additional Estimates

Department of External Affairs

Division 11c (Expenses of GovernorGeneral’s Establishment),* £15,000.

Sir GEORGE TURNER:
Balaclava, Treasurer · Protectionist

– This item was allowed to stand over for further consideration. Honorable members are aware that the amount of the Governor-General’s salary is fixed at £10,000, and -His Excellency has been paid at this rate up to the present time, so that he will have received altogether some £15,000 up to the end of this month. We have also voted the sum of £10,000 to assist in recouping His Excellency for the extra expenditure which he had to incur in consequence of the visit of the Duke and Duchess of Cornwall and York. It was proposed that an annual allowance of £8,000 should be made to His Excellency to cover expenditure which the Governor-General has to incur, but honorable members proved adverse to the proposal. A day or so after its rejection, the Prime Minister and I had an interview with His Excel.lency, and after discussing the matter, told him that as far as we could gauge the feeling of honorable members, it was their desire that in the future there should be no allowance over and above the salary of £10,000. We also said that we thought that up to that particular date, the 1st May, we ought to discharge some of the liabilities which had been incurred, but that afterwards the salary of £10,000 would have to be looked upon as covering practically everything, except the cost of a very few services such as those of caretakers and cleaners, some orderlies, which would be provided for in the future from the Defence department, and telephones and telegrams, which would be comparatively small items. We stated that we would also make provision in regard to railway travelling.

Mr McCay:

– What will be the total value of the services just mentioned by the Treasurer, over and above the £10,000 allowed to His Excellency as salary - will it run into thousands?

Sir GEORGE TURNER:

-No; the amount will be comparatively small. The caretakers and one or two cleaners, and the telephone and telegraphic services will have to be provided for, but railway travelling will not be charged for by the States, so that the amount tobe provided for would be comparatively small. Later on the AttorneyGeneral will submit to the House a statement as to what is proposed in connexion with the allowances to any future GovernorGeneral. Wc told His Excellency that we felt perfectly certain that the House would be prepared to pay certain allowances up to the 1st May. Whilst matters were pending for many months, a number of accounts came in and were provided for out of the Treasurer’s advance account, until it was decided whether they were to be paid personally by His Excellency or to be deducted from the allowance which it was then hoped Parliament would make. The items which will be covered by this £5,000 are few in number. I have provided for £5,000, but so far as I know £4,000 will meet all requirements. It is difficult to say exactly what the amount will be, because some of the accounts are not rendered promptly. For gas we have paid £948, and there are accounts now in hand amounting to £81. These are mostly Melbourne accounts. For electric light we have paid £174, and we owe £335. For fuel we have paid £210, and outstanding accounts amount to £156.

For orderlies, including forage, horseshoeing, and uniforms, £102 lias been paid, and £604 is owing. These orderlies are taken from the New South Wales constabulary, and the amount owing will have to be handed to the New South Wales Government, to recoup them for the pay which has been given to the men during the fifteen or sixteen months in which they have been acting as His Excellency’s orderlies. Then another item which would have been payable out of the allowance to His Excellency is for crockery, marquees, and breakages, for which £53 has been paid, and £79 is owing. For flags, £73 has been paid, and £16 is represented by outstanding accounts. The accounts of the Government Printer represent various items in connexion with entertainments at Government House and other requirements of His Excellency, and, with other accounts for stationery and newspapers, and a few miscellaneous articles, represent a total of £775, which has not yet been paid. The total of the accounts which I have mentioned is £3,613, of which £1,563 has been paid subject to adjustment, and £2,050 is outstanding. Therefore, although we are asking for a vote of £5,000 in order that we may be on the safe side, we do not think we shall be called upon to pay more than £4,000. Under all the circumstances, and in view of the misunderstanding which arose, and the fact that these are accounts which the Prime Minister and I myself practically told His Excellency we believed honorable members would agree to pay, I trust that no difficulty will be raised, and that honorable members will agree to the proposal without much discussion. In the future we can arrange matters so that the new Governor-General shall know how much he is to receive, and there will be no misunderstanding, and no unpleasantness, as in the past.

Mr THOMSON:
North Sydney

– I wish that the Treasurer had been able to inform us as to the intentions of the Government regarding future allowances to the Governor-General, as well as to claim our consideration for past payments. The right honorable gentleman’s statement has shown the absolute need of a definite understanding as to the allowances which are to be attached to the position of the Governor-General in future. I join with those who think that His Excellency the Governor-General has been placed in a false position, because an attempt was not made at an earlier date to fix his allowances, but I recognise that this is not the time to enter upon a discussion of that question, and that we must regard the present proposal in the light in which it has been placed before us by the Treasurer. If the Commonwealth have been committed to certain payments to His Excellency by any statements made by his Ministers, we are bound to carry out that undertaking. I understood the Treasurer to say that he and the Prime Minister had indicated to His Excellency that Parliament would no doubt grant these allowances up to the 1st May. His Excellency knew from our action in connexion with the Governor-General’s Establishment Bill that the allowances would not be continued. According to the Treasurer’s statement the Governor; General was led to believe that the outlay which he was incurring would be repaid by the Commonwealth. As evidencing that, payments have been made by the Government to the extent of £1,563.

Mr Watson:

– Subject to adjustment.

Mr THOMSON:

– I did not hear the Treasurer use those words, which hardly fit in with the statement that, so far as the Ministry could settle the matter with the GovernorGeneral, these allowances had been agreed to.

Mr Henry Willis:

– The accounts were subject to adjustment.

Mr THOMSON:

– I do not know the exact meaning of that reference.

Sir George Turner:

– Had Parliament voted an annual allowance of £8,000 to the Governor-General, the latter would have deducted these amounts from that sum.

Mr THOMSON:

– I am indebted to the Treasurer for his explanation. But in the meantime sums have been paid by the Government to the extent I have mentioned on the understanding with the GovernorGeneral that the full allowances would be paid. If that be the position, honorable members can complain that Parliament was not consulted sooner, and because this state of doubt and indefiniteness, which might have been ended months ago, was allowed to continue. However, it has continued, and it has left the Governor-General under the impression that these sums would be paid. That being so, although I stand by the views which I previously expressed regarding the granting of an annual allowance of £S,000, 1 cannot see my way to break the understanding arrived at with the GovernorGeneral. Fortunately these amounts will not recur without the authority of Parliament. Before any future arrangement is made, Ministers have promised that a schedule of the allowances proposed shall be submitted to and approved by Parliament. I am sorry that it is not in our possession now, as it ought to be. Under these circumstances I regard the whole affair as unfortunate, and believe that we have been committed to an expenditure beyond that which it was intended we should incur. But, whilst the position is an unfortunate one, it would be a still greater misfortune if we allowed anything to stand against our good name in connexion with our transactions with the Governor-General. Up to the present nothing can be urged against our good name, and in order that nothing shall be, I intend to support the proposed vote, but on the distinct understanding that a schedule of future allowances shall be submitted to Parliament at an early date.

Mr WATSON:
Bland

– I am sorry that, in the face of the almost unanimous decision arrived at by this House only a few weeks ago, the Government have seen fit to introduce, practically, a similar proposal, at any rate so far as the expenditure affects the present year. While the £8,000 which it was proposed to vote under the GovernorGeneral’s Establishment Bill would have been a recurring expenditure, and the sum under discussion is limited to one year–

Mr Wilks:

– The other was limited to two years.

Mr Thomson:

– It was to be paid until the federal capital was established.

Mr WATSON:

– -That possibly may not be established for more than two years. In any case, the present proposal is that Parliament should vote £5,000, to cover exactly the same items of expenditure that were included in the Governor-General’s Establishment, Bill which was rejected the other day. I use the word “ rejected “ advisedly, because the unanimity of honorable members was so palpable that one may fairly claim that the Bill was defeated, even though it was altered in such a way as to make it practically another measure. A number of people seem to entertain the impression that the whole amount which the GovernorGeneral is costing the Commonwealth at the present time is £10,000 per annum, and they use that sum in criticising the position taken up by this House only a little time ago. I should like to ask the Treasurer whether the sum of £775 due to the Government Printing-office for printing in connexion with the Governor-General’s establishment, bears any relation to the sum of £2,000 upon the Estimates for “official printing, stationery, travelling, telegrams, and other incidental expenditure for the Governor-General “ ?

Sir George Turner:

– No ; it is quite a different item.

Mr WATSON:

– Then in my opinion £775 is a fairly large bill for printing.

Mr Deakin:

– The other expenditure is really Executive Council expenditure.

Mr WATSON:

– I am just a little bit tired of the matter being cloaked in this way. It is better that the House should know how this money is expended. When an amount is placed upon the Estimates for the Governor-General, the committee naturally infer that it directly concerns his establishment. In addition to the sum of £2,000 which the Treasurer has at his command for the incidental expenses of the GovernorGeneral, there are two amounts for the upkeep of the Government Houses in Sydney and Melbourne which total about £5,500.

Sir GEORGE Turner:

– We have not expended anything like that sum this year.

Mr WATSON:

– Just so ; but that is the amount which, I presume, will be voted annually for the purpose indicated, until we see the unwisdom of maintaining two Government Houses.

Mr Mauger:

– That is good, coming from the Sydney side.

Mr WATSON:

– I do not look at the matter simply from the point of view of Sydney. I do not believe that the people of Sydney care one dump whether the Governor - General resides there., or not. There may be a few who are anxious to hang on to his coat tails, but the great body of the people have no sympathy with the proposal to maintain two Government Houses. A number of the items mentioned by the Treasurer struck me as covering expenditure which is certainly optional with the Governor - General, and which, therefore, should be defrayed out of his salary. The printing, I understand, relates chiefly to invitation cards which are issued for various functions. Then there is an expenditure upon flags, gas, electric light, fuel, &a. The large sum involved in these items is accounted for by the number of entertainments which the Governor-General has seen fit to give in

Melbourne and Sydney - principally in Melbourne. The people of the Commonwealth have never asked him to provide such entertainments, and he is under no obligation to give them. Indeed, I feel sure that the public would be just as well pleased if none were given, so long as the GovernorGeneral manifested a desire to forward the interests of the Commonwealth as a whole, and to hold the balance evenly as between thedifferent parties in politics. In connexion with this matter I do not recognise the right of the Ministry to commit the House - especially after the decisive vote which was recorded in May last. Yet, according to the statement of the honorable member for North Sydney, the very day after the House had arrived at a decision upon the Governor-General’s Establishment Bill, theMinistry deliberately pledged Parliament to vote allowances to the extent of £5,000 to the Governor-General. It is rather important that we should know the period at which this pledge was given.

Sir George Turner:

– It was not a pledge.

Mr WATSON:

– If any pledge has been given, I should like to understand whether it was made before or subsequent to the rejection of the Governor-General’s Establishment Bill.

Sir George Turner:

– Will the honor* able member allow me to explain ? I mentioned that after the rejection of the proposal to grant the Governor-General an annual allowance of £S,000, the Prime Minister and I myself waited upon His Excellency. We told him that the evident feeling of the House was that allowances should not be given, and that in future he would be expected to pay for everything out of his salary of £10,000. He then asked - “ How will that apply to the past?” and we replied that, so far as the past was concerned, we had no doubt that theHouse would vote the expenditure incurred up till the 1st May.

Mr WATSON:

– The total sum paid to and on account of His Excellency up to the present time - exclusive of the grant under discussion - is about £35,000. The £5,000 which we are now discussing will bring the amount to £40,000 for eighteen months, or at the rate of £24,000 per annum. People were under the impression that the cost of the Governor-General would be £10,000, and I was one who voted

I for the allowance of £10,000 with a desire to get over any misunderstanding that might have been generated in the mind of the Governor-General through his confidence in the advice tendered him by the Prime Minister some time ago as to the probability of Parliament giving him a grant. It was with an idea of being reasonably generous in the matter that I voted for the additional £10,000. But I am assured since that the amount expended on the visit of the Duke and Duchess of York was not £10,000, but that there was a margin, which the Governor-General now has. I do not grudge the Governor-General that margin, whatever it may be, because in my mind it wipes out the whole moral obligation which might have existed as between the Governor-General and the Parliament, because of the advice given by the Prime Minister.

Mr Wilks:

– Does the honorable member mean to say that the Governor-General made a profit on the £10,000 ?

Mr WATSON:

– I am given to understand that the expenditure, especially that in connexion with the Royal visit, did not amount to £10,000, but to £9,000.

Mr Deakin:

– That was all explained in the last debate.

Mr WATSON:

– A number of us voted for the £10,000 with the object of being reasonably generous under the circumstances, and we had no idea there would be any attempt to bring up this question again. The sum that the Governor General is costing outside of any allowances is about £18,000 per annum. It struck me that the Prime Minister, when in charge of the Governor-General’s Allowance Bill, was a little ingenious rather than ingenuous in regard to a comparison with the sum paid to the Governor-General of Canada. I obtained from the official Gazette of Canada the amount that is voted to the GovernorGeneral there for his establishment. I forget what the figure was, but it was disputed by the Prime Minister, and,- 1 think, b)7 the Treasurer. The sum, as paid to the Governor-General of Canada, was given by them, and yet even on their own figures the total was (he same, or very little more than the 18,000 we are paying without allowances.

Sir George Turner:

– We are not paying £18,000.

Mr WATSON:

– We are paying £18,000 “to and on account of” the GovernorGeneral. There is 12,000 under the special vote.

Sir George Turner:

– I have told honorable members several times that that expenditure of £2,000 comes under the heading of the Executive Council, and that the Governor-General does not get a shilling of it.

Mr WATSON:

– Is it for the use of the Governor-General in any shape t

Sir George Turner:

– It is for the use of the Executive Council, in order that they may pay for cablegrams in connexion with Commonwealth work.

Mr WATSON:

– At any rate, that explanation affords a pretty good argument for striking the item out or recommitting it.

Mr Deakin:

– Cablegrams must be paid for. These are cablegrams to the Secretory of State, the Agents-General, and other persons with whom the Government have relations in England.

Mr WATSON:

– No doubt we must pay for our cablegrams, but this appears in the Estimates for the Governor-General.

Mr Deakin:

– Because the cablegrams are sent through the Governor-General.

Mr WATSON:

– To say the least, this is not an explicit way of preparing the Estimates for the information of honorable members. I do not think that an AuditorGeneral would pass .an appropriation by the Treasurer under this heading as being strictly legal, if it were not for the purpose of the Governor-General’s establishment in connexion with His Excellency’s telegrams, stationery, printing, or travelling. I regret that the Government have seen fit to submit this proposal, and I intend to act in consonance with the decision of the House a few weeks ago, and vote against it.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I agree largely with the views of the honorable member for Bland in regard to the duties that we should expect from our GovernorGeneral in consideration of the official salary of £10,000 a year. But from the various, and, I regret to say, somewhat conflicting statements placed before us from time to time, it appears that the Governor-General was induced or encouraged to incur a much larger expenditure than his salary would justify, in consequence of a promise made by his Ministers to bring in a Bill increasing he amount of his annual remuneration by 8,000 per annum. Had that been granted, I understand it was not the intention of the Governor-General to make any claim for the £10,000, or whatever the amount was.

