House of Representatives
17 June 1902

1st Parliament · 1st Session



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

page 13744

QUESTION

CORONATION ADJOURNMENT

Mr KING O’MALLEY:
TASMANIA, TASMANIA · IND; ALP from June 1901

– I desire to ask the Minister representing the Prime Minister whether it is intended that the House shall adjourn for three weeks, including the holidays in connexion with the Coronation celebrations - in other words, for a period sufficient to enable honorable members to reach their homes. I wish to go to Tasmania.

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

– I hope to he able to make a statement to the House on this subject at the conclusion of this sitting.

page 13744

OPENING OF COMMONWEALTH PARLIAMENT

Mr McDONALD:
KENNEDY, QUEENSLAND

– I wish to know from the Minister representing the Prime Minister, whether the Government have Agreed to purchase from the Commonwealth Publishing Company, a picture representing the opening of the Commonwealth Parliament by H.R.H., the Duke of Cornwall and York.

Mr DEAKIN:
Protectionist

– The Government have not agreed to purchase from the Commonwealth Publishing Company, or any other company, any picture whatever. Some company, of which I do not remember the name, but for which Mr. Tom Roberts is acting as the artist, has offered to present a picture to the Commonwealth. We have gladly accepted it, but the Government have not agreed to purchase any picture.

page 13744

PUBLIC SERVICE APPOINTMENTS

Mr KIRWAN:
KALGOORLIE, WESTERN AUSTRALIA

– I desire to direct the attention of the Minister for Home Affairs, to a matter which has been prominently referred to in the Age during the last day or two. Is it true that political patronage is rampant in connexion* with the appointment of the public service inspectors ; is the Minister aware of any combination of honorable members with a view to furthering the claims of any particular candidates; and will he give the House an assurance that the appointments to the positions referred to will be made in accordance with merit, and without any regard to political influence 1

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

– I have seen the paragraphs to which the honorable member refers, and I can assure him that the information is not correct. Considering the number of appointments that have to be made, I am surprised that I have not been spoken to by honorable members with reference to candidates. I have scarcely been approached in the matter, and, so far as I am aware, there is no combination of honorable members to advocate .the claims of any candidate.

Mr KIRWAN:

– Will the Minister give the House an assurance that the appointments will be made upon the merits of the candidates, and without any regard to political influence?

Sir WILLIAM LYNE:

– I scarcely think it is necessary to give such an assurance. I have handed over the applications to the ‘Public Service Commissioner, and I presume that as far as possible his recommendations will be carried out in all cases.

Mr O’MALLEY:
TASMANIA, TASMANIA

– I desire to know whether there is any law to prevent an honorable member from recommending for appointment any civil servant in his own State whom he believes to possess merit ?

Sir WILLIAM LYNE:

– Certainly not If the honorable member knows of a good man, whether lie be in the service or outside of it, he ought to bring him under the notice of the Minister.

page 13745

IMMIGRATION RESTRICTION ACT

Mr WATSON:
BLAND, NEW SOUTH WALES

– I wish to know whether the Minister representing the Prime Minister can give the House any information with respect to the number of permits issued by the States Governments to Chinese who have still to return to Australia. In to-day’s Argus it is stated that some eleven Chinamen have just come here on permits which were issued by the States Governments some time ago. It would be interesting to know how many of these permits are still outstanding.

Mr DEAKIN:
Protectionist

– I hope to be able to give the precise information to the honorable member within a few days. It is now some weeks since we wrote to the various States Governments asking to be informed of the number of permits issued to Chinese who had not yet returned. To that request we have received an answer from the Victorian Government only, and honorable members will probably be surprised to learn that three weeks ago there were no less than 550 permits which had been issued by that State still outstanding. It is understood that in New South Wales few, if anypermits have been issued in recent years. A number have been issued in Queensland, comparatively few in South Australia, and some unknown number in Western Australia. However, the full particulars will be to hand very shortly, and will be laid before the House. Honorable members will understand that on the passing of the Immigration Restriction Act, restrictions were imposed, so far as Chinese were concerned, in addition to those existing under the Chinese Exclusion Acts of the various States. In January, of this year, all the States were requested not to issue any more permits under their Acts, and at the same time it was intimated that those which had already been issued would be honoured by the Commonwealth. It was not then supposed, for a moment, that the number of permits issued would have reached such numbers as I have mentioned.

Mr Watson:

– I suppose no permits issued after January will be honoured ?

Mr DEAKIN:

– None.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Has the attention of the Minister representing the Prime Minister been directed to a remark made by a police magistrate in Queensland in connexion with a case arising under the Immigration Restriction Act. The magistrate stated that he had tried to obtain a copy of the Act, but had failed to do so. Will the Minister see that copies of the Act are supplied to all stipendiary magistrates 1

Mr DEAKIN:

– I understood that that had been done. We have largely increased the supplies of our Acts to the various States, and have relied upon the States departments to distribute them. I have no reason to suppose that they have not fulfilled their duty in this ‘respect. I know that a large number of Acts have been supplied.

page 13746

QUESTION

SOUTH AFRICAN WAR MEMENTOES

Mr WATSON:
for Mr. Mahon

asked the Minister representing the Minister for Defence,upon notice -

  1. Whether certain members of the5th Western Australian Mounted Infantry received, through Major Darling, D.S.O., before leaving Capetown, a message from Lord Kitchener to the effect that they would be permitted to retain their rifles us mementoes of their services in South Africa?
  2. Whether on arrival in. Australia the members of this contingent were compelled by Colonel Campbell to deliver up their rifles to the Military Department?
  3. If satisfied that Lord Kitchener gave the undertaking referred to, will the Minister direct that it he honorably carried out?
Sir WILLIAM LYNE:
Protectionist

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

  1. After the return of Captains Darling and Campbell, and on their report that they understood before leaving South Africa that the rifles were given to the men as curios of the campaign, the Commandant of Western Australia cabled to the authorities in South Africa enquiring if such were the case. In reply, a cable was received stating that the arms in the possession of the 5th and 6th Western Australian Mounted Infantry were the property of the State, and were not given to those units as curios, although they were not withdrawn compulsorily on embarkation.
  2. Yes.
  3. See reply to No. 1.

page 13746

QUESTION

BACCHUS MARSH RIFLE RANGE

Mr CROUCH:
CORIO, VICTORIA

asked the Minister representing the Minister for Defence,upon notice -

  1. If he is aware that the Bacchus Marsh Rifle Range has been closed for nearly four months ?
  2. When will the range again be open for practice ?
  3. What position are those members of the rifle clubs in who, owing to rifle ranges being closed, have been unable this year to complete their musketry course ?
Sir WILLIAM LYNE:
Protectionist

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

  1. Yes. The Range was closed in February last on the ground that it was, in the opinion of the Commandant of Victoria, absolutely unsafe for the use of the.303 rifles.
  2. As the site is considered an unsafe one, this range will probably not be opened again.
  3. Those who fail to complete their musketry course would lose their allowance of free ammunition, viz.: - 200 rounds per member. The General Officer Commanding points out, however, that the members of the Bacchus Marsh Club could have completed their musketry course on a neighbouring range without expense.

I think the range was closed on the recommendation of the honorable and learned member for Corio.

page 13746

QUESTION

DUTY ON CONDENSED MILK

Mr MAUGER:
for Mr. Watkins

asked the Minister for Trade and Customs,upon notice -

  1. Is it a.fact that in New South Wales duty is collected on 45 lbs. in each case of “Gold Medal” condensed milk, whereas in Victoria duty is only collected upon 43½ lbs. in each case?
  2. If so, will he see that this anomaly is adjusted, and that justice is done to each State?
Mr KINGSTON:
Minister for Trade and Customs · SOUTH AUSTRALIA, SOUTH AUSTRALIA · Protectionist

– The answer to the honorable member’s question is as follows : -

It is a fact that a want of uniformity has been discovered in the computation of the weight. Also in the. particulars of the invoices, some of which invoices expressly refer to the tins as 1 lb. tins. This anomaly is in course of rectification. It is considered that whether or not the invoices refer to the weight the goods are sold, and prepared for sale, and are reputed to be, 1 lb. tins, and are so bought by the public. For the protection of the revenue and of the public against short weight, it is intended to charge on the weight which the public believe they are getting, in accordance with section 136 of the Customs Act 1901, in all cases to which this section applies.

I may add that I find that the newest form of competition is not a reduction of price, but a reduction of the quantity of goods supplied to the public. We do notthink we ought to favour that sort of thing.

page 13746

QUESTION

NAVAL AND MILITARY PENSIONS

Mr CROUCH:

asked the Minister representing the Minister for Defence, upon notice -

  1. Whether the Government propose to grant any pension or compensation to those members of the naval and military forces who are shortly to be retired on account of old age or for any other reason ?
  2. Whether he can assure the House that all ranks will be similarly treated in this direction ?
Sir WILLIAM LYNE:
Protectionist

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

  1. I shall consider this question with a desire to carry out some such policy.
  2. I have asked the Commandant to make a recommendation with regard to the men as well as the officers.

I may say that a recommendation has already been made, and will be submitted for the consideration of the Cabinet with a view to asking the House to deal with this question, because it seems that there will be great hardship in many cases.

page 13747

QUESTION

RETRENCHMENT : QUEENSLAND DEFENCE FORCES

Mr WILKINSON:
MORETON, QUEENSLAND

asked the Minister representing the Minister for Defence, upon notice -

  1. Whether the Queensland Government has requested the disbandment of the 4th Queensland Regiment ?
  2. Whether it is the intention of the Commonwealth Government, in pursuance of their scheme of retrenchment in connexion with the Defence Force, to disband that regiment ; and, if so, will the Ipswich, Boonah, and Lowood companies be attached to any other regiment ?
Sir WILLIAM LYNE:
Protectionist

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

  1. No.
  2. The General Officer Commanding the military forces of the Commonwealth has recommended as a part of the scheme of retrenchment in Queensland that the 4th (Darling Downs) Regiment shall be disbanded. The infantry companies mentioned, being a portion of the 4th Regiment, are included in the foregoing recommendation.

page 13747

QUESTION

TEMPORARY EMPLOYÉS OF THE COMMONWEALTH

Mr TUDOR:
YARRA, VICTORIA

asked the Minister for Home Affairs, upon notice -

Whether he will instruct the Public Service Commissioner, in making appointments to the public service, to give effect to the promise made by the Minister when the Public Service Bill was before this House, that temporary employes who had been in the employ of the departments for some time would have the preference when any permanent appointments were to be made ?

Sir WILLIAM LYNE:
Protectionist

– Will the honorable member say when such a promise was made, and, if so, where it is to be found ? Though anxious to give the application of employes referred to favourable consideration, I cannot remember ever definitely promising that no other applications would receive consideration. I may tell the honorable member that the applications will receive every consideration. I feel, however, that where we find people with bright intellects and highly qualified outside the service, it is to our advantage to secure them.

page 13747

LOAN BILL

Second Reading

Debate resumed from 10th June(vide page 13436) on motion by Sir George turner -

That the Bill be now read a second time.

Mr THOMSON:
North Sydney

– As the mover of the adjournment of the debate upon thisBill, it is not my intention to detain the House at any great length. I recognise that we have now reached a stage at which it is alike in the interests of honorable members and of the Government that we should deal with the remaining business with as little discussion as possible. To me there seems to be two issues involved in this measure. The first is whether at this stage we should borrow at all, and the second whether the purposes for which we propose to borrow are those which properly come within the scope of a Loan Bill. The latter issue can be best dealt with when the Loan Appropriation Bill is under discussion, and therefore I intend to confine my remarksto the question of whether we should at this stage enter upon a career of borrowing. I quite recognise the strength of the arguments that have been used against unnecessarily or unduly expending loan moneys, and against duplicating the borrowing which is going on extensively in some of the States. I feel that we are old enough to realise the effects of that legacy of debt which our predecessors have left to posterity, and we know that those effects are constantly being added to by the freedom - “ recklessness “ would perhaps be a better word to employ - with which borrowing is conducted in some parts of the Commonwealth. For these reasons, unless I could see that under the financial conditions imposed by the Constitution we must either borrow or place the departments at a standstill, I should be very reluctant indeed to support any proposal for entering upon the money market to-day. I feel that we have lost at any rate our first opportunity to avoid borrowing. If my memory serves me accurately, when the Treasurer brought forward his financial proposals in October last he anticipated that, after meeting the requirements of the Commonwealth out of our one-fourth share of the Customs revenue, he would have a surplus of something like £500,000. That was the time to have prepared for the prevention of borrowing. Had he then recognised that unless the whole of that money was appropriated by the Commonwealth for some particular purpose it would have to be distributed month by month amongst the States,, we might have acquired a sufficient sum to render the present Bill, which provides for borrowing £600,000 odd, unnecessary. However, we did not do so. What is the result 1 The balance of the Commonwealth’s share of Customs revenue has gone into the coffers of the States, and has been expended by them.. That fact not only prevents us from making use of it in order to avoid the necessity for borrowing, but it has also exercised a bad effect in that the States now regard the sum provided by the Treasurer as likely to be forthcoming for their future wants. Consequently if we withdraw that revenue, we shall, to that extent leave them in the lurch. If we do leave them in the. lurch, will not their deficiencies - for almost all of them have deficiencies - be increased, and shall we not avert borrowing ourselves merely by compelling them to borrow ? That is one aspect of the question. But it may be said that, whilst our initial opportunity has been lost, we have still before us the coming year, and that profiting .by our experience we may appropriate the balance of our share of Customs revenue for the purposes for which it is now proposed to borrow. Can this be done 1 I entertain very grave doubts upon the question. In the first place, we do not yet know in what form the Tariff will be finally passed, and, therefore, we cannot estimate with any probability of accuracy the revenue which it will yield. We have further to recognise that in two of the States, at any rate, very serious conditions exist - conditions which must certainly affect their revenue during the coming year, and perhaps, also, during the subsequent year. The drought in New South Wales and Queensland has not yet seriously decreased the volume of their importations, but nothing is more certain than that if their exports are considerably reduced, their imports will shrink. Our only hope that this contingency will not arise must be based upon the hope that there will be a sufficient rise in wool, values in the markets of the world - especially in the price of merino wool - to counterbalance the deficiency in the quantity exported. If such an increase in wool values occurred it might create a large fall in revenue, but we cannot prognosticate the future of the wool market with any certainty. Then we have to consider that the .Constitution provides that the Commonwealth shall take over certain departments which have not yet been transferred. For instance, it must assume control of light-houses, quarantine, &c., which are spending departments, and not to any extent revenue-producing. Another important question which has yet to be settled is the method by which payment is to be made for the buildings already taken over by the Commonwealth in connexion with the transferred departments. The States appear to be very strong in their desire to be relieved of a portion of their debts equivalent to the value of their buildings, and if they succeed in obtaining their desire - or even if the adjustment proposed by the Ministry takes place - the Common-wealth will have to provide for the payment of a considerable sum in interest. The question therefore arises “ Can we meet all these necessities out of our one-fourth share of the Customs revenue, whilst the Braddon clause” - which contains some good, but also some ill - “continues to hamper our operations ?” I do not think so. By so doing we should inevitably paralyze the departments, and desirous as I am that we should avoid borrowing I could not contemplate the possibility of the Commonwealth taking over great commercial departments like the Pos’t-office, and not only failing to administer them as effectively as they were conducted by the States, but actually running them to a stand-still. These are questions upon which I wish to to satisfied, and at a later period - possibly when the committee stage is reached - I should like the Treasurer to give us certain information. I should like him to tell us what has been the monthly net revenue and expenditure of the Commonwealth since its establishment, in order that we may see what balance’ of our onefourth of the Customs revenue is available.

Sir George Turner:

– That information would not be of much use, because all the heavy payments have to be made this month.

Mr THOMSON:

– If we had the figures for the whole period, and an estimate for this month, they would certainly be something in the nature of a guide. They would also enable us to see the effect upon the revenue of certain duties which were remitted by this House. Honorable members would then be in a position to judge whether we are able to do without borrowing for the purposes specified in this Bill, or whether the £50,000 or £100,000 a month - at which rate, I presume, this expenditure will take place - can be provided for some months out of revenue. It is my intention to vote for the second reading of the Bill so that this information can be supplied in committee. If the Treasurer can show that he will not have a sufficiency of revenue to provide for these necessities after deducting the expenditure of the Commonwealth from the onefourth of the Customs revenue, there will be no reason for us to authorize borrowing. If we could settle this question once and for all at the present time - no matter what the temporary inconvenience might be - I should now refuse my assent to the Government proposal. But I recognise that if the matters to which I have alluded are in the near future to absorb the whole of our fourth share of the Customs revenue, any postponement of borrowing will not overcome the difficulty. We should have to face it at a comparatively early stage, when the absorption of ‘ all our share of the revenue took place. Consequently, as I say, this is not a temporary question. If it were merely a temporary difficulty we ought to face it now. But if we have to meet the same difficulty some little time hence, when the whole of our revenue is absorbed, and there is no provision for items such as these, then we face the whole situation now. That is all I have to say on the question of borrowing, and any further remarks will be devoted to the question of the sinking fund. The Treasurer seems to have greater faith in the efficiency of sinking funds than have many honorable members.

Mr SPEAKER:

– The honorable member will perceive that he is going beyond the matters provided for in the Bill, and is now discussing a question which will arise in connexion with Order of the Day No. 3.

Mr THOMSON:

– The allusion I have made may be a little outside the Bill, although I think I can put it in order by pointing out what effect a sinking fund will have in connexion with the loan. The Treasurer, in introducing the Bill, said-

Mr SPEAKER:

– The Treasurer was introducing another measure, which I cannot allow to be discussed now.

Mr THOMSON:

– I do not wish to transgress any of the rules.

Sir George Turner:

– I shall not proceed in committee with any one Bill until we have passed the second reading of the three.

Mr THOMSON:

– It was merely to save time that I referred to the cognate subject of a sinking fund. However, I can leave my remarks on that subject to a later stage. At any rate, the question we have to face is borrowing or no borrowing. If I could see my way perfectly clear to refuse to borrow under any circumstances, I should vote against the second reading of the Bill, being fully impressed with the desirability of the Commonwealth not adding to the borrowings of the States if that step can be avoided. But I desire further and fuller information from the Treasurer before deciding whether to accept, reject, or try to modify the Loan Bill, and in the meantime shall vote for the second reading of the Bill, awaiting the committee stage as the most convenient for obtaining that information.

Mr. HIGGINS (Northern Melbourne).I did hope that at the start of the Commonwealth we should have begun to act on something like sound financial principles - that we should not have fallen into the same haphazard, hand-to-mouth methods which have hitherto been adopted in all the States. We have before us in the near future great undertakings, and yet here we have before us a little bit of a Bill - that is, little in comparison with what we must expect in the future - providing for the borrowing of £1,000,000 in order to make additions and improvements to post-offices and telephone switchboards. The £1,000,000 includes provision -

For repaying into the Commonwealth Consolidated Revenue Fund any sums before or after the commencement of such Act expended on any such public works, buildings, or undertakings, or matters connected therewith.

I have always found great unwillingness on the part of Treasurers to meet out of revenue any expenditure connected with buildings or works ; but here we go a step further, and having actually spent some money out of revenue, we provide, in fear that we shall be virtuous even to that small extent, for repaying the revenue from borrowed moneys.

Sir George Turner:

– I have had to finance, out of the Treasurer’s advance, to the extent of £40,000 or £50,000, some works which were imperative ; and the clause referred to enables that money to be paid back into revenue.

Mr HIGGINS:
NORTHERN MELBOURNE, VICTORIA

– That is exactly what I say. The whole system of borrowing for works of the sort is a mistake. Of course, it is said that we are a new and progressive country, and that it is, therefore, impossible for us to avoid borrowing. ^ But I suppose it will be admitted that for the last 30 or 40 years Japan has been a progressive country, which, in addition, has had to meet the expenditure of a big war. Japan has had to build a large navy, and in modern times there is nothing so expensive. But how does Japan stand ? In that country there are 44,000,000 people, and their existing debt, including that of the war, is £50,000,000. During the last 32 years Japan has repaid £11,000,000 of the principal of their debt, and of the remaining debt some £20,000,000 is represented by remunerative works. We, apparently, never think nowadays of paying back any principal. In Japan the people are lightly taxed ; there are small taxes on wine, spirits, and tobacco, but none on tea, silk or beer.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Where “ does Japan get her revenue 1

Mr HIGGINS:

– Japan gets revenue without that kind of taxation. The claim that a young country must borrow is not justified by facts or experience. Canada is quite as progressive a ‘ country as is Australia, and the public debt of the Dominion is hardly equal to that of Victoria alone, namely, about £50,000,000.

Mr Conroy:

– The cost of the railways must be deducted from the public debt of Victoria.

Mr HIGGINS:

– There are hosts of matters to be considered.

Mr Thomson:

– Does the public debt of Canada, as mentioned by the honorable and learned member, include the States’ debts 1

Mr HIGGINS:

– It is the whole of the Federal debt.

Mr Thomson:

– But the States’ debts.

Mr HIGGINS:

– I am simply dealing with the debt of Canada as a whole ; but honorable members will find that the States’ debts in the Dominion are far less in proportion than those of the Australian States. I have looked into this matter somewhat closely, and I find that all financial writers agree that there is no country in the world with such a heavy debt in proportion to population as has Australia. Even after allowing for all the public works, it is found that Australia is the most heavily burdened country in the world in proportion to population.. Of course we have to take facts as they are ; but I did hope that when we started federation we should refuse to pursue the same old thriftless, shiftless course which the States have followed. No one will deny that there have been good works carried out by the States.

Mr Poynton:

– Has the Commonwealth Government of Canada to hand back threefourths of the revenue to the States?

Mr HIGGINS:

– Of course not.

Mr Poynton:

– That makes a difference.

Mr HIGGINS:

– I hope I shall be allowed to follow my own track of argument, whether it be right or wrong. I have not had time to get all the figures here necessary to answer every question, but if we take the public debts of Canada, both Dominion and State, we shall find that her liabilities per head are nothing compared with those of the Australian States.

Mr Watson:

– Does the Canadian debt exclude the cost of the railways ?

Mr HIGGINS:

– Yes; the State railwaysThe question now before us seems to me of infinitely more importance to our future than that of the Tariff. The Tariff is very important to individual industries, and to the flow of trade ; but this Bill, which we are apparently asked to pass without much debate, involves a question which transcends in importance, all other questions, including that of the Tariff. The theory is that this borrowing is for the relief of the taxpayer - that the present taxpayer ought not to be compelled to bear the whole burden of that which is of permanent use to the country.

Mr Bamford:

– Does the honorable and learned member mean that the maintenance of public buildings ought to be made a burden on posterity ?

