House of Representatives
30 September 1902

1st Parliament · 1st Session



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

page 16205

PAPER

Mr. DEAKIN laid upon the table

Correspondence between the South Australian and Commonwealth Governments in reference to thearrest of the crew of the Dutch vessel

page 16205

QUESTION

SOUTH AFRICAN LABOUR MARKET

Mr KIRWAN:
KALGOORLIE, WESTERN AUSTRALIA

– Some weeks ago I asked the Acting Prime Minister if he would make inquiries as to the state of labour in South Africa, so that Australians might not go there under a misapprehension. Have such inquiries been made, and, if so, will the honorable gentleman kindly communicate to the House the nature of the replies which have been received ?

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

– I have made some inquiries, but should have liked to secure completeness before presenting the information received to the House. As the honorable member told me of his intention to ask the question to-day, I will give him a condensation of the information now at my disposal. It has been derived from official and semi-official sources in South Africa, and from South African, English, and other newspapers. The official statement is that there is no demand for persons seeking clerical or professional employment, or positions in the military, police, or constabulary. Men who enlist in the military in South Africa do bo at Imperial rates of pay, and there is an overabundance of local applicants for positions in the police and constabulary. There is a slight difference of opinion as, to the prospects of unskilled labour, because of a proposal, which is in the experimental stage, to substitute white unskilled labour for native labour in the mines. The terms now offered are, I understand, 5s. a day, with what are termed “quarters” in some instances, and “food and lodging” in others. The semi-official report on this head is that the outlook is unpromising, because an endeavour is afoot to obtain the services of 200,000 natives, who, it is expected, can be recruited at the rate of about 10,000 a month. If enough of them can be obtained, the unskilled white labour sought to beemployed in the mines, and practically the whole of the unskilled white labour in the country, will be unprovided for. No land is at present available for farmers or graziers. It will be some time before the Crown land, or land under the control of the Crown, will be fit for settlement, and in other parts the land is awaiting subdivision. Skilled labour, according to official information, is in good demand, and from semi - official sources. I learn that men of character and ability have excellent prospects, because wages are high, though the cost of living is high too, being twice as great as in Australia. Independent testimony from other sources, however, is to the effect that all the skilled labour likely to be required until the anticipated revival of prosperity occurs is already in the country. From 12,000 to 15,000 people are now in the coastal ports, awaiting permission to proceed inland. The permits issued by the Commonwealth at the request of - the Imperial Government, although authorizing the landing of the holders in South Africa, do not give permission to proceed inland ; consequently, the coastal towns are congested. With regard to permits to proceed inland, preference is given first to old residents of the country, whether belonging . to the population lately in arms or to the loyalists, and, secondly, to those who have seen military service under the British flag ; so that now -comara have to take third place. Hundreds of Australians have been waiting for weeks, and some even for months, for permission to seek employment inland. That is the gist of the information which I have received to date. I am still endeavouring to obtain an accurate estimate of the opportunities, if any, for Australians in South Africa. My present opinion is that there are none.

page 16206

COMMONWEALTH AND STATES FINANCES

Sir LANGDON BONYTHON:
SOUTH AUSTRALIA

– Has the Treasurer read the .statement of the Treasurer of South Australia as to- the effect of the federal finances upon those of South Australia, and, if so, is he prepared, to make an explanation upon the subject 1

Sir GEORGE TURNER:
Treasurer · BALACLAVA, VICTORIA · Protectionist

– I have not yet had an opportunity to carefully consider the statement of the Treasurer of South Australia, but I shall be prepared to give my honorable friend an answer on Thursday, on the lines of the answer to a similar question on the notice-paper to-day. I might, however, point out that the Treasurer of South Australia has left out of consideration the fact that tho Commonwealth propose to spend £20,000 on new works’ and buildings this year, which in previous years has been charged to loan account.

page 16206

MILITARY COMPENSATION

Mr CROUCH:
CORIO, VICTORIA · PROT

– Will the Acting Minister for Defence, before we proceed to deal with the Defence Estimates, cause a return to be laid upon the table, showing the names of those who are receiving compensation, the States from which they came, the length of their service, and the amounts paid 1

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

– As I hope that the Defence Estimates will be dealt with to-morrow, this is rather short notice ; but I. shall be very glad to furnish honorable members with all the information I . can obtain.

page 16206

COMMONWEALTH OFFICES, SYDNEY

Mr MAUGER:
MELBOURNE PORTS, VICTORIA

– Has the attention of the Minister for Home Affairs been directed to a paragraph in to-day’s newspaper in which it is stated that he intends to have a very expensive mantelpiece and other costly furniture placed in the Commonwealth offices in Sydney 1

Sir WILLIAM LYNE:
Protectionist

– I noticed a statement in one of the newspapers to-day that a mantelpiece to cost £100 was to be placed in the Commonwealth offices in Sydney ; but there is - not a scintilla of truth in it, and no foundation for it. When I spoke to my Under-Secretary on the subject this morning, the only thing that he could imagine had suggested it was a reply which. I caused to be sent to a request from certain persons connected with a marble quarry on the Macleay that their marble should be used in any works in which marble was required by the Commonwealth. That reply was as follows : - - I have the honour, by direction of the Minister for Home Affairs to acknowledge receipt of your communication of the 19th ultimo, relative to marble which you have recently quarried from the Kempsey district, Macleay River, and to inform you- that if any is required, and it is good and cheap, the Government of tho Commonwealth will be pleased to see Australian products in competition with imported material.

I cannot but think that the person who wrote the paragraph referred to, either deliberately wrote what he knew to be untrue, or did not exercise the discretion which one in his position* should have exercised.

page 16206

SUPPLY BILL (No. 12)

Royal Assent reported.

page 16207

QUESTION

SOUTH AUSTRALIAN DRILL INSTRUCTORS

Mr BATCHELOR:
SOUTH AUSTRALIA

– Have the Government yet come to a decision in regard to the retention of the military drill instructors in South Australia?

Sir WILLIAM LYNE:
Protectionist

– I have asked for definite information regarding the work which these instructors are called upon to perform, and I find that they have a great deal to do, because, not only are they engaged in giving instruction, but a great deal of their time is occupiedin keeping records, and in the performance of other duties. No final decision, however, has been arrived at in regard to their retention in South Australia. I saw it stated in a newspaper paragraph that the General Officer Commanding has said that they are not to be withdrawn. That statement can only be taken to mean that the officer concerned does not recommend their withdrawal. No decision has yet been arrived at on the subject.

Mr Batchelor:

– The honorable gentleman is still Acting Minister for Defence?

Sir WILLIAM LYNE:

– Yes, and I shall show in this, asin other matters, that I have full control over everything connected with the department, and intend to keep it.

page 16207

QUESTION

PACIFIC ISLANDS LABOURERS ACT

Mr PAGE:
MARANOA, QUEENSLAND

– I desire to ask the Acting Prime Minister whether he or the Prime Minister, when they visited Queensland during the federal campaign, entered into any compact with the Premier of Queensland in regard particularly to legislation upon the kanaka question ?

Mr DEAKIN:
Protectionist

– No reference was made to me regarding the kanaka question by Mr. Philp, or by any one else, when I was in Brisbane, or after that date. No communication was made on the subject to the Prime Minister so far as I am aware ; if there had been, I should have known it. No secret compact was entered into between the members of the Federal Government and the Premier of Queensland upon any matter, and no promises or pledges were made either by the Prime Minister or myself during our visit to Queensland as private individuals or afterwards, when Sir Edmund Barton visited that State as the leader of this Government, except those uttered on the public platform and reported in the public press.

page 16207

QUESTION

DEFENCE RETRENCHMENT

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

– The Acting Minister for Defence promised that before the Defence Estimates were considered, he would lay upon the table details of the Defence retrenchment scheme. I now desire to know whether this information is available, and if not, whether the Minister will furnish the House with the necessary details before we are required to consider the Defence Estimates ?

Sir WILLIAM LYNE:
Protectionist

– I do not remember having promised that I would submit the details of the Defence retrenchment scheme, before the Defence Estimates were under consideration. I said that I would furnish honorable members with the fullest information when the Defence Estimates were before them. That is my intention, and I think that the information which. I shall supply will be fuller than some honorable members may wish.

page 16207

QUESTION

EXPENDITURE UPON TRANSFERRED DEPARTMENTS

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

asked the Treasurer, upon notice -

  1. . Has his attention been drawn to the following telegram which appeared in the Argus of 25thinst. : - ‘ ‘ With reference to the Federal Budget, the Premier of Queensland states that there has been a large amount of unnecessary expenditure in connexion with the transferred departments. The increased expenditure in Queensland alone was for the year ended June - Post and Telegraph, £38,700 ; Defence, £59,085 ; Customs and Excise, £3,937, or nearly £102,000. The Government was in the dark as to how this increased expenditure had been incurred, as the information asked for on the matter had not been supplied ? “
  2. Are the statements made with respect to the increase of expenditure in the transferred departments and the failure to supply the information asked for correct ?
Sir GEORGE TURNER:
Protectionist

– With regard to the latter part of question 1, which states that the Queensland Government were in the dark as to how the increased expenditure had been incurred, as the information asked for had not been supplied, I have made the fullest inquiries in my department, and I find that no informatian which has been asked for has been withheld. In addition to that, for the very purpose of enabling all the States Governments to obtain the fullest possible information as to the receipts and expenditure, I have employed three of the principal officers in each of the State Treasuries as my officers, instead of taking the whole of the Commonwealth Treasury work oat of the State departments, as I might have done. From these officers the States Treasurers can derive all the information available, and, further, the officials in the transferred departments have instructions that every information desired by the States Treasurers is to be afforded them, even before it is sent on to me. The Premier of South Australia, in his Budget statement, made a complaint similar to that preferred by the Premier of Queensland. I wrote to Mr. Jenkins, and asked him what information had been denied to him, and he said that all he had asked for had been supplied except the estimates of receipts and expenditure for this year. Honorable members will understand that it would have been impossible to allow the officers to give details of the Estimates for this year until they had been dealt with by the Commonwealth Administration and by the Federal Treasurer, who naturally alter them as they may think necessary to suit financial requirements. With this exception, however, the fullest information afforded to the States Treasurers, not only by the returns sent to them every month, and by the quarterly statements showing the detailed receipts and expenditure, but by the officers of the various departments, who have placed every possible detail at their disposal. With regard to the statements which are being made as to the federal expenditure, and which are no doubt considerably injuring the Federation in some of the States, I will not say that they are made deliberately, but that they are uttered without proper inquiry in the States departments or at the Federal Treasury, where the fullest information is available. The cost of the whole of the transferred departments in Queensland in the year 1900-1 was £606,958, made up of £63,568upon Customs, £156,796 upon Defence, and £386,594 upon the Post-office. Last year the expenditure ‘ upon Customs was £62,039, upon the Defence £ 1 45, 3 1 4, and upon the Post-office £404, 890 ; making a total of £612,243, or an increase of £5,285. The tabulated statement is as follows : -

I propose to send this statement to the Treasurer of Queensland in order that he maycheck it and see in what respect it differs from his own figures. In order to be absolutely fair it is necessary to say that the expenditure for 1900-1 included £7,663 for additions, new works, and buildings, whilst owing to the Estimates being passed late in the year, we spent under this head during 1901-2 only the amount of £1,022. There was, therefore, an excess of expenditure in the previous year of upwards of £6,500 upon new works and buildings. Against this, however, the amount for 1901-2 is taken from the Treasury figures, which are £8,000 more than the expenditure shown by the Post-office department, and this is probably accounted for by the fact that some of the arrears of 1900-1 were debited in the Treasury books to the year 1901-2, in consequence of arrears and current expenditure being included in one return. If this be so, the amount should be deducted from the expenditure of 1901-2 and added to that of 1900-1. If we add the £8,000 to the expenditure of 1900-1, the total would be £614,958, and the total for 1901-2 would be reduced to £604,243, tout I have taken the Treasury figures as the least favorable to 1901-2. In view of this, therefore, it would appear that the expenditure in Queensland in connexion with transferred departments is no greater, but probably a little less, than before the Commonwealth assumed control.

The difference in the figures I have given and in those used by the Premier of Queensland arises from the fact having been overlooked that we had to provide in 1901-2 an immense amount of arrears which properly belong to the previous year. This was one of the consequences of adopting the new practice of closing down on the 30th of June instead of following the plan previously pursued in Queensland of waiting for three months later and debiting the expenditure to the previous year. With the permission of the House I should like to give some particulars of a similar character with regard to the State of Tasmania. So far asVictoria is concerned, I made a statement in the course of my Budget speech, and I gave the fullest details in order that the State Treasurer might check my figures if he thought fit. In New South Wales the same difficulty arose, but the State Treasurer sent me his calculations, and I was able to show him where he was wrong. In his Budget speech he made these remarks -

I may also add that from my observations I have every reason to believe that the transferred departments are as well and as economically managed by the Federal Government as ever they wereby this State.

The following table gives approximate particulars of the expenditure of the transferred departments in Tasmania during Several years : -

I may point out that in 1900-1 the departments were for the greater portion of the year under the control of the State, and, therefore, it cannot be said that the increased expenditure was caused by the change of control. As a matter of fact, the Estimates of the State Treasurer provided for the amount that was actually expended. In 1901-2, when we had control, the total expenditure in the three transferred departments amounted to £134,134. The following statement gives the details in comparison with the year 1900-1 : -

It will be seen that the expenditure for last year included some items which were not embraced within the expenditure of the previous year. This year, exclusive of £1,100, provision which has to be made for compensation in connexion with the Defence department, and for £11,000 which it is proposed to spend out of revenue, upon works similar to those previously constructed out of loan funds, the total expenditure will be increased to £141,153. Even if we expend the whole of that amount - and there probably will be some savings - the increase will be only £7,000 over the expenditure of the previous year. That is accounted for by two items, namely the increments, amounting to £2,052, which have been given to the public servants, according to the practice which has been followed in Tasmania, and £4,037 for the cable subsidy, which now has to be wholly paid by Tasmania, whereas it was formerly divided amongst the States. I intend to forward all these statements to the States Treasurers concerned, so that they may be checked. I contend that they show that the transferred departments are being worked as cheaply by the Federation as they could possibly be conducted by the State, and that all the statements which have been made regarding extra expenditure, amounting to hundreds of thousands of pounds, are myths.

page 16210

SUPPLY (1902-3)

In Committee (Consideration resumed from 26th September, vide page 16205):

Additions, New Works, and Buildings

Division 1(Trade and Customs), £4,767

Sir GEORGE TURNER:
BalaclavaTreasurer · Protectionist

-I desire that honorable members should first consider the estimates of expenditure for additions, new works, and buildings, at page 229. I wish the committee to decide, as early as possible, whether the proposed expenditure upon new works, amounting to about £571,000, should be met out of revenue or loan moneys. If it is decided that we shall not borrow any money it will be necessary to submit additional worksEstimates, and to considerably reduce the amount proposed to be appropriated. I should, therefore, be glad if some honorable member who is averse to borrowing would propose the reduction of the first item by £1, so that we may have a test division- which would indicate the feeling of the committee.

Mr REID:
East Sydney

– We are approaching wonderfully close to the position of having a Ministry acting simply as clerks, and awaiting our instructions as to what they are to do. I know that a large number of persons think that it would be much better if Ministers were merely clerks instead of being responsible administrators. They think that our political affairs would be very much better managed under such conditions, and it may be that the Government are quietly introducing that .system. The Treasurer had an ample opportunity of obtaining a decision from honorable members in connexion with the Loan Bill.

Sir George Turner:

– We could not do that because we did not then know the state of the finances for this year.

Mr REID:

– But whatever the state of the finances might- be, the Treasurer must have made up his mind as to whether or not he wanted a Loan Bill, because he introduced the measure. If the question of introducing’ a Loan Bill had been contingent upon the state of the finances, the Treasurer with his usual good sense would have refrained from bringing in a Loan Bill until he had ascertained that it was necessary. A Government should always be in a position to submit its policy in a concrete form before it asks honorable members, even in an indirect way, to express their views. We are now asked to participate in a discussion which involves the reduction of a certain item by £1 without any definite proposal on the part of the Government being put before us. I have no desire at this period of the session to provoke unnecessary controversy. We are all anxious to finish the remaining public business at as early a date as possible. But I would point out that the course proposed- is rather an inconvenient one. I quite recognise that the Government must occasionally resort to Loan Bills for some of the expenditure which will be incurred in the carrying out of public works. The Treasurer, however, is adopting a course which I do not like, and which I am prepared to allow only in view of the general desire that we should finish during the present week the remaining business with which it is proposed to deal this session. I do not .wish to take up a strong position in regard to any matter if I can possibly avoid so doing ; but I cannot refrain from pointing out that it would be much more satisfactory if the decision of the question of whether or not we are to pass a Loan Bill were deferred until that particular measure, was under consideration. If we are to adopt the course which has been proposed, I hope that the Treasurer, in order that >ve may have a fair opportunity of deciding the matter, will make some short statement of his own views upon the subject.

Sir George Turner:

– I did so when I made my Budget statement.

Mr REID:

– That was a very long statement, and honorable members cannot be expected to carry all the details connected with it in their minds. I do not ask the Treasurer to make a long speech upon this matter. I merely desire that he should give the committee, in a brief way, the salient figures - the amounts involved, and the services to which they relate. I can assure him that at the present time I am absolutely in the dark as to the true bearings of this matter. Seeing the enormous Customs revenue which we are now deriving, I am rather inclined to keep down loan expenditure as much as possible. At the same time, I should be very sorry to commit myself to the view that we may not have to resort to Loan Bills in order to carry on our reproductive departments. I strongly sympathize with those honorable members who desire to go slow at first, and to restrict as much as possible the tendency to resort to loans, but I do not wish to ‘ take a course (iii opposition to the views of the Government upon this matter unless I am very clear as to the facts. I think that it would he to the interests alike of the Government and the committee if the Treasurer gave us just a few leading figures, indicating the works which he thinks ought to be constructed out of loan moneys. The result of a deci- ‘ sion upon a proposal to reduce a certain item by £1 is a’ very clumsy method to decide whether or not a Loan Bill is necessary, seeing that honorable members might be very willing that some of these works should be constructed out of loan money. A test vote upon a motion to reduce this item by £1 will perhaps mean that none of the public works proposed are to be constructed out of loan moneys this year, whereas a majority might be of opinion that certain works might legitimately be so constructed. I .have no desire to stand in the way of any course which the Government desire to take to expedite the transaction of business, but I hope that the Treasurer will recall to our minds the total amounts involved under each of the different services, so that we may know exactly what we are deciding,

Sir GEORGE TURNER:

– When the Loan Bill was under consideration I placed before the committee the strongest reasons why, under the exceptional circumstances of the case, the Government should be granted permission to borrow a certain reasonable amount for a few years instead of taking - as my colleagues and myself would have liked - all the expenditure upon works and buildings out of revenue. Nearly all the States have hitherto adopted the practice of constructing their buildings out of loan moneys. The difficulty with which we were confronted was that in only two of the States could the necessary money be taken out of their revenue, if we were to allow of their receiving a large return. I do not know that those States would be embarrassed if we took the money required for the construction of the public works which it is proposed to carry out within their borders out of revenue, but certainly they would have a sufficiently large surplus to justify the adoption of that course. In the other States the surplus was not sufficient to justify us in depriving them of large sums. During the present year we are proposing to reverse the practice of the States to the extent of £180,000. We propose to construct buildings out of revenue - works which in nearly all the States have hitherto been constructed out of loan moneys. When this matter was previously under consideration, honorable members were in doubt as to whether the revenue of the present year would not show such a very large increase as to obviate the necessity for floating a loan. It was to enable us to ascertain what were the real facts that the debate was adjourned and the financial statement made, before we decided the question of whether or not we should raise loan moneys. To my mind it is altogether a matter of expediency. If we can construct the whole of the works out of revenue, well and good, but I wish to impress upon the committee - as I did when I introduced the Loan Bill, and as I repeated in connexion with my Budget statement - that, in my opinion, four of the

States cannot afford to have the works proposed constructed out of revenue. That is my great difficulty.

Mr Glynn:

– Does it matter very much to any of the States ?

Sir GEORGE TURNER:

– Certainly, some of the works included in the Loan Bill represent a very large sum.

Mr Watson:

– The committee ought to be informed of how much.

Sir GEORGE TURNER:

– I circulated the Bill some time ago, but I will give honorable members the amount.

Mr Watson:

– Can the Treasurer tell the committee how much worse off some of the States will be if the whole of the works are constructed out of revenue as compared with the position which they would occupy after paying interest upon the loan proposed ?

Sir GEORGE TURNER:

– The interest upon the loan would be only 3 per cent., whilst if the amount were taken out of revenue it would represent 100 per cent.

Mr Mahon:

– We cannot float a loan for 3 per cent, at the present time.

Sir GEORGE TURNER:

– Yes, we can.

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

– By how much has the total amount Originally provided in the Loan Bill been reduced ?

Sir GEORGE TURNER:

– Up to the present time I have reduced it by £75,000, which was the amount set down for the purchase of switch-boards. The general opinion seemed to be that the money necessary for making that provision should be taken out of revenue. I have not provided the whole of the £75,000 upon this year’s Estimates. I have, however, set apart a sum of £32,000, which would be sufficient to meet the requirements of the present year. The balance would have to be forthcoming next year. Assuming that the total amount of the loan is £575,000, it would be distributed as follows : - New South Wales, £228,000; Victoria, £122,000; Queensland, £125,000; South Australia, £44,000; Western Australia, £46,000; and Tasmania, £10,000. If we are to adopt the principle that new expenditure shall be borne upon a population basis, the result will be that some of the States will contribute a larger amount than is expended within their borders. In Victoria, for example, the expenditure would be £122,000, but the contribution of that State would be about £180,000. If we are to construct these works out of revenue, I think we should adopt the principle of charging to each State the cost of the works carried out within its own boundaries.

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

– Should all this expenditure be classed as new expenditure?

Sir GEORGE TURNER:

– Yes.

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

– A great deal of it is for renewals and maintenance.

Sir GEORGE TURNER:

– No ; all the expenditure necessary for maintenance and renewals comes out of revenue. I admit that, in ‘Victoria, the expenditure is for a reconstruction of the existing telephonic system. In New South Wales we are proposing to substitute the metallic circuit in lieu of the old system, but I do not know that we can fairly charge any outlay in this direction to the vote for maintenance and repairs. It is really expenditure in connexion with a new work, and should be paid for out of loan money.

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

– The expenditure upon the system which it will supersede came out of loan money also.

Sir GEORGE TURNER:

– There is no doubt that that is so. Honorable members have asked for information with regard to the loan expenditure proposed. The total amount set .down for works which were originally included in the Loan Bill was £650,000. That has been reduced by £75,000 for switchboards. The first items contained in that measure relate to large additions to the General Post-office in Sydney and to the Newcastle Post-office, and total £26,000. In Queensland it is proposed to construct new buildings at a cost of £25,000. The balance proposed to be expended in New South Wales was for the construction of a telephone line connecting Sydney with Melbourne, for taking over certain guaranteed lines, for the ordinary -extension of the telephone and telegraphic service, for establishing metallic circuits, and for new instruments. In Victoria, practically a new system has to be adopted by under-grounding our telephone wires, by introducing the metallic circuit, and providing a new switchboard.

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

– The under-ground lines will only displace the old over-head lines.

Sir GEORGE TURNER:

– I admit that. Then, provision has been made for the ordinary extension works in Victoria. In Queensland we had to provide for the extension and construction of telegraph and telephone lines and to pay for works which have been carried out within the last twelve months. The same remark is applicable to South Australia, Western Australia, and Tasmania. A large proportion of the expenditure in those States is for ordinary extension work, and a considerable sum is provided for reconstructions which will be rendered necessary by the adoption of the new system. If we believed that the revenues of all the States could bear the strain, we should have been only too glad to debit the whole cost of the works to revenue. - But, so far as I can see, to charge the large expenditure involved in their construction to the various States during the present year would, under existing conditions, be unwise and unfair. If these works had been undertaken by the States themselves, they would have been constructed out of loan moneys ; and, seeing that we have deprived them of their chief source of revenue, it seems to rae that we should be going too far if we insisted upon constructing the whole of them out of revenue. Having given the matter* full consideration, I am forced to that conclusion, although I sympathize with- those who urge that we ought not to borrow. If we are to deal fairly with the States, it seems to me that we are compelled to borrow. Certainly we ought not to do anything to place them in a more difficult position than that which they occupy at the present time.

Sir Malcolm Mceacharn:

– Does this expenditure provide for the completion of the whole of the works 1

Sir GEORGE TURNER:

– No ; the additional expenditure necessary is shown in another column.

Mr WATSON:
Bland

– I do not quite know that a proposal to reduce the Estimates of Expenditure from revenue by £1 is a good way of testing the question of whether or not we should ‘ consent to loan expenditure. It seems to me that it would have been better had the Estimates of loan expenditure been placed before us, and a motion had been submitted to reduce the first item. The vote then could have been accepted as a decision applicable to the remainder of the items. But, so far as I am concerned, I shall adopt that course if it will lead to the discussion and the disposal of the matter in a quicker and easier fashion. There is, however, one point to which those of us who believe that works should be carried on out of revenue rather than out of loans would do well to pay some attention. The Treasurer stated that if the loan expenditure is vetoed by this House then the amount spent on the works must be considerably reduced. I do not see the force of any such statement. It is to be assumed that these works are proposed only because they are necessary. If the majority of honorable members, in view of the fact that we have an estimated surplus of revenue over expenditure of some £915,000, decide that revenue shall provide the funds, they do not declare that works which the Government say are necessary shall not be carried out this year.

Sir George Turner:

– The trouble is that the honorable member does not deal with the individual States, but takes them as a whole.

Mr WATSON:

– I am looking at this’ question from an Australian stand-point.

Sir Georg r Turner:

– But the money has to be returned to the States.