Mr Watson:

– It was £9,000.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I am told, . on very good authority, that the amount was considerably more.

Mr Watson:

– But the Prime Minister stated officially that it was £9,000.

Mr Deakin:

– That was the official expenditure, but if the expenditure of sums of the kind we are now considering be taken into account, the total was considerably more than £10,000. It was because the Governor-General drew attention to the difference that he offered to return something under £2,000, if the view were taken that only official expenditure in connexion with the Royal visit was to be debited to him.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– It may be too late to mention the matter, but it is very unfortunate that the Government did not take Parliament into their confidence at an earlier period - a course which might have saved a great deal of misunderstanding and unpleasantness oh both sides. However, the Governor-General having been given to understand by his Ministers that his annual allowance would be increased b)’ £8,000, and he having been led into additional expenditure in consequence of that promise, it would hardly be fair or dignified for the Commonwealth to take advantage of the fact. Therefore, we have scarcely any alternative under the circumstances than to sanction the payment of this amount in regard to the past. I sincerely hope, however, that this vote will not be regarded as justifying the Government in making any promises in the future without first taking Parliament into their confidence. This is a matter upon which Parliament should be consulted beforehand. Of course, there are some items of expenditure in connexion with the up-keep of Government-house and grounds, and these, which have always been paid by the States, were not under consideration when we decided the question of the additional £8,000 per annum. Unfortunately on that occasion we were not given to understand that the amount we are now considering lay behind.

Sir George Turner:

– The Prime Minister mentioned the cost of lighting, and of the Governor-General’s staff - he mentioned all the items.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– It appears to me, however, that this is an expenditure incurred by the Governor-General on the faith of a promise by his Ministers that they would introduce a Bill to increase his allowance by £8,000 per annum.

Mr Deakin:

– The Governor - General would have had to incur the expenditure, or a portion of it, under any circumstances.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– But the GovernorGeneral could have pleased himself, in the absence of any promise, whether he would exceed the £10,000.

Sir George Turner:

– The usual practice in the States is to allow the cost of lighting and other services.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I agree with the honorable member for North Sydney that under the unfortunate circumstances we have no alternative but to vote the amount proposed. I’do not attach so much importance to the last promise made by the Government on the 1st May, because the money had been spent. A part of the bills had been sent into the Treasurer for liquidation in anticipation of Parliament passing the extra allowance of £8,000 per annum, and it appears to me that, although the £2,000 had been paid, it was intended to continue sending the bills in until the whole £8,000 had been liquidated.

Sir George Turner:

– A sum of £1,500 had been paid; there were accounts for £2,000, and a few more had to come in.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I would not consider myself bound by the promise made on the 1st May. Certain expenditure had been incurred prior to that date, and it does not affect the matter in one,’ way or the other, except that the Government expressed their belief that Parliament would pay it, but that such allowances would not be continued. The first promise goes back much further, and it appears tome that the Commonwealth, in deference to its own good name and reputation, is bound to vote the amount asked for. While I shall vote for the item, I hope that the Government will not, in regard to any future Governor-General, make any promise or commit the Parliament, directly or indirectly, without first consulting honorable members.

Mr MCDONALD:
Kennedy

– When the Governor-General’s Establishment Bill was before us we were distinctly led to believe that the vote of £10,000 got rid of the GovernorGeneral’s allowances altogether - that we were to have a clean sheet apart from the salary of £10,000. We all know the peculiar circumstances under which that Bill was passed ; and I do not think any parallel can be found in Australian politics. The Prime Minister had practically agreed, or come to some understanding with the GovernorGeneral, to bring in that Bill, and the Government intended to pass it at all hazards. If they had no such intention, why did they mislead the Governor-General in- the way they did? But the Government abandoned the Bill at the last moment and handed it over to a private member. The position was simply disgraceful, and I hope we shall never see it repeated in the life of the Commonwealth. The Governor-General has been here some eighteen months, and the £8,000 asked for would have been, roughly speaking, £12,000. Parliament voted the Governor-General £10,000 for the Royal visit, and now we are asked for another £5,000, or £3,000 more than was proposed in the Establishment Bill. Is that a right way in which to treat the committee? Yet some honorable gentlemen say that because the Government have practically pledged Parliament in this matter they propose to stultify their previous action, and -vote for the item. Politics are coming to a pretty pass when members will act in that way. I shall not allow the Government to pledge my vote upon any occasion. They had neither authority nor power to make these promises to the GovernorGeneral, and if they had had any courage they would not have held office for a day after the Governor-General’s Establishment Bill was so radically altered in committee. I cannot find a parallel case in the history of Australian politics. I am disappointed, too, at the action of the Governor-General in making these petty bargains. It would seem as though he were trying to extort as much money as he could from the Commonwealth. It is all very well to say that we should talk with bated breath about the Governor-General; but, as we have heard so much from his advisers ‘as to the bargain made with him, and what they said, and what he said, we have a right to express our opinion upon the matter. I think that the whole thing is a scandal, both upon the Governor-General and the Ministry.

Mr Sawers:

– The Governor-General is not here to defend himself.

Mr MCDONALD:

– But the Ministry are here to defend him. They have tried to deceive the House repeatedly upon this matter, and their action shows that they do not care much for the opinion of honorable members. £10,000 have been already voted to the Governor-General apart from his salary, and £2,000 which the Government say is not for the Governor-General at all, though it stands in the Estimates as a vote to defray the expenses of his household. Now we are asked -to vote another £5,000. I shall not, like some honorable members, vote for the item because the Government have made a promise ; I shall divide the committee against it.

Mr WILKS:
Dalley

– Honorable members and the people generally must admit that this is a sorry bit of business altogether. The honorable member for North Sydney appealed to the committee not to tarnish our good name. It is the members of the Ministry, not us, who are doing that, and they have now done so on two occasions.

Mr Mauger:

– Honorable gentlemen opposite are making a party question of the matter.

Mr WILKS:

– No, we are not. That was said when the Governor - General’s Establishment Bill was before us, but, although any honorable member might have made that a party measure, by moving that it be read “ this day six months,” nothing of the kind was done. I do not intend to refer to the Governor-General personally ; my remarks will have relation simply to his office. The honorable member for Gippsland has spoken of the peculiar and regrettable circumstances of the case, and tells us that we have no alternative. I am tired of those words. We have the alternative in regard to this item that we have in regard to other items, and if we do not believe that the people of the Commonwealth are committed to the payment of the money, we can vote against it. In the first place, the Government asked us to vote an annual allowance of £8,000, to cover certain expenditure by the GovernorGeneral, but, in committee, the Bill was dealt with in such a way that, if it had been a State measure, the State Government introducing it would have resigned, and in the rarer atmosphere of federal politics the same action should have been taken by the Commonwealth Government. As I voted against that proposal, I shall vote against his. £8,000 a year is equivalent .to £16,000 for two years; but now we have voted £10,000, and we are asked to vote another £5,000, all within eighteen months of the Governor-General taking office, so that this is only another way of getting round the stump. Not withstanding the general expression of opinion in regard to the Governor-General’s Establishment Bill that no action of this kind should be taken before Parliament had been consulted, we find the Ministry again pledging Parliament to the voting of £5,000. When allowances to the public servants are proposed, they are dealt with relentlessly, and why should we act differently when allowances for the highest public servant in the land are proposed? The Treasurer told us that this sum was to cover expenditure upon lighting, fuel, entertainments, and so on, and the items which he read out might well make one think that he was listening to the accounts of the household of Aladdin, instead of to the expenditure of the Governor-General of the Commonwealth of Australia, where the press are everywhere clamouring for economy, and the needs of the States actually demand it. As representatives of the people, we should not be more mealy-mouthed in speaking upon a subject like this than we should be if the allowances of a head messenger were at stake. When the subject of allowances generally was under discussion, the Ministry promised to withdraw them, and by that promise probably extricated themselves from a defeat upon a motion for adjournment. If there had been in our public life a dignified leader like the late Sir Henry Parkes, the present Ministry would not be in power to-day. The Commonwealth Parliament should set an example te the State Parliaments, but we have not done so in regard to this matter. The leader of the labour party and others have shown that the Governor-General has received the astounding amount of £35,000 or £40,000 for eighteen months’ service. He was voted £10,000 for the entertainment of the Duke and Duchess of Cornwall and York. We can pass that by, because the expenditure was national expenditure. They were invited by the people, and therefore the expenditure was of a national character, but at the time that our Royal visitors were here, the public were under the impression that they were being entertained by the Governor-General. I do not see why the Parliament should be called upon, after having al ready voted Hi s Excellency £10,000, to give him another £5,000 to meet purely domestic expenses. Honorable members might as well put in a claim for an allowance in consideration of their having been detained in Melbourne for a longer time than they had anticipated. Yet a proposal in that direction has been consistently scouted by the press. The Treasurer tells us that the greater part of the expenditure for which we have been asked to provide has been already met out of the Treasurer’s advance account, and the Government should be compelled to take the responsibility of the payments. The present proposal is an attempt to overcome the difficulty created by the refusal of the House to pass the Governor-General’s Establishment Bill in the form in which it was originally introduced, and I hope that honorable members will not support it.

Mr O’MALLEY:
Tasmania

– I agree with those honorable members who have spoken against the proposed vote, but at the same time I do not think that the Government were called upon to resign because they failed to secure the passing of the Governor-General’s Establishment Bill in its original form. The fate of a Ministry should not, in any case, depend upon the insignificant question whether we ought to vote a large amount of money for the entertainment of the aristocracy of Australia. The Ministry were culpably negligent in not wiring to the Secretary of State for the Colonies at the outset telling him that they did not intend to increase the Governor-General’s salary or allowances, and that they were not going to allow the Commonwealth to become a breeding place for any sort of cads or snobs. ‘ The figures which have been mentioned by the honorable member for Bland have astonished me. The amount which has been paid to His Excellency the Governor-General is equal to nearly 200,000 dollars, and there is nothing in ancient or modern history to compare with this for extravagance. The newspapers have viewed with disapproval the proposal which has been made in some quarters for an allowance to recoup honorable members the expense to which they have been put owing to the length of the session. It has been urged that His Excellency was brought here under a misapprehension, and honorable members may fairly say that they, too, sought their present positions under a misapprehension. I understood that the first session of this Parliament would probably not last for more than four months. I have received only £400 for a year’s work, whereas I have never earned less than £1,500 per annum since I have been in Australia. Because I ask the Ministry to make some addition to my salary, the newspapers tell me that I must not exploit the Treasury. There is no difference between the position of honorable members and that of the Governor-General, except that we are starving and the GovernorGeneral is not. We have been here now for thirteen months, and there is no hope of our getting away till Christmas. If it were not for the representatives of the States which are farthest removed from Melbourne there would be no quorum in this Chamber on Fridays, when the Ministry desire to keep a House in order to pass their Supply Bills, and yet we hear that the honorable members from South Australia and Victoria are opposed to the proposal that representatives should receive an increase of salary. I do not oppose this proposal because of any illfeeling towards the Governor-General. I have the profoundest respect for him, because he is an able and intellectual man. But I am attacking the system which has grown up and which has been followed by the Ministry. We must have democratic simplicity in our public institutions, and if there is no noble gentleman in England who is able to run Government House and keep the people loyal by providing them with champagne and big fat turkeys, let us appoint as Governor-General some Australian millionaire who is willing to spend his money in that way. Miltiades, who Avon the Battle of Marathon, and drove the Persians into Asia, was content to live in simplicity in a dwelling as humble as any in Athens, and j’et it is considered necessary to keep up an immense barracks here in order to impress the people. The Australians, next to the Americans, are the most intelligent people on earth, and no circuses or tin-pot shows ure needed to impress them, or make them loyal. The ] oval tv of the Australians springs from their intelligence, and is better than any feeling that springs merely from the stomach.

Mr. HENRY WILLIS (Robertson).The proposed vote should be passed by the committee, because an assurance has been given by the Prime Minister arid the Treasurer to His Excellency the Governor-General that certain expenditure incurred by him would be provided for. The action of the House in refusing to ratify the Government proposal to make an annual allowance of £8,000 to His Excellency the Governor-General was a censure upon their administration, and as they did not resign, His Excellency the GovernorGeneral had no recourse but to retire from his position. I hold that the committee should vote the £5,000 proposed, because the Government have pledged themselves to the Governor-General to recoup him ‘ for his out - of - pocket expenses. Had the Ministry done their duty to the country when the GovernorGeneral’s Establishment Bill was practically rejected, they would have resigned. Having failed to take the- proper constitutional course, there was only one alternative left to the Governor-General, which was to retire from his high office. I shall support the vote in fulfilment of the pledge made to the Governor-General by his constitutional advisers.

Mr FOWLER:
Perth

– The vote which I gave when a somewhat similar matter was under discussion a little time ago is -I think a guarantee that I am prepared to allow anything in reason in relation to the Governor-General’s expenses. The sum which this House voted upon that occasion was one which Lord Hopetoun could fairly claim to have expended on behalf of the people of Australia. But this is altogether another matter, involving a very important principle, which prevents me from supporting the Government. Honorable ‘members have been told that there is some understanding with the GovernorGeneral of a more or less definite character in connexion with the expenditure covered by this particular item. I am unable to see how honorable members can be asked to indorse any such agreement. I have no doubt that the present Government will take reasonable care that no excessive expenditure is permitted under the heading of allowances. But it is quite possible to imagine that at some future period we may have a Government who are not imbued with the same ideas of economy that are entertained by at least some members of the present administration, and if we vote the sum proposed, it may fairly be regarded as a precedent. Therefore I cannot pledge myself to the Government proposal. It is absolutely necessary that we should know precisely what we are doing, and I blame the Ministry very much for the way in which they have allowed an indefinite understanding with the Governor-General to exist, resulting at length in the resignation of Lord Hopetoun and the placing of Parliament in an unfortunate and unpleasant position. The Government must take the responsibility of their mistakes in this connexion. I shall certainly not vote for the proposal before the committee.

Sir LANGDON BONYTHON:
South Australia

– I have already expressed my opinion upon this subject, and I shall not repeat what I said upon a previous occasion ; but as I agree substantially with a good deal that has been said, and as I hold that the Government are responsible for the muddle and misunderstanding which have occurred in connexion with this matter, I feel I must ask the Treasurer to give the committee an assurance that when another Governor-General is appointed, there will be no misunderstanding as to the salary attaching to the position, or as to what the allowances are to be.

Sir George Turner:

– I shall take very good care of that.