Mr HIGGINS:

– I do not think that posterity ought to pay for the maintenance of public buildings, and the honorable member has hit one of the main flaws in the Bill. These proposals, if we only grasp exactly what they mean, are really maintenance proposals. No doubt they are proposals for the improvement of buildings, but, at the same time, we can improve a building in a way which really saves us the cost of repairing it, and enables to throw on loan moneys burdens which ought to be borne by revenue. Good work has been done inV ictoria in regrading the railways out of loan moneys, and the way in which that was done saved the year’s revenue from liability for maintenance, the regrading including the keeping of the rails and the permanent way in good order. As I was saying, the whole theory is that this borrowing is a relief to the taxpayer. But even supposing that all the works which have been done out of loan money had been done out of revenue, the taxpayer would not have paid one penny more, and we should not have had any debt. I had the advantage a few years ago, through the kindness ofthe present Treasurer, of having a statement laid before the Victorian Parliament showing the interest and expenses in connexion with our Victorian debt up to the end of June, 1898. At that time the Victorian debt amounted to about £48, 000, 000, and about£40,000, 000 had been paid in interest upon it, while the expenses of flotation, including brokerage and discount, had amounted to over £500,000. Now, however, the amount of the Victorian debt is actually less than the amount of interest which has been paid upon it, so that the poor taxpayers, whom it was proposed to relieve, have had actually to pay more interest than the principal which has been borrowed, and, to put an extreme case, if we had paid for all our works and built our railways . with revenue, we should have had no more to pay, and we should not be owing the amount which we are now owing.

Sir William McMillan:

– But the public works have earned the interest upon the debt.

Mr.HIGGINS. - I am sorry that the orthodox parties in this House do not seem to realize our financial position. Though we all deprecate borrowing, and are very sorry that loans have to be raised, we still give our consent to them. It is now proposed to borrow £1,000,000. Having regard to the present state of the London money market, it is probable that, while we give bonds for £1,000,000, we shall receive only £940,000 in cash, and we shall have to pay 3 per cent., or £30,000 a year as interest in perpetuity. There area host of requirements for which, as a civilized community, we should provide, but we are unable to do so because so much of our revenue goes to pay interest. I do. not know how it is in other States, but I know that in Victoria there is a strong movement in favour of better technical and other education. Still, as we have not sufficient revenue, we must cut down our expenditure in those directions. We should also do something in the matter of prison reform, but we have not the money. No matter how useful a thing may be, we are told that there is no money for it, and the revenue is more and more reduced by the piling up of interest as new loans are floated. The argument that has been advanced is that it is not just and fair for the present generation to bear the cost of permanent public works. But that argument was used twenty or thirty years ago, with the result that they spent the money that we are earning now, and we are proposing to forestall and to spend what will be earned by people living twenty or thirty years hence. I feel that the argument has been pushed too far, and I want the House to recognise that many of the works for which we are borrowing are not permanent, though they may be quasipermanent, in the sense that there will always be something of the kind in existence. The courseof modern improvement is so rapid now-a-days that that which is useful to-day has become antiquated to-morrow. If we spend money on switchboards to-day, boards of an improved character, or, perhaps, an entirely different device, will be necessary a few years hence.

Mr Tudor:

– The report of the experts admits that one of these boards, which has been in use for only four years, is already old.

Mr HIGGINS:

– Quite so. The system of borrowing tends to prevent us from adopting new improvements. When we have spent loan money upon a particular asset, we do not feel justified in wiping out that asset to adopt an improvement, whereas if we had spent only revenue upon it, we should not have that scruple. Thus the borrowing system is a drag upon our progress, and prevents the adoption of improvements. The Treasurer, to make this pill as sweet as he can, has told us that he intends to establish a sinking fund. I like the idea of sinking funds, if they are likely to remain sinking funds ; but the Treasurer knows that £50,000 was, by the Ministry which succeeded his, taken out of the sinking fund which he established in Victoria three or four years ago.

Sir George Turner:

– That money was not taken from the sinking fund. It was money which had been put away to pay off trust funds which had been improperly used.

Mr HIGGINS:

– I understood that £130,000 had been set apart by Act of Parliament to liquidate a principal debt, and that £50,000 of the amount was taken to meeta deficit from revenue.

Sir George Turner:

– To meet liabilities falling due in two or three years time.

Mr HIGGINS:

– If the loan is raised, I shall support the sinking fund proposal for all it is worth, though I have very little faith in it. So long as you have a body which can borrow, and which can, by Act of Parliament, lay its hands upon a sinking fund, it will do so whenever it is in need. Even if the sinking fund is to be faithfully administered, it will not repay the principal until after 30 years, and in the rapid development of inventions, and in the changes which are likely to occur in a country like this during that period, the works for which the money has been borrowed will become out of date and unsuitable, and we shall have to borrow more to replacethem, and then to borrow again to replace them a second time, until we shall have three or four loans for the one asset. This subject opens up a great variety of questions. It opens up the whole questionof taxation. One cannot enter upon its consideration without looking all round about. A host of things have to be considered. For instance, we have to consider whether we shall place Queensland in a difficult position if we refuse to borrow. I believe that Queensland has been the most extravagant of the States in the amount of her borrowings per head of population.

Mr Macdonald-Paterson:

– That is a crude way of calculating the debt of a State. A more useful way is to estimate it according to the number of sheep carried, or to the miles of railway opened for traffic.

Mr HIGGINS:

– Taking the number of sheep depastured in Queensland just now, I should think that the debt of that State is even bigger still. I have nothing to say against Queensland ; I am simply mentioning a fact.

Mr Macdonald-Paterson:

– The practice of referring to a debt in relation to population has been abandoned even in London.

Mr HIGGINS:

– In the March number of the North American Review, a London writer of great ability still uses it.

Mr Macdonald-Paterson:

-People who speak in that way forget the territorial area.

Mr HIGGINS:

– I think that the money borrowed by a State should have relation to the size of its population rather than to the area of its territory. I have said that the orthodox parties do not appear to appreciate the danger of this borrowing system.

Sir William McMillan:

– No one has spoken yet.

Mr HIGGINS:

– The honorable member for North Sydney has given utterance to views which I suppose are those of his party.

Mr Thomson:

– No ; they are my own.

Mr HIGGINS:

– The honorable member’s view is, practically, that there should not be any borrowing, but that he will vote for the loan.

Mr Thomson:

– I have not said so.

Mr HIGGINS:

– I feel convinced that the party that will take up the finances of the Commonwealth, and work to establish a true financial system, will have a great future in our political history.

Mr Thomson:

– Can the honorable and learned member show how that can be done in view of the Braddon clause ?

Mr HIGGINS:

– Braddon clause or no Braddon clause, I say that this Bill ought to be rejected. The only party that shows the slightest appreciation of the danger of our present system of borrowingis the labour party, against whom all kinds of sneers are directed. I have seen one of the programmes of the labour party in Victoria, in which they declare themselves against borrowing, although, perhaps, not so strongly as I could wish. Sufficient attention has not been paid to the dangers we are incurring, and to the bad repute in which we stand in the financial markets of the world. I direct the attention of honorable members to what has been written by thoughtful men in London and America regarding the unsoundness of our financial system. According to a calculation made by Mr. Harold Cox, one-third of our revenue from taxation has to be devoted to the payment of interest on loans spent in works which were expected to be reproductive. As a Commonwealth, we have before us some very large undertakings. We have to create the federal capital, and a large demand will be made for money to pay the owners of . the land comprised in the site, and for the purpose of erecting the necessary buildings, and perhaps for creating a harbor. We also have to pay for the buildings which have been taken over from the States in connexion with the transferred departments. We shall have to take over some of the States’ debts, and eventually the railways will fall under our control. Great financial operations will have to be carried out in one form or another, and we may require to borrow £5,000,000, £8,000,000, or even £10,000,000 for the purpose of erecting the federal capital. I am speaking only of probabilities. If we acquire a large area for federal purposes, as we can do and ought to do, we shall probably construct a harbor, and the expenditure will be huge.

Mr Watson:

– The work would be very gradually carried out.

Mr HIGGINS:

– Yes ; but we have to prepare for all these things. It would be quite sufficient if the Treasurer were to come down with proposals for borrowing in connexion with large operations of that kind, and not for finicing works such as those which it is now intended to provide for. The fact is that we appear to be like a number of men who have borrowed as much as they can as individuals, and who have formed a limited company so that they may issue more debentures and go on borrowing. By our federation we have created a new borrowing machine over our heads.

Sir William McMillan:

– Have not we taken over certain services ?

Mr HIGGINS:

– Yes, we have. We have to consider the fact that the population of Australia, as a whole, is not increasing to the extent expected. I read recently a prophecy which was made by Sir Francis Bell before the Royal Colonial Institute, in London, in 1882. That prophecy has not been fulfilled. Sir Francis Bell thought that within twenty years from that dateby about this time - we should have had a loan indebtedness amounting to £200,000,000. So we have. He also thought that we should have about six times the population that we have. If we were sure that the population of Australia would increase in the ratio expected by Sir Francis Bell there might be some reason in borrowing, but Australia is increasing her population more slowly than almost any other new country in the world.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Everything is done to discourage an increase of population. Canada sends over to England for people.

Mr HIGGINS:

– I admit that pulling up is a painful operation, but we must pull up at some time, and the sooner the better. We are in the position of a man who has had too much liking for drink. He has to be pulled up sooner or later, and the sooner the better. >I do not know of any time better than the present for the Commonwealth. There is no financial authority in the world who does not laugh at our financial position. If he is friendly he shakes his head.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– They gave New South Wales the money she wanted ten times over last month. I do not know whether that is laughing.

Mr HIGGINS:

– They gave her the money at a considerable discount.

Sir William McMillan:

– At one-half per cent, less than the rate of the greatest borrowing power in the world.

Mr HIGGINS:

– Honorable members must see the absurdity of speaking like that. If the New South Wales loans are so very desirable why did they not fetch a better price ?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– My statement was made in answer to the honorable and learned member’s remark that the financial authorities of the world were laughing at us.

Mr HIGGINS:

– They may not laugh at our loans, but they laugh at our financial system. I think the honorable and learned member will agree with me that our financial system is’ not sound.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Hear, hear - I quite agree with the honorable and learned member.

Mr HIGGINS:

– The sooner we stop borrowing the better. No one wishes to embarrass the Treasurer or to cause inconvenience to the States, but the question is how are’ we to best, provide for the future ? It would be much easier for us to go on borrowing for present purposes as long as we could obtain money. It would be much more comfortable for us to give £1,000,000 worth of bonds and receive £940,000 in return, but having regard to the future of the Commonwealth and of the States, it would be well if the House were to determine that we should not raise any loans for the present. I intend, therefore, to vote against the second reading of the Bill.

Mr HUGHES:
West Sydney

– The honorable and learned member who has just sat down has very justly pointed out some of the evils of borrowing. The honorable member for North Sydney pointed out that, on the Treasurer’s showing, there was a surplus of £500,000 over and above the amount of money which had to be given back to the States. It is quite true that the Treasurer says - and I think he is to a certain extent justified in so saying - that there will be a less volume of imports next year, or as soon as the effects of the drought and general depression are felt to the fullest extent, and that, therefore, the surplus will diminish. It is only fair, however, to point out that hitherto the volume of imports in times of drought has been greater, or at least equal to, that of ordinary times, this being clue, of course, to the importation of borrowed money or its equivalent in goods. Therefore, it is fair to assume that the States will have recourse to fresh loans to cover their present distress and discomfiture, and that in the ensuing years there will not be an appreciable falling off in the volume of imports. There is no necessity to review the financial position of the Commonwealth at present. The Treasurer has fairly and ably done that, and it is clear that the financial system under which we work as provided for in the Constitution is at the root of a good deal of the trouble. It is one thing to admit that the financial system is bad, and quite a different tiling to realize that bad as it is it is not incapable of amendment. It seems to have been assumed that being there it must remain. The Treasurer says that a very clear line must be drawn between the old and the new works, but I am bound to say that I do not see in the list of works anything that could be described as reproductive.Coghlan differentiates between non - productive and reproductive works. According to that authority, a nonproductive work may consist of a bridge, a road, or a post-office ; whereas a reproductive work - such as a railway - is something upon which a toll may be levied - something which yields a direct return that can be devoted to paying off the outlay which it involved. Viewed from that stand-point, none of the works mentioned in the schedule can be described as reproductive. Telephones are reproductive in one sense, but if the additional instruments which the Government propose to purchase do not yield more revenue to the Commonwealth than telephones have returned under State management, it is evident that they will not provide the cost of maintenance, and interest upon the expenditure involved. The arguments which have been used against taking the money necessary to carry out these works out of the revenue are, of course, very cogent ones - the most cogent being the difficulty of raising a sufficient amount. At the same time it does appear to me that there is another way of dealing with this matter. Some of the works are very much more important than others, and upon the Treasurer’s own showing it is possible to construct a portion of them out of revenue. In this connexion the right honorable gentleman proposes to expend £440,000 out of revenue, and £600,000 out of loan.

Sir George Turner:

– The £440,000 includes £180,000 for buildings.

Mr HUGHES:

– I fail to see any works mentioned in the schedule which urgently call for the borrowing of money. I notice that additions are to be made to the General Post-office at Sydney, and to the post-office at Newcastle. I believe that the addition which is contemplated at Newcastle is the erection of a clock tower.

Sir George Turner:

– No. This money is to provide for the erection of a colonnade, tunnels, &c.

Mr HUGHES:

– I remember a question being put upon the business - paper in reference to this particular post-office tower. Anyhow the erection of such a tower forms a part of the Government proposal.

Sir George Turner:

– No. The proposed expenditure is for additions to the building.

Mr HUGHES:

– I do not consider any of the works set out in the schedule are urgently required. Neither in Newcastle nor Sydney has there been any increase of business to warrant special additions being made. It is quite true that a. number of the States have deficits, and that these deficits are likely to increase. But they will increase under any circumstances, and no effort has been made by the Governments to prevent them increasing. The Treasurer has declared that Victoria will have a deficit this year of £400,000. Next; year that amount will be increased. The right honorable gentleman adopts a peculiar way of attempting to assist the States in times of difficulty when he forbears to increase their expenditure out of revenue lest they should be compelled to resort to extra taxation and adds to their loan expenditure, thus causing them to pay additional interest, because each State has to pay interest upon works which are carried out in that State. For example, I notice that £20,000 is provided for constructing conduits in Victoria and £24,000 for telephone lines, (fee. All these tilings will have to be paid for by the Victorians themselves, with interest. If there is going to be a deficit, what provision is made for this increased expenditure ? Obviously none. The Treasurer’s idea is that we should borrow £500,000 annually for some years to come. For how many years does he suggest we should borrow, and what guarantee have we that the limit will not be overstepped ? Certainly we have none if we are to profit by past experience. Year by year the borrowing of these States has1 increased, and the figures showing the extent of our indebtedness are indeed extraordinary. Indeed, every financier of repute has pointed out that Australia is the giant debtor country of the world. In the Investors’ Review recently I read an article by a partial and hostile critic, who warns the English money lenders that the labour party here were likely to lead a cry for repudiation. I have been associated with that party for a good many years, and I have never heard even a suggestion in regard to repudiation. But the words which are finding an echo in the breasts, not only of labour representatives, but of all sensible men throughout the’ Commonwealth, are “ bankruptcy and ruin.” Our intentions and desire to meet our liabilities are as they ever were, but our capabilities sooner or later will be exhausted. Within the past five years I find that the revenue of Australia has increased by £4,364,000, whilst the expenditure has increased by£3, 100,000, thus giving an excess of revenue over expenditure of £1,264,000. But during that period the interest paid and payable by the States has increased toa much greater extent. The interest upon our public debt in 1900 amounted to £7,500,000, which is equivalent to 27 per cent, of our total expenditure. It represents 34 per cent, of our net revenue, because in many of the States money is received from land sales which is credited to revenue. In Victoria I believe that a certain portion is put aside as a sinking fund which is used for the purpose of constructing railways’, &c, but in the majority of the States, this money - which in 1900 amounted to nearly £2,000,000- is treated purely as revenue. Perhaps the most extraordinary figures in connexion with this matter are that our public indebtedness aggregates £227,000,000, whilst our private indebtedness totals £143,000,000, making a total of £370,000,000. Deducting £60,000,000 of this amount on behalf of New Zealand, it will be seen that our total indebtedness stands at £310,000,000. But since the year 1 900 further borrowing has taken place. For instance, only last year, I believe New South Wales raised loans amounting to£7, 000, 000. She floated a loan of £4,000,000 in connexion with the Darling Harbor resumptions, and another of £3,000,000 has recently been raised. Since 1 900 the various States have incurred an additional liability of £10,000,000 or £15,000,000. The interest upon our total indebtedness is about£1 2, 000,000. During the past 29 years we have increased our indebtedness, public and private, to the extent of £297,000,000, but only £8,669,000 of that amount has found its way into Australia. These figures are so startling that they cannot be at once grasped. I repeat that, although we have increased our indebtedness during the period indicated by £297,000,000, the interest which we have had to pay upon that amount and upon our accumulated debts has approached within £8,000,000 of that colossal amount. The public debt has been increased during the past 29 years to the extent of £192,000,000, but during that period we have received only £28,000,000, so that it has cost Australia in interest upon that amount and upon what she previously owed £164,000,000. This is an astonishing condition of affairs. Although none of the nations of the world have ever plunged them. selves into debt to anything like this extent, yet it is considered to be the normal condition in Australia, and people evince nosort of interest in it. They have been brought up in an atmosphere of borrowing, and do not bother about the matter. But during the next 25 years there must come a time when the interest payable will be such as cannot be covered even by the ex;traordinary - which with us is the normal - increase of borrowing which has taken place during the past 30 years. We shall then have to continue that policy merely for the purpose of paying the charges’ upon our national indebtedness. Within the next five years we have to meet loans which fall due aggregating £21,000,000. There has never been any attempt made by the States - if we except New Zealand - to consolidate or convert these loans. During the next 25 years loans totalling £134,000,000- will mature. That means that within the next 25 years we must borrow £134,000,000 in order to pay off that indebtedness. If we be fortunate enough to get rid of our presentsystem, we may consolidate or convert the debts ; but in any case that amount of money will have to be found. In one year there will fall clue some £50,000,000, and during the next 25 years we shall be compelled merely to redeem or renew the maturity loans, the raising of loans averaging £5,000,000 per annum. In addition, of course, there are the ordinary charges for interest and so forth, amounting to £12,000,000. It does not require a great amount of foresight to realize what the result must be. . Sooner or later the interest will catch up to the average rate of borrowing, and unless we resort to still further expansion in that direction, we shall be kept busy doing nothing else but paying interest, receiving nothing from the loans when they are floated. If any one went into a court of law and declared that out of a total borrowing of £297 he had repaid all but £8, but still owed £297, that would be regarded as a piece of shameful usury. But, in the case of the State loans there is no suspicion of usury, but a simple and legitimate transaction. So far as I can see, none of the loans have carried interest over 4i per cent., the average being about £3 17s. ; and that we should have benefited only to the extent of £8,000,000 out of £2 9 7, 000, 000 is a most astounding and significant commentary on our financial methods. If we go on at the same rate during the next 25 years, we shall . not only not receive £S,000,000, but shall be something to the bad, notwithstanding the fact that there will be a lower rate of interest. These are not my own impressions, but are taken from Coghlan, whose words are entitled to some respect. Coghlan says : -

With this explanation, in mind it will not be difficult to understand how, in spite pf the fact that during the last 29 years the indebtedness of Australasia was increased by £297,119,000, the money or moneys worth actually received, as represented by the excess of imports, was only £8,609,000. Such is the operation of interest as affecting a debtor country.

I find that Victoria in that period borrowed £41,600,000 and paid in interest £39,634,000, so that the State received benefit only to the extent of £1,983,000.

Sir William McMillan:

– Have we not the assets ^

Mr HUGHES:

– We have the same assets we ever had, but we have not gained any as a result of our borrowing this huge sum. I am not speaking of the assets, but am showing that the interest is gradually creeping up, so as to absolutely swallow the whole of the new loans. New Zealand which, happily for us, is outside the Commonwealth, borrowed £39,S00,000 during that period, and paid interest amounting to £42,488,000, leaving a debit of £2,6SS,000. Of course, no one denies that Australia still offers admirable security for all the money borrowed. Financiers of the London market would not lend us money if they did not think that we possessed good assets. But the question is, not to what extent we can mortgage our securities, but to what extent it is wise to do so. The Treasurer, who is one of the most careful financiers of the Commonwealth, has become so enmeshed in this terrible system of borrowing, that he contemplates it almost with melancholy pleasure. He said the other day that he should be very glad if borrowing could be avoided, but his tone was that of a man who, given to drink, says he would be very glad to pass a public house, if it were possible. I do not deny that it is extremely difficult to stop borrowing. Every sensible man. as the member for North Sydney said, must admit that it is impossible for the States to stop the system now. Something must be done in the way of meeting their liabilities. All, or nearly all, the States have huge overdrafts on their revenue accounts. New South Wales has over £2,000,000 represented by Treasury Bills, and Victoria has a huge cash overdraft. Yet the States seem to regard this as a normal condition. There is a body of reformers whose chief plank is that public borrowing shall cease. But when the present Premier of Victoria asked them in a very pertinent way to what extent they proposed public .. borrowing should cease, these amiable and enthusiastic persons then declared that reproductive works were to be excluded from their programme. The interpretation of that declaration is that expenditure in the district where the reformers live is reproductive, whilst expenditure elsewhere is not. I have been watching these gentleman very carefully, and I have come to the conclusion that that is what they and every body else mean when they speak of reproductive works. I have no doubt that we could hear a number of excellent reasons from the representatives of each State why their particular works set down in the schedule of the Bill should be regarded as reproductive, and equally good reasons why works in other States should not be so regarded. We ought to set an example to the States, which are pursuing a course which inevitably will land them sooner or later in financial chaos. The people will wake up to the fact that not only are they paying £12,000,000 per annum for interest, but that the interest is increasing at such a rapid rate as to leave practically no other prospect than that of absolutely absorbing a great portion of the productivity of the people. When the people do wake up to that fact, they will put down their foot in a very certain and convincing way. For my part, I cannot agree to this borrowing by the Commonwealth. As to whether it is a good thing or a bad thing that the proposed public works should be proceeded with, all I can say is that the most important, the fitting up of the new switch boards, and the construction of a trunk line of telephones between Melbourne and Sydney, are connected with a science which is progressing at so rapid a rate, that it is almost impossible to say what two or three years will bring forth. Judging from our experience in Sydney, no new switch board can be put up in Victoria or anywhere else under eighteen months

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It took nearly three years in Sydney.