Mr WATSON:

– The Australian standpoint is that from which I prefer to regard the question ; and, as a preliminary, I say that, so far as my vote is concerned,’ while I am against loan expenditure, I am against any reduction of the expenditure on necessary works. I take it for granted that the inclusion of the works in the schedule is an admission that they are necessary. In view of the general .economical traits of the Treasurer, we know that he is not likely to assent to any works which cannot be shown to be not only necessary, but immediately necessary. I do not wish to go over the whole ground of discussion, traversed some months ago ; but we may, at least, congratulate the Treasurer on the fact that, according to the Estimates, he proposes a considerable increase in the amount to be expended from revenue on works, a great number of which, I am sorry to admit, have always in the States been constructed out of loans. That is a step on which those who believe in such expenditure being made out of revenue may congratulate the Treasurer. That we cannot go to the extent the Treasurer now proposes in regard to loan expenditure is, to myself at any rate, a matter of regret. I must emphatically protest against the idea that while we have an enormous -balance of revenue over Commonwealth expenditure - a balance which we are entitled to spend in any direction we think fit for the Commonwealth as a whole - we should go into the money market of the world ‘ or of Australia and borrow a paltry £500,000. The Treasurer points to the probable result that the States may be in the position of having a deficit as compared with the previous state of affairs; but if the States have obtained their balancing of accounts only by charging to loan works which should have been charged to revenue, such balancing is not a fair criterion of the state of their finances. If the States can only balance accounts in that way, why should the people of Australia as a whole, while having money at their disposal, resort to loans merely in order to save the States Treasurers, who are responsible to their constitutents for the expenditure, from the necessity of raising loans 1 Even if any action we may take in the direction of causing monies to be expended out of revenue does compel loans, it is much better that the loans should be raised by those responsible for the expenditure, namely, by the States Government; and even if we spend £570,000 out of the revenue which is still at our disposal for the ensuing year, we shall return the States - not individually, but collectively- -hundreds of thousands of pounds more than we are bound by the constitutional contract to return. In view of this fact, it seems in the last degree ludicrous to find the Commonwealth, at the inception of its career, with an overflowing Treasury, practically confessing to the world that we cannot find money to carry out extensions of the mere business undertakings we have entered into on behalf of the people. It is repeatedly claimed that the Post-office is a paying commercial concern, and- yet it is proposed to admit that we cannot find a paltry ±’500,000 this year in order to make the department more reproductive and more convenient to the people. That,’ in my opinion, is a lamentable confession in the face of an estimated surplus of £915,000.

Sir George Turner:

– The unfortunate thing is that the States have not overflowing Treasuries.

Mr WATSON:

– That is a matter over which, as I have contended all along, we have no control. We are constrained to hand to the States three-fourths of the revenue from customs and excise, and if we do that our part of the bargain is fulfilled. Even if the £570,000 referred to be taken out of revenue, there will be between £300,000 and £400,000 handed back to the States Treasurers in excess of the amount which they are .legitimately entitled to claim.

Sir George Turner:

– Queensland will get £68,000 short of the fourth, and Tasmania also will receive an amount short of that proportion.

Mr WATSON:

– Quite SO; but I do not know that we are constrained to make any special effort to save Queensland from the consequences of the failure to balance accounts, that failure being due to an unwillingness to raise revenue from sources which are still open. If the Queensland Government refuse to take advantage of these sources of revenue, surely the Commonwealth are not compelled, because of that, to put extra burdens on the shoulders of other people who have used similar sources ? Other States have imposed land and income taxation in order to meet their own necessities, and, in at any rate most cases, those States are not in the position occupied by Queensland to-day. While Queensland leaves these sources of taxation untouched, she has no right to come whining to the Commonwealth Parliament for any special consideration. I refuse to believe that the people of Queensland desire any whining to be indulged in on their behalf ; in my opinion they are prepared to put their hands into their pockets in order to make good the necessities of the State Government.

Sir Malcolm MCEACHARN:

– A great many have nothing in their pockets.

Mr WATSON:

– I do not advocate for a moment that any attempt should be made to “extract blood from a stone” - to get. taxation from those who have nothing with which to pay. That is a labour I would not like to see even the Treasurer of Queensland enter on with any hope of satisfactory results. But the Government of Queensland have made no attempt to get money out pf the pockets of those who are able to pay ; and that is where I find ground of objection. At the same time, the Queensland Government fill ‘ the press with lamentations, and, in some cases, with accusations against the Commonwealth Government because of the failure of the latter to prevent the necessity of taxing a few of the remaining rich people of Queensland in order that they may bear some fair share of the public burden. I do not wish to go in detail into this aspect of the question, but merely to say that while there is failure in Queensland to exploit various forms of taxation which yet remain open, the Government of that State have no right to ask the Commonwealth Government to enter on a career which is foreign to the interests of the people of the Commonwealthas a whole. I maintain that to pay for the various necessary works out of loans is against the best interests of the people. In my view, loans always lead to false notions as to the value of economy. If people can borrow easily and cheaply they are frequently led to indulge in extravagance of which otherwise they would not be guilty, and borrowing builds up for those who will come after us in a few years a burden which it is impossible for us to appreciate at the present time. I shall not go into this matter at any great length, but with a view of testing the question whether the committee is in favour of a borrowing career being entered upon at this early stage in the. history of the Commonwealth, I move -

That the item, “ Construction of new boat harbor at Newcastle, £150,” be reduced by £1.

Mr MACDONALD-PATERSON:
Brisbane

– The honorable member for Bland would, I think, have better helped the committee, and better served his purpose, had he confined himself to a discussion of the question whether or not the Commonwealth should borrow. One astonishing statement made by the honorable member was that the- Post and Telegraph department is a paying- concern.

Mr Watson:

– I -did not say that the Post and Telegraph department is a payingconcern, but only that it is always claimed to be such.

Mr MACDONALD-PATERSON:

– I fancy that the honorable member will find that the word “ claim “ is not reported in Hansard, and my contention is that the department has never paid its way. In Australia, as a whole, the Postal department was never expected to be revenue producing in the way that it is in Prance, Germany, and particularly in the United Kingdom. In the mother country, speaking roughly, there is a profit on the postal branch of some £3,500,000, though the telegraph branch,’ I believe, shows a small deficit. That deficit in the telegraph branch is, however, being reduced each year. I advocate the principle which has obtained in all the States of borrowing for new works of this character. Is it contended that, because borrowing for such works has been good in the past for the States individually, it is not good for the States under a federal union ?

Mr Fowler:

– Borrowing has been the curse of Australia.

Mr MACDONALD-PATERSON:

– The idea of the labour party just now is to “ whine “ for taxation on property, on money in the banks, and money owned by individuals, and let all other taxation go.

Mr Watson:

– People who have no property or money in banks pay a fair amount of taxation through the Customs.

Mr MACDONALD-PATERSON:

– The honorable member for Bland also misstated the case in respect to land and income taxation. As a matter of fact, the income tax under other names has existed in Queensland for many years. In New South Wales there is no local taxation outside the municipalities ; but in Queensland, Crown lands held fey private individuals under leasehold and land held in fee simple are all taxed for the purpose of maintaining roads, bridges, and waterworks. There is immense taxation in that State, which, however, seems to be the subject of attack by several honorable members, who ought to pay greater regard to the misfortunes through which it has passed; as compared with the other States. First of all there is the drought, and then the Prime Minister, and also the acting leader of the Opposition, promised that the sugar industry should be protected. It was stated that there was no desire to interfere with any of the industries of Queensland in any way whatever - that they were there to preach preservation, and not destruction.

Mr Watson:

– The Queensland sugar-, growers have a better market now than they ever had.

Mr MACDONALD-PATERSON:

– We do nob come here to whine about the position of any of the States. But no one has ever yet said that Queensland was not to have a say in regard to the preservation of her industries or that they were to be utterly swamped by the aggregate vote of Australia.

Sir John Quick:

– - Queensland is not swamped ; it was her own vote that determined the policy to which the honorable and learned member refers.

Mr MACDONALD-PATERSON:

– I know that the white men in Queensland will petition for a modification of the present law, and that will come about in due time.

Mr Watson:

– Oh, no, they will not.

Mr MACDONALD-PATERSON:

– I am not going to refer to past debates in regard to that question, but I do say that there is a strong nail upon which to hang a case for the modification of the law. That nail is now being used in Queensland. The grievance of the people of Queensland is that they relied upon the Commonwealth to preserve their industries, and expected that the Federal Government would do so. I am here to express my views in no unhesitating fashion from my knowledge and experience of Queensland, though I do not intend to whine about her condition. A man who has the interests of his country at heart has no business on the floor of this House if he is a winner. There is nothing to whine about in Australia. We have come through very great difficulties in the past and shall come through them again. But he must indeed be a neophyte in finance who urges that we should not borrow any money for necessary works. We all know that “a new broom sweeps dean,” but we must not sweep all borrowing out of the Commonwealth Governmental programme. What was good for the several States in the past is good enough for us in the aggregate. Our railways, which are most potent factors in the development of our territory, and our light-houses, have all been built out of borrowed money upon which we have been able to pay the interest. When the 40-lb. rails which were formerly used throughout the Commonwealth were supplanted by 60-lb. rails, and those in their turn owing to the increase of traffic were supplanted by 80-lb. rails, the renewals were paid for out of loan money. What is the difference between what I have cited as to the policy pursued in the past, and the policy which ought to be pursued by the Commonwealth Government ? I would warn honorable members that, although it is estimated that there will be a considerable revenue this year, we shall not always have such a revenue. We may possibly be tens of thousands of pounds short, and the deficit of Queensland, South Australia, and Tasmania may be very large. Adverting to the £900,000 surplus for the present year, I do not wish to be pessimistic, but I can assure honorable members that the revenue of Australia for the next five or six years “ will not rise. The Government had better nurse the surplus which they have. The revenue will fall every day, and the people will not be able to bear severe local taxation. Already they are heavily taxed by the shire councils, municipalities, and divisional boards. It is folly to think of refraining from borrowing. It was considered to be good enough to borrow nineteen or twenty years ago for the purpose of erecting telegraph lines and plant, and it is equally wise to borrow for reconstruction only for a more modern plant which will last very much longer. A wise firm, or company, if it saw that new plant was necessary for which it was not able to pay out of revenue, would not hesitate to borrow money ; and what a wise firm would do may well be done by this Parliament.

Sir Malcolm McEacharn:

– The honorable and learned member is supposing that what is to be borrowed - is for reproductive plant, but it is not.

Mr MACDONALD-PATERSON:

– The new plant that is to be instituted is to take the place of another plant, and that is work which, to a certain extent, is reproductive. There is very much that I should like to add to what I have said, but there will be other opportunities. I have risen principally to dispel the idea that it is not wise to borrow such a sum- as the Treasurer suggests. I am not in favour of what I may term a financial-piebald policy - paying for works partly out of revenue and partly out of loan money. No; I go entirely for a loan policy on this occasion.

Mr POYNTON:
South Australia

– It appears to- me that this committee is attempting to do too much all at once. In the first place, this is a very bad time to start constructing expensive works out of revenue, and in the second place these estimates provide for a very substantial reform in the direction that many honorable members desire - that is, the construction out of revenue of certain works that have hitherto been paid for out of loan money.

Mr Higgins:

– South Australia has not been in the habit of paying for drill rooms out of borrowed money, has she ?

Mr POYNTON:

– No, she has not.

Mr Higgins:

– Nor boat sheds ?

Mr POYNTON:

– Notwithstanding the financial position of South Australia and the shortage which, according to the Treasurer’s figures, is to take place at the end of the financial year, he proposes to construct out of revenue works to the extent of £20,000, which works hitherto would have been constructed out of loan money. That is a reform in a proper direction. But to say that in the case of every State the construction of extensive telegraph lines and other important works should be paid for out of revenue, would be a line of policy about which the States would have good reason to complain, particularly since they are now struggling to make both ends meet. It is all very well for the honorable member for Bland to single out a particular State and say that it has not done as much as it might have done in the way of the imposition of taxation. But other States have utilized nearly the whole of the sources of taxation,- and.yet are faced with a deficit at the end of the year. What is now proposed would simply have the effect of creating further confusion in State finances.

Mr Watson:

– Is it not wiser for them than for us to borrow, seeing that they have control of expenditure and we have not1?

Mr POYNTON:

– Do I understand that the honorable member wishes the States toborrow for works which the Commonwealth undertakes to construct 1

Sir George Turner:

– They would have to borrow to make up a shortage of revenue.

Mr POYNTON:

– Is that the’ positionthat the honorable member thinks the States ought to borrow to make up the deficiency ?

Mr Watson:

– If the honorable member’s’ contention is correct that there will be a. deficiency, I say that those who make thedeficiency, and not this Parliament, should borrow if there is to be borrowing.

Mr POYNTON:

– I cannot see that. The Commonwealth has taken over certain transferred departments. The States, under their own systems, would have done the work for these departments - as the Treasurer is wishing to do it - out of loan money.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The honorable member forgets that we are raising more money through customs and excise than the Statesraised.

Mr POYNTON:

– I am well aware of that, but I am equally well aware that the States have to face a shrinkage, and that the amount of revenue which will be raised is problematical. We all hope that the amount will be greater than the Treasurer estimates, but at the same time what is proposed by the honorable member for Bland is not the way to help the States’ finances. The honorable member for Bland objects to the position that if we do not grant the power to raise a loan these works will not be carried out. I fail to see how we should be justified in providing for all these works out of revenue, and thus robbing the States and preventing them from being able to pay 20s. in the £. In many instances, what may be regarded as a pin-prick policy has been adopted. Considerable irritation has been caused in the States owing to the fact that many of these works had actually been approved, and in some cases provision made for them, when the Federal Government took over the departments, and a new born zeal to do away with an established custom came into play. Apart altogether from the works to be carried out under the Loan Bill, provision is made under these Estimates for onethird of the works to be constructed out of revenue which formerly have been provided for out of loan moneys. In the future we may be able to adopt the principle of providing for our undertakings out of revenue, but it is absurd to seek to provide for all these works out of revenue, in one of the worst years that has ever been experienced in Australia. Such a course would not be calculated to assist the States Parliaments. I trust that the Treasurer will make a fight for his proposition, and not allow it to go by default, simply because of the fact that a few honorable members think that these works ought not to be provided for out of loan moneys. If he is in earnest he will fight for his proposal. If he does, I shall fight with him. He has gone quite far enough in providing out of revenue for fully one-third of the works which used to be constructed out of loan moneys. It is our duty, in the present financial position of the States, to make a determined stand, and not allow them to become involved simply because of this new-born idea of providing for everything out of revenue. In our private capacity many of us would like to be able to do without recourse to loans, and many private institutions have the same desire, but the force of circumstances is such that we are often compelled to resort to borrowing. That is to-day the position of the States. If these works are to be carried out, they must be constructed out of loan moneys. It is idle to blame the States for hanging up the works. If they are justifiable, as they should be, when provision is made for them on the Estimates, we should not make it more difficult for the States to carry on by enforcing at this juncture a scheme for providing for everything out of revenue.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The position in regard to the Loan Bill is somewhat different from what it was originally, owing to the fact that the Treasurer has announced that to a certain extent some of the works which he had previouslyproposed to carry out by means of loan moneys are now proposed by the Government to be constructed out of revenue. To that extent, there has been an alteration, but the alteration is not one of principle. The principle is the same as before, although the loannow proposed to be raised is somewhat small - so small, indeed, that I think it would be almost ridiculous for the Commonwealth to go on the market to float it.

Mr Glynn:

– Discounting our solvency at the very start.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Whilst it might not be discounting our solvency, I think it would be undignified for the Commonwealth to float a loan of only £500,000. It may be that the Treasurer takes the opposite view, and desires the public to be encouraged in the belief that this overcautiousness on the part of the Federal Government is a sign of our greater solvency, and a desire not to increase our debts. Still, I think the amount proposed to be raised is so small that the matter might very well be allowed to stand over altogether. It is in regard to the principle involved in the present discussion that I propose to make a few observations. We are told that the position of the States is such that some loan moneys must necessarily be expended in order to enable certain works to be carried out. I have no doubt that were there no federation the works now proposed to be constructed out of revenue would be constructed for the most part out of loan moneys. I do not disguise that fact for a moment. But the States had already entered upon the policy of borrowing when federation was established, and they have so fed themselves upon that policy that it is very hard for them to initiate a new one. In regard to the Commonwealth, however, the position is entirely different. Theprinciple of borrowing has not yet been affirmed by this Parliament, and I hope that it will not be for some time to come. The responsibility for whatever the States may choose to do for themselves lies with them. On the other hand, the responsibility lies with us in endeavouring to preserve the credit and solvency of the States as a whole. I am one of those who think that for the Commonwealth to initiate a policy of borrowing in addition to that pursued by the States, would be to do that which is financially wrong.

Mr Sawers:

– How are we going to build the federal capital 1

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I said I hoped that we should not borrow for a very long time to come. If there be one thing more than another which is necessary to-day in connexion with the financial affairs of Australia, it is that there shall be something like firmness in relation to our operations in money matters. I fear that for the Commonwealth to initiate a borrowing policy would be to add to the unsteadiness which prevails. For years past, nearly the whole of the States have had vast deficits. In round figures I suppose that the total of the States deficits for last year was about £1,750,000.

Mr Poynton:

– Will the honorable member show how his vote is going to improve that position 1

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– If the honorable member will allow me to proceed, I shall endeavour to make some remarks pertinent to the issue. I wish to emphasize the fact that these huge deficits in all the States do not tend to facilitate financial operations to any extent. Those who are to lend us the money know that no amount of juggling can alter the fact that the same people will have to pay the taxation. The taxing authorities are different, but the taxpayers remain the same, and the investor is not to be hoodwinked by the fact that it is the Commonwealth which asks the loan, and not a particular State. A new population has not been created because of the fact that the colonies have been merged into the United States of Australia. There are some 4,000,000 people in Australia, and they are now endeavouring to pay the interest charges on the States debts. If the Commonwealth seeks to borrow money, the foreign or the British investor1 - I care not which - will not be blind to the fact that the same people will have to pay interest on both the Commonwealth and the States loans. Therefore, for ‘the Commonwealth to borrow is for the

Commonwealth to add to the unsteadiness in matters financial which prevails today in Australia. I am afraid that’ - for the Commonwealth to initiate this policy would be to impair rather than to add to the credit of the States. . In the State of Victoria, with which I am most familiar, some £5,500,000 of loan moneys will be due early in 1904. Of course, Victoria will not be in a position to pay off thai amount. It will be necessary for it to float a conversion loan in order to cover the deficiency. It will probably have to float a loan of £6,000,000, because, in view of the present state of the market, the State Government are not likely to be able to obtain anything like the rate which they previously secured. My belief is that, in order to cover the expenses and other charges, they will have to borrow £500,000 in excess of the loans repayable on the date named. If the Commonwealth also goes into the market how will it affect the credit of the State in endeavouring to convert that loan 1 Will it not rather impair its credit 1 On the other hand, if the Commonwealth determines to construct its public works out of revenue, and keeps out of the market altogether, it will be of fundamental assistance to the States which are compelled to go into the money market, simply because they cannot possibly meet the obligations as they become due. I have here some figures relating to Victoria, which are a little remarkable as affecting the question of borrowing. I have endeavoured to find out to what extent the interest charges in Victoria are responsible for the added payments as a whole in connexion with the financial affairs of the State. It is asserted in some quarters that the increased expenditure in Victoria is due to the fact that we are employing too many civil servants here. Others put it down to differing causes. I tried to find out how far the State borrowings were responsible for the increased expenditure by way of interest.

Mr Poynton:

– Did not the honorable member vote for borrowing when he was a member of the State Parliament t

Mr Glynn:

– We all did. We have all been fools at some time or other.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I find that in 1891 the public debt of Victoria was in round figures- £43,000,000. Between 1891 and 190J loans were floated to the extent of £18;5u0,000, but during the same period loans were redeemed to the extent of £8,000,000. In other words the public debt of Victoria was increased during the - ten years by some £10,000,000, or £1,000,000 a year. As the result of that increased borrowing we have the further fact that whilst the interest payable in 1891 was £1,700,000, it had risen in 1901 to £1,950,000. That is an increase of £250,000, which is equal to about 5s. per head of the population, and that 5s. per head remains as a permanent tax..

Sir George Turner:

– Does the honorable member allow nothing for the additional revenue which was received as the result of the expenditure of that loan money upon railways and other works ?

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I have figures in respect of the revenue, and I think it will be found that for the most part there was a decrease of revenue during the period named.

Sir George Turner:

– From other causes. The money expended on new works must have brought in some extra revenue.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– On . the contrary, I shall prove that as a matter of fact the whole of the moneys borrowed in Victoria during the last twenty years have practically been non-productive.

Sir George Turner:

– They have opened up the country.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– As a result of this increase in the burden of interest, the people of Victoria have to pay 5s. per head, or about 9 per cent, of taxation in excess of what they were previously called upon to bear. As to the question of whether these loan moneys have been reproductive or not, I find from the last statement made by the Victorian Treasurer, Mr. Shiels, that the earnings on loan moneys expended fall short of the interest hurden by about £500.000. If we capitalize that sum at 3& per cent., we shall find that it amounts to” £15,000,000. During the last twenty years we have in Victoria borrowed about £1 5,000,000, and if the figures, as given by the State Treasurer are correct, then the whole of the £15,000,000 borrowed during the last twenty years has been absolutely non-productive, since it has not met the payment of the interest involved in the obligations incurred. Of course some of the recent loans have been productive, whilst some of the earlier ones have- been now productive, but, taken collectively, the result is as I have stated it.

Mr Poynton:

– Has there been no indirect gain to the State ?

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I am not now discussing whether there has or lias not been any indirect gain to the State. I do not say that it may not be wise in some instances for the States to borrow money j but I am endeavouring to prove, perhaps somewhat impotently, that for the Commonwealth to add to the debts of Australia by entering the loan market on its own account will result only in adding to the instability which at present exists in money matters, and will in some sort impair the credit of the States. I am further endeavouring to prove that, in view of the increased revenue which the Custom-house is now yielding to the Commonwealth, there really is no necessity for the flotation of such a very small loan as the Government have submitted to us. I candidly admit that I have not had full time to digest all the figures I have obtained, or to obtain all I hoped to obtain in conexion with these matters. It was my intention to have given them a little more scrutiny, but though we knew that the proposal was coming on, it has been brought on earlier than I expected. I wish to emphasize my statement that, so far as the Commonwealth is concerned, it is hardly worth our while to enter the money market for go small a loan.

Mr Deakin:

– Surely, on the honorable member’s argument, the smaller the loan the better.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Certainly ; but sofar as the Commonwealth is concerned, I believe there should be no loan. I further wish to say that if the States cannot now meet their obligations in connexion with interest charges, unless by resorting to taxation or retrenchment, there must sooner or later come a time when the limit of taxation will have been reached. I do not know whether that limit has yet been reached in Australia or not, but the State Treasurer apparently believes that it has been reached in Victoria. If that is so, we are hardly warranted in adding to the burdens of the people of the States by imposing upon them additional interest charges for Commonwealth loans.

Mr Salmon:

– If we take their revenue for public works will they not be in a worse position ?

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I think not. Under the Commonwealth the State of Victoria is getting back more customs revenue than she previously obtained.

Sir George Turner:

– Not this year.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

-I am speaking of last yeal1.

Sir Georg r Turner:

– Yes; but the States have nil the new expenditure put upon them.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Our Commonwealth expenditure is as much for the benefit of Victoria as .for Australia as a whole. If we get a new post-office in Victoria, it does not do any particular good to Queensland,

Mr Salmon:

– The State Treasurer of Victoria would much prefer that we should pay interest upon this loan, than that he should have the. money taken out of his revenue for this year.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I have no doubt he would ; -but what is our duty in the matter ?

Mr Salmon:

– I thought the honorable member was arguing from the State Treasurer’s point of view.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I am arguing from the point of view of the Commonwealth. A future State Treasurer will find himself in the position some years hence that the present State Treasurer finds himself in now. That is to say he may have to face increased expenditure, by way of interest for some additional borrowings, just as the’ present State Treasurer has to meet the sum of £250,000 a year for interest as the result of the last ten years’ borrowing. If we add to the borrowings, a future Commonwealth Treasurer will find himself in the same position, and increased taxation will ultimately become inevitable. If we can avoid borrowing at the present time, we may save State taxation to a certain extent. If we proceed upon a borrowing policy we shall inevitably hasten further taxation. I do not know that any one is anxious to add to the taxation imposed upon the people of Australia. I, for one, am not. I prefer that we should have each year’s debts met by each year’s revenue. That is the difference between spending money from revenue and spending money from loan. If our expenditure is defrayed from revenue, the debt, once contracted, is paid and done with. But, if it is paid out of loan, the debt goes on for ever, because the interest charge remains as a tax, and is seldom or ever removed.

Mr Poynton:

– The honorable member prefers to travel by mulock dray.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– - No : I prefer to be solvent. I prefer to pay my way. 40 a

Mr Fowler:

– The thrifty man who does not borrow gets an improvement upon the bullock dray soonest.

Sir George Turner:

– Western Australia would not have been opened up if the State Government had not borrowed.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I am not discussing the inadvisability of ever borrowing at all, but the inadvisability of the Commonwealth borrowing at this stage. There was a time, and my remarks have indicated the fact, when the States could borrow money at advantage, and I instanced Victoria as a case in point. But that time apparently ceased twenty years ago in Victoria, for all’ the borrowings during the last twenty years, do not return sufficient to pay the interest charges upon them. That is the point I sought to make, and the Victorian case is better than that of any .of the otherStates, because Victoria has borrowed less-, money per head than the other States. I repeat that for the Commonwealth to enter the money market and borrow money at this stage would be very inadvisable ; first of all, because it would have the effect of interfering with the credit of the States in .connexion with their loan conversions, which must shortly take place ; and in the next place, because we have plenty of money coming in from the Customs and otherwise to carryout the £500,000 worth of public works to» be covered by the proposed loan. I believe those works can be constructed out of revenue, and that, therefore, there is no need for us to add an annual charge, that will remain perhaps for ever, in the shape of interest payable upon the loan proposed to be floated. In these circumstances, I hope that honorable members will not agree - to the proposed loan, but that they willi instruct the Treasurer, as he desires instruction, to carry out from revenue the works which are really necessary, and leave those not urgent for a future time.

