House of Representatives
18 October 1904

2nd Parliament · 1st Session



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

page 5629

ESTIMATES

Mr. SPEAKER reported the receipt of messages from His Excellency the GovernorGeneral, transmitting Estimates of Revenue and Expenditure, and Estimates of Expenditure for additions, new works, ‘ and buildings, for the year ending 30th June, 1905, and recommending appropriation accordingly.

page 5629

PETITION

Mr. DUGALD THOMSON (for Mr.

Sydney Smith) presented a petition from certain residents of Carcoar, praying the House to pass the Manufactures Encouragement Bill.

page 5629

PAPERS

Ministers laid upon the table the following papers: -

Correspondence respecting the suggested prohibition against the introduction, manufacture, and sale of spirituous liquors in Papua.

Papers prepared by Sir George Turner, for the information of honorable members in connexion with the Budget of 1904-5.

Memorandum by the Minister of Defence on the Estimates of the Defence Department for the financial year 1904-5.

Notifications of the acquisition of land at Narrabri West, Boggabilla, and Darlington, New South Wales, for sites for post offices; and at Colah (Hornsby), New South Wales, for Defence purposes.

” EXISTING AND ACCRUING RIGHTS.”

Mr HIGGINS:
NORTHERN MELBOURNE, VICTORIA

– On Friday last, in reply to a question asked by the honorable and learned member for Angas, the Minister of Home Affairs stated that it has been held by the Crown law officers that the classification of the Service made by the Public Service Commissioner supersedes the States Acts as regards salaries, increments, and allowances,, but that the present Attorney-General has given no opinion on the matter. . The inference has been drawn that the opinion stated was given by myself, and therefore I ask the honorable member whether any opinion was given by any Attorney-General to that effect ; if so, when, and has ‘he any objection to stating who gave that opinion?

Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– In reply to the honorable and learned member, I wish to say that the opinion in question was antecedent to his occupancy of the office of Attorney-General. I shall have the papers examined, and any information which it is desirable to furnish I shall have much, pleasure In supplying.

page 5630

QUESTION

PREFERENTIAL. TRADE : PREFERENCE TO LOCAL TENDERERS

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I wish to ask the Prime Minister whether he has received any communication from the Government of the United Kingdom in reference to the suggested Imperial Conference upon preferential trade, and if he has not, whether he intends to make an inquiry into the matter, with a view to informing this House of what is actually proposed?

Mr REID:
Minister for External Affairs · EAST SYDNEY, NEW SOUTH WALES · Free Trade

– I have not received any in formation upon the subject, and inasmuch as the Conference referred to by the honorable member is a proposition contingent upon a general election in the United Kingdom,, which is about two years distant, I do not feel called upon to make any inquiry into the subject until we approach somewhat . nearer the. period’ indicated by the Prime Minister of the Imperial Government. At this stage, perhaps I may be allowed to mention with concurrence that the honorable member for Coolgardie had intended to move the adjournment of the House to-day for the purpose of discussing the question of the granting of preferences in the Postal Department :, but I have informed him that the Postmaster-General is absent from Melbourne, and will not be in attendance here until to-morrow. He has therefore very kindly consented to defer his motion until to-morrow, when the Minister in charge of the Department will be present.

page 5630

QUESTION

EMIGRATION SCHEME

Sir LANGDON BONYTHON:
BARKER, SOUTH AUSTRALIA

– Last week a cablegram was published in the newspapers with reference to a movement initiated in London in favour of an emigration scheme, in which it is said that Northern Australia is interested, for the encouragement of cotton growing. Is the Prime Minister able to furnish any information upon that subject?

Mr REID:
Free Trade

– I am very sorry that we have not: received information ; but the Government will gladly welcome any upon the important- question indicated by the honorable member.

page 5630

QUESTION

FEDERAL CAPITAL

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

asked the Minister of Home Affairs, upon- notice -

  1. Whether the Government is yet in a position to say how much of the goo square miles to be appropriated for Federal Capital purposes consists of down lands such as the Commonwealth is entitled to ask the Government of New South Wales to grant free of charge, and what proportion of such area is private property such as the Commonwealth will require to resume and nav for.
  2. If not yet in a position to give an answer,, how soon does he anticipate being able to do so?
Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

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

Within a radius of ten miles of Dalgety, the proportion of Crown lands to alienated is approximately one-seventh ; within a radius of seventeen miles the proportion is approximately onesixth. Until the precise outlines of a territory are arranged, the actual proportions in that territory cannot ‘be: stated. They may vary very, considerably from those given.

page 5630

QUESTION

TARIFF COMMISSION

Mr ISAACS:
INDI, VICTORIA

– In asking the Prime

Minister, upon notice -

Whether, in view of the urgency and national importance of the question, the Government will afford this’ House an early opportunity of discussing and deciding the motion for the appointment of a Royal Commission upon the working of the Tariff, of which notice in the name of Mr. Isaacs now stands’ upon the notice-paper,

I should like, by permission of the House, to say by way of explanation that I desire to remove any misconception, should it exist, in the ‘mind of the right honorable gentleman as to the question I put to him the other night. I know that on that occasion the Chamber was charged with a sort of electricity. ‘After the House had risen I saw the Prime Minister, and told him that I quite understood why he had overlooked the question, and that I intended to ask it on the’ following day. My colleagues and I, however, thought it would be proper to place the question on the noticepaper, and allow the Government time to give further consideration to it, so- that they might give such an answer as the merits of the matter deserve. I think that the right honorable gentleman might consider that, whatever the respective views of honorable members on both sides of the House may be as to the matter itself, it is only fair that the House should be afforded an opportunity to decide it as- it thinks best

Mr REID:
Free Trade

– I am glad to be able to inform my honorable and learned friend that it is the intention of the Treasurer in the Budget Speech which he is about to deliver, to deal with the matter which he has brought under our notice.

Mr isaacs:

– That as hardly an answer to my question. Will the Government allow us an opportunity to decide ‘the motion ?

Mr REID:

– The course we propose to adopt will have the great advantage of enabling honorable members generally to discuss the matter - an advantage which a question and answer do not afford.

Mr Isaacs:

– I should like an answer to my question.

Mr REID:

– The Treasurer will give the honorable and learned member an answer. He will initiate a discussion upon the question.

Mr Isaacs:

– But that is not an answer to my question. Have we to accept that statement as being equivalent to an answer in the negative ? If so, it is very unsatis- . factory.

Mr REID:

– The honorable and learned member ‘has no right to do so.

page 5631

HIGH COURT

Motion (by Mr. Johnson, for Mr.

Ewing), agreed to -

That a Return be laid upon the table of the House showing the amount of work performed by the High Court during the first year of its existence, viz. : -

A list of the cases heard, with a brief indication of the nature of each one.

A list of the cases awaiting hearing, with similar details.

What has been about the average period taken in dealing with an appeal by the High Court.

What was approximately the period which an appeal to the Privy Council involved before the decision was registered in the local courts.

Motion (by Mr. Thomas) agreed to -

That a Return be laid on the table of the House showing -

Court has sat and dealt with cases during the first year of its existence, distinguisnlng the days -

Council, and the number of appeals sent to the High Court, during the same period; and how many of the latter appeals could have been taken to the Privy Council.

page 5631

QUESTION

BUDGET (1904-5)

In Committee of Supply:

Sir GEORGE TURNER:
Treasurer · BalaclavaTreasurer · Protectionist

– Once again it is my privilege to place before honorable members the financial position of the Commonwealth. They will, no doubt, bear with me when they recollect that in this financial statement I have to deal with practically seven statementsone for the Commonwealth, and six for the various States. While the Treasurer of the Commonwealth is “in the happy position of not having to impose taxation, or to talk about deficits and retrenchments, he still has to place on record, for . the information of honorable members, and especially for the information of the various States Treasurers, the fullest particulars he can possibly give, so that they may know exactly the position in which the.y are likely to stand at the end of the year. Therefore . a Commonwealth Budget becomes, to a . very great extent, a mere statement of figures. . There are a few matters of general interest to which I will refer later on in my speech, but in the meantime I have distributed to . honorable members papers in the form of tables, giving all the information that . 1 think will be useful to them. I propose, if honorable members will follow me through those papers, to explain them as shortly as I can. Other figures which I may not use, and which will be- explanatory of those which I do use, I propose - as I did last year - to insert in Hansard so that honorable members, when they refer to the official report, will have as full information as I think they will require in order to enablethem to deal with any question which may arise in connexion with the finances. To plunge at once into the mass of figures, I will ask honorable members to take page 1 of the papers, on which . they will find the total Customs revenue collected during the last financial year. It amounts to , £9,105,758. That amount is £1,243 less than my estimate; but it is only fair to say that some £34,000 was collected in Victoria from sugar excise, and placed in a Trust Fund, instead of being paid into revenue. It will also be noticed that whilst the total collected very nearly corresponds with my estimate, there are considerable variations in some of the States. Unfortunately, Queensland and Western Australia came out much worse than I anticipated. I estimate that the revenue from Customs for the present financial year will be £8,980,000. That is a decrease, as compared with the revenue last year, of £12 5,758.The receipts this year include a windfall to the State of Victoria in the shape of £50,000 for sugar, which has been placed in a Trust Fund- A dispute arose between the Sugar Refining Company and the Government of the Commonwealth - and this also applies, although in a less degree, to the State of Queensland - as to whether certain sugar, made before Federation, was liable to pay the excise duty. The Customs Department insisteduponthewholeof the duty being paid. The case was tried, and is now under appeal to the Privy Council. In the mean-, time the sum of £61,000 or £62,000 has been deposited by the company, and is kept in a trust fund- £27,000 being paid in one year, and £34,000 last year. That money has not yet got into revenue, but I have . arranged with the company’s legal advisers that, if it be possible, £50,000 out of the £61,000 will be paid over to Victoria,which State naturally requires the money, £1 1,000 remaining to meet any verdict that could possibly be given, that being the full amount in dispute between the company and the Government. So far as t’he decrease is concerned, I propose to explain that later on when dealing with details. In the Postal Department we have collected £2,510,264, an increase of £60,264on my estimate. That was not my fault - I am glad to see the increase - but to a very great extent it is accounted for by the fact that the Postal Department was able to collect arrears for services rendered to the Savings Banks in some of the States, going back to the commencement of Fed’eration. The amount collected was about . £41,000, bur I had not calculated such a sum in the amount I expected to receive. The estimated revenue from the post-offioe this year is £2,560,000, an increase of £49,736 on the revenue of last year. It will be seen that the total revenue received last year was £11,631,056, or £64,881 over my estimate; and this year I anticipate to receive the reduced amount of . £11,570,000, or a decrease of £61,056. But as this year we get the benefit of the , £50,000 I have mentioned, and last year we did not get the benefit ofthe £34,000 we ought to have received, the real falling-off in the total revenue amount-! to£145,000. The following table gives a detailed comparison of the estimate of revenue for the year 1903-4, and of the estimate for the present year, with the actual receipts for the year 1903-4: -

We have had to contend against the reduced telegraphic rates which were sanctioned by this House.

Mr Higgins:

– In Victoria?

Sir GEORGE TURNER:

– No, throughout the Commonwealth. These were the reductions in the rates brought into effect under the Postal and Telegraph Rates Act, and there is also the decrease caused by the reduction of the postage in Victoria to one penny. On the other hand, we have gained somewhat by charging all the States for Government postage and telegrams. .Only some of the States used to pay those charges. In addition, we have received a considerable revenue, as I have said, from carrying out the Savings Bank work for the various States. The postal receipts are steadily improving in New South Wales, Victoria, and Tasmania, but. unfortunately, in Queensland, they are not so good as we could wish. In the latter State the receipts are practically stationary, and in South Australia and Western Australia heavy losses have been occasioned in consequence of the Pacific Cable, and also in consequence of alterations made in agreements entered into with the Eastern Extension Telegraph Company, those bargains having been made by the States before Federation. I mentioned that last vear we got the benefit of a certain amount of Savings Bank business, and this year we expect £45,000 from the same source. This, of course, somewhat disarranges the comparison with previous years, and in addition the Postal Department is sanguine enough to expect from the States Treasurers a considerable amount from what are called weather telegrams. A bargain was made two, or it may be nearly three years ago, that such telegrams should be sent by the Commonwealth without charge, on the understanding, however, that the States were to be debited with the cost. So far no amounts have been collected under this head. The total amount we expect from the Postal Department in New South Wales is £935,000, a decrease of £6,000 on the revenue of last year; in Victoria we expect to receive £660,000, an increase of £9,000; in Queensland, £324,000, practically the same as last year; in South Australia, £273,000, an increase of £14,000; in Western Australia, £258,000, an increase of £27,000; and in Tasmania, £110,000, an increase of £5,000 - a total increase of some £49,000. On pages 2 and 3 of the distributed papers honorable members will find the details with regard to the finances of the Post Office. The following table shows the total receipts for four years : -

Mr Higgins:

– How much is expected from the weather telegrams?

Sir GEORGE TURNER:

– I am not certain, but it should be a considerable sum.

Mr Higgins:

– Is it included in the receipts which have been mentioned ?

Sir GEORGE TURNER:

– No, because I am not certain what amount can be collected. I might say. however, that it will certainly be ,£20,000 to .£30,000.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– What is the explanation of the immense difference between the receipts in New South Wales and the receipts in Victoria?

Sir GEORGE TURNER:

– A larger business is done there, the population being greater, and as my honorable friend knows

the postage is more than in Victoria. Penny postage is universal here, whereas in New South Wales it exists in only certain centres. Honorable members will find that in the next table, on pages 4 and 5, the main source of revenue - the Customs - is dealt with. In previous years I had to give the gross amounts, and take off certain lump sums for drawbacks and Inter-State trade. I am glad to say that now I can place before honorable members the net amount so that the amounts which are entered against each State are those which have been credited, and which in this year we expect will be credited to the particular States. But I wish to ask honorable members in studying any of these figures, or in making any calculations, to bear in mind that there are disturbing elements in the fact that in the first years of Federation great loading up had taken place in New South Wales and other States, and that this inevitably reduced our’ Customs revenue. In 1902-3 and 1903-4 we received very large amounts from the grain and fodder duties, and this year we received practically nothing from that source. As showing the great effect which the grain duties would have, I may state that, in 1901-2, the total amounts came to £69,000 ; in 1902-3 they jumped to £597,000, being an increase of £528,000 ; in 1903-4 they came down to £265,000, showing a fall of .£332,000; while in 1904-5 we expect to get £33,000, showing another fall of £232,000. Honorable members will see, therefore, that the States finances are somewhat disarranged ; that one item has a large effect in causing trouble with regard to the revenue. Then this year, in consequence of the larger crop in Queensland, we expect a decrease of £100,000 in the revenue from sugar. I mentioned that this year shows less than last year to the amount of £125,000, but the two items I mentioned as deposits in a trust fund - £50,000 and £34>00° - have to be taken into consideration when making any comparison. So that the actual falling off in the Customs revenue- for this year is £209,000. Of that sum, £56,000 is accounted for by the reduction in the special Tariff of Western Australia, leaving an anticipated reduction of £I 53,000 on the uniform Tariff in all the States. The special Tariff of Western Australia has now got down to- the twofifths stage, and the result is that that State, having been able to charge on foreign imports the State or Federal duty, whichever might be the higher, received a considerable amount of revenue which it will now lose. There will also be a far larger trade with the eastern States. This fall to the two-fifths duties very largely interferes with the revenue in Western Australia. There is an anticipated falling off of £232.000 from grain, £102,000 from sugar, altogether £334i 21 5- But the comparison I am making for the consideration of honorable members takes the form which will be found at the end of page 5. I desire to leave out the disturbing elements of grain and sugar in both years, and make a comparison with regard to all other items, so that honorable members will then be able to see whether I have allowed fairly for increase or decrease on that particular basis. That seems to me the best and fairest mode of making a comparison. I have allowed for increases amounting to £180,000, namely, to New South Wales £51,000, to Victoria ,£67,000, to Queensland £24,000, to South Australia £13,000, to Western Australia ,£21,000, and to Tasmania £2,000 - that is, about 2 per cent, all round on the total amount of the collections. That I consider is justifiable. I do not think that a Treasurer ought to unduly lower the anticipated receipts. At the same time it is wise to keep within the mark, because if we do not, and the receipts should fall .short of the anticipations to a great extent, then the Federation and the Federal Parliament would unquestionably be held to be blameworthy. So that, while not over-stating the amounts I expect to collect, I certainly do not understate them, and have given what I believe will be approximately the amount collected. This year we certainly have better prospects. The crops seem to be turning out well, people are getting into better heart, and there is no doubt that imports are increasing in consequence of people having more money to expend on luxuries and various imported articles. On the other hand we certainly have an increase in . Inter-State trade, and increases in manufactures in many of the States. These matters have to be taken into consideration by honorable members when endeavouring to arrive at a fair estimate of what we may expect from our Customs revenue. The experience of the three months, I am sorry to say, has led me to believe that my estimate with regard to Queensland is very doubtful. I am afraid it will not be realized. So far as Western Australia, also, is concerned, the returns have certainly been very disappointing, and unless some very great improvement takes place, I am afraid that State will have to meet a considerable falling off in the amount I have estimated. I have allowed for this year, taking all sources of collection into consideration, for New South Wales, £3,160,000, a falling off of £69,786; for Victoria, £2.440,000, an increase of £46,000; Queensland, £1,115,000, a falling off of £16,761 .; South Australia, ,£685,000, a falling off of. £14,792; Western Austrafia, £1050,000, a falling off of £12,296; Tasmania; £340^00, a falling off of £2,189; anc