Mr HUGHES:

– If we are to believe that electricity is to stand still in the meantime no harm will be done. But a system of telephone has been tried with success in the United States, and is to be introduced into Chicago. Under this system there are self-adjusting switches by which persons can get into communication without the intervention of a third person in the switch room. In a very few months, or years, we must arrive at a stage when the progress of this science, as compared to the present stage, will be perfection, and we ought to pause before entering on a system of borrowing which has been the partial ruin of the States, and which, if continued, will be their absolute and irretrievable ruin. The honorable and learned member for Northern Melbourne truly pointed out that borrowing is increasing at a greater ratio than population. Men are experiencing difficulty in finding employment for their energies and capital here, and are going to South Africa. And yet in the face of this loss of men and money, the States go on each year increasing their indebtedness. Before we follow that example we should be shown clearly and decisively that the proposed works are of a truly national character. I utterly refuse to regard the works set out in the schedule to the Bill as works which cannot be paid for from revenue. The building of the federal city is quite another matter. I think we might fairly embark upon a system of loan expenditure in regard to it ; but, even then, I should vote against the borrowing of one penny if the loan was not secured by a charge upon the land resumed, and provision made for its repayment in the rating and leasing of the federal territory. I think, therefore, that a local loan might very well do in that case. The honorable and learned member for Corinella, in speaking of the Canadian system of issuing paper money, said that, so far as the principle is concerned, there is very little difference between that practice and the proposals of the Treasurer, the only difference he could see being that, in one case, interest had to be paid, while in the other it had not.

Sir William McMillan:

– A perpetual loan without interest would be a very good thing.

Mr HUGHES:

– Of course, we cannot borrow money without paying interest upon it ; but I should like to know what greater difference there could he between two systems of borrowing money than the distinction of having to pay interest or not having to pay interest upon the amount borrowed?

Sir George Turner:

– What the honorable and learned member for Corinella meant was that Canada is not paying for works of this kind out of revenue.

Mr HUGHES:

– I can only accept what the honorable and learned member said, and I should like to know why, having expressed the view he did, he prefers a system of borrowing which involves the payment of interest? I do not say that to float a loan locally, or by the issue of paper money, or by any of the other diverse and ingenious methods to which resort is made by States and individuals is better than .that now proposed, but I know that none of them could well be worse. We recognise the dominance of England. She is our sole creditor, and we are tied to her, not only by ties of blood, but also by ties which seem much stronger - those which exist between creditors and debtors. Our interests and hers are identical, and we are not likely to- come to grief so long as we owe her such a huge amount of money as we do, an amount which is equal to nearly £400,000,000. The capitalists of England are, of course, no worse than capitalists elsewhere, though in their dealings they do not recognise any such thing as nationality. They are as ready to lend their money x to this country as to any other country, and they are willing to sell their ships and to transfer them from the flag of England to that of some other country, in order to increase their gains, as though they considered themselves unworthy of, or did not appreciate, the name of Englishmen. I should be very sorry if anything happened to sever some of the ties by which we are bound to the mother country ; but I think that the people of England, as apart from the capitalists of that country, do not wish to see us ground still further under the heel of the money lender. If we are going to establish here a great nation, we should set ourselves religiously against’ borrowing, and endeavour to live within our means. If our ideas are beyond our purse, let us curtail them. If it were proposed to borrow money for the development of our resources, so that we might more readily pay off both interest and principal - as by the creation, of a national system of Irrigation - there would be something to say for the proposal. But none of the works set down in the schedule can be termed either reproductive or national. They are all works the carrying out of which can very well be postponed until the)7 can be paid for out of revenue, and for that reason I shall vote against the second reading of the Bill. I shall vote against it as a protest against a system of borrowing which has carried us so far that we cannot with safety to ourselves as a nation go further. It has carried us so far that we are now an object lesson to the whole world. No other nation of our size has ever in the past attempted to borrow so much, and, warned by our fearful example, I do not think any nation ‘will emulate us iu the future.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Judging by the attendance of honorable members at the present time, the Bill is not attracting the attention which its principles merit. We are beginning a policy for the Commonwealth under circumstances which are somewhat unique, and in view of that fact it is strange that more interest is not shown in the matter. The probability is that to-morrow the Australian press will give more prominence to the debates which are taking place in the other Chamber upon the Tariff than to this ; though I agree with the honorable and learned member for Northern Melbourne that in the highest sense of the term the financial policy of the Commonwealth is much more important than the individual items of the Tariff. I have had some little difficulty in making up my mind as to how to vote upon this measure. It is only after a careful examination in detail of the proposals of the Treasurer, that I have arrived at a conclusion as to what I should do. In my first speech in this Parliament I expressed the hope that there would be a public works policy for the Commonwealth, and that it would be found possible to cany it’ out without the aid of borrowed money. Of course, there are certain .works which it would be impossible for Parliament to pay for purely out of revenue, but for the most part we should be able to pay for our public works in that way. The Treasurer, however, appears to take a different view. He told us that we are to borrow £1,000,000 at the present time, and that for a number of years to come we are to borrow £500,000, or perhaps ‘ more, per annum for the construction of public works which are to be built in the future. He did not say for how many years this policy of borrowing is to continue, but if we go on borrowing at the rate of £1,000,000 a year for the next ten years, we shall at the end of that time have to meet as an interest charge the sum of £300,000 per annum, which, added to the amount which he proposes to take out of revenue - some £400,000 - makes a total of £700,000, or rather more than the expenditure provided for in the schedule of the Bill.

Sir George Turner:

– But it is not proposed to borrow £1,000,000 a year. I said £500,000 a year - not more.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Even in that case the position in twenty ‘ years will be as

I have stated. That being so, I have to ask myself whether the proposed expenditure is justifiable, or whether, if the money cannot be found out of revenue, the works cannot be kept back for a time, or set aside altogether. The Treasurer told us that he would rather not borrow, but that if he paid for these works out of revenue he would add to the burdens of the States. He mentioned, however, two other expedients - the Canadian expedient, about which he has doubts, and which he thinks in any case might be more properly left over until the building of the federal capital is being considered ; and a more restricted public works policy. Having viewed the circumstances very carefully, I think we shall have to adopt the latter expedient. But there is a third expedient, to which he did not refer, and that is the expedientof imposing special taxation for the construction of publicworks of a reproductive character. I am inclined to doubt if the public would at the present juncture agree to that. Personally, and bitterly asI am opposed to such a tax, I should have preferred to see a duty imposed upon tea, to give the Commonwealth a little more revenue, but I know the difficulty of raising money for public works through the Customs. A special tax, outside the Customs, would meet the case : but it is doubtful if the public would allow such a tax. Now the Treasurer has told us that we must not increase the burden of the States, and that is a very proper justification for borrowing, so far as it goes. He also said that these works were necessary ; but the information with which he supplies us is not sufficient to show their absolute urgency, or the probability of their returning interest on the money spent in construction. I quite agree that the cost of carrying out some of our public works of a reproductive character is properly chargeable to capital ; but we have not been strictly adhering to that principle. As was shown by the honorable and learned member for Northern Melbourne, the Victorian Government have borrowed upon as many as four occasions for the purpose of replacing engines upon the railways, and after the four borrowings they have had one set of engines to represent the four which had been purchased out of loan moneys. I can understand borrowing in the first place for the purpose of building railways or erecting works of a reproductive character; but I cannot support the expenditure of loan money for the renewal of obsolete or wornout materials or plant.Works in order to be truly reproductive should not only return a sufficient amount of revenue to cover all working expenses, but should also pay the interest on the money spent in construction, and-, if possible, leave a credit balance. Business people expect when they borrow money not only to realize the amount of the interest they are obliged to pay, but a profit besides, and the State ought not to incur any greater risks in the management of its business than would a private individual, except in certain instances such as Defence. The Treasurer has told us that it has been the practice of the States to borrow money in the way now proposed, and that he is following upon a well-beaten track. But we are following the States’ practice only in part. I understand that in South Australia they have adopted a very wholesome policy in connexion with loan expenditure, but, unfortunately, the example of that State has not been generally followed. Take a case in point. It is now proposed by the Government to spend £73,000 in the erection of switchboards in connexion with telephone exchanges in Victoria, New South Wales, and Western Australia. The existing switchboards in these States would probably have cost something like £50,000, and if we followed the South Australian practice we should borrow, not £73,000, but £23,000, and rely upon the revenue for the balance of £50,000. By adopting this plan we should not borrow twice over in connexion with the one asset. On the contrary; if any additional money were spent upon a given asset, then only to the extent of the value added would the expenditure of loan money be permissible. Under this system it would not, however, be justifiable to spend £73,000 upon these switchboards, and to charge nothing to revenue, in view of the fact that money was borrowed by the States for fitting up the switchboards in the first instance. I therefore think the present proposals are to be condemned on the ground that a certain proportion of the money is to be devoted to purposes for which loan funds should not be appropriated. Then, again, it seems to me that unnecessary haste is being shown in the construction of public buildings, and in the carrying out of some of the works proposed in connexion with the telephone and telegraph systems. The very timidity of the present proposal also condemns it. The sum proposed to be borrowed is paltry, compared with the total debts of the States. The works proposed will not be reproductive, and I think that a good deal more information should have been furnished with regard to them. I find that £71,000 is to be provided for the construction of new buildings ; but, so far ‘as I am able to gather, these works are not by any means so urgent as one would be led to believe.

Sir George Turner:

– The additions to the Sydney and Newcastle post-offices were being made at the time of the transfer to the Commonwealth, and this money is required to finish the works.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Money should be provided for carrying out contracts which had been entered “into prior to the time of the transfer of the departments.

Sir George Turner:

– That is what the money is for.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Then it becomes a question as to whether it should not be provided out of the revenue. Where new works are proposed, I do not think that any undue haste should be shown, and that we should wait a little longer before we saddle ourselves with a permanent liability of £30,000 per annum. We have no information as to the way in which the £S0,000 proposed to be appropriated for telegraph and telephone, lines is to be spent. All we are told is that it is proposed to expend the money in the construction and extension of telephone and telegraph lines, and in purchasing cables and material. We do not know whether the works referred to are likely to be reproductive or otherwise.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– All that information is in the report of the experts which was laid on the table.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I have not seen the report; but in any case we should have had more information from the Treasurer regarding these matters. Then we are told that some portion of the loan money is to be spent in substituting underground cables for the present overhead wires, and in providing for metallic circuits to replace the present system. These are not legitimate charges against capital, and loan moneys should not be expended over and above the amount previously devoted to the construction of the existing systems.

Sir George Turner:

– The material which is to be replaced will be used for other purposes for which we should otherwise have to borrow money.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– That is information which was not previously vouchsafed tto us. It is absurd to talk about replacing telegraph wires, or telegraph poles, oout of loan money, and it is equally absurd to ask for a loan vote in order to provide new common battery telephone switchboards to replace those which are now obsolete. Unfortunately, the subject of high finance has not engaged the attention of our public men in Australia to the extent that it should, have done, and the result is that we have suddenly to pull up. We have a loan indebtedness amounting to £200,000,000, upon which there is an annual interest charge amounting to £8,000,000, and we have really exhausted our borrowing possibilities for some time to come. There must be some limit, and I believe that, like the South American and North American states, we have reached the limit of our borrowing powers, and the sooner we realize our position the better it will be for us. We ought to derive a lesson from our experiences during the boom period. By a system of excessive borrowing, we induced people to suppose that they would become rich, not by production, but by a system of exchange. That was wrong, for we have been told on the best authority that quite one-third of our population were living upon the result of public borrowing. We can only be truly solvent when our population lives on the results of their own efforts in production, and when we cease to borrow year after year in order to pay the interest upon our loans, and iii some cases even the principal, and for the purpose of carrying out works which are wrongly called reproductive. I had hoped that in connexion with the financial policy of the Commonwealth more attention would have been devoted to the consolidation and conversion of the State debts. I believe you, Mr. Speaker, estimated that ultimately £1,500,000 per annum could be saved by the consolidation and conversion of the public debts of the States ; and, if a scheme of that kind could be carried out, a large amount of money might be available for the purpose of carrying out a public works policy. I have very little to add. I have already indicated my attitude upon this Bill, and the vote which I intend to give. But I say as a last word that though I do not desire, any more than does the Treasurer, to impose disabilities upon the States, neither do I wish to inaugurate a policy which is to spring out of an urgent necessity. We should not confound a high principle, such as is involved in the initiation of a borrowing policy for the Commonwealth, with the necessity to build a post-office in Brisbane, or a telegraph line in South Australia. We ought, if possible, to do our business in such a way as to educate the public mind to an appreciation of its responsibilities, and the necessity for a sounder system of finance. If the policy which has been adopted by the States is to be continued, if we are to borrow in a haphazard fashion, and to pay interest upon our public indebtedness by means of raising new loans, the same bankruptcy which faced the South American States, and at one time threatened the North American States, is likely to confront the united States of Australia. To avoid such a result I feel that upon this occasion I cannot follow the lead of the Treasurer, and must vote against the second reading of the Bill.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Unlike the last speaker, I do not think that the Commonwealth is approaching bankruptcy, or that the Australasian States are likely to imitate those of the Argentine. I deprecate as much as possible any remarks of that kind. Surely we may discuss what the honorable member for Bourke has been pleased to term “high finance,” without lugubrious references to bankrupt countries, whose productions failed, and whose people generally are in a bad way. I speak the more strongly upon this matter, because, like the honorable member, I have come to the conclusion that at this stage of our national career, we ought to draw a very tight rein as regards borrowing. But it does not assist discussion to predict that red ruin stares us in the face unless we peremptorily discontinue the flotation of loans. On the other hand, I think it is quite time that we decided what course the Commonwealth shall adopt in regard to the future incurrence of debt for enterprises such as the Treasurer has outlined upon the present occasion. Personally, I have had some difficulty in making up my mind upon this question, because, unlike the last speaker, I do not think that the construction of some of the works enumerated in the schedule can be deferred. I have no fault to find with that schedule. The works are most pressing and important. Of my own knowledge, the telephone system of the continent urgently needs revolutionizing. Since the adoption of the electric tramway system in Sydney the telephone service of New South Wales has become completely disorganized-. I am aware that the same condition exists in a less degree in the other States. Something must be done immediately to put the New South Wales telephone system upon a more satisfactory footing. A few years ago it was admitted by all our experts to be the best in Australia, but since the introduction of electric tramways it has got into a completely disorganized mess. It is of the utmost importance, therefore, that relief should be afforded as speedily as possible. I do not quarrel with the schedule of this Bill. The misgiving which I entertain is in regard to the means to be employed for raising this loan. The question which presents itself to me is whether we ought, at the beginning of our federal career, to lay down “the principle that we will for all time raise money for constructing perishable works by means of borrowed “money. That these works ave shortlived will be readily admitted. We have been told that electricity is assuming new forms. Science is absolutely revolutionizing the old systems, and we must resolve to adopt new systems so far as the application of that subtle force is concerned. The question that suggests itself to me is whether, in making readjustments in our electrical systems, we ought to go to the loan markets of the world for the wherewithal, and particularly whether we ought to do so at the present time. The honorable member for Bourke said that, to some extent, the old, wild, boom borrowing in Australia had been stopped. I wish I could believe that.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I did not say that. I said that if we were to continue our present policv, boom-borrowing would be stopped.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am not so sure that we are not borrowing wildly. Recently I read an article in the Age - which, by the way, has occasional lucid intervals - pointing out that during the past two and a-half years Australia has borrowed £27,500,000. That is an alarming sum.

Sir George Turner:

– Some of those loans were simply conversion loans.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I dare say a little of that total represented conversion loans.

Sir George Turner:

– A great deal of it.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I doubt whether there was a great deal of it.

Sir George Turner:

– There was nearly £5,000,000 in connexion with Victoria alone.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The article did not give any particulars. I have no doubt that all the States are borrowing pretty freely. They are getting just as much money as the London market will permit them to obtain at a reasonable rate of interest and upon favorable terms. It is not at all a popular policy - as the Treasurer has discovered before to-day - to discontinue borrowing and endeavour to bring our expenditure within reasonable dimensions. The old couplet applies to nations equally with individuals -

The devil was sick, the devil a monk would be ;

The devil grew well, the devil a monk was he.

We do not think of the consequences of borrowing. The moment our circumstances are bad we rush round in an hysterical manner to ascertain if we cannot discontinue that policy which in former times we have been prone to adopt. Ought we to pursue a policy which can certainly yield no enduring results in regard to our future relations with the States ? I should not have so much hesitation in voting for the Government proposals if I could see the slightest intention to economize on the part of the States. But New South Wales continues to borrow at an alarming rate. The simple question which I put to myself is - “ Ought I to pile up the Commonwealth indebtedness, concurrently with the piling up of State obligations?” I have come to the conclusion that I ought not to do so, particularly in regard to the State which I represent, where there is a huge surplus of revenue which ought to be drawn upon for the construction of necessary public works. I realize the difficulty which has been pointed out by the Treasurer. I know that some of the States could not possibly stand the strain of constructing these works out of their ordinary revenues. They affirm that their revenues are depleted by our federal finances ; but, upon the other hand, ought we to impose obligations upon the whole of the States because a couple of the small ones find themselves in temporary financial difficulties? It appears to me that that is the question which we ought very seriously to face. In New South Wales we have already submitted to having a revenue foisted upon us which we did not require, and to which we strongly objected, because the small States needed it for their own solvency. Are we to perpetuate the same system in regard to the loan expenditure of the Commonwealth? In New South Wales the revenue, if carefully husbanded, would easily enable us to construct these works without piling up more indebtedness. If the small States cannot pay for works which may be undertaken within their own borders out of revenue, can they not replenish their revenues out of State loans ? Works representing an expenditure of £600,000 are included in the schedule to this Bill. Of that amount, £400,000 relates to works which it is proposed to undertake in the two large States.

Sir George Turner:

– Victoria could not possibly construct out of revenue the works proposed to be undertaken in this State unless additional taxation were imposed.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Is that an absolutely insuperable objection? Are there no resources in Victoria which can be drawn upon for this particular purpose ? I cannot believe that this State is at the end of her financial tether, and cannot bear an additional expenditure of £120,000 for the purpose of constructing necessary public works.

Sir George Turner:

– The works proposed represent a good deal more than that.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– But I draw a distinction between perishable works and those of a more enduring character.For example, there is a sum of £71,000 included in the schedule which comes within the purview of the Minister for Home Affairs. That amount is for buildings, tunnels, &c. These works are of an. enduring character, and I see no objection to paying for them out of loan moneys. But the other items, aggregating £112,000 in the case of Victoria, and £221,000 in the case of New South Wales, ought to be paid for out of revenue. If the word “ renewal “ had been used, it would have more clearly indicated the nature of the works. The old idea when these works were first constructed out of a loan was that all replacements would be paid for out of revenue ; but here in the schedule of a Loan Bill we see £30,000 for a new switch-board in Sydney, and a large amount for a similar work in Melbourne. Because science has rendered the old switchboards obsolete, it is proposed that we shall go again to the London money lender in order to pay for what are really renewals. The Sydney switch-board is by no means an old one. It has not been installed more than three years, although it is six or seven years since it was first ordered, the balance of the time having been occupied in constructing it, owing to the initial difficulties which are met with in all large undertakings. The switch-board, when first ordered, was not expected to last more than ten years ; and honorable members must not run away with the idea that frequent renewals and replacements mean inherent structural defects. To-day, in Sydney, the board is full of subscribers, and only the other day I saw the Postoffice officials enlarging it. So rapid has been the growth of the telephone system that it has overtaken the capacity of the switch-board, the original cost of which was £15,000. This plan of paying for renewals out of loans has been followed in all the States, and no provision is ever made for repayment to the loan funds. The bulk of the money in the schedule is for short-lived works of the kind I have indicated. The construction of telephone and telegraph lines or poles means, in many cases, merely replacing the old, worn-out works, and, as I said before, it would be better if the word “ renewal “ had been used.

Sir George Turner:

– This expenditure is not intended for mere renewals.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have no doubt that some of the proposed lines are new ; but in most instances they mean the replacing of old lines with new ones.

Sir George Turner:

– Renewals will have to be paid for out of revenue.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– All these services are very short-lived. When we ai-e told that the works ought to be constructed out of borrowed money because they are for future generations, the answer is that the works will probably cease to be of use long before the present generation has passed away.

Sir William Lyne:

– In New South Wales, when the honorable member was in office, £100,000 a year was voted for the extension of telephones.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That £100,000 was for the construction of new lines and tunnels, and I arn not now arguing that permanent works and buildings ought to be paid for out of revenue. The £70,000 which appears in the schedule against works in the department of Home Affairs may very properly be paid for out of loan. My present arguments are against loan expenditure on short-lived, perishable works, which . in a few years leave no asset against the money borrowed. These remarks apply to nearly £500,000 of the proposed expenditure.

Sir William Lyne:

– For the Post-office 1’

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Most of themoney is for the Post-office. The life of a telephone is a very few years at most : and if we accept the theory that these instruments should be replaced out of revenue, why should the first cost not come from the same source, seeing that it takes precisely the same amount to renew as to purchase at the outset ? We ought not to begin in theCommonwealth the policy of constructing such works and renewing them again and again out of loan money. The switchboards afford us a concrete instance of the undesirability of such expenditure. We are told that the Commonwealth finances will not stand this expenditure out of ordinary revenue ; and as to that the Treasurer might have tabled an estimate of the excess revenue which he has paid to the States over and above the Braddon requirements. I believe that the amount so paid, but which he need not pay, is about as much as the total estimated expenditure on the worksunder this Bill ; that is to say, the Treasurerhas not used up one-fourth of the total revenue by £500,000 or £600,000.

Sir George Turner:

– If we deal with the whole total that probably is so, but wehave to deal with individual States. It would be all right for New South Wales and Western Australia, but all wrong with the other States.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Then how far ought we to go in the direction of helping the smaller States in their temporary difficulties 1

Sir George Turner:

– If the revenue were divided on a population basis therewould be no trouble.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– If we had a good sound Commonwealth financial scheme there would be no trouble. For my part, I think that the smaller States might very well be allowed to replenish their resources from their own State loans, rather than that the larger States should be compelled to pile up their debt. I see no insuperable difficulty in the course I suggest, and it ought to be adopted in common fairness to the States which have abundance of means and desire to spend their revenue in the directions indicated. This matter is so important as affecting my own State that I do not think I ought to vote for the second reading of this Bill, in view of the State borrowing which is going on, and of the overflowing revenue. I say again I have no quarrel with the schedule. These works are absolutely necessary ; and something must be done to place the telephone services on a firm and lasting basis. The metallic circuit is another instance of using loan moneys to replace works. That circuit is intended to supersede the old earth circuit, the latter of which I suppose will become utterly useless. It has been said that one reason why we cannot undertake these liabilities outof revenue is that there are some functions which have not yet been taken over by the Commonwealth. The honorable member for North Sydney pointed out, as an instance, that we have not yet paid for certain buildings which we have acquired, and that we have not as yet assumed control of the light-houses or of quarantine. All that is very true ; but we ought to look forward in the near future to a break up of the drought, and a more hopeful financial condition throughout Australia. Those altered circumstances may be regarded as a set-off against the obligations to be assumed when we take over all the federal functions. The Treasurer has told us that he has a surplus of £500,000 or £600,000, on which he can operate next year, amounting in the aggregate to the total involved in this Bill. I think that there is the fund to which we should look for the financing of these works, instead of continuing to pile up the indebtedness of the country. Under these circumstances I feel compelled, as a protest against a system which has operated in the States for many years, and in connexion with which I am afraid we are all somewhat to blame, to vote against the Bill. I think that under our new conditions we might very well make a new departure, even if it should involve a little trouble at the outset.