Mr GLYNN:
South Australia

– I am sorry I cannot in this matter agree with my honorable colleague from South Australia,, Mr. Poynton. We have pulled together in connexion with a good many other things, but I cannot assume a position on behalf 0t South Australia in the Federal Parliament,, which I should have repudiated as a member - of the State Legislature. For the last five, or six years there were several of us who, in. the local Parliament, were determined to. put a stop to the borrowing which has been too frequently resorted to during the last fifteen or twenty years. It remains for us now to be somewhat consistent with the policy to which we gave expression in the local Legislature. Nor do I share the fears expressed by my honorable colleague as to the effect upon South Australia if we reject the proposed Loan Bill. I do not think there was very much fight in the Treasurer’s speech upon this point. The right honorable gentleman seemed, in making the proposition, to be balancing all the pros and cons pretty fairly. His speech was somewhat like a proposal of marriage made by some bachelor who was praying Providence all the time that the woman would reject his suit.

Sir George Turner:

– I spoke as strongly as I could in the Budget speech.

Mr GLYNN:

– I read the speech through. I know that a considerable amount of emphasis may be given to political statements, if the speakers are exceedingly desirous that they should succeed in, what they propose ; but I noticed a certain weakness and lack of warmth in that part of the Treasurer’s speech in which he asked honorable members to take up the Loan Bill again. I do not share the fears of the honorable member, Mr. Poynton, as to the effect upon South Australia of throwing this class of items upon revenue, because federation has left South Australia pretty well off. The Treasurer’s statement of last week showed that, after deducting the new cost of the federation in 1901, we returned to South Australia £35,000 more from Customs than that State received in the year prior to federation. In other words, -that State really made a profit in that year as against the year 1900. By deducting the per capita cost - and that is the way I take the Treasurer’s speech, and I think his figures bear me out - from the total net revenue, there was ‘still an excess of £35,000 returned in 1901 as against that State’s receipts in the last year under the old regime.

Sir George Turner:

– That excess has come down to £13,000 this year.

Mr GLYNN:

– I was going to say that this year the excess comes down to £13,000, but it is still a profit in 1901-2 as against 1900, the year prior to federation.

Sir George Turner:

– No; there is a loss of £21,000 this year as compared with 1900.

Mr GLYNN:

– Is the right honorable gentleman quite right in saying that of 1 902-3 ? I think he said there was a minus entry of £20,000 ; but we know that in the previous year, 1901-2, there was a profit of £13,000, and it seems to me that the new cost of federation this year, on a comparison with the Customs of 1900, will be something like £8,000 to South Australia. That is to say, allowing for increased Customs receipts, that the estimate for the current year will be only £8,000 as against an estimate of about £35,000 in the 1897 Convention. I say therefore that, no matter in what way we take it, federation has really left South Australian finances in a pretty sound condition. Therefore ‘we are not called upon in a petty matter of this sort, an expenditure for all States of £500,000, to follow, at the very outset of our political life, the wretched ‘ example which the States have- followed for the last twenty years. As regards the method of apportioning this money in case we borrow it, I point out again that South Australia comes out pretty well in the transaction. If honorable members from South ‘Australia will look at page 65 of the papers presented last week by the Treasurer, they will find that, of the £174,000 to be paid out of revenue for new works, an expenditure of £20,000 will take place in South Australia, but her contribution per capita will be £3, 6 8 8 less than that. There we have one example of the financial effect upon that State of the application of the principle of paying per capita in connexion with expenditure from revenue. In other words, there will be during the current year an expenditure of £20,000 in South Australia as against a per capita contribution towards that expenditure by that State of £16,417. So that if we throw the whole of the public works expenditure upon revenue, instead of £174,000 of it, and apply the same principle to the whole, we in South Australia shall actually gain by the transaction, because in respect of our share of the total we shall pay less per capita than the expenditure necessitated in that State this year.

Mr Higgins:

– The honorable and learned member is speaking only of South Australia, because her gain may be our loss.

Mr GLYNN:

– I am speaking merely as to the effect upon our position, because there has been a good deal of unnecessary timidity displayed in relation to the State finances under federation, and a good deal of unjustifiable criticism against the policy of the Federation, and its effect upon local finances. I think it is our duty, as we are perhaps more interested in the figures applicable to our own States, to submit a fairer representation of the effects of federation. As regards the method of debiting this money, if the loan should be floated, I think the suggestion of the Treasurer is a very fair one, and can be constitutionally carried out - instead of debiting the lot per capita, that it ought to be regarded as transferred expenditure. I know it is very difficult to say under what category some of this expenditure should be put; whether, for instance, switchboard expenditure should be regarded as transferred expenditure or new expenditure.

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

– The Treasurer says “ transferred expenditure.”

Mr GLYNN:

– The right honorable gentleman since the Loan Bill was introduced settled the doubt, as regards switchboard expenditure, by regarding it /as transferred expenditure, and throwing it upon revenue. But he can with the same liberal and fair construction of the terms of the Constitution regard, for instance, as transferred item 26 in the Loan Bill - construction and extension of telephone lines, and item 27 - construction and extension of telegraph lines.

Sir George Turner:

– Yes, but the difficulty is that those which we took over will have to pay on a per capita basis, while those which we are constructing now will pay on a revenue basis.

Mr GLYNN:

– I do not see that it makes any difference ultimately.

Sir George Turner:

– Ultimately the States will have to pay on a per capita basis.

Mr GLYNN:

– What does it matter? There is very little difference between such an item as a switchboard and items 26 and 27 in the Loan Bill under the head of South Australia, because they can very well be said to be part of the maintenance of the department as it was transferred. Maintenance includes something more than what is ordinarily regarded as repairs. Even additions to the military force are regarded as maintenance, though I admit the construction that the additions might be regarded as new expenditure is a plausible and fair one. Where we have these points of doubtful construction, we ought to -adopt the wise, sensible, and fair policy, which is to regard the’ item as transferred expenditure, because then the whole expenditure in the State - no more and no less - will be debited to the State. We shall get rid of the inequalities which were pointed out by the 46 a 2

Treasurer when he said that if it were dealt with as new expenditure, some States would contribute more than the total expenditure therein. If it is regarded as transferred expenditure, the matter is comparatively simple, because each State will then be debited with the exact amount spent therein during the current year. Surely we ought not to be afraid of spending £44,000 out of the revenue of South Australia. I should prefer not to go in for the expenditure at all just now than to sanction at the very outset of our career this pernicious policy of including in a Loan Bill some of these small items. We ought not to be afraid of casting on the revenue of the current year a little additional burden to the amount of what is really urgent of £44,000, in view -of ‘the very much greater question of setting an admirable example to the financiers of the States. Look at the question of our indebtedness which has been so well dwelt upon by the honorable member for Bourke. According to w»e Treasurer, we have a public indebtedness of £208,000,000. The securities for this amount are the very assets that we are now going to mortgage again. Federation has’ not added a single acre of ground or a single personal asset, except in the way of greater efficiency from combination, to the sum total of the resources of the States. Still we. are asked to enter the lists in competition with the States, and to raise for these particular purposes a federal loan on the security of the very same assets which now are somewhat pressed by the enormous burden of debt which rests upon them.

Mr Mahon:

– Is not that an argument for all time against raising any Commonwealth loan ?

Mr GLYNN:

– No. It is an argument for scrutinizing a petty loan of this sort. It is. not an argument against loans which are needed for the conversion of State debts - big transactions involving millions which would increase the reputation of our solvency. Surely to go into the English money market at the very beginning of our career, and .to ask for a petty loan of £500,000 when we have a revenue of about £11,000,000-

Sir George TURNER:

– But we are not going to do that ; it is to be a local loan.

Mr GLYNN:

– Is not that -much worse? If it is offered locally, what will be the effect? Shall we get the money at less than 3½ per cent. at par? It is not likely we shall. So that we are going to set the value of our local solvency before the whole world at 3½ per cent., while Canada can borrow in the English market, at a little less than par, for 2¾ per cent., and in 1898 did borrow at 2½ per cent. We are actuallygoing to mark the value of our securities at 3½ per cent. at par, and I defy the Treasurer, at the present time in Australia, to get money at less than that rate. . It is an extraordinary thing that Canada can borrow money in England at about 2¾ per cent. at very nearly par. If we go there for a loan of £500,000 - the sum total is made of a number of equivocal little items - we shall be injuring the reputation for solvency and the good financing of the Commonwealth at the very start of its career, and we shall not get the money for 2¾ per cent., or probably 3 per cent., at par, whereas if we borrow the money locally we shall be setting up a value of our assets or security, which is measured by the interest we shall have to pay.

Mr Mahon:

– Would it not deteriorate State loans also?

Mr GLYNN:

– It would have an effect upon them. Let the federation wait until it is asked to offer a loan of three, four, five, or six millions to convert State debts, or some clearly reproductive outlay for which revenue is inadequate. Doing that will be evidence of something which will attest our solvency, which will increase our reputation for solvency, because it will relieve by reconversions some of the burden, of State interest. We ought to be most careful not at the very outset to decide that the States are in such need that small sums of £10,000, £15,000, or £20,000 cannot be charged against the revenue of the current year. The whole of the amount need not be spent in the year. The Treasurer said in his speech that about £500,000 was the total sum which he expects to spend. If that is so, the burden will not be cast on the revenue of this year ; it may be spread over two years. Surely it is within the competency of the Treasurer to arrange such expenditure aswill throw only two-thirds, or perhaps half, the burden on the revenue of the current year. Ifthat is done the States will not feel very much the burden of the greater responsibility. I ask honorable members once and for all to put their foot down, and say - “ Unless the loan is one that is needed for conserving our finances or debts, or cannot possibly be avoided, we decline in the very first session of the Federal Parliament to set an example against which we have all been crying out in the States for the last five or ten years.”

Mr DEAKIN:
AttorneyGeneral · Ballarat · Protectionist

– The last speaker complained that the Treasurer did not press this proposal with the warmth which he would have exhibited on its behalf if he had spoken with a whole-souled devotion to it. I think it is much more desirable for him to exhibit frankly exactly the feeling he had, and the opinion he holds than to assume an enthusiasm which would not have been warranted by his feeling, or that of the Government. We are unable to put this forward as a proposal springing from those principles which we all hope will govern the future of Australia in regard to its borrowing. We admit, as much as any honorable member can do, that there has been much undesirable precedent in the matter of borrowing, which we do not seek to follow and from which we hope to distinctly diverge. The borrowing policy may have had its day - it is unnecessary now to discuss its good or ill results. But it is noticeable that the position we have now reached is one in which the continuance of that policy is neither proper nor desirable. We have to initiate a sounder system of finance, and the urgency for such a change is furnished to us by the misapplication of borrowed funds in most of the States. One of the first principles upon which the people of Australia are likely to take their federal stand is that their borrowing shall be of the smallest possible total, and be devoted with the greatest possible circumspection to particular investments justifying a departure from what I trust will be the ordinary policy of the Commonwealth - that is, to meet out of the funds of each year the demands ofthat year. Only for works of great size, character, reproductive nature and Australian quality, should borrowing be allowed. It ought to be regarded from the first as an indulgence, and should not form one of the regular elements in the financial proposals of Australian Governments: All are agreed, I take it, on those broad lines. It is impossible, even under the pressure of temporary circumstances, to propose with any degree of warmth to depart from those sound principles. What the Government say is that they make this proposal, not on the ground that it is entirely in harmony with those permanent principles, but because the special and peculiar circumstances of Australia at the present time make expedient some such departure as this from those principles. I do not even urge that it is expedient in the interests of federated Australia, if we could consider federated Australia as something separate from the States of which it is ‘ composed. But we do put it forward distinctly as in the interests of the States themselves, considered as units of the federation, with whose prosperity ours must always be bound up, and who at the present time are associated with us financially in a very special manner. It is not owing to any action or inaction on the part of this Parliament or this Government that we find ourselves unable as yet to dissociate ourselves from the special financial policies and particular financial interests of the several States. The Constitution has not yet united us in finance. It does not create a federated Australia. It leaves us financially only a confederated Australia. It provides for an elaborate system of accounts, under which each State receives only its earnings within its borders, and is made responsible only for the expenditure within its borders. Putting aside for the moment the extent to which all contribute for common federal purposes - the maintenance of this Parliament and Federal Departments, each State is “still allowed to remain relatively independent. For at least five years, and possibly for ten years, the separateness of the States is preserved, and we are therefore obliged, not by the circumstances of the time alone, although they are serious, but by the very character and provisions of our Constitution, to deal with the States during that limited period differently from the manner in which we may reasonably expect to deal with them when it has expired. For the present each State is to remain financially on its own basis, and for the time therefore the Government submit as the proper and constitutional course for this Parliament that it ought to consider the States, not in the general fashion in which we shall always consider them, but in a special manner - in a special way in which we shall not be called upon to consider them when the time of transition expires.

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

– The honorable gentleman advises us to agree to this without prejudice.

Mr DEAKIN:

– No. For five, and possibly for ten years, we shall be called upon to regard the interests of our constituents, not merely as members of the Commonwealth, but as citizens of their respective States, and in connexion with the latter capacity, we shall be bound to consider the condition of the States Treasuries, and to consult State policies. When the Commonwealth has attained its majority in matters of finance, this obligation will be no longer imposed upon us. The citizens of Australia will then be treated alike, without dis* ..action of State, in our financial administration. But we anticipate events if we at once cast that full responsibility upon the States Governments, and shape our policy without regard to their difficulties, particularly at a time of depression like the present.

Mr Higgins:

– Is to borrow on loan to anticipate the true federal policy t

Mr DEAKIN:

– It is, to my mind, contrary to what will be the true federal policy when we shall have shaken off the obligations of the present intervening period and have obtained full command of our resources. But under the circumstances the Ministry are justified in pressing the proposal upon the committee. The Treasurer has put, with his accustomed clearness and force, the effect which its refusal may have upon the States.

Mr O’Malley:

– W - Will it mean bankruptcy to them 1

Mr DEAKIN:

– No ; but it must increase their embarrassments. The honorable member for Bland, although he admitted that the States must ,be dealt with individually in regard to finance, based his argument from first to last upon the contention that a large amount is to be returned to the States collectively. If, however, he and others were in partnership, and large profits were to be returned to the partnership collectively, in which he personally did not share, he would not consider the position satisfactory.

Mr Watson:

– If the money had to be taken out of my pocket first, I might waive the objection.

Mr DEAKIN:

– We take out of the pockets of the States the amount spent, and return to them the amounts earned within their boundaries.

Mr Watson:

– Before a surplus can be returned to the States it must be earned.

Mr DEAKIN:

– That is true. But while it is the popular belief that the States are entitled to receive back threefourths of the revenue earned by duties of customs and excise, the Constitution does not provide that three-fourths must be returned to each State. It. provides that three-fourths of the gross amount collected must be returned. In the present year Queensland is an illustration of a State to which less than three-fourths of the amount earned is being returned, and it may be considered to have a deficit upon the return popularly expected from the Federal Government. The real strength of our proposal arises from the fact that although there is a large sum to be returned to the States collectively, practically the whole of the money must be paid to two of them, while the other four receive much smaller amounts. If the proposed expenditure is treated as new instead of as transferred expenditure, and the works are paid for out of revenue instead of out of loan, two. of the States will meet it out of what may be called their surplus, while the other four will have another increase of their deficits. I agree with the honorable and learned member for South Australia, Mr. Glynn, that it is possible to so construe the Constitution as to allow this proposed loan expenditure to be treated as transferred expenditure and paid out of revenue.

Mr Glynn:

– It will then be taken into consideration subsequently.

Mr DEAKIN:

– We shall have to make arrangements, perhaps, under the Property Acquisition Act, by which we shall pay for the properties in the. particular States transferred to the Common wealth. We could then pay back to the States the money now expended outof revenue, so that the proposal of the honorable and learned member would be legal and ultimately equitable. The proposal of the Government is not. based upon the assertion of a legal principle, but the contention that it would be inexpedient, impolitic, and inconsiderate if at this moment, when four of the States are struggling with financial difficulties, we diminished the return to be made to them by spending revenue upon works, instead of postponing the payment for them to a time when the States will have more or less emerged from their difficulties. The Government contend that their policy is justified out of consideration for the position of the States, and will be regarded by the

States Governments as a proof of our sympathy with their trials, and of our willingness to interpret the Constitution, wherever we reasonably can, so as to make retrenchment and taxation more gradual. The matter should be gravely weighed by honorable members. They must decide how far it is consistent with their obligations to their constituents to recognise that the Constitution provides for an interregnum in financial administration, and whether it is fair and reasonable to agree to a special policy for that period which need not be afterwards continued.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Which is the more honorable policy, for the Commonwealth to intervene with a loan, or for the States to levy taxation to make good their deficits?

Mr DEAKIN:

– That scarcely puts the position, because practically all the States Governments are about to increase their taxation and to retrench their expenditure. The question is whether we shall give them time in which to gradually adjust their finances to the new state of affairs. This occasion marks no mere incidental or accidental change. Either with or without federation, the States would have found themselves confronted with the difficulties which they now have to face, and with the necessity for new financial methods.

Mr Mauger:

– Surely a loan of £500,000 would not help them out of those difficulties?

Mr DEAKIN:

– It would tide them over for a year or two by making things easier. Honorable members who vote for the loan may do so legitimately, on the ground that one of the implications of the Constitution is that for five years we should shape our financial policy in recognition of the fact that the States are financially independent, and require to be treated as separate units. After that period the Commonwealth will deal with its finances considering only the circumstances of the citizens of Australia as a whole. It will not seek to distinguish between those of one State and those of another.

Mr Higgins:

– We shall have to regard the solvency of the States at the end of the ten year period, as now. We shall have to find enough money to keep the States solvent.

Mr DEAKIN:

– Yes; but my proposition implies that when the Commonwealth reaches its financial maturity, which, under the Constitution, it will do at the end of about eleven years after its inauguration, it will be able to deal with its revenues without the restrictions of sub-section (S7), and of the bookkeeping sections, solely in the interests of Australia as a whole. That may imply a serious alteration of the relative powers and functions of the States and the Commonwealth.

Mr Watson:

– Are we, in guaranteeing the solvency of the States, to overlook their expenditure ?

Mr O’Malley:

– T - The borrowing powers of the States of the American union are restricted. Our States can borrow as much as they please, and may find themselves bankrupt ten years hence.

Mr DEAKIN:

– There is in this Parliament what I regard as a healthy re-action against borrowing, but no one will say that an end must be put to all Australian borrowing where the loans are for justifiable and payable purposes.

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

– No one has said so.

Mr DEAKIN:

– If, under the Australian Constitution,, we look forward to borrowing, in the future we may regard, without apprehension, the present small proposal for the purpose of granting assistance to the four States which are in difficulties. The Government concession to them is strongly recommended to honorable members on this ground alone, but it is also an expedient both proper and profitable. It implies a patriotic view of our relations with the States Governments. It would show to them at least as much, if not more, consideration than they are inclined to extend to us. We shall set the States a ‘good example by proving to them that we are willing, in order to meet the exigencies of their case, to adopt a course diametrically opposed to the policy which we would prefer to follow. This loan would assist the States during the intermediate period for which they are still individually and severally responsible by lightening their individual burdens for the next year or two. This is to be accomplished by constructing, at the expense of the people of Australia, works which, if’ carried out at the cost of the people of. the particular States in which they are to be erected, would increase, the necessities for retrenchment and taxation. I hope, therefore, that honorable members will not lightly put aside the consideration that is fairly due to the States, now passing through a period df severe trial.

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

– I am sure that some of the States will be very grateful to the Acting Prime Minister for his candid declaration as to the underlying motive of this proposal. He says that it is intended to tide the States over the intermediate period, until we can obtain absolute control over the finances of the Commonwealth. At the end of the period we may dispense with borrowing, and construct public works out of revenue. In effect the Minister says that the moment we can make some of the States pay for works to be constructed in other States, we: shall be able to dispense with borrowed money. Until then, however, the Government propose to continue the system of borrowing in order to assist the States. Surely, if for no other reason than that stated, we should reject the proposal. The Acting Prime Minister says - “ It is all very well to contend that these works should be constructed out of revenue. AVe believe that this is a sound principle, and that we should depart from the old-time methods of borrowing money for the construction of minor works, but we have the smaller States to consider. At present they cannot construct their own works out of their own revenue, but the time will come when we shall be able to appropriate the funds of the larger States for the construction of works in the smaller States.” The more honest course would have been to refrain from borrowing altogether. If the smaller States are in need of bequests from the larger States as indicated by the Acting Prime Minister, we might as well begin to pay for their works at the outset. The Minister has given the whole case away by his fatal admissions. The smaller States have not made any advance to us, but the Attorney-General assumes that they would be content to appropriate the revenue of the larger States. In this respect I think he is doing them an injustice.

Mr Poynton:

– That is not the proposal.

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

– The Acting Prime Minister says that it is necessary to borrow in order to assist the smaller States until the Commonwealth can secure full control of the revenue. Then the works can be dealt with on a per capita basis.

Mr Poynton:

– Each State will be debited with the interest upon the loan money expended within it.

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

– I am quite aware of that; but if the States require to be tided over a temporary difficulty they should be able to borrow on their own account. They would only be pursuing their settled policies as States, whereas we are now being asked to inaugurate a borrowing policy for the Commonwealth in order to tide some of the States over a difficulty. I do not see how we could make any difference to the’ States by borrowing money in order to carry out these new works.

Sir George Turner:

– The States would have not incurred this expenditure out of revenue, if the federation had not taken place. The works would have been provided for out of loans. If we do not borrow the money we shall force the States to borrow for revenue purposes.

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

-They would have borrowed the money in any case. We should ask them to do precisely what they would have done if they had retained control of the works. Under the Government proposal, however, the States which have a surplus would be forced to borrow money which they did not want.

Mr Poynton:

– That is the trouble ; no sympathy is felt for the States which are in difficulties.

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

– If the honorable member wants sympathy let him ask for it.

Mr Poynton:

– We are asking for our rights, and not for sympathy or charity.

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

– We are proposing to give the States their rights to the full, and at the same time to conserve our own.

Mr Poynton:

– The honorable member desires to dictate to the States as to what they should do in this particular matter.

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

– Not at all. . We are not dictating to any one, but we are dealing with our own property. The honorable member is crying out for loans, so that additional burdens may be placed upon the people of his State. Already 35 per cent, of the revenue raised in South Australia is applied to the payment of interest on borrowed money.

Mr Poynton:

– That is not a fair way of putting it. The honorable member should mention what the railways and water works and other similar undertakings are paying in the way of interest.

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

– The revenue from the railways and other reproductive works forms part of the income, and ! am stating the mattei- fairly when I say that 35 per cent, of the income from all sources is sent away to London to pay the interest on borrowed money.

Mr Poynton:

– The Government in which the honorable member was a Minister wa3 responsible for heavier borrowings than perhaps any other Ministry in New South Wales.

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

– The honorable member is quite wrong. The Government with which I was associated holds the record for low borrowing. I have pointed out the position of South Australia. Now what is the condition of affairs in New South Wales’? I admit that, at the present moment New South Wales is a big sinner in this particular respect, and that she has been one for the past two or three years.

Mr Sawers:

– She was a big sinner when the Government with which the honorable member was associated held office.

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

– I have already told the honorable member that the borrowings of the Government of which- I was a member were upon a much lower scale than were those of any previous or succeeding Ministry.

Mr Sawers:

– They even charged the formation of flower plots in the Botanic Gardens to loan account.

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

– I am not prepared to say whether that was done or not, because I do not_ know the facts. But if it were, that is a reason why we should now make a new departure, and the honorable member, above all others, should set us an example in that direction. Surely in thi’s new arena he desires to avoid the mistakes which he so vigorously condemns. All I ask is that we shall establish outnational life upon a proper basis, and that our expenditure from loan moneys shall be able to stand the test of the strictest scrutiny. Of course, we have received from the Government of New South Wales a certificate of character regarding the way in which matters are being conducted here. I am afraid, however, that such a certificate from that quarter is not of very much value. I am sorry to have to make this admission, but it conveys the truth. The Government of the State which I have the honour to represent will naturally say that the administration of the Commonwealth is being economically conducted, because they themselves have such strange ideas of what economy means. The position in New South “Wales is that next year she will derive a revenue of £1,250,000 in excess of what she previously collected. Last year she spent nearly £4,000,000 of loan moneys, and am I by embarking upon a certain policy to duplicate that borrowing? No; whilst New South Wales has such an overflowing revenue, I cannot in justice to that State countenance the adoption of any policy which will add to the interest-bearing burden of the community.

Mr SALMON:
Laanecoorie

– I cannot agree with those who assign as a reason for their opposition to the proposal of the Government that borrowing operations can be better undertaken by the individual States than by the Commonwealth. I have always been under the impression that loans could be raised very much more advantageously by the Commonwealth than by the integral States of the union. Indeed, one of the reasons why a large number of people voted for federation was that under it there would be an opportunity of funding the States debts, and thus saving a large sum of money in interest. Of course, that result could only be achieved if the credit of the Commonwealth was greater than that of the States composing it.

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

– Keep the list clean till then.