Western Australia, Special Tariff, £140,000, a falling off of £56,429. But if we take into consideration the sugar excise items, there is a falling off in Victoria of £37,505. The following table shows the amounts in a tabulated form: -

I hope that Queensland will get the amount of excise that is now in a trust fund, amounting to some £20,000, because it may be of some help to her. In the same way that Victoria will get £11,000, and that will assist her revenue also. I have set out later on the items of increase and de crease, and I will draw honorable members’ attention to them when I get to that particular table. During the last three months, and1 especially in the States of Victoria and New South Wales, there has been a considerable increase in the importations of apparel. Honorable members, I think, will be pleased to know that the increases are occasioned by imports of what we may regard as raw material for manufacturers within the States - silks, velvets, trimmings, cotton-piece goods, and such like. The returns lead us to believe that there is a smaller importation of made-up articles and a larger importation of material for the purpose of manufacture in the Commonwealth by our own people.

Mr Hughes:

– Is that true of all the States ?

Sir GEORGE TURNER:

– The difference has not been so marked in the case of the other States, but in the two States to which I have referred the returns show very large increases. The following is an epitome of the Customs and Excise revenue : -

On pages 6 and 7 I have endeavoured to place before honorable members certain very interesting information with regard to sugar, from which we derive a very large revenue. Honorable members will recollect that the sugar excise and sugar bonus will expire on the 1st January, 1907, and shortly it will be the duty ot the Parliament to take into consideration what course should be pursued with regard to the excise, and with regard to the rebates.

Mr Fisher:

– This session?

Sir GEORGE TURNER:

– I do not know that it- will be possible to deal with the matter this session. It is one which requires very careful and full inquiry, but so far as I am personally concerned, I sympathize altogether with the position, especially of Queensland’, in this connexion, and I may say I am prepared to do whatever is possible to assist the sugar industry, to keep it alive, and to enable growers of sugar to work in such a way that they will be able to do without black labour, without suffering any real hardship or loss. The return to which I direct the attention of honorable members sets forth the yield of white and black grown sugar, the number of producers, the area under cultivation, the quantity of sugar produced, and the amount of bonus paid. Honorable members will recollect that the Commonwealth passed a Bill providing the basis for the bonus or rebate. It is pleasing to know that in Queensland there has been a large increase in the number of white producers. In the first year of the operation of our legislation, there was an increase of 527, which was an increase of about 33 per cent, of the total number, and there was a further increase last year of 94. The white producers now number over ‘two to one in Queensland. In New South Wales the producers of sugar are nearly all producing it by means of white labour. New South Wales has undoubtedly received a very large benefit from the sugar rebate, because, before Federation, the planters there were growing nearly all their sugar with the aid of white labour. Consequently, the bonus has been a little god-send to them. Unlike the people of Queensland, they have not had to change their methods of production. During the two years I have mentioned, the area under sugar cane in Queensland tilled by white labour has increased from 36.088 acres to 56,289 acres, whilst the area tilled by black labour has decreased from 59,609 acres to 57,402 acres. We expect that this year Queensland will produce 31,000 tons of white-grown sugar, and 98.000 tons of black-grown sugar - a total of 129,000’ tons - which is an increase of about 40,000 tons on the production of last year.

Mr Mcwilliams:

– Then, the production of black-grown sugar is increasing much more quickly than that of whitegrown sugar?

Mr Mahon:

– And the number of black labourers employed seems also to be increasing ?

Sir GEORGE TURNER:

– The number of black labourers has increased, and so has the area under cultivation by black labour. While the sugar grown by whitelabour has increased from 24,000 to 31,000 tons, the sugar grown by black labour has increased from 65,000 to 97,000 tons.

Mr Fisher:

– All on account of the season.

Mr Hughes:

– What percentage of that is due to the increased crop for this year?

Sir GEORGE TURNER:

– It would be impossible to say. I have given the number of additional acres under cultivation, and the number of additional producers,, but I do not think it is possible to give more definite information to the honorable and learned member. In New South Wales the estimated production for the year 1904-5 is 18,600 tons of white-grown sugar, and 2,000 tons of black-grown sugar, or 20,600 tons altogether. Therefore,, the total production, of the Commonwealth for the year 1904-5 will be 149,600 tons; while our requirements amount to about 187,000 tons. Honorable members will see that, as the production of sugar increases, our Customs revenue will decrease, because whereas wecollect an import duty of £6 per ton onimported sugar, we collect only an excise- of £3per ton on locally-produced sugarNearly all the imported sugar comes first to Victoria and South Australia; but part of it is re-exported to the other States, so that during the book-keeping period the chief loss will fall on the two States I. have mentioned. When we supply the whole of our requirements by local production, there will be a very serious loss in revenue.

Mr Fisher:

– The same thing would happen if we produced locally all the boots or all the hats that we require.

Sir GEORGE TURNER:

– Yes ; but not to so great an extent. I am not complaining about the increase in the local production of sugar ; I am glad of it. I draw attention to the fact because, since some hon- orable members may think that the Treasurer should spend more money than we propose to spend, I wish to place it on record that we may in a year or two have to face a very serious situation by reason of the decrease of revenue, due to the increased production of sugar in Queensland and New South Wales.

The bounties which have been paid amount to over £250,000, including £100,000 paid this year. Of the amount just named, £137,000 has been paid to Queensland, and £113,000 to New South Wales. The anticipated expenditure this year is £[100,000. The figures are given in full in the following statement: -

We expect that the Commonwealth will import 42,000 tons, from which we shall obtain a revenue of £252,000; and we estimate the consumption of Australian sugar at 145,000 tons, from which, we shall receive a revenue of £435,000, a total of £687,000, which is £100,000 less than last year. Page 8 of the papers gives a very interesting monthly comparison of the receipts under the Tariff, and page 9 will enable those who desire to do so to check the figures which I have given, because it gives the population of the Commonwealth and the percentage of popu lation in each State. On pages 10, uv and 12 are a series of very interesting comparisons with regard to the revenues of the various years. I do not intend to refer to these in detail. I would ask honorable members to look at table C on page 10, in which I have set out for last year - amongst others - the amount collected per head under the operation of the uniform duties. The average for the Commonwealth is £2 5s. 4 1/2d. New South Wales collected £2 5s. 3d. per head, Victoria £2 os. 5d., Queensland ,£2 3s. nd., South Australia £1 17s. 11 1/4d., Western

Australia £4 13s. 7¼d., and Tasmania £1 18s.1½d., whilst the Western Australian special Tariff realized 17 s. 3¾d. per head. Honorable members will notice that in Western Australia the amount collected per head is being steadily reduced. To a very great extent that is accounted for by the number of women and children who are now joining their husbands and fathers in that State, and also by the production of goods there. When I come to deal with a later portion of the Estimates I will show that the fact that Western Australia still continues to collect per head of population an amount far in excess of that which is collected by the other States is responsible for a difficulty in dealing with the distribution of the surplus revenue. The following tables give a comparison of receipts : -

The Customs revenue forms a very important part of the revenues of the various States, and at the top of page 11 honorable members will find a comparison of the Customs revenue with the total revenue of the . different States. The average is 26.98 - practically the same as it was in 1 899-1 900. But since that period the conditions obtaining in the various States have changed considerably. Naturally the revenue of New South Wales has been largely increased ; that of Queensland, Western Australia, and Tasmania, has, unfortunately,., been very considerably reduced, whilst that of Victoria and South Australia remains about the same as it was. My desire has always been to return to the States approximately the amount of the Customs revenue which they collected in 1900, which was a fairly favorable year, in addition to providing for the “ other “ expenditure of the Common wealth. By “other” expendiutre . I mean . not merely the expenditure caused by ‘Federation, but all the “other” expenditure, not including new works and buildings in connexion with the transferred services - a special loan expenditure ; money which in the States would have been spent out of loan funds. I have given the details relating to this matter for the various years, an epitome of which will be found on page 12. The epitome gives the details for four years. “ It shows that after paying all the “other” expenditure which I have mentioned, New South Wales has received an amount - in excess of her Customs revenue during 1900 - of . £5,000,000, South Australia of £78,000, and Western Australia of £545,000. in addition to £771,000 collected under her special tariff ; whereas Victoria lost , £16,000, Queensland . £1,634,000, and Tasmania . £607,000. There is thus a total gain of . £3,369,000, not including the receipts from the’ Western Australian spe cial Tariff. The following table shows the details : -

I do not say that this result is entirely attributable to the alterations which we have made in the Tariff, because it is undeniable that in some States changes would have taken place. Unquestionably, some States were bound to be affected by the drought, and, consequently, by the smaller purchasing power of the people. But, as I have already pointed out, other States have derived a largely increased revenue in consequence of the grain duties. Nevertheless, it cannot be doubted that one State has gained an immense sum of money, whereas Queensland and Tasmania have, unfortunately, lost very heavily. The loss in those States has been occasioned by our action in having abolished many of the revenue duties which they formerly collected under their State Tariffs. The difficulty which the right honorable member for Adelaide, as Minister of Trade and Customs, and I experienced in framing the Tariff was due, to a very great . extent, to our efforts to preserve, as far as we could, the finances of those two States, and we had to provide for revenue duties, which otherwise - we certainly should not have asked the House to impose. I may mention, in passing, that for the four years the total “ other “ expenditure was £1,473,000. In addition to that for the first six months there was an expenditure of £131,000. So that our outlay under what is known as “other “ expenditure has amounted to a considerable sum. I shall now ask honorable members to refer to page 13 of the Budget papers, where they will find what is called the Inter-State Adjustment Account. Honorable members will, no doubt, recollect that, regardless of the State in which they may have been collected, duties have to be credited to the State in which the goods, in respect of which they are obtained, are consumed. They may be transferred from one State to another, the State in which the goods are consumed receiving the benefit of the revenue so collected. Last year there was a debit against New South Wales of £122,309; and against Victoria a debit of £254,287 ; whilst Queensland received a credit of £158,793; South Australia, £20,721; Western Australia, £90,442 ; and Tasmania, £106,640. These figures show a very large increase indeed on those for the previous year, as honorable members will see themselves on referring to the comparison at the end of the table. New South Wales and Victoria are evidently the Australian centres of distribution for imported goods. Honorable members must bear in mind that the table to which I have referred, does not in any way “deal with Australian goods. The returns for the first three months of the present financial year show a further increase, more especially in Victoria, in this particular direction. The following statement gives a comparison of the last two years: -

On page 14 will be found a table showing that I anticipate the receipts of the Patents Office at £13,400, and the expenditure at £9,203, so that this Department at all events appears likely to show a profit.

Mr Higgins:

– -What, the Patents Office show a profit?

Sir GEORGE TURNER:

– Yes.

Mr Higgins:

– Does the right honorable gentleman allow in his estimate for the salaries of officers and all expenditure in connexion with the office?

Sir GEORGE TURNER:

– Yes, ‘ everything chargeable against the -Department for any purpose whatever is provided for in this estimate, and the details are set out in the following table: -

On page 15 honorable members will find a comparison of the net receipts under each heading for the years 1900-1, 1901-2, 1902-3, 1903-4, and the estimated net receipts for the year 1904-5. I have tabulated them as follows : -

I shall not take the Committee through the details, but simply give them some figures which are interesting in regard to the addi tional amount collected through the Customs Department during the five years. The collections, as compared with those for 1900, showed an increase in New South Wales of .£5,710,901; in Victoria, £666,852; South Australia, £271,339; and Western Australia, £677,361 ; while those for Queensland show a falling off of £1,502,271 ; and those for Tasmania, a falling off of £554,251, or a net increase during the five years of £[5,269,931. This does not include the sum of £771,000 received from the special Western Australian Tariff. The figures which I have just given I have tabulated as follows: -

The returns for the earlier years of the Commonwealth were largely affected, of course, by the “ loading up “ in anticipation of the uniform Tariff, which has been in operation for only a portion of the period covered by these figures. The total revenue may be seen in the following tabulation : -

The revenue under general heads is tabulated as follows: -

I have come to the end of my story so far as the receipts for the two years are concerned, but if honorable members turn to page 17 of the Budget papers they will see how we deal with the expenditure. The actual amount of Commonwealth expenditure for last year was £4,252,562, being £67,887 less than my estimate. That was occasioned by the fact that a large number of works were not carried out as I had anticipated ; and that on thu other hand, we had to pay an increased amount under the Naval Agreement Act. I antici pate this year an expenditure of £4,433,233, an increase of £180,671. on the expenditure for last year. I give the details of that increase in a table which I shall quote later on. In the meantime, I may mention that provision is made for an increased expenditure of £38,561 in New South Wales; £88,735 in Victoria; £45,549 in Queensland; £10,600 in South Australia; £[7,261 in Tasmania; and a reduction of £10,035 in Western Australia.

Mr Groom:

– That is including buildings and everything chargeable to revenue ?

Sir GEORGE TURNER:

– Everything for which we pay out of revenue. The following statements give the information in tabulated form: -

I shall deal later on with the question of making provision for buildings, and shall show how the item has been affected in that direction. It may be necessary during the currency of the financial year to provide for unforeseen items of expenditure for which no provision has been made on the Estimates; but, naturally, a certain saving will be effected in the different Departments. It is fairly certain that there is one item for which we shall have to provide, but for which no provision has been made, and that is a portion of the cost of carrying out the survey of the Western Australian railway.

Mr Higgins:

– Does the Treasurer include “new” expenditure as well as “ transferred ‘ ‘ expenditure in this estimate ?

Sir GEORGE TURNER:

– Yes; these tables cover the whole.

Sir JOHN FORREST:
SWAN, WESTERN AUSTRALIA · PROT; WAP from 1906; LP from 1910; NAT from 1917

– What did the right honorable gentleman say about the Transcontinental Railway ?

Sir GEORGE TURNER:

– Provision will , have to be. made for that survey out of the Treasurer’s advance account.