Mr. BATCHELOR (South Australia).The honorable member for Bourke has complained of ‘the apparent want of interest shown by honorable members in this Bill, although, after a session has lasted for thirteen months, it is only natural that there should be a want of interest in any measure brought forward. I am very glad, however, that all who have spoken up to the present time have opposed the Bill. I hold that to be a good augury for the future treatment of financial questions by this Parliament. I take it that the members of this Parliament do not intend to pass loan Bills without the closest scrutiny, and that some attempt will be made, if not to stop borrowing altogether, to at any rate very much curtail the rate of borrowing. No doubt the States have borrowed to a much larger extent than other nations have done in proportion to population. But the fact that in Australia, to a much greater extent than elsewhere, the Governments are realty huge industrial concerns is very often overlooked. . The objects for which money has been borrowed by the States are very different from those for which most other national debts have been floated. We have borrowed practically nothing to buy powder and shot, and, indeed, we have a splendid asset to show for nearly the whole of the £400,000,000 which we owe. Of course, in some cases we have borrowed at higher rates of interest than we should pay now, and we have no doubt borrowed more than we required, and have lived at too great a rate ; but most of the works upon which the borrowed money has been spent are earning interest. The indebtedness of South Australia is £32,000,000 - an enormous debt per head of population - but 2- per cent, is being earned by the works upon which more than £26,000,000 of the amount borrowed was spent.

Sir William McMillan:

– And the South Australian railways supply the needs of a population larger than that of the State.

Mr BATCHELOR:
SOUTH AUSTRALIA

– Yes. They cater for a very much larger population than that of the State. The construction of the Broken Hill railway at one time seemed a speculation which was hardly justified, but it has turned out to be one of the best revenueproducing works which we could have undertaken, and is earning 6 or 7 per cent, upon the original cost of construction.

Mr Crouch:

– But while 2 per cent, is being earned upon a large part of the amount borrowed, the rate of interest paid is something like 3f per cent.

Mr BATCHELOR:

– I do not say that the works to which I refer are reproductive to the extent of paying the full amount of the interest charged upon the loans with which they were constructed, but, to the extent to which they pay interest, they decrease the burden of the taxpayers. I believe that I am in accord with the honorable and learned member as to what should be the policy of the Commonwealth iu this matter ; but I am trying to show that it is unwise to exaggerate the position of the States, and to say that we are running into bankruptcy and ruin, when, as a matter of fact, we are not. These communities would have remained very small if they had not, early in their history, borrowed money for the development of their resources. The people of South Australia could not have constructed the overland telegraph line, which has shortened our communication with Europe to a few hours when it previously took months, out of revenue, and I doubt if even the whole of Australia could have done so at the time when it was constructed.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– But, special considerations apart, is there not a limit to the extent to which borrowing should take place 1

Mr BATCHELOR:

– Certainly. I am speaking against the wholesale condemnation of the public works policy of the States. AVe could have constructed very few railways in the first instance if we had not borrowed money to do so. But before money is borrowed, care should be taken to see that the works upon which it- is to be expended will be reproductive. Where they will not be reproductive, they should be paid for out of revenue. The honorable member for West Sydney said that no State, except New Zealand, had yet made any serious attempt to convert its loans. As a matter of fact, however, South Australia, since the passing of her Loan Conversion Act in 1896, has converted £2,000,000, and saves 1 per cent, upon that amount of her debt.

Sir George Turner:

– Victoria has converted £4,500,000 within the last three years.

Mr Thomson:

– But that can be done only as. loans fall due.

Mr BATCHELOR:

– Exactly. You cannot induce people to abandon privileges which you have given to them. Furthermore, in South Australia -) per cent, of our total indebtedness is set aside every year as a sinking fund, which is never under any circumstances touched by the Treasurer. Some honorable members have spoken strongly against borrowing for works which may afterwards have to be replaced by others, and reference has been made to a switchboard, for which provision is made in the schedule. Every one admits that works of that kind should be carried out. The practice of charging the loan funds over and over again for new work to take the place of old work and not providing for the original cost out of revenue, is one which must be condemned, and I hope that honorable members will set their faces against it. There is not a single instance of a replacement in South Australia in which the cost of the old work has not been charged to revenue, and only the balance provided for out of loans. Some of the proposed works should be provided for wholly out of revenue. The Treasurer has omitted from the proposed loan appropriations the cost of the post-offices to be erected at Woodville, Walkerville, and Gawler.

Sir George Turner:

– Those are comparatively small’ works, which I thought we could afford to pav for out of revenue.

Mr BATCHELOR:

– The. State will have to beal: that expenditure.

Sir George Turner:

– No. They will have to be’ paid for by the Commonwealth, and the cost will be distributed amongst the States on a population basis.

Mr BATCHELOR:

– I do not see that there is any distinction between such works as I have mentioned, and others which it is proposed to provide for out of loan funds. Telephone and telegraph extensions - I do not mean replacements - are fairly chargeable against loan funds. The proposed new telegraph line’ to Tarcoola, which will cost £14,000, could not very well have been constructed out of revenue and charged to the South Australian Government.

Sir George Turner:

– If these works are constructed out of revenue they will have to be paid for by the whole of the States on a population basis, so that South Australia will have to pay a considerable portion of the cost of whatever works are done, wherever they may be.

Mr BATCHELOR:

– Quite so. It is perfectly justifiable to spend loan moneys in constructing a telegraph line to a place such as Tarcoola, where a large amount of business will be done. That will be a reproductive work, and there are probably other works of a similar character. We can scarcely say that there shall be no further borrowing, but I intend to cut down the loan expenditure as far as I possibly can. I agree with the suggestion of the honorable member for Bourke, that we might levy special taxation in the shape of a duty on tea, and earmark it for the purpose of carrying out the public works of the Commonwealth.

Mr Watson:

– We could only use onefourth of the revenue so raised.

Mr BATCHELOR:

– We could easily make some arrangement which would overcome that difficulty.

Sir William McMillan:

– Why does the honorable member wish to tie our hands in that way ?

Mr BATCHELOR:

– Because I wish to place some limit upon loan- expenditure. I do not desire to see a £1,000,000 loan raised this year, a £2,000,000 loan next year, and a £3,000,000 or £5,000,000 loan in subsequent years. If we had some special tax which i would yield about £500,000 per annum, which the Treasurer says will be required for carrying out urgent public works, we should be able to dispense with any heavy borrowing.

Sir William McMillan:

– There is no natural connection between the amount that a tax will yield, and the necessity for public works.

Mr BATCHELOR:

– No; but there will be a strong disinclination on the part of the people to pay directly for those things which they fancy they require.

Mr Isaacs:

– Would the honorable member debit the capital cost of erecting postoffices to the revenue of one year ?

Mr BATCHELOR:

– Yes. The Treasurer says that £500,000 per annum will be required for urgent public works for the next few years, and I do not see that any objection could very well be raised to our ear-marking the tea duty, for instance, for the purpose of carrying out public works. I do not think we can absolutely stop borrowing just now. We have been accustomed to carry out a great number of works by means of loan moneys, and if we were to suddenly stop now we should be applying too drastic a remedy. It would be better to gradually curtail our loan expenditure until we can provide some other system.

Mr WATSON:
Bland

– I intend to vote against the second reading of the Bill. Our experience in connexion with loans in New South Wales, at all events, has been that whilst honorable members have on every occasion deprecated loans in theory, and expressed bushels of good resolutions, they have never gone any further. I have voted for loans, and I am prepared in some circumstances to vote for further loans, but I refuse to believe that the Commonwealth is in such a position that we must go to the money lender for £500,000. I could quite conceive of circumstances in which it would be impossible to do without a loan for the purpose of carrying out public works. Proposals have been made for the construction of two transcontinental railways which inquiry may prove to be justified, and we also have schemes suggested for the locking and weiring of two or three of our principal rivers. So far as my inquiries have gone, I believe that one of the latter proposals is abundantly justified. To carry out any one of the works referred to such a large sum would be required that we could not expect it to be provided out of the revenue of any one year. I do not therefore suggest that some circumstances may not occur in which I would ‘ be quite prepared to vote for a loan Bill. Even in connexion with works such as that mentioned by the honorable member for South Australia, where there is a reasonable prospect of interest being earned, it must be recollected that the interest payments to people outside the Commonwealth constitute an annual drain upon the resources of those engaged in production within the Commonwealth, and that, when taken in conjunction with the already heavy obligations of the States, they have a serious effect so far as the annual return from labour is concerned. The fact that even a few millions of money had been spent in South Australia without yielding any return from which the interest upon loan money might be provided is significant when one considers the small population of that State. Even in Victoria there has been a great waste of loan money so far as non-interest returning expenditure is concerned.

Mr Poynton:

– Take the river scheme. Will that pay interest upon the outlay directly 1

Mr WATSON:

– Not directly ; but I believe that indirectly the return will justify the expenditure.

Mr Poynton:

– Does not that apply to a number of these proposed works t

Mr WATSON:

– I am not denying that. I merely assert that there has been a wasteful extravagance in connexion with loan expenditure, which would never have occurred had the people been compelled to dip their hands into their pockets to find the necessary money. That is the chief objection which I entertain in regard to such expenditure. The people are careless of the amounts voted, because they entertain the idea that the matter does not concern them, but only posterity. Year by year, however, theburden which they are called upon to bear increases and its evil effects are multiplied. The Treasurer proposes that this year we shall borrow £600,000. Yet . in October last he anticipated that there would be a surplus revenue on account of the Commonwealth of £534,000. Since then - in March last - he stated that he had to add to his estimated revenue £575,000. Our onefourth share of that amount represents £140,000. In addition to that, owing to the reduction of the Defence Estimates, we have effected a saving of at least £130,000. A number of other economies have also been made. For example, there is the non-establishment for the time being of the High Court and Inter-State Commission. These savings will give the Commonwealth a surplus of between £800,000 and £900,000.

Sir George Turner:

– Not so much as that.

Mr WATSON:

– Of course I have not allowed for the loss involved in the remission of the duties upon tea and kerosene.

Sir George Turner:

– The honorable member is leaving out of consideration the additional expenditure.

Mr WATSON:

– The expenditure upon the Commonwealth account has been kept well within limits.

Sir George Turner:

– The honorable member has not seen the figures which were circulated on the 25th April. They show a surplus of, close upon £600,000.

Mr WATSON:

– Is that after making an allowance for the remission of the duties upon tea and. kerosene?

Sir George Turner:

– Yes.

Mr WATSON:

– Then the position is practically what I have stated. Had the Commonwealth retained its one-fourth share of the Customs revenue, the Treasurer would have a sufficient sum of money in hand to carry out the works proposed in this Bill without having recourse to the money-lender.

Mr Poynton:

– Has the Treasurer allowed for the increased expenditure in the Postal department?

Mr.WATSON. - I take it for granted that he has allowed for that. According to the right honorable gentleman the Commonwealth should have a balance of £600,000 on the present financial year. I admit that that money is not in hand, because he has handed over to the various States whatever balances seemed to be available. In defence of that practice, he has cited the financial condition of some of the smaller States, and declared that each State practically has a deficit. But I hold that so long as we provide the States with the money they will continue to have deficits. So long as the Commonwealth furnishes the revenue, the States Governments will take every care that it is spent, and possibly mortgaged a little in advance to deter us from economizing so far as our taxation is concerned. Therefore we cannot too soon show the States Governments that we intend to use every penny that we deem necessary of our share of Customs revenue to efficiently carry on the services of the Commonwealth. It seems to me that money derived from taxation can be applied to no better purpose than the creation of public works, because they relieve the taxpayer from the very moment of their completion. If they are reproductive, they at once begin to return revenue, either directly or indirectly, and consequently relieve the taxpayer to that extent. I trust that the result of this debate will be to convince the Treasurer that these works should be constructed out of revenue, so that the taxpayers may be eased of some of their burdens immediately. That is a “consummation devoutly to be wished.” In New Zealand, for years past, the practice has been adopted of transferring from the general revenue account to the public works account nearly £500,000 annually. The result is that a good many of the public works of that colony are now producing an amount which goes a long way towards relieving the general taxation of the country.

Sir George Turner:

– I am doing exactly the same thing ; I am taking a large sum out of revenue.

Mr WATSON:

– To that extent I congratulate theTreasurerupon havingdeparted from the evil course followed by the States Governments. But I contend that he should go still further. In Western Australia, during the past few years, a number of permanent and semi-permanent works have been constructed out of revenue. Of course they have expended loan moneys upon their larger undertakings. I think that there are some items included in this Bill which, on account of the returns which may reasonably be expected from them, are not only justifiable, but are practically urgent. If this measure be rejected, I trust that the House will see the wisdom of insisting that a large number of these works are undertaken out of revenue.

Mr Poynton:

– And so depriving the States of revenue?

Mr WATSON:

– So far as that goes, where is the difference between the States being compelled to borrow and the Commonwealth being obliged to adopt the same course 1 The honorable member seems to lie happy in the idea that the States will be relieved from the necessity of borrowing, whilst the Federal Parliament will be compelled to engage in it. He knows that the only alternative to constructing these works from revenue is that we must borrow. He proposes that we should hand the revenue over to the States, and subsequently float loans.

Mr Poynton:

– It is a fair proposition that new works should be constructed out of loan money.

Mr WATSON:

– From that stand-point, I do not see that it much matters whether tha Commonwealth or the States do the borrowing. The States have the ordering of their own affairs.

Mr Poynton:

– We have no right to play “ ducks and drakes “ with their finances.

Mr WATSON:

– Certainly not. But, on the other hand, they can play “ ducks and drakes “ with every cent we hand over to them, and what voice have we in its expenditure? I say it is a wrong principle that we should be expected to find money for other persons to spend. If we have to accept the responsibility of raising taxation from the people, at least we ought to have control of that expenditure, so that we may account to them for our charge. The States ought to be encouraged to rely upon the taxation resources which still remain to them. It is their business to make ends meet without depending upon the parentalism of the Federal Government. Regarding the general principle involved in the Bill, the honorable member for Wentworth and the honorable and learned member for Parkes, by way of interjection, pointed out that a sufficient sign that the States were progressing was supplied by the fact that recently the New South Wales Government had been able to borrow money at a very cheap rate, and that the loan asked for was subscribed several fold. I do not know that that has any bearing upon the question of whether it is wise that we should borrow.

Sir William McMillan:

– I think that interjection was made in connexion with something that was said, but not as the honorable member puts it.

Mr WATSON:

– We have to remember that every young spendthrift who is cast upon the world finds usurers who are ready to advance him any amount of money up to the extreme limit of his assets. I do not think the financial position of Australia is such as to justify any adverse criticism regarding our ability to pay our debts. We are absolutely solvent. The people of Australia can meet their engagements, and have a handsome margin to spare. Many of the works enumerated in the schedule are directly or indirectly reproductive, and the money-lender need entertain no apprehension so far as the return of his principal or interest is concerned. Still it is questionable whether it is wise of the Commonwealth to assume liabilities because it may be offered cheap money, when by compelling the Government to expend revenue we should insure due criticism on the part of honorable members, the press, and the public generally, which would probably result in economy where otherwise extravagance would continue. The Treasurer should insist on carrying a number of the items, whether the Loan Bill pass or not, seeing that they are essentially reproductive, either directly or indirectly. But there are other items, totalling a fairly round sum, which it would be wiser to allow to wait. I refer particularly to the item of the switch -boards,’ on which it is proposed to expend a total sum of £75,000 in four capitals of the Commonwealth. It is. specially indefensible to provide a switchboard in Sydney from loan expenditure, even if it be thought advisable to have a new one. It is only about three years ago, I think, since the present switch-board was ordered, and it has not been in active work more than two years.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– - It was ordered six years ago.

Sir George Turner:

– If the work is done out of revenue, the other States will have to contribute their proportion, and New South ‘Wales will pay only a third of the total. The other States will have to suffer for some mistake made in New South Wales.

Mr WATSON:

– The other States will have to suffer just the same if a loan be raised, seeing that they will have to pay their share of the interest.

Sir George Turner:

– New South Wales will have to pay the interest on the total sum.

Mr WATSON:

– But the proportion to be paid by the other States remains exactly the same.

Sir William McMillan:

– Ultimately, but not at present.

Mr WATSON:

– I admit that the amount is not the same, but the proportion to be paid is the same, whether the expenditure be out of revenue or out of loan.

Sir George Turner:

– The interest on the £30,000 will be charged against New South Wales alone.

Mr WATSON:

– I cannot see why that should be so under the Constitution.

Sir George Turner:

– New South Wales gets the benefit of the work.

Mr Deakin:

– And the revenue which’ the work earns.

Mr WATSON:

– As it happens, the new switch-board will not earn any additional revenue. The switch-board there now is earning as much as a new one would, within a comparatively small amount. I find that in speaking a few nights ago on the Estimates I did the electrician now in charge in Sydney some injustice. I then assumed from the report laid before us by the Treasurer that the switch-board in Sydney had -room for only 100 or 200 more subscribers. That assumption was no fault of mine, because that is the simple statement in the portion of the report submitted to us. I find, however, on further inquiry that while in a measure the statement was true that the board already erected is nearly full, it is possible to so extend the board as to provide for double the present number of subscribers. As the report laid before us seems- in this respect to have been incorrect, I must withdraw any imputations on the administration of the gentleman responsible in Sydney. I should like to point out that the switch-board in Sydney which it is now proposed to replace at a cost of £30,000 is working reasonably well. The service is perhaps a little more expensive than it would be if a common battery switch-board were installed, but the former is giving as much satisfaction to the subscribers as can be given without the installation of a metallic circuit. In the present state of telephonic science, it would, in my opinion, be a grave error on the part of the Government to spend £75,000 in erecting four switch-boards, which, even according to the information we have today, will in all probability be superseded before they really get into working order. This is an important phase, which we ought to consider. In New South Wales, four or six years ago, there was erected, at a cost of £30,000, what was considered to be an up-to-date switch-board.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The cost was £13,000.

Mr WATSON:

– Whatever the price was, the board was considered to be up to date. But now experts have reported, and the Government seem to have adopted the report, in favour of ins’talling what is known as the common battery system. A system is to be tried in Chicago under which the switching is done automatically, and not only cheaply, but without any waste of time or temper ; and I personally object to the expenditure of any sum of money on switch- boards, either in Melbourne or Sydney, pending the development of inventions. In both Melbourne and Sydney the main drawback at present in this connexion is the absence of the metallic return ; at any rate that is the drawback which mostly affects the subscribers. Even if the metallic return would not mean economy, its absence interferes with the efficiency to such an extent as to largely render the telephone useless to the people.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The instalment of the metallic return would be purely a replacement.

Mr WATSON:

– To an extent I admit that would be the case. This expenditure on the switch-boards might very- well be held over for a year or so, though I think that the installation of the metallic circuit in Melbourne and Sydney and other large centres is most urgent. There is necessity for this Parliament to take a definite stand in regard to the loan expenditure. We should adopt the idea that loan expenditure is justifiable only in the case of large and important works, which it would be unfair to expect one year’s revenue to bear. Where such works are entered upon, we are perfectly justified in asking the money-lender to assist ; but in regard to ordinary small works, it ought to be possible to raise a fund of £500,000 a year from the vast population of the Commonwealth. The honorable member for South Australia, Mr. Batchelor, has said that he would agree to a tea duty in order to enable these works to be carried out. If it be proved that extra taxation is necessary for this purpose, I should be prepared to vote for extra taxation, but not for a tea duty, seeing that the Commonwealth would get only onefourth of the revenue raised from such a source.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We should not require to raise £500,000 a year.

Mr WATSON:

– The amount necessary has yet to be shown. But if it be necessary to raise contributions from the people in order to carry out these works by means of the revenue, I should be quite willing to support such a step, and I do not believe that the people as a whole would object. Prom the 4,000,000 people in the Commonwealth, a few pence, or at most1s. per head would be quite sufficient to obviate the necessity of going to the money market.

Mr Poynton:

– Does the honorable member suggest a poll tax?

Mr WATSON:

– There are various direct taxes which might be adopted.

Mr Poynton:

– But we cannot get at all the people by means of direct taxation.

Mr WATSON:

-I thought that the principle of direct taxation was so clear as to leave no possibility of a misunderstanding. It is pretty well established that under direct taxation every individual in the community participates - at any rate so far as a land tax is concerned, seeing that each person at least stands on the land, and has in some way to pay his proportion. I am not now suggestinga means ; but I say that if it is necessary to have a Public Works fund, I am prepared to take the step of asking the people to contribute. At the present time, pending whatever com- plications may arise in the finances later, we have more than ample funds to carry out the works necessary, and I trust that the House will insist, during this year at any rate, that these shall be constructed out of revenue.

Mr CROUCH:
Corio

– In my opinion this is the most important Bill we have been called upon to consider. We have had a Tariff Bill, a Customs Bill, and an Immigration Restriction Bill, but this Loan Bill is the most important,simply because it is the first of a series which, when passed, will, more than any other legislation, affect the future of the Commonwealth. It is creating a precedent which will be only too readily followed. This is the case of the “ first step that counts ; “ if we once start another loan authority, when we already have six, we shall live to be very sorry for it.

Mr O’Malley:

– We must stop the States borrowing.

Mr CROUCH:

– The only circumstances under which I could consent to the Commonwealth entering upon a borrowing policy would be the taking away from the States of the power to raise money in that way. It may be pointed out that the Federal Government cannot, under the Constiturion, take away this power from the States. But it must be remembered that the Commonwealth, having absolute power of taxation, could tax any loans raised by the States to the extent of 100 per cent. That might be a roundabout way of stopping State loans, but it would be quite sufficient.

Sir William McMillan:

– Is that a serious proposition?

Mr CROUCH:

– It is a proposition under which, if we have no direct authority, we could take indirect authority. I am sorry that there are some honorable members who desire a Loan Bill for the purpose of unreproductive works, such as we see in the schedule to the Bill.

Sir William McMillan:

– Who are these honorable members ?

Mr CROUCH:

– The Treasurer who introduced the Bill must be supposed to support the items in the schedule, as must also the other members of the Government and some of their followers. Personally, I think Australia has had a good loan “drunk,” and that it is just about time she went into an inebriate retreat. Her one hope is to cry off loans in future. The people, when voting for the Constitution, expected that in any case, the States would be left to do their own borrowing, and not that the Commonwealth would start borrowing also. Look at the alarming position now existing. The interest paid on Australian loans amounts to £2 2s. annually for every man, woman, and child in the community, as compared with8s. per head in Great Britain, where there is an immense army and navy, and an enormous annual sinking fund of about £9,000,000 ; as against 4s. 6d. in Turkey, which is usually described as the insolvent State;1s.10d. in the United States, where there is a pension fund, totalling many millions of pounds ;1s. 5d. in Russia ;1s. 6d. in Germany, which is somewhat analogous to Australia, in that the German Government own about 90 per cent. of the railways ; and 9s. in Canada, which is a federation whose example we are trying to follow in some directions, though unfortunately not in this.

Sir George Turner:

– Government railways are not included in the debt of Canada.