Mr SALMON:

– I am not now dealing with the question of the advisability of borrowing, but with the argument, which has been used by some honorable members that, bv raising loan moneys, the Commonwealth would be impairing the ability of the States to borrow under better conditions. I am not of that opinion at all, but I am opposed to the proposal of the Government. In this connexion, I do not intend to repeat the arguments which have been used, but I cannot refrain from emphasizing one which was advanced by the honorable and learned member for South Australia, Mr. Glynn, and which was first brought under my notice by one of the best financiers in Australia. That argument is that if the Commonwealth Government goes upon the money market for a small loan of £1,000,000, it will probably establish the price to be paid for any future loans for a considerable time. That is an aspect of this question which deserves most careful consideration at the hands of honorable members. We must realize that this loan, if floated, will not command anything like the price at which Canada can command money in the British market to-day. There is no reason in the world why the Commonwealth should not occupy just as good a position as does Canada, and it is only precipitancy in rushing upon the market for a small sum under unfavorable conditions that will hamper our future operations in the direction of funding the debts of the various States, and thus securing a large saving in the amount of interest that is annually sent by Australia to other parts of the world. Under the circumstances, it is well that we should pause. I do not think it is necessary that the States should go upon the money market to borrow. In those States where it is absolutely necessary that certain works should be undertaken, means will be found to pay for them out of the ordinary revenue. But, in going through the schedule to the Loan Bill, T was struck by the number of works which are not absolutely necessary, and which need not be carried out for very many years to come - works such as the undergrounding of the telephone wires.

Sir Malcolm McEacharn:

– The sooner that is undertaken the better.

Mr SALMON:

– That is so ; but is the Commonwealth to borrow money to undertake it ?

Sir Malcolm McEacharn:

– The adoption of that system would result in an increase of revenue.

Mr SALMON:

– I quite agree with the honorable member for Melbourne that its adoption would probably result in an increased revenue ; but that revenue would’ not be anything like sufficient to justify us in borrowing money at the present time to carry out the work. The States would not be inconvenienced if a large number of the works enumerated in the schedule were deferred - say for ten years - until the Commonwealth reached the position to which the Attorney-General made reference this afternoon. Opposed as I am to perpetuating a principle which in the State Parliament I always condemned - the principle of borrowing - I do not feel that I have any reason to alter my attitude on this occasion. Indeed, I feel that the present position of the States furnishes a very strong argument in favour of maintaining that attitude.

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

– I recognise that this question is one of the most important with which Parliament has to deal. There is -a very substantial principle at stake, and the interests of a number of States have to be- seriously considered. I regret that Ministers have not given us that light and leading upon this question which we had a reasonable right to expect from them. The Treasurer, who is one of our most trusted public men, and upon whose judgment in matters of this sort we rely with the utmost confidence, has put a proposal before the committee, and has declared that he requires light and leading from honorable members, instead of imparting it to them. I do not think that is a proper attitude to adopt, because, although the Opposition has been charged with a lack of constructive ability, if Parliament decides that it is unwise to borrow, the Opposition is not in a position to indicate what measures should be introduced to enable the Government to carry out the public works proposed without the aid of loan money. The Opposition is not even in a position to submit a proposal for carrying out a certain section of the Constitution which provides for the granting of assistance to the States during the few years in which their finances may be embarrassed. That is why I complain that Ministers have given honorable members such very little light and leading upon this vexed matter. To a very great extent .1 think that it is a question as between the present generation and posterity ; and although a certain wellknown writer has said - “ Hang posterity. What has posterity ‘done for mel” I say that this Parliament represents posterity to a degree that no future Parliament will represent it. We are laying the foundations of the future, and if inconsiderately we adopt a policy of borrowing to carry out these somewhat insignificant works, we shall do something for which posterity will have good reason to curse us. I do not say that we ought not to borrow under any circumstances. I think that would be a somewhat narrow-minded view to adopt. But there is a broad distinction between admitting that for certain national works requiring a very large expenditure we should borrow, and adopting the other extreme by declaring that for the construction of every work which will last longer than a year, we are justified in increasing our national indebtedness. The Attorney-General, this afternoon, delivered a speech which augurs well for the way in which he will grace the office of a Judge of the High Court when that tribunal is established. A more judicial speech I never heard. He showed us the rights and wrongs of this question. He balanced them and exposed all the surround-, ing difficulties. Some of those difficulties are so great as to make me doubtful whether I ought not to support the measure pro-, posed by the Treasurer. I do not look at this question from the point of view of how it affects any particular State, but from that of how it affects the whole of the States. I admit that I have been somewhat grieved to. find that some of our financial operations are creating a certain amount of friction and difficulty in some of the States. On the other hand, we ought to be very careful lest we remedy those difficulties too easily, because, there are certain responsibilities connected with matters of finance which ought properly to be thrown upon the States as States. It will never do for this Parlia- ment to say to the States, “ We will meet all the difficulties ‘which you choose to create,” because by so doing we should only be accentuating, the weakest feature in our Constitution. . That feature is the provision that for all time the States Treasurers, in making their financial arangements, must be in touch with the Treasurer of the Commonwealth. It is one of the weak points of the Constitution that this should be so, and, in view of the fact, we are bound to take care that we do not in any way unnecessarily upset the financial arrangements of the States. Consequently, when I come to a proposal to carry out certain works, which in the past have been defrayed by recourse to loans, I have to consider whether, in reforming the procedure, we may not be easting a great burden on the States. But, on careful consideration of the whole question, I have come to the determination that, for many reasons, it would, be far wiser for us to refuse to go. into the money market at the present time. First of all, I do not think it is necessary that we should spend this sum of £500,000 on works. It is not at all likely that between, now and the 30th June next we shall spend even one-half of that amount, and, consequently, we need not make provision to. the extent now proposed. In the second place, it will be eminently disastrous to probable future financial operations of the Commonwealth if we go into the money market of the world, or even if we borrow locally so insignificant a sum as £500,000, 1 and thus set, as it were, a low standard of our value. It is unreasonable to expect that such a borrowing will not prejudice any future financial operations we may be forced to undertake. I believe that we shall be- justified in borrowing money for certain Government works such as the Commonwealth will ultimately have to undertake, such as railway construction and water conservation for the purpose of making some of our great rivers navigable; but I do not think that the items which the Treasurer has placed in the schedule- would justify borrowing on the part of even the States Governments, who in the past have gone further in this direction than the Commonwealth is entitled to go. The schedule provides for placing telegraph wires in tunnels, but this is only to replace overhead wires which are now discarded. Then provision is made for the extension of the telegraphs ; but this may be regarded as ordinary maintenance, and a similar remark may be made in regard to the switchboards which are to replace appliances which are) found by experience to be utterly unfit for the increasing requirements in growing cities. There are several other items which, I believe, in five out of the six States, where less consideration is given to such matters than I hope we shall give, would be objected to. But, apart from all this, it behoves us, in the early days of federation, to avoid a policy of borrowing quite as much as to protect the States Governments in the little difficulties which may arise- from this expenditure being met out of- current revenue. Throughout most of the States the Commonwealth would be utterly unpopular if it were found that we had plunged thus early into a policy of borrowing, at a time when the States are considering how enormous has become the burden of debt throughout Australia. Later on the Commonwealth will have to. consider the question of consolidating the debts of the whole of the States. We- shall also have to consider the taking- over of the railways, and probably, the question of granting financial assistance in some way to- some of the States whose calculations have been upset by the operation of federation. Under the circumstances, we can very well postpone borrowing until Ministers have had time and opportunity, not. yet afforded them, of considering the broader questions of finance which must inevitably arise. If we have- to consider, as I believe we shally the funding of the debts of the various States, we had better keep a “ clean sheet “ until that time arrives, and thus be enabled to go into the markets of the world with a better chance of obtaining money on the very best possible terms. I do not believe that we should be bound by the current rates on borrowed, capital. I see no reason why, in the near future, the Commonwealth should not be able to borrow money at rates on a par with those ruling for British Consols. The security in Australia is ample. The leader of the Opposition pointed out the other day that most of our debt has been incurred for the construction of railways, the value of which, so long as they are well maintained, must increase from year to year. I do not think the British money-lenders, or money-lenders in any part of the world, would ever be afraid to lend money to federated Australia, so long as we- show in our financial operations that we are governed by reason and caution, and are determined to see that our present debt is not added to unless for the purpose of large national works. I am not opposed to borrowing, but I am opposed to this proposed Loan BilL I believe that for great national reproductive works we shall have to borrow, but the debt thus incurred should be looked upon as irredeemable- a debt without a sinking fund, and not to be taken up at a future date - a funded debt, which may be permanent, with the knowledge that we have a quid pro quo to enable us to pay the interest, and something more.

Mr Watson:

– Why leave the debt forever? There is- no virtue in having a debt.

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

– I shall endeavour to explain the virtue of a permanent debt. If we borrow to-day at 3- per cent.,, with a minimum of £99 or £9S, we are, by renewing and selling at a price slightly under par - because that seems- to be the idea and object of financiers - constantly adding to the debt, while not constantly adding to the securities. When we go in for a sinking fund and for redeemingdebts,, the circumstances are often made an excuse for borrowing for purposes which would not be contemplated if we had an irredeemable- debt. Redeemable- debts are often, an excuse- for meeting, out of loans, expenditure which ought to be met out of revenue, and Treasurers often make- use of sinking funds in the- production of surpluses from time to time. In this way arise- many I of the evils and errors of financing which in the past have been exhibited in the

States. If a work is of such a temporary character that it may exhaust itself in a few years, the cost of its con- struction ought to be met out of revenue ; and such a policy would place us in a sounder position, and ultimately enable us to save money. If the works now proposed be constructed out of loan money, and £500,000 a year be borrowed for 40 years, we shall probably have works which cost £20,000,000 ; but, as experience in the past has shown, we shall not have £20,000,000 worth of works. The principle which underlies the policy of borrowing is that population and the means of paying increase with the growing volume of interest. That justifies the handing of debts on from one generation to another, and the generation which receives a debt in this way feels justified in passing it on to its successors. But where the policy miserably fails, so far as Australian experience goes, is that many of the works get worn out or become obsolete, and have to be replaced by some better invention. Works thus really pass out of being, and are no longer held as securities for the debts. In the case of railways,, by keeping up the permanent way and renewing the rolling stock from time to time, we always have the value of the money originally spent. But buildings and some of the defence works, water conservation works, telegraph lines, telephones, and so forth, pass away while the debt remains for ever as a charge on posterity. It is for these reasons that, after carefully considering the troubles which may arise, I feel disinclined to support the Government proposal. I would rather go to the extent of further embarrassing the finances of some of the States than support a measure the effect of which will be to plunge the Commonwealth into that policy of borrowing which has had such disastrous effects on the separate States in the past. If it should prove necessary to grant financial assistance to the States, under the provision in the Constitution, I am quite willing that the surplus which would otherwise go to New South Wales should be reduced to some extent ; but what form that assistance should take, it is not for me to say. Some of the States that have suffered by the financial operations of the Commonwealth, or which fancy they have suffered, declare that they are not prepared to take charity - that if it be a case of lending money they might just as well borrow on their own account. But there are many ways in which temporary assistance could be given to the States. Such assistance might in the first instance be granted out of the sums to be received by the larger States which are better off, and that money will ultimately be returned to them. I see no reason why the embarrassed States should not have more consideration than anybody has yet seemed disposed to give them. Under the Constitution we give considerable financial assistance to Western Australia, an assistance which, I believe, is far greater than any one expected when the matter was decided at the Convention ; indeed, in my opinion, it is proving greater than- the State authorities of Western Australia expected.

Sir GEORGE Turner:

– Western Australia could not have come into the federation without that assistance.

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

– That may be ; but having granted that considerable concession, in order to obtain complete union, we might, out of a sense of justice, in any way the Government think wise, grant assistance to the States which may suffer during the first years of federation. Personally, I am quite prepared to support any liberal measure for tiding States like Queensland and Tasmania over a few. years of difficulty. I would go further, and say that, even in the Federal Government, we have not gone as far as we might in the way of economy, in some of the States which now suffer, or appear to suffer, from the operation of federation in the transferred departments. In looking through the Estimates, it seems to me that there is plenty of room for further reduction in, the expenditure on some of the transferred services in Queensland.

Sir George Turner:

– I should be glad if the honorable member would mark the Estimates for me.

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

– Unfortunately, honorable members agreed to waive their right of discussing the Treasurer’s Budget speech.

Sir George Turner:

– But if the honorable member will mark his copy of the Estimates, and hand it to me, I shall consider the hints he gives.

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

– I cannot inform the Treasurer as to details, but the cost of collecting the customs duties in Queensland seems phenomenally heavy for a much smaller revenue than is obtained in several of the other States.

Mr A Paterson:

– There is an enormous coast line in Queensland.

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

– That may be so, but in the Customs department there is room for economy, as there is also in the Postal department. If the financial straits are so great as represented in several of the States, we should pause and consider whether it is not necessary to defer the construction of the proposed works until times improve. I admit that many of the works should be readily undertaken, and that we may look to them for increased revenue in the future ; but if we cannot afford to meet the cost of all out of revenue without dislocating the finances of the States, it would be better to defer some for a few years until the States can afford to have them carried out without recourse to borrowing.

Sir George Turner:

– I have already said that we must do that.

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

– It will be far better to resort to any scheme honorable members like, rather than plunge this Commonwealth in the first year of its existence into that policy of borrowing which has been so disastrous in the States.

Mr. HIGGINS (Northern Melbourne).It is quite refreshing to hear member after member speaking so strongly against the policy of borrowing. The Treasurer will bear me out when I remind him that in the “Victorian State Parliament I used to inveigh against him in regard to his wickedness in borrowing.

Sir George Turner:

– Others used to inveigh against me because I did not borrow enough.

Mr HIGGINS:

– I never did.

Sir George Turner:

– No ; but the great majority did.

Mr HIGGINS:

– In those days, when I found the Treasurer straying from the right path of public policy, I attacked him occasionally - I hope not too bitterly. I regret that the debate should have taken place at this stage without notice. Perhaps, however, that was a wily design of the Treasurer to cause the speeches to be short.

Sir George Turner:

– I gave notice through the press that I intended to bring on this matter to-day. I forgot it when the adjournment took place on Friday, but I got a paragraph put in the newspapers.

Mr HIGGINS:

– This is no doubt one of the gravest subjects that has occupied the attention of this Parliament. Other subjects have been grave, but this question of the financial position of the Commonwealth goes to the very root of our policy ; and I think that honorable members have not gone too far in applying to this pressing problem their best theories. At the same time I feel that upon the whole rather too much theory has been advanced this afternoon. We have an urgent problem of practical government that has to 1 be solved, and solved very quickly. The honorable member for South Australia, Mr. Poynton, who has spoken so well for his own State, has looked at her position solely, and urges that it would be more convenient for the South Australian Treasurer to continue to borrow than to impose more taxation. I consider that it has been quite proper for honorable members to look at the wants of the Treasurers of their several States. The matter becomes -one of balancing practice and theory ‘ Everybody appears, curiously enough, to be, in theory, against borrowing. «

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

– Not against borrowing, absolutely, but against borrowing for unreproductive works.

Mr HIGGINS:

– The Acting Prime Minister’s argument, which was very nice and pleasant as usual, really came to this : Borrowing is a very bad thing - let us do it now, and possibly not do it again. The Acting Prime Minister referred to the hard times. These are hard times, but I never knew a Treasurer or a Minister yet who

Gould not point to something hard in the times when it was sought to justify the borrowing policy. If people want to borrow they can easily find something’ in the times hard enough to justify it. I was not impressed by ‘ the distinction which the Acting Prime Minister drew between the first ten years and the after time, because, although there is no rigid limitation, yet after that period has expired, the duty will still remain as stern and uncompromising as ever for the Commonwealth to finance the States and keep them solvent. There is no doubt whatever that this is one of the defects of our Constitution - a defect of which, with my poor power of foresight, I. am unable to see the ultimate solution. It is one of the great defects that our States should have to depend upon the Commonwealth for their solvency, and that while for the first ten years or so we have to return to each State its own surplus, when the ten years are up the balance has to be re- I turned to the different States as Parliament may direct. We are getting on pretty smoothly at present, but when it comes to be a question of grab between the different States after the ten years have expired - a question as to how much each State shall get - I do not view the prospect with anything like pleasure or equanimity.

Mr Wilks:

– The “federal spirit” will come in then.

Mr HIGGINS:

– I hope the honorable member will develop more of the federal spirit and exhibit it. The question here is - Are we to borrow £500,000 or so for the proposed public works ? If one looks at these works, what are they 1 I find here the item “ common battery switchboard.”

Mr Watson:

– That has been withdrawn.

Mr HIGGINS:

– There is also an item for the construction of telegraph lines. Then there is the line -

Sydney General Post-office, additions thereto, and works in connexion therewith.

Sir George Turner:

– Those works were going on when federation took place.

Mr HIGGINS:

– It is delightfully vague, of course. There is also the item -

Alterations in connexion with new telephone s witch board.

Sir George Turner:

– That is an alteration of the building to enable the switchboard to be erected.

Mr HIGGINS:

– Is it to be paid for out Of loan money ?

Sir George Turner:

– Yes.

Mr HIGGINS:

– Then there is-

Proportion of cost of constructing telephone lines between Sydney and Melbourne, £34,000.

Erection of public and private telegraph and -telephone guarantee lines, £8,500.

Common battery switchboard, £30,000.

Sir George Turner:

– The last item is on the revenue Estimates now.

Mr HIGGINS:

– I am very glad that we have succeeded in shifting some of these items on to the revenue Estimates.

Mr Watson:

– Yes, considering that the switchboards were to replace other switchboards paid for out of loans.

Sir George Turner:

– Not in Victoria ; we paid for them out of revenue.

Mr HIGGINS:

-Then the schedule speaks of -

Construction and extension of telegraph and telephone lines, cable, instruments, and material, £10,000 for Tasmania. These are samples of the kind of work to be done. The particulars with regard to buildings are most delightfully vague as to whether what is proposed is in the nature of additions, or is intended to replace older buildings. If there is one thing upon -which the best thinkers on public finance agree more clearly than another, it is that such things as these should not be paid for out of loan money. There is no provision for any sinking fund to .meet the repayments. Here is what Professor Bastable has said at page 550 of his Public Finance -

Outlay on public works is not, of itself, and apart from the revenue to be thence derived, different from the cost of war or other unproductive expenditure. No readier or more dangerous mode of increasing debt can be found than the execution of works which are not economically productive. - He explains “economically productive” as “ yielding interest “ -

Vague assertions of indirect benefits should not be allowed to conceal the fact that “ improvements “ of this . kind should be paid out of income, and cannot be regarded as investments in the proper sense of the term. - That is only one of a number of statements from eminent thinkers which are of the same purport. What, after all, is the object of borrowing in place of paying out of -revenue? The object is to relieve the taxpayers of the current year- - to prevent -tie taxpayers .from having to pay too large a proportion during the current year. That policy has been a ghastly failure, even for its professed purpose. Of course, as the -honorable member for South Sydney - whom we might call the member for Posterity - has said, all this burden falls upon those who are to come after us. Rut even : as regards the present generation of taxpayers, the borrowing policy is very bad policy indeed. When I was in the Victorian Parliament, I got from the Treasurer a return of the interest .and expenses in connexion with Victorian loans up to the 30th June, 1898. At that time the Victorian public debt was about £49,000,000 ; but ‘the interest that had been paid was almost exactly £.40,000,000 ; and the expenses amounted to .£507,356. In “ expenses” -were included all discounts, commissions, and so forth. There’ .have been four years since then, during -which time Victoria -has been paying in interest at the rate of £2,300,000 per annum.

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

– Does that return show the money received from the works upon which the loans have been spent 1

Mr HIGGINS:

– No. We have been spending at the rate of about £2,300,000 a year, and the result now is that the interest which has been paid by the taxpayer is about equal to the full amount of the public debt.

Sir George Turner:

– Could the country ever have been developed if thismoney had not been borrowed for railways and other works ?

Mr HIGGINS:

– There may be a good deal said from that point of view. I am only showing that even as regards reproductive public works, it is by no means clear that the borrowing policy is a sound one in the public interest.

Sir George Turner:

– The honorable and learned member leaves out the money received to help to pay the interest.

Mr HIGGINS:

– That does not interfere with what I am saying.

Sir George Turner:

– The honorable and learned member forgets that we have received large sums of money.

Mr HIGGINS:

– The position is, however, that the country could have got the profit from public works, like railways, by taking from the taxpayers exactly the same sum as it has borrowed.

Sir George Turner:

– But the country had not the necessary income.

Mr HIGGINS:

– Assuming that the £49,000,000 expended upon public works had been taken out of revenue, we should have had all the profit from those public works which we have now, and we should not have had the capital debt which we have now before us.

Sir Malcolm McEacharn:

– The works would not have been built.

Mr HIGGINS:

– That may be. I am putting forward a very simple proposition. I am very glad that the motion against the proposal to borrow money has come from the labour party which has been so much accused of extravagance. I have conceived that the accusation is wholly unjust. I might use a very strong word, and say that it is impudent. The party of extravagance is the party of borrowing, and the party of borrowing is the party thatwishesto sendup the prices of the lands of this country. Booming and borrowing go together. It is, to my mind, a very hopeful sign that themovement against borrowing has come from those who are most accused, and most unjustly accused, of extravagance. The huge interest payments which we have to make are the real cause of our extravagance. We have in Victoria an annual expenditure of between £6,000,000 and £7,000,000, and one-third of that amount - £2,300,000- represents payments for interest alone.

Sir George Turner:

– £1,900,000.

Mr HIGGINS:

– Not at present. I have seen the returns, and the amount is what I have stated. Of course the right honorable gentleman ought to know more about the matter than I do.

Sir George Turner:

– It is only £1,900,000.

Mr Poynton:

– Has not the expenditure of the principal moneys created avenues of employment for thousands of people?

Mr HIGGINS:

– I sincerely hope that it has. What I was saying was that if the whole £49,000,000 which we have spent out of loan moneys had been taken from revenue we should have had the same advantages the same opening up of the country, the same advantage from profitable lines that we now enjoy. We should have had less cost, and no capital debt. This system of borrowing is the real cause of our economical and financial difficulties. The result of borrowing is to hamper and cramp us in our annual expenditure of the moneys requisite for the purpose of furthering social development, and to advance all civilization. I admit that there would not be very much harm in having recourse to loansif our population were increasing. I think that in this House I referred not long since to an article by Sir Francis Dillon Bell, then Agent-General for New Zealand, which was published about twenty years ago in an . English review. In dealing with the borrowings of the colonies, he said in effect in chat article - “I expect that by the year 1900 Australasia will have borrowed £200,000,000. But there will be no harm in that. By that time the population of Australasia will be 25,000,000.” Wehave borrowed the £200,000,000, and more, but we have not the population of 25,000,000. It is about time for us to take some care in regard to the system of borrowing when we find our population increasing so slowly, if at all ; when we find the manhood of our States flocking over to South Africa in large numbers, and when we find that Australasia has borrowed something like £260,000,000,while the total population is only about 5,000,000.

Mr MACDONALD-PATERSON:
BRISBANE, QUEENSLAND · FT

-paterson. - We do not borrow on the security of the population, but on the security of our public lands and works.

Mr HIGGINS:

– If the population left Australia we should be able to test the value of our public lands as a security. I would remind my honorable and learned friend of a story by Max Adler, in which he describes a town, called Goldtown, that was raised in one of the western States. Upon the discovery of gold in the district a big rush took place. At first there were tents, then houses, and then streets. Next there came a corporation and a mayor, and then the coporation began to borrow. They caused splendid bonds to be prepared, with the names of the mayor, aldermen, and councillors of Goldtown emblazoned amid big flourishes upon them. The bonds were sent to Holland, where they were eagerly taken up, somewhat at a premium. By-and-by, however, the gold gave out, every one gradually went away, and the only one left to pay off the huge debt due under the magnificent bonds was an old negro resting on a stump. If the State of Queensland is to follow the advice of the honorable and learned member for Brisbane, it will find that a blackfellow resting on a stump will be the only person left to pay. It is not safe, to go on borrowing unless the population increases. I might remind the honorable and learned member for Brisbane that the most progressive little country in the world is Japan. Of late years it has been called upon to meet modern conditions, but it has a debt less than that of Victoria, although most of its railways are public property.

Sir Malcolm Mceacharn:

– All its railways are not public property.

Mr HIGGINS:

– There are some privatelyowned lines, but, at all events, the Japanese Government do construct railways. Within the last 33 years they have paid off £11,000,000, although during that time they have had a . most expensive war. There is no war so expensive as a naval war, and some few years ago Japan had to go to war with China with a full equipment of ships.

Mr Poynton:

– There is a slight difference between the population of Japan and that of Victoria.

Mr HIGGINS:

– Although Japan has such a large population, it has a very small public debt.

Mr Poynton:

– There is also a difference’ between’ the way in which tho respective populations live. ‘

Sir Malcolm Mceacharn:

– The people of Japan are perfectly happy.

Mr HIGGINS:

– I should like to sum up what I feel with regard to this proposal. I think first that ‘ that organization should borrow which needs to borrow. The Government are doing a great deal of harm to the Commonwealth, in the eyes of public men and financiers, in proposing to bring down a Bill to provide for a loan of £500,000 when they have not even spent the income which they have in hand. Injury has been inflicted already, but we shall be injured to a still further degree if the Bill is passed. What a pawky, miserable, niggling thing it would be if, after all the blowing and flourishing of trumpets which have taken place, the Commonwealth were to ask iu London, or even in Australia, for a loan of £500,000 ! It injures a body which desires to raise money if it begins to borrow in this niggling way. Secondly, I consider that the present is a distinctly bad time for borrowing. The Victorian Government recently borrowed money, and obtained only about £92 per £100.

Mr Poynton:

– Upon another occasion it obtained only £82 10s.

Mr HIGGINS:

– The honorable member was once a Victorian, and the borrowing happened a long time before he left this State.

Mr Poynton:

– No.. It was after my departure.

Mr HIGGINS:

– The system of borrowing in a small way is very injurious to outstanding. We should nurse our credit as a sacred treasure for use in extreme emergency. I take it that we shall have some of these days great ‘ use for borrowed money. Among other works which we hear discussed is the building of the federal capital.

Mr Poynton:

– And a trans-continental railway.