In the next tables, page 18, I compare the expenditure of the different States, and then I give the full details of the expendi ture on page 19, compared year by year, taking the headings as they appear in the Estimates. The totals are as follow : -

But the table to which I desire particularly to draw the attention of honorable members is the one on page 21, because that shows the total cost of each Department. Honorable members will be aware that various amounts are paid by the different Departments for other Departments, and when I first became Federal Treasurer, I was anxious to ascertain how much each Department cost in each particular State; but I found it was almost impossible to do so. The items were scattered over different parts of the States Estimates, in places where no one would ever dream of looking for them. Therefore, I have brought into .the table to which I have referred an account of everything expended on account of each Department, so that honorable members . and . the Treasurers of the States will have an opportunity of seeing what the cost of each of our Departments has been in the past, and what-, the cost has been during the past year. I do not propose to go through all these details, because it would take me a very long time to do so; but, later on, when we are dealing with the Estimates, if honorable members desire to have fuller information, I shall be very pleased to deal with the subject with greater fulness. Honorable’ members are aware that we have to close down the Commonwealth accounts on the 30th June of each year. We do not, as some of the States do, keep our accounts open for two or three months, or for ten days after the close of the financial year. Therefore, it is somewhat difficult to pay all our accounts during the year. The first year of the existence of the Commonwealth, when the arrears were £281,000, afforded an unfair comparison in this respect, because we closed down our accounts on the 30th June, whereas the ordinary payments would run two or three months over that period. In that year th”; total arrears came to £281,000. But in the next year 1901-2, we had brought down the amount to £104,000 ; and in the year 1902-3 the amount was down to £41,000. This year, I am told .that the total unpaid accounts on the 30th June, for work done during the year, amount to only £25>000- That shows that the Departments were able to pay their accounts promptly. A great portion of the sum unpaid is accounted for by the fact that the Railway Departments have not all sent in their accounts ; otherwise, we should practically have had no arrears on the 30th June last. The following table, relating to new works and buildings, will be of great interest to honorable members : -

The proposed expenditure for this year is £404,240. The actual expenditure last year was £325,009 ; or an apparent increase of £79,231. Of that sum, we have provided £33,016 extra for a special vote for armament for the Defence Department ; so that our actual expenditure for this year would exceed that of last year by only £46,000. This year, also, there are re-votes from last year to the extent of £47,431. In addition, the Postal Department has considerable amounts to pay for goods which were ordered last year, but were not delivered until the early part of this year. There was unexpended last year a sum of £139,000; and a great cause of com- plaint I have always had against the Department of Home Affairs is that the money voted is not spent more rapidly. This causes me trouble, inasmuch as if I provide money one year and tell the States. Treasurers that they will receive back a certain amount, and the Department of Home Affairs does not spend the amount voted to the extent of £100,000 or £150,000, the States receive more than was anticipated by that amount. In the next Estimates, .however, I have to provide both for the current year and the past year, and this leads to Federation’ being charged with extravagance. However, I believe that the arrangements have now been made more per- feet in the Department, and it is to be hoped that the amount I have provided will be expended in proper time. It is of 110 use my placing on the Estimates sums which cannot be expended during the currency of the financial year. Under the circumstances, however, I do not think that we shall have anything like the unexpended balance that we have met with in previous years. To show that the Commonwealth is not extravagant in this particular item, I may say that last year the Estimates, exclusive of armament, amounted to £367,000, and this year they are £274,000, a decrease of £93,000. As I mentioned, the amount I ask for is £404,00(0, (Which, with revotes amounting to £47.000, leaves for new expenditure, £356,000. That ‘.expenditure is made up of armaments, £130,000; telegraph and telephone works, £155,000; and machinery, £1,600, leaving only the comparatively small sum of ,£70,000 for any new buildings required in the Customs Department, for any post-offices which may be required, and also for a large number of works which have to be provided for in the Defence Department, not only in the way of buildings, but also in the shape of rifle ranges, small alterations to fortifications, and so on. The amount is made up as follows: - Customs, £[3,000 ; Defence, £35,000 ; and Postoffice, £32.000. I think, therefore, that honorable members will agree that I have not asked for too large a sum. In fact, honorable members will probably say, when I ask for £70,000 for new works, that that is much less than they would be prepared to vote if I thought the finances of the various States could stand the strain. The figures appear in the following table : -

We have to bear in mind that, whereas in the old days the States met this particular class of expenditure out of loan monies, the Commonwealth Parliament has determined that it shall be met out of revenue. When we compare our expenditure with the expenditure anticipated by the

Federal Convention, we must remember that the Convention never contemplated that all new works would be paid for out of revenue, and merely went to the extent of providing for the interest on any money which might be borrowed for the purposes of new works. I have information which leads me to believe that there will be a saving in the Department of Home Affairs of £[25,000; and I shall ‘have the full concurrence of the Committee when I say that, whatever savings I may see later on in the year - ;any savings which are likely, or are certain to be made in the Departments - I purpose to add to the special vote for armament in the Defence Department. For that latter purpose I have provided £130,0.00 this year. Before leaving office I originally fixed the amount at £125,000, and the honorable member for Bland, when Treasurer, raised it to £129,000 odd, so I thought I would “ gp one better,” and ask for the round sum of £130,000.

Mr McCay:

– The sum asked for was £177,000.

Sir GEORGE TURNER:

– That -is so ; and if the Department will only be a little economical in the way of lace and feathers, and if there are savings on other works and buildings. I have no doubt that the sum provided will be somewhere near £177,000. I confess I would much rather see the money for the Defence Department spent in the direction I have indicated than in any other. We must keep up the efficiency of the forces - we must have officers, and men must be trained, and ammunition provided. At the same time, there is no doubt that if we have money to spare from any of the other votes, we shall be fully justified in applying it to the purchase of rifles, guns - extra armament or accoutrement - which are not provided for in the special votes. By that means we shall not lessen the amount we have led the States Treasurers to believe they will receive, and we shall apply the money to as good and as useful a purpose .as could the States Treasurers themselves if they had control of the expenditure.

Mr Higgins:

– Is the honorable gentleman going to apply it to increasing the Australian Light Horse?

Sir GEORGE TURNER:

-I shall leave the Minister of Defence to deal with that matter as he is more intimate with the details than I am. One of the large expenditures, and one that will require the serious attention of honorable members, is in connexion with Fremantle in Western Australia, as is stated on page 31. Apparently, from the best advice we can get, it is necessary that fortifications should be

erected at Fremantle and North Fremantle, and the expense will be very large. The total amount that will be required as estimated is £87 ,000. The details are as follow : -

Allowing for the usual errors in estimates, we may reckon any sum up to £100,000. If it is necessary, in this and the two following years, to put Western Australia in a fair state of defence, the money must be expended because the defence of any particular place vitally affects the defence of the whole Commonwealth. Therefore, if we are satisfied, no matter what State we may represent, that that is a reasonable and proper expenditure, I am certain that honorable members will not fail to pass the amount asked for.

Mr Kelly:

– Was not a sum, voted on the Estimates last year, devoted to some other purpose?

Sir GEORGE TURNER:

– There was. My rule is always to tell honorable members the total amount of expenditure to which I believe . I am committing them when passing any items. On that occasion the information given to me by the Department of Defence was not as full as it ought to have been. I was misled, and I innocently misled the ‘House into believing that a comparatively small sum would be required for this purpose. But when I came to go into the details before authorizing the expenditure, I found that the sum asked for was absolutely inadequate, that it would be useless to spend that sum unless we were prepared to spend an additional sum of £60,000 or £70,000. Not having given Parliament that information, I felt bound to come down here before expending that vote and state the full facts. I did not divert the vote on the Estimates, but I allowed an amount equal to that sum and other amounts to go for the purchase of a reserve of ammunition which was badly required in all the States.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Who misled the honorable gentleman?

Sir GEORGE TURNER:

– The simple fact was that the officers of the Defence Department did not give me the full information. Several schemes have been suggested, and have been investigated by our advisors. Taking into consideration the area available for the works, the scheme to be carried out, if approved by the Committee is, I believe, the best one possible, and as I said, it will cost £87,000. The land will cost £[34,000, but of that sum nearly £24,000 is required for land belonging to Western Australia. In order to assist ‘in getting the work carried out, the State, instead of asking us to pay cash for the land, as in strictness it would be entitled to do, is prepared to let it be considered as one of the transferred properties, and to be so dealt with. That, of course, relieves the revenue from -a considerable expenditure. Then more land has to be purchased. The cost of the works is estimated at £[22,000, and the cost of the armament is set down at £31,000. When we come to deal with this item, no doubt the Minister of Defence will be able to give any fuller information which may be required. It is impossible for us to disclose confidential communications from our own officers and our advisors in the old country. Therefore honorable members have to be satisfied with our assurances that the best that can be done is being done, and that about the amount named will be required. It will be. for them to say whether an expenditure of say £[100,000 is justifiable for the purpose of putting this portion of the Commonwealth in a fairly satisfactory state of defence. I have considered the matter as carefully as I possibly could. I have gone into it very fully with the responsible officers and the Minister, and I have no hesitation in placing this amount on the Estimates, and in asking the House to pass it, in order that the work may be proceeded with asrapidly as possible.

Mr Carpenter:

– Is that the actual expenditure that will be necessary?

Sir GEORGE TURNER:

– The actual expenditure required for this year on this particular work is £24,400. Seeing that it is now pretty late in the year, the probabilities are that the whole of that amount will not be expended.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– Is not this for the defence of Western Australian property ; and why, should that State charge the Common wealth with the cost of defending its property?

Sir GEORGE TURNER:

– The honorable member might just as fairly make the same complaint with regard to all defence works which have been handed over to the Commonwealth. The same principle would apply to the expenditure on Thursday Island, King George’s Sound, and everywhere else.

Mr McDonald:

– Would it not be better to have direct taxation, consideiing that this expenditure is required for the purpose of defending private property?

Sir GEORGE TURNER:

– I am not in accord with the honorable member foi Kennedy on the subject of direct taxation for the Commonwealth. I tried it for the State of Victoria, and got beaten. When the demand was made, in fixing the land tax, for an exemption of £500, and when I desired the exemption to be only £100, I looked upon it as class taxation, and objected to it.

Mr Higgins:

– The right honorable gentleman helped us to get the income tax.

Sir GEORGE TURNER:

– I did, and it’ was badly wanted. I shall not detain honorable members by referring in detail to pages 32, 33, and 34. These pages contain details of the estimated expenditure for 1904-5 in the various States. I was asked on one occasion to give the information in this particular form, in order that honorable members might not have to go through all the returns to pick out the amounts from other parts of the Estimates. I wish to say that if honorable members desire to make any calculation, I hope they will, not try to pick the items out from, particular returns, which, to my officers, are no doubt very simple, and which are comparatively simple to myself, but which to honorable members who have not our full knowledge of the subject must be to some extent confusing. If honorable members desire fuller information, or any details as to how any particular amount is made up,, we shall be only too happy to supply them with the full figures if they will apply for. the information. It will be recollected that last year we altered the Naval Agreement. If honorable members will turn to page 35 they will find the particulars in connexion with this matter. We agreed to contribute a sum of £200,000 instead of the amount of £106,000 which we had previously been contributing an.nually. It so happened that last year we paid, up to the11th November. We had to pay for a year in advance, six months after the Agreement came into operation. However, the Imperial authorities desired that the payment should apply only, to their financial year ending on 31st March. The result of that was that last year we paid a considerable amount in excess of what we otherwise would have been called upon to pay. We are therefore able this year to considerably reduce the amount, and instead of asking for the full amount of £200,000, which will have to be asked for next year and in subsequent years, we are asking for only £148,000. That amount, with the balance of last year’s payment, will make the full payment required up to the 31st March next year, and will do more - it will pay £50,000 for a quarterly instalment on the 1st April. It has cost a considerable -amount in exchange to remit this £200,000 to Great Britain, and, after some pressure, the Home authorities have agreed in future, at the end of this financial year, to allow us to pay this money over to their representatives in Sydney, as a great part of the money is expended there. By that means we should, under ordinary circumstances, save £1,000 a year in exchange. At the present time, as the banks are not in agreement, the saving will be small, but the banks will, no doubt, come into agreement again, and if we can save £1,000 in that way, it will be of advantage to the States.

Mr McDonald:

– They want their pound of flesh.

Sir GEORGE TURNER:

– The banks are not so very bad to deal with, although, up to the present, I have not been able to enter into an agreement with them on behalf of the Commonwealth. There has been a sort of go-as-you-please arrangement, under which I think I have been doing better than I would have done under the agreement which I tried to get. Then we have established a Commonwealth Fidelity Guarantee Fund, the receipts and expenditure of which are shown on page 36. The total amount collected from our officers at the rate of 2s. 6d. per cent, per annum was £1,587, while the defalcations made good during the year amounted to £66, so that we made a profit of . £1,521. I hope that, for the sake of the fund, for the honour of the service, and for the good example which will be set in dealing with other matters of a similar nature, that state of affairs will long continue in the Commonwealth.

Mr King O’Malley:

– That is Socialism.

Sir GEORGE TURNER:

– It may be, but it is not the Socialism which my honorable friend desires.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Those facts ought to encourage the Government to establish a Commonwealth Life Insurance office.

Sir GEORGE TURNER:

– I see no objection to the Commonwealth insuring the lives of its own officers. On page 37 appear various comparisons which I have prepared for the information of honorable members. They show the percentage of the receipts and the expenditure for the years 1901-2, 1902-3, and 1903-4, compared with the percentage of ‘ the population of each State, and honorable members may, if they desire, study them at their convenience. I do not propose to give the details now, though they will be found in the following table : -

On pages 38 and 39 is a statement which contains information as to “other “ or new expenditure. These are the actual payments on a cash basis : -

I prefer, however, for many reasons, to compare the Departments on the actual cost during the year. Under the cash system, more especially during the first year, we had to pay a very large amount in arrears from previous years, and, therefore, to make a fair comparison, I ask honorable members to turn to pages 40 to 42. There the cost of each Department for each year is shown, and, as usual, I have made clear what is the amount of expenditure actually caused by .Federation.

In addition to the departmental expenditure, there is the expenditure upon New Guinea’, and the sugar rebates for which Parliament in its wisdom thought fit to provide. The expenditure upon the Commonwealth celebrations is, of course, a non recurring item. At the end of page 42 honorable members will find a useful epitome of the preceding tables. The “ other “ expenditure has been debited to the States as follows : -

They will see that the cost of the Departments in the year 1901-2 was £205,288, or1s.1d. per head of population; in 1902-3 £228,181, or1s. 2¼d. per head; in 1903-4 it was £342,308, or1s. 9d. per head; while for 1904-5 it is estimated at , £296,108, or1s. 5¾d. per head. The total of the “ other “ expenditure fairly chargeable as caused by Federation is £1,071,000, to which we have to add about £7.7,000, incidental to the first six months. The expenditure during 1903-4 was large, but, in making comparisons, two facts should be taken into consideration, namely, that in that year general elections were held, and cost £47,000, while the expense of bringing the Electoral Act into operation was £33,000. Those sums, in making a comparison, are hardly chargeable against the particular year in which they were expended. We never know what- may occur; but under ordinary circumstances, that expenditure might fairly be distributed over a period of two or three years. This year we have to provide £21,503 for New Guinea, £104,000 for sugar rebate and expenses, making the total “ other “ expenditure, apart from new works, £422,000.

Mr McWilliams:

– That is quite enough.