Mr CROUCH:

– In Canada the first loans were incurred for railway purposes. The Argentine Republic, which, while it does not own the railways, subsidizesthem by paying a large portion of the interest on their construction, has a smaller interest charge per head than Australia. It has been said that the Canadian Government does not own the railways there, but I should like to point out that our railways have cost more than they are worth at the present time. In the United States, when one company buys up the railway of another company, the value is generally estimated at from fifteen to twenty years’ purchase, which is equivalent to between 5 and 6 per cent. upon the capital cost. Our railways have cost in the aggregate £136,552,168, but as their net earnings amount to only £3,981,960, their value at twenty years’ purchase, which is the best obtainable valuation, would represent only £79,639,000, or £47,000,000 less than their actual cost.

Sir William McMillan:

– But by a stroke of the pen their rates could be increased.

Mr CROUCH:

– My great objection to State socialism is that if a Government goes into what appears likely to be a reproductive work, and the enterprise turns out to be a losing one, it cannot withdraw from it.

Sir George Turner:

– But a private company would charge much higher rates than the Government charge, and would therefore obtain a higher return upon their capital.

Mr CROUCH:

– That is a strong argument why the Government should not enter upon undertakings of this kind.

Mr Watson:

– The people have had the benefit of low rates.

Mr CROUCH:

– At any rate, Australia cannot go into liquidation, and will have to make up £47,000,000 of leeway. The Treasurer proposes to borrow under this Bill £1,000,000, of which £650,000 is already ear-marked by the Loan Appropriation Bill. In the schedule to that Bill a provision is made for an annually occurring vote of £225,500, and for additional expenditure totalling £328,350. This, with £328,000 additional for the completion of works proposed, makes up the sum of £1,203,000, instead of the £1,000,000 in the Bill.I think it is a great pity that these works are not to be paid for out of revenue. The honorable member for Bland extracted from the Treasurer a statement that the charges for interest and sinking fund must eventually be paid by the Commonwealth, though the immediate cost goes to the State. IfI were to analyze the schedule to the Loan

Appropriation Bill-

Mr SPEAKER:

– The honorable and learned member cannot refer to the provisions of a measure which is set down upon the notice-paperfor discussion later on.

Mr CROUCH:

– Well, I am informed that of the £650,000 to which I have referred, New South Wales is to receive £258,000, an annual vote of £80,000, and additional expenditure amounting to £94,750. Victoria is to have an immediate vote of £152,000, an annual vote of £42,000, and additional expenditure amounting to £108,000.

Mr SPEAKER:

– The honorable and learned member is now contravening Standing Order 274, which forbids the anticipation of the discussion of subjects set down on the notice-paper.

Mr CROUCH:

– I regret that I am unable to refer to those figures. The indebtedness of the States at the end of 1900 amounted to £210,826,700, while their sinking funds amounted to only £896,046. At the present time their indebtedness is about £240,000,000. Yet it is proposed that the Commonwealth shall enter the money market, and try to increase this enormous burden of debt. People . complainabout the want of prosperity, but how can we prosper while a large portion of our revenue, of our produce, and of our manufactures has to be sent out of the country to pay the foreign creditor ? The life blood of the community is being drained in the payment of interest, and the sooner we get back to a saner method of finance the better. We may have dull times on the way back to proper finance; but every penny paid off means greater prosperity eventually. To the end of last year, the deficit of the Australian States totalled £4,116,000. I find from Coghlan that the revenue from the States for the vear ending 1900-1 was £30,778,571, and their expenditure £31,467,866, or £689,359 more. But it must be borne in mind that from the revenue must be deducted the sum of £3,426,000, which was the proceeds of the sale of land.

Sir William McMillan:

– Some of the land revenue, so far as New South Wales, at any rate, is concerned, is derived from the rents paid by squatters, and from other forms of occupation.

Mr CROUCH:

– I am not sure that I have allowed for that, but, at any rate, a very large amount which was treated as ordinary revenue was really money derived from the sale of capital. Would any private individual, or any corporation other than a Stats, be allowed to treat the proceeds of the sale of capital as ordinary revenue ? If he sold or mortgaged his land, he must regard the amount so used in his expenditure, and it must be included in his losses. It has been said that if we put a sudden stop to our loan expenditure there would be disaster. . But we shall have to put a stop to it some day. The time will come when the foreign creditor will treat us as Egypt and Greece were treated when they overborrowed. The creditors of Greece demanded, with the guns of warships ranged upon the city of Athens, the assignment of a certain proportion of the excise revenue from currants and from other articles ; while, in the case of Egypt, the Khedive was deposed, the war of 1884 was undertaken, and the administration of the finances of the country was forced upon England.

Sir William McMillan:

– Does the honorable member regard those as parallel cases ?

Mr CROUCH:

– Not quite as parellel cases, but as our security is eaten up by loans our credit will fall, and every time we have to borrow we must pay a higher rate of interest. Some people think that loans are a good thing, because they bring capital into the country, but the money has eventually to be paid back, and what we are doing now is like trying to “keep a dog alive by feeding him on his own tail. I have some figures in regard to the propoed sinking fund, which I should like to put before the House, but I understand that Mr. Speaker has ruled that the sinking fund cannot be referred to during this discussion. I regret that owing to the way in which this Bill has been drawn up I cannot refer to the purposes to which the money is to be applied, or to the way in which it is to be repaid. It is necessary to discuss all the surroundings of such a proposal, and I can only regard the failure of the Government to bring it down in such a form as to admit of this being, done as another reason why I should vote against the Bill.

Sir JOHN QUICK:
Bendigo

– I have given very careful and anxious consideration to the loan proposals of the Government, and have considered the possible effects of rejecting them, and although I desire as far as possible to support the Treasurer in his financial proposals, I feel that I cannot vote for the second reading of the Bill. No doubt the Treasurer, ‘in introducing the measure, has been acting under pressure from the department principally interested. I do not suppose that his’ own views, so much as what are regarded as the departmental necessities of the situation, are expressed in the measure. It may be also that the officers of the Post and Telegraph department have been guided by custom and tradition. It is well-known that in years gone by, in all the States, whenever occasion has arisen for an extension of post and telegraph’ works and revenue has not been available, the officials have considered that all they had to do was to run to the Treasurer and induce him to provide loan funds for the purpose. Probably, if the Postal department had- been called upon in years gone by to provide for the ordinary expenditure out of revenue, we should not have had this application made to us. It is a great pity - I was almost going to say it was a great shame - that in this, the first session of our Commonwealth Parliament, one of the prominent features of our financial scheme should be a proposal for a loan of £1,000,000 of which about £650,000 is to be immediately spent in ordinary work. We have not the details of the proposed expenditure annexed to this Bill, but we have a fair idea of the destination of the money, and we know that it is to be devoted to the extension and improvement of the postal, telegraphic, and telephone services of the Commonwealth.

Sir William Lyne:

– There are not many post-offices provided for - the votes are mostly foi” telephone and telegraph works. There is one big post-office work in Queensland for which £150,000 is required.

Sir JOHN QUICK:

– It would be invidious for us to discuss the items, and it would be very difficult to discriminate between those which should be provided for out of loan and those for which revenue should be appropriated. It would be far better to postpone the whole scheme for the present session, and refer it back to the department principally interested, and call upon the officers to cut down the proposed expenditure to such a point that it can be provided for out of ordinary savings.

Mr Deakin:

-It lias been cut down by one-half already.

Sir JOHN QUICK:

– I have no doubt that the Government have done their best to apply the pruning-knife, but they have been acting under the pressure of their departmental officers, who should receive a salutary check, and be warned that they cannot expect to come to Parliament every time they want to raise money for the purpose of extending the postal or telegraph system. At the present juncture in the history of Australia, we ought to be very careful about floating loans for purposes such as those contemplated. It is not proposed to borrow money to provide for grest national necessities or save us from a great national disaster. If that were the case we should all concur in the proposal. The expenditure is of an ordinary character, and none of the works are urgent. None of them are so important as to justify us in floating a loan during the first session of our Parliament and pledging the credit of the Commonwealth for that purpose. It is time that this Parliament set an example to the Parliaments of the States in the matter of economy and financial discrimination. There was never a more unfortunate time than the present for floating a loan of this trifling and unimportant character.

Mr Deakin:

– There was never a more unfortunate time to curtail expenditure on necessary works.

Sir JOHN QUICK:

– I know that it is unfortunate that we should have to suggest anything like curtailed expenditure ; but we ought to provide as far as possible for the whole of these works out of ordinary revenue. .Most of the works that are urgently needed ought to be provided for 39 e out of revenue, and the construction of the others should be postponed until some future time when we are considering a great loan scheme, such as will probably have to be dealt with at a later stage in connexion with the federal capital, or other great national works. Public opinion in Australia has been developed up to a point at which there is a very strong feeling against the perpetuation of the borrowing system for the purpose of carrying out such works as are held in view. We are asked where we are to obtain the money ; but in reply to that question I ask, “Where is the borrowing for such purposes as are now indicated to cease “ ? Is it to go on indefinitely, until, we receive some tremendous rebuff in the money markets of the world 1 I do not wish to suggest that our credit is in any danger so long as we exercise our powers with judgment and discrimination, but it is necessary that we should specially consider a Loan Bill of this character. Let us look round and see how Australia stands in reference to its loan indebtedness. I have received a paper issued by the Taxpayers’ Union of Sydney showing the amount of money per adult that has been borrowed by the various States of Australia. I do not know whether the figures are exactly correct, but I presume that a document of this kind would not have been issued by a public body unless the calculations were approximately correct. According to this statement “Victoria comes out on top as the least indebted of all the States.

Sir George Turner:

– That is taking it on the population basis : but look at her small territory.

Sir JOHN QUICK:

– But we are entitled to look at her population - her reservoir of taxing power. Victoria is indebted to the extent of £96 per adult of her population ; Tasmania, £98 ; New South Wales, £100 ; Western Australia, £115 ; Queensland, £141 ; and South Australia, £142.

Mr McCay:

– That represents the public and private indebtedness combined.

Sir JOHN QUICK:

– In any case, the figures show that there is already a very big loan bill against Australia, and it ought to make us pause before we launch merrily into any further borrowing. If works of the character indicated in the papers before us could be constructed out of revenue or out of savings, Or by means of levying a little extra taxation, the people of Australia would gladly acquiesce. I am firmly, convinced that we ought to show the officials of the Post and Telegraph department that we are determined that .as many as possible of these works shall be carried out without resorting to the expenditure of loan funds. I am not voicing what might be regarded as a mere popular cry in Australia, because in the issue of the newspaper called United Australia, of March 20th, 1902, the following passage occurs : -

The Financial Times, London, of January 24th contains u strong leader on a series of articles which have appeared in its own columns on “Australia’s debts and assets.” Speaking of the writer of these contributions,, it says - “ While carefully guarding against playing the role of an alarmist, he states plainly that the financial position of Australia is by no means satisfactory, and utters a warning that unless a check be imposed on borrowing, and a halt called to extravagant expenditure, that position may become dangerous.”

This warning from the other side of the globe, uttered by a high financial authority, combined with the warnings which are uttered by those amongst us, and the drift of public opinion, it ought to restrain us from rushing thoughtlessly into the floating of any loans. It is not proposed to borrow money for the purpose of developing our production or our resources, but merely to facilitate inter-communication amongst our people. One could understand a loan being proposed for the purpose of constructing a transcontinental railway, or a system of canals intended to facilitate Inter-State trade, and which might incidentally also be used for water supply and irrigation purposes, because such works would be of a national character, and might assist in the development of our resources. But though these undertakings may be very nice, useful, and agreeable, they do not go to the root of national wealth, but are merely for the purpose of facilitating Inter-State communication. Let me remind the Treasurer that some of the works which it is proposed to construct will enter into competition with existing federal services. ‘For instance, the proposed telephone between Melbourne and Sydney, which is tobe constructed at a cost of £70,000 or £80,000, will compete with the existing telegraph line between those two capitals.

Sir William Lyne:

– So does every telephone.

Sir JOHN QUICK:

– Then why should we construct that line out of loan money ?

If these departments were overflowing with revenue, and could afford to do so, I should say, by all means, let them undertake these works. But when we are asked to float a beggarly loan of £600,000 to enable them to be carried out, it is time we plainly declared that Parliament will not entertain a scheme of this kind, and that, to justify a loan, any work must not only be necessary, but urgent, for the purposes of the Commonwealth. Should any well-considered proposal be submitted to Parliament, for a loan either to construct railways or to provide a water supply, I am quite sure that honorable members would cheerfully acquiesce in it. But I should further like to ask whether the Government are satisfied that the proposed works will be approximately of a reproductive character ? I should like to know whether they will pay a fraction of the working expenses. I do not think we have very much information on the subject. I suggest this inquiry, because I have noticed that where an application is made for an extension of telephonic communication in a country district, the department sends out an officer to ascertain what will be the probable revenue from the -work. That is a business-like inquiry. Quite recently I presented a petition from some of my constituents at Fosterville, a few miles from Bendigo, in favour of telephonic extension. The department, however, found that the revenue which would be derived from this work was not sufficient to justify the expenditure, and accordingly refused to carry it out unless a cash guarantee were ‘ given for the payment of interest. I should like to know whether the same principle - to which I do not object - has been observed in connexion with the works initiated in this schedule? T do not think we have any guarantee that these works will pay the expenses proposed to be incurred in- the undertaking. We ought to know a little more about the internal organization and the results of the working of these departments before launching into a schemp of this kind. Doubtless the Government are doing what they think is the best thing under the circumstances. They do not wish unnecessarily to cut down, public works. They feel the pressure of the various departments, and in submitting these proposals to Parliament they may have done their duty. Probably many of their critics would have acted precisely as they have clone. But the responsibility rests upon Parliament. It is for the House to determine whether it will sanction what the Government suggests. After most anxious consideration, I am reluctantly bound to confess that I cannot support the second reading of the Bill.

Sir WILLIAM McMILLAN:
Wentworth

– I cordially agree with honorable members who have stated that this is one of the. most important measures that has yet been brought under the notice of Parliament. It would be a strange thing indeed if a Bill of this kind were not fully and drastically discussed, and, if necessary, criticised most completely. I purposely abstained from speaking earlier in the debate because I was anxious to hear the views of honorable members, as one or two of them seemed to entertain very extreme opinions upon this question. But, in listening to the discussion, I did not find that any speaker went sofar as to argue that under no possible circumstances should the Commonwealth raise a loan. That brings me to the fact that this series of Bills has been put before us in rather a disconnected way. I think it is unfortunate that we are not now discussing this Bill in conjunction with the schedule of works. I suggest to the Treasurer that, before making his speech in reply, the debate should be adjourned and that we should proceed with the discussion upon the Bill covering the appropriation. Then, if honorable members will allow the second reading of the Loan Appropriation Bill to be passed,so that we can getinto committee, the Treasurer will have an opportunity of explaining, item by item, his reasons for including them in the Bill, and the principle underlying them. If the whole schedule be vetoed, of course the measure which we are now discussing will fall to the ground. Similarly, if two-thirds of the items are vetoed, the Treasurer may conclude that in order to provide such a small amount as £100,000 or £200,000 it will not be necessary to go upon the money market.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Will the Treasurer consent to have his Bill emasculated in that way ?

Sir WILLIAM McMILLAN:

– I think that the method which has been adopted is scarcely fair either to the House or to the Treasurer. Many honorable members disagree with certain items which are embodied in the loan proposals, but there may be works, which, after further explanation from the Treasurer, may fairly and reasonably be constructed out of loan account. Having made this suggestion, I should like to offer a few remarks in connexion with the Bill itself. Honorable members naturally feel that as this is thefirst Loan Bill which has been presented to them, the whole principle of borrowing ought to be thoroughly criticised. But I think some imagine that we are absolutely untrammelled in dealing with loan expenditure. Really, we are not. This is not a Government which is starting with an absolutely clean sheet, free from all responsibilities. The Commonwealth Government has had to assume control of certain transferred services, and whether we pay for the public buildings connected with those services - which represent a value of £10,000,000 or £12,000,000- by accepting, an equivalent portion of the States debts, or merely by discharging the interest upon them,we are practically initiating a loan policy. The interest upon that debt will constitute a very large amount, because in many of the States interest was not charged upon the expenditure involved in these buildings. Therefore, when we take them over, either upon a valuation or under whatever terms may be agreed upon, the Commonwealth will have to pay the full interest owing upon them. Consequently we start, to a large extent, with a policy which has been handed to us. I was really surprised at the peculiar intellectual finessing of the honorable and learned member for Northern Melbourne, when he declared that in the aggregate we had paid in interest an amount equal to the whole of our loans, a fact which evidenced that if we had repaid the loans year by year, we should have been in a much better position. No doubt we should but we could not do it. The Commonwealth Government, therefore, does exactly what the States Governments are doing. They take over a certain amount of business and certain responsibilities connected with the carrying on of that business. If the business of the post and telegraph office andthe railways had not been projected years ago, we should have had no income and no services. It is absolutely absurd to talk about a policy under which we never should have borrowed. We had not the necessary money, because large amounts derived from the sale of land in the different States were used for developing the country and rendering it possible of habitation.

Does not the very prosperity of Australia at the present time give the lie to the pessimistic views which are entertained by many people ? We talk about a loan fund. In 1900 the various States had incurred a loan expenditure aggregating £180,000,000. Of that amount, however, £140,000,000 was absolutely reproductive. It had been spent upon railways, telegraphs, and in connexion with water, sewerage, and other services, leaving only £40,000,000 to be accounted for. When one considers that a large amount of that £40,000,000 has been expended in the erection of post-offices, by which the States now save the rent of those premises, and iri other works which are either directly or indirectly reproductive, I think it will be seen that we can fairly face the world. I doubt very much whether we could not getrid of the whole of the railways of Australia at the present time for the amount which stands against them. Honorable members talk about the per capita of debt, but forget the enormous services which those debts have promoted. When we talk about our indebtedness we should remember that the trade and business of Australia are -something phenomenal in the history of the world. At the present time the trade of the Commonwealth represents £16 1,000,000 annually. We have an external trade -amounting to £80,000,000 annually. When one recollects that we are merely a handful of 4,000,000 of people, these figures altogether put out of consideration ‘ any ordinary comparisons. At the same time, I think that we should be careful in considering our loan policy. There were two weaknesses in the finances of the States. One of these has been prevented in our finances by the admirable Audit Act which we passed. That was the danger of putting the expenditure of a year into the year afterwards, and thus creating fictitious surpluses. There was also the question of the loan account. Honorable members who have been in the State Parliaments recollect that the loan account was almost the last measure of the session, and that it was rushed through when members wanted to get home. The only cure for the evil we are facing to-night is conscientious and careful consideration of every item the Treasurer puts before us in the loan account. It is no use laying down a broad rule to never borrow. It is of no use earmarking or taking any such artificial and absurd steps. We have to recognise the fact that, in certain large services taken over as a matter of public necessity and convenience, there are works of an absolutely reproductive and interestbearing character, which are permanent, at any rate, to the extent of 30 years, and with which it would not be fair to burden the current revenue. On the other hand, as we make the period of our loans 30 years, any work that will stand only ten years ought not to be included in the loan account ; above all, what we call renewals ought not to be paid for out of loans. We ought to err on the side of revenue, and not on the side of loan expenditure. If we make any mistake, it ought to be in defraying out of revenue, works which might possibly be defrayed out of loan, and not in defraying out of loan those which might be defrayed out of revenue. These are the only principles I know of to guide us. The danger of our action to-night lies in the fact that we have before us a Loan Bill, by which the Government propose an expenditure of £1,000,000, which is authorized in detail in another Bill. Should weve to the second residing of the Loan Bill without considering in detail the items of works in another Bill? We must not forget that the States are watching our financial operations. Several of the States know that they are on the verge of very large deficiencies, and if it goes before the world that we will have nothing to do with loan accounts - as might be deduced from many of the speeches to-night - there may be even more discontent with the Commonwealth than there is at present. It would be better for us to show the country, not that we do not believe there are items to which the loan account could be properly applied, but that we believe that the items making up the £600,000 are not such as ought to be paid out of loan account. Or on the other hand, we could show that we believe there is a. sufficient surplus arising out of our present Customs revenue to justify our postponing the consideration of a loan .to a more necessitous time. I do not want the public to be deceived as to the attitude of the House. It is very reasonable to say that a large number of these items, such as renewals, ought to be paid out of revenue. It is reasonable to say that with our large Customs revenue we have an ample margin to enable us to meet the expenditure out of revenue, or, at any rate, that we intend to do so this year. But it is not reasonable to say that under no conditions are we going to excercise the right we have of raising loans. We are in a much better position to safeguard loans than are members of the State Parliaments. The loans we raise will be practically under the advice of the Executive of the Commonwealth, and they will be chiefly in connexion with the Post and Telegraph service. That service will, I believe, not be interfered with except to a small extent by honorable members. We have to deal with quarantine, lighthouses, and defence, and there is scarcely one of the items which will bring in the machinations of what we used to call “ the roads and bridges member.” Very little personal influence or kudos will be obtained by members through the raising of any loans by the Commonwealth. We need not be fearful about the future if we carefully and calmly, without any party spirit, consider every item the Executive lay before us. There is not the same reactionary feeling there might be in a State Parliament. We are simply keeping up certain services which are absolutely necessary. In the great department of defence, it would be the wildest folly to carry on any “ cheap-jack “ policy. I am speaking of loans applied to fortifications and works of that kind, which must be dealt with absolutely by themselves. We do not know to what extent we may have to renew these works. We may at any time have to make a large expenditure for the public safety ; and that alone shows how difficult it is even in the matter of renewals to lay down any rigid rule. There is one matter on which I should like to say a word to the Treasurer. I cannot see what necessity there was for the Treasurer, without, at any rate, some consultation with this House, to pay over his surplus revenue. Section 87 of the Constitution is as follows : -

During a period of ten years sifter the establishment of the Commonwealth, and thereafter until the Parliament otherwise provides, of the net revenue of the Commonwealth from duties of customs and of excise, not more than onefourth shall be applied annually by the Commonwealth towards its expenditure.

Sir George Turner:

– The honorable member must not forget section 89, which ties my hand absolutely.

Mr Thomson:

– The Treasurer could have appropriated the money.

Sir George Turner:

– I could have spent it, of course.

Sir WILLIAM McMILLAN:

– Section 89 provides -

The Commonwealth shall pay to each State, month by month, the balance (if any) in favour of the State.

Sir George Turner:

– I must pay over every shilling.

Sir WILLIAM McMILLAN:

– I do not think that was intended. I do not know what is the absolute law, but if there was this danger, and the Treasurer thought, as he must have thought, that there would be some difficulty over the question of loans, it would have been better to bring the matter up earlier. The Treasurer knew that there were certain services connected with the post-office which have been carried on under the loan account in the States ; and he must have known that these liabilities would have to be met.

Sir George Turner:

– The States, with the exception of Queensland, have met these liabilities.

Mr McCay:

– If this and all the other Bills ought to have been brought up earlier, what would have been left to bring up later ?

Sir WILLIAM McMILLAN:

– There are certain financial matters which, to my mind, take precedence of all else. The Treasurer must have known that in the first year there would be a large number of liabilities. I take it that the States paid up only to the 31st December previous to the foundation of the Commonwealth.