Mr HIGGINS:

– Yes. It is also said that there must be a High Court, which I do not think is necessary at the present time ; and an Inter-State Commission is also proposed. It is a rather unpleasant prospect, but I can clearly foresee that next year the federal expenditure will be more than it will be for the present year. We ought not lightly to handle the credit . of Australia. We should not handle it except for great purposes. I take it that if we are to make a new departure, now is the best time to do so. I know very well that to say there shall be no borrowing is very hard upon those who have to struggle to make the State expenditure and revenue balance at the present time, but there is a greater consideration to put before us. In starting the Commonwealth we are instituting precedents, and we do not want to have it said that the first Parliament borrowed money for the purpose of putting down telephone wires between one city and another. To any one who takes the trouble to look into the matter it must appear very bad to be talking of raising this loan when we have not spent our income. Such a person would say at once - “ You have not spent the one-fourth of the revenue to which you are entitled.”

Mr Poynton:

– According to the honorable and learned member’s argument, it would be a virtue to borrow £10,000,000, but a sin to borrow £500,000.

Mr HIGGINS:

– I have not said that it would be a virtue to raise any sum. I have said that when we do borrow it must be because of some great pressure, and for a great sum. If it came to a question of national defence, we should be justified in borrowing to the very end of our credit, in order to be in a position to defend ourselves. We should not borrow except in extreme cases, and, above all, we should not appear before the money market as making our first application for its favours in respect of a sum of £500,000.

Mr SKENE:
Grampians

– I fully recognise the difficulties which surround this question, and which have been so ably stated by speakers who have preceeded me. But there is another difficulty which has been mentioned before in this House by otherhonorablemembers as well as by myself. I refer to the danger of handing back too much money for State Treasurers to spend. What appeals to me most forcibly in connexion with this matter is the fact that by borrowing this £500,000 we shall only have so much more money to hand back to the State Treasurers. The Treasurer has estimated that he will receive in revenue over and above the amount of money required for the carrying on of the Government of the Commonwealth, a sum of £915,000. If this sum of £575,000 is borrowed, the former amount will have to be handed over, not to the people from whom it was collected, but to the Treasurers of the States.

Mr Poynton:

– Almost the whole of it will go to one State.

Mr SKENE:

– No ; it will go to each State in proportion. I am inclined to agree with the honorable and learned member for Brisbanethat we ought not to go in for new public works too hurriedly, but that we should for some time be content with the existing conveniences for carrying on the Government. I would remind honorable members that if this proposed expenditure is defrayed from revenue there will still be a sum of £340,000 to be returned to the States, and that will greatly tend to reduce the indebtedness of the two States which have been specially referred to.

Sir George Turner:

– In the case of Queensland we are going to hand back only £7,000 more than the one-fourth. The honorable member is dealing with the Commonwealth as a whole, but this matter must also be considered from the point of view of the individual States.

Mr SKENE:

– The honorable member for South Sydney drew attention to section 96 of the Constitution under which financial assistance may be given to a State. I presume that section was placed in the Constitution for some good purpose, and if it is ever to be operative, the present is a good opportunity to put it into operation. The Acting Prime Minister said we should wait until we are asked, but I reply that we should act when we see that there is a necessity for action. The States at the present time are proposing means of their own by which to work out their financial salvation, and those means will not involve additional taxation upon the people. We shall be imposing additional taxation if, as proposed, we carry out these works from loan.

Mr Poynton:

– So will the States if they are carried out from revenue.

Mr SKENE:

– After all, if we go back to the position of Tasmania and, Queensland, the two States most affected, in order to return them back £135,000, we shall have to return a great deal of money to the otherStates- £228,000 to New South Wales, £122,000 to Victoria, and so on. It seems to me that until a real exigency for borrowing arises, we might very well carry out necessary public works from revenue. At the end of the next financial year we shall better understand the methods to adopt. If it were not for the fact that all this money will have to be handed back to the States Treasurers, to be squandered, as, I am sorry to say, it probably will be in some instances, or spent in some direction diametrically opposed to the wishes of the people, I should not be in favour of carrying out any new public works at the present time. For many years we have done without a telephone between Sydney and Melbourne, which, it is estimated, will cost £50,000. We have a telephone system established in Melbourne, which has served fairly well, and I really believe that a little better administration in some of the departments would be of more advantage than new instruments. The States are trying to work out their own financial salvation without resorting to extra taxation, aud we ought not to encourage them by dependence on what they are to receive from the Commonwealth to return to the old lines of extravagance. The honorable and learned member for Northern Melbourne referred to the landed people as the people who are going in for borrowing and booming.

Mr Higgins:

– No ; I did not.

Mr SKENE:

– I understood the honorable and learned member to say that it is the labour party who are now going in for retrenchment, and that the people on the land are going in for booming.

Mr Higgins:

– No; I said the wealthy classes were the boomers.

Mr SKENE:

– I am sorry I misunderstood the honorable and learned member. I, at all events, am not an advocate of booming, and I say it is the people in the country districts who are now trying to diminish expenditure.

Mr Poynton:

– But not in their own particular districts.

Mr SKENE:

– That difficulty will settle itself, and I think we shall find that the people of the country districts in Victoria will vote for a system of retrenchment.

Mr Poynton:

– They are advocates for the borrowing of money.

Mr SKENE:

– The time may come when it will be necessary to borrow some money. But I think we may well wait until we see that there is a greater necessity to do so than exists at the present time. So long as we have £915,000 of surplus revenue in the year, such public works as are here proposed should be constructed out of revenue.

Mr WILKS:
Dalley

– I have listened attentively to the debate, and in the last two speakers, the honorable and learned member for Northern Melbourne and the honorable member for Grampians, we have a legal man on the one side and a commerciallytrained man on the other, recommending honorable members not to encourage a loan system for the Commonwealth. The honorable and learned member for Northern Melbourne gave us a long, theo’retical speech to show why loans are objectionable. But we know, from our experience in the various States, that the cry of the people is that the -system ofborrowing shall cease. We have now also a commercially-trained gentleman like the honorable member for Grampians advising the committee most strongly against borrowing, because at the end of the year we shall have a surplus df £915,000 derived from revenue. The honorable member points out that this is nol the time to initiate the borrowing system. It is, indeed, remarkable that the Ministry, on amatter of vital policy, have not allowed the House to decide, by accepting or rejecting a Bill, whether the Commonwealth shall go in for a borrowing policy or not. They have practically “ side-tracked “ theHouse, probably because it is assumed that honorable members at the end of the session may be willing to be “ side-tracked “’ into discussing a matter of policy under cover of an item on the Estimates. I should think that is unparalleled in the history of Australian Parliaments. It may have been the practice in Victoria, but ithas never been the practice in any of the other States. The honorable member for Melbourne Ports assumes that anything which is said against Ministers is a joke.Responsible Government may be a joke to the honorable member, because, so far as he and his friends, are concerned, they have governed this State irrespective of responsible Government. But it is not a joke to representatives from the other States, or to the people of Australia, to learn that the Commonwealth Ministry, instead of testing this question on a Bill as a matter of policy, are sheltering themselves under cover of an item in the Estimates. Were it not that after so - long a session honorable members are tired and are anxious to get to their bornes, it is quite possible that this proposal would have been met by a motion of censure. I think that at this stage of our history the Commonwealth should not enter upon a borrowing policy upon the lines laid down by Ministers-;

The Treasurer says that he is against the principle, and that the Ministry are opposed tothe practice of it. He has shown that they are opposed to the practice by including in these Estimates a number of works to be constructed out of revenue which, in the past, it has been the practice of States Governments to construct out of loan, and because it is proposed that onehalf of the works referred to on the Estimates should be constructed out of revenue, Ministers take to themselves theflattering unction that they are proposing half a reform. The Treasurer has told us that if he could have his own way he would not borrow at all.

Sir George Turner:

– I would not agree to borrow in Victoria, and I used to be yelled at in consequence.

Mr WILKS:

– I think the right honorable gentleman was correct. He says that he was yelled at in Victoria because he would not borrow, but to-day the Victorian people and the Victorian press affirm the right honorable gentleman’s non-borrowing policy. In interjecting during the speech of the honorable member for Northern Melbourne, I meant no reflection upon Victoria when I said she could not float her loans. What I meant was that even the lenders were flying the stand-off signal. The lenders of money in Lombard-street were flying the stand-off signal in August last, and the people of Victoria, knowing the operations of government, refused to subscribe.

Sir George Turner:

– They did not refuse a Government loan in Victoria.

Mr WILKS:

– The right honorable gentleman knows that it was underwritten for a certain amount, and that only £50,000 was subscribed in the open market, and he knows the treatment which the last Victorian loan received in London.

Sir George Turner:

– Except for the redemption of loans, Victoria has not borrowed in the London market for ten years. Victoria is not a great sinner in this respect.

Mr.WILKS.- I say that the stand-off signal was flying there and here. I admit that New South Wales a littletime ago floated a loan of £3,000,000, which was over-subscribed ten times.

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

– And spent.

Mr WILKS:

– And spent ; and that is the reason why representatives from that

State should use every effort to prevent the adoption by the Commonwealth of a systemwhich the people of New South Wales and of the Commonwealth generally are not desirous of continuing. I do not intend to follow the honorable member for Northern Melbourne by picking out certain works, but speaking generally I say that we have yet to learn that the works referred to here are really necessary. It is admitted by the Treasurer and his supporters that many of the works here referred to are not indispensable. Surely, this Ministry does not require to live as State Ministries have lived in the past - on a spirited works policy? Surely, they do not hope to hold office or retain power by the prosecution of a spirited works policy for which excessive borrowing must take place? Surely, the old system prevailing with States Governments has not followed them in here? Surely, no honorable member in this Parliament requires that his electorate should be fed by public expenditure. Surely, in the rarer atmosphere of this Federal Parliament there is not a single honorable member or follower of the Ministry who will urge that because he has secured a large expenditure of public funds in his electorate he is entitled to support? That is a thing of the past. It is one of the evils of State Government, which I hope we are not going to introduce here. I cannot believe that the Ministry are tied to a works policy. They admit that many of these works are not indispensable, and if that is so the remedy is to throw out the Loan Bill, and have all necessary works constructed out of revenue - which the Treasurer has intimated he can do. I do not. know whether a single penny has been placed on the Estimates for my electorate, and if it is not required, I do not wish to see that penny there. If any expenditure is required in the electorate for the renovation, and up-keep of any federal buildings, I trust that it will be provided simply to protect public property. I do not wish to go to the Government cap in hand, and to support a policy of borrowing in order that a large sum may be spent in my electorate. The honorable member for South Australia, Mr. Poynton, seems to take the view that the financially powerful States are not treating the financially weaker States in a proper manner. He said that his State would not accept financial assistance from the Commonwealth in order to tide over temporary difficulties. He says it is an act of charity for the Commonwealth to offer such assistance. It is no act of charity. It is cheaper andbetter for the Commonwealth to exercise thatpowerthan to borrow money for the purpose, while the States are squandering money.No civilized country, with a population of 1,000,000 souls,has ever expended so much money as did New South Wales last year - £15,000,000. Surely the Commonwealth Parliament ought to take a higher stand than do the States Parliaments, and to stop the introduction of a borrowing policy. I wish that the Loan Bill were before the committee, so that the Government could be compelled to declare their policy. I shall vote for the amendment as a distinct protest against a system of borrowing money. I believe that the people of Australia are not prepared to add to the millions of State borrowings by sanctioning a federal era of wasteful expenditure. It is a small sum of £500,000 to-day, but in a year or two this Ministry or some other will ask for a loan of £1,000,000, and in federal politics, as in State politics, Ministerial supporters will be favoured with a lavish expenditure of public funds in their electorates. I think it is wise for the committee to oppose a system of borrowing.

Sir MALCOLM McEACHARN:
Melbourne

– If I followed aright the Acting Prime Minister, I should say that the meaning of his speech was that he was hardly in favour of borrowing, but that in consequence of the position of some of the States, it is necessary to bring in a loan Bill.

Mr Page:

– Are they insolvent?

Sir MALCOLM McEACHARN:

– No, and they are not likely to be insolvent, but some of them are in a very serious position in consequence of lack of revenue from other sources. I cannot go all the way with the honorable member for Bland, because he would not only do without borrowing, but would insist upon all the proposed public works being gone on with. I think it would be extremely unwise for the Government to attempt to raise a loan at the present time. I believe, however, that if the principle were now affirmed that we should borrow, a great many of the items on which it is proposed to expend money would be omitted when they were reached. Queensland, which has been referred to so. much, is doing all it can to put its finances straight, for it is. contemplating an income tax. The land in that State is already pretty heavily taxed, and it is going tobe taxed still further. The position which any State would take up, if it had not a Federal Government to discuss the question of borrowing, would be to see in what way it could stop its expenditure. It is proposed to expend £150,000 on the erection of a post-office at Brisbane. I know Brisbane pretty well, and I cannot conceive what necessity there is for spending such a large sum there. The proposal now is to spend £25,000, and the additional amount required to complete the work is £125,000.

Sir George Turner:

– If I recollect aright, they had that item on their own Estimates.

Sir MALCOLM McEACHARN:

– I think that if the Queensland people were to consider their own interests, and not the fact that we were likely to borrow the money to enable them to erect these buildings, they would stop the expenditure in view of their present financial position. I shall not deal with the question of the extension of telephones and telegraph lines, which are revenue-producing. If I were in favour of borrowing at all, I should say borrow for that which is revenue-producing, but certainly not for that which is not revenueproducing. I find that there are other items proposed in connexion with telegraphs, amounting to £100,795, so that altogether a sum of about £250,000 will be spent in Queensland.

Sir George Turner:

– No; £125,795 is the total sum proposed to be spent in Queensland for this year.

Sir MALCOLM McEACHARN:

– It must be remembered that if we are to borrow the money which is required forthis year, we must borrow the further sums which will be required for the additional works. I think it would be unwise for us to start a borrowing policy, and I quite agree with the honorable and learned member for Northern Melbourne, that it is undignified for a Commonwealth Government to talk of borrowing a sum of £500,000. I am not against borrowing for carrying out large reproductive works, but I am certainly against the borrowing of small sums for constructing that which we should either do without or pay for out of current revenue.

Sir George Turner:

– In Queensland they cannot do without the proposed extension, if the department is to be properly managed, and we cannot take the money out of current revenue.

Sir MALCOLM MCEACHARN:

– Certainly they can do without some of the proposed expenditure. “With regard to the items which are to be paid for out of revenue, I find that telegraph offices are to go up all over the country. One State is as bad as another in that respect. In New South Wales a number of buildings are to be erected - for instance, at Humula, Newbridge, Nundle, Woonona. The latter is the only place I know, and I see no necessity for any expenditure there. In the present state of our finances, we should not rush into this extravagance. If the money were proposed to be spent in my own electorate, I should take the same view. In New South Wales alone £13,500 is to be provided for sundry offices in mining towns. Again, in the estimates of the Defence department, we’ find many works which might be done without. Our proper course, I contend, is to reduce the items on which it is proposed to expend this sum of money and to pay for the rest of the works out of current revenue.

Mr McCAY:
Corinella

– I must confess that I have a strong predisposition, apart from the particular circumstances of any case, to look with great suspicion upon loan proposals. I feel that if it were possible - and I do not know that we can say yet that it is not possible - for the Commonwealth to set out on its career as a nonborrowing community, it would in the end work out for the good of the people generally. However much may be said in favour of loan proposals of various kinds, the sanguine expectations formed in many cases are not realized. I have no sympathy with those who object to the loan proposals of the Government because they are so small. In comparing large and small loans the merits are primd facie on the side of the latter, and it is quite as dignified to borrow a small sum as a large sum. Even if the dignity of the Commonwealth were in question, the material welfare of the people would not be assisted by borrowing more than is absolutely necessary. On this occasion neither the remarks of Ministers nor the schedule of the Loan Bill afford sufficient justification for entering upon a borrowing career. I am quite aware that if the Bill is not passed it will be impossible to spend a large sum of money which might otherwise be profitably invested in certain works, but I prefer to believe that the result will not be so injurious to the States concerned as to make it impossible to abstain from borrowing. I recognise that in some instances the works needed cannot be constructed out of revenue at the present juncture. The expenditure of the amount proposed out of revenue in Victoria would add considerably to an already heavy burden, and to the troubles of the Government of the State, which has quite enough on its hands at present. I do not desire to be any party to forcing the States Governments to impost taxation of any kind. I desire that they should be perfectly free so far as that matter is concerned, and if we are to choose between borrowing and leaving the works undone, I feel that the matter is not so urgent but that we can afford in the great majority of cases to allow the undertakings to stand over fora short time. I think that the case in favourof borrowing has still to be made out; and,, although I recognise that certain inconveniences, which I regret, will attend our decision not to pass the Loan Bill, I shall votewith those who are opposed to that measure.

Sir LANGDON BONYTHON:
South Australia

– I intend to support the Government proposal, but I must confess that I am not particularly enthusiastic about taking this course, because I feel that all the argument is on the other sideI have been for many years, and still am, strongly opposed to heavy, borrowing by the Australian States, but I feel that upon this occasion I must bow to the necessities of the Treasurer of South Australia. In the State which I have the honour torepresent we have been careful to draw a clear distinction between works which should be constructed with borrowed money and works which should be paid .for out of the revenue. In this respect we have been perhaps more particular than some other States. In South Australia, for instance, all replacements have been provided for out of the general revenue. In order to illustrate the care which has been exercised in this regard, I may mention that at the present time a splendid building - the School of Mines and Industries - is being erected in Adelaide at a cost of £35,000, and as a gentleman in South Australia was generous enough to contribute a handsome sum towards the cost of the structure, theGovernment decided that the rest of the money required should be provided out of the general revenue. In view of these facts it would be very improper indeed to make the Treasurer of South Australia suffer, by calling upon him to give up a large amount of revenue, which he urgently needs to meet State requirements. I gather from the tenor of the debate that the Loan Bill is not likely to be carried, and I cannot say that I shall altogether regret an adverse decision regarding it. In such an event, however, I shall do my best to see that the general expenditure is so reduced as to mimimize as far as possible the inconvenience to the Treasurers of South Australia and other States.

Mr. BATCHELOR (South Australia).There is something very attractive about the proposal to launch the Commonwealth on its career without resorting to borrowing. I should like to see that idea carried out if it were possible, but I do not regard it as practicable under present conditions. If all our revenues were pooled, I should be happy to assist the Government . to dispense with loans altogether, but some of the States are in a very awkward position, and I should not be doing my duty to South Australia if I voted against the Government proposal. If revenue alone is to be available for the construction of new works, a large number, most of which, I think, may be regarded as of a strictly reproductive character, will have to be abandoned for the present. Some of these works are partly constructed, and, for the most part, .they are urgently needed - particularly those connected with telephone and telegraph extensions. Although these works would undoubtedly return a great deal more than the interest upon the outlay, South Australia could not provide .the money, except at very great inconvenience. The honorable and learned member for Northern Melbourne drew a very attractive picture of the happy position in which we should have found ourselves if all our public works had been constructed out of revenue. We should have saved all the interest that has been paid in years past, and we should have had no public debts. It would be idle to suppose, however, that- we should have been able to carry out our public works system upon anything approaching the present scale, or that the country would have been so rapidly developed if we had entirely relied upon revenue. .For instance, the Western Australian Government would not have been able to undertake the Coolgardie water supply scheme without resorting to loans.

Mr Fowler:

– That scheme has not been thoroughly tested yet ; it. may prove a white elephant after all.

Mr BATCHELOR:

– The scheme itself may not be the very best that could have been devised, but some work to effect the object aimed at was absolutely necessary, and in any case the cost could not have been met out of the Western Australian revenue, buoyant as if is. Many works which may not be directly reproductive are absolutely necessary to enable the business of the country to be carried on. I might point to the overland telegraph line from Adelaide to Port Darwin, which certainly assisted to an immense degree in the development of Australia. It would have been quite impossible for South Australia, or even for the whole of the States to construct that line out of their revenues. In view of these facts, it must be recognised that the speculations of the honorable and learned member for Northern Melbourne have resulted only in the painting of a very pretty picture. It seems to me that the Government proposals are very reasonable. It is proposed to spend out of revenue £180,000 upon works similar to those which have in the past been constructed out of loan moneys. This is a step in the right direction. The items upon which it is proposed to expend loan moneys are for the most part telegraph and telephone extensions, . and these are justifiable ‘from a strictly reproductive stand-point. We could better afford to do without new buildings which are intended to replace inferior or inconvenient structures than to dispense with sufficient telegraphic and telephonic extensions. *It has been urged that the States which find themselves in financial straits can economise still further, but that does not apply to South Australia, because we have had our noses to the grindstone for ten or twelve years. The South Australian counterpart of the Kyabram movement in Victoria is not a thing of yesterday, but of many years ago. Retrenchment has been carried to an extreme point in that State. We might, by reducing the expenditure upon defences, provide a great part of the money required for new works in some of the States, but,, so far as South Australia is concerned, the saving would not be very large if the whole of her defence vote were cut off.- That State has been so close in her defence expenditure that the Federal

Government, while expressing the greatest desire for economy, have found it necessary to increase it by £7,000 or £8,000 a year. I do not see that that State can do much more in the way of retrenchment, but I am afraid that if further economies are forced upon us, it will interfere with our system of free education, and thus, in bringing about one political reform - the stoppage of public borrowing - we shall be doing harm to a much more important one.

Mr Reid:

– That is drawing a red herring across the trail. Does the honorable member think that the people of South Australia will allow their school system to go down ?

Mr BATCHELOR:

– No, but if they have to practice still further economies they may adopt the New South Wales system of charging fees for the instruction of school children.

Mr Reid:

– The New South Wales charge is only 3d. per week for each child, and ls. a week for each family, no matter how many it comprises.

Mr BATCHELOR:

– I am proud that in South Australia the education of their children need cost parents nothing beyond their ordinary contribution to the revenue. We do not believe in placing a poll tax upon parents.

Mr Reid:

– The honorable member might as well say that he does not believe in placing a poll tax upon travellers, and that, therefore, people should be allowed to travel free on the State railways.

Mr BATCHELOR:

– That is a very different thing. The children of the State should be able to obtain the highest education whatever the circumstances of their their parents may be.

Mr Reid:

– No parent in New South W ales need pay anything for the education of his child if he says that he is unable to do so.

Mr BATCHELOR:

– That was the old South Australian system, but I do not think it is a good one. Let us be satisfied with a fair thing. I am prepared to vote against every item in the schedule, where it is proposed to borrow money for work which is not strictly reproductive, but I do not think we should go beyond that. This is not the time to stop all borrowing. Let us not kill the patient by heroic remedies to cure his disease.

Mr A PATERSON:
Capricornia

– I am sorry to obtrude the position of my unhappy State upon the committee, but it appears to me to be necessary to do so. It has been suggested by some honorable members that Queensland is not reducing her expenditure to meet her altered circumstances. But I do not think that any State in the union has set a better example in that respect. The Governor has voluntarily offered to accept a smaller salary, all other salaries in the public service have been reduced, and 500 officials have been discharged from State employment. It is clear, therefore, that Queensland is doing the best she can under the circumstances.

Mr Mahon:

– Has she imposed a land tax?

Mr A PATERSON:

– She levies a very stiff income tax. Leaving Western Australia, which has practically two Tariffs, out of consideration, I find, from the Treasurer’s statement, that of the total revenue received by the Commonwealth New South Wales will receive back S4J- per cent., South Aus-‘ tralia 84J per cent., Victoria 81^ per cent., Tasmania 79 per cent., and Queensland 71^ per cent. The average return is 80 per cent. If Queensland received 80 per cent, she would get back £960,000, instead of £885,300, or £74,700 more than it is proposed to give her. Owing to her enormous territory, the cost of administration and collection is much heavier in Queensland than in other States. One cannot be surprised, under the circumstances, at the indignation prevailing there because of the way in which she is being treated, and she is likely to find that she has made a mistake in mortgaging a glorious and sure future. The greatness of Victoria is in the past; that of Queensland is in the future. It is all very well for honorable members to say that they sympathize with the position of Queensland. They have now an opportunity to give practical evidence of their sympathy. If the Commonwealth does not assist her by raising a loan, and giving her a share of it, she will have to go into the money market for herself. During the debate this afternoon it crossed my mind that some of tlie speakers are very much influenced by the words of a famous financial writer in London who rejoices in the name of Wilson, and who systematically holds up to contempt every Australian security. But if we compare the indebtedness of Australia. with that of England, what do we find? The national debt of England is something like £710,000,000, and the only pledgable assets she could give as security for that. amount are £27,000,000 worth of Suez Canal shares.

Mr Reid:

– The honorable member takes no account of her taxable assets.

Mr A PATERSON:

– That is another matter. The total State indebtedness of Australia, excluding municipal indebtedness, with which the Commonwealth has nothing to do, is about £206,000,000, and- of this amount £130,000,000 has been expended upon enormously productive works such as railways and telegraphs,1 so that only £76,000,000, or less than £20 per head, has been borrowed for other purposes. Putting the interest at 3£ per cent., that makes a charge of only 13s. 6d. per head per annum. No securities except those of America are to be mentioned in the same breath with Australian securities, and no one knows that that is so better than do the wretched brokers who writedown Australian stock in order to -bear the market whenever we want to borrow. Arguments of an extraordinary character have been used during the recent debate upon the Loan Bill. The honorable and learned member for Northern Melbourne pointed out how glorious our position would be if we had paid for our railways out of revenue. But if we had tried to do that, we should have had no railways. If we find it difficult to pay interest on the money borrowed, how could we have provided the principal.

Mr Watson:

– We have paid away in interest an amount equal to the principal borrowed.

Mr A PATERSON:

– That is precisely the argument of the honorable member for West Sydney, who said that out of nearly £300,000,000’ borrowed by New South Wa.les only a little more than £28,000,000 found its way into Australia, because New South Wales had paid back in interest an amount nearly equal to the principal borrowed. How ridiculous is an argument of that sort ! Supposing that I borrowed £10,000 with which to erect certain properties : At the end of twenty years am I entitled to say to the individual from whom I borrowed - “ I have repaid you in interest the whole amount loaned to me, so that the properties are now mine “ ? Where did I get the money with which to pay that interest ? Did it not come to me in the shape of rents %

Mr WATSON:

– Could not the honorable member have obtained a similar return under different conditions ?