Mr SPENCE:
Darling

– There is one phase of this matter to which I should liketo call attention. I am opposed to voting the sum of £5,000 provided upon these Estimates, and I cannot help remarking that a good deal more explanation seems to be required than has been given by the Government. If there has been any understanding between the Government and the Governor-General, I. presume it must have been in connexion with this particular class of expenditure. Very big items of expenditure have been presented to us for printing, gas, electric light, &c. I do not know whether these items . refer solely to Government House, or whether the Government have had anything to do with them. If the expenditure set forth has been incurred entirely by the GovernorGeneral, why should Parliament be asked to pay for iti On the contrary, if the expenditure has been under the control of the Government, the latter should discharge its just obligations. There appears to be a lot of mystery which I should like to see removed in connexion with this matter. But the particular phase of the question to which I desire to call attention is that the Government have spent large sums of money without legislative authority whilst Parliament was in session.. . In New South Wales an administration was deposed for having expended £150 without authority whilst

Parliament was in recess, and I believe that one of the members of the present Commonwealth Ministry made considerable political capital out of that fact. I intend to vote against the proposed expenditure, because I do not think it is necessary. AVe should declare, once for all, that the Governor General is not expected to spend money in mere entertainment, and that we consider his salary of £10,000 should be sufficient to cover all expenses. I protest against the pernicious principle which has been adopted by the Government of spending money without the consent of Parliament.

Mr SALMON:
Laanecoorie

– I yield to no honorable member in my desire to see due economy exercised in our governmental expenditure, and I deeply regret that at the commencement of our federal existence it seems impossible to curb extravagance. Especially do I desire to see an example of simplicity and domestic economy set by those in authority. At one time I really thought that under federation we should have an opportunity of making a fair start in this direction. ‘But I find myself disappointed, and, very much against my inclination and better judgment I am compelled to support the expenditure proposed. However, I am very glad to believe it will be the last of the kind that this committee will be asked to sanction. I wish to ask honorable members who desire to see the work of governing the country earned on as economically as possible consistently with efficient administration, to look nearer home, and ascertain whether we cannot reduce some of the unnecessary expenditure that is undoubtedly being incurred. I feel that whilst we are talking of the printing bill of the Governor-General’s establishment, we should be thinking of the printing bill of this House, for which honorable members themselves are very largely responsible.

Mr Conroy:

– There must be debates.

Mr SALMON:

– I am not talking about Hansard, although I know that the honorable and learned member has a very large interest in. that publication. I am referring to the general printing bill. I feel sure that we can economize to a very large extent in this particular direction. It has already been stated that the GovernorGeneral’s establishment need not cost the large sum of £750 pei annum for printing, but I think that we must not lose sight of the responsibility which rests upon us to set our own House in order. Heaven has been described as a place where every nian keeps his own doorstep clean, and I think we should be doing a good work if we started to reduce the expenditure of Parliament, and thus set an example to the community which I feel sure would result in greater economy being exercised in high places. I have gone very carefully through these items, and, with one exception, I find that the charges enumerated in these Estimates have always been paid by the Government of Victoria. I believe also that the New South Wales Government have paid them. I have not had an opportunity of inquiring what is the practice adopted in the other States. I have not had an opportunity of making inquiries as to the practice in the other States. But under the circumstances it is scarcely fair to gird at the action of the Government, however objectionable we may deem such expenditure.

Mr Fowler:

– The States federated in order to save this “fancy” expenditure.

Mr SALMON:

– I am as anxious as the honorable member for Perth to keep down expenditure. I feel that a mistake has been made - that some of these are charges which should not be met by the Commonwealth, and that it should not be a valid excuse to say that similar charges have hitherto been met by the States Governments. That is some excuse, however, for the Ministers falling into error in imagining that Parliament would sanction the expenditure.

Mr Fowler:

– It is an excuse for the Governor-General, but not for the Federal Ministry

Mr SALMON:

– I do not agree with the honorable member. I prefer to leave the Governor-General out of the discussion, and we have been told frankly enough by the Treasurer that the Government accept the full responsibility for the expenditure. After this discussion, however, there can be no such excuse for the Government, and I hail with satisfaction the promise given by the Treasurer that the future Governor-General will have it pretty well laid down, not what are the desires of the Ministry, but the actual decision of Parliament. We are to be consulted, and I trust that we shall see that the foundations are laid on those economical lines which we all so ardently desire should obtain throughout the Commonwealth.

Mr CONROY:
Werriwa

– I trust we have heard the last of assertions to the effect that the vote of £10,000 was a payment direct to the Governor-General. As a matter of fact, that £10,000 was merely paid through the GovernorGeneral, because he happened to entertain the guests of the Commonwealth. I am sure there is not a single person throughout Australia who desired that His Excellency should himself bear the expenses of that entertainment, and the feeling of the House in the matter was shown by an immediate expression of readiness to pay the money. The great mistake was on the part of the Government in allowing His Excellency to incur the expenditure j the accounts ought to have been sent to the Government, and no doubt only passed through His Excellency’s hands, because they had to be checked by him. The money voted to the Governor-General simply reimburses him for expenditure met on our account, and it is much to be regretted that the great bulk of the people should have received the impression that this money was for His Excellency. The position was very complicated by the introduction of the Governor - General’s Establishment Bill. That measure confused not only the public mind, but the mind of Parliament, and it has been almost impossible to follow the erratic procedure on the part of the Government. At present we are asked to vote £5,000, and we are told that the Government have given the- Governor-General an assurance that that money will be paid. There must be some Executive, and if the Executive enter into an arrangement of that kind, they must be supported. If a similar contract had been entered into between the Government and a private individual, a court of law would decide that the contract must be fulfilled ; and for the honour of Parliament this item must be passed.

Mr CONROY:

– The honour of Parliament is bound up with that of the Executive, who have entered into a certain arrangement. While I support this item, I strongly disapprove of the action of the Government in not consulting Parliament ; and I should be perfectly willing to submit a vote of want of confidence. That would test whether honorable members are in earnest when they say they intend to vote against the payment of this £5,000. Does anyone » suppose that the cost of the lights in Sydney Government House and the lamps at the entrance have anything to do with the Governor-General? It might just as well be said that the members of this Parliament receive the cost of the lights in front of Parliament House, or the interest of £25,000 a year on the cost of the building. The item now under consideration has no more to do with the salary of the Governor-General than it has to do with the salaries of honorable members. There are certain observances which attach to official positions, and if honorable members desire to abolish all ceremony they should commence with that connected with Parliament. I do not think, however, that such a course would mean any saving. There are a couple of mounted police on duty at Sydney Government House, and we are told that the cost of these men is an addition to the Governor-General’s salary.

Mr Fowler:

-Why have they police ?

Mr CONROY:

– That is a question which may be dealt with on another occasion. These observances have gone on in the past, and my great objection is to their cost being regarded as part of the GovernorGeneral’s salary.

Mr Fowler:

– These observances do not go on with the sanction with this Parliament.

Mr CONROY:

– It must not be forgotten that there was a sort of arrangement or understanding that the Governor-General was to spend some time in Sydney ; and if such a course would tend to keep up good feeling between the States, I should not begrudge the necessary £4,000 or £5,000 a year. But whathas that arrangement to do with the Governor-General’s salary? Even when the Governor-General is away, there must be repairs and allowances, and a certain amount of lighting.

Mr Fowler:

– We speak of the GovernorGeneral in an impersonal sense in this matter.

Mr CONROY:

– But some honorable members have spoken of these charges as if they had been incurred by the GovernorGeneral, and the great mass of the public, owing to some of the assertions made, are misled into a belief that the GovernorGeneral receives £25,000 per annum while be receives only £10,000.

Mr Wilks:

– Will the honorable and learned member assume that position in regard to all the undertakings of the Government?

Mr CONROY:

– While there is an executive which is responsible to Parliament, the fair and reasonable contracts which it has entered into must be observed. If the arrangement under discussion had been made with any one but the GovernorGeneral, it is possible that he could sue the Commonwealth for, and recover from them, any expenditure made under it ; and I take it that Parliament would not refuse to vote the money which the court said should be paid. This is one of those arrangements which, when entered into by the Government, must be accepted by Parliament ; but the moment the money has been voted we are free to say to the Government - “ You did wrong in making the arrangement, and we have no further confidence in your administrative ability.” That is not my view alone ; it is the opinion of men who have had experience in executive positions. Under any circumstances, I should feel compelled to support the Government on this occasion, but, inasmuch as the money is to provide for expenditure which is no more the expenditure of the Governor-General than it is my expenditure, I feel still more obliged to vote for it. I hope that the public will not be misled in this matter, but will understand that the money is to be devoted to the upkeep of buildings which are in the possession of the Commonwealth.

Mr SAWERS:
New England

– As I could not be here when the GovernorGeneral’s Establishment Bill was before the House, I should like to take this opportunity to express my profound regret that a disagreement between Parliament and His Excellency has led to his resignation of office. Though I attach some blame to the Government in connexion with this matter, I do not see that they are wholly to blame. When the Governor-General accepted office there was no Commonwealth Ministry in existence. He appointed his Prime Minister after he arrived in Sydney, and therefore no arrangement in regard to his allowances could have been made between him and the Ministry prior to his coming here.

Mr Wilks:

– The Constitution states what his salary must be.

Mr SAWERS:

– Yes ; but allowances have always been customary in the past, and any one accepting the position would feel justified in believing that they would be continued. The Governor of New South Wales received £7,000 a year, and the State Parliament did not carp at the allowances given to him in the way of pay to his private secretary and aidedecamp, and in other directions. The circumstances show us how definite we must be in the future in dealing with the allowances of this office. I blame the Government because they did not pursue the course which I believe is always taken in Great Britain when any matter affecting the Crown is under consideration. No English Ministry would bring forward a proposal for granting an allowance to a member of the Royal family without first taking into their confidence the leaders of the Opposition. It is only when the two front benches have come to an arrangement upon delicate matters of that kind, that a Bill is introduced, and it appears to me that our Government might have followed a similar policy. I think that if they had done so they would have avoided a great deal of the friction and disappointment which has come to Australia in connexion with this matter. The explanation of the Treasurer shows that the actual salary of the Governor-General would be insignificant, and unworthy of the Commonwealth, if it were supposed to cover all his expenses. State Governors have been given allowances, and the occupant of the loftier position of Governor-General should not be required to meet such expenses as the salaries of his private secretaries and aidesdecamp. In the future we should either provide the Governor-General with an adequate salary - something like £20,000 a year - and expect him to pay everything, or give him £10,000 a year, and undertake to pay certain definite expenses. In my opinion, the salaries of the gentlemen attached to his household shouldbe paid by Parliament, and I have no doubt that the Ministry will have a clear understanding upon this subject with Lord Hopetoun’s successor. Something has been said about economy. I come from an economic stock, but I do not believe in meanness, and I think that the extra expense incurred by the Governor-General occasionally occupying the Government House at Sydney, which the New South Wales Government have liberally placed at his disposal, should be met by the Commonwealth. The Governor-General should not have a salary which would tie him down to the occupation of one official residence ; he should be able to visit Sydney and the various State capitals, so that he could be seen by the people generally, and, if necessary, entertain them to some extent, though I am told that entertainments are regarded as completely out of date by this Spartan Parliament. While economy is a good thing, I think that to give the GovernorGeneral only £10,000 a year and expect him to pay all expenses is unworthy of the Commonwealth.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– I blame the Government because they make it so extremely difficult for the committee to know what it is really proposed to grant to the Governor-General. What I want to know is how much is paid to the Governor-General by way of allowances in addition to this £5,000 ? I have looked through the Estimates and the Supplementary Estimates, but the only other item dealing with the Governor-General’s expenditure which I can find is this -

Official printing, stationery, travelling, telegrams, and other incidental expenditure for Governor-General, £2.000.

Sir George Turner:

– The whole of the details are given in the papers which were circulated on the8th October.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– Is it proposed that £7,000 shall be given to the GovernorGeneral by way of allowances - the £5,000 now under discussion, and the £2,000 to which I have just referred?

Mr McCay:

– The £2, 00 to which the honorable member has just referred is to provide for the official expenditure of the Executive Council.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– Then, are we asked to vote only £5,000 for the GovernorGeneral’s establishment ? When the Prime Minister introduced the Governor-General’s Establishment Bill he told us that in addition to the statutory salary of £10,000 there were allowances amounting to £9,000, and honorable members determined that they would not vote an additional allowance of £8,000 a year, although they were willing to vote a special grant of £10,000, to recoup the Governor-General for the expense to which he was put in dispensing the national hospitality to the Duke and Duchess of York. What I understood then was that Parliament was committed to an expenditure of £29,000 on account of the Governor-General for thefirst year, and of £19,000 for subsequent years. I find, however, that that is not the idea accepted by the press, and, although I have seen explanations in the newspapers in regard to the item now before the committee, I am considerably mystified as to the expenditure which it is intended to cover.

Mr McCay:

– We had a full explanation whilst the honorable member was absent from the Chamber.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– From the tenor of the remarks I have heard it is clear that some honorable members did not understand any explanation that may have been given, and I think the Treasurer might give me a simple answer stating the total amount which will have to be paid for contingencies and allowances in connexion with the GovernorGeneral’s establishment.

Sir George Turner:

– About £6,000 has to be paid for the up-keep and maintenance of the Government Houses in Sydney and Melbourne, and there is another item of £2,000 with which the Governor-General has nothing whatever to do. The present vote is intended to pay for the cost of lighting, fuel, . orderlies, flags, crockery, printing and stationery, and other miscellaneous items which will not have to be provided for hereafter.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– What I complain of is that these items should have been kept back until the last moment. The Government must have known from the outset that somesuch items must be provided for, and they should have been placed in the Estimates-in-chief in the first instance. This House is not likely to become an institution for registering the decrees of the Executive ; and although we cannot do anything practical if the money has been spent, we can impress upon the Executive the necessity of acting constitutionally by voting against their proposals, and allowing the responsibility to rest entirely upon them.

Mr McCAY:
Corinella

– I recognise that the present position of the committee is clue to the action of the Government, and I feel the greatest reluctance in voting for this proposal. I should vote against it if I did not think that we should be punishing the Governor-General, who would have to meet expenditure which he was under the impression would be provided for by the Government out of the public funds. I blame the Government for having, without testing the feeling of honorable members, assumed that they would be willing to vote these allowances, but the refusal to vote the money now will not mend matters. The Government have not fairly treated the House or His Excellency theGovernorGeneral, and the proof that they have not acted wisely is afforded by the fact that it has been necessary to disclose what took place at interview after interview between the Governor-General and his advisers. There should never be any necessity to disclose the results of interviews between the Governor-General and his advisers. The question of the Governor-General’s allowances should have been settled from the outset, and honorable members should have been afforded a clear idea as to the total expenditure in connexion with the GovernorGeneral’s establishment. The items should be properly grouped together instead of being scattered through the Estimates. We should know distinctly to the last penny what it is costing the community to maintain the position of the Governor-General.

Mr Deakin:

– That is to be done. A distinct statement is to be made of all. allowances and expenditure in connexion with the Governor - General’s establishments.

Mr McCAY:

– It is on the faith of that promise that I shall support, not the Government, but the proposal to recoup for the expenditure which His Excellency the Governor-General was given to understand would be met out of public funds. It is apparent from the fact that the Treasurer and Prime Minister told His Excellency after the Governor-General’s Establishment Bill had been amended, that the money which he had already expended would be recouped to him - that the previous understandingwas of an entirely differentcharacter.We were not able to obtain from the Prime Minister a definite statement as to what took place at former interviews, and I am sorry that he is not here to explain the discrepancy between his statements and those we have recently heard. He never explained to us what has since been made clear by the Treasurer, and we can only infer that His Excellency was given to. understand from the first that his allowances would be paid in accordance with the practice previously followed in the States. In however false a position we may feel that we have been placed by the dilatoriness of the Government, we are bound to reimburse His Excellency.