Sir George Turner:

– The States paid up to last December. I made arrangements with the States that until a loan could be raised, they should pay for works out of loan funds, and that these moneys should betaken into consideration when fixing the value of the buildings transferred.

Sir WILLIAM McMILLAN:

– It come to much the same thing, but that is a matter about which I have not much to say. Our main object is to deal with the principle of loans. While I think the sinking fund is a very good proposal if kept under proper check, and it is clear that we shall not have deficiencies side by side with it, there ought to be some principles laid down with regard to loans in the future. It is difficult to fix a line ; it is difficult to say what works should be put in the loan account, or to decide whether a work will be sufficiently permanent to last 30 years. It is sometimes difficult to say whether a work is really productive, but we must have some understanding on our own part, as a sort of traditional guide to the Treasurer. We might lay it down as a rule that, as our loans are floated for 30 years, anything not sufficiently permanent to last that period must be paid for out of revenue. We could certainly lay down an absolute rule that, all renewals shouldbe paid out of revenue. If I may refer to the schedule of another Bill, I must say I am surprised that the Treasurer, with the surplus he has, should include any items approaching renewals.

Mr Macdonald-Paterson:

– What does the honorable member mean by “ renewals ?”

Sir WILLIAM McMILLAN:

– Renewals of switch-boards, for instance.

Mr Thomson:

– Switch - boards which have been paid for out of loans current.

Sir WILLIAM McMILLAN:

– As has been said to-day, a telegraph post which is replaced ought certainly to be paid for out of revenue. These are simple principles which anybody can understand.

Mr McDONALD:
KENNEDY, QUEENSLAND · ALP

– Paterson. - That has already been done in several States.

Sir WILLIAM McMILLAN:

– Nobody can tell, from a superficial reading of the schedule, whether certain matters are or are not renewals.

Mr Macdonald-Paterson:

– Why this suspicion?

Sir WILLIAM McMILLAN:

– We have only that suspicion which is very healthy in members of Parliament who desire to understand everything brought before them. If I understand the Treasurer aright, he has paid out of revenue for similar services about £180,000.

Sir George Turner:

– The charge against revenue this year is £120,000, and next year it will be £180,000.

Sir WILLIAM McMILLAN:

– But the question is whether the Treasurer has carried out the principle as far as possible. I certainly agree that if we are not going to allow, at any rate one-half of the Treasurer’s proposals, it will be scarcely worth while going to the money market. The Treasurer is not now in the position to which he has referred. If we liked to operate at once with the whole of this amount as ordinary revenue, the Treasurer would not have to return it to the States. I take it that this amount could be distributed. In other words, the Treasurer need not take the money out of the States all at once. He could take the money as required. But, having taken over the services, we are certainly not justified in refusing to keep them in a proper state, and to develop them, whether out of revenue or lean account. I hope that the Treasurer will not neglect to get this money which is absolutely necessary. The telephone system apparently is going to be an enormously expensive one ; but I hold that it is better, perhaps, that it should be dealt with as part of the Postal and Telegraph department than by the States. Of course, we must be careful in dealing with a service like that from a loan standpoint. We might have a number of small items in a large service which in two or three years would aggregate a very big amount. But, on the other hand, very small items may properly be charged to capital expenditure, and, therefore, it is not reasonable always to consider that, because an item is comparatively small, it ought not to be debited to capital account. But it makes it all the more necessary that in any loan schedule which we may have before us, we should have as full details as possible, and the fullest explanation from the Treasurer. I should like again to suggest tomy right honorable friend that it would be well to postpone this debate, and allow the House to deal with the Loan Appropriation Bill. I would strongly recommend honorable members, whether they intend to oppose these items or not, to deal fairly and generously with the Treasurer, as we generally do, and to allow him to go into the schedule of that Bill, so that he may have an opportunity of explaining the items. After that explanation, if we are still ofopinion that it is unreasonable to place these items in the loan account, we can negative the schedule. In that event, of course, both the Loan Appropriation Bill and this Bill would fall to the ground.

Mr McCOLL:
Echuca

– Like other honorable members, I feel very strongly the responsibility that rests upon us, in initiating Loan Bills, to see that they are placed on a firm and solid foundation. The experience of honorable members who have sat in the States Houses has been of a character that should make us extremely careful to know, now that we are in the higher atmosphere of the Commonwealth, what we are going to borrow money for, and how we propose to apply the money borrowed. While the Government may naturally feel slightly disappointed at the tone of the debate, on the other hand they ought to be gratified that the measure, which is a small one, has been subjected to such drastic criticism, in order that we may lay down a policy for our guidance in regard to the way in which we shall borrow and spend money in the future. It is difficult to vote against this Bill, because I take it that, if it is rejected, the whole of the Bills depndent upon it, together with their schedules, will fall to the ground. We know that a large number of these works are absolutely required. We know also that there is a great dearth of employment, not only in this but in other States, and that the carrying on of a number of works in the schedule- will provide employment, without any extravagance, for a great number of people. We are indebted to the acting leader of the Opposition for his proposition that this debate should be adjourned, and that we should proceed to deal with another measure in order to see what items the House will be inclined to pass. If we do that we shall know positively whether or not it will be necessary to raise a loan. My own belief is that we shall not require to do so. I am strongly of opinion that we ought not to raise a loan for small works. In the case of large undertakings, if it is unavoidable, perhaps, we should do so, but otherwise- we should try to live within our means. We ought to regard the provision under which we must pay the States 75 per cent, of the Customs revenue as an absolutely business one, and keep within our own power the spending of the remaining 25 per cent., which is- justly due to the Commonwealth. No doubt there are difficulties in some of the States, but if we are going to study the States whenever they get into some difficulty, we shall never be done. Hard cases make bad laws. If we study every hard case; our legislation will not be what it ought to be. I do not propose to take up any further time, because the measure has been threshed out at very great length to-day, and very little remains to be said after the speech which we have just heard. Sooner than borrow money for most of the purposes named in the schedule, I should be prepared to revert to the two-penny postage, and to increase the charges for telegrams. With some regret I feel that I cannot vote for the second reading of the Bill, and I hope the debate will be adjourned for the present, in accordance with the suggestion of the acting leader of the Opposition.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I hope that the Treasurer will not proceed with this Bill. I think it is too early in our political history to enter on the down grade by borrowing for unproductive works, or works that will be, at best, only reproductive to a very limited extent. A great many of them can stand over for the present, and the few which cannot possibly stand over should be constructed out of ‘ revenue. After a year or two we shall know our position better.

Sir W illiam McMillan:

– The honorable member would not stop the expansion of thetelephone service.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I do not see anything desperately pressing about that matter. We have not yet passed the Tariff. We do not know what our revenue is to be ; we are groping in the dark, and will be doing so for some time to come. By allowing these works to stand over for a time - and there is nothing so desperately pressing about them that they cannot stand over for a limited time - we shall know our position better. I sympathise with the Treasurer in his desire to carry out works for which the different States are clamouring, but we know that it is not always wise to do so.. It .appears to me to be too early to commence the system of borrowing for unproductive works. I do not wish to take up any time in discussing this matter ; I do not think it is necessary, because a few words explain our position as well as if we were to speak for half an hour. I certainly cannot support this Bill at the present time.

Mr MACDONALD-PATERSON:
Brisbane

– I rise to expostulate against this tirade in regard to borrowing on behalf of the Commonwealth. I speak not only for the. State I represent, but for various districts in New South Wales, as well as in other States - judging by the expressions of opinion in the press - when I say that if it had been thought that we should be hammered into a corner like this, and that we should not be allowed- to spend a few tens of thousands of pounds in the maintenance of great telephonic and great telegraphic services, and upon the erection and repair of public buildings, not one vote would have been cast for the Constitution Bill in many parts of Australia. We have shorn the States of their power to borrow for these works, and, forsooth, some honorable members would now absorb the right which the States possessed, before they joined the Commonwealth, of maintaining the services within their own territory. In connexion with this Bill, I find that the parochial and provincial spirit is stronger than it was even when we were dealing with the Tariff. A paltry £1,000,000 is proposed to be divided amongst six States, and I find the- honorable and learned member for Northern Melbourne, a notable barristerinequity, disclosing his utter ignorance of the effects of wholesome utilitarian expenditure - at all events, in connection with telegraphs and telephones, and the maintenance of the public buildings of the Postal department - upon the welfare of the people, and the development of trade and commerce. No State is in debt when it has the wherewithal to pay in the shape of railway works and works of public utility. I heard with sorrow to-night the statement made by an honorable member that a certain writer in an European or American journal had made the statement that one-third of the whole of the revenue of Australia was devoted to the payment of interest upon the public debt. There never was a more barefaced falsehood floated on the atmosphere of this continent.

Sir William McMillan:

– The honorable member said that the writer made the statement’ that that was the expenditure in respect of the payment of interest on the unproductive debts of Australia. That was not true.

Mr McDONALD:
KENNEDY, QUEENSLAND · ALP

– PATERSON. - That is so. That writer did not know of the vast estate which we have been developing, and the indirect revenue that we receive, and have received, in all the States, by reason of our expenditure for the settlement of population, the encouragement of immigration to this country, the establishment of telegraphy, the construction of railways, roads, and bridges, and the giving of bonuses for the discovery of goldfields, as well as to various industries. Those works came out of the profits of the general revenue, and the general revenue was augmented by- the higher prices of lands sold as freeholds, and the higher rents ‘ obtained from Crown lands, as the result of the construction of railways and good roads. The whole revenue has been augmented alike from gold-fields and coal-fields, timber licences, railways, telephones, good roads, and settlements. That was brought about by the population becoming prosperous, and giving traffic alike to road, river, and rail, while consuming articles on which the Customs levied duties. We Ought to have had 2,000,000 more people in this country, but the fact that our population has not increased by such leaps and bounds as was predicted, is due to the effects of floods and droughts and diseases amongst our flocks and herds, and to various other causes. The gentlemen who uttered the prophecy was speaking without due regard to the teachings of history. We do not know what Australia will pass through during the next 50 years ; but we know what has happened during the past 50 years. We have passed through a period of great borrowing, and what would Australia have been to-day without this borrowing? Is it not a fact that the railways of Australia are worth more than the whole of our national debt? Is it not true that some years ago, whilst the late Mi-. Speight was Chief Railway Commissioner in Victoria, an offer was made by capitalists in Europe to take over the whole of the debts of Australia in consideration of the railways being given to them.

Sir William Lyne:

– That is so. We should have no national debt if we sold our railways.

Mr MACDONALD-PATERSON:

– When the various States entered into the federation, the belief was entertained that the transferred departments would be conducted on lines similar to those which had previously been followed. But now we find that a strong objection is being raised to any further borrowing for the purpose of carrying out public works, such as have hitherto been constructed out of loan funds. The honorable and learned member for Northern Melbourne has told us that if a big loan were proposed he would raise no objection. He objects toa sprat, and he would not even have a mackerel, but he wants a whale loan. I cannot agree with his view. If the Commonwealth had not been established, the majority of the works now proposed to be provided for would have been constructed by the States out of loan funds. The Treasurer has told us that he desires to construct as many works as possible out of revenue, but that the loan is proposed for the purpose of lightening the demand upon the revenues of the States. I think that the Treasurer has not gone far enough, because not one sixpence should have been taken out of the revenues of the States for the purpose of carrying out these works. We are face to face with the most disastrous condition of affairs that has ever been experienced in Australia. The whole of our yield of wool has gone, and we find that two of the largest meat works in Queensland are being closed down, and that there is no likelihood of their being reopened for five years to come. The gold industry is not prospering or advancing, and our industries generally are in a very depressed condition. I am speaking on behalf of the whole of the citizens of Australia, when I contend that every 6d. that may be deducted from the State revenues for the purpose of carrying out works such as those referred to will increase the burden of the disaster which isnow overshadowing us, and which will in the end prove much worse than that of 1893, when our banks and companies failed on every hand. Would the people of Queensland have voted for federation if they had understood that no new telegraph lines would be provided for them except out of their revenue? Would they have consented to any arrangement under which necessary post-office buildings - the erection of which had, in some cases, been postponed for many years past - would have to be constructed out of revenue? They would never have joined the federation under those circumstances. The same statement would apply to the people of Western Australia. I do not wish to refer to those questions which have previously been decided by this Parliament in a manner outrageously against the interests of Queensland ; but I contend that honorable members who propose to discharge this Bill from the notice-paper, and who declare that there should be no more borrowing for the purpose of carrying on public works in Queensland and other States, have no proper conception of the present situation. I promise honorable members that if that attitude is taken we shall attempt to break away from the federal union, and to return to the wholesome conditions which prevailed before we federated. Then there was prosperity, and peace, and financial soundness, and everything that appertained to a State which was developing its industries under the laws of its own Parliament, and the administration of its own Government, with the help of its banking institutions. But what do we find now ? They are all gone, and we are down in the depths of the miserable disasters which have been brought about by federation. This is the “ last straw “ which will “ break the camel’s back.” Every one knows that Queensland, Tasmania, and South Australia are sufferingand will continue to suffer from the operation of the Tariff.

Mr SPEAKER:

– The honorable and learned member is not discussing the measure before the Chair.

Mr MACDONALD-PATERSON:

– The question is, shall we initiate a borrowing policy for a miserable £1,000,000? I say unhesitatingly that I should be utterly ashamed of this House if it had not the courage to borrow £1,000,000 within its own country at 3 per cent., and distribute it as is proposed amongst the several States. God forbid that I should think this House will reject the measure ! If I had £1,000,000 sterling myself I would lend it for nothing. We want the States to be honestly dealt with.We do not desire their financial conditions to be disturbed or their local indebtedness prejudiced by the fact that they are unable to repair a telegraph office, renew a telegraph wire, or aid in the development of the Postal or Customs departments. We wish all the services which are referred to in this Bill to be maintained, if not developed, in the interests of the Commonwealth.

Mr KIRWAN:
Kalgoorlie

– I am exceedingly sorry that the discussion of a Loan Bill for what the honorable and learned member for Brisbane has so frequently referred to as “ a paltry million “ should have been productive of the violent outburst which honorable members have heard against federation. A good many honorable members on both sides of the Chamber fought very hard for union, and I am sure they all agree with me that, because an honorable member of this House cannot have his own way regarding a Loan Bill, it is rather an extreme course for him to adopt to condemn federation. None of us can secureall that we should like in the way of legislation, but surely those who differ from us can adopt another course than that followed by the honorable and learned member. Surely they can seek to change the personnel of the House. I am not in agreement with theattitude taken up by the honorable and learned member on the Loan Bill, though I can follow his line of reasoning. His stand upon this Bill is in perfect accordance with his actions in the past. I congratulate him upon ‘his consistency, but I regret that I cannot similarly congratulate some honorable members upon the Government side of the House who oppose this Bill. I refer particularly to the honorable member for Gippsland and the honorable member for Bourke, who. are present, and to others who are not present. Those honorable members have condemned this Bill, and argued that money necessary for the carrying out of public works should be derived from revenue. Yet what is the policy which they pursue 1 Upon the very Bill which preceded that which is now under discussion - a measure under which it is intended to disburse £324,000. out of revenue amongst a few individuals- =-

Mr SPEAKER:

– The honorable member is not in order in referring to another measure.

Mr KIRWAN:

– I may be permitted. to say that, so far as their idea of constructing public works out of revenue is concerned, it cannot be carried out if that revenue is to be utilized to subsidize private individuals. I shall vote against the second reading of this Bill. To my mind there is no urgency in connexion with the flotation of’ the proposed loan. Honorable members ought to pause until we know what is the financial position of the Commonwealth. Furthermore, the particular works which it is proposed to construct may very well wait. I do not agree with those who declare that the Commonwealth is upon the verge of bankruptcy, but its indebtedness is such that we might very well pause before adding to it. The honorable and learned member for Brisbane corrected something that was said to the effect that one-third of the total revenue of the Commonwealth was spent in interest upon our public indebtedness. I admit that it is not correct to say that one-third of our revenue is devoted to that purpose ; but of the total revenue of the States, namely, £28,500,000,£7,500,000, or more than one-fourth, goes to pay interest and charges upon the national debt.

Mr Thomson:

– The honorable member has not deducted the earnings.-

Mr KIRWAN:

– I am merely stating that one-fourth of our total revenue, including those earnings, goes in interest and charges upon our national indebtedness. In this connexion I have a few figures which show how Australia compares with other nations of the world. These figures are derived from the Statesman’s Year Book, and show that the indebtedness of Australia is considerably greater than that of any other country.

Sir William McMillan:

– Is it fair to compare our indebtedness, which includes the cost of all the services which have been mentioned, with the indebtedness of countries where those services are carried out by private individuals ?

Mr KIRWAN:

– Some of the countries to which I intend to refer have incurred expenditure for similar services, such as railways, Ac. The public debt of Australia is £55 per head, and the annual interest payable upon that sum is over £2 per head. Next to Australia, France is the most heavily indebted country. There the national debt represents £30^ 17s. 9d. per head, and the annual interest 25s. 4d. per head. The indebtedness of Great Britain is £16 13s. 7d. per head ; the interest payable upon it being Ss. lOd. per head. Similarly the debt of Italy is £15 lis. 10d., and the interest chargeable 14s. 4d. per head. Austria has a debt representing £4 19s. 9d. per head, the interest upon which is ‘4s. 5d., whilst Denmark has a per capita indebtedness of £4 16s. 10d., upon which the interest is 3s. 2d. per head. The national debt of Germany amounts to £2 2s. lOd. per head, representing an annual interest of ls. 7d. per head. Russia has an indebtedness of £6 3s. 6d. per head,, upon which the interest is 5s. 2d. per head ; Switzerland a debt of £1 2s. 4d. per head, the interest upon which is ls. per head. The national debt of Turkey is £6 ls. lOd. per head, and the interest payable upon it is ls. 8d. per head. The debt of the United States is £5 18s. per head, the interest upon which represents ls. lOd. per head. In Japan the indebtedness is £1 3s. per head, and the interest ls. 9d ; in Canada it is £10 per head, and the interest 8s. Several of these countries have very considerable assets. For example, Austria has £240,000,000 invested in railways, and Germany owns her trunk: lines. Most of these countries have to maintain navies and huge standing armies, and yet the most heavily indebted country, France, has a much smaller debt than we have. Under these circumstances, we cannot exercise too- rauch caution before embarking upon any loan policy. I do not urge that loans ought not to be floated in cases of great urgency, or for the carrying out of works of a national character. For instance, if no other means could’ be adopted, I should not object to the flotation of a loan for the purpose of locking the river Murra)’, or for constructing the transcontinental railway to “Western Australia. Such works occupy an altogether different plane to some of those included in the schedule of the Loan Appropriation Bill, which, according to the Treasurer himself, are not urgently required; Owing to the numerous changes that are constantly being effected in telegraphy and telephony, there is every indication that if these works are constructed, they will be virtually out of date within a few years. I quite agree with the remarks of the honorable member for Echuca, in reference to the wisdom of retaining our fourth of the Customs revenue. I would much prefer to see the Commonwealth spend that money upon reproductive undertakings than return it to the States to be expended in utterly useless works. In one or two of the States which I could mention the States Governments have a huge surplus, which they are spending in a way that is altogether unnecessary. They are virtually wasting the money, and it would be much better, if we are pressed, to draw on this source rather than increase the already heavy indebtedness of the whole of Australia. From all sides of the House this Bill has met with general condemnation, and the Government would act very wisely if they accepted the suggestion of the honorable member for Wentworth and withdrew it, at any rate temporarily.

Debate (on motion by Mr. Manifold) adjourned.

page 13783

ELECTORAL BILL

Second Reading

Debate resumed from 5th June (vide page 13361), on motion. by Sir William Lyne -

That the Bill be now read a second time.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– I did not expect that we should reach this measure to-night, and I a?n certainly not prepared to deal with it in the manner its importance demands. But it would not be well for the second reading to pass without a word or two of discussion. I went through the Bill when it was first distributed, but we cannot remember all the provisions of a large number of measures, and unless we know when the debate is to be resumed we cannot be properly prepared. The impression on my mind is that there is a great deal in the Bill to commend it to favorable consideration. It contains a great many, useful provisions, to- one of which I should like to direct particular attention. That is the provision dealing with the proportion of representation to be given to the great centres of population and to the country districts. I understood the Minister for Home Affairs, in introducing the , Bill, to say that the Government were favorable to the adoption of equal electorates, though I think the Bill provides that that principle may be departed from in certain cases to the extent of 25 per cent.

Sir William Lyne:

– Below or above onefourth or one-fifth.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– We should place clearly on the face of the Bill what we mean to do as to the proportion of representation. It would be a fatal mistake to adopt anything approaching a system of equal representation. Those who know me will not suspect me of any desire to give to property or territory that representation which, I think, should be exercised by individuals alone. I have on all occasions, from the very commencement of my Parliamentary career, opposed anything in the form of plural voting, and I have always advocated, the system of adult suffrage. My desire is that every section of the community shall have an equal voice in its government, but if -we adopt the system of equal electorates, that wholesome principle cannot possibly be given effect to. If honorable members consider the advantages which the metropolitan population possess over the scattered population of the country, they cannot fail to see the force of what I say. In the first place the country population is so scattered that people cannot get together to discuss matters of mutual interest. They are split up into different political sections, one person scarcely knowing, what are the views of his next neighbour. In the metropolitan districts the people are all aggregated within a small area, and can readily meet to discuss public questions. They can form associations of various kinds, and give effect to their views in a manner utterly impossible in the country. Large numbers of people in the country districts have to travel long distances to the poll, and in consequence many are unable to vote. In 1 the metropolitan districts every person lives within a short distance of a polling booth, and can exercise the franchise without any personal inconvenience. All the head officials of the State are in the great centre of population, and the business of Parliament is conducted there. People who live in the metropolis have every opportunity of seeing their representatives and Ministers, and can exercise an influence in legislation that is utterly impossible for the people in the country. Even in horseracing we have to call in the services of a handicapper to place the animals on an equal footing, and we know that in shooting the man who fires at 500 yards aims at a bulls-eye three times the size of that aimed at from 200 yards. The same principle holds good in politics, people who live in remote districts being at a great disadvantage as compared with the compact population in the cities. When we were dividing Victoria into federal electorates we gave to the country districts, with a population of 700,000 or a little under, fifteen electorates, while we gave eight electorates to the metropolitan area with a population of close on 500,000. At that time the present Treasurer pointed out that my Government had unduly favoured the metropolitan districts, and contended that there should have been a greater disparity between the representation of metropolitan and country electorates. I should like to know what the Treasurer thinks of this proposal to have practically equal electorates. I feel sure that he cannot be in agreement with it. Victoria sent 29 members to the House of Representatives and the Senate ; and notwithstanding the fact that the country districts have fifteen electorates as against the eight allotted to the metropolitan districts, there are only eleven members who can, by any stretch of the imagination, be regarded as country representatives - that is, country representatives who reside in the country, and have their interests there - while the metropolis has returned eighteen members in both Houses. There are twelve members in the House 6f Representatives who are permanent residents of the town, and who cany on their business or professions there, although only eight electorates have been allotted to the metropolis. The country electorates have not sent one man into the Senate : and unless we make a very great disparity between the representation of the country and the representation of the towns, the latter will exercise almost the whole of the influence brought to bear upon legislation. Honorable members, especially those who know my political career, will credit me with not desiring to give advantage to any section of the community. I only wish to give to the country districts that preponderance which is absolutely necessary to place them on something like a fair footing. This becomes even more important seeing that in the future women will have the right to exercise the franchise. I am one who from the first day I entered Parliament has supported the claims of women in this connexion. At the same time, we know that there are far more women in the metropolitan districts, in proportion to the total population, than there are in the country. If we give anything approaching equal electorates we shall largely increase the political power of the great centres of population, which I maintain already exercise too much influence on the Governments of the various States, and of the Commonwealth. It is scarcely fair that Melbourne and suburbs, with a population of 500,000, should have eighteen members in the two Houses of the Federal Parliament, as against eleven members from country districts, with a populatian of 700,000. I hope no one will think for a moment that I wish to convey that the Melbourne gentlemen who represent country districts do not represent them well and faithfully. But I do say that they, being intimate with all the conditions prevailing in the metropolis, are naturally in a position, whilst not neglecting the wants of their constituents, to render that help to metropolitan representatives which a country member pure and simple would not be able to render, owing to his want of knowledge of local conditions. Precisely the opposite prevails in regard to the country districts. Although there are many honorable exceptions, and some in this House, we cannot reasonably expect a permanent resident of a city to have as much knowledge of country matters as a person who is always intimately associated with them. Therefore, regarding the matter from every stand-point, I maintain that unless we insert a provision in the Bill setting forth clearly what shall be the basis of representation for the metropolitan and country districts, the country will be completely submerged. I sincerely hope that when we get into committee, alterations will be made that will give effect to these views.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Is the honorable member opposed to the principle of one vote one value?