Mr A PATERSON:

– No ; because I should not have been able to obtain the principal. It is all moonshine to urge that we can ever tax the people to the extent necessary to provide the capital required for carrying out reproductive works. The scheme is wholly a visionary one, unless the socialists cut the throats of the capitalists, and take their money from them.

Mr Watson:

– Could we not raise another £1,000,000 1

Mr A PATERSON:

– The only feature about the Government proposal which I dislike is that of going upon the market, for such a very small sum. But if we are to develop this country we must begin to borrow at some time. We cannot tax the people sufficiently to provide the necessary money to enable us to undertake reproductive public works, and the only way to develop our resources is by obtaining loan moneys for that purpose. I shall, therefore, support the Government proposal.

Mr O’MALLEY:
Tasmania

– - I am very pleased that the leader of the democratic party has moved to test this question. To me it is peculiar that the representatives of the various States, both in the States Legislatures, and in this Parliament, apparently entertain the opinion that we can do nothing unless we initiate a borrowing policy. I know men in private life who are imbued with a similar idea. I was acquainted with a man in Adelaide who used to accost me regularly each week with a request for the loan of 5s. or 6s., until I began to think that he regarded me as a sort of “grafter” for him. That is precisely the position which the Commonwealth occupies to-day in regard to the various States. The trouble with the latter is that they are suffering from chronic financial delirium tremens. They have had a perpetual financial drunk, and they are suffering from “ snakes.” The time must come in the history of the Commonwealth when this Parliament must stop the States from continuing their present policy of borrowing. The honorable member for Bourke showed to-night that during the past ten years Victoria has borrowed £10,000,000 - upon which she is annually required to pay by way of interest £350,000 - without having received any corresponding increase of revenue from reproductive public works with which to meet it. What does that mean 1 Yet some people attribute the disappearance of Victorian prosperity to the labour party. I should not utter one word to-night if Victoria were not full of stump orators who declare that tlie financial misfortunes which have’ overtaken it are directly traceable to the party with which I have the honour of being identified . I repeat that this State has borrowed £10,000,000 within the last ten years.

Mr Poynton:

– Has she no assets for that expenditure 1

Mr O’MALLEY:

– S - She has assets in the shape of disabled engines, ruptured passenger cars, and burst-up goods cars, which are now to be seen lying about the railway yards, and to which Mr. Bent should devote his attention, instead of abusing the labour party. The other day I had a look at this disabled rolling-stock, and I can assure tlie committee that for similar maladministration a private railway company in the United States would have its manager in gaol. So long as we supply extravagant financiers with plenty of- money, they will not economise. There is an old adage which says that “everything comes to him who waits,” but I have noticed that the thing for which one is waiting never comes. The time may come - and perhaps it is not far distant- when the Commonwealth Government will have to render financial assistance to some of the States. There may come a period when the small States will not be able to go upon the money market, and raise sufficient funds to cover their indebtedness, and, if so, they will be obliged to ask the Commonwealth to keep them solvent.

Sir Malcolm Mceacharn:

– They are not likely to do that.

Mr O’MALLEY:

– I h I have seen it done in America. There certain States have had to approach Congress with a request for assistance. Congress has assisted them, but, at the same time, it has placed a curb upon them so that they could not borrow. The Australian States, however, can go upon the London market, and float loans without any restriction. Every second man one meets in London is there on behalf of ,some of the States Governments. Have the various States reduced the expenditure involved in the maintenance of their AgentsGenerals’ staff since the establishment of federation ? Not a bit of it ! Have they abolished the offices of States Governors, and all the tin-pot paraphernalia associated with them ? Have they talked about reducing the emoluments of their Judges, who receive salaries of which ancient emperors and kings never dreamed ? Not a bit of it ! Yet the Treasurer and his eloquent colleague, the Acting Prime Minister, declare that we must not interfere with the States. We want to save them. I represent the smallest State in the union, and the one which perhaps has sacrificed most. But I wish to teach that State, as the State in Western America, where I lived, was taught, that she must study economy - not tomfoolery economy - and that she must throttle the extravagant, spurless roosters who are bringing her down to disgrace. Let us look at another aspect of this question. Supposing that we allow these State gentlemen to continue their policy of “borrow, boom, and burst,” without interference, what will’ be the result? Unquestionably, they will borrow, boom, and burst. Yet we are told that we must not interfere with the revenue of the States- that we must go upon the money market and borrow as much as we can, whilst the States continue to borrow as much as they can. The point which seems to escape attention is that there is no new population coming to our shores. The real trouble is that the various States, when federating, forgot that the same people would have to pay the taxes. As a result, every State, just prior to the inauguration of the Commonwealth, started to pile up its military expenditure. In Tasmania two post-offices were established, which were absolutely unnecessary, because her people were under the impression that the expenditure connected with them would fall upon the Commonwealth. Similarly, everT second man one met was looking to the Commonwealth for an increase in his salary. It was thought that we were to have a Rothschild, or some of the American millionaires, at our back, instead of the people of Australia. But the same white-faced Caucasians have to pay the taxes, and they are , the people of whom I am thinking. We are determined to stop this loan business - small as it is - to-night. Three-quarters of the revenue derived from Customs has to be returned to the States, but one-quarter of it must be retained by the Commonwealth to enable us to carry out reproductive public works. The “boodler” must go. I will admit that the money which has been borrowed in this country has enriched a lot of gentlemen. By a system of exploiting the earnings of the workers they have grabbed it, and now they object to paying their fair share of the taxes. Every year they want the same struggling man to come up to the scratch and pay the taxation for them. How long would it take the Victorian Government to wipe out the State deficit if they would come down with a legitimate system of taxation ? But we shall never obtain anything from the frozen-hearted, gilded, and spurless roosters of to-day until we force them to give it. As, however, I can see that there is no prospect of the Government proposal being carried, I will not debate the matter further.

Mr MAHON:
Coolgardie

– It is rather unfortunate that at this late stage of the session a matter which is of the greatest importance to the Commonwealth should have been introduced in this way. I think that the Government ought to have found time earlier to formulate some proposal for taking over the whole of the indebtedness of the States. By that means not merely would the States themselves be considerably relieved, but the Commonwealth would occupy a very much improved position.

Sir George Turner:

– How would the States be relieved?

Mr MAHON:

– By a reduction of interest on their loans. The Treasurer would find that if the Commonwealth assumed those debts, he could convert the present loans into stock bearing a lower rate of interest.

Sir GEORGE TURNER:
Treasurer · BALACLAVA, VICTORIA · PROT

– Onlyas theyfalldue.

Mr MAHON:

– I amnot quite so sure of that. I think that the British bondholder is always open to accept a consideration, and it is quite possible that he might be prepared to surrender his stock upon terms.

Mr Isaacs:

– What inducement would he have to do so ?

Mr MAHON:

– To begin with, he would obtain a better security, and I presume that he would also obtain some monetary consideration.

Mr Isaacs:

– The States will not fail to meet their obligations.

Mr MAHON:

– True. But as the Commonwealth has taken over the principal sources of revenue of the States, together with a great many buildings which were erected out of loan funds and which comprised their chief assets, it seems to me that the Government should have submitted a comprehensive scheme for the assumption by the Commonwealth of these obligations.

I am not one to join in an indiscriminate howl against borrowing. But before I go further I should like to call attention to a remark by the Treasurer, in reply to an interjection by myself, that a loan at 3 per cent. could be floated at par. In the present state of the money market I take leave to doubt that statement ; and, if I am right, that is all the more reason why the Treasurer, though he might not put a scheme immediately into force, should have a proposal ready when the time is ripe. As I say, I am not one to shut my eyes to the difficulties which are being experienced owing to the unfortunate drought and the failure of sources of revenue. I am thoroughly with the representatives of the necessitous States who have spoken to-night ; and the committee should listen sympathetically to the claims which these gentlemen have advanced. This is not the time - and I can say this freely - for the imposition of fresh burdens on the people ; at the same time, Queensland, lightly taxed as the people of that State are in comparison with the people of Western Australia, must have considerable resources which could be levied on in order to make up the deficit. Queensland, where the difficulty is greatest, has ample resources which have not yet been availed of by the State Treasurer. Although I have every sympathy with Tasmania, South Australia, and Queensland, the proposal of the Government to raise such a small sum of money is calculated rather to damage than to enhance our credit, and, on that ground alone, I do not intend to support the authorization of a loan. The Treasurer knows quite well that in Western Australia no loan is required for works in the Postal, Defence, or Customs departments. It is possibly no news to the right honorable gentleman, that since 1895, when £11,698 was expended, no loan moneys have been devoted to works connected with those departments.

Mr Watson:

– Yet the Government propose to expend in Western Australia £46,000 out of loan moneys.

Mr.MAHON.- The amount which I have just mentioned was for telegraph works ; and, I may may say further, that since 1897-8, when £2,633 was voted, no loan moneys have been spent on public buildings. With the exceptions I have mentioned, all loan moneys in Western Australia have been expended on railway extensions, improvements of harbors and rivers, and the construction of the Coolgardie water supply scheme. Another reason why, from the Western Australian point of view, the proposed loan is not wanted, is that that State, by means of the federal Tariff, and also the Inter-State Tariff, is this year receiving nearly £250,000 more than was ever before received from customs and excise. In the year 1898 the amount collected in Western Australia from customs and excise was £906,831, in 1899 the amount was £S59,915, and in 1900 it was £976,410. The amount which the Treasurer proposes to return to Western Australia, if he has not absolutely returned it, is this year £1,225,000, or roughly £250,000 more than the highest sum obtained in that State from the same sources. What does Western Australia want with a loan ? It is proposed to expend only £46,000 of the proposed loan in that State.

Sir George Turner:

– Happily Western Australia does not require a loan, but we cannot treat the States differently.

Mr MAHON:

– There is no doubt that Western Australia does not require a loan, and for the reasons I have given I shall be obliged to vote against the proposal of the Government.

Mr. POYNTON (South Australia).- If we have learned anything to-night it is that there are a great number of honorable members who have missed their avocation, and who, as Treasurers, should be showing how the finances of the various States ought to be conducted. It appears to me that there is a conspiracy both inside and outside the House to belittle the resources of Australia. There is one continual howl about our national debt, but not one word is said about our assets. We hear nothing of the great advantages which have been derived from the expenditure of public money ; not a word is said of the thousands of avenues of labour which have been created, or of the fact that in London there could be obtained, inside a fortnight, a number of financial men to take over the whole of our debts, provided the assets were also handed over.

Mr Crouch:

– We have heard that for a long time.

Mr POYNTON:

– The honorable member has not heard that in this debate. Yet honorable members are crying out, as if all the loan money had been spent on . powder and shot, a way in which the honorable and learned member for Corio would no doubt be willing to spend it. In my opinion, this is not the time to adopt the drastic reform which has been suggested, and I submit that there has been a want of sincerity in a number of the speeches delivered to-night. Does any honorable member take up the position of saying that there must not be any borrowing ?

Mr Crouch:

– Hear, hear ! .

Mr POYNTON:

– Does the honorable and learned member take up that position ? Does the honorable member for Coolgardie say that there must be no more loans ?

Mr Mahon:

– Certainly not.

Mr POYNTON:

– If there are to be no more loans, how is the transcontiental railway to Western Australia to be constructed? I ask honorable members of the Opposition how they propose to acquire the necessary land and create the federal capital unless the cost ‘ is met out of loan moneys ? How, without borrowing, are we to construct the works on the river Murray, which are expected to be of great advantage to. Australia generally ? Simply because some of the States have a little more money than they want, very little consideration is being shown to other States, which every day we sit here, are getting deeper into financial difficulties. Some honorable members tell the States Governments that they ought to do this and that ; but what are we doing 1 We are increasing the expenditure day after day. The Treasurer will agree with me that the financial position of South Australia is this year, and will be next year, very much worse than it was last year; and yet, in the face of these facts, we have what I was going to call /a brutal majority, but which I shall content myself by describing as a heartless majority.

Mr Reid:

– That is what I thought when the salt duty was under discussion.

Mr POYNTON:

– In South Australia £62,000 is to be taken out of revenue for loan works. In addition, the revenue of that State is built upon a false basis, seeing that some £14,000 is realized from imported material on which duty has not been previously paid, and I am right in adding that sum to the £62,000, thus showing £76,000 to come out of revenue. At the present time in South Australia there are really two land taxes, and it is proposed to reduce the minimum income for taxation purposes to £100. The Federal Parliament is helping to’ force the Parliament of South Australia, as a next step, to cut a lump off the education vote. Of course, the South Australian Government could make up the deficit, but it would have to be by reducing salaries, the policy which has caused all the noise in Victoria, and which is opposed by some honorable members who have to-night spoken against the loan proposals of the Commonwealth Government. It is idle to say that it is a bad principle to borrow a sum of only £500,000.’ Perhaps if the sum had been £10,000,000 there would not have been the same opposition ; but it must not be forgotten that there never was a time when money was more wanted by the necessitous States. To say that these States must fall back on their own resources, and have increased taxation, is not the way to encourage a proper federal feeling. I am very much disappointed at the attitude of the committee to-night. If it were proposed to lay down a hard and fast line that there should be no more borrowing, I could understand the position ; but there is hot an honorable member who would advocate such a course. We know very well that the moment the transcontinental railway is proposed, Western Australian representatives will be in favour of borrowing money for its construction, and the New South Wales representatives would be in favour of a loan if it were intended for the purposes of the federal capital, although the latter discloses no such great necessity as I have indicated in connexion with South Australia. I suppose it would be of no avail, if I were to stand here all night and plead for the smaller States. At the same time, I think honorable members ought to give more consideration to the position of South Australia, inasmuch as - and I am not demurring to this - the loan expenditure has been reduced by onethird, and the revenue called upon to bear the burden to that extent. All we ask is that for this year, and until we have better times, the Commonwealth Parliament will not put the States in a worse financial position than they are in now.

Mr. REID (East Sydney). - I think that one who has listened to this debate- has some fault to find with many of the observations which have been made by honorable members who have taken opposite views upon the question. Those who are so .earnestly in favour of the passing of a Loan Bill at this time for the services specified, while reproving other honorable members for observations that they think tend- to disparage the credit of Australia, seem to me themselves to have fallen into the same error - of making it appear that the financial soundness of Australia depends upon this item. Both of these lines of observation are open, I think, to very grave exception. We ought always to remember, whatever the borrowings and the financial management of the different States may have been, that every one of them is absolutely sound and solvent. Some of us in Australia seem to think that the moment a shadow of trouble or strain comes upon us the end of our existence is near. Why, the average state of existence in other countries is at a much greater tension than we seem .to feel, even when the worst of droughts is cursing the whole continent. We do not know what trouble is in Australia ! We have no idea of the strain which is put upon humanity in the endeavour to live in other parts of the world. I regret that on both sides observations have been made which would do this country no good in the centres of financial operations, were it. not that every sound financier, wherever he lives and in whatever country he may be, knows, if he is tolerably well informed, as one of my honorable friends has said, that instead of our public debt being represented by destruction and shot and bloodshed, we have magnificent assets to show for it. But we must not forget that we have spelt the word “ Loan “ very largely in our political history in Australia, that we shall have to spell the word “ Retrenchment “ more largely than we have been accustomed to do, and that we shall have to spell the word “ Economy “ much more largely than we have ever had to do. So far as I am concerned, I think I have the very clearest course before me. It is one of the curiosities pf our public affairs that one of the most important debates in which we could’ engage in this Federal Parliament - in which we are supposed to settle a great principle - should be on the question of whether we shall spend £150 of revenue on the construction of a new oat Harbor at Newcastle. That is one of the eccentricities to which our public business is reduced. If there were any necessity for this I should have no complaint to make. We all know that sometimes there is a necessity for this convenient course to be pursued. But a Loan Bill was introduced into this Chamber on the 1st June, and the second reading of it was moved on the 10th June. The motion for the second reading of the Bill was the occasion for this question of principle to be discussed. If there had been a majority for the Bill, the second reading would have demonstrated the fact, and then the House could have gone into committee on the details. If, however, there had been a majority against the Bill, the Government would have known there and then what their position was. But we have drifted on to the end of September, and now that we are in the middle of the Estimates, we are suddenly called upon to go into this Boat Harbor at Newcastle, and to consider this question. We desire to close up the business of the session as soon as possible, and I do not want, therefore, to make any stronger criticisms than are necessary. We all wish to finish the business of the session as amicably as we can. All I have to say in connexion with this matter is that whilst I certainly do not wish to be understood as saying that the Commonwealth should not borrow - I do not take up that position at all -I decline, by my vote, to support the Government in the way in which they are dealing with it.

Mr CONROY:
Werriwa

– I certainly agree with those who say that it would not be a very wise thing for the Commonwealth to give up all idea of borrowing. If money can be borrowed for reproductive purposes at 3 per cent., and can give a return of 4 per cent., it would be very unwise for us to say that we will raise the rate of interest against our own people to 6 or 7 per cent., as we should do, by calling upon the capital that we have in the country. I am surprised that some honorable members who have been posing as democrats have failed to realize the obvious fact that if we were to borrow in Australia, the ordinary rate of interest would be so raised against the producers - because the Commonwealth itself would be the most favoured borrower - that production in many instances would be stopped. My principal ground of complaint against the Government is that they have not put before us any statement from which we could find out whether the items are those for which money ought to be taken from revenue, or to be charged against loans.

Sir George Turner:

– Sheet after sheet of details were put before honorable members in connexion with the Bill.

Mr CONROY:

– But the Government themselves have not attached any importance to those details, because they have not come before us with any statement showing exactly what amount of money was required. The Government ought to have formulated their proposals, placed them in the Bill, and come before the House, and said - “ This is what we propose, and if the House does not like to accept it, it has another alternative, and can find some one else to manage the affairs of the country.”

Mr Watson:

– If the honorable and learned member were Prime Minister, he would be resigning every week.

Mr CONROY:

– If I were Prime Minister the men associated with me would know what responsible Government meant, and the measures put forward would be submitted after due consideration, and not tossed before the House to be dealt with at the sweet will of anybody. We have departed from the principle of responsible Government in this Parliament. The present Ministry has not chosen to accept any responsibility whatever. A question which should be remembered is that when the Commonwealth was called into existence we were told that a revenue of about £8,000,000 from customs and excise would be all that was required. We were led to expect that no more than that sum would be taken from the people. But now an extra million, or a little more, has been taken from them, and, that being the case, the more ordinary expenditure that can be met from the extra taxation the better. For that reason, I intend to vote against the proposal of the Government.

Question - That the item, “Construction of new boat harbor at Newcastle, £150,” be reduced by £1 - put. The committee divided.

AYES: 30

NOES: 15

Majority … … 15

AYES

NOES

Question so resolved in the affirmative.

Departmentof Home Affairs

Division18(Administrative Staff) - £6,411

Mr McDONALD:
Kennedy

– I think we are entitled to some explanation in regard to this division. It appears to me that the whole of this department is run upon very extravagant lines. We have a secretary receiving £750 per annum, a chief clerk receiving £600, a chief accountant receiving £550 per annum, a senior clerk (also secretary to Minister) receiving £450 per annum, and a clerk and shorthand writer receiving £250 per annum. In my opinion the number of these officers could be reduced. I think that the senior clerk and secretary to the Minister is a new appointment.

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

– The appointment referred to by the honorable member is not a new one. The amount named has been voted upon two different sets of Estimates.

Mr McDonald:

– There is nothing in the Estimates to show that it is not a new appointment.

Sir WILLIAM LYNE:

– Honorable members will remember that a discussion upon the question of the appointment of a secretary to the Minister took place some fifteen or sixteen months ago, when the appointment of three or four secretaries to Ministers was dealt with. Although some honorable members seem to think that I am extremely extravagant, I have been endeavouring, as far as possible, to economise. The working capacity of the department is not taxed to the extent that it will be in a very short time, and I have not used any part of the £450 set apart for this office. I have managed to obtain another clerk, whose time was not quite fully occupied, to do the work which will have to be done by-and-by by a clerk drawing this’ salary. It is because of that fact that the item appears on the Estimates as if the appointment were a new one. If the honorable member turns to last year’s Estimates, he will find that the item was voted there.

Mr. BATCHELOR (South Australia).I think it would assist the committee very much if the Minister would say whether any of these items show an increase upon lastyear’s estimates.

Sir WILLIAM LYNE:

– I think the only increase which has been made is one of £18 to a messenger performing double duties. He acts not only as a messenger, but, when I have work to do elsewhere, carries out clerical duties. He receives £125 a year, and I think the increase I have named is the only one which appears in my estimates. I have given that increase, because the young man has done very good work and saved a great deal of expense by being able and willing to act as a messenger as well as a clerk.

Mr A PATERSON:
Capricornia

– On Friday last we failed to reduce the salary of £750 which the secretary to the AttorneyGeneral receives. There is another item here representing almost a similar amount, to which I wish to draw attention, namely, “Office cleaners, £679.”

Sir William Lyne:

– That represents the cost of cleaning all the offices.

Mr A PATERSON:

– We have already passed a sum of £1,000 for cleaning Parliament House.

Sir WILLIAM LYNE:

– The item referred to by the honorable member does not provide for the cost of cleaning Parliament House, but covers the cost of cleaning the whole of the Federal offices. There is first of all the building at the corner of Spring and Collins streets, the new offices adjoining them, and a third building between those and Dr. Bird’s hospital, which we have been called upon to rent. All those buildings are crowded almost to suffocation. I think the item also provides for cleaning the Sydney offices.

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

– How many officers are there?

Sir WILLIAM LYNE:

– I think there are six or seven of them. They do not receiveon an average the minimum wage required under the Public Service Act.

Sir Malcolm McEacharn:

– Under the heading of “ Public Service Commissioner” provision is made for a caretaker and cleaner at a salary of £65 per annum.

Sir WILLIAM LYNE:

– I did not wish my Estimates to be loaded with the cost of cleaning all the other departments, but it was considered that they should bear that responsibility in respect of the whole of the buildings. I was, therefore, compelled to give way. In defending my Estimates I would point out to the honorable member that the amount named does not relate solely to the department for Home Affairs, but that it also covers the cost of cleaning the AttorneyGeneral’s department, the Prime Minister’s department, and the building which is partly occupied by the Defence department, and one or two other offices.

Sir Langdon Bonython:

– What is the reason for the difference between the amount passed on last year’s Estimates and that which we are asked now to vote ?

Sir George Turner:

– Last year we did not have all these offices.

Mr. A. PATERSON (Capricornia).- The committee will observe that £150 was placed on last year’s Estimates for this work, and that £190 was spent. This year, however, the amount has suddenly jumped up to £679. I thought it included a provision for painting and furniture, but I find it represents only the cost of cleaning. As pointed out by the honorable member for Melbourne, there is a sum of £65 set apart for cleaning the offices of the public service commissioner, while, with the usual economy of the Treasurer’s office, the work in that department costs only £56 per annum. Why should this enormous sum be set apart for cleaning the other departments?

Sir William Lyne:

– In one case there are only two or three rooms, while in the other there are two or three buildings.

Mr A PATERSON:

– I am sure that the champagne brigade, with General Fleming at its head, would do the work for half the money. I move -

That the item, “ Office cleaners, £679,” be reduced by £200.

Sir WILLIAM LYNE:

– I hope the honorable member will not press his amendment. I find that there are two male cleaners employed at a wage of £2 per week, and seven female cleaners receiving £1 per week, in addition to one cleaner employed in the Sydney offices.

Mr McDonald:

– I wish to move an amendment in an earlier part of the division, but if the honorable member proceeds with his amendment now I shall not have an opportunity of doing so.

Mr A Paterson:

-I am quite willing to temporarily withdraw my amendment.

Amendment, by leave, withdrawn.

Mr McCAY:
Corinella

– I desire to have some explanation in regard to the item “ Travelling expenses, £650.” I confess that I do not understand it.

Mr Reid:

– That is for the parliamentary circumnavigation of the Australian continent.

Mr McCAY:

– The peripatetic method again. I presume that the item refers to the travelling expenses of the adminstrative staff. It seems to me that the adminstrative staff will not have time to do their work, if they are allowed to spend £650 a year in travelling.

Mr Reid:

– It is a mere flea-bite to this department.

Mr McCAY:

– Without in any way attributing extravagance to the Minister, I must say that when I come to the Estimates of the Department for Home Affairs, I always look at the items, and the sums set opposite them.

Mr Salmon:

– The amount is £68 less than that provided last year.

Mr McCAY:

– That is a kind of negative merit. It may mean merely that the position is better than last year. The AttorneyGeneral’s staff is satisfied with £100, while the Treasurer allows his staff to have only £75 worth of travelling in the course of a year. I therefore cannot understand how the administrative staff of the Department for Home Affairs can require to travel so much.

Mr Watson:

– Does the amount include the cost of travelling by inspectors under the Public Service Act?

Mr McCAY:

– No; there is a sum of £1,500 provided for the expenses of inspectors under the Public Service Act whose business it is to travel.

Sir Malcolm McEacharn:

– And £400 for the public works staff.

Mr McCAY:

– I can understand the expenditure in the case of the sub-department of the public service and in the case of the Public Works branch, but not in regard to the administrativestaff of the department for Home Affairs. The Treasurer has a staff of sixteen officers, and he allows them £75 to travel. . Yet we find that an administrative staff of sixteen in the department for Home Affairs requires £650 to travel on. I should be glad to hear some of the items from tlie Minister, because this seems to rae, as at present advised, to be a very extreme amount.

Sir William Lyne:

– The honorable and learned member will see that it was £718 last year.

Mr McCAY:

– Yes ; but that does not prove anything, except that it was too much last year.