Question - That the item “Expenses of Governor-General’s Establishment, £5,000 “ be agreed to - put. The committee divided -

Ayes … … … 23

Noes … … … 13

Majority … … 10

Question so resolved in the affirmative.

Mr CONROY:
Werriwa

– In order to give honorable members an opportunity of showing that they really intend to reprimand the Government, I move -

That the Chairman do now leave the chair.

The action of the Ministry in regard to all these matters has been anything but satisfactory. The facts are well within the recollection of honorable members, and, therefore, I do not intend to labour the matter. I merely wish to give those who have just expressed their dissatisfaction with the Government an opportunity of condemning them in a practical manner.

Mr Deakin:

– I should like to ask the honorable and learned member whether he takes this step with the sanction of the acting leader of the Opposition?

Mr CONROY:

– I am acting upon my own initiative. I am merely desirous of affording honorable members who have already expressed their disapproval of the action of the Government an opportunity of placing upon record the fact that they do not agree with their administration. I do not wish to see the proceedings of Parliament turned into a farce.

Honorable Members. - Hear, hear.

Mr CONROY:

– I am surprised that honorable members should have divided the committee upon the question of the GoverorGeneral’s allowances, when theyare not prepared to vote in accordance with their convictions. But as I realize that the temper of the committee is adverse to my motion, it would be idle for me to press it.

Mr WILKS:
Dalley

– The action of the honorable and learned member will give Ministers an opportunity to explain matters to the general public, who are much confused over the items connected with the Governor - General’s allowances. If members of this House who are accustomed to dealing with Estimates cannot understand those items, how can the general public be expected to do so? Prior to the division which has just been taken, I could not fail to observe the distressed appearance of some honorable members opposite, who were loud in their expressions of grief at the action of the Government, and anxious for their good behaviour in the future. Nevertheless, they were not prepared to vote against the item, from the fear that the Governor-General might have to pay this money out of his own pocket. As, however, ‘that possibility has now been removed, I appeal to the honorable and learned member for Corinella to be consistent, and to vote for the proposal under discussion.

Mr McCay:

– I cannot be charged with ever having voted inconsistently with my utterances since I have beenamember of this House.

Mr WILKS:

– I trust that the honorable and learned member will not make the present occasion an exception.Rather than see the Ministry defeated, some honorable members would destroy every vestige of responsible government. Their expressed reluctance to sanction expenditure without legislative authority is so much claptrap unless they are prepared to visit the Government with condign punishment. The honorable member for New England endeavoured to make his constituents believe that only a certain sum of money was paid to the Governor-General. But I would point out that under the heading of “ GovernorGeneral,” the total expenditure provided by the Treasurer in October last was £19,530. I should like the public to be made aware of this fact so that they may be in a position to determine whether the Governor-General is poorly or dearly paid. I hold that he is dearly paid. But altogether apart from the £10,000 which the Commonwealth voted in connexion with the reception of the Duke and Duchess of York, an additional £5,000 has now been sanctioned. The public should be given to understand that the cost of the Governor-General during eighteen months has been £40,000. The honorable member for New England cannot defend the position that Lord Hopetoun has been scurvily treated by the people of Australia. I believe that if the leader of the Opposition had been present to-day he would have compelled the Ministry to abandon their guns. If the Government are not punished for their action, they may be induced to repeat the offence.

Mr McCAY:
Corinella

– It is quite possible that the fervid appeal of the honorable member for Dalley might prevail with me were it not for two facts concerning which I am in doubt. The first is as to who the new Prime Minister would be. I always understood that the mover of a successful adverse motion was entitled to be sent for by the Governor-General to form a new Administration. But in this case the mover’s chief follower is the honorable member for Dalley, who follows the honorable and learned member for Werriwa only far enough to repudiate him entirely. Therefore the honorable and learned member for Werriwa is to be Prime Minister and Pooh Bah, and to run the whole Administration himself. If I am compelled to make a choice between the present Ministry and a Government Jed by the honorable and learned member for Werriwa, followed at a long distance by the honorable member for Dalley, I shall be obliged to retain my present quarters, because, bad as they may be, they cannot be so bad as I conceive the others might be.

Mr HUGHES:
West Sydney

– The motion deserves more consideration than it has obtained, and I am inclined to deny that there has been any repudiation of it. I notice that the only honorable member who has risen on the other side has sought by a few amusing phrases to wriggle out of the position. The Victorian delegation, as has been pointed out, have almost to a man thrown aside all caution, and voted to support a line of conduct at which, on the hustings, they would never even have dared to hint. They have committed themselves to a line of policy absolutely opposed to every tradition of representative government. 1 see five or six members of the Victorian delegation present; a little while ago I think there were eight. They are supposed, by a long-suffering country, to attend to the business of Parliament, and yet they do it so badly that not one-third are present on such a crisis as this. When they are here they support a Government whose action not one of them would venture to defend ; and every one of them has been more or less an apologist for the sins of the Govern- ment. “Retrenchment” and such shibboleths can never be employed consistently by these gentlemen again. We have arrived at the astounding conclusion that the Governor-General has his salary of £10,000, and in addition £8,000 or £9,000 as allowances, together with the £5,000 sanctioned this evening ; and yet there is not a solitaryword of protest from honorable members opposite. I am sorry there is not public spirit enough in the representatives of Victoria to do justice to the country, even if they do violence to the Ministry.

Mr O’Malley:

– The honorable members for Corio and Northern Melbourne voted with us.

Mr HUGHES:

– I had forgotten that; but I suppose that in every barrel load of apples these must be one or two sound. But out of the 23 or 24 representatives, only eight, excluding Ministers, think it their duty to attend, while members of far-distant States are here in much larger proportion. I venture to say that if attention were called to the state of the House there would not appear more representatives than we see out of the 25 members of Victoria, outside the Ministry ; and that is an eternal disgrace to the members for the State in which Parliament is meeting. We are entitled, before the motion is withdrawn, to a clear and concise statement on the part of the Government as to what is proposed for the future ; and in making that statement there should be no hesitation on the part of the Government. This is the Government which is said to set itself rigidly against extravagance ; but even the Treasurer, who is the “white-headed boy” of Australia, has made only a little statement, which he considers quite sufficient. Prom neither the Minister for Home Affairs, nor the honorable member for Tasmania, Sir Philip Fysh, do we hear airy indication as to the future policy ; and the Government will find it exceedingly hard work to convince the country that “they have done right in this matter. Whenever the Government speak in the future of retrenchment I shall not hesitate to remind them that they neither started it for themselves nor sought to enforce it on others, excepting in the case of persons whose social position did not stand in the way of their being retrenched out of existence. The Government have now the appalling effrontery to ask the House to vote another £5,000 ; and the request is granted, because the delegations from other States, who have been kept here for thirteen months, have found it necessary to go and look after their own neglected businesses. I cannot see that the Government have been wisely advised, or that, everything, in connexion with this matter has transpired ; what has transpired calls for the severest and most wholesale condemnation. I shall be very much inclined to support the motion of the honorable member for Werriwa, unless the Government give us an outline of what they propose to do with the next Governor-General. We do not want every detail, but we do want’ a clear, general statement, so that the next GovernorGeneral may have in black and white the exact terms on which he is engaged, and what allowances are to be made. .

Mr SALMON:
Laanecoorie

– I. wish to correct one or two trifling inaccuracies of the honorable member for West Sydney. The first is, that the whole of the members for Victoria voted with the Government. As a matter of fact, two Victorian representatives voted the other way. Instead of only eight members for this State being present, there were ten members for Victoria present and two Ministers, making a total of twelve, while, at the same time, there were present only fourteen representatives of New South Wales. The honorable member for West Sydney was also wrong in his opinion that if the bells were rung no more representatives of Victoria than are now in the Chamber would be found in their places.

Mi-. THOMSON (North Sydney).- I admit with those who have opposed the Government, and with some of those who have supported them, that the situation which has been created is. a difficult one. Some of those who voted with the Government did not mean thereby to indicate that in their opinion the Government have not done wrong. They stated with their voices that they considered the action of the Government in this matter a series of mistakes from beginning to end ; but they felt that they should not add another wrong to that done by the Government by refusing to support an undertaking made with a third party, however undesirable that undertaking may be. It has been said that if the proposed allowance had been for some one in a lower position than that of the Governor-General it would not have received so much support, but I should like to remind honorable gentlemen that the same consideration has been extended by them from time to time towardsallowances to other public servants. The House objected, on principle, to the allowances, and the Government were constrained to discontinue them ; but it was felt that in regard to certain allowances which the Government had promised, the undertaking entered into should be carried out. I have acted in regard to the Governor - General’s allowances as I should have acted if my votes had been given in regard to the humblest servant of the Commonwealth. It is quite natural, however, that honorable gentlemen should seek to mark in some definite way their disapproval of the actions of the Government. But, while the motion of the honorable and learned member for Werriwa is intended to do that, I think it would be a mistake to push it to a division, because, if that were done we should get, not a clear-cut vote upon the question really at issue, but a vote upon the question of the desirability of allowing a private member to take the business out of the hands of the Government. I trust, therefore, that the honorable and learned member will withdraw his motion.

Mr. CONROY (Werriwa).- The honorable member for North Sydney has very correctly expressed the intention of my motion. I moved it to mark my disapproval of the way in which the Government have managed’ this business throughout. When the Executive enters into an arrangement on behalf of the Commonwealth, that arrangement must, as a rule, be carried out by Parliament, though that does not prevent Parliament from afterwards expressing disapproval of it. A merchant or any one else who deputes an agent to act for him may feel himself obliged to carry out a contract entered into by that agent, but that will not prevent him from dismissing him immediately afterwards. That is the position of some of us on this side of the Chamber.We blame the Government for having cast an unnecessary slur upon the Governor-General, and also for having made it appear that the money which we have been asked to vote goes into his own pockets, when as a matter of fact he has practically nothing to do with its expenditure. I think, however, that the discussion which we have had has been sufficient to convince the Government that, if they act in this way again, direct means will be taken to bring them to book, and therefore, having in some degree obtained my object, I wish to withdraw my motion.

Mr McDONALD:
Kennedy

– I do not know that the honorable and learned member should withdraw the motion. I disapproved of his action in voting for the allowance, but I approve of his action in moving, as a protest against the manner in which this business has been conducted by the Government, that the Chairman do leave the chair. Although every honorable member knows that the Government have done wrong, the committee is willing to do what theGovernmentdesire. Probably, under any other circumstances, the Government would have lost their positions over this matter. W e have not had one straightforward statement from them in connexion with it, and their quibbling, twisting, and wriggling has been such as any decent Government should be ashamed of. The Government hesitated about giving the widow of an unfortunate public servant - who, through no fault of his own, received injuries during the execution of his duties which caused his death, and left those dependent upon him penniless-£100; and yet they are prepared to place the Australian Commonwealth at the feet of Mr. Chamberlain, and to ask honorable members to vote any amount for the up-keeping of the establishment of the Governor-General. Such conduct is degrading, not only to the Government, but also to Parliament ; and as a Member of Parliament I feel humiliated and ashamed at what has been done. It is time, therefore, that some one made a strong protest. I think that the very high reputation of the Treasurer will be shaken by what has taken place, though I am pleased that the Prime Minister happens to be away, because the probability is that, if he had been here, we should not have received the straightforward statement which was delivered by the Treasurer to-night. If the motion is not withdrawn, I shall vote for it as a protest against the action of the Government. I consider that the Commonwealth have been got at in this matter. When are we going to receive the promised statement as to the Government’s proposals in regard to these allowances? I should like to get at the same time the true history of the whole business, and to know what pressure was put upon the Government. I have it upon very good authority that in anticipation of the right honorable member for Maitland becoming the first Prime Minister, it was arranged with him in London that, in addition to the £10,000 salary, the Governor-General should be paid a sufficient amount in allowances to be able to do the thing in style. I have entered my protest on this occasion, and in future years when these votes are brought forward there will probably be discussions similar to that which we have had tonight.

Sir JOHN QUICK:
Bendigo

– I cannot say that I altogether approve of the action of the Government in regard to this matter, but I do not think there is any ground for the statement that the Governor- General’s Establishment Bill was submitted to this House at the dictation of Mr. Chamberlain or of any one else.

Mr McDonald:

– Let the honorable and earned member read the despatches.

Sir JOHN QUICK:

– There is nothing to justify that statement. Mr. Chamberlain made a suggestion which was conveyed to Ministers by the Governor-General, and I believe that the Prime Minister, as a matter of courtesy and generosity, informed the Governor-General that he would submit the matter to Parliament. He never pledged himself, however, to make it a Ministerial question ; if he had done so, he would have been most unwise, as the matter was one upon which no one could have been expected to pledge his Ministerial existence. The matter was never submitted to the House as a party question, and honorable members had a free hand to decide the matter one way or the other. The Prime

Minister discharged his obligation to the Governor-General by submitting the matter to Parliament, and it is childish to say that the Ministry should resign because they could not carry a proposal which never formed part of their policy. The only mistake the Prime Minister made was in promising to introduce the Bill, but at the same time he acted honestly in fulfilling his promise, and as honorable members decided the matter for themselves, the Ministry cannot be blamed for the conclusion arrived at. I fail to see what good object is to be gained by the discussion of a motion of this kind. It is said that its object is to afford honorable members an opportunity of giving effect to their views ; but I regard the whole thing as a huge joke. Those who voted against the Governor-General’s Establishment Bill, as first introduced, recorded their protest, and it was also open to honorable members to vote against the proposal which has just been agreed to. Although I voted against the proposal to allow the Governor-General ,£8,000 a year for expenses, I reserved to myself the right to support the Government on the present occasion, because it is only fair that we should indemnify the Governor-General for expenditure incurred by him under the impression that the necessary provision would be made by Parliament.

Mr O’MALLEY:
Tasmania

– I do not say that the Government should be put out of office because they have made a huge blunder in connexion with the GovernorGeneral’s allowances. I wish to give them an opportunity of denying the rumour, which is being circulated, that some sort of understanding was entered into between Mr. Chamberlain and the Prime Minister that the salary attached to the position of the Governor-General was to be raised to such an extent as to permit of its being occupied by some sprig of Royalty. Personally, I do not believe the statement.

Mr Deakin:

– There is not a shadow of support for it.

Mr O’MALLEY:

– I am very glad to hear it. It has also been rumoured that certain Ministers were expecting to have high titles conferred upon them on Coronation Day, in consideration of their action in connexion with this job. I do not believe that either. It would be sinful if any extravagance were indulged in in connexion with the maintenance of the GovernorGeneral’s establishment whilst this country is so deeply in debt, and if the Government lend their countenance to any such proceedings they will be traitors to their country.

Motion, by leave, withdrawn.