Sir GEORGE TURNER:

– I shall be glad if my honorable friend would show me how to decrease it. I have spent many an hour trying to ascertain how it could be decreased. I cannot see any means of decreasing it, except by some small savings which may be made during the course of the year. In the next table I deal with a matter which has caused me great trouble and anxiety, because I wish to do what is fair and just to the States, and at the same time to keep within the provisions of the Constitution. Under section 89 of the Constitution we have to charge as transferred expenditure all moneys required for the maintenance or continuance as at the time of transfer of the Departments transferred. Any other expenditure is looked upon as “other” expenditure. The provision to which I have referred has puzzled me very greatly, and, although I have consulted the law advisors of the Crown in regard to it, I have not been much helped by their opinion. Last year it seemed to me somewhat inequitable to charge against the States more than the amount expended in them, say, for telegraphs and telephones, for example. In some of the States it is necessary to spend a large amount on these works ; but it seemed to me rather unfair to charge this expenditure on a population basis, when the revenue derived from them is paid to the State in which they are carried out. I thought that it would be just to charge the whole expenditure for new works against the State in which they were contracted. As I told honorable members, I was doubtful if to do so would be to comply strictly with the terms of the Constitution ; but I thought that it would be well to ascertain by way of experiment how the system would work out in actual practice when compared with the system of charging on a population basis. I believed that when the Commonwealth Treasurer came to settle with the Treasurers of the States in connexion with the transferred buildings, there would be very little difficulty in making any necessary adjustments. Honorable members will see that in connexion with four of the States the arrangement I suggested worked out fairly well. New South Wales gained only £1,176 in three years, Queensland £3,616, and Tasmania £147, while South Australia lost £1,701. It would not have been very difficult to rectify matters in connexion with those States, either in consultation with their Treasurers, or in the financial arrangements of the fourth year. But in regard to Victoria and South Australia, I came across a state of things which I had not anticipated. I found that Victoria, being charged only the amount actually expended within the State, gained in the three years £23,939, while Western Australia lost £27,177, the reason being that, as Victoria is compact and well settled, she does not require so much expenditure on new works and buildings; and where new telephones and telegraphs are provided it is not necessary to erect such long lengths of lines. Western Australia, on the other hand, is a very big State, with a small population, and is only now being opened up, so that the expenditure on new works there is much larger. I was, therefore, forced to reconsider the whole of the circumstances. When I worked out the arrangement for this year in the same way as I had worked it out for previous years, I found that New South Wales would gain £16,196; Victoria, £40,927; Queensland, £2,560 ; and Tasmania, £2,442 ; while South Australia would lose £7,458, and Western Australia, £54,667. These figures somewhat startled me. They appeared to be getting too large to permit of any hope of an adjustment being arrived at hereafter, especially if they continued for another year or two at the same alarming rate. This year we are spending - as honorable members are aware - a considerable sum upon defence, more particularly in Western Australia. Next year that expenditure will be still larger. Whatevei view I might entertain in regard to expenditure upon post offices, telegraph’s, and telephones, I could come to only one conclusion concerning Defence expenditure, namely, that it ought to be charged against the whole of the Commonwealth upon aper capita basis. Wherever expenditure is incurred upon defence matters, it must be regarded - if it is necessary - as being for the benefit of the whole of the Commonwealth, and consequently it should be borne by the Federation. I endeavoured to pick out certain items which might be regarded as constituting transferred expenditure, and others which might be looked upon as “ new” expenditure, but in so doing, and in studying the opinions of the Crown Law. officers, I became more mixed than ever. Finally, I determined that the only way in which I could deal with this matter was to charge the whole of the works and buildings to the Commonwealth upon a population basis, thus reversing the course which I followed last year. I think that in acting thus, I am keeping strictly within the bounds of the Constitution. We shall ultimately have to pay for whatever buildings we took over when the Commonwealth was inaugurated upon a population basis, and whatever works we undertake after we get a common purse will also be paid for upon that basis. Therefore, I have concluded- that, upon the whole, it is wise to reverse the course which I pursued last year, and not to charge each State with the expenditure therein. It would be manifestly unfair to impose an extra expenditure of £54,000 upon Western Australia, when a large number of the works which are to be carried out there will benefit the whole of the Commonwealth. If it is necessary hereafter, rectifications can be made in respect of past expenditure.

Mr Hughes:

– Has the right honorable gentleman any reason to believe that the Crown Law officers regard his action as unconstitutional ?

Sir GEORGE TURNER:

– No; but it was difficult for me to say whether it was constitutional or otherwise.

Mr McCay:

– The opinion of the Crown Law officers stated that there was a good deal to be said upon both sides.

Sir GEORGE TURNER:

– Yes; and it also said a good deal upon both sides. I passed it on to my honorable and learned friend, as a constitutional lawyer, but he has not yet given his- reading of it. I have already shown the effect upon the various States of distributing the expenditure upon new works and buildings in the way I have mentioned, instead of charging them with the actual expenditure incurred within their borders. The information has been tabulated as follows : -

The question still resolves itself into one between Victoria and Western Aus tralia. If I followed the old practice, I should put£40,000 into the coffers of Vic- toria, and take £54,000 from Western Australia. That is what has been done to a small extent hitherto. I am not above reversing the course which I have hitherto followed, when I think that it is inequitable to the whole of the States.

Mr Webster:

– It is a point which is worth considering, at any rate.

Sir GEORGE TURNER:

– It is a point “which is well worthy of consideration. We often desire to know the position of the Post and Telegraph Department. Upon page 44, I have attempted to give particulars in regard to this large revenue-producing, and equally large expending, Department. Honorable members will notice that no charge is made for interest upon its works and buildings. It is impossible to make any such charge, because we do not yet know the value of its various properties, and what interest can fairly be debited to them.

Mr Webster:

– When will that be ascertained ?

Sir GEORGE TURNER:

– I shall speak of that matter at a later stage. . In this Department - as in the Customs - there are always varying circumstances in connexion with receipts and expenditure. However, taking the figures from the actual cash basis, in 1902, there was a loss throughout the Commonwealth of £57,784. Honorable members can peruse the details connected with each particular State if they so desire. The new works and buildings cost £37,149 in 1901-2, and £i35.°99 in 1902-3. In 1903-4, for the first time, the Department showed a profit of nearly £2,000. That, however, was not a genuine profit, because it included arrears which we had collected for conducting the Savings Banks business. But for that unforeseen source of revenue we should have sustained a small loss. Works, and buildings cost £[187,776. This year we anticipate a loss of £36,000, and the buildings to be erected and the new works to be undertaken represent an outlay of £217,648. The following table gives the particulars for two years : -

Thus in three States, namely, New South Wales, Victoria, South Australia, we anticipate that the Department will show a profit, whilst in Queensland, Western Australia, and Tasmania, unfortunately,, it will sustain losses. In this connexion, I wish to draw particular attention to the position which is occupied by Queensland. We have recently heard some complaints concerning the amount of revenue which is returned to that State.

Mr Groom:

– Does the Treasurer refer to the return of three-fourths of the Customs revenue collected by that State?

Sir GEORGE TURNER:

– Yes. I am speaking of the amount returned to the. Queensland Treasurer and to our encroachment upon the three-fourths of its Customs revenue. I desire to point out that during the past four years the working of the Department in that State has resulted in persistent losses. These represent £^02,505 in 1901-2, ,£105,887 in 1902-3, and £90,489 in 1903-4, while the estimate for 1904-5 is £99j639, a total loss upon t’he working of the Post Office during that period of £400,000, not taking into account new works and buildings. Honorable members will admit that such a loss would dislocate the finances of any State. I do not know how this position of affairs is to be remedied. We cannot increase the revenue, and, except by making small savings in administration, I cannot see much hope of reducing that loss. I have set out in the following table the estimated receipts and expenditure so as to complete the Budget papers for the convenience of those who have not got copies of the Estimates : -

Upon pages 48 and 49, it will be seen that the balance to the credit of our Trust Fund is £188,000. I was anxious to invest a considerable portion of that amount, but I found, upon going through the figures, that considerable advances had been made for Post Offices, Money Orders, Savings Banks, and Telegraphs. Consequently, I discovered that at the most I could not invest more than £[35,000 or £[40,000. However, that amount, if invested, will return us some revenue, and accordingly I have given instructions that the largest sum con sistent with safety shall be invested. I was, to some extent, under a misapprehension upon this matter, because last year I thought that a much larger sum could have been invested. Upon page 50, I deal with the very important question of the surplus returnable to the different States. I have shown it year by year, and have instituted a comparison in the case of each State, and of the whole Commonwealth, with the sum returned in previous years. The figures are epitomized in the following table: -

The return for this year amounts to no less than £7,138,986, which is a falling off of £243,000 as compared with that of last year - a very serious matter for the States. That amount is made up by a loss of revenue representing £.6 4 008, and an increased expenditure of £180,000. This comes upon the heels of last year, when the amount returned to the States declined to the extent of £817,000 as compared with that of the previous year, the amount being made up of £474,000 loss of revenue, and £351,000 increased expenditure. In two years, therefore, the surpluses have fallen off to the extent of over £1,000,000. To a great extent that is accounted for by the fact that in the previous year - 1902-3 - the States received an unforeseen revenue from the grain and sugar duties, aggregating £600,000, and the amount of their surpluses in that year, as compared with the preceding twelve months, was increased by £832*000. At the same time, I realize that it is very hard for the States Treasurers to find year after year that the amount returned to them by the Commonwealth as decreasing. Nevertheless, it is scarcely fair for them to attribute this fact wholly to additional expenditure, or to declare that it is due to extravagance on the part of the Commonwealth. The various States have suffered losses in their revenue, the extent of which honorable members would be able to see for themselves by reference to the Budget papers. I do not propose to take them through all the details. On pages 51 to 57 inclusive will be found all the tables necessary for the information of the States Treasurers, and on these the summary with which I have been dealing has been built. On page 57a will be found a new table, which I have prepared, and which honorable members, I believe, will find very interesting, showing the reasons for the falling off in the amount of the surplus paid last year to the several States^ From a perusal of it honorable members will find what fluctuations in the revenue and expenditure were responsible for this falling off, and what increases or decreases have taken place in the revenue obtained from different Customs duties. Some startling figures are given, in regard to these changes, and information is afforded as to where the increases 01 decreases - mostly increases - in expenditure have taken place. I now ask honorable members to proceed to the comparison of this year’s expenditure with that of last year, which can be found on page 57c. The following is a summary : -

The falling off in the estimated surplus to be paid to the States for the year 1904-5 as compared with that for 1903-4, amounts to ,£243,474, mainly accounted for by a loss to the extent of £215,658 in the collections in respect of agricultural products, and of £56,429 under the Western Australian present Tariff. Had it not been for these fluctuations we should have been able to return to the States a larger surplus than was received by them in previous years. I have mentioned that the increased expenditure is estimated at £180,671 ; but, in taking these amounts into consideration honorable members must remember that we are dealing, not with an individual State, but with the six States of the Union. If the Treasurer of a State proposed an increased expenditure of £30,000 or £40,000 in any one financial year, .no one would regard it as a very extravagant increase. The increase in our case is mainly made up of provision for new works, etc., for transferred Departments amounting to £65,414, and £33,016 for rifles, guns,’ and other equipment That accounts for an increase of £98,000. I have allowed for an increase of £77,863 in the expenditure of the Defence Department, and of £[85,675 in the Postal Department. The increased “ other “ expenditure amounts to £[14,120. Against that we have a reduction of £47,519 -in respect of the Naval Agreement, and of £[58,936 in electoral expenditure. Honorable members will probably be glad to know how these items are made up. I mentioned a few moments ago that new- works for the transferred Departments and equipment for the Defence Department largely accounted for the increased expenditure. I do not think that anyone will cavil at the increase in the Defence and .Works Estimates, for which we are asked to make provision, when we compare them with those for 1903-4, and realize that we have also to provide for re- votes from previous years. On page 57c I show that in the Defence Department there is an increase of £42,300 in respect of pay. That increase is accounted for by the fact that last year the ranks were not filled. Recruiting was held back until January last, to a large extent at my request, in order that savings might be effected in the interests of the

States. Last year we had to provide a comparatively small amount in this respect, as the ranks were only filling up slowly ; but this year we have to provide practically for full ranks in all’ the regiments. Rifle clubs represent an increased expenditure of £20,400, due to the fact that the effective allowance is for twelve instead of for six months, and that an increased grant of ammunition is to be made. No one will begrudge the expenditure on our rifle clubs. It is likely to increase .from year to year, but, having regard to the good value we receive from the clubs compared with the return from other branches of the Defence Department I believe that no reasonable expenditure in that direction -will be opposed. I think that the rifle clubs cost us about £2 2s. 6d. per member, as against a considerable amount per head of militia. Military camps will cost £2,400 more than last year. More men will be in camp, and increased railway fares will have to be paid. The States insist on our paying extra railway fares, which must increase the expenditure of the Commonwealth - it will” be spoken of as “more extravagance on the part of the Commonwealth “ - and increase the railway revenue for the States.- In- equipment there will be ari increase of £6,000, but of that sum £500 represents an old indent order given before the Federation was established. The goods have been delivered, and we now have to find the money for them. Ammunition represents £200 extra, general £1,300, and repairs, &c., £6,000, making a total of £78,600; but allowing for a reduction of £800 in respect of stores, we have a total increase of £77,800 in this Department. I have gone very carefully through these estimates with the Minister of Defence, and his officers, and, while I think that there will be savings in. respect of effective allowance, not. fully earned, as well as in other directions, I do not expect the saving will be a very large one. Whatever it may be, if the Committee concurs, I shall be only too glad to utilize it in increasing the armament expenditure. For the Postal Department the expenditure provided for also seems large, but’ we must realize that the expenditure of this Department must necessarily increase. The revenue is increasing, and it is necessary to give the people, and more expecially those of the more sparsely populated States, all the conveniences which they may reasonably expect. To do that we must provide for an increase of expenditure. Salaries account for £63,000 . of this increase, and mails for £11,000. Here again the railways are calling upon us to pay more for services rendered. In Victoria, the Railway Department used to transact our telegraphic work for 25 per cent, of the receipts on telegrams transmitted through its agency ; but it now insists upon receiving 50 per cent, of the receipts. That means an increased expenditure amounting to £3,000 in the Postal Department in Victoria, and an increased revenue of ,£3,000 to the State Railway Department. I do not pretend to say that it is unfair for the Department to make this charge, but I mention it as showing an increase which the Commonwealth cannot avoid.

Mr McDonald:

– And yet the Premier of Victoria refuses to pay for weather telegrams.

Sir GEORGE TURNER:

– The maintenance of lines accounts for an increase of £4,500; uniforms, which were not provided for in last’ year’s Estimates, of ,£6,500; pensions, ,£4,500; and repairs, &c, ,£6,000. Allowing for savings amounting to ,£10,000, the increase in the departmental expenditure amounts to £85,500. Then, under the heading of “ other “ expenditure, an increase of £6,000 is provided for in respect of one item in the Estimates of the Department of External Affairs. This is to provide for increased mail and shipping facilities between the Commonwealth and the Islands of the Pacific. The question has been under the consideration of several Cabinets,, and from time to time it has been determined that the Government should do all that it could within reasonable limits to increase the facilities for trade between the Commonwealth and the islands. It is with this object in view that we propose this additional expenditure of £6,000. We shall.be able to deal fully with the matter later on, and the Minister in charge of the Department will be able to furnish the Committee with a full explanation of the details when the Estimates of the Departments are before us. An increased sum of £1,500 is provided for in respect of British New Guinea. This amount is necessary to pav an overdraft with the Bank of Queensland, which was guaranteed by the Government of that State. It will be returned to us Li about three years’ time in the shape of £500 per year received by way of survey fees.

Mr McWilliams:

– What is the total expenditure in respect of New Guinea?

Sir GEORGE TURNER:

– I think it amounts to about £21,500 per annum. An increased expenditure is also provided for in the Attorney-General’s Department, provision having to be made for the maintenance of the High Court for the whole year, instead of for only a portion of the year, as was the case in the last Estimates. The total cost of the High Court per year is estimated at £14,885.Increased expenditure . has also to be provided for in the Department of Home Affairs. The additions necessary to complete the staff and the classification scheme, account for an increase of £5,500. A further sum of £1,500 has to be provided for the Treasury, owing to increases under the classification scheme, which considerably raised the salaries that I fixed for my staff. The Patents Office shows an increased expenditure of £6,300, whilst we provide £1,700 for statistics. A further increase will probably lake place during the year, under the head of statistics, and I, for one, shall not object to it.

Mr Groom:

– Is that money to provide for a new Statistical Department, or for payments under the existing arrangements?