Sir WILLIAM LYNE:

– This amount is to cover official travelling in connexion with a great many, matters. I heard it stated the other night that Ministers received travelling expenses, but I know that I have received none. But when an officer travels with me upon official duties he gets his travelling expenses. These officers have had on many occasions to go to States to deal, with matters which have had to be inquired into on the spot, and the whole of the travelling expenses involved are included in this sum of £650. The honorable and learned member has said that £718 was too much to vote last year, and he will be glad to hear that we hope to be able to get through the present year with; less. A good deal of work has to be done in Sydney, and in connexion with one or two matters I have had to send officers over upon two or three occasions. I have had to borrow officers from Sydney in connexion with matters to be dealt with here. Their expenses backwards and forwards have had to be paid, and all those expenses come out of this amount which I consider reasonable for the department.

Mr McCay:

– It is equivalent to fifteen months travelling for one officer at a very generous rate.

Sir WILLIAM LYNE:

– I have not gone into that calculation, but honorable members will believe me when I say that a very great deal of care is exercised in preventing undue travelling expenses. After the votes have gone through my economical hands, I have a battle royalwith’ the Treasurer before I can get them through his hands. . Honorable members will therefore see that they are cut down as low as possible, and I hope they will not attempt to reduce this vote. I cannot at the present moment describe all the little matters connected with travelling, but officers have had to travel backwards and forwards to Sydney, and once or twice to Adelaide, and in doing so they necessarily incur expense.

Sir Malcolm McEacharn:

– Is there any scale of remuneration provided ?

Sir WILLIAM LYNE:

– Yes, the payments are all made in accordance with a scale.

Mr REID:
East Sydney

– I think the Minister will acquit us of any desire to make any special set upon his department, but there has been a great deal -of curiosity about this department of Home Affairs. It seems to embrace a great variety of matters, to which the honorable gentleman gives his personal attention, but which never appear upon any official list. I have been looking over these departments, and I find that this mammoth expenditure, £650 for travelling expenses is about three times as much as the military staff ask for in carrying out the work of our great military forces. If this vote of £650 is to cover the expenses of the scientific expedition which the Minister intends to carry out-

Sir William Lyne:

– Will the right honorable gentleman go ?

Mr REID:

– No.. I shall not be able to go, but I suggest that no expense should be spared upon matters of that sort. The Australian fisheries require special attention as well as the forts and fortifications along the shores of the continent. I hope the honorable gentlemen will enjoy himself very much, and I must say that if this item is intended to cover the expense of that expedition it is very moderate. But if it is intended to cover only the expenses of ordinary officials of the department, then, when I turn over the page, I find that the travelling expenses under the head of the Treasury department amount to only £75.

Sir William Lyne:

– Before the right honorable gentleman goes any further, I should like him to look at the travelling expenses of the head-quarters staff. I think he has made a mistake in connexion with that vote.

Mr REID:

– At page 40, I find a reference to travelling expenses in connexion with the Department of Defence,” “ Chief Administration,” “ Central Staff,” and “Secretary for Defence” - that should be the right place to look - and under the heading of contingencies, the vote for travelling expenses is set down at £250.

Sir George Turner:

– That is in connexion with the civil administration. The right honorable gentleman willfind at page 5 1 that the travelling expenses for the staff are set down at £1,170.

Mr REID:

– The vote to which I have referred covers only the travelling expenses of clerks?

Sir George Turner:

– Yes. The administrative staff.

Mr REID:

– Except under the head of “ Customs,” I find no amount which approaches this £650 for travelling expenses. Is the department of Public Works in full operation yet?

Sir William Lyne:

– No.

Mr REID:

– Is it provided for in these Estimates?

Sir William Lyne:

– Yes.

Mr REID:

– Will this amount for travelling expenses include the travelling expenses of officers employed in connexion with the department of Public Works?

Mr McCay:

-No.There is £400 provided for them.

Mr REID:

– If they are specially provided for I think that this item of £650 can be cut down by at least one - half. Another item which calls for some notice is the £679 for office cleaners. I am astonished that the Minister for Home Affairs, who stands forward as the champion of the other sex, and who has received various touching testimonials from women, should actually pay his women cleaners only half the salary paid to male cleaners. I admit that at ordinary tradesmen’s work a man may do twice as much as a woman, but I will guarantee that a woman can do twice as much office cleaning as a man any day. Why, therefore, should they be paid only half the salary? In connexion with an occupation which is essentially suited to the sex, it is a degrading and humiliating spectacle that the Minister should be sweating the women in his department down to half the wages which men are receiving for doing the same work. I think it is right that I should call attention to the unchivalrous conduct of that gentleman in this respect. The total amount for the department is £6,400, and if we take off £2,500 the department will get a fair staff.

Mr POYNTON:
South Australia

– The way in which this department is growing is alarming. I find an increase of £2,408 for the administrative staff, and an increase of £1,199 for the electoral office.

Sir George Turner:

– We are providing in these Estimates for a full year, whereas in last year’s Estimates we provided only for portion of a year.

Mr POYNTON:

– Then the office of Public Service Commissioner, which is practically a new department, involves an increase to the enormous extent of £10,187. There is an increase of £9,467 for the public works staff, and an increase of £6,270 for works and buildings. Then, under “ Miscellaneous,” there is an increase of £34,965, and that, I notice, includes the cost of compiling the new electoral rolls. It is clear that the Minister is not justified in saying that he is trying to economize when we find the enormous increases to which I have referred in the department; which is under the honorable gentlemen’s careful supervision. The fact that this is new expenditure, but emphasizes the remarks which I made before to-night on the question of the State finances. The expenditure in connexion with this department, under the present administrator, is increasing by leaps and bounds, and it is hard to say where it is going to stop. I notice that the £35,000 for electoral expenses is classed as “ new “ expenditure.

Sir George Turner:

– It is clearly “ new expenditure.”

Mr POYNTON:

– The effect will be that States in which practically none of this money will be expended will have to pay their share of the amount on the population basis.

Sir George Turner:

– It is just the same as the expenses of the election itself. We shall all have to pay on a population basis for that. A large proportion of this amount will be spent in the printing of rolls and that sort of thing.

Mr POYNTON:

– I fail to see how the department is going to spend £35,000 on the preparation of the electoral rolls.

Mr Reid:

– Leave it to the Minister; he will do it.

Mr POYNTON:

– I am not as anxious to leave everything to the Minister as the right honorable gentleman is. While the Minister says that he insists upon economy, he does not show any evidence of it in his work. I fail to see why an expenditure of £35,000 should be necessary for compiling new electoral rolls.In South Australia, very little expense will have to be borne on this account, as the work to be done willbe practically a reprint of the rolls in existence at the present time. . The work generally should be only a compilation from the census returns, unless the Minister, in his anxiety for economy, proposes to send around a number of men to collect new names. I do not wish to say anything about the votes for travelling expenses. The total is very large, because it includes not only the sum of £650, but items of £300, £400, and £1,500. I believe that we shall be perfectly safe in cutting down the vote for the department by £15,000, and I propose to test the opinion of the committee on the point.

Sir WILLIAM LYNE:

– The fust recommendation which was made by the Acting Electoral Commissioner was that a sum of £45,000 should be provided for expenses in connexion with the introduction of the Electoral Act. I pointed out to him that in South Australia, Western Australia, and New South Wales there could not possibly be as large an expenditure as he anticipated, because’ we shall use the State rolls to a very large extent, of course, with the concurrence of the States. All we shall have to do with the State rolls will be to group them in divisions. In New South Wales, the estimate of £9,000 includes £4,974 for COSt of printing rolls, £121 for advertising courts, ls. per day allowance to police in cities and towns, and 2sv per day to mounted police in the country. The cost of registration and administration is not included in the estimate. In Queensland, the estimate of £8,151 includes for cost of administration and £2,761 for cost of printing rolls. There must be a branch of the service in that State for the purpose of collecting the rolls, because the work cannot all be done from one centre. In Western Australia, the estimate of £7,746 includes the cost of holding courts, and printing. The estimate for the cost of printing the rolls has had to be increased, because we must have rolls in nearly all the polling places, in consequence of electors being allowed to vote at any polling place in a division for the House of Representatives. The estimated expenditure for South Australia is very low - £200 for revision courts and £500 for registrars - because, practically, the State rolls will be used. In Victoria, the estimated cost is £17,000. I have not the figures for Tasmania. In Victoria and Queensland the rolls will have to be made ‘ up, because, there is no adult suffrage. It will cost just as much to get the Federal rolls together there as it costs to prepare the State rolls, and that is why it is that those two large States will absorb £25,000 out of the vote of £35,000.

Mr Page:

– Will not- the roll be taken from the census?

Sir WILLIAM LYNE:

– Yes, as far as it can be done. The roll will not be made until two years after the census was taken. In the meantime, the population may increase or decrease in various parts of a State. We cannot have a fair or reliable roll unless we can revise the State roll as well as use the census. I have no desire to swell this amount. I took the trouble to go into the question, and I reduced the first estimate by £15,000. If all the money is not required, it will not all be spent, but we must not be left without money. The rolls should be compiled quickly after the Electoral Bill becomes law. When that measure is brought into operation the federal rolls will be found to contain a larger number of electors than did the State rolls in consequence of its liberal provisions in every way. I hope that honorable members will accept my assurance that this estimate has been cut down as low as possible.

Sir LANGDON BONYTHON:
South Australia

– I wish to ask the Minister for Home Affairs whether it is a fact that under the arrangement South Australia is to contribute £3,500, and to have only £700 expended therein ? I am very much surprised at the smallness of the amount required in that State.

Mr. McCAY (Corinella). - The honorable member for Kalgoorlie asked a question the other day with regard to the item “ Conveyance of Members of Parliament and others,” and I understood the Minister to say that he would furnish some information on the subject when his Estimates were reached.

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

– I will when I come to that item.

Mr McCAY:

– The gain may be very much outweighed by the popular dissatisfaction created by the expenditure of the money.

Mr Wilks:

– That is to defray the travelling expenses of honorable members to and from their districts.

Mr McCAY:

– It is required to provide honorable members, among other things, with passes over all tlie railways of Australia.

Sir George Turner:

– That costs £6,600, to begin with, and then there are the coach and steamer fares to be paid.

Mr McCAY:

– I believe that the States have no cash outlay in connexion with the provision of passes for their Members of Parliament.

Sir William Lyne:

– In New South Wales we used to pay £32,000, and it was reduced to £25,000.

Mr McCAY:

– This cash expenditure by the Commonwealth comes under the term of “ other expenditure “ and is payable on a population basis. I think it should be kept down as low as possible. I confess that if occasion offers I shall use my pass, but I never could see what justification there was for honorable members to have a pass over all the railways of the Commonwealth. I think that an honorable member is entitled to be conveyed all over his constitutency, and from the seat of government to his constituency and home. We should be very chary in incurring this expenditure, for the reason that a great many electors attach to it an importance which. to my mind is much greater than it warrants.

Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

– It is a wonder that the honorable and learned member ever took the allowance of £400 a year. He is too sensitive.

Mr McCAY:

– It is not a question of being personally sensitive upon the matter, but a question of how it affects the estimation in which this Parliament is held. I hold that the unwarranted odium which is caused to Parliament by an expenditure of this kind far outweighs the possible advantages to individual members, and that consequently we should exercise the utmost care in passing such items.

Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

– The honorable and learned member thinks that a Member of Parliament ought to know nothing about Australia.

Mr McCAY:

– I do not think that a Member of Parliament, either in the Commonwealth or in a State, expends a large amount of time in travelling over Australia or his State for purposes directly connected with his legislative work.

Mr Fowler:

– Supposing a Member of Parliament lives in a suburb of Melbourne, does he travel in connexion with official duties when he comes here?

Mr McCAY:

– I lay down the general rule that universal picnics are not desirable. 46 c 2

Mr Conroy:

– If the honorable and learned member had to travel to and from Sydney once a week he would not consider it, a picnic.

Mr McCAY:

– If the honorable and learned member had listened to me, he would know that I specially exempted cases such as he refers to. I recognise that we could not adequately reward honorable members for the inconvenience to which they are subjected in travelling between their homes in Adelaide or Sydney and Melbourne by any salary which we could expect the people of the Commonwealth to pay. I am objecting to the proposed expenditure upon a special trip to Western Australia, because I think it is right that honorable members, unless they are travelling strictly upon legislative business, should pay their own expenses.

Sir WILLIAM LYNE:

– I have listened to the speech of the honorable and learned member for Corinella with some regret, because he takes a very broad view of most subjects, and his speeches are listened to with great attention. If the honorable and learned member had to live in the north of Queensland, or in Western Australia, and had to travel from those States to Victoria to discharge his parliamentary duties, he would find it absolutely impossible to defray his own expenses.

Mr McCay:

– I said distinctly that the cost of conveying honorable members to and from Melbourne should be paid by the Commonwealth.

Sir WILLIAM LYNE:

– I did not quite understand the honorable and learned member on that point. He said, however, that an importance which was wholly unwarranted was being attached to this subject. I do not know what importance is attached to it in Victoria, but I know that in New South Wales - and I think also in other States - it has been the practice for a great many years to pay a large sum of money for the conveyance of Members of Parliament and their wives upon the railways. At one time the sum of £35,000 was appropriated for this purpose in New South Wales, but it was subsequently reduced to £22,000 or £25,000.

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

– That included the expense of conveying distinguished visitors over the railways.

Sir WILLIAM LYNE:

– There were nob many distinguished visitors to be paid for. Provision was made in .that amount for passes which were-‘ issued to honorable members’ wives for one month during the year.

Mr Reid:

– The cost of conveying school children was also provided for in that sum.

Sir WILLIAM LYNE:

– 1 think not. I. am speaking from memory only, but I believe that the cost of conveying school children over the railways represented a much larger amount. At all ‘ events, a large sum of money is appropriated at the present time for the purposes to which I have referred. If it is right that honorable members should have every opportunity to become acquainted with the conditions existing in every State; now is the time that facilities should be afforded. A large number of honorable members are acquainted only with the State which they represent, and yet they are called upon to legislate for the whole Commonwealth. I feel, therefore, that it would be good policy for us to afford every opportunity to honorable members to visit during the recess any States with which they are not acquainted. More money will be saved to the Commonwealth by adopting this course than by compelling members to remain in ignorance of what is required in other parts, unless they are prepared to pay their own travelling expenses.

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

– That is right. The more we spend the more we shall save.

Sir WILLIAM LYNE:

– In this particular case the more we spend within reason, to enable honorable members to understand the subjects upon which they are required to legislate, the better it will- be for the Commonwealth. The expense involved will be a mere bagatelle compared with the amount which may be saved in connexion with some of the items honorable members are called upon to consider, and it must be remembered that every year we have to deal with an increasing volume of work and a larger expenditure. I feel very strongly, also, that it would be niggardly on our part’ to prevent honorable members’ wives from going to and from any part of Australia. In most cases the free travelling of honorable members’ wives has been confined to the one trunk line to and from the home, but I do not think that even this restriction should be continued, because no abuses are likely to occur. The money which we spend in this direction is being contributed to the railways of the various States.

Mr Wilks:

– And is being kept in the country.

Sir WILLIAM LYNE:

– It is being kept in the country ; and it is not to be placed in the same category as that which is sent abroad for the payment of interest on loans. I am not interested in this matter personally, because I have used my own pass, and nothing more. The members of my family have not- travelled one yard on the railways at the public expense. I think, however, that it is highly improper that there should be any carping at the expense involved in bringing honorable members’ wives from other States to Melbourne, when we consider the long distances honorable members have to travel, and the great expense -to which they are put. Some sarcastic remarks have been indulged in with regard to the proposal to afford facilities to honorable members for travelling to the various States during recess. I may mention that I have already received a telegram from Western Australia heartily approving of the proposal, and making certain suggestions with reference to it, and I know that a similar feeling will be evinced in the other States.

Mr Reid:

– Hear, hear. Even the people of New Guinea are looking out for us.

Sir WILLIAM LYNE:

– The amount voted last year was £10,000 ; but all that has not been spent, because a balance of about £1,000 remains. Honorable members will, therefore, see that we have not spent the money lavishly. I propose, and I am sure my colleagues will agree - unless the committee determines that honorable members and their wives are not to be permitted to travel free from State to State - to follow the course which’ has been pursued in the past, and which was adopted fit my instance.

Mr. REID (East Sydney).- I think that after the manly, patriotic, and generous address we have heard from the Minister, all opposition to these Estimates should be withdrawn.

Mr KIRWAN:
Kalgoorlie

– I am very glad that the Minister takes such a liberal view of the proposal which I recently placed before him. The honorable and learned member for Corinella, and one of the daily newspapers of Melbourne, have referred to the proposal as another example of extravagance ; but I do not think they have fully considered the need which exists for affording honorable members opportunities to acquaint themselves with the requirements of the Commonwealth. What I suggested, was that during recess honorable members who desire to visit Western Australia should be supplied with free passes by the steamers trading between Adelaide and Fremantle. I ‘ also mentioned that whilst I was in Fremantle a few weeks ago I saw the Premier, and other members of the State Ministry, and many other prominent citizens, all of whom were delighted at the prospect of seeing as many members of this Parliament as could visit them during recess. The honorable and learned member for Corinella, and other Victorian members, should remember that the representatives of all the States have to come to Victoria. During the eighteen months we have been here, we have had ample opportunities for learning all about the resources and requirements of Victoria ; but honorable members have not had equal facilities for acquiring knowledge regarding the resources and needs of Western Australia. That State lies out of the ordinary track of most honorable members, and surely those who desire to visit it during the recess, should have every facility offered to them. It must be remembered that if the Government are true to their promise, the subject of the transcontinental railway from South Australia to Western Australia must be discussed during next session.

Mr Poynton:

– That work will have to be constructed out of loan moneys, I suppose.

Mr KIRWAN:

– The question of- whether or not that work should be constructed out of loan funds was not considered in connexion with the vote recently taken. Honorable members would probably take an entirely different view if a work of a distinctly national character were proposed. Honorable members have made extensive trips into New South Wales in order to discover the most ‘suitable site for the federal capita], and I believe that the money spent in defraying their expenses was well applied. In connexion with the transcontinental railway also, I feel satisfied that honorable members will be assisted in arriving at a proper decision if they have an opportunity of judging for themselves as to the progress recently made in Western Australia, and the absolute necessity for uniting that State by railway with the .other States. I hope honorable members will agree to the proposal of the Minister, and that a.11 those who can visit Western Australia will do so. I am quite sure they will receive a hearty welcome from the Government and the residents of that State. The expense incurred by the Commonwealth will not be very great, but the visit of honorable members will probably result in benefit, not only to Parliament, but to the State of Western Australia and the Commonwealth generally.

Mr WILKS:
Dalley

– As this matter has been brought prominently forward by the honorable and learned member for Corinella, I think it is only right that it should be presented in its proper light, and that the electors should thoroughly understand what a good bargain they have made. The Minister for Home Affairs says that there still remains in hand £1,000 of ‘the £10,000 voted last year to defray the travelling expenses of honorable members. That proves in the first place that there has been no abuse. In the next place I contend that the amount set down is a very small sum for the conveyance of members of the House of Representatives and of the Senate to all parts of Australia. If the suggestion of the honorable and learned member for Corinella had been adopted, the cost would have been a great deal more. Personally, I have travelled 68,000 miles on the railways during the last seventeen months, and my travelling has been less than that of a few other honorable members. Surely the honorable and learned member.for Corinella would not ask those of us who live in other States to walk to our homes, or expect those who represent Tasmania to swim there ? I might point out to the Minister for Home Affairs that the right honorable member for East Sydney has Lord Howe Island in his electorate, but no provision is made for paying his travelling expenses there. Surely the Lord ‘Howe Islanders might expect to hear an occasionaladdress from him. Too much is being made of expenses like this. The public do not expect their representatives to travel all over the continent at their own cost. I shall not be able to afford to travel to other parts of Australia in the recess, and I certainly shall not travel for pleasure. In a long session such as this has been, most of us have had more than enough railway travelling, and are not likely to pass our time in railway carriages for our own entertainment. A railway journey may be a very pleasant thing to the honorable and learned member for Corinella, whose private residence may be in Bourke-street, or somewhere near at hand, but those of us who have to make long journeys twice every week view the matter very differently. I do not agree with the Minister for Home Affairs that members’ wives should be conveyed free. It is, however, well that this matter has been referred to, so that it can be put in a clear light before the public.

Mr SAWERS:
New England

– I wish to know, in regard to the amount of £500 which is put down for the compilation of the Seven Colonies of Australasia, when the publication of the work is to take place ?

Sir George Turner:

– The work is nearly completed. The amount set down here was not expended last year, and is being revoted.

Mr SAWERS:

– When I was a member of the New South Wales Parliament I used to receive a great deal of statistical information, which is not sent to me now. Will the work, when published, be posted to honorable members 1

Sir WILLIAM LYNE:

– As I pointed out on a former occasion, the Seven Colonies of A Australasia is a work which was formerly compiled by the Government statistician of New South Wales at the expense of that State ; but, as the New South Wales Government was indisposed to continue the publication, I induced my colleagues to put this sum upon the Estimates to provide for the work being done by the Commonwealth. I believe that it is nearly completed, and the moment copies are ready they will be distributed to honorable members.

Mr CONROY:
Werriwa

– I think that the amount set down for railway travelling is a very proper one, and I trust that the committee will support it. I do not think that it is any too large. It would be a good thing for the Commonwealth if honorable members could make themselves better acquainted with the conditions of States other than their own before legislating concerning them: The Premier of Queensland was verv anxious that members of this Parliament should visit that State before passing certain legislation which seriously affected Queensland, and it has since been urged that had they done so that legislation would not have been passed. Similarly in the future we may be called upon to pass legislation specialty affecting, say, Western Australia or South

Australia. At any rate, honorable members will continually be asked to vote upon measures affecting States other than those which they represent, and it is, therefore, desirable that they should visit them. I do not think, however, that many of us will make railway trips for pleasure during the coming recess. Our expenses during the session have been so heavy that, if we include our election expenditure, they will not be covered by our allowances. Most of us, therefore, will have to devote the whole of our energy during the recess to getting back our lost incomes. I shall have nothing but commendation for the man who is so patriotic as to incur further expense in visiting other States. Even if honorable members did travel merely for pleasure, they could not help deriving instruction and information from their journeys at the same time. I did not understand the honorable and learned member for Corinella to suggest that railway passes should not be given to honorable members. Perhaps if there had been no passes some of us would have been better off, because we should not have been expected to travel here so frequently. The honorable and learned member only pointed out that certain expenses were being incurred which he did not quite agree to, and it was quite competent for him to do that. The amount set down for railway travelling is really very small, and I shall certainly vote for the item.

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

– I think that it is of the greatest importance that the Commonwealth should have a statistician of its own at the earliest moment. The compilation of statistics affecting the Commonwealth and the States should be under our own control, and the information when compiled might be made available to both Commonwealth and States authorities.

Sir William Lyne:

– The matter has been discussed by the Cabinet, but it was considered that it would be necessary to pass an Act before we could do what the honorable member suggests.

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

– I do not see why the passing of an Act should be necessary, but in any case, the arrangement should be made as soon as possible. The last edition of the Seven Colonies of Australasia does not contain figures of a later date than 1900, and I am glad to hear that a new edition is shortly to be issued. The work has been of immense value to us in the discussion of

Commonwealth affairs, and has indeed become an absolute necessity, but there is still a great deal of detailed information which we cannot obtain from it, and for which we have to search the Statistical Registers of the States. The sooner all statistical information is collated by a Commonwealth bureau, the better it will be for everybody. lt will mean more expense to the Commonwealth, but it will result in savings to . the States, and, I think, bring about more accurate and complete compilation.

Mr O’MALLEY:
Tasmania

– I I have great sympathy with the Minister for Home Affairs in regard to the criticism which has been levelled against the item providing for the travelling expenses of members. If we listen to the Age and’, the Argus in these matters we shall be coming here dressed as Adam was in the garden of Eden. They growl at every expense which is incurred by this Legislature, however necessary it may be. They want Members of Parliament to be clothed almost in the primitive fashion of “Tiger Cat,” an Indian chief, who was captured in Arizona in 1885, and whose first question was - “ What do they think of me in Kew York ?” Here every little item in connexion with travelling expenses has to be accounted for. Yet a member of the United States Congress draws £1,000 a year, and is allowed £350 for expenses. Further, there is a Bill before Congress at the present time to increase that salary to 2,000 guineas. Of course, all this money is not spent upon the gilded-spurred, high-toned roosters. A little of it is reserved for the people. Did honorable members come here to be told that the veriest details of expenditure are to be set out in these Estimates? I have the greatest resepct and sympathy for the representatives of Victoria. The deluge of my compassion flows out to them, because when they rise to speak I always know that they have to dance to a certain tune.

Sir Malcolm McEacharn:

– Surely that is very insulting.

Mr O’MALLEY:

– I - I will withdraw the remark and put it another way. When brother Jasper in Virginia was describing the electric telegraph to the scared negroes he said - “ Well, brethren, if we had a dog long enough to have his tail here and his head in San Francisco, when I pinched his tail here lie would bark in San Francisco.” That is exactly the position here. The Age and Argus pinch the tails of the Victorian representatives in Collins-street, and they bark economy in this Parliament.