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– No. I say that if we give equal representation to town and country, we shall not have one vote one value. I have been endeavouring to show that people residing close to the seat of government, who can always get together and exchange their ideas, who can reach the polling booth without travelling any distance, and who can come to Parliament House and impress their views upon the Government and honorable members generally, have an enormous advantage over the residents of scattered country districts. I desire to give to the scattered country districts an advantage of numbers in proportion to population that will bring them on a footing of equality. I do not want any more, but I think it only fair that the people of the country should be on a footing of equality with those of the metropolitan centres, and in proportion to their numbers have the power to influence legislation to the same extent as electors in the metropolitan districts. That is all I desire, and I think that my honorable friend will admit that there is nothing unfair in that.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– How would the honorable member secure it ?

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– By giving a larger representation, in proportion to their numbers, to the country electors. Even if that is done, we shall still have a number of town men representing country districts. I do not say that that is always undesirable, because we know that many town men represent country districts well and ably. There is the honorable and learned member for Indi, for instance, a professional gentleman residing in Melbourne, who represents his country constituency in a most creditable manner ; but who, by reason of his association with city matters, is able also to give a helping hand to representatives of the cities. When the Commonwealth Constitution was before the people, one of the grounds upon which I opposed it was that the country districts would be unrepresented in the Senate, which, in most matters, has as large powers as has the j House of Representatives. My prediction ‘ has been verified to the very fullest , extent. There is not one single country member from Victoria occupying a seat in ‘ the Senate, the whole of our representatives there coming from the metropolis. My honorable friend must see that that gives an enormous advantage to the metropolis, and I can assure him that that influence has not been unfelt in the amendments of the Tariff which have been suggested in another place. I refer to that matter only to point out the effect of giving undue representation to the metropolitan districts. I have not read the Bill lately, because I did not think it would come on to-day ; and, therefore, I am quite unprepared, and am speaking only from the impressions which were left on my mind after reading the measure when it was first distributed. According to my recollection, there is a provision in the Bill for the appointment of three commissioners for each State, to divide it into electorates.

Sir William Lyne:

– I said that it would not follow that there would be three fresh commissioners for each State.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– But the Bill provides for three commissioners for each State. I must remonstrate with my honorable friend. No honorable member has a greater respect for the Minister for Home Affairs than I have, and I think he knows it ; but I must say that he is too anxious altogether to augment the importance of his own department. At every possible opportunity he creates sub-departments, and appoints officers at high salaries. I think that arises from the largeness of my honorable friend’s heart ; but at the same time I cannot see the necessity for appointing eighteen highlypaid commissioners to do what the Minister in his own department, with the assistance of his own officers, could accomplish just as well as any commissioners.

Mr McCay:

– The Government ought to take the responsibility.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– Yes. The Government ought to submit proposals to us, and then the whole matter would be thrashed out on the floor of the House. There is a superstition amongst some honorable members that an irresponsible person can do work very much better than one who is reponsible for it. I do not know why the department for Home Affair?, without the appointment of a single outside person, could not take I the responsibility of dividing the Common- 1 wealth into suitable electorates. When Parliament has laid down the numbers that are to form the basis of representation in towns and country, it is very easy to count the number of electors within any given area, and to make the divisions as fairly as possible. In country districts, let the department approximate the number as nearly as possible. In districts where the population is very scattered, I would certainly give a larger proportion of representation ; I would allow fewer electors in respect of every member to be returned. There is no difficulty in the matter. I hope that the Minister will abandon that part of his proposals, and take due notice of these points, with a view ito doing what he may think fair and just when we get into committee. Another part of the Bill makes provision for electors changing their districts. Of course it is absolutely necessary that every reasonable facility to vote shall be given to a person who changes his place .of residence after the compilation of the rolls ; but we must be careful that we do not leave that provision open to abuse by allowing electors to .change their electorates within a very short date of polling day. To do that would be to enable one electorates to lend electors to another. If it ‘was thought necessary to do so, it would be very easy for a certain number of the population to shift from one electorate to another immediately before an election. I think that the Bill makes provision for votes being recorded by electors who shift to another electorate within not less than one month from polling day, but in any case, to do justice to every person, to let him record his vote legitimately, and not to give undue facilities for the removal of electors from one district to another for some political purpose, is a matter which requires careful consideration. I do not remember any other points winch impressed me when I read the Bill, but probably I shall have a good deal to say on the details when we get into committee. With the exception of a few points of the kind that I have referred to, I think that on the whole the Bill is a very good one, and can be made a very workable and liberal measure.

Mr WATSON:
Bland

– I think that oil the whole we can congratulate the Minister upon the Bill which he has introduced. It embodies a number of liberal provisions in common with some that I must object to, although it may be found “that a majority of the House is in favour of them. To my mind one of the best features of the measure is that to which objection has been offered by the honorable member for -Gippsland, namely, that it fixes an absolute equal quota right throughout the Commonwealth as to the number of persons required to return a representative to this House. I have often heard the battle in :favour of special representation for the country fought out. Although I wai) not in Parliament at the time, I watched with a great deal of interest the debate on the Electoral Bill introduced into the New South Wales Legislature in 1893 by the Government of which the Minister for Home Affairs was a member. An effort was made then to give some special representation to country electors in excess of that to which their numbers entitled them. At the first sight it would seem that a plausible case had been made out for such a proposal ; but with the experience which I have gained, as a -representative of a country electorate for the last eight years - first in the local State Parliament, and subsequently in this House - I contend that there is not only no political justification, but no practical justification for it. In the first place, every man or woman in the Commonwealth has the right to an equal voice in our legislation, whether he or she resides in town or .country. I presume that the honorable member for Gippsland will admit that, whether a man resides at the extreme of civilization or .in the very centre of the metropolis, his interest in the legislation which is passed is exactly .the same. He should be allowed to exercise similar power in either case, and no more. My experience of the people in country districts is that they have a greater appreciation of the value of the franchise than ‘have residents of cities. I have found that in the country men will travel immense distances in order to record their votes, while frequently a man will not go round a street corner in Sydney in order to register a vote for any one. In New South Wales, where our electorates arebased upon an equal quota for country and city, we find that the percentage of votes recorded in the country districts is just as great as in the metropolis.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– That is not so in Victoria.

Mr WATSON:

– That shows that the people in Victoria want waking up, and if the labour party in federal politics are spared long enough we intend to wake them up.

Mr Mauger:

– A larger proportion of votes “was exercised in the country than in the metropolitan districts in connexion with the federal elections.

Mr WATSON:

– I am glad to hear it. So far as New South Wales is concerned, we have had just as large a percentage of votes recorded in -the country as in the metropolitan districts. It is said that the men in the country districts cannot come together for the purpose of discussing political matters in the same way as voters living in the city. I admit that they cannot come together so easily, but they have very little trouble in arriving at a fairly correct estimate of political questions.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– Does the honorable member know of any country resident who represents a metropolitan electorate ?

Mr WATSON:

– No.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– Does the honorable member know of any metropolitan resident who represents a country electorate 1

Mr WATSON:

– Yes. I am one myself ; and on several occasions on which I have submitted , myself to the electors I have been opposed by candidates who have resided in the district.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– They failed because of local jealousies ?

Mr WATSON:

– No, not on that account, but because the majority of the people preferred my politics to those of my opponents. I desire to emphasize the point that the basis of the whole system should be the influence upon legislation, and I contend that residents in the country districts understand political questions just as distinctly as do those who reside in the metropolitan areas. Further than that, they are willing, taken as a whole, to make greater sacrifices in’ order to insure that the candidate they favour shall be returned to Parliament. I admit that so far as influence upon administration is concerned, the residents of the metropolitan areas have considerably the best of it, but the only way in which that difficulty could be got over, whilst at the same time allowing equal power in regard to legislation, would be by having one House to deal with legislation only and another to deal with administration. Of course, we know that that is impracticable. The arguments which might be advanced in favour of a larger proportion of country representatives in the State Parliaments, owing to the great variety of interests to be attended to there, cannot be applied with the same force to the Federal Parliament, where a few large matters have ‘to be dealt with, and where there is a more gene*ral community of interests. The honorable member stated that, whilst the voters in the metropolitan area of Victoria were entitled to fill eight seats, in this House there are twelve metropolitan residents amongst the representatives of that State. I suppose that the explanation is to be found in the fact that gentlemen were returned w.ho had some knowledge of the districts they represented, and whose political . views most nearly accorded with those of their constituents. It would be a very sorry reflection upon the intelligence of the country voters of Victoria to say that they were not able to select the best men. It seems to me that equal electoral districts, having regard to population, is a natural corollary of the one man one vote- system. The honorable member for Gippsland seems to misunderstand the application of the one man one vote principle when ‘he seeeks to give the country residents, merely because they are country residents, a greater proportion of power than is enjoyed by their city brethren. This is the same old cry that we had to fight against in New South Wales in reference to the Federal Constitution when we were asked to give votes in consideration of territory and not of population. It was contended that we should give greater proportionate power ‘to some of the States with comparatively small populations, simply because they were States.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– When I was fighting for one man one vote the labour representatives declared that they would not press for equal electorates. Having secured the one man one vote principle, they are now making another demand.

Mr WATSON:

– If any labour representatives -did that, I would be the first to attack them for making any such bargain, because it is against the whole principle for which the labour party have been fighting, namely, that the power of governing should be- shared by the people in absolutely equal proportion.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– Which is the most important - that we should have the same number of heads in each electorate, or that each electorate should exercise the same influence upon the Government of the country ?

Mr WATSON:

– It is a question whether the same influence is exercised, not upon the Government, but upon the legislation. I contend that the influence of the country individual voter under the New South Wales system is as strongly exercised in proportion to his representation as is that of the city voter. So far as New South Wales is concerned we have not equal electorates.

Sir William McMillan:

– Roughly we have.

Mr WATSON:

– The standard upon which the electoral divisions were fixed was equal representation, but the number of voters in many electorates considerably exceeded the quota. In the electorate I represented in the local Parliament there were considerably more than the quota of voters, and in the adjoining district, which now forms a part of the electorate which I represent in this House, the voters numbered a third more than the quota.

Sir John Quick:

– The returns furnished at the federal convention showed that there was by no means an equality of voting power in the various districts.

Mr WATSON:

– That was the result of accident rather than design. During the time that the distribution of seats was taking place in 1893, the electoral commissioners had absolute equality given them as the standard to work upon, but they were allowed to depart from that standard, just as is proposed in this Bill, according to local circumstances, so long as they did not vary the numbers to a greater extent than was laid down by the Act. After the distribution of seats inequalities occurred. In one portion of my present electorate a gold field was discovered, with the result that a large number of men congregated there, and upset all previous calculations. Something similar happened in various city electorates, becausepopulation decreased in some places, and increased in others. The electorate represented by the honorable member for North Sydney presents a case in point. Inequalities occurred and were not remedied by the operation of the automatic clauses of the Bill which provided for a redistribution of seats every five years.

Mr Salmon:

– Did any bad results follow those inequalities?

Mr WATSON:

– It is difficult to determine what bad results may have followed. It is most improper, as in Victoria, to give an elector in a country district two and a half times the power of an elector in the city. It is not just, nor does it afford any guarantee that the true , feeling of the people is represented in Parliament.

Mr Salmon:

– Notwithstanding all that, we have too much centralization.

Mr WATSON:

– We shall have that under any system. We should see that the men returned to this House represent the voice of the people. If the same number of votes is required in one portion of the State to return twelve representatives as would suffice in another portion to return fifteen members, justice is not being done. So far as this Bill is concerned, not only shall I endeavour to have the present clauses retained, but I shall go a little further. I think that a variation of one-fourth from the standard quota is too much to allow. We may assume that with the extension of the franchise to women the quota will be somewhere about 20,000. If that is so, the variation of one-fourth from the standard would permit of electorates being so divided that there would be 15,000 voters in one electorate, and 25,000 in another. In some instances there might be a difference of 75 per cent. in the numbers of voters in two electorates, and I cannot understand why, under these circumstances, the honorable member for Gippsland should raise any objection.

Mr McCay:

– That clause will be inoperative.

Mr WATSON:

– We have found a similar provision to be fully operative in New South Wales. We passed an Act for the division of New South Wales into federal electorates, giving as the standard the same quota throughout. What was the result? The electoral commissioners brought down a report, which we had to accept, because we had no time to make a fresh subdivision, allowing for 9,000 voters in some districts and 15,000 in others. That is not equal representation, and the conditions ought to be altered at the earliest possible opportunity. I hope that the Ministry will secure a different set of commissioners on this occasion, and that they will insist upon the divisions being made according to the principles laid down by the Bill as it is passed.

Mr Kirwan:

– Why does the honorable member want commissioners instead of a committee of this House?

Mr WATSON:

– I am not certain that the work can be so easily accomplished by a committee. No doubt a committee would cost less, but personal and party considerations might sometimes be allowed to influence its decisions.

Mr McCay:

– Does the honorable member know of any distribution effected by Parliament which has evidenced party influence ?

Mr WATSON:

– I do not know of any distributions which have been undertaken by Parliament.

Mr McCay:

– The Victorian Parliament defined all the State electorates.

Mr WATSON:

– The question of who undertakes the distribution is amatter of detail, and the work of the commissioners will come back to us for consideration. But it is just possible that we may find ourselves confronted with the difficulty that faced the Parliament of New South Wales upon the occasion to which I have already referred. The report of the commissioners came back just before the date fixed for holding the election, and if we had not acted upon it, the State would have had to vote as one . constituency. I quite agree with the honorable member for Gippsland that the facilities offered to men for changing their electorates should not be too lax. A section should not be able to swamp an electorate, simply by changing their residence within a week of an election. But such a remark coming from Victoria is rather peculiar, seeing that the laws of this State permit of something of that sort occurring, in that they allow people with property in more than one electorate to vote in any electorate in which such property may be situated. Thus, if a conservative is safe in one particular division, they can flock over to another and knock out the liberal.

Sir John Quick:

– Plural voting is abolished in Victoria.

Mr.WATSON. - A man is at perfect liberty here to do as I suggest. I hold that we should not facilitate that sort of thing under the Commonwealth law. At the same time we want to insure that if an adult does remove from one electorate to another, his or her rights as a citizen shall be preserved. Until the time when a man becomes qualified to vote for the new electorate in which he resides, he ought to be able to exercise the franchise for his old electorate. We want to insure continuity of citizenship.

Mr McCay:

– I am doubtful whether the Bill allows that.

Mr WATSON:

– I entertain a similar doubt. At any rate, we should make it perfectly clear that there shall be no break so far as a man’s ability to vote is concerned. There are two or three other points to which I should like to direct attention. One has reference to the postal vote. I am not too certain that that vote is likely to be a great success. I agree as to the desirableness of allowing persons to register their votes for their own electorates wherever they may happen to be, but if a man can get an authority to vote away from a polling booth and can register his vote before certain officials, the door is at once opened to the exercise of undue influence. We want to preserve the secrecy of the ballot.

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

– The postal vote is secret.

Mr WATSON:

– It may be, but on the contrary it may not.

Mr Higgins:

– By requiring it to be registered before officials its secrecy is safeguarded almost absolutely ?

Mr WATSON:

– I admit that by requiring it to be registered before permanent Government officials, the risk of undue influence being exerted is minimised. But if, on the contrary, it is registered before other people, there is a danger that they may successfully insist upon the elector disclosing the way in which he is voting. I prefer the system which obtained in Queensland and Tasmania during the first federal elections. That system allows a voter upon polling day to enter the nearest polling booth and sign a declaration that he is upon the roll for a particular electorate, whereupon he is given a blank ballot-paper. That paper, when marked, is posted by the presiding officer of that particular booth to the returning officer of the division to which the person voting belongs. That seems to me to do away with any possibility of influence being exercised.

Mr McCay:

– Is that any more secret than the postal vote would be? There might be one or two persons voting at polling place A for electoral division B, and thereturning officer and his deputy might becasual employés only.

Mr WATSON:

– But under the Bill there may be scrutineers representing different candidates and presumably different parties. To some extent that will safeguard the secrecy of the ballot.

Mr Crouch:

– Let us have both systems.

Mr WATSON:

– I am not certain that it is wise to adopt the postal system at the present time.

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

– The scheme outlined by the honorable member would not meet the case of the sick.

Mr. WATSON. ~I admit that it would not, but I am satisfied that voting by post is liable to abuse in the way I have indicated.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– We have never found it so in Victoria.

Mr WATSON:

– I have been told that in South Australia it was abused. I do not know that the electors there enjoyed the same safeguards as are contained in tins Bill, but I am assured that the women voters were influenced to a considerable degree. They took out these certificates, and voted by post. It seems to me there is a fine field for the exercise of undue influence unless the Government proposal is safeguarded to a very considerable extent. The only objection which can be urged against the system I have indicated is that it may delay the declaration of the poll by a few days, during which the votes are being forwarded by post fi om the places where they have been recorded to the divisions for which they are cast. That, however, is a very minor matter. The contingent vote which is provided for in the Bill will, I fear, prove confusing to the electors.

Mr McDonald:

– No one will use it.

Mr WATSON:

– I understand that that is the experience of Queensland. It has not been used by either political party there. At each election the different parties have strongly advised their followers not to use the contingent vote.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– In individual cases it has been used, and has affected elections.

Mr WATSON:

– But, generally, parties are unwilling to avail themselves of it.

Mr McCay:

– There is an obvious reason for that.

Mr WATSON:

– Of course, that appeals to any party man. The element of confusion is, I think, worthy of consideration, because there will probably be an attempt made to synchronise the elections for the two Houses, so as to minimise expense. As the time approaches when a proportion of the Senate must go to the country, there will be an attempt made to bring about the dissolution of this Chamber, so that the two elections may take place upon the same date. Probably that will save Australia £40,000 or £50,000, and there will naturally be a desire on the part of Parliament that that course shall be adopted as often as is convenient. Of course, a penal dissolution affecting this House only would prevent that being done ; but, assuming that in a majority of cases the House of Representatives and one half of the Senate have to be elected upon the same day, the position is that the electors will be given two ballot papers, one of which will have to be marked with crosses, whilst upon the other the voter will have an opportunity of recording his preferences according to the number of candidates in the field. That will most likely result in confusion.

Mr McColl:

– We could have separate polling booths.

Mr WATSON:

– But still there would be a risk of confusion arising, and it would entail all the expense attaching to two. elections, because the engagement of extra pollclerks and presiding officers, and to a moderate extent the erection and renting of buildings, would run into money. There is the possibility of confusion resulting, and the large political parties in the Commonwealth will probably advise their followers not to use the contingent vote. After all, there is not a great deal of trouble likely to ensue through men being returned by minority votes. Some members in this Parliament have been returned by minorities, but the cases are comparatively few. For myself I am not afraid, because in the past I have always had an absolute majority. I am not speaking with any personal feeling, but I think we can afford to run a small risk in this regard rather than run the risk of the confusion which will arise if we insist on legalizing the contingent vote. Theoretically, like many other proposals, the contingent vote has much to recommend it ; but it is doubtful whether in practice the good is sufficient to counterbalance the confusion created in the voter’s mind.

Mr Thomson:

– Under the Bill a minority may return a member.

Mr WATSON:

– I am inclined to agree with the honorable member that we cannot insure, even under the Bill, that a majority is in favour of the man returned. We must always recollect, in regard to these fancy methods of voting, .that the electors” have to take a candidate, as the sailors say, “ by and large.” They cannot expect to get a man with whom they agree on all questions, and can only have regard to one or two important matters on which they do agree, and let the rest go. The only way to ensure that public opinion can be given effect to is to have the referendum applied to large and important questions. By this means we get a straight issue, independent of individual opinion and personal likes or dislikes.

Sir John Quick:

– That strikes a blow at the representative system.

Mr WATSON:

– I am more concerned about the people’s will being carried out than I am about the representation. I have heard about the representative position of Members of Parliament; and have tried to feel it occasionally; but after all, that is a minor matter as compared with the question whether all the people are for or against any measure which is of sufficient importance to justify the expense and trouble of a referendum.

Mr Isaacs:

– The end is more important than the means.

Mr WATSON:

– That expresses the position.

Sir John Quick:

– Would the honorable member abolish representatives altogether ?

Mr WATSON:

– No; because even representatives have their uses. The powers that we should still have in regard to the discussion of public questions would give us considerable influence in the disposal of such questions even under the referendum. I am sorry to say, however, that when I spoke against the Constitution Bill, I had but little influence. People had made up their minds to vote for federation, and my voice was a “ still, small “ one, so far as effect was concerned. Another point is with regard to the voters’ certificates under the Bill, which are designed to meet the cases of men who, having been set down for a particular polling place, think they are unlikely to be ‘able to vote there, and desire to vote somewhere else within the division. I object absolutely to that provision, being of opinion that there is no necessity to confine men to one particular polling place. The object of the Minister is a good one, and no doubt in his opinion the provision sufficiently meets the case. But I know of instances where men could not possibly know of their probable absence in sufficient time to apply for a certificate. Men who live in the country, and have to look after stock, may be away from home 20 or 40 miles on the day of election, and yet still be within their division. Under this

Bill, unless such men have, in sufficient time, given notice of their probable absence, and unless they can spare the time to get a certificate, they are absolutely disfranchised. In order to get the certificate it may be necessary to go to a post-office a distance of 10 or 15 miles ; and because they are unable to do this they, through no fault of their own, are disfranchised, although they are just as good citizens as they were a few days previously: Some means should be devised to avoid the likelihood of personation or fraud, and, at the same time, insure an opportunity of voting, so long as a man has remained in his division. At the last election in my own district quite a number of men were disfranchised because they were away from home, and they would not have had an opportunity of obtaining certificates under such a Bill as this. There are other cases where men have ridden, say, 20 or 30 miles, in order to obtain electors’ rights, only to find that the official was too busy to issue them, or away. That is just as likely to occur in regard to the issue of these certificates.