Sir GEORGE TURNER:

– We provide for work to be carried out through the agency of Mr. Coghlan. That gentleman will be allowed certain assistance, and is to receive a- reasonable remuneration for the work performed by him on behalf of the Commonwealth. That matter has not yet been finally dealt with ; but £1,700, to which I have referred, will provide for printing the statistics. While I naturally object to any increase if it can be reasonably avoided, I must confess that I think it absolutely necessary that we should have uniform Commonwealth statistics. We can only obtain a uniform system by the Governments of the States and of the Commonwealth working in conjunction for their mutual benefit. Whenever I have sought statistical information from the different States I have never been able to obtain it, except on a varying basis, which rendered it of no service to me. Under all these circumstances I think the House will willingly consent to an increase for that particular purpose. There are small increases for other Departments : For the Customs Department there is a small increase of , £500; for the Defence Department, £800 ; and for the Post Office, £500. The following table is an explana tion of the increases for 1904-5, compared with those of 1903-4: -

Last year, I went ‘ fully into the question of the charges of extravagance which are sometimes made against us in the States, and I tried to show, as far as our administration as a Government and as a Parliament were concerned, that there was no extravagance. We have thought it wise to increase the pay of some of our lowly-paid public servants, and to undertake new services and projects in ceiiiin directions, but so far as the actual expenditure itself is concerned, there has been no extravagance. I do not intend to go into that matter in detail again, because I give my personal assurance to the Committee that everything in connexion with the Commonwealth Departments is conducted on as economic a basis as possible.

Mr Hughes:

– Who makes these charges of extravagance?

Sir GEORGE TURNER:

– They are generally made in the different States, but they are made very vaguely.

Mr Hughes:

– I think the present Prime Minister made some of them.

Sir GEORGE TURNER:

-I wish to deal just for a minute or two with the position of Queensland. It is a matter of deep regret that that particular State does not come out as well as we should all like, with regard to her revenue. I found last year that there was likely to be an encroachment on the three-fourths revenue which- I had hoped to return to the State. I, therefore, went again into the Estimates and cut down and kept back whatever expenditure I could. The result was that we had an unexpended amount of £36,000, which was of great benefit to that State. But, unfortunately the consideration which I showed works out in this way against me. I put off works which I should have liked to carry out last year, but I have to provide for them on the Estimates this year. I kept back the matter of filling up the ranks in the Defence Department last year, but I have to provide for filling them up this year. The result is this : If last year I had, we will say - spent £3,000 upon a new Post-office - for which provision was made on the Estimates - expenditure to the amount of £3,000. would have been incurred. But as it was not spent last year, the amount ‘has to be placed upon the Estimates against this year. That increases the current year’s expenditure by . £3,000, and makes a difference of £6,000 as between the two years. It is in regard to matters of that kind ‘ that some of our financial critics do not treat us very fairly when they compare our totals. They do not take into consideration the amount which we have endeavoured to save in one particular year in order’ to suit the convenience of the States. They do not consider that the more I try to keep down expenditure in one year, the more I may have to increase expenditure in the following year. These vague remarks about our extravagance are continually being made, and I wish to place before the Treasurers of the States, the full facts of the case, giving the most complete figures which I can give, in order that our critics may, if they can, pick out any item of extravagance. If they will do so, and will let me know of it I will take care that an investigation is made by myself and by the Department interested. I come now to another difficulty, in which the State of Queensland is especially interested. That is in regard to the effect of section 87 of the Constitution. The details are given on page 58 of the budget papers. In the Convention we fought time after time to obtain a guarantee for some of the States that they should have a certain amount of revenue returned to them. I know that in Victoria, unless there had been some guarantee, probably there would have been very great difficulty indeed in securing Federation. But the feeling in the Convention was strongly against the Federal Parliament being in any way tied or hampered. The members of the Convention wanted to trust the Parliament entirely, as to how much of the revenue collected it should return to the States, and how much it should expend. I was not prepared to agree to that because - although I believed that the Federal Parliament would always try to do justice to the States - I knew that some people would not look upon it in the same spirit; and I was aware that, unless we had some guarantee, there would be a difficulty in some of the States in carrying out what we earnestly desired. Eventually we were able to prepare a clause which bears the name of a respected member of this House, who, unfortunately, has passed away. I allude to the Braddon section. That guarantee was to the States collectively that they should get back threefourths of the net Customs and Excise revenue. But that did not mean that any individual State must get back three-fourths of its own net Customs revenue. I had fought for that in the finance committee of the Convention, and had fought for it in the Convention itself, ‘but I had been over-ruled, and had to accept the best compromise we could get. There was no misunderstanding on this subject in the Convention.- The” Convention knew perfectly well what it was doing. It did not intend to tie the Federal Parliament to give back to each State three-fourths of its Customs excise revenue.

Sir John Forrest:

– Yes, it did; I understood it in that wavi

Sir GEORGE TURNER:

– There can be no doubt whatever that there was no intention in the Convention to give back that amount to each State individually. I recollect the matter distinctly, and I have since looked it up in the reports. I myself fought very hard to try to get what it is now said by some people that the Convention intended. But I was beaten, and had to accept the best compromise I could get. I will admit, however, that it was never dreamt that any State would not get back its three-fourths. That is the exact posi- tion. Queensland was not represented in the Convention. If she had been represented, information might have been placed before the Convention to show how the proposal would affect her financial position.

Mr McDonald:

– Then we should never have had Federation.

Sir GEORGE TURNER:

– I think we should have had Federation, and, if possible, a more democratic Constitution. I do not wish it to go forth that the States were in any way misled. They could not have been misled if they followed the Convention debates; although I freely confess that the (Convention and the Treasurers who were present at that Convention never dreamt that the Federal Parliament would haw to utilize more than one-fourth of the net Customs revenue of any one State. But still, as far as the Constitution is concerned, we have a right to do it. It, however, is a right which should be used as sparingly as possible. The States have received during the four years over and above the amount that we might have expended if we had appropriated the full one-fourth the following amounts: - New South Wales, £1,403,115; Victoria, £837,952; South Australia, £297,693; Western Australia, ,£794,402 ; Tasmania, £110,620. This year we have encroached on the three-fourths of the Queensland revenue to the extent of £56,602 ; but taking the Commonwealth as a whole, the States have during the four years got back £3,379,583, which, if we had chosen, we might have expended. It shows that this Parliament, having a free hand to the extent of £3,400,000, has not abused the privilege conferred upon it by the Constitution, but has dealt as fairly as possible with the various States. That amount includes £192,000, the one-fourth of the special Western Australian Tariff. Queensland is a State which unfortunately has been “ hit,” but, taking the three years up to the present time, even that State has not much to complain about. In ‘1901-2 the shortage in Queensland was £20,000 ; in 190374, in consequence of my keeping back expenditure, the encroachment was represented by only £2,000, whereas in 1902-3 Queensland received- more than her three-fourths to the extent of £15,000. It will be seen that in the three years this State has had only £7,500 taken from its three-fourths of Customs revenue. But in the period from the 1st January, 1901, to the 30th June, 1904, we have returned £62,926 more than the three-fourths. In addition, the expenditure in Queensland in 1903-4 exceeded that in the previous year by only £1,325, the loss to that State being caused by reduced revenue. This year, unless we have the savings for which I hope a much larger amount will be deducted from the sum returned to Queensland ; but experience so far has shown that a comparatively small amount has been retained over and above what the Commonwealth would have been entitled to keep, even if we had been bound to return threefourths to the State.

Mr Fisher:

– What does the Treasurer mean by “keeping back” ?

Sir GEORGE TURNER:

– I mean keeping back expenditure on defences - asking the Department not to fill up vacancies, and so on, and also asking the Postal Department not to proceed with new buildings.

Mr Fisher:

– Those are savings.

Sir GEORGE TURNER:

– I hardly like to call them savings, although they may in one way be so termed. The practice is one I do not like, namely, postponing expenditure, in order to help a State through a particular financial year.

Mr Hughes:

– Is the expenditure necessary ?

Sir GEORGE TURNER:

– Yes. This year- the total ^amount to be returned to the States is £600,000 more than the Commonwealth would be bound to return if we took advantage of our full power under the Constitution. In considering this question, we must not forget that in the past we have not been paying interest or sinking fund in connexion with the transferred buildings. Unfortunately, I have not yet been able to come to a satisfactory arrangement with the States, but, assuming an arrangement is arrived at this year and the payments start from the 1st July last, it will necessitate our providing £450,000, which will leave us only about £150,000. We have still to take over departments, such as the administration of quarantine and the lighthouses, which are non-paying, and honorable members will see that we shall have very little to “come and go” upon. in connexion with’ the surplus in the future, after charges under these heads have been met. Therefore, while I should be very glad to ask the Committee to institute penny postage throughout the Commonwealth, the accounts disclose facts which prohibit my making that request. We certainly should not be able to spare the amount of revenue which would be lost in consequence of such a reduction in the postage rate.

Mr Webster:

– Not with the present revenue ?

Sir GEORGE TURNER:

– Not unless we were to make a general alteration by which we could collect more revenue from some other source. Honorable members know that in past year’s I . have held the view that as soon as possible we should have “one pocket.” With revenue credited and expenditure debited to the States, and accounts having to be kept as at present, we are not a ‘true fede ration. In my judgment - and this I always contended for at the Convention, but was beaten - a true federation is one where you have simply a record of the receipts and expenditure, and the surplus, whatever it may be, divided amongst the various States on a population basis. However, it was seen at the time of the Convention, that, in consequence of the varying revenues, it would be very difficult under any uniform Tariff that might be adopted to have a .distribution which would be equitable to all the States. The following table shows the effect of section 87 of the Constitution on each State : -

I show in the following table what, would happen if we dealt with all the States on a population basis instead of on a bookkeeping basis: -

Last year New South Wales would have lost about £78,000 and’ Western Australia £[479,000, which would have been distributed amongst the other four States. This year New South Wales would have lost £22,000 and Western Australia £468,000, which would have had to be similarly divided. I am free to confess that Western Australia could not fairly be asked to stand such a loss. It is a new country, where developments are required, and with a revenue likely to be reduced rather than increased, as already shown by the returns. It would not be fair when dealing with this question a couple of years hence to insist on a per capita, basis over the whole of the Commonwealth. I have therefore made a calculation dealing with the States other than

Western Australia, and that information will be found on page 67 of the Budget papers. . The following table epitomizes it : -

Omitting Western Australia, New South Wales last year would have lost £262,000, which would have been distributed, in the proportion shown, amongst the other States. This year. New South Wales would have lost £205,000, which would have been distributed in a similar way. But seeing that in the year before last, New South Wales ‘would have lost £399,000, it can be seen that independently of any of the , disturbing elements which naturally arise in connexion with the grain duties . and other matters, the amount appears to be steadily decreasing in that State. If these disturbing elements were eliminated from the figures, the amount of loss to New South. Wales would be considerably reduced; but the tables are prepared on actual receipts. Any scheme ‘ which may be brought forward by a Treasurer withina reasonable number of years must, I think, provide for a certain amount of revenue belonging to New South Wales being distributed amongst the other four States, if we are to divide on a -per capita basis. But I have always felt, and experience strengthens my view, that as the years roll on less Customs revenue will be collected’ in New South Wales. There will be more Inter-State trade and more Australian -manufactures, and the expenditure in a large State, such as New South Wales; will increase much more rapidly than in smaller States, such as Tasmania and Victoria. In a reasonable space of time, I have no doubt that a per capita basis will be found to be fair and equitable to all the States, resulting in what I regard as a true Federation. No one car. realize the amount of bookkeeping which has to be carried on under present circumstances. Honorable members can see the immense mass of figures which have to be dealt with in connexion with the finances of all the States. If I had only one fund to deal with, my financial statement would be very simple, and not nearly as trying to myself or to the patience of honorable members. This is a matter which will have to be dealt with, though not in this Budget statement, and I am building up the figures, year by year, so that those who follow may have the benefit of our past experience. I have no doubt that in connexion with the next Financial Statement the Committee will have to give careful consideration to the question of distributing the surplus ; and my belief is, that the true solution of the difficulty will be found in a scheme under which a sliding scale of. say, five years, is allowed to the States other than Western Australia, the latter being allowed ten years. At the end of that period after the expiration of the bookkeeping arrangements, we should not. I think, be doing any iniustice to any of the States, not even to Western Australia, by a per capita distribution.

Sir John Forrest:

– There is no evidence of that yet.

Sir GEORGE TURNER:

– I do not know that we could apply such a scheme at once to any of the States, but sooner or later, there will have to be a per capita distribution - we cannot be expected to continue the present bookkeeping for all time. - No doubt, that was known to the people- of Western Australia when they agreed” to enter the Federation, and it was one of the reasons why a concession was given to that State, enabling it to tax the productions of the other States on a sliding scale for five years.

Mr Mahon:

– There is no concession in that ; the Western Australian people pay.

Sir GEORGE TURNER:

– I have not been in Western Australia, and am not in a position to say what the people there want, but I hope shortly to take a trip West. I know only what the representatives of Western Australia at the Convention agreed to, and what I have indicated was a suggestion made to induce Western Australia to join the union - it was a bargain made between the States. On page 68, New Guinea is dealt with, and on page- 69 I have tried to get, for the information of honorable members, from the Departments, the increased expenditure on account of increments and promotions. I believe these figures to be approximately correct. In the Treasury, we have no means of checking them exactly. I fear that some States do not make them up on the same basis as others, and that I intend to inquire into, but I believe that the figures are approximately correct for the purposes of honorable members. From the table, on page 69, we see that for the three years the minimum wage has been in operation - taking the annual expenditure at the end of the year, which is something more than the amount provided on the Estimates, because, as a rule, an increment does not run for the full year in the first instance - we have paid to these lower-paid servants an extra sum of £94,000. The increases of salaries come to £82,000 this year, representing £16,000 for the minimum wage, and £60,000 for increments and promotions ; the appointment of new officers . to fill vacancies, and provision for new positions, involve a sum of . £31,500; the. increased expenditure under section 19 of the Victorian Public Service Act, comes to £5,000 ; while the increments under the law of South Australia amount to £2,000. making a total of £114 , 000. But we make savings by retirements and so forth, to the amount of’ £32.000, leaving the total ‘ increases.at . about , £82,000, andI hope that we shall have a further saving, of some £8,000. The details are shown in the following table: -

Since. I, last delivered a Budget, statement a. classification of the Public Service has been- made. We have heard something about this from those who are interested. I asked the Public Service Commissioner to give me a short report, for the guidance of honorable members, as to. how this scheme was arrived at, and. , how, it is, likely to work out in practice., Undoubtedly he had a very difficult task to perform, I do not say that he has given satisfaction to everybody ; but I consider that he has tried to deal fairly and honestly with a most difficult and complex question., I tried.to classify the public service of Victoria,: and I had to, give up the task in despair. It will be useless for us at the present time to discuss, at any rate, at great length, the classification of our Public Service or its effect, because there are 2,000 appeals still pending, and until these have been- decided we shall not know exactly what the classification will involve.. The determination of those appeals may remove many apparent inconsistencies which might otherwise require to be discussed.

Mr Hughes:

– It will take a considerable time to deal with them.

Sir GEORGE TURNER:

– I understand from the Commissioner that the appeals will be dealt with pretty rapidly. What I propose is that the officers shall get the benefits of the classification as. fromthe 1 st July last, and it will not be finally accepted by the Governor-General inCouncil until honorable members havehad a full opportunity to. deal with any objections which they may thinkought to be brought before the House, and the Government have had an opportunity to fully consider every objection which may be raised from any quarter. After the Commissioner has dealt with the appeals, the responsibility will rest with the Government.

Mr Hughes:

– Will the scheme be discussed this session ?

Sir GEORGE TURNER:

– I do not know that the opportunity will arise this session ; but certainly before the classification is finally dealt with-

Mr Hughes:

– Before it takes effect?