Mr FOWLER:
Perth

– I wish to congratulate the Minister for Home Affairs upon his vindication of the right of honorable members to put themselves in such a position that they will be able to legislate intelligently for the whole of the Commonwealth. When the honorable and learned member for Corinella was speaking I interjected once or twice with a view of discovering exactly the form of travelling expenses to which he objects. I find that he objects particularly to an alleged pic-nic by some honorable members who may wish to visit Western Australia. I am aware that the term “ pic-nic “ is applied to all travelling undertaken by members of this Parliament by a certain section of the Victorian press. At the same time, I very much regret that that cry has been raised in this Chamber. I can assure the honorable and learned member for Corinella that the people of Western Australia will not regard any visit to that State by .the members of the Commonwealth Parliament as partaking of the nature of a pic-nic. They will regard it as a visit which ought to be made by every member of this Parliament who has not previously been in that State. My honorable colleague has alluded to the question of the construction of the trans-continental railway. At a very early date we are hopeful that that subject will be discussed by this House. It is one which is very dear to the hearts of all residents of Western Australia, and I do not think I am exaggerating when I say that the hope of having that railway built was one of the principal reasons which induced Western Australia to join the Federation. Under the circumstances, it is only fair to expect members of this Parliament to discuss that question with some knowledge of local conditions. The representatives of Western Australia are perfectly willing that it should be discussed absolutely upon its merits. But, I ask, is it possible for such an important matter to be debated in an intelligent way by people who have not. visited that State? If Western Australia were merely a barren desert, containing a few gold deposits here and there, there possibly might be some justification for refusing to undertake the construction of that line. But we are perfectly willing to allow honorable members to ascertain for themselves whether the demand for its construction is a reasonable one - whether it is likely to prove a financial success, or a burden upon the Commonwealth. All that we ask is that honorable members shall be enabled to bring some local knowledge to bear upon the discussion of that matter. I will go so far as to say that if .this Parliament seriously objected to any expenditure which might be incurred in respect of honorable members visiting Western Australia, the Legislature of that’ State would be only too glad to bear that expenditure.

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

– We could not allow that.

Mr FOWLER:

– I hope that this House will be sufficiently seized of the justice of tlie request to render it unnecessary for the State Legislature to bear any expenditure in this connexion.

Mr. POYNTON (South Australia). - I think that the Minister for Home Affairs should be very grateful to the honorable and learned member for Corinella for directing the trend of the debate from the real subject at issue. Personally, I do not intend to lose sight of the main feature connected with these Estimates. I want a good deal more information than has yet been given in respect of a number of items relating to office fittings and furniture. I would point out that an amount pf £11,463 is provided for that purpose, and that of the total vote for Division. No. 22, £6,323 is “new “ expenditure.

Sir William Lyne:

– To what item does the honorable member refer 1

Mr POYNTON:

– I am referring to the total under “ Works and buildings,” on page 23. I would further direct attention to the fact that the sum of £2,850 is provided for “ travelling expenses,” and an additional £1,050 for “incidental and petty expenses.”

Sir William Lyne:

– The item of £1,500 for travelling expenses in the department of the Public Service Commissioner covers the travelling expenses of the inspectors who have to visit the other States for the purpose of regrading the service.

Mr POYNTON:

– Then I should like to know what is meant by “ temporary assistance 1”

Sir George Turner:

– It means that instead of employing clerks who hold permanent appointments, when there is rush of work - as there was in connexion with the preparation of my Budget statement - temporary hands are engaged.

Mr POYNTON:

– The Estimates for the department for Home Affairs differ very materially from those of other departments. To my mind, there is ample room in’ them for affecting a considerable reduction.

Sir William Lyne:

– Will the honorable member refer to specific items 1

Mr POYNTON:

– I would direct the Minister’s attention to the amount of £650 which is set down for “ travelling expenses “ under subdivision (2) of division 18. Immediately beneath it is a sum of £200 for “ temporary assistance.” Then, again, under subdivision (2) of division 19 appears an item “ Travelling expenses, £300,” another of “Temporary assistance, £300,” and a. third of “ Incidental and Petty expenses,. £50.” Similarly on page 21 the large amount of £1,500 is provided for travelling expenses in connexion with tlie department of the Public Service Commissioner, a further sum of £500 for “ temporary assistance,” and still another amount of £750 for “incidental and petty expenses.” The items relating to office fittings and furniture to which I have already referred appear on pages 22 and 33,. but the total amount is given on page 23.

Sir W illiam Lyne:

– The honorable member forgets that that sum is for the whole of the departments of the Commonwealth.

Mr POYNTON:

– The figures show that the new expenditure is increasing by leaps and bounds.

Sir George Turner:

– But we must furnish our new offices.

Mr POYNTON:

– That is so ; but we require a lot in addition to mere furniture. Then, again, I was under the impression that we had paid the cost of tlie Parliamentary inspection of the capital sites. But I see that on page 24, there is an amount of more than £1,000 provided in this connexion.

Sir William Lyne:

– That is to defray the expenses of the board of experts which is to be appointed to report upon the eligible sites.

Mr POYNTON:

– Are we to understand that that is the total amount to be expended upon the board ?

Sir William Lyne:

– There is another item upon the Estimates to cover the expenses of the board which will be asked to value the properties taken over by the Commonwealth.

Mr POYNTON:

– The Minister is now giving me information which honorable members could not obtain the other night I asked the other night what would be the expenditure in connexion with the visit of the experts to the proposed federal capital sites, but the Minister could not give me the amount. We now understand that the total expenditure on this score is estimated at £1,500, and I shall be delighted if that prove the maximum.

Sir William Lyne:

– I hope that will be the maximum ; it is as near the amount as we can guess.

Mr POYNTON:

– I do not think that the Minister would tie himself down to that amount. I move -

That the vote, “Administrative staff, £6,411,” be reduced by £2,000.

Mr MAHON:
Coolgardie

– Any criticism of the Estimates should be reasonable, and honorable members ought to attack only such items as warrant attack. I do not propose to refer to matters which have already been dealt with, and shall only call attention to the item - “Bank exchange payable in respect of the business of the department within the Commonwealth, £25.” Although the amount in this case is small, if honorable members look through the whole of the Estimates, as I have done, they will find that bank charges in the various departments total nearly £7,000.

Sir George Turner:

– I know these charges come to a considerable sum.

Mr MAHON:

– I cannot understand why some of these departments should have any bank charges at all. Why should the Customs department, when a merchant pays duty on goods, not insist on that merchant adding the bank charges to the cheques? Could not the Postal department, with its money order office and saving bank, discharge the functions of a bank, and thus save these charges?

Sir George Turner:

– All moneys must be paid into banks, unless, as may ultimately be done, we make the Commonwealth Treasury the bank of the Commonwealth to deal with all the Commonwealth’s own funds. We cannot do that at once, because we want some experience.

Mr MAHON:

– When a cheque is received by a Customs officer, say in Fremantle, why can it not be paid to the Commonwealth account in the local Post-office

Savings Bank, or money order office, and credit given in the same way as is done by a bank? It is very seldom that banks transmit coin, they rarely, if ever doso in individual transactions ; there is merely a letter written from the branch to the head office, and, under the circumstances, it seems ridiculous that in this connexion the Commonwealth should be put to the expense of £7,000 a year.

Sir George Turner:

– We are dealing with £11,000,000 receipts,and £11,000,000 expenditure, and we must pay some exchange ; we cannot expect the banks to do the work for nothing.

Mr MAHON:

– But how much coin actually passes from one State to another?

Sir George Turner:

– Banks charge exchange on cheques to all their customers, and the Commonwealth is only an ordinary customer.

Mr MAHON:

– And a great piece of extortion it is on the part of the banks. For instance, they charge from 1½ to 2 per cent. exchange between Melbourne and the gold-fields, when all that is done is merely to write a letter.

Mr Salmon:

– A State bank is the only remedy.

Mr MAHON:

– Not at all ; there is a remedy without setting up a State bank.

Sir George Turner:

– We use adjustment to the fullest possible extent in order to save exchange. We have large amounts to remit to the States from time to time, but we do not bring the money to Melbourne and send it away again, but get one State to remit to another.

Mr MAHON:

– In view of the expenditure of £7,000, the adjustment does not seem to be very successful.

Sir George Turner:

– As soon as I can get an opportunity in recess, I propose to look into the whole question of exchange.

Mr. McDONALD (Kennedy).- I quite agree with the proposed reduction of the amount in this division. There is provided for here a secretary at £750 per annum, a chief clerk at £600, a chief accountant at £550, and a senior clerk at £450. The sixteen clerks employed in this branch are paid a total of £4,022, and of that amount the four first receive £2,350. This department could be run much more cheaply, and I hope that if the amendment be carried the outrageous salaries of some of these gentlemen will be reduced.

Mr Mahon:

– These officers had to be obtained from the States departments.

Mr MCDONALD:

– When the department was being organized there was no need to get officers at these expensive salaries, seeing that at present there is not a considerable amount of work.

Sir William Lyne:

– I beg the honorable gentleman’s pardon ; the officers have more work than they can do.

Mr MCDONALD:

– I should like some further information as to the amount of work. Whenever an attempt is made to reduce estimates in the way proposed, honorable members are told that the officers have more work than they can do; but when popular feeling is expressed it is generally ascertained that not only are the men not overworked, but that a considerable number can be dispensed with. It is simply ridiculous to think that the officers in this new department are overworked, but if they are they should be paid smaller salaries and more men should be engaged. It is quite evident to me that it is the men with the small salaries, and not those at the head, who do the work.

Sir WILLIAM LYNE:

– I cannot allow the remarks of the honorable member for Kennedy to go uncontradicted. I am sure that had the honorable member known what work is done in the department by the officers he has mentioned he would not have spoken of them in the way he has done. I altogether differ from the view taken by the honorable member, and hold that the best policy is to pay men reasonably and make them work well. The officers in this department do their work efficiently, and are not paid salaries that are too high. Except it may be in the small States, it is scarcely possible to find a similar department in which such low salaries are paid.

Mr McDonald:

– There is a good deal of extravagance in the States.

Sir WILLIAM LYNE:

– The honorable member has said that when there is a public outcry, it is usually found that the men are not overworked, and that it is easy to reduce their number ; but the little outcry I have heard through the press on one or two occasions has not affected me in that way. On the contrary, I have found that the officers in this department work very hard, as is shown by the fact that during the last six or eight months they have worked until eight and ten o’clock night after night. I hope honorable members will not take the view that the proper policy is to pay officers such salaries as compel them to live in a condition of genteel starvation. I have always held that the best officers are obtained when in return for good work they are well paid, and I hope the item will not be reduced in the way proposed. Indeed, if the amendment be adopted, I do not know how I shall be able to carry on the department. Honorable members forget that the Home department is probably the largest in the Commonwealth, and has the most subjects to deal with. A.nd, further, it must not be forgotten that we are not dealing with one State, but with the whole of the Commonwealth. That makes a vast difference in the volume of accounts and papers which pass through the department’ in the course of the twelve months. All this tends to make the department appeal- large, but I am sure honorable members will take my word that there is no extravagance, and that the officers do their work well and creditably for salaries, which cannot be described as too high. When the officers do their work earnestly and efficiently, we should stand by them and see that their salaries are not reduced below a figure on which they can reasonably live.

Mr. MCDONALD (Kennedy).- I do not wish it to go forth that I desire to pay any body of men miserable wages. I have merely pointed out that of the sixteen officers in this division, four of them draw nearly two-thirds of the total amount paid in salaries. ‘ If any miserable wage is paid is it not paid to the other twelve clerks?

Sir William Lyne:

– That is not so.

Mr MCDONALD:

– The Minister seems quite prepared to battle for those officers who receive salaries ranging from £450 upwards, but does not show much energy in any effort to obtain better terms for the clerks below that rank.

Sir William Lyne:

– The honorable member never knew me to attempt to underpay any officers.

Mr MCDONALD:

– It is useless for the Minister to try to make out that there is such an enormous amount of work. I do not wish to reflect in any way on the gentlemen who fill tlie higher positions to which I have referred, but I certainly think that the amounts paid to them are too high. The secretary is fairly paid at £750 a year, but I think that the salary of the chief clerk might well be reduced to £450 or to £500, that of the chief accountant to £400, and that of the senior clerk to £350. It appears to me that when the department was established due regard was not paid to economy. The secretary should be a man qualified to supervise, but all the others I have mentioned do mere clerical work. In my opinion, the clerk who is paid £250 does just as important work as that done by the chief clerk with £600.

Sir MALCOLM McEACHARN:
Melbourne

– I think it is too much to ask the committee to reduce this division by £2,000, though there is some reason for the comments made by the honorable member for Kennedy. It is essential that the chief man should be paid a good salary, but I do not see the necessity for four or five clerks at the high salaries here proposed. However, it is difficult to get really good men, and the Minister must have the best men obtainable.

Mr MAUGER:
Melbourne Ports

– I am anxious to be as careful as possible in regard to expenditure, but if we adopt the amendment we shall be proceeding in a haphazard fashion. We shall not know who will suffer by the reduction, and it is possible that the very men whom it is desired to serve may have to bear the brunt. We agreed to these salaries on the last Estimates, and should not attempt to deal with them in this way now. I quite recognise that if vacancies occur, the Government should be careful about making fresh appointments. The honorable member for Kennedy will not pretend that he knows anything about the duties which have to be carried out by the officers of the department. He can only make haphazard suggestions. I am anxious to reduce expenditure, but we should know the consequences of the votes we give. It is unfair to attack salaries in this random way. I would not be a civil servant under present conditions for three times the salary most of them receive. Either the Minister in charge knows the requirements of his department, or he has no right to be in his present position. To take off £2,000 without knowing the effect of the reduction would be to act in a way that is anything but statesmanlike.

Mr. MAHON (Coolgardie). - I could not support a motion to reduce these Estimates by £2,000. The. arguments advanced in regard to some of the salaries paid should rather be directed towards the removal of the Government from office, because if we cannot trust the Minister, who is responsible, and should know how much every officer is worth, he should be shifted. That is the logical course to take, not to reduce the Estimates haphazard by a lump sum without knowing whether the officers are worth so much money or not. The only comparison we can make which will throw any light whatever upon the present position is to compare the department with any great banking institution in Australia. Do honorable members mean to say that no chief accountant or chief clerk in any banking institution in Australia receives £600 or £550 a year? The suggestion is absurd. The chief men who control the business of these great institutions are highly-salaried officers.

Mr McDonald:

– But some of them have to control £8,000,000 or £10,000,000. whilst this department spends less than £100,000.

Mr MAHON:

– The Home department deals not only with money, but with other very important matters also. A really good man in this department could save his own salary on a few transactions.

Mr McDonald:

– The head of the department ought to do that.

Mr MAHON:

– The head of the department is the responsible Minister, and if he cannot be trusted to see that the men who receive these salaries earn them, the proper course for Parliament to take is to shift him. It is not true economy to make reductions such as are proposed.

Mr SALMON:
Laanecoorie

– I cannot agree with either of the last two speakers. The honorable member for Melbourne Ports says that because we have previously discussed these salaries we should not criticise them again. If that contention be correct, it isof no use to bring these Estimates before the committee at all. There is one new position in these Estimates, and that is that of senior clerk and secretary to the Minister.

Sir William Lyne:

– The salary was on the previous Estimates, but to save expense the money was not paid.

Mr SALMON:

– I thought this was a new appointment. There is an anomaly in connexion with some of the departments. The head of the Home department receives less than the heads of some other departments, but there are officers immediately following him who receive more than the salaries paid to similar officers in other departments. No doubt there has been a great amount of work to do in the Home department, but surely the work done by the accountant does not exceed that done by the accountant in the Treasury who has to check the accounts of all the other departments. Yet the accountant to the Treasury is to receive but £420, whilst the accountant to the department for Home Affairs receives £550. Then, again, the Chief Clerk of the Home department receives £600 a year, whilst the Chief Clerk in the Treasury receives little more than half, namely, £335. Is the work more arduous in the Home department than the Treasury? I do not think so. . In the absence of any specific statement from the Minister that the Home department officers have more work to do of a more intricate character, requiring greater ability, experience, and industry, my opinion is that there should not be these differences between the officers in respective departments. It is quite right that the Commonwealth should pay good salaries. The Commonwealth service should be the cream of all ‘the services of Australia, and we ought to get the best men, but should exercise the greatest possible discretion in respect of the number of officers employed. That is where the great danger arises. I am sorry to see the increase of numbers in some of the departments. The Minister has said that his department will, expand more than any other. I quite believe him, but I enter my protest against the multiplication of officers.

Mr. SYDNEY SMITH (Macquarie).Every honorable member is desirous of exercising the strictest economy in the Commonwealth offices. We have taken a great deal of trouble in framing the Public Service Act, which will soon be in force. A. Commissioner has been appointed to administer the Act, and I compliment the Government upon having selected a very able, painstaking and trustworthy officer to fill that position. I feel sure that the Commissioner is a man who can’ be trusted to discriminate between a good and a bad officer. He will have power to make reductions in the number of officers employed if he thinks it desirable. In New South Wales the Public Service Commissioner had very extensive powers in regard to reductions and the re-arrangement of offices’. Here he will have power to make a searching inquiry into every department, in order to ascertain what the officers are doing, whether the proper men have been appointed, whether the salaries being paid are too high or too low, and whether the departments are overmanned. When that has been done we shall be able to review the whole position.

Mr Glynn:

– The whole Estimates can then be varied.

Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

– Yes ; it is difficult for us to express an opinion upon the merits of the various officers. We do not come in contact with these men. We have placed all the departments under the Commissioner, with a view to put an end to political influence, and to enable the service to obtain justice. I feel that we shall have to be content with the explanation that has been given, and I am more inclined to be satisfied because of the fact that I know an officer has been appointed who will see that the departments are not overmanned, and that the salaries are in accordance with the work done. It is very difficult for honorable members to bring about any reduction in the salaries or the number of officers. We have to depend to a large extent upon the report of the Minister, just as we shall have to depend upon the Commissioner’s report.

Mr Mauger:

– And the Commissioner will be responsible.

Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

– He will be responsible to us.

Sir William Lyne:

– He will be able to make a re-adjustment of the salaries right through the departments.

Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

– That was understood. One of the strong reasons put forward for passing the Public Service Bill was that it would remove all officers beyond the power of the Minister. I merely mention these facts in order to show that in view of the explanation which has been given, it is impossible for me to vote for the proposed reduction.

Sir MALCOLM MCEACHARN (Melbourne). - I rise simply to point out that the papers put before us are somewhat misleading. It is true that they refer us to the fact that the expenditure shown for last year was for only a portion of tlie year ; but, in looking over the Estimates for last year, I find that we voted £3,895 for salaries of the administrative staff. Therefore, the increase shown here is only £127 in excess of the sum which we passed on the last Estimates.

Sir George Turner:

– The department for Home Affairs has also taken over from the, department for External Affairs some expenditure in relation to messengers.

Sir MALCOLM McEACHARN:

– That accounts for the difference. Upon these figures there is nothing to criticise.

Mr BROWN:
Canobolas

– I am thoroughly in sympathy with every effort to keep the expenditure, not only of this, but of all Government departments, within reasonable limits, but I think it would be a great mistake, on the plea of retrenchment, to sacrifice efficiency. We should have some regard to the efficiency of the departments. The department under review is perhaps one of the most important in the Commonwealth. It has the control of nearly all internal affairs, and, through the Public Service Commissioner, has largely the control of the whole civil service of the Commonwealth. Whilst it is most undesirable that the service should be overloaded, those who are charged with responsible duties should be well paid for their services. To so reduce the remuneration that the services of the best men could not be obtained, would be a penny wise and pound foolish policy. A mistake made by a leading officer in charge of a large department like this might involve the Commonwealth in a loss of thousands of pounds. I happen to know some of the gentlemen who hold positions in this department, and who previously filled important offices in the States services. I consider that in appointing them eminentlysuitable selections were made. I do not see anything in the item to which I should care to take exception upon the score of economy, nor do I think the department is overmanned. It has to do the pioneering work of organizing the whole service, and necessarily a very considerable amount of labour now falls upon the shoulders of these officers, which will hereafter be greatly reduced. It is very desirable in the interests of the Commonwealth that this initial work should be well done. If it could be shown that the department was overmanned I should be prepared to support the proposed reduction, but from my own knowledge of the work, as well as from the arguments I have heard, I am convinced that the officers who have been appointed are necessary. It would be very unwise to sacrifice efficiency to the mere plea that we should keep down expenditure.

Mr. A. PATERSON (Capricornia).- Iam just as anxious for real economy as is any honorable member, but we must nosacrifice efficiency to economy. The amendment to reduce this amount by £2,000, is ridiculous. I am sure that the economists of the committee will completely alienate the sympathy of those who would otherwise be inclined to support them by pressing such a proposal. I should favour a reduction of £400 or £500, knowing that the Minister couldeasily re-arrange the department, so as to effect that change. Anything more than that, however, would involve a sacrifice of efficiency. It would be of no advantage to the Commonwealth, and would act as a discouragement to good officers.

Question - That the vote, “ Administrative staff, £6,411,” be reduced by £2,000- put. The committee divided.

AYES: 3

NOES: 30

Majority … … 27

AYES

NOES

Question so resolved in the negative.

Motion (by Mr. Poynton) proposed -

That the vote “ Administrative staff,£6,411.” be reduced by £500.

Mr. SALMON (Laanecoorie). - I should like to know what reason the honorable member has for reducing the vote by that sum. Is it his intention to attack any particular item ?

Mr. SALMON (Laanecoorie). - I should like to know if this £650 is all for railway fares, or whether the living expenses of those who travel are included in the amounts ?

Mr. McDONALD (Kennedy).- I understand that officers when travelling get their railway fares, and from 15s. per day downwards as expenses in addition.

Question - That the vote “Administrative staff, £6,411,” be reduced by £500- put. The committee divided.

AYES: 0

NOES: 0

AYES

NOES

Question so resolved in the negative.

Mr. BATCHELOR (South Australia).I move -

That the vote, “ Administrative staff,£6,411,” be reduced by£250.

The object of the motion is to get a clear division upon the question of reducing the vote for travelling expenses. I remind honorable members that £1,500 was voted for contingencies last year, and the vote set down for this year is £2,389, or an increase in one year of £800 for contingencies alone. The vote required for officers’ salaries is not much greater than last year,and asonly£100 more is asked for, there cannot be many more officers. But the vote for contingencies has gone up from £1,500 voted last year, and £1,736 spent, to £2,389. Under these circumstances, honorable members will agree with me that this vote can well stand the reduction.

Mr GLYNN:
South Australia

– I really think that we do not do anything in the way of economy by these petty parsimonies.

Mr Poynton:

– That is the argument every time.

Mr GLYNN:

– No. The honorable member is most economical and parsimonious in small matters, but in matters involving large expenditure he, like many of us, is sometimes very lavish. We sometimes support an amendment in a Public Service Bill, for instance, involving an addition to the ordinary expenditure of £40,000 to £50,000 a year.

Mr Poynton:

– That was to give a fair salary to men who are not getting £100 a year ; and this is to fatten men who are getting £750 a year.

Mr GLYNN:

– That does very well on the public platform, but it does not go down when we are speaking seriously here of economies to be practised by a Treasurer who gets £11,000,000 of revenue. I cannot support this proposal. I remember that we have had discussions in our local Parliaments upon the scale of travelling expenses allowed to some members of the public service, and we have found that it has been, in cases, low, officers of the middle grade being, it was said, at times out - of pocket under the scale. That is the very scale which is being applied now, and, under the circumstances, I appeal to honorable members not to make these petty objections.

Mr Poynton:

– That is only dust thrown in the honorable and learned member’s eye. This money will not be paid upon that scale at all.

Mr GLYNN:

– The Minister has told us that he adopted the scale in force in the States. /

Mr Poynton:

– I suppose they will starve on 15s. a day.

Mr GLYNN:

– .That is ad caplandem also, because very few men in South Australia get 15s. per day. A few at the top of the department may get that amount, and to prevent that the honorable member would cut off something from a vote which will be apportioned amongst all.. I know that in discussing’ the position of officers in the railways and police in the State Parliament it was said that some of them were out of pocket in connexion with, travelling expenses.

Mr Poynton:

– Why not move that the Estimates be taken as read 1

Mr GLYNN:

– That does not follow at all. There is such an immense amount of what legal men call rum sequitur in the honorable member’s arguments that it is utterly impossible to meet him upon any ground. I cannot join with my honorable colleagues in cutting down this item by £250 with a view of securing any economy that will help the finances of the State.

Mr BATCHELOR:
South Australia

– The last speaker has rated my honorable colleague, Mr. Poynton, for practically straining at the gnat and .swallowing the camel. I do not think it is fair to indulge in such criticism. The honorable and learned member referred to a vote given for the purpose of insuring to men at least a living wage which the community is prepared to stand. It is quite another thing to vote a large sum for travelling allowances in one department. This small administrative department is asking for £400 more for this purpose than is any of the other departments, notwithstanding that some of them are much larger. To accuse honorable members of petty parsimony because they will not swallow these amounts without a word is absurd. It is not a case of petty parsimony, but a case of scrutinizing estimates which are submitted for our decision, and reducing the expenditure where there seems to be a reasonable ground for taking that course. We are not proposing to do any harm to any public servant, to reduce his salar)’ below a living rate, or to do anything of that kind, but to fairly reduce what seems, judging from the expressions of opinion from all sides here, an extravagant estimate of the requirements for the year.

Amendment negatived.

Vote agreed to.

Division 19 (Electoral Office) - £1,988

Mr PAGE:
Maranoa

– I should like the Minister to explain why he is asking the committee to vote £450 for the chief electoral officer this year as against the £348 voted last year.

Sir WILLIAM LYNE:
Protectionist

– That amount will be attached to the office when it is filled permanently. The present occupant of the office is getting £225, but that is in consequence of his receiving a pension in New South Wales. After the Electoral Bill is passed, a permanent appointment must be made, when the whole sum of £450 will have- to be paid to the officer.

Mr Page:

– Why vote the whole sum on the Estimates if it is not being paid ?

Sir WILLIAM LYNE:

– Because he will be appointed almost directly.

Mr McCAY:
Corinella

– I hope that, in carrying out the provisions . of the Electoral Act, the Minister will decentralise as far as possible with regard to the preparation of the rolls in each State, and notrequire all matters to go through tho central office. I also hope that he will find it possible in each State to utilize the services of some officer who is fully acquainted with its electoral work, because in that way I believe he will be able to save fi considerable sum.

Vote agreed to.

Progress reported.

page 16268

SPECIAL ADJOURNMENT

Resolved (on motion by Mr. Deakin) -

That the House at its rising adjourn until 1 1 o’clock to-morrow morning.

Houses adjourned at 11.22 p.m.

Cite as: Australia, House of Representatives, Debates, 30 September 1902, viewed 6 July 2017, <http://historichansard.net/hofreps/1902/19020930_reps_1_12/>.