Division 12 (Miscellaneous), £420

Mr MCDONALD:
Kennedy

-! should like some explanation with regard to the amount of £300 provided for expenses in , connexion with the Coronation church services.

Mr DEAKIN:
AttorneyGeneral · Ballarat · Protectionist

– It is proposed that the Coronation shall be celebrated in Australia, as elsewhere, by religious services. The whole of the Protestant bodies have united with a view to conducting a joint service in the Exhibition-building on Coronation Day. On the following Sunday high mass will be held in St. Patrick’s Cathedral, and the two services taken together may be fairly taken to represent the religious feeling of the Commonwealth. The £300 is not to be paid to any person connected with the religious bodies, but is to be devoted to defraying the cost of printing the hymns and cards, the hiring of chairs, placing them in position and removing them, the cleaning of the Exhibition-building, and so on. It will really be expended in labour.

Mr Spence:

– Is any provision made for services elsewhere than in Melbourne?

Mr DEAKIN:

– I believe there are services to be held elsewhere, but the two services in Melbourne will represent practically the whole of the religious denominations in the Commonwealth. There will probably be 6,000 or 8,000 persons at the service in the Exhibition-building, and considerable expense will be entailed in the hiring of chairs and placing them in position.

Mr Wilks:

– If they hold similar services in Sydney the people concerned will have to pay for them ?

Mr DEAKIN:

– Surely this is not a question as between Melbourne and Sydney, or anywhere else. The service in the Exhibition-building will be a joint service, and will be generally representative.

Mr O’MALLEY:
Tasmania

– Section 1 1 6 of the Constitution provides that -

The Commonwealth shall not make any law for establishing any religion, or foi- imposing any religious observance, or foi- prohibiting the free exercise of any religion, and no religious test shall be required for any office or public trust under the Coin mon wealth.

In the first place, we have no established religion within the Commonwealth. All countries where they have an established religion are cursed. If the vote proposed amounted to £1 only I should oppose it, because it will be impossible to equitably distribute the money over the whole of the religious denominations represented amongst us, whilst every taxpayer in the Commonwealth, irrespective of his religious belief, will, have to contribute.

Mr. MCDONALD (Kennedy).- I understand that this money is to be spent in connexion with the service to be given in the Exhibition Building ?

Mr Deakin:

– Yes.

Mr MCDONALD:

– Then the other denominations are not asking for any assistance? If the Protestant bodies wish to make a show, let them use their own buildings, or hire the Exhibition-building at their own expense. As the money is to be given to a certain section of the community, I move -

That the item “Expenses of Coronation services, .£300,” be omitted.

Mr SPENCE:
Darling

– I am opposed to the proposal on principle. I have an objection to State aid to religion in any form, and I thought that that principle was so. firmly established in all the States that there was no probability of it ever arising again. The fact that the King is to be crowned on the 26 th June affords no reason for any departure from the principle which has been embodied in our Constitution and in the statute-books of all the States. There are a number of religious denominations in the Commonwealth which would not participate in this grant, and it would also be unfair to restrict the State aid to the denominations in any one capital city. In any case, however, I should object to the grant.

Mr THOMSON:
North Sydney

– I wish to ask the Treasurer if he thinks it wise to persist in the retention of this item ? It would be very invidious to make the proposed contribution. In the first place similar church services will be held throughout -Australia. I do not object to the Government proposal on the ground that one particular city in the Commonwealth is selected for this expenditure, but I fisk by what authority does the religious body, or collection of bodies, which is to hold the proposed service in the Exhibition-building represent the churches of Australia. If it does not represent those churches why should it be particularly selected? Then again there are people who entertain certain religious beliefs, who will not engage in the service in the Exhibitionbuilding. Are we going to contribute to a particular service and to entirely ignore many other religious bodies ? That is a dangerous precedent to establish, and as I believe that the churches are quite able and willing to provide their own services I must oppose this item.

Mr CROUCH:
Corio

– I take up the same position now that I adopted upon a previous occasion when this item was before the committee. I then held that the State as a corporate body represents no religion, knows no religion, and has no religion. The honorable member for North Sydney said that as the various bodies which intend to conduct the proposed service in the Exhibition - building do not represent the whole of the churches in Australia he could not support the item. But even if they did represent all the churches, I hold that that fact has nothing whatever to do with the matter. As long as there is one citizen outside of the churches which will engage in this service who could not- conscientiously take part in it, he is entitled to have hisreligious scruples respected. Once upon a time England was a Christian and a Protestant State. Then Roman Catholics were given the franchise, and England was no longer a Protestant State, although it still remained a Christian State. In the Commonwealth we admit to citizenship those who are non- Christians. Every citizen has a right to have his religious views, respected. He has absolutely the same rights that are enjoyed by every other person within the State. That is the principle which was fought for when we secured the abolition of State aid to religion. I have taken the trouble to work out a few figures in this connexion, and I find that 85 per cent, of the population formerly received State aid to their religions. But although that was abolished for the sake of the minority in the present case, at least onethird of the community, totalling 1,242,860 persons, cannot, for conscientious reasons, be present at the proposed service at the Exhibition - building. These constitute a very important minority. I have been privileged to see a copy of the programme to be followed upon the occasion in question. Speaking from memory, that programme contains a statement that some .clergyman will declare “ We proclaim to you this day Edward VII. our gracious King, who is the upholder of the Protestant and Reformed Religion and the head of the Established Church of England in England.” Seeing that the use of those words might be offensive to some of the minority, I think that the proposed vote should be eliminated.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– I support the striking out of ‘this item. To my mind it is very clear that the various churches throughout the Commonwealth will fittingly celebrate the occasion of the Coronation without.any assistance from the State. The voting of this money will only create an invidious distinction between the churches located in the capital of Victoria which receive aid for this service and those churches throughout the Commonwealth which will conduct services upon their own initiative and without any assistance whatever. It is an unfortunate thing that the Government should offer this green and yellow sop to theology. They have practically divided the community into two sections, Protestants and Catholic, forgetful of the fact that there are many other denominations amongst us - notably the Jews - who are probably the most loyal people to be found in our midst. One can scarcely enter a church in which he will not hear prayers offered on behalf of the reigning monarch. We can well leave the churches to celebrate the Coronation in their own way without incurring the dangers inherent in any proposal to subsidize religious services. .

Mr Page:

– I rise to a point of order. Section 116 of the Constitution Act provides -

The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion ; and no religious test shall be required as a qualification for any office or public trust tinder the Commonwealth.

In the light of this provision, I have very grave doubts whether this item ought to appear upon the Estimates. I believe that a big constitutional question is involved ; and I ask the ruling of the Chairman upon the point which I have raised.

Sir JOHN QUICK:
Bendigo

– Strictly speaking, I do not think this vote can be said to be contrary to the provisions of the Constitution, although it may be in opposition to the spirit of that Act. This is merely a vote of money for a special purpose. It does not propose to permanently appropriate that money, or to imPOse any system of religion upon the Commonwealth, but merely to defray the expenses in connexion with a certain religious ceremony. But whilst I do not agree that the item is unconstitutionally upon the Estimates, I intend to vote against .it. . I shall do so because, by granting this money, we should be establishing a very bad precedent. I fear, also, that we should create a religious sore in this community, inasmuch as the vote amounts. to a discriminating one. It is a vote which is to be applied to a religious ceremony for a group of religious bodies, to the exclusion of other religious bodies. If it were a vote in which the whole of the religious bodies in the Commonwealth - Jew and Gentile, Catholic and Protestant - shared alike, one could not object to it as discriminating ; but, as it stands, it is openly intended for the Protestant denominations, and as a Protestant I object to any such discriminating vote. I trust that there will be no division upon the item, and that the Ministry will see the wisdom of withdrawing it and thereby avoiding unnecessary discussion and unpleasantness.

Mr WILKS:
Dalley

– The mild manner in which the arguments of those -opposed to this item have been presented must be a strong inducement to the Government tq withdraw it. The Ministerial proposal undoubtedly introduces the thin end of the wedge of State aid to religion. Every one recognises that the various religious bodies will fittingly carry out their functions upon Coronation Day at their own expense. The proposed service is not a ceremonial provided by the Commonwealth, and therefore I trust that the Government will adopt the suggestion which has been thrown out and remove it from the Estimates.

Sir LANGDON BONYTHON:
South Australia

– I, too, must join in the request to the Government to withdraw this item. I object to it for two reasons. In the first place I altogether disapprove of the principle involved, and in the second I see no reason why special provision should be made in the case of Melbourne. Similar services will be held in Adelaide, and no doubt in other cities, and the churches in Adelaide are certainly making no application to have the expense of those services defrayed by the Commonwealth.

The CHAIRMAN:

– In reference to the point of order raised by the honorable member for Maranoa, I wish to say that, although the spirit of section 116 of the Constitution Act may be somewhat in favour of his objection, I do not feel disposed to rule the item out of order.

Mr Higgins:

– I should like to ask if the Chairman is bound to give rulings upon constitutional questions immediately they are raised ‘! I think it is unfair to expect him to do so. I suggest that it is not for the Chairman to decide points of law.

The CHAIRMAN:

– When a point of order is raised I am bound to give a ruling.

Mr. MCDONALD (Kennedy).- Before the question is put, I should like to know what the Government intend to do in the matter 1 They have as yet given us no information as to whether they will withdraw the item. The Government have promised to certain religious bodies a. grant of £300.

Mr Deakin:

– The honorable member is quite wrong ; the Government have done no such tiling.

Mr MCDONALD:

– How is it, then, that this item appears on the Estimates? When the Government find that their own supporters leave them, they refuse to give any indication of their intentions.

Item negatived.

Mr PAGE:
Maranoa

– I should like some information as to the item of £50 provided for the expenses of the representation df the Commonwealth at an international conference on workmen’s insurance at Dusseldorp Germany.

Mr. DEAKIN (Ballarat - AttorneyGeneral). - The question of old-age pensions is intimately associated with the question of workmen’s assurance, and a conference is being held at Dusseldorp at which experts will attend from countries in Europe, and, I believe, from America. This £50 will enable us to obtain the services of Sir John Cockburn, who has done so much in this connexion in Australia. He will attend the conference on behalf of the Commonwealth, and furnish us with a report. I think this is money well spent.

Mr. MCDONALD (Kennedy).- When are we likely to get the report of Judge Dashwood, Government Resident at Port Darwin, on the pearl-shelling industry at that place and Thursday Island in connexion with the operation of the Immigration Restriction Act ? I see that £70 appears on the Estimates for this service.

Mr DEAKIN:

– I understand that Judge Dashwood has finished his inquiries at Port Darwin and Thursday Island, and is either on his way to or has arrived at Merouka. There is good reason to hope that we shall have his report very shortly.

Reduced vote, £120, agreed to.

Progress reported.

page 13461

BONUSES FOR MANUFACTURES BILL

Second Reading

Debate resumed from 27th May (vide page 1 2S5S), on motion by Mr. Kingston - “

That the Bill be now read a second time.

Mr THOMSON:
North Sydney

– The honorable member for Wentworth was to have resumed the debate, and it was my intention to leave him to state the objections to the measure. However, in his absence, and at very short notice, I shall say as briefly as I can why I intend to oppose the second reading. To some extent, of course, this measure was discussed when dealing with Division VIa. of the Tariff. I shall not weary the House by re-entering on the arguments which were then so freely used against the duties which are to follow this bonus proposal. Many free-traders have been claimed as supporters of the bonus system, and some, no doubt, rightly, in that they admit that if encouragement is to be given to manufacturers it can, from their stand-point, be more effectively and more freely given by means of a bonus than by means of protective duties. They admit that it is an advantage that the whole community that pay the bonus should share in the cost of that political engine, rather than that the whole cost should fall on that portion of the community who have to pay higher prices under protective duties. They also admit that whilst protection, even according to its own advocates, does for a time, and occasionally for a very considerable time, raise the prices of commodities, there is no such necessity under the bonus system. In fact, the competition obtained under the latter system is against the raising of prices which takes place under protective duties. But even those who to that extent favour bonuses- and I am not one - must admit that in the present instance the bonus is only the beginning of a protective system. It is proposed that, when these bonuses have done their work, if the)7 do it, they shall be followed by a protective duty. That duty in the meantime has been fixed at only 10 per cent., but I feel assured that once this course has been embarked on, if 10 per cent, is not found sufficient, Parliament will be asked to vote 20 per cent, or 25 per cent, to sustain the industry created by the bonus. Under the circumstances, even those who believe in bonuses not necessarily followed by protective duties, may find reasonably strong objection to the proposal of the Government ; and now is the time to decide whether we shall have this bonus system, with its corollary of protection. The Minister has delayed this Bill to the present date, and I am rather surprised he has not delayed it a little longer, until he saw whether there was likely to beany necessity for it. It is quite possible that Division S7I.. of the Tariff may not eventually receive the force of law, and as we shall know within a reasonable period whether that division will be passed, it would have been better to leave this Bill, which is valueless in the eyes of the Minister, without its addendum, until that addendum “had been finally dealt with. The question arises whether this bonus proposal and following duty are really likely to thoroughly establish in our midst the iron industry. I venture to think that under the Bill no portion of that industry will be established which, in the larger markets of Australia, would not have come into existence without the proposed encouragement. We have to remember that at best we cannot anticipate for many decades an export trade in iron. The United States, for instance, with a magnificent population, was never able to enter on the export trade until it had reached a” development we cannot possibly reach for a great number of years. Canada, it is true, adopted the bonus system, and the Minister has chosen to argue that the very moderate success of the iron industry there is entirely due to that system and protective duties.

Mr Kingston:

– I did not previously quote the figures for 1901, but the success in that year was marvellous.

Mr THOMSON:

– May I point out to the Minister that in dealing with Canada lie did not take into account the production beyond the Dominion.

Mr Kingston:

– I did as to Newfoundland.

Mr THOMSON:

– Exactly ; Newfoundland is part of Canada certainly, but it is beyond the Dominion. I shall now show the difference between the Minister’s proposal and the system in Canada. The Bill before us excludes importations from beyond the Commonwealth, and discourages that blending of ores which, all the world over, has been found so necessary to successful manufacture. Canada, on the other hand, encourages blending by the admission of Newfoundland ores. In this the ‘Minister has not followed the example of Canada, and where he has departed from that example he has done so in a way likely to be injurious to the manufacture. The United States admit from Cuba the ores necessary to the production of the finest steel. England imports from Spain, not that England has not sufficient ore of her own, but because by means of the Spanish -ore, there can be acquired the qualities necessary to a successful industry.

Mr Kingston:

– Tasmania is our Cuba.

Mr Spence:

– There is a royalty on iron ore in England.

Mr THOMSON:

– In spite of that royalty, the ore from Spain is landed at a higher cost than that at which England can produce her own ore. m But as the honorable member no doubt knows, perhaps better than I do, these foreign ores are needed for blending with the native ores in order to produce the finest quality of iron and steel. The Minister says that Tasmania is our Cuba. I hope that may prove to be true, because there is no success in that direction we do not all wish Tasmania.