Sir GEORGE TURNER:

– Before the scheme takes effect, the House will have the fullest opportunity of discussing it. Probably in the early part of next session it could easily be dealt with. On the Estimates we have provided for all the benefits given by the classification. One portion of the Publice Service will be paid at once, but another portion will not be paid the proposed increases. In the first instance - and I mention this specially because I understand that my predecessor said he did not intend to pay - in the case of all salaries upto £160, I propose to commence paying the increments at once, and not to wait for the, passing of the Estimates. That practice I followed in previous years, with the concurrence of the Committee. Under the Public Service Act there are certain increments which a man gets almost as a right. It is only in a very few cases that the Commissioner would deprive an officer of the concession, and, as the amounts are very small individually. I think it is only right that they, should be paid as they accrue. Then under section 19 of the Victorian Public Service Act, we have to allow certain officers to receive the amounts at which they have been assessed up to the present. These are higher than the amounts which are provided by the Commissioner in his scheme, but until it has been finally decided, we think it is fair that the officers shall be permitted to draw them.

Mr Tudor:

– When is it going to be decided ?

Sir GEORGE TURNER:

– Early next session, I hope. In the meantime, the officers cannot grumble, because they -are getting an increased amount. The officers of the Crown Law Department are of opinion that as soon as this classification takes effect it will supersede all State Acts with regard to salaries and such matters. That, of course, is a very important question which we shall have to fully discuss when we are dealing with the scheme of classification. As we have not too much time at our disposal, I would ask honorable members to refrain from discussing, at any rate, at great length, the various grievances, or supposed grievances, which public servants may bring under their notice when we are dealing with these particular Estimates. As far as the effect of the classification is concerned, the Commissioner took all the increases which should be provided, and against them he placed the amounts which he was giving independently of the increases. Honorable members know that up to £160 a year the increments would operate whether we had a classification or not. Unfortunately the Commissioner mentioned that the cost of the classification was £54,000. As a matter of fact as he pointed out afterwards, it is nothing of the kind. Fiftyfour thousand pounds was the total of the increases, including £34,000 for increases, which otherwise would have been given. Therefore, the present cost of the classification is £20,000 per annum. That, he believes - and I agree with him there - will be considerably reduced, probably by onethird during the year, by filling up vacancies at lower rates which he has provided in some cases, and I think it will be found when full effect is given to the scheme that what he has done will mean little, if any increased expenditure to the Commonwealth. That sum of , £54,000 includes £41,000 for increases’ of salaries under £200; £12,000 for increases of salaries from £200 to £500; £200 for increases of salaries over £500; and £400 for increases for administrative division. Honorable members will therefore seethatit isnotacaseofbenefiting the tall poppiesandtramplingon the little daisies.Ibelievewhatwe have done, and whattheCommissioner hastried to carry out, has been equitable to all the Departments. Seventy-six per cent. of the concessions is give to those receiving thelowerratesof pay .The interpretation of section19 of theVictorian Public Service Actisaburningquestion with Victorian members. It does not affect other honorable members to anygreatextent. Under that provision certainofficers were to receive ashigha salary, as officers performing corresponding work or holding corresponding positionsin other States . That was thought by theStateParliamenttobe only fair, and whatevertheextra costmay be. during the book-keeping period Victoria will have to bear that burden.Sofar,for a period of three andahalfyearswehave paid £35,000. Alltheclaimshavenot yet been received,butwhentheyareallin the amount to be paidwillbeconsiderably less than any sumwhichwasestimated Some estimates amountedto£40,000a year.Ithoughtthatitmightcometo £30,000ayear,butIamsatisfiednowthat it will be considerablylessthananyestimate which was madeandtheamountprovided on the Estimateforthisyear-and we have alreadydealtwithaconsiderable portion of the claims-comestoonly £6,600.

Mr Tudor:

– Doesthe£35,000represent the amount for three; years?

Sir GEORGE TURNER:

-Forthree and a half years.

Mr Tudor:

– Are thebulkofficers satisfied?

Sir GEORGE TURNER:

-Yes,I think so. There may be a littlemorelitigation in some cases. I have prepared inprevious years for the information ofhonorable members certain figures with regard to the imports and exports of the Commonwealth. I have had to abandon all the figures Ipreviously put before honorable members. ‘ At the time I said that I did notplace very much reliance upon them, butthey were the best I could submit, owing to the differing circumstances of the different States. But this year I made provision for a fresh start with information furnished to me by Mr. Coghlan on a uniform basis. Each State has gone on its ownbasis, in making its calculations, but, in future; believe we shall have comparisons which will be very useful to honorable members andtothose interested in trade. I do not propose to go through,, the details of this document, but I specially recommend honorable members to study the following figures, . with regard to the net imports into the different States, showing, the dutiable and nondutiable articles: -

The total net imports during the year came to £36,244,000, and the total of the InterState transfers of our own products - not re-exports of imported foods - came to £24,431,000.’ There is one matter which is somewhat peculiar in the comparison between New South Wales and Victoria. The free imports for New South Wales for the year 1903 amounted to £3,317,000, and for Victoria they. amounted to£3, 140,000. These amounts are almost the same, but in respect of dutiable goods, the figures for New South. Wales are , £9,262, 000, and for Victoria £6,948,000. Even allowing for the discrepancy in the population of the two States, it is shown that an immense amount is being imported into New South Wales in excess of the importations into Victoria, and it is for this reason that I believe that as years go on the New South Wales revenue will certainly come down very considerably from what it is at the present time. I have now given the information supplied by the Budget papers, and I can only say again that I have to go into all these matters for the information of the Treasury Department, and in order that the Treasurers of the States may have full opportunities of comparing the figures. As we have to keep these records under the bookkeeping sections, I think it wise that honorable members should have the benefit of the information they ‘supply. If they desire to go to the. trouble of comparing the tables, in order to work out any amounts referred to in the financial statement, they will have all the material before them that I have had. I have concealed nothing from honorable members, and I have given them exactly the figures on which I have myself worked. There are two or three other matters not coming directly within the financial statement, to which I desire to refer.’ One has reference to the question of States debts’.

If there is one question of more importance than another to the Commonwealth it is that of the method to be adopted in dealing with the immense amount of money we owe to our creditors. I am not satisfied with matters as they stand in- this respect. I called a meeting of the Treasurers of the States, and we had a very interesting and very instructive discussion on the whole subject, extending over several days. I am glad to be able to say that we came more nearly to an agreement as to what ought to be done than I at first anticipated. When we first started our proceedings, we were very wide apart indeed, but gradually, day after day, upon arguing the matter out, we saw we could get more closely to each other. We agreed that all the debts should be taken over, and not merely a portion of them. South Australia preferred that a portion only of the debts should be taken over, but did not object to the whole being taken over. Then it was thought that we should deal with the whole subject at the earliest possible moment, and the Treasurer of New South Wales- said that he would like to wait to see what would be the effect of the working of the Federation, in order to ascertain whether the Federation could borrow more cheaply than the States. That was one of his difficulties. Then there was unanimity amongst us as to the necessity for a properly guarded sinking fund for each Commonwealth loan - a genuine sinking fund, which could not be used by the Federal Treasurer if he should require’ it for any ‘other purpose. It was agreed that it should be vested in trustees, and that it should be applied whenever opportunities arose in buying up our own stock, and by that means reducing the amount of our indebtedness, arid securing a good return for the ‘ money we were investing. The only difference between us on this point was that, while I thought the only fund which would be satisfactory to those who would be advancing us money would be a 1 per cent, fund, the States Treasurers desired that we should establish a½ per cent, sinking fund. However, I think that if we meet again, we shall probably be able to arrange this difference satisfactorily.

Mr King O’Malley:

– Is it proposed to take over the railways as security ?

Sir GEORGE TURNER:

– The amount of the sinking fund would not be very large at first. It would not apply to existing loans, but only to loans floated by the Commonwealth for the purpose of taking up existing and new loans. It would, therefore, be a number of years before the sinking fund could be any burden upon the States, because in the earlier years, they would be making considerable savings from the rate of interest, which would probably recoup them for any payments they might have to make to the sinking fund.

Mr Hughes:

– Those would become appreciable as time goes on.

Sir GEORGE TURNER:

– They would, and that is the reason I say it is open to consideration whether a sinking fund of 1 per cent, should be insisted upon. With regard to this matter, I should be very glad to have the opinions of honorable membeis who are willing to express them in discussing the Budget statement. I mention the matter now, because I like to get all the information I can from every possible source. I insisted that there should be ample security given to the Federal Treasurer, so that he should at no time be placed in the position of having to sue a State. It may appear a somewhat hard thing to say, but I came to the conclusion that the only ample security would be the right to collect the gross railway revenue of the States. The Customs and Excise revenue would be sufficient for some of the States ; in others the net receipts from the railways would probably be found sufficient to make up any deficiency, but in the case of some of the States, and more especially if further borrowing is to go on, the Commonwealth Treasurer would not be safe unless he had control over the gross revenue from the railways, and it would never do to differentiate between the different States in this respect. I met the objections of the States Treasurers in this way : I said, “ I do not wish in any way to interfere with you unless the necessity to do so arises.” My proposal therefore was not as put forward in the first instance, that we should collect the railway revenues and pay them back to the States . month by month as we do Customs revenue, but that we should not interfere with any State so long as we had sufficient money in hand to meet any liability we had to pay, or so long as the Treasurer of the State made up an amount required to meet a deficiency whenever the Federal Treasurer wrote to him stating that that amount was required. But I still desire to have the reserve power, in order that those in the old country who lend us money might know that if a deficiency arose, the Federal Treasurer, in case of necessity, would have the right to take possession of the gross receipts from the railways for the purpose of meeting it ; of course, returning immediately to the States any moneys which would not be required for that purpose. I have no doubt the Treasurers agreed with that modified form of my demand.

Mr Mcwilliams:

– In the case of most of the States, would not the Customs revenue give the Federal Treasurer ample security ?

Sir GEORGE TURNER:

– No: If my honorable friend will read the very inter esting report of the Treasurers’ Conference, and the figures there supplied, he will fmd that I showed clearly that the Customs revenue would be sufficient only in the case of very few of the States, and that in some of the States, in one if not in two, it was perfectly clear that it would not be sufficient to take merely the net revenues of the railways. While I cannot see any harm in the Commonwealth having this particular power, to be exercised only when necessity arises, I feel positive that it will be a very great advantage to those who are acting as our financial advisers in the old country to be able to show when they are attempting to float a loan that there is ample security behind the Federal Treasurer. There is no likelihood of. payments not being made punctually. They know as well as we do that in every instance interest will foe paid when it falls due. But when they wish to make the best bargain they can for themselves and their clients, thev do not tell all that they know. I desired that the Federal Treasurer shall do all future borrowing, and- there we struck on a rock. I admitted freely that the Federal Treasurer should not control the borrowing of the States by dictating what amount of money they should borrow. In my opinion, no hard and fast line can be laid down. It could not be said that one State shall borrow so much and another State so much. I was willing to leave it to the Parliaments of the States to decide what each State should borrow, because it is certain that for many years to come there will be no heavy borrowing, and no extravagant expenditure of loan money. All I asked was that, to prevent competition between’ the States and the Commonwealth, the whole of the borrowing should be done through the Commonwealth Treasurer, who would borrow for the States what they required, so long as he had ample security for repayment.

Mr Thomas:

– Under that arrangement would there be any danger of the Commonwealth encroaching upon the land revenues of the States?

Sir GEORGE TURNER:

– No; because if the borrowing of a State were approaching a dangerous point, the Commonwealth Treasurer would say, “I will not borrow any more for you, as I do not think that the security is sufficient. Your revenue may fall off. I shall not consent to borrow any more for you unless you are prepared to assign me further revenue, and to give me the right to collect it myself, if I think that necessary.”

Mr Hughes:

– Would the purposes for which a State desired to borrow be taken into consideration by the Treasurer of the Commonwealth ?

Sir GEORGE TURNER:

– No ;. under my scheme the Commonwealth Treasurer would not interfere in any way with the borrowing of the States. Whatever a State asked for - £r, 000,000, ,£2,000,000, or £3,000.000 - he would borrow if the market were favorable, and the transaction would not conflict with a consolidation loan, provided that ample security was given to him. My suggestion was strongly objected to, because the Treasurers of the States desired to have unlimited and unfettered powers of borrowing. My reply was that if they persisted in that view, the Conference must end. I think that the whole, or a great portion of the benefit to be gained by allowing the Commonwealth Treasurer to borrow on behalf of the States would be in the prevention of competition between States in the London money market. We should not have one ‘ State rushing into the money market” to get an advantage over another State, or over the Commonwealth, nor would a State be forced to take whatever terms it could get, and be squeezed by the financiers in the old land. I think that all borrowing should be done through the Commonwealth Treasurer. The honorable member for Kooyong has suggested that a finance commission might be appointed to do the work; but, personally, I should be prepared to trust the Commonwealth Treasurer to do what is just and equitable. Any man holding the position would have as his only object the assistance of the States, because he would know that if trouble came to one State it would react on the Commonwealth. The only agreement I could make with the Treasurers of the States was that, instead of a sinking fund of 1/2 per cent, if the Commonwealth Treasurer borrowed, they would provide a sinking fund’ of 1 per cent. ‘ if the Treasurers of the States borrowed. That, however, is not an arrangement to which I feel inclined to agree. Of course I do not wish to utter anything in. the nature of a threat. I do not believe in doing that. But I had to point out to the Treasurers of the States what I point out again now. that, sooner or later, the States will be forced, to borrow through the Commonwealth. The Treasurers of the States insisted that the Braddon section of the Constitution should be made perpetual, and that three-fourths of the total Customs revenue raised by the Commonwealth should be returned to the States each year. South Australia and Tasmania wished to have the surplus returned on a *per capita basis. I was ready to go a long way, because I was very desirous of bringing the Conference to a successful termination, and of being able to propose to Parliament a scheme which I could honestly recommend, and for which I could fairly claim support. Besides, having been a State Treasurer myself,- I know the difficulties with which the State Treasurers have to contend. I therefore offered to ask the Federal Parliament to agree to an absolute extension of the Braddon section of the Constitution for a period1 of fifteen years, thus giving it a currency of twenty-five years instead of ten years, as is now provided for. They would then be entitled to obtain collectively three-fourths of the total Customs revenue raised by the Commonwealth for a period of twenty-five years from the inauguration of Federation.. Another proposal I made to them was that, during the currency of the existing redeemable loans, which is something over forty years, the Commonwealth should return to them each year three-fourths of the net Customs and Excise revenue raised in that year, or that they should be given a sum equal to three-fourths of the average yearly collection of the Commonwealth during the ten’, years of the operation of the Braddon sec- tion, whichever might be the lesser sum. At the end of ten years from the inauguration of Federation we shall know how much Customs and Excise revenue has been obtained by the Commonwealth, and will be able to determine the average yearly receipts ; and I proposed that there should be given to the States each year after that the amount of such average, or where the collections were less than the average, their three-fourths of the actual amount collected. I think that I met the States very fairly, but I shall be glad if honorable members will shortly let me know if they think that the position which I took up was justifiable, because I intend, later on, to make another effort to settle this very vexed, difficult, and important question. No one can realize its difficulties and com.plications until he begins to study it. When Federation was being advocated, it was said by some, though I did not say it, “ Federate the debts, and you will save £1,000,000 straight away.” Those who look deeply into the matter will see that, although it will be wise, proper, and right ito federate the debts of the States, the saving in interest would not, in the long run, amount to very much, because a considerable portion of our public debt has been borrowed at 3 per cent., and the Commonwealth could not hope to borrow at a lower rate. One of the chief advantages obtained from the federation of the debts would be the prevention of the competition to which I have referred, and the improvement of the position of the Commonwealth- and of the States in the money markets of the world.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– What is the average rate of interest now paid on the debts of .the States?