Mr Poynton:

– What would the honorable member substitute ?

Mr WATSON:

– I do not know that it is necessary to substitute anything. Personally, I have a liking for the system of electors’ rights which obtains in New South Wales. I admit, however, that at this stage it would be unfair to ask the House to consider a provision of the sort, which would necessitate an elaborate set of clauses. Further, I admit that there is a good deal of difference of opinion on the question. It does seem to me, however, that if there was any doubt about the voter, he could always be asked to sign a declaration. After all, the leakage from this cause would be comparatively small, if any If the penalty for false declaration were imprisonment without the option of a fine, I do not think there would be much likelihood of men running the risk of incurring it.

Sir William McMillan:

– I find the difficulty is to get men to vote.

Mr WATSON:

– There is a good deal in what the honorable member says. At any rate, we might try the experiment of doing away with these certificates, and if it is found that any abuse creeps in, we can at our leisure devise some other method.

Sir William McMillan:

– What about a compulsory clause to make men vote?

Mr WATSON:

– Personally I should like such a clause well enough, although I do not know that an elector should be compelled to vote, if he does not think that any of the candidates are good enough. I trust the question of these certificates will be considered, because it will probably affect a very large proportion of men and women, particularly men, who, from their occupations, are compelled to move about at very short notice.

Mr Poynton:

– If the provision for granting these certificates is struck out, many men will not be able to vote under the Bill.

Mr WATSON:

– Before the certificate provision is eliminated, we should insure that men are enabled to vote in any part of the division where they happen to be on the day of election. . If, in addition, there be voting by post, I think every necessary provision is made. I am now referring to the altogether unfair proceeding of preventing a man voting in his own division. It is a mistake to confine him to one polling place, and I trust that honorable members may see the wisdom of making some alterations. I give the Minister every credit for introducing an up-to-date Bill. I have pointed out what seem to me some errors, but these are errors of detail rather than of principle. I, for one, am so anxious to see this measure, or something like it, become law, that I am prepared to give way to some extent rather than delay legislation which I believe will go far to ensure that the representation of the people in Australia will be at least equal, if not superior, to that found elsewhere,

Mr McCOLL:
Echuca

– It is to be regretted that the Bill has been sprung so suddenly on the House. I am sure that, had the circumstances been otherwise, there would have been a larger attendance of’ honorable members ready to discuss the provisions. I have only glanced at the Bill and cannot deal with it at the length I should like, but generally I may say I regard it as a very good measure. There are a number of provisions in it which are entirely, new in Victoria, though I believe they are in operation in some of the sister States, and have proved very acceptable. The Minister for Home Affairs may claim to have reached the high-water mark of liberal legislation in electoral matters. I join with the honorable member for Gippsland in taking exception to the provision dealing with the distribution of districts. Like himself, I had to do with the redistribution of electorates in Victoria for the federal elections. That was not a very hard task, and we certainly do not require an elaborate and expensive body, such as that proposed in the Bill, ‘ to carry it out. I suppose that in committee the Minister will say whether or not he intends to disturb, the existing districts. In Victoria, there has been no objection raised on this score, and it is to be. hoped they will not be. disturbed. I welcome the provision for voting by post, and, personally, I do not see why all the voting should not be done in that way, and enormous expense thus saved. But everything must have a beginning, and I am glad to see a provision by which distant or delicate persons may exercise the franchise. One important provision in the Bill to which I take serious objection, together with the honorable member for Gippsland that a proper distinction has not been made between country and State electorates. The honorable member for Bland takes very strong exception to any difference being made in the proportion of representation between city and country electorates. He claims that the basis should be purely that of population. If that basis is adopted it will be most unjust, to the rural districts. The people there cannot meet together and arrive at conclusions in the same united way as can those in the city. If we form the electorates simply upon a population basis, the country constituencies in many parts of Australia will be enormously large, entailing increased difficulty upon the electors in regard to the recording of their votes, and certainly imposing greater difficulties upon honorable members. It is set forth in the Bill that in regard to the demarcation of the electoral districts regard shall be had to community or diversity of interest, means of communications, and physical features. If we ure to divide the States into electorates solely upon a population basis, what necessity can there be for asking the commissioners to make any discrimination in regard to those matters? They will only have to find out where the population is and carve out the districts accordingly. If regard is to be had to the three points to which I have referred we certainly cannot act in accordance with the present provisions of the Bill. I would point out that if we subdivide our electorates absolutely on a population basis we shall place nearly the whole of

Australia under the heel of a few cities. We know that in this newly-settled country population is not distributed as in olderlands. It is to be found mainly in the cities, and if we adopt this provision in the Bill without allowing a considerable margin in respect to the country electorates - and the Bill is somewhat undetermined as to what that margin shall be - we shall place the whole of the rural population under the dominion of the cities.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Then the honorable member does not want one man one vote?

Mr McCOLL:

– I am prepared to accede that principle, but this question is- not affected by it. I ask simply for justice. The provision for equal representation on the bash of population maybe ideally correct, but practically it works out in a most unjust way. The population of Sydney and suburbs is equal to 35 per cent, of the total population of New South Wales ; the population of Brisbane is equal to 24 per cent, of the total population of that State ; the population of Adelaide represents 44 per cent, of the population of South Australia ; the population of Melbourne represents’ 41 per cent, of the population of Victoria ; and the population of Perth is equal to 19 per cent, of the population of Western Australia. We find that out of a population of 1,359,133 in New South Wales there are no less than 582,617 resident in ten large towns, including Sydney and suburbs. Out of a total population of 503,266 in Queensland, no less than 210,122, or nearly onehalf, are to be found in eleven towns. In Victoria, out of a population of 1,206,438, 577,254, or nearly half the population of the State, reside in three cities, namely, Melbourne and suburbs, Ballarat, and Bendigo. Therefore, if we have representation according to population, Melbourne, Ballarat, and Bendigo will have a majority of the votes and representation. What country districts would stand that? If we take South Australia we find that, out of a population of 362,604, a total of 178,322 reside in five towns and cities. I would ask the honorable member for Bland is it fair that representation should be dig.tributed in such a way that in Victoria, for example, we would have some eleven or twelve members representing Melbourne and suburbs, and only eleven or twelve representing the whole of the State? The principle would be most unjust’ to this

State. On the accomplishment of federation, the Victorian Government brought down to the State Parliament a proposal, which was indorsed without any objection, either on the part of the labour party or any other section, to take, approximately, about 14,000 electors for every town constituency, 12,000 for every urban ‘constituency, and 10,000 for every country constituency.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We should get thatinequality under any system?

Mr McCOLL:

– No. We shall not havethat population if we have representation absolutely according to population. Provisionis made for a margin of one-fourth in the Bill,., and if that is made specific and allowed weshall be content. But the whole matter is tooundetermined, and it should be settled definitely one way or the other. The provision in regard to the recording of votes by persons who change their electorates shortly before polling day is one in regard to which care must be taken. A provision for the issue of voters’ certificates, which was intended to remedy an injustice irc Victoria, has worked out most unjustly.. Instances have happened in which a monthbefore polling day some hundreds of people whohave emigrated from one district to another, and, have taken up their quarters in deserted; houses or other places, have been ablelargely to influence elections. No honorablemember would desire that. It is not failthat at the last moment, and after the.rolls have been compiled, a district which, has a settled population should be liable toa sudden influx which could upset an election. This provision is an instrument which, while ifr may be used to suit the working classes on certain occasions, can also be used with very vicious effects by rich men. I do not know that I have much more to say, because the Bill is really one more for consideration in committee than for second reading speeches. I am sure that that part of the Bill which relates to the limitation of election expenses will be welcomed by honorable members generally. It is taken, I believe, from the South Australian Act, and I think it will work well in a democratic sense. Speaking for myself, I welcome it most heartily, because if it is in force at the next general election the tricks which were tried in my constituency on the occasion of the last election will be impossible. The Bill is, on the whole, verycreditable. It is excellently drafted, and the clauses are terse and easily understood. It has reached the high-water mark of liberal legislation in electoral matters, and I trust that, with the few changes I have indicated, we will pass it into law as speedily as possible. No doubt it will take twelve or eighteen months to get the necessary machinery into order. The Government might have pushed on the measure before, but, at all’ events, I hope there will be no delay, so that the machinery may be put into operation as soon as possible-

Mr O’MALLEY:
Tasmania

– As the hour is late, I do not intend to take up much time in addressing the House, but I think I should add a few words to the debate. I have had a great deal of experience in my short political career in Australia^ and I know what it is for rolls to be packed just before an election in order t©’ defeat a man, especially when there is a strong combination and plenty of money behind it. In the first place, I wish to congratulate the Minister for Home Affairs on the amount of ability that he has displayed in reaching in this Bill Himalayan heights of liberality. But, nevertheless, we shall have to make some great changes in the Bill if we wish it to work with absolute perfection. In the first place, it seems to me that the returning officers throughout the Commonwealth should be authorized to use the various post-offices. That would save a great deal of money. It seems to me that, if men are paid for certain work, it does not matter to them how they are required to carry out that work. I know that when I was in the employ of a certain institution it did not matter to me what I had to do as long as I received the same pay. I wish to enter my protest at once against the idea that we who have been sent here by the various constituencies, because the people believe in us, cannot act fairly in the division of the various States into electoral districts. I want to ask honorable members to lift up their voices against what is really a premium to people outside to discount the honesty of purpose of members and thensense of justice in carrying out any work. I refer to the fact that everything to be dor.e, not only in connexion with this Bill, but in relation to other matters, is to be carried out by some one outside Parliament. If it is only to skin a dog the Government at once select some one outside for the work. “When the proper time comes I shall move that a select committee, similar to that in existence in South Australia, be appointed for the purpose of cutting up the Commonwealth into electoral divisions.

Mr McCay:

– Then the House will cut up that cutting up.

Mr O’MALLEY:

– Very well. In that event, the House will have to deal with the matter ; but if we allot the work to outside experts, they will be able to take as long as they like in the performance of it they will, perhaps, bring in an imperfect measure, which, must either be accepted or else we must fight the election again with some qf the States undivided. We could appoint two honorable members from each State on the select committee.. If honorable members are afraid to be appointed to delimit the electoral boundaries of their own States, I shall be perfectly prepared, for example to let the honorable and learned member for Corinella go to my State for that purpose. I would rather trust my brother members than outside experts. It is strange that I have more confidence in my brother members than they have in themselves.

Mr McCay:

– Than they have in the honorable member.

Mr O’MALLEY:

– It is a matter of indifference to me what confidence they have in me. I am one of the most independent “men in the House. I have done nothing in this House that should cause me to forfeit the confidence of honorable members, but if they are so absolutely narrow intellectually that they are unable to appreciate the intelligence that I bring to bear here, then the Lord pity them. Another point to which I desire to refer is in regard to the enrolment of electors. We continually . find courts of revision sitting here for the purpose of striking- people off the rolls. It is difficult enough to put them on, without desiring to put them off. It seems to me that there should have been courts of revision to place people on the rolls, and not to throw them off. The police should be employed wherever possible to help to place people on the rolls. Unless we make it easy to place people on the rolls, thousands will never be able to exercise, the franchise. It will be just as it was in Tasmania. Last year I put upon the roll in Tasmania 3, 200 men who had been disfranchised because no one had exercised sufficient energy to travel’ over the mountains and arrange t» have them registered as electors. In one of the States certain people looked down the rolls before the courts of revision sat, and lodged objections against numbers of working men whose names were on the roll. Notices were sent to these electors, who resided 30 or 40 miles away, calling upon them to appear at the revision court to answer the objections, and those who failed to attend had their names struck off the roll. When I offered myself as a candidate for election to the Legislative Assembly in South Australia a second time, I was defeated by fourteen votes, because for two months before the elections, a number of

Votes were transferred from other electorates to that which I was seeking to represent. People stopped at the hotels in my electorate for the ten days required to’ qualify them as electors in that district, and then voted against me. We should exercise the greatest care with regard to transferred or “ faggot” votes. I am glad that, in fixing the divisions of the electorates, a margin of one-fourth is to be allowed. Upon the mines of the west coast of Tasmania there are thousands of men whose wives live in Melbourne, Sydney, Launceston, or Hobart, and, therefore, if a strictly equal standard is provided for, or a narrow margin only is allowed, the gold-fields will not receive the representation to which they are properly entitled. In some cases the mining fields may be associated with agricultural districts, and the miners will be virtually disfranchised if a farmer is elected to represent them. In reference to the purging of the rolls of the names of dead men, I might point out that great pleasure has been taken in Tasmania in striking off the names of hundreds of living men because of their temporary absence from the district in which they were enrolled. This is another matter regarding which we shall have to exercise great care. I do not agree with the proposal that certificates should be issued to enable electors to register their votes at polling booths away from the locality in which they reside. The aristocrats will be all right if certificates have to be obtained, because they are always prepared to exercise the franchise, but working men will not have the time or opportunity to bother about obtaining certificates. In Tasmania they have what is known as the Gilmore Convenience Clauses in their Electoral Act, which enable a man to vote at he booth nearest to the place at which he may happen to be on the day of election. When he records his vote a certificate is sent to the returning officer at the booth to which his vote properly belongs. Why could not this be done in the case of our elections 1 I wish to state a case which will give point to my remarks. There is a train leaving Mount Lyell early in the morning before the polling booth is open. Electors travelling by this means to Zeehan are, under ‘ the Tasmanian system, allowed to exercise their votes at the latter place. Under the plan proposed in the Bill they would require to obtain certificates before they could register their votes. We could provide that, wherever a man or woman may be within the Commonwealth on election day, he or she should be able to vote. Supposing a Queensland elector happened to be in Victoria on election day, he should be allowed to register his vote in the latter State on making a statutory declaration that he was on the roll” for his own State. A penalty of five years’ imprisonment might be imposed upon persons who were found guilty of making false declarations. I shall make a proposal in this direction when we deal with the Bill in committee. I do not approve of the proposal to refer all election disputes to the High Court. My experience in South Australia has shown me that the system of referring such disputes to the law courts involves very heavy expense, and I venture to say that if the South Australian system had been in vogue here it would have cost the honorable member for Fremantle and the honorable member for Tasmania, Mr. Hartnoll, £500 each to defend their seats before a ‘ Judge. This House should exercise absolute authority in the settlement of all election disputes, because they relate to questions of fact, and not to points of law. I shall also oppose any proposal to refer election disputes to the State courts. What chance should I have if a case in which I was concerned were referred to the Judges in Tasmania. The Judges of that State, for whom I have” the greatest respect, are influenced by their environment, and I should want my case to come before the members of this House. I have a strong objection to the proposed system of voting by post. I regard post voting as an absolute violation of the secrecy of the ballot, and as placing an engine in the hands of the aristocracy for the destruction of the democracy ?

Sir William Lyne:

– How would the honorable member provide for the cases of men located in remote portions of the back blocks?

Mr O’MALLEY:

– Arrangements could easily be made for such men to vote at the nearest booth. During the last election in which I was concerned in South Australia the local postmasters and postmistresses were engaged travelling around in vehicles with the agents of my opponent, collecting post votes. I did not know what they were doing until it was too late, and as a consequence I was beaten. I also object to post-voting, because it offers facilities for getting voters out of the, way on election day, and using their votes in the interests of particular candidates. During one election I went to a watering place near Adelaide, and on speaking toa number of nice young ladies, whom I saw there, was informed that their mistresses had given them a holiday in consideration of their leaving their votes behind. These votes virtually decided the election for the district of North Adelaide.

Sir William McMillan:

– And yet the honorable member voted in favour of female suffrage.

Mr O’MALLEY:

– Yes ; but I want the female voters to face theresponsibilities of the suffrage in the same way that the males do. I further intend to oppose the proposal to assist electors. That is another great scheme which has been tried in America. I can assure honorable members that if they will allow me to enter the polling booths with the electors I will have three-fourths of them blind before the day is over. I remember seeing the secrecy of the ballot utterly destroyed in Melbourne some ten or twelve years ago. Upon that occasion a man entered the polling booth, secured a blank ballot-paper, had some copies struck off. marked them in favour of a certain candidate, and afterwards deposited them in the ballot-box. I note that this Rill prohibits candidates from addressing elec- tors in any public-house. In my electorate, nearly every hotel has a hall attached to it, and I should like the Minister to explain what effect that provision will have in this connexion. Furthermore, in the case of senators, why should a man be compelled to vote for three ? I might think that only one candidate is worthy. I am also opposed to disfranchising the returning officer. Does clause 185 mean that every candidate must have an agent ? Personally, I do not want one; I am my own agent. These are points that I intend to fight for in committee. I trust that honorable members will not relegate every function which has to be discharged, to outsiders. When we came here it was supposed that we were the picked men of Australia, and yet Ministers to-day, by their actions, are continually declaring that we are fit for nothing except to register their decrees. I am opposed to that sort of thing. Everything that we can honestly and justly do, we should do, because we are paid for it. I am perfectly willing to act as a member of a committee to define the electoral divisions of South Australia and Tasmania. When the proper time comes, shall have more to say upon this matter.

Debate (on motion by Mr. McCay) adjourned.

page 13796

ADJOURNMENT

Proposed Special Adjournment

Mr DEAKIN:
AttorneyGeneral · Ballarat · Protectionist

– I move -

That the House do now adjourn.

In doing so, I desire to ball attention to the state of public business. It is now evident that the Senate is likely to be engaged upon the discussion of the Customs Tariff Bill for some three or four weeks longer. Under these circumstances, and recognising the strain which has been imposed upon honorable members, the Government feel that a short interval should be afforded to them before they resume consideration of that measure upon its return from another place. The only remaining Bills which absolutely require to be disposed of prior to that short adjournment consist of the Electoral Bill - the second - reading debate upon which I had hoped to see concluded this evening - and the Bonus Bill, which forms part of the Tariff proposals of the Government. The House has made it evident that the latter measure will require amendment, and certainly senators are entitled to know what those amendments are, especially as some of those already proposed would radically alter the character of the. measure. They are, therefore,justified in asking to be made acquainted with the, form which the amendments will take before being called upon to deal with Division VIa. of the Tariff, which is dependent upon the Bonus Bill. It is because of, not a desire to unduly force that measure upon the attention of the House, but simply of the necessities of the case, that I ask honorable members to complete its consideration. Whenwe have come to a decision upon these points wemight well adjourn. I have taken an opportunity of consulting Mr. Speaker, and believe that there is no constitutional objection to that adjournment being of a provisional character. That is to say, we might adjourn until a fixed date - possibly three weeks or a month hence - on the understanding that if unexpectedly the Tariff were disposed of by the Senate before that date, Mr. Speaker could, by giving honorable members some days’ notice, fix a day for the re-assembling of the House. It is undesirable that the discussion upon the Tariff should be delayed a single day by any adjournment. Once we have disposed of the business which is absolutely preliminary to the Tariff, there is no reason why we should not adjourn.

Mr POYNTON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– Is it intended to adjourn this week ?

Mr DEAKIN:

– Yes, if we can dispose of the business I have mentioned.

Mr Poynton:

– Next week is Coronation week.

Mr DEAKIN:

– Yes, and in the interests of representatives from the distant States, we should, if it be necessary, sit a portion of next week to dispose of the business referred to, so that honorable members may have two or three weeks’ adjournment, which will enable them to return to their homes.

Sir WILLIAM McMILLAN:
Wentworth

– I certainly think that the adjournment should take place at theend of the present week. It is not fair to ask honorable members to attend here during Coronation week, and to expect us to come back again in view of an adjournment would not be reasonable. The Attorney-General has set before us rather a large order. I think that if we dispose of the Electoral Bill this week we shall do very well. I do not quite see with him that we ought to consider the other Chamber in connexion with the Bonus Bill. It would be just as reasonable for us to wait for the Senate to either accept or reject Division VIa. of the Tariff as an indication whether it is of any use for us to proceed further with the Bonus Bill. I am quite willing to expedite matters as much as possible. I think that our first aim should be to shorten the debate upon the second reading of the Electoral Bill, because, after all, nearly everything in connexion with that measure will have to be. said over again. It is essentially a committee Bill. I do not intend to speak upon the second reading, but I think that whilst we will do our best to reach the Bonus Bill this week, if we finish the consideration of the Electoral Bill, the adjournment should take place.

Mr McCAY:
Corinella

– As one of those whom the Attorney-General declares has earned a rest - and I agree with him in that - I feel that if we are asked to complete the consideration of the Electoral and Bonus Bills this week, we are expected to do something which a good many do not feel themselves justified in doing, in view of the opinions which they may have to express on behalf of their constituents; I know that the honorable gentleman is always amenable to reason, and I hope that upon reflection he willsee his way clear to allow honorable members to reach their homes prior to the festivities in connexion with Coronation week. There are a number of provisions in the Electoral Bill which will have to be altered. If we finish dealing with that measure this week, I think we shall have done very well. In view of the fact that the Bonus Bill, if passed, will have to come into operation on dates much later than are now proposed, I do not see any great necessity for dealing with it now. I do not agree with the honorable member for Wentworth when he says that we ought to wait until we know whether the other place accepts DivisionVIa. of the Tariff.

SirWilliam McMillan. - I said it was just as reasonable that we should wait, as that they should wait to see what we do with the Bonus Bill.

Mr Deakin:

-We originate, they criticise.

Mr McCAY:

– All the other place can do is to make requests; and to suggest that our Bill should depend on those requests seems an abrogation of our rights. We ought to be very jealous of those rights, because there can be no definition of them except by ourselves and the honorable members of another place. I do not think that the other place is.anymore likely to be affected by what we do with the Bonus Bill than we are likely to be affected inour treatment of the Bonus Bill, by the nature of their requests in regard to DivisionVI a.

So far as I can see, the Senate is carrying on its functions irrespective nf us so far as this question is concerned. *’

Mr CONROY:
Werriwa

– I hope the Attorney-General will reconsider his determination in respect of the Bonus BillThere are 215 clauses and sixteen or seventeen schedules in the Electoral Bill, and in dealing with the latter measure members might be induced to restrain themselves if there was a prospect of a well-earned holiday at the end of this week. I hope the suggestion of the honorable member for Corinella will be acted on.

Question so resolved in the affirmative.

House adjourned at 11.5 p.m.

Cite as: Australia, House of Representatives, Debates, 17 June 1902, viewed 7 November 2016, <http://historichansard.net/hofreps/1902/19020617_reps_1_10/>.