Mr Kingston:

– I mean as to the nature and quantities of the ores, and their accessibility.

Mr THOMSON:

– The Minister says that Tasmanian ores will do for Australia what the Cuban and Spanish ores do for America and England ; but that has to be proved. From experience in iron smelting in New South Wales, I know that whilst we may imagine all that the Minister forecasts, the truth can never be proved except by practical work. Iron-smelters from Great Britain, who have had the largest experience, have come to New South Wales, and have not been successful in dealing with ores there, which on examination beforehand, they and other experts thought would readily and cheaply produce magnificent iron. The industry has to be developed, and I hope will be successfully developed. But more depends upon the market, and the securing, as has now been secured, of the whole population of Australia as consumers, than upon the granting of temporary bonuses, followed by larger or smaller duties. As the Minister has properly stated, the iron industry is at the base of a great many others. If you establish it successfully, you give great encouragement to other industries ; but if you do not, or if you establish it upon such a basis that heavy protective duties are required to maintain its existence, you will, by raising the price of its products, injure many other industries. I should be very sorry to see duties imposed, which, while they might have a tendency to encourage the iron industry, would raise the price of iron to such an extent as to prove injurious to other important industries. That is the .danger which we must fear if we embark upon the course proposed. ‘It is a peculiar thing, too, that the people who are to be assisted by the proposed bonus and subsequent duties have indicated their willingness to establish the industry, and to manufacture a considerable output, without any such encouragement. All they asked for was an order of a certain quantity of steel rails, at the price at which similar rails could be laid down in Australia from Great Britain or the United States. That offer was made to the small market of New South Wales, at a time when the InterState Customs barriers were in existence.

Mr Kingston:

– To what offer does the honorable member refer?

Mr THOMSON:

– To the offer made to the New South Wales Government two or three years ago by the Blyth River Company. They offered to establish works which would produce a considerable quantity of iron, if the Government would undertake to purchase a certain quantity from them - I think 150,000 or 200,000 tons- during a certain period.

Mr Watkins:

– Why did not that offer reach fruition 1

Mr THOMSON:

– I do not know. I do not think the company withdrew it, and I believe that they accepted the labour conditions attached by the New South Wales Parliament.

Mr Watkins:

– I am of opinion that the Government were willing to adhere to their part of the contract.

Mr THOMSON:

– No doubt the Minister for Home Affairs, who conducted the negotiations for the Ministry of the day, could give us full information. The offer could have been accepted, and the company would then have been bound to carry out the contract. Then, again, if newspaper telegrams are to be believed, £750,000 has been subscribed for extending the Lithgow ironworks, and producing larger quantities of iron, and certain descriptions of iron which have not hitherto been produced, from the native ore in that district. Under these circumstances the proposal to grant a bonus seems like offering a gift to the companies to whom I have referred. Whatever bonus is paid for the manufacture of such iron as is now manufactured in New South Wales will certainly be a gift to the manufacturers. Furthermore, under clause 3 of the Bill, £50,000 is to be paid in bonuses for the manufacture of galvanized iron, wire netting, anc iron and steel tubes of not more than 6 in. internal diameter. I do not know to what extent iron or steel tubes of small diameter are manufactured within the Commonwealth, but, leaving them out of consideration, the quantity of galvanized iron and wire netting manufactured here is considerable, and it is being manufactured without the aid of either a bonus or of duties. If the proposal of the Government is agreed to, however, most of this £50,000 will be I swamped up by the manufacturers of these articles, and will be practically a gift to I them. I do not know what regulations will be framed in connexion with the ! granting of the bonus, but apparently as 10 per cent, is to be given upon the value of the goods produced, the amount obtained by any manufacturer will depend upon the rapidity of his production. For these reasons, and because ‘ I know the amount of manipulation which often takes place in connexion with bonuses, and that the money does not always reach the right people. I shall oppose the Bill. I do not wish to prolong the debate, and therefore I shall not again enter upon the arguments which were used in connexion with the provisions of Division VI. a of the Tariff. The Minister, in his second-reading speech, did not show that the offers to which I have referred were made in anticipation of the granting of a bonus, or the imposition of duties. They were made to the Government of a free-trade State at- a time when there was no likelihood of other encouragement than that asked for, and the Minister has not shown that they are not now available, or would not be available if sought. We can quite understand, however, that, seeing Ms readiness to give them a bonus, capitalists should hang back, and neither renew their offer nor hasten to embark upon their- enterprises. If we agree to the Bill, we shall commit ourselves to the bonus system, and to all the dangers connected with that system, notwithstanding the exposures which we have had in Australia in the past. Furthermore, while the Customs duties which are to be imposed may at the beginning be low, from a protectionist stand-point, they will be raised from time to time if it is found, or if it is thought - which is not the same thing - that they are insufficient for the maintenance of the industry. In taking that course we shall be shutting off the markets of supply from a number of other industries, of which the iron industry is the basis, and we shall incur great risk of injuring a number of producing interests which are as worthy of encouragement us is the iron industry. We do not know all the difficulties in the way, and, therefore, we may, after all, fail to accomplish that which we desire - namely, the establishment of the industry on such a footing that it can hold its own upon competitive lines with the rest of the world.

Sir J OHN QUICK:
Bendigo

– At the present stage, I can venture to give this Bill only a qualified support. I desire to take the very earliest opportunity of conveying my appreciation of the very able manner in which the Minister for Trade and Customs presented his case to the House. Considering all the surroundings, and the materials at his disposal, he presented the matter very forcibly, and one could hardly help being influenced very largely by the sympathy which he displayed. I speak from a sympathetic point of view with regard to the bonus and bounty system. I believe that the State can, under proper and favorable circumstances, largely assist in developing its natural resources by means of bonuses and bounties, and there is no industry within the whole range of the possible development of this continent more entitled to favorable consideration at our hands than is the iron industry. Isolated sis we are, and so far removed from the great iron resources from which the world is at present supplied, we cannot look forward to the future growth and development of the iron trade of the world without very great anxiety. I believe it may be very fairly said that the nations that can control the iron trade will shape the industrial destinies of the world. Therefore, whatever difficulties may at present surround us, we shall have, sooner or later, to deal with this problem in a thoroughly systematic and effectual way. I am not prepared to say that we can do so at the present moment, in view of certain difficulties which I shall proceed to point out. I thank the Minister for the careful consideration which be has given to this matter, and for the determination he has evinced to follow it up to the best of his ability, and, “if possible, overcome all the difficulties which stand in the wa)’. The first question that we are called upon to consider is the nature of the inducements which can legally and constitutionally be held out to any companies to engage in the development of the iron industry. So far as I can understand from the circulars issued by those whose opinions are worthy of attention, at least three inducements must be held out to any bond fide company to encourage them to launch out upon an enterprise of the kind contemplated. The first is a 15 per cent, duty upon all the materials which are within the scope of this bounty ; the second is a guarantee of a bonus or bounty on the same lines, and to the same extent as that given in Canada, and the third and most difficult of all is a guarantee that the company shall have a monopoly of the supply of iron and rails required by the States Governments in connexion with the railways. I venture to say that we cannot guarantee to any company, however strong, the monopoly of the supply of all the iron required for the States railways. The question whether States railway material shall be subject to a duty of 10- or 15 per cent., or whatever rate may be decided upon, is beyond our jurisdiction. The company will require to be assured of protection against the free importations of rails by the States Governments. *

Mr Kingston:

– We are not proposing to guarantee that.

Sir JOHN QUICK:

– Any bonuses or bounties will, according to a circular issued, be a dead letter unless that is guaranteed. Under section 114 of the Constitution Act, it is clearly provided that the Commonwealth Parliament shall not tax property of any kind that is imported belonging to the States.

Mr Kingston:

– The -Act does not provide that we shall not tax any property that is imported.

Sir JOHN QUICK:

– It provides that State property of any kind shall not be taxed, and that includes all property, whereever it may be, in any part of the world, within or without the Commonwealth, imported or exported.

Mr Mauger:

– The honorable and learned member for Parkes has argued to the contrary.

Sir JOHN QUICK:

-i admit that the matter is open to argument, but the point will have to be faced sooner or later.

Mr Kingston:

– The sooner the better.

Sir JOHN QUICK:

– That question ought to be settled before the details of. this great scheme are determined. No company would dare to venture upon an enterprise of enormous magnitude, involving, perhaps, millions of money, unless they were clear as to their rights so far as importations are concerned. We may be able to pass a Bill upon the Canadian lines, providing for a 15 per cent. duty, but if the companies engaged in the iron industry cannot obtain protection against importations by the States Governments, all the bonuses in the world will be of no use to them. The States Governments will not give up their rights to the free importation of railway material. Judging from conversations which I have had with responsible politicians in Victoria, I do not believe that that State would give up its right to import railway materials free of duty. They would object to give the proposed company, not merely a huge bonus, but also the benefit of a tax upon the imported railway materials of the States. These are difficulties which will have to be considered in connexion with this Bill.

Mr Mauger:

– I do not think any objection will be raised by the people of Victoria. The Government have given preferences in regard to locomotives.

Sir JOHN QUICK:

– Perhaps that is because they can be made in Victoria.

Mr Mauger:

– Surely they would not raise an objection in this case because the rails might be made in another State?

Sir JOHN QUICK:

– I do not believe that the people of Victoria would agree to any company of the character proposed being granted more favorable concessions than those conceded to Victorian companies of a similar character. This leads me to consider whether we could guarantee to any company the same terms as are offered in Canada, or whether we could guarantee any company bonuses or bounties on the Canadian terms. It is a serious question whether any company, or any number of companies, should have a gift made to them of £250,000 or £500,000, as is here suggested, unless the money is placed at their disposal subject to a trust.We have had experiences more or less favorable of bounties and bonuses in Victoria.

Mr Kingston:

– The butter bonus was a very good thing.

Sir JOHN QUICK:

– No doubt. We have also had bonuses and bounties given in connexion with the mining industry, and a bonus was given to the Maffra Beetroot Sugar Company. I would invite the attention of honorable members to some of the provisions in connexion with the last-named much-abused enterprise.

Mr Kingston:

– Which went very close to becoming a success.

Sir JOHN QUICK:

– It did. An Act was passed in 1896, entitled An Act to Encourage the Establishment of the Beet Sugar Industry in Victoria. This Act is well drawn, and is surrounded by safeguards and conditions of the most salutary and valuable character which may well be taken into consideration by us.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– No bonus was given to the Maffra Company.

Sir JOHN QUICK:

– No ; it was practically an advance made by the Government of Victoria on the security of the assets of the company, and subject to the conditions laid down in section 17 of the Act, which provided -

The amount advanced to any company shall be repaid by such company to the Treasurer by means of half-yearly repayments, commencing at the end of two years after the date of the payment of the first instalment of the advance. Such repayments shall be made on dates to be fixed by the Treasurer in 46 half-yearly payments, all being of an equal amount except the last. The company shall also pay to the Treasurer interest on the amount of such advance, calculated from the date of the payment of the first instalment at the rate of £4 per cent. per annum.

That is the principal section of the Act in question. The experiment was a very great and important one. The Government agreed to make an advance which was practically a bounty, which was to be repaid in the event of the enterprise proving a success. If it were not a success the Government stood the loss. They had the assets of the company as a security, whatever they might be worth. If, before entering upon an enterprise for the development of such an industry, the great protectionist State of Victoria thought it wise to insert such a condition as I have indicated, this Parliament would do well to consider whether - if honorable members decide to launch upon a scheme such as is contemplated - it ought not to insist that no company formed shall be allowed to declare a dividend before repaying the Commonwealth the amount advanced to it. Why should any subsidized company declare dividends out of public money? We can make advances to give them a helping hand in the same way as advances were made to the Maffra Beet Sugar Company. The Government of Victoria were practically a partner in that company. Why should not the Federal Government in the same sense become a partner in the iron industry ? If we are to make advances of this kind they should not be made in such a way that they can be distributed at any time amongst the shareholders in the shape of dividends. Even in Victoria the Beet Sugar Company is not an isolated case of a qualified advance being made by way of loan, because the same principle is observed in the Mining Development Act. That Act provides that the Minister, subject to certain regulations and conditions, shall be allowed to make advances by way of loan, for the purpose of pioneer mining, procuring machinery, working plant,&c. It contains a somewhat similar provision tothat embodied in the Beet Sugar Act. Section 11 provides -

Notwithstanding anything contained inany company’s articles of association, the payments to be made to the Treasurer byany company pursuant to the agreement made under the provisions of this Act shall form a first charge on the profits and assets, except uncalled capital, of the company; and there shall not be divided amongst or paid to members or shareholders of the company any profits, or dividends, or bonuses, or any returns of any kind until the company has repaid the advance and interest thereon to the Treasurer.

The principle embodied in these two Victorian Acts ought to be recognised in connexion with this Bill. Unless the measure contains some precautions of the nature I have indicated, I shall be unable to support its third reading. I might also point out that the Queensland Government assisted the sugar industry of that State by making advances by way of loans. Any company which makes a big success of an industry will not be crippled by being compelled to return, in small instalments, the money which has been advanced to it. Such a provision would rob the suggestion that a free gift had been made to a private company of all point, and we know it will be urged that an unqualified gift of this magnitude constitutes a robbery of the public funds. I do not go so far as that, but I hold that it is only just we should insist upon the insertion of some such provision as I have referred to. I am afraid that it is somewhat premature to definitely lay down the lines upon which we should enter upon this great work. I trust that when we do make a start in the direction of assisting the development of our iron industry, it will be upon lines which are bound to succeed, and which will be acceptable to the people of Australia. We should lay down conditions which can be vindicated and defended upon any platform in Australia. We want to be able to justify the proposed expenditure as a public transaction, as well as a patriotic bargain. The time has scarcely arrived when we can definitely hold out any hope of giving companies the three conditions which they demand.

Mr Page:

– What are they ?

Sir JOHN QUICK:

– First, they demand a duty of 15 per cent upon all importations of iron.

Mr Kingston:

– That is not proposed.

Sir JOHN QUICK:

– That is what they want.

Mr Kingston:

– They will not get it.

Sir JOHN QUICK:

– They further want the Canadian bonus, without any obligation to refund, and the assurance that the States will pay duty upon their importations of railway material. Before we pass this Bill, I want to be satisfied that the ground is solid under our feet, that we are not entering upon a vague experiment, and that every possibility has been taken into consideration. Whilst I know that theM inister for Trade and Customs is most sympathetic, patriotic, and enthusiastic, concerning the plan which he has submitted, I hope he will not consider that my observations are prompted by any hostile spirit. I merely wish to be assured that the industry will be a success, that our legislation will be a credit to the Ministry and to Parliament - and that in the years to come, there will not be any flavour of disaster or failure in connexion with it.

Mr WILKS:
Dalley

– The honorable and learned member for Bendigo has expressed a hope that the legislation which it is proposed to enact will not be a failure. Upon all occasions I listen to him with a very great deal of interest. But it is a remarkable fact that the attitude adopted b)’ the honorable and learned member in February last, when Division VIA. of the Tariff wai under discussion, is diametrically opposed to that which he has taken up this evening. I am indeed pleased that he is a brand plucked from the burning. Upon the occasion referred to the honorable and learned member said -

I do not see what advantage is to be gained by postponing the consideration of this item. 1 hope that the scheme embodied in this Bill will be curried, because I heartily approve of it.