Sir GEORGE TURNER:

– Three and five-eighths per cent., I think. Another question which I have been trying to settle since Federation was inaugurated is ,the payment for transferred properties. The Conference was most disappointing, so far as that matter was concerned. It was the second Conference held to deal with the subject, but nothing -came of its deliberations. The Treasurers of the States met in a Conference of their own, and gave me what they called their ultimate decision, but what I regarded as rather their ultimatum. At any rate, I was not at -all satisfied with it. Of course,- property exclusively ‘used by -the Commonwealth -came over to us under the, Constitution with . nui any trouble,- but where’ properties not exclusively used by the Commonwealth have. been taken over, other arrangements have to be made. The Treasurers of the States went to the length of saying that if a clerk employed by a State occupies any one room in the largest building taken over by the Commonwealth, that building is not exclusively used by the Commonwealth, and does not belong to the Commonwealth as a matter of right, but must be resumed under other sections of the Constitution. That may be the strict legal interpretation of the Constitution, but it is not an equitable one, and was not the intention of its framers. Their intention was that if a building were occupied mainly by officials of transferred Departments, it should be handed over to the Commonwealth, whereas if it were occupied mainly by officials retained by a State, and the Commonwealth officials occupied only a few rooms in it, it should be regarded as belonging to the State. I wished that intention to be carried into effect. The States Treasurers further suggested that the land upon which transferred buildings have been erected should be paid for by the Commonwealth at market rates, although it Eas cost the States nothing, and in many cases is of immense value. As far as I am aware, the General Post Offices at Melbourne and Sydney were erected upon Crown land, which was of very little value at the time. Now, however, it is of immense value. The States Treasurers wish the Commonwealth to pay them the present value of that land. But when it comes to the mode in which the States shall be compensated for the transferred buildings, they adopt a different system. They desire the Commonwealth to take these, not at their market value, but at their value. That really means, so far as I can ascertain, that the Commonwealth is asked to pay to the States the cost of these buildings, because the value of a post-office, if it is not used as such, i3 merely what we should obtain by pulling it clown. The States Treasurers wished to have matters all their own way.

Mr Fowler:

– It was a case of “heads. I win, tails you lose.”

Sir GEORGE TURNER:

– That is what I said at the ‘Conference, though I do npt like to put it exactly in. that way. If -thev States are to. be repaid the cost -.of the.transferred buildings,, thev -should also, re…,ceive the original cost of. the land upon’ which those buildings.. stand: ‘ However, the’ Treasurers do npt, .desire-, that..- They wish.; to secure the present value of the land, and the original cost of the buildings.

Mr Fisher:

– What is the difference to the electors?

Sir GEORGE TURNER:

– Very little.

Mr Isaacs:

– How are the two things separable ?

Sir GEORGE TURNER:

– I do not wish , to separate them.Istated at the Conference thatI was prepared to pay the States the market value of the land and of the buildings.

Mr Groom:

– That is at the date of transfer?

Sir GEORGE TURNER:

– Exactly. I was prepared to agree to a settlement of the difficulty upon the basis of the cost of the land and buildings, and I am equally willing to pay the States the market value of the land and of the buildings. In order to arrive at the value of the transferred properties the States. Treasurers desired that for each State two valuators should be appointed with a judge of the Supreme Court as umpire, whereas, I wished one valuator to be appointed for all the States, another for the Commonwealth, and thesetwo individuals to choose the umpire. That is a detail, however, concerning which I should not be too insistent. Regarding the mode of payment to be adopted, the first idea was that the Commonwealth should hand over cash to the various States. I think that I dispelled that idea before theConference took place. Then they proposed that the Commonwealth should pay them in3½ per cent. bonds. I objected to Commonwealth bonds being held by the States to be placed upon the market as they thought fit. If the whole of the debts were taken over it became a matter of simple adjustment, but, if not, I was prepared on behalf of the Commonwealth to make an offer to pay off the total amount due to the States by providing a sinking fund of one or two per cent., and to pay3½ per cent. interest, which I regarded as a very reasonable rate. As the value of the transferred buildings is said to be £10,000,000, honorable members will see that itwould be very awkward for the Commonwealth to be required to go upon the money market for its first loan, when that market might be unfavorable, or to risk having its bonds placed upon the market and sold for whatever the States chose to accept for them. I could not agree to that proposal. The States Treasurers will not even supply us with their claims. They have them made out, but will not hand them over until we have agreed upon the mode in which they are to be compensated. I believe that these claims amount to £15,000,000 or £16,000,000. The honorable member for Wide Bay interjected just now, “ What does it matter to the electors”? If the States made no charge whatever against the Commonwealth, it would not make very much difference to the position. Whatever they receive, and whatever we have to pay, must come out of the same pockets. The only difference is that upon a population basis some States will have to contribute a larger amount than others. My suggestion at the Conference was that we should strike a balance, and then leave a very small sum - perhaps £2,000,000 - to be paid in the manner I then indicated. The States Treasurers objected that the adoption of such a proposal would result in taking away from them all their buildings, and leaving them with all their loans. To my mind, there is not much in the contention. The main object, however, is to control Federal expenditure. They know that if we had to borrow money and to provide interest and sinking fund we should need to set apart £400,000 or £500,000 annually out of our one-fourth of the Customs receipts. They make no secret of their desire. Their main purpose is to restrictourexpenditure. Therefore, when we consider that we have a certain surplus, we must not forget that sooner or later we may have to meet these demands, and that there will not then be very much left.

Mr McWilliams:

– If the States had the security that would be provided by the extension of the Braddon section of the Constitution, the difficulty would disappear.

Sir GEORGE TURNER:

– I do not blame the States Treasurers for desiring to obtain some security in the form of the continuance of the Braddon section of the Constitution. I do not think they desire this so much in their own interests. But it is very easy for people outside to originate a rumour that the Federal Parliament is dreadfully extravagant, and that it is expending hundreds of thousands of poundshere, there, and everywhere. Moreover, when the Federal Treasurer has an immense surplus, there is always a temptation - if the Parliament has absolute control of it - to incur expenditure which would not be incurred if its hands were tied. I do not object to our hands being tied in this connexion, although personally I am prepared to trust the Parliament.

Mr King O’Malley:

-Are we not tiresome’ people?

Sir GEORGE TURNER:

– Yes, and in view of the fact that we have a large object to gain in bringing about the federalization of the States’ debts, I would not stand out for terms unless they were the essence of the bargain. There, are two other matters which I cannot discuss in detail, because, they are matters of policy. I refer to preferential trade, and the appointment of a Tariff Commission. The Prime Minister will probably speak early in the debat-; upon my Budget statement, and will then be able to discuss these, two questions fully from his point of view. So far as the Tariff Commission is concerned, we are all agreed that the fullest investigation should be made into the working and effect of the present Tariff upon Australian industries. We also agree that it should be an impartial inquiry. It should be made by persons in whom the people would have confidence, and whose decision could not be said to be tainted in any way. We should make the best selection possible with human nature to select from, and we should secure the services of a board in which the vast majority of the people have complete confidence.

Mr Hughes:

– Does the Treasurer mean that it should be appointed from outside of Parliament ?

Sir GEORGE TURNER:

– That is a point for fuller consideration. Irrespective of whether or not it is composed of members of Parliament or outsiders, the personnel of the Commission must be such that the people will have absolute confidence in it. Admittedly, it is a matter of national importance, because upon the right settlement of this question depends, to a great extent, the future prosperity of the Commonwealth. Without venturing to offer any opinion upon the question of free-trade versus protection, I say that we should have the fullest possible inquiry. With that end in view, we propose to appoint a Royal Commission, the constitution of which will have to be dealt with by the Government, because a Commission is really an appointment by the Governor-General, acting upon the advice of his responsible Ministers. There is one aspect of this matter upon which the honorable and learned member for Indi and myself differ very much. For years we worked together, although we were sometimes a little bit apart, because he was always more radical than I. Nevertheless, we worked together harmoniously for very many years. But so far as this question is concerned, I differ entirely from the views of the honorable and learned member, and because he desires to restrict the inquiry. As I understand his proposal, he desires ‘that the Parliament, with practically no evidence before it, save the statements of interested parties, shall limit the scope of the inquiry to a certain number of trades. That course was adopted by the late Sir Graham Berry, when he came back from England. I was then Commissioner of Trade and Customs, and in that capacity had intimated that, except for revenue purposes, there would be no revision of the Tariff during the then session of the Parliament. But pressure was brought to bear upon Sir Graham Berry, just as it has been brought to bear on honorable members, of this House, with a view to a variation of that decision. The duties on boots, hats, and woollens were mentioned, and it was urged that there should be a revision of “ just a few lines,” but I warned Sir Graham Berry that if the matter were once opened it would be impossible for him . to withstand the rush that would be made to extend the revision of the Tariff to almost every industry. I feel satisfied that any effort in that direction, in the case of the Commonwealth Tariff, would be attended by the same results. If we attempted in any shape or form to restrict the inquiry to a few industries to be named by us, without having any proper information at our disposal to guide us in determining whether it should be so restricted that would be the result. The main object of the Commission will be to inquire into the effect of the Tariff, and if we attempt to restrict it in any way we shall make a great mistake. Although a thorough inquiry may take a little longer than would that suggested by the honorable and learned member for Indi, I have no hesitation in saying that, in my judgment, a full investigation should be made. The representatives of every occupation, trade, and manufacture who desire to appear before the Commission to express the views entertained by those engaged in their avocations should have an opportunity to do so. I speak from experience, because I have been through the ordeal of three Tariff revisions. Two of these took place in the Victorian Parliament, while the third was that through which we passed in this House, and which, unfortunately, broke down the health of the right honorable member for Adelaide, who was then my colleague, and seriously injured my own. The great difficulty which I experienced in dealing with the Federal Tariff was that I approached its consideration with preconceived1 ideas as to what was necessary from the Victorian stand-point; but a vast quantity of information was laid before me, and caused me to change my views. As the result of this information, I was forced to the conclusion that the very high duties which had prevailed in Victoria were not wholly required. This matter will have to be fully threshed out before a Commission in whom both sides have confidence, and the work will be a very heavy one.

Mr Isaacs:

– Do the Government propose that the Commission shall deal with the whole Tariff?

Sir GEORGE TURNER:

– Yes. Why should any industry be shut out? Why should we say, for example, that “ The Commission shall deal with the industries of A, B, and C, and that should D come forward, and say, ‘ I am interested in an industry which, though small, constitutes my sole means of earning a livelihood, and is just as much to me as is any industry controlled by a large company. I wish to be heard,’ he should be shut out.” Such a man might be even more vitally interested in the work of the Commission than would be the shareholders of a company. The latter might have other means of earning a livelihood, whereas the man engaged in a small industry might have to rely upon it for a living.

Mr Crouch:

– An inquiry into the whole Tariff issue might extend over years

Sir GEORGE TURNER:

– Not necessarily.

Mr King O’malley:

– Will the Government provide that the Commission shall furnish progress reports on certain items?

Sir GEORGE TURNER:

– We may or may not do se*. If a Commission be appointed, the members of which are able to devote a considerable amount of time to its inquiries, there will not be any very great loss of time. If what I suggested had been done before the Federal Tariff was passed - if the right honorable member for Adelaide and I had been appointed a board to investigate all the claims for consideration in the Tariff before we took it up, and given power to take evidence on oath - we should have been able, in six months, to deal with the whole matter, and to report very fully upon it. I repeat that we could not, in justice or equity, shut out any industry, no matter how small or struggling it might be. Every one admits that there should be an inquiry into the working of the -Tariff, and if it is to be conducted on right lines no industry, whether it be -small or large, should be shut out.

Mr Crouch:

– While the Commission is sitting the men will be starving.

Mr Webster:

– Some trades could be dealt with before the position of others was considered.

Sir GEORGE TURNER:

– Probably.

Mr Webster:

– Could we not consider the reports of the Commission in relation to those trades?

Sir GEORGE TURNER:

– We could, to some extent, but my experience teaches me that the moment a Tariff Commission touches one line, it is impossible to say where its labours will terminate. Take, for example, the item of “ woollens,” which is subject to an import duty of 15 per cent., and in respect of which it may be urged that a duty of 25 per cent, should be imposed. If that duty were so increased, it would necessarily follow that an additional duty of 10 per cent, must be imposed on articles made up from the raw material, otherwise we should handicap those who are making up the raw material in Australia. I do not wish, however, to enter into a long discussion of the question at this stage.

Mr Hughes:

– It sounds like old times.

Sir GEORGE TURNER:

– Quite so. I speak feelingly on this matter, because I have been, on several occasions, through the ordeal of a Tariff revision, and have always recognised the difficulty of accepting onesided statements. I for one should welcome the fullest and most exhaustive inquiry that could be made into the working of the Tariff. The Commission should be so appointed’ that honorable members will have every confidence in it. It should be appointed at an early date, and pressed to report to the Parliament as quickly as possible. It may take some little time to deal with the questions submitted to it; but we must take care, in dealing with the matter, that the inquiry shall be thorough. We ought not to exclude any one ; we should endeavour to do justice to all.

Mr Groom:

– Would the Treasurer say that the Commission should report in time for this Parliament to deal with the question of Tariff revision?

Sir GEORGE TURNER:

– I am pledged to oppose the present Parliament dealing” with the revision of the Tariff.

Mr Robinson:

– And so is the honorable and learned member. .

Sir GEORGE TURNER:

– I shall not be a party to any revision of the Tariff during the life of the present Parliament. Honorable members know that the Deakin Government and its supporters went to the country, as a party, knowing that certain industries were not flourishing as well as they ought, and that it was said that they were not receiving the requisite measure of protection to enable them to succeed. Knowing of these facts, we weighed them against the possibility of re-opening the whole question, and all the difficulties and trouble which invariably take place in connexion with the revision of a Tariff, and decided, not without the fullest consideration, that we would not support any revision during the life of the present Parliament. I see no reason whatever to depart from that decision. I have heard nothing to show that any change of that policy should be made. No reasons have been advanced during the various discussions that have taken place on the question this session that would justify any departure from the solemn pledge I made to my constituents that I would not support any interference with the Tariff during this Parliament. Until our constituents have released us from that pledge - and few members of the Victorian Protectionist Party, at all events, failed to give it - I, for one, shall not feel justified in doing anything to re-open the Tariff question during this Parliament.

Mr Fisher:

– That does not apply to the provisions of the Sugar Bounty Act.

Sir GEORGE TURNER:

– No; that Act provides for an experiment which we decided should extend over a certain number of years. Some of us hoped that at the end of the period named for that measure, the growers of white sugar would be able to carry on the industry without any further assistance from the Commonwealth. Whether that be so or not, it is my opinion that we shall have to thoroughly investigate the question, and if, as I said earlier in my speech, we find that the white growers . of sugar have strong claims on us for further assistance - if it be shown that their industry is likely to be destroyed, or to be prejudicially affected to any extent, I. for one, shall not stand in the way of a further extension.

Mr Isaacs:

– I understood from the Prime Minister this afternoon that the Treasurer, in the course of his Budget speech, would give a distinct answer to the question I put to him in regard to the Tariff Commission. 9 m 2

Sir GEORGE TURNER:

– I did not understand the Prime Minister to give that answer to the honorable and learned member. I understood him to say that I would briefly open the question of preferential trade, in order that honorable members might discuss it during this debate.

Mr Isaacs:

– I spoke not of preferential trade, but of Tariff revision.

Sir GEORGE TURNER:

– The Prime Minister said that I would open up the question in order that preferential trade might be discussed, as it may well be, on the Budget statement, and also to allow honorable members an opportunity to discuss the question of whether a Tariff Commission should be appointed.

Mr Isaacs:

– Am I to understand that the Government say “ No “ to my question ?

Sir GEORGE TURNER:

– I am not in a position to answer.

Mr Isaacs:

– The Government should know its mind on that question.

The CHAIRMAN:

– Order. This is not the time for the honorable and learned member to put questions to the Treasurer.

Mr Isaacs:

– We were promised an answer to my question.

Sir GEORGE TURNER:

– I listened very carefully to the reply made by the Prime Minister, and certainly did not understand him to say anything which would lead the honorable and learned member to the conclusion he has just stated. I thought the honorable and learned member took the view of his answer which I have just mentioned, because he said, “That is not an answer to my question.”