Mr SPEAKER:

– I call the attention of the honorable member to Standing Order 266, which says -

No member shall allude to any debate of the same session upon a question or Bill not being then under discussion, nor to any speech made in committee, except by the indulgence of the House for personal explanations.

The honorable member, therefore, can proceed no further with his present line of argument, nor with the quotation from Hansard he proposed to read.

Mr WILKS:

– I bow to your ruling, but point out that Division VIa. which was inserted in the Tariff, practically established the bonus system, which we are now discussing. I am glad that the honorable and learned member for Bendigo has seen the dangers surrounding this system. One of those dangers was recognised in New South Wales in connexion with this very industry. The company, to which reference has been made,, would not comply with the labour conditions of the Minister ; and the Bill under discussion does not provide for any such conditions.

Sir William Lyne:

– The honorable member is quite wrong : I had to deal with this question in . New South Wales. and the company agreed to the terms presented.

Mr WILKS:

– I am alluding to the time when the Reid administration was in power. The honorable and learned member for Bendigo is not satisfied with this Bill because it is not safeguarded with certain conditions. The people of Australia are to be taxed for the purpose of providing this bonus, and it is the duty of the Government to surround the measure with proper safeguards.

Sir William Lyne:

– The Blyth River Company agreed to the labour conditions.

Mr WILKS:

– As to Canada, in 16 years, under the bonus system, the production of iron increased from 29,000 tons to only 34,000 tons ; while, during the same period, there were imported 65,000 tons.

Mr Kingston:

– The iron made from Canadian ore increased as the honorable member has stated ;. but the iron made from imported ore increased by 67,000 tons. The whole increase was from about 30,000 tons to about 100,000 tons.

Mr WILKS:

– The experience of Canada is not such as to warrant Australia entering upon a system of coddling this industry. From the schedule I see that the amount required over a certain number of years is £324,000 ; and to provide that sum the people of Australia, under the financial arrangements of the Commonwealth, have to be taxed to the extent of at,out£1 250,000. Then the bonus system is to be buttressed by a duty of 10 per cent.

Mr Kingston:

– -Which may be called into existence on resolution of both ‘Houses.

Mr WILKS:

– The provision as to the resolution of both Houses was put in the Bill because we realized the great danger of handing over to any Ministry the power of granting such assistance. By clause 9 of the Bill the Government are given immense power by means of regulations, as to the provisions of which we know nothing. A big industry such as this would be very desirable in our midst, and in many years to come it might employ thousands of our people; but that day has not arrived. The millions of capital at the disposal of manufacturers in the old world would have been invested here before now had there been sufficient demand for the product. If New South Wales contains the valuable iron ore of which we have heard, and there were a ready market, capitalists abroad would not require encouragement by means of a paltry quarter of a million of money. The honorable and learned member for Bendigo has pointed to the difficulty there will be in inducing the States Governments to purchase their supplies from the bonus-built company. We are told that so far as Victoria is concerned the Government .are not prepared to give up their right of purchasing their railway material in the open market : and the same may be said of all the other States”. The sale of the produce of any iron company which might be establishedunder the bonus would be confined to private purchasers, and in order to meet such a market it would be difficult, even with the proposed assistance, to induce people to invest in expensive plant. If the Government desire to assist the industry, let them, by all means, nationalize it. If the claim for bonuses be granted in this connexion, an equally legitimate claim could be made on behalf of ship-building or deep sea fisheries; with the object not only of supplying the home market, but of exporting. When once we begin the system no one can say where it will end. As a free-trader, it has often been my lot to oppose the protective system, for the reason that while the few receive the benefit, the many have to pay. The bonus system now proposed is merely the modern idea of protection - it is the “gilded pill.” A Bill of this character is undoubtedly an innovation in most of the States of Australia, and it was not foreshadowed in any way in the GovernorGeneral’s speech, nor on the public platform by any member of the Government. In the first session, such a measure ought not to have been introduced, though I can understand that the Minister for Trade and Customs is attached to it, and is desirous of establishing the industry. Freetraders would welcome the industry, but do not desire to see it established by means of oppressive bonuses. All the artisans of the Commonwealth ought to receive equal consideration, and there has been no hint of extending this system to other industries. We cannot forget the discussion which took place on this subject when the Tariff was before us, and I am pleased that the honorable and learned member for Bendigo, who is an ardent protectionist, sees that the bonus system is not so free from blemishes as the Minister would have us believe. The results of the system as applied to the butter industry in Victoria have not been all that could be desired. The intention was that the money should go to the dairyfarmers, but, as a matter of fact, it got into the hands of the speculators. In one case the sum of £1,500 went directly into the hands of a middleman in Great Britain. The people of Victoria discovered that the bonus system was not free from blemishes, and their experience of it will be repeated by the people of the Commonwealth. Although in New South Wales the Lyne Government, following the Reid Ministry, considered the expediency of giving a bonus for the establishment of iron works, the See Ministry, knowing the feeling of the public on the subject, have not repeated the advances that they made to investors. They have, however, seriously considered the advisability of establishing a State industry.

Sir WILLIAM LYNE:
HUME, NEW SOUTH WALES · PROT; IND from 1910

– No, they have not.

Mr WILKS:

– I know that they have; and negotiations were biking place with a view to procuring a site on the Parramatta River. A free-trader might as well vote for protective duties as for the bonus system, though, of course, under the bonus system it is possible to ascertain what the public are called upon to pay. The Government ask us to provide for the granting of £324,000 in bonuses, but whether the granting of this amount does or does not achieve the object in view, we shall hereafter be asked to increase the amount. If the iron industry is not successfully established, we shall be asked to vote more to prevent the loss of the money already expended, and the money voted will go to enrich manufacturers, while the expenditure will not benefit the Commonwealth.

Mr WATSON:
Bland

– Every honorable member will recognise that the advisability of attempting to establish theiron industry in Australia upon a permanent basis is a very important question. We are assured by experts who have examined the deposits that there is iron ore in abundance in the Commonwealth. We know, too, that coal occurs in various places, and that the iron consumption of Australia is sufficiently large to justify an investigation in regard to the possibility of establishing iron works here. Our experience hitherto goes to show that we cannot establish iron works here unless the manufacturers are given some encouragement.We know that iron is manufactured in America under very favorable conditions, and under conditions which, perhaps, prevent competition by Australia. Those of us who have inquired into the conditions there, believe that, had it not been for the action of the American Government, the iron industry of the United States would not have attained its present enormous proportions. I know, of course, that natural conditions have had a great deal to do with its success, but the encouragement given to it by the State has had still more to do with it.

Mr Thomas:

– It has also given Carnegie his millions.

Mr WATSON:

– One of the objections I have to the competitive system is that it enriches a few at the expense of the many. Although the many reap some slight advantage from the expenditure of money in the process of production, they are not benefited in the same ratio as are those who are at the head of the operations.

Mr Kingston:

– But in no industry do the people employed get more than in the iron industry.

Mr WATSON:

– I believe that a larger part of the total expenditure in the iron industry goes towards paying labour than is the case in other manufacturing industries. But while I am prepared to do something towards the encouragement of the establishment of the iron industry here, I do not think that the means proposed by the Government are the best that can be adopted. The honorable and learned member for Bendigo has, I think, very properly and carefully put the arguments against the probable success of the system proposed by the Government. The Blyth River Company are supposed to hold the richest deposits of iron ore within the Commonwealth.

Sir William Lyne:

– And the best deposits in regard to bulk, too.

Mr WATSON:

– Although they possess these rich deposits in Tasmania, and have at their command about £1,000,000 of capital, they insist upon conditions which can hardly be granted by the Commonwealth. In the first place, they ask for a minimum duty of 15 per cent, upon pig and raw iron, and they want a guarantee that duty shall be collected upon all State importations. This Parliament has done what it can towards making State importations pay duty, by removing such importations from the free list; but, speaking as a layman, it seems to be doubtful whether we can, under the Constitution, levy duties upon State importations. The company, however, very properly point out that the State Governments are the largest consumers of iron, in the Commonwealth. They use an immense quantity in the construction of railways, bridges, and other public works, and if they can import it free of duty - and under the bookkeeping system, even if they had to pay duty, they would during the first five years obtain an adjustment in regard to it 38 i - it seems improbable that any of their constructing departments will order its materials from a local manufacturer or contractor. Not only are the State Governments the largest consumers of iron work, but the steel rails which form the bulk of their consumption do not require a great variety of patterns for moulding, and can be made in large quantities without a proportionate extra cost. The company further point out that in the United States of America and in Canada-, the railways are private concerns, and the material which they use has, therefore, if imported, to pay duty, or, if the local iron is used, an increased price nearly equivalent to the duty. Now, I believe, however, the inside and outside prices in both countries are about the same. Under these circumstances I am very doubtful if any set of men who thoroughly understand the conditions will invest their money in the establishment of hon works, and I believe that the only safe and efficient way of establishing such works will be for theCommonwealth or one of the State Governments to undertake the enterprise,, after due investigation, and the discovery of a practical scheme. Most proposals for the extension of Government functions meet with the opposition of vested interests, and in many cases the difficulties are almost insuperable, but in the case of iron works, there arc practically no vested interests, because in Australia we have no establishments worthy of the name devoted to theproduction of iron : at any rate we have none which produce pig-iron. If one of the State Governments established iron works it would have an incentive to use the iron in its own undertakings, whereas if tho Commonwealth were to undertake the enterprise, it would be likely to receive orders from the State Governments, because the people of the States are also citizens of the Commonwealth, and would thus be partners in the concern. The proposal which I have to make does not bind either myself or any other member of the House to anything until there has” been a full inquiry into all the facts, which will enable us to form a correct opinion upon the subject.

Mr Kingston:

– Has the honorable member considered the possible constitutional difficulty 1

Mr WATSON:

– I do not think that there is anything in the Constitution to debar us from embarking on any such enterprise, but supposing we were debarred it would be practicable for one of the States to undertake the work, and it would be permissible for us to encourage them by some system of bonuses

Mr Kingston:

– I do not think there is anything in the Bill that would prevent a State Government from exercising its undoubted power to receive a bonus.

Mr WATSON:

– Quite so ; but I wish to go a little further than that. The Treasurer tells us that the revenue funds are practically exhausted, and that he is therefore under the necessity of borrowing money, and yet the Minister for Trade and Customs proposes to hand over £300,000 to the various syndicates who may be prepared to enter upon the development of the iron industry. If, on investigation, it is found that the production of iron can be undertaken at only a small increase on the landed cost of imported iron, it would be wise for the Commonwealth to embark upon the enterprise. I have no sympathy with those people who believe in the establishment of Government works of this sort, with the idea that politicians should “ run the show,” because I can only consent to the establishment of such enterprise, on condition that they are freed absolutely from political control by being handed over to Commissioners. Therefore I do not wish it to be said that I am seeking to increase the number of works over which politicians should exercise control, and in which they should have opportunities of finding billets for their friends, even when legitimate vacancies do not exist. In view of the large sum involved, I regard this question as too big to be hurriedly dealt with. The interests at stake are too enormous to be disposed of, in a mere haphazard manner, on partial experience of what has occurred in the United States. I therefore desire primarily that the matter should be investigated by a body of men selected from this House, with a view to obtaining evidence as to the practicability of establishing iron works. I would also have’ them consider the advisability of the Commonwealth undertaking the work, and the question whether the Commonwealth has the power to undertake the work if it should be found advisable. Further, I would ascertain the views of the States, and the extent to’ which they would be prepared to support us in the event of our taking action : also what they would be prepared to do themselves in the event of the Commonwealth not embarking upon the enterprise. With regard to the general principle, I may point out that in South Australia, during the premiership of the Minister for Trade and Customs, Government works were established for the manufacture of iron pipes. The Minister, finding that the prices charged for iron pipes by some of the local manufacturers were too high, and failing to come to a satisfactory understanding with them, established Government works, and so far as I have learned they have proved very successful. The prices at which the pipes were supplied were satisfactory to the Government, and the pipes were of as good quality as those formerly made by private contractors. That has been the experience of every corporation in the world. They have all found it economical to have their work carried out by their own managers. It does not always pay big railway companies to enter upon the manufacture of steel rails, because the quantity they use is small in comparison with the amount turned out at the large ironworks which are devoted solely to the manufacture of that particular class of goods. But, speaking generally, large corporations find it of advantage to do nearly every kind of work that is of sufficient importance to justify the establishment of large departments. Considering the enormous consumption of iron by the States, it would be well worth their while to pay an expert to superintend the manufacture of any iron that they require. Whatever profits might be derived from carrying on such operations would flow into the national exchequer, and any loss that might be incurred would not exceed the amount now proposed to be granted to a private company. The Blyth River Company say that they will require a capital of about £1,000,000 to establish works with an output of 150,000 tons pei1 annum. The consumption of steel rails in the Commonwealth, according to the circular issued by the Blyth River Company, is just about 100,000 tons per annum, and in addition to this the various Governments would require thousands of tons of girders for bridge-work and shipbuilding plates, and so on, which would probably represent another 50,000 tons. Therefore the consumption from the outset would represent the total capacity of the proposed Blyth River Company’s works.

Assuming that it was proposed at first to meet only the requirements of one or two j of the States, such as Victoria and New South Wales, which would be most handy to the source of supply, leaving out Western Australia, Queensland, and other places to which the coastal freights might prove excessive, ‘ we might very well calculate upon a demand of 75)000 tons per annum. Speaking merely by rule of thumb, I assume that we might establish works capable of turning out this quantity of manufactured material for half the sum proposed to be expended by the Blyth River Company. The company include in their, estimate the cost of special steamers for bringing the ore from the Blyth Baver to the smelting works, whether they be at Newcastle, Illawarra, or at some other point on the coast handy for shipping. Therefore, the amount that need be spent upon a thorough trial - because, after all, it is only an experiment - of the possibility of establishing iron works under direct Government control would not be greater than the sum proposed to be spent by the Minister for Trade and Customs under this Bill. I move -

That nil the words after “ now’” be omitted, with a view to insert in lieu thereof the words “ that the Bill be referred to a select committee to consider and report upon the advisability of establishing Commonwealth or State iron works. “ 2. That such committee consist of the Minister for Trade and Customs, Mr. Thomson, Mr. Fuller, Mr. Mauger, Mr. B. Edwards, Mr. Batchelor, Mr. Kirwan, Mr. Hughes, and the mover.

I have only hurriedly selected these names, and I am quite willing to alter the personnel of the committee as honorable members may desire. In the event of the amendment being defeated, I should like to receive assurances on some other points. A provision should be inserted in the Bill placing upon a fair and proper basis the wages to be paid to, and the hours to be worked by, the employes of any company taking advantage of these bonuses. The agreement made by the Minister for Home Affairs, when he was Premier of New South Wales, with the Blyth River Company, contained stipulations regarding hours of work and wages, and we should have the fullest assurance that reasonable conditions will be observed in regard to labour. It should also be made clear that any State Government would receive the bonus in the event of their establishing the necessary works. 3S i 2

Mr Kingston:

– That is intended.

Mr WATSON:

– It seems to me to be unnecessary to place galvanized iron and wire netting upon the list of manufactures which it is proposed to bring within the scope of the bonus. These articles are already largely manufactured within the Commonwealth, and there is no need to spend a large sum of money in encouraging these particular branches of industry. The whole question should be thrashed out before any direct action is taken by Parliament. I do not at this moment assert that it would be a good thing for the Commonwealth or for any of the States to undertake the manufacture of iron. Before we can come to any definite conclusion upon that point, we must go into the matter very thoroughly and have expert advice as to the margin between the cost of production here and the landed cost of imported iron or steel. That is a question which can be settled only after proper inquiry, and therefore at this moment I would not pledge myself to the feasibility of such a claim. But to my mind there is a greater feasibility in that connexion than there is in the proposal to hand over £300,000 or £400,000 to a number of private individuals, who, however estimable they ma)’ be, have no direct claim upon the people of the Commonwealth.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I think that the Government are to be commended for their desire to establish this most valuable industry within the Commonwealth. I would be prepared to go as far as most honorable members to attain that very desirable object if we had a reasonable assurance of the permanent success of the industry when established. With that intention in view, I supported Division VIa. of the Tariff, but on the distinct understanding that before a penny was expended, the Government would bring down a Bill - as they have done - and would submit such information to Parliament as would justify us in voting the large amount of money involved in this proposal. I never expected that the whole of that information could be obtained in time to allow of a measure being introduced during the current session, and I think that the Minister for Trade and Customs is disposed to push this matter forward with undue haste. The point referred to by the two last speakers is one upon which we should have more information before we entertain the idea of voting such a large sum of money. The question to be considered is whether any protective duties which may hereafter be imposed can be levied against the principal users of iron. It appears to me that if the States Governments can introduce iron for their railways and other works free of duty, it would be a very serious matter, because they are beyond all question the largest users of this material - practically the only users. At any rate, those persons outside of. the States Governments who use iron would not take a sufficient quantity to justify us in incurring the great cost involved in establishing this industry. It appears to me, therefore, that we should have fuller information upon this point before attempting to proceed further. I should be indeed sorry to see this great question shelved by the defeat of a Bill at the end of the session. Honorable members must recollect that £324,000 is a very large sum of money, more especially when on the very day that we are asked to vote that amount a Loan Bill has been introduced, showing that we cannot, out of revenue, provide sufficient money for works which are usually paid for from that source. I would strongly recommend the Government to postpone the consideration of this matter. Parliament has already been sitting for thirteen months, and I think that this Bill might well be held over till next session. It would be infinitely better to adopt that course than to run the risk of the defeat or shelving of the Bill for a considerable time. Of course, if reasonable assurance could be given upon the most material points, I would support the Government, but I could not justify my action to the people of the Commonwealth and to my constituents if I supported such a large expenditure upon such flimsy information as has up to the present been placed before us. I do not blame the Minister for Trade and Customs for being unable to place fuller information before us because he has not had time to do so, and his hands have been full of other matters. But it would certainly be wise to inquire fully into this matter during the recess, and to ascertain, if possible, whether protective duties can be levied against the States Governments, and if not, whether the industry could live without any measure of protection. I fear that it could not. I repeat that the Minister for Trade and Customs would be acting wisely if he allowed the consideration of this Bill to be deferred till next session.

Mr HARTNOLL:
Tasmania

– I have no desire, even in the remotest degree, to be regarded as an upholder of the principle of protection. But I can see a very reasonable distinction between the principles of protection and the creation in this or any other community of a large number of Oliver Twists who are everlastingly crying out for more encouragment to their various industries. In. this particular instance it appears to me that it would be a wise thing for the State to come forward in a liberal manner, and make a strenuous effort to encourage natural industry. I have listened with a great deal of interest to the address of the honorable and learned member for Bendigo, and it appeared to me he advocated that, in lieu of the system proposed by the Government, similar encouragement to that offered to the Maffra Sugar Company should be given to this particular industry. In other words, a certain sum of money should be advanced by the State, and those connected with the development of any scheme of this description should in future repay the amount of the advance. To my mind what is provided for in this Bill is an infinitely better commercial transaction. All that the State is asked to do is to say to” a certain number of investors or capitalists - “Bring your capital here j establish in our midst extensive works, and when you produce an article of a certain recognised quality, then we, as the controllers of the State finances, will give you a certain sum for every ton of ore you produce.” That appeal’s to me to be a perfectly satisfactory and safe business transaction. Let me remind the honorable and learned member for Bendigo that about 30 years ago certain speculators and investors in Victoria, with the assistance of Tasmanian capital, established works at Ilfracombe. They spent about £100,000 in the purchase of the most modern machinery. They had a very large deposit of ore to deal with, but when they commenced operations it was found to contain a large quantity of chrome, which at that particular period was a product which prevented malleable iron from being manufactured. In fact, what they manufactured at that time was steel, and, as there was not sufficient inquiry for steel, as against malleable iron, the whole undertaking fell to the ground. Thus £100,000 was lost to the shareholders, the machinery was sold, and what might have been the scene of a flourishing industry is to-day a waste. Such a result might follow from the undertaking now proposed, though I do not think for a moment that it will. I have seen the immense deposit of iron at the Blyth River, and I know, from analysis, that it is of good quality. Everything points to the fact that if capital were invested in this enterprise the industry would be successfully established. Under the proposal of the honorable and learned member for Bendigo, if the State advanced £100,000, or £200,000, it would be incurring a serious risk, whereas, in the Bill under consideration, the Commonwealth take no risk whatever.

Mr Kingston:

– The State pays only on the actual product of good quality.

Mr HARTNOLL:

– We may bring into the community additional wealth by enabling people to utilize a mountain of iron ore which at present is of no good to any one. If that mountain can be made to produce material which will enable our railways to be extended by hundreds of miles, it will be of enormous advantage to the community as a whole. We are all interested in giving reasonable encouragement to our natural industries, and there is no product which can give such an impetus to wealth as can iron. The iron and coal industries are regarded as having made England the great commercial centre she is to-day, and with the magnificent deposits of coal in New South Wales, and the enormous deposits of high class iron ore in Tasmania, we shall have the wealthiest State and the smallest State joining hands as great wealth producing agencies in the Commonwealth. I hope that the measure will not be postponed. It is suggested that the industry should be taken up by the States : but we live in a practical age, and we know perfectly well that none of the States would venture on such an undertaking. All such industries must be developed by private capital and enterprise, and we have to face that self-evident fact. According to some honorable members, the Bill ought to be referred to a select committee, but such a course would elicit precisely the same kind of information as that which is available at present, and would simply shelve the question. The first and

Only question is whether or not the industry is worthy of encouragement by the Commonwealth j and if we have any reasonable belief that the deposits of coal and the enormous mountain of high-class ore in Tasmania can be profitably worked-

Mr McDonald:

– There are dozens of mountains of ore in Queensland.

Mr HARTNOLL:

– All the better; it does not matter whether the mountains of ore are in Queensland or Tasmania, so long as this highly desirable industry is established within the Commonwealth. Although I am only a recently elected member in this Chamber, none will give more generous or fuller support to undertakings of this description. I hope we shall grapple with the question as it is presented to us, and support the measure if we believe it will prove a source of wealth in the future. There are provisions in the Bill .which in committee I may not be able to fully support. I should have liked to see the Minister for Trade and Customs propose some encouragement to the production of oil from the shale deposits in Tasmania. The honorable member for Tasmania, Sir Ed ward Braddon, has suggested that in this direction assistance might be rendered to the amount of £3,000 ; and that is just about the sum which the company interested would have to pay as duty on the necessary machinery. If the Minister could see his way to .afford some small encouragement of the kind he would receive the thanks of the smaller States of the Commonwealth. I have much pleasure in supporting this Bill, and I hope the amendment of the honorable member for Bland will not be regarded as worthy of support.

Debate (on motion by Mr. G. B. Edwards) adjourned.

page 13473

SOUTH AFRICAN WAR

Declaration of Peace

Mr SPEAKER:

– I have received the following letter from His Excellency the Governor-General, under date 6th June, 1902 :-

In acknowledging the receipt of your letter of the 3rd instant, So. 1902/140, I have now the honour to forward, for your information, the subjoined copy of a telegraphic despatch which I have this day received from the Secretary of State for the Colonies : -

His Majesty the King, His Majesty’s Government, and British people have received with much satisfaction resolutions of Commonwealth Parliament conveying cordia congratulations on termination of war.

page 13474

ADJOURNMENT

Discharge of Naval Employés

Motion (by Sir William Lyne) proposed -

That the House do now adjourn.

Mr MAUGER:
Melbourne Ports

– I desire to bring under the notice of the Government a matter of considerable importance to a large number of persons in the employ of the Commonwealth. When the Defence Estimates were being discussed a number of honorable members urged that unless they had some control over the proposed economies, those in the lowest grades of the military service would be the first to suffer. I am sorry to say that the economies are working in that direction. A number of men in the Naval department have received notice that after the 30th June their services will be no longer required. These notices appear to have been issued quite irrespective of the time men have been in the service, or whether they are married or single. Not only are married men being discharged simply on the ground that their time has expired, but also men who have volunteered and served in China. These latter men were absent in China when they should have been resworn, and because they were not here they are receiving no consideration. The Minister for Defence ought to look into this matter, and I am sure he will have sympathy not only with the married men, but with those who have served the Empire abroad. It has been urged here and on the public platforms - we have even called poets to our assistance to. strengthen the opinion - that the men who have risked theirlives for the Empire should have their positions kept open for them. It has been urged that the Empire is under a debt of gratitude to them.

Mr Conroy:

– I thought the honorable member was against all war.

Mr MAUGER:

– This is not a question of peace or war, but of common justice.

Mr Conroy:

– Are men to be kept on if there is no need for them?

Mr MAUGER:

– If reductions are to be made they should be made on a scientific basis. We are now in the midst of winter, and in a very dull season so far as shipping business is concerned. Many of these men are married, and have families. I am anxious to impress on the Minister that he should consider the matter in this light, and that, wherever it is practical, married men should be given the preference. I know that it is difficult to retrench at any time, but it certainly is unfair to the naval branch of the service that it should be made to suffer in an undue proportion. The House instructed the Government to retrench the Military department to the extent of £130,000 per annum, but the naval branch of the service seems to have been subjected to 40 per cent. of the retrenchment.

Mr Thomas:

– Does not the honorable member believe in retaining the most competentmen?

Mr MAUGER:

– I do, and for that reason I advocate that these reductions should be made on’ a scientific basis, and that the Minister should not discharge men who simply happen to have served their time.

Mr Wilks:

– It is always the way when block reductions are made.

Mr MAUGER:

– If we are to have block reductions, length of service and the consideration whether men are married or single should be taken into account. But no consideration appears to have been given to any scientific principle upon which these reductions should be made. I do not intend to cite individual cases, but I can assure honorable members that there are cases of genuine hardship in connexion with these dismissals. There are men who have been receiving 6s. a day and who find themselves suddenly deprived of their livelihood, with no chance of obtaining employment at the present juncture. Many of these men have wives and families’ depending on them. I will hand over to the Minister the list of men which I hold in my hands, and ask him whether steps cannot be taken to make the proposed reductions bear more equitably. It is well known that I do not advocate reductions of salary because men are in high and responsible positions, but I do say that when reductions have to be made they should be carried out in such a way as will cause the least suffering. That is all that I am asking to be done in this instance. I recognise that retrenchment is necessary, but I again urge that the interests of married men with families at this particular juncture should be taken into serious consideration. I earnestly and sincerely urge the Minister to pay attention to this point of view. I am sure he is in sympathy with me, and that he will see what can be done to save the married men rather than single men, the latter being better able to find employment elsewhere.

Sir WILLIAM LYNE:
Minister for Home Affairs. · Hume · Protectionist

– The honorable member for Melbourne Ports has certainly submitted a very important matter for my consideration. It is a matter withwhich there is very great difficulty in dealing. In carrying out retrenchment it is almost impossible to please every one ; and I recognise that a rather difficult task has been left to me to perform. The House has decided that £131,000 shall be taken off the military Estimates, in which, of course, are included the naval branch of the service in the various States. Certainly the recommendations that up to the present time have been madeto me savour very much of terminating theconnexion with the service of those men whose time is justabout expiring. They have been token on, I understand, for a certain period, and in nearly all cases where the time, of men is about expiring it is recommended that they shall not be re-engaged.

Mr Mauger:

– It is purely an accident that the time is expiring at this particular juncture.

Sir WILLIAM LYNE:

– I am not prepared to say whether it is an accident, but certainly no claim can be made in connexion with those men whose time is expiring. If they are engaged for a certain time it cannot be said that they have a claim when that time expires. Otherwise, they might as well be engaged continuously. But I do agree that, if it is possible to retain the services of married men, they should be retained, other things being equal, in preference to single men. I presume, however, that the single men are more active and better fitted to carry out work they are called upon to do.

Mr Mauger:

– It will be found that some of the most capable men and officers are being discharged.

Sir WILLIAM LYNE:

– I am doing the best I can to make full inquiries, but I must confess that to inquire into every branch of a service with which I have hitherto had nothing to do is rather a gigantic task for a Minister to undertake. I must depend, to some extent, on the representations made to me by my officers and the heads of the different branches. I may lay down rules and principles, but in the carrying out of them I must depend, to a large extent, upon the officers. But what I wish is, that the retrenchment should not all fall upon the lower ranks. The officers will have to bear their fair share of retrenchment. As far as the recommendations have gone up to the present time, I think the officers do bear their fair share. I have taken the trouble to find out the percentage of reductions affecting officers and men respectively. I certainly do not want to find that a small percentage of officers have been retrenched as compared with a large percentage of men. I mention that in order to give a little confidence to the men that they will not be ruthlessly discharged, or retrenched, without some good reason being shown. The measure is receiving my very careful consideration, and the consideration of the members of the Government. I had hoped to get it settled before now ; but I do not think it possible to get the matter absolutely settled by the 30th of this month. Next year’s Estimates will be framed in accordance with the reductions the House has desired to have made; but I confess thatit will take two or three months to complete the arrangements to meet the demands of the service for next year. I mention this to honorable members now, because I wish it to be understood that I do not think it possible to have all retrenchments effected before the 30th June next. Some little time must be given for changes to be made. The honorable member can quite understand that my sympathy is with the remarks he has made. I shall make further inquiry ; but I cannot undertake to make a thorough inquiry into every branch of the service, and in respect to every name which is submitted to me to deal with.

Question resolved in the affirmative.

House adjourned at 10.33 p.m.

Cite as: Australia, House of Representatives, Debates, 10 June 1902, viewed 6 July 2017, <http://historichansard.net/hofreps/1902/19020610_reps_1_10/>.