Mr Isaacs:

– I am entitled to an answer.

Sir GEORGE TURNER:

– Other honorable members advised the honorable and learned member to ask the question again, and he himself said that the only course open to him was to take the Prime Minister’s reply as equivalent to “No.” Therefore, he could not have expected me to reply to his question ; and in a matter of policy of this kind I have no right, without a decision of the Cabinet, to discuss it. As I have said, my right honorable leader will fully discuss the matter at an early stage of this debate. Therefore, honorable members will have during this financial debate, when a.11 matters of importance are open to discussion, every opportunity to deal with the subject, and to ascertain the views of the Government in connexion with it. ‘ .

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The Prime Minister practically said that he would delegate his answer to the Treasurer.

Sir GEORGE TURNER:

– So far as concerns the management of the Defence Forces, honorable members will find a sum of . £500 upon the Estimates for the purpose of the initial expenditure in connexion with a Board or Council of Advice. That is a matter which will have to be debated; and, I think, that experience has shown that it is better to discuss all matters relating to Departments when the Estimates for those Departments are under consideration. Of course there are some financial matters - such, for instance, as those with regard to States debts, transferred properties, preferential trade, and the Tariff - which can be discussed at the stage which we look upon, as equivalent to the second reading stage. But all matters particularly affecting Departments, such as the Post and Telegraph Department and the Defence Department, can, I think, be better discussed when we reach the Estimates for those Departments. Therefore, I have asked my colleague, the Minister of Defence, to make a full statement when the Estimates of his . Department are reached with regard to the future administration of the Defence Forces. I have now concluded by task. It has taken me longer than I had anticipated. I have omitted a large number of figures which I might have given to the Committee, but I will rectify that omission by requesting the publication of tables in the Hansard report, so that honorable members, before the Budget is discussed, will have an opportunity to consider everything that I have said in the light of full information. I can only assure the Committee that I have placed the whole of the facts before them, and I have put forward my anticipations, from the only point of view which I could justify - that which I honestly consider is likely to occur. I thank honorable members for allowing me to proceed with so few interruptions. I have not been in the best of health lately, and my strength has been somewhat strained. f will conclude by moving -

That including the sums already voted in this present session of Parliament for such services, the following sums be granted to His Majesty to defray the charges for the year 1904-5 for the several services hereunder specified, namely - The Senate, , £6,722.

On that resolution the whole financial debate can take place. It is probable that, before we enter upon the discussion of the

Budget, I may have to ask for further supply.

Mr Isaacs:

– Probably I shall be able to obtain a definite answer to my question then.

Sir GEORGE TURNER:

– I again thank honorable members for their attention. I think that from the figures which I have given them honorable members will be able to obtain the fullest information in regard to the position of the States they represent. I can only say, in resuming my seat, that I hope that it will not be the duty of the Federal Treasurer on many more occasions to have to bring down the seven Budget statements which I have had to open in this and previous financial years.

Mr HUGHES:
West Sydney

– I understand that the Government are prepared to adjourn the debate, and on behalf of my colleague, the leader of the Opposition, who is unavoidably absent, I should like to ask that progress be reported.

Mr KNOX:
Kooyong

– I wish to ask if the Treasurer will have the official report of his speech circulated among honorable members as early as possible ?

Sir GEORGE TURNER:

– A special number of Hansard will be issued to honorable members to-morrow morning.

Progress reported.

page 5676

MANUFACTURES ENCOURAGEMENT BILL

Second Reading

Debate resumed from 23rd March (vide page 821), on motion by Sir William Lyne -

That the Bill be now read a second time.

Mr AUSTIN CHAPMAN:
EdenMonaro

– In dealing with the second reading of this Bill, perhaps it would be advisable for me to make a short explanation as regards the position of the measure, and as to why it falls to my lot to continue the debate at this stage, and nominally to take charge of the Bill. Before doing so, I wish to remind honorable members that the Bill is really part and parcel of the Tariff, which was passed by the first Federal Parliament. The part to which I allude is known as Division 6a. The right honorable member for Adelaide moved the second reading of this Bill - or what was practically this Bill, because the measure introduced by the honorable member for Hume is based upon the measure placed before the House by the right honorable member for Adelaide, who moved the second reading on the 27th May, 1902. The debate that took place is a matter of history. The measure was discussed at considerable length. Many honorable members expressed themselves in favour of granting bonuses for the production of iron, tout a large number held that it would be a good thing to endeavour to nationalize the industry, instead of holding out encouragement in the way of bonuses to private enterprise. After some long and interesting speeches, in the course of which a great deal of information was given to the House, the subject was referred to a Royal Commission. That Commission was composed of honorable members of this House, selected from each side, and a glance at the fiscal faith, or professed’ fiscal faith, of those gentlemen, shows that half may be classed as freetraders and the other half as protectionists. This selection insured that from the fiscal standpoint, the whole) matter would be thoroughly investigated, and that a good deal of information of value to honorable members, and to all who take an interest in the matter, would be furnished. The Commission held meetings in three or four of the States, and heard evidence from1 all the experts available. When the time arrived for the presentation of the report, it was found that the members of the Commission were divided in opinion, and that there were two reports, one of which might be called the report of the Commission, since it represented a majority, created by the vote of the Chairman, while the other was what is termed a minority report. The first report was in favour of a bonus to encourage this great industry, and in favour of its being undertaken by the State rather than by private enterprise. Just at that time there was a change of Government, and an appeal to the electors, and the policy on which the then Prime Minister, the honorable and learned member for. Ballarat, went to the country was fiscal peace and preferential trade. It was understood that the question of a bonus for the iron industry, and also that of preferential trade were excepted from “ fiscal peace “ ; and, consequently, the latter issue was placed before the electors as plainly as was possible on the occasion of a general appeal of the kind. We all recognise that this proposal for a bonus for the iron industry was really part and parcel of the Tariff. A good deal of Injustice was caused by the postponement of the consideration of Division 6a. Those, engaged in the industry suffered much loss ; indeed, some of the works have been prac tically closed, owing to the unfortunate delay brought about in the way I have indicated.

Mr Fisher:

– The honorable member will show that there has been this loss?

Mr AUSTIN CHAPMAN:

– I shall show that. When the new Parliament met, the Minister of Trade and Customs, who was then the honorable member for Hume, introduced a Bill which was almost identical with the proposals laid before honorable members in 1902 by the right honorable member for Adelaide. That Bill reached its secondreading stage in the hands of the honorable member for Hume, and is the Bill before us to-day. Before it could be advanced further than the commencement of the debate on the second reading - and when the honorable member for North Sydney had moved the adjournment of the debate - the Deakin Government resigned. Some honorable members at that time attached much importance to a power on the part of the Government to resume any iron works which might be subsidized, but beyond that, there was no great difference between that measure and the measure introduced by the right honorable member for Adelaide. When the Watson Govern- 1 ment entered office, I gave notice of a motion in favour of the encouragement of the iron industry. I recognised that that was a mixed Government - that in fiscal faith its members were equally divided, there being four protectionists and four free-‘ traders. Under the circumstances, we could not expect that the Bill would be considered in the same way fiscally as it would have been by a Government, all the members of which were protectionists. I gave notice of motion because I recognised that this should be one of the premier industries of the country, and would, if established, give a great deal of employment and impetus to trade. Just about that time the honorable member for Hume asked some questions in the House as to whether the Watson Government would set apart time to enable him to proceed with the Bill, and it was promised that the matter would be considered in Cabinet, and a reply given in a few days. A deputation of ironworkers waited on me and asked me to introduce them to the Prime Minister, in order that they might show the great injustice under which they were suffering owing to the delay in proceeding with the measure. They pointed out. that in the wire-netting branch of the industry works in Victoria had already been closed, and large establishments in New South Wales, in which an immense sum of money is invested, and which afford a good deal of employment, were about to dose unless they received some consideration at the hands of Parliament. When the deputation waited upon him, the Prime Minister informed me that the matter would be brought before the Cabinet on the following Tuesday - it was a Saturday on which I introduced the deputation - and it was very likely that time would be given to a private member to proceed with the Bill, he at the time mentioning the name of the honorable member for Hume. I told that honorable member that I was very anxious to give every assistance; and it was my intention then to withdraw my notice of motion. We know that on the following week the Watson. Government promised to give the honorable member for Hume time in which to proceed with the measure; but before any further steps could be taken, that Government resigned. When the present Government came into office, it was understood that the question of a bonus to the iron industry was to be an open one, in the same way as it had been an open one with the’ preceding Government, with the difference that the present Government stated their intention to afford a private member time to introduce a measure, with a view to obtaining an expression of opinion from the House.

Mr Fisher:

– The measure had already been introduced.

Mr AUSTIN CHAPMAN:

– Well, then, to go on with the measure.

Mr Fisher:

– To take it out of another honorable member’s hands.

Mr AUSTIN CHAPMAN:

– Honorable members are quite able to defend themselves without requiring any champions, and the honorable member opposite need not’ show so much pique, seeing that I am not saying anything against the Government of which he was a member.

Mr Fisher:

– I do not feel any pique.

Mr AUSTIN CHAPMAN:

– I understood the honorable, member for Hume to state, in the House, that he would not accept anything from the present Government. How I got that impression I do not know; but the honorable member has denied making that statement, and I must accept his denial. On the other hand, the Prime Minister assures me that the hon orable member for Hume did make such a’ statement, and I am obliged to accept that assurance also. I asked the right honorable gentleman in the House what he was going to do, and he said that it was an open question. The honorable member for Hume was not on very good terms with me, though for what reason I did not know, unless it was that as I had voted differently from himself, and he had chosen not to be 01; speaking terms with, me for a time. Consequently, I could not approach him and ask him what he proposed to do. I took the next best step. Recognising that the position was serious, I asked the secretary of the Protectionist Union in Sydney; of which the honorable member for Hume has been president for many years, what, in the opinion of himself and of Sydney protectionists - who are much interested in this proposal - was best to be done in the circumstances. The secretary informed me that the honorable member for Hume had intimated to him that if I could obtain time from the ‘ Government to go on with the measure, he would give me every possible assistance. That naturally led rae to believe that the report I had heard - that the honorable member for Hume would not accept anything from this Government - was correct. Otherwise, why should he offer to help me? Why did he not say at once, “Oh, no; this Bill is mine.” If he had done that the position would have been very different. I then asked the secretary of the Protectionist Union if he had any information which might be of service to me in dealing with the question. He told me that he had sent a number of the papers to the honorable member for Hume, whom he would ask to hand them over to me. I said, “ Sir- William is not speaking to me now, and perhaps it would be better if you obtained the papers- from him yourself.” He forwarded the papers to me, and I concluded that he obtained them on the understanding that the honorable member for Hume’ would give me a’ helping hand. When I asked the Prime Minister in the House if he would give me time to go on with the Bill, neither the honorable member for Hume nor any one else took exception to my request. Paragraphs on the subject appeared in the Sunday Times and daily newspapers of Sydney, and in the Age and Argus here, but no one raised any objection. After the papers were sent to me, a motion of censure was interposed. During the progress of the debate on that motion, the newspapers referred again to’ the fact that, if it were not carried it was the intention, of the Prime Minister to give me time to go on with this measure, arid no one offered any objection until the vote was taken last Thursday evening. Then what happened? Perhaps it would have been better tactics if the Prime Minister had deferred making any explanation until the following day, because honorable members generally were warm, and after a close division of that kind those who are defeated are rather apt to make statements which they would not make in their cooler moments. But the Prime Minister - assuming, I suppose, that there would be no difficulty - simply announced to honorable members what would be the order of business. What remarks were made then? First of all we had the leader of the Opposition on his feet, championing the cause of the honorable member for Hume. All of us who know the latter believe that he is well able to champion his own rights. Why was it necessary, therefore, for the exPrime Minister, the ex-Minister of Trade and Customs, the ex-Minister of Home Affairs, the honorable member for Kennedy, and the honorable and learned memmer for Indi, to rise in their places one after the other and, in championing the honorable member for Hume, pitch into me ?

Mr McCay:

– They wanted to let off steam.

Mr AUSTIN CHAPMAN:

– In letting off steam, as I think they will admit now, they did me an injustice. Exception was taken on that occasion, by the honorable member for Moira to the fact that the measure should not be placed in the hands of a private member, since an expenditure of ^324,000 was involved, and a similar objection was made by the honorable member for Parramatta. Does it not seem strange that they should take up this attitude when they did not object to the proposal of the last Government to hand over the Bill to the honorable’ member for Hume? Although the honorable member for Wide Bay cheered the remark that it should not be handed over to a private member, yet he, as a member of the late Government, was quite prepared to hand it over to the honorable member for Hume. What was right then is evidently wrong now. That requires some explanation which perhaps he will be able to give in due course.

Mr Fisher:

– Hear, hear.. Certain things had happened since then.

Mr AUSTIN CHAPMAN:

– I know that circumstances do alter cases, but nevertheless it is difficult to understand when some persons are in earnest. I took rather strong exception to certain remarks of the honorable member for Bland - first, because he was doing an injustice to me, and secondly, because he was making a threat against the measure. Of course, I accepted his assurance that he was making no such threat, and that he was only standing up for the rights of the honorable member for Hume. But I would call particular attention to this fact: that it was not necessary for four or five of the leading lights on the Opposition side to take exception to the action of the Prime Minister, when the honorable- member for Hume was here to speak for himself. On the following morning I went to the Prime Minister and told him that as there appeared to be some misunderstanding over this business, as the honorable member for Hume appeared to be taking up the role of an injured politician, and as. the leading lights in the Opposition appeared to me as if they would not view the Bill from a too friendly stand-point, I wished him to allow one of his colleagues to take charge of it, so as not to prejudice its passage through the House.

Mr Crouch:

– Would he’ not give his consent ?

Mr AUSTIN CHAPMAN:

– I made the request so that the complaint could not be made that an honorable member was being badly used. I have no desire to pose as having charge of the Bill. I have no wish to try to. get out of it any kudos. Any right I am entitled to in this House I will, if necessary, obtain at the point of the political bayonet, or else I shall know the reason why. I do not wish to take an unfair advantage of any honorable member, nor have I ever attempted to do so here.

Mr Crouch:

– What reply did the Prime Minister give?

Mr AUSTIN CHAPMAN:

– Recognising that the passing of the Bill might be jeopardized - because we have had most alarming statements about the intended action of some honorable’ members - I thought it was only right to ask the Prime Minister to allow one of his colleagues to take charge of it, or else to hand it over to the honorable member for Hume. I told him that I was quite prepared to help the latter, and to vote for the measure, as I did not wish to get any special credit or kudos out of its passage. All I wished to do was to elicit from the House a definite statement as to whether it was prepared to give a bonus, and for that reason 1 suggested to the Prime Minister that the Minister of Defence should be allowed to take charge of the Bill, because he, as a member of the Royal Commission, had displayed an anxiety to encourage the establishment of this great industry, and would be acceptable to the House as a compromise. But I had not the least objection to the honorable member for Hume taking charge of the Bill. Indeed, I should be very glad if he would take charge of it now. That, I “think, ought to show my bona fides in this matter.

Mr Crouch:

– What did the Prime Minister say?

Mr AUSTIN CHAPMAN:

– The Prime Minister declined to accede to my request for certain reasons, which, I suppose, he will give here. In the first place, he said “ the honorable member for Hume will take nothing from this Government,” and, in the second place, he said, “ when a private member requires time to go on with a measure he generally goes to the Prime Minister and asks for it. It is not for the Prime Minister to go to him and ask him whether he will go on with the Bill or not. The honorable member for Hume has not asked me for any time.”

Mr Thomas:

– The Prime Minister says that he communicated with the honorable and learned member for Ballarat.

Mr AUSTIN CHAPMAN:

– The honorable member will have an opportunity presently to speak. As regards a Minister taking charge of the Bill, the Prime Minister gave reasons why he did not think it was a. proper thing to do, and, further, he said that he would follow the course which he laid down on the preceding evening.

Mr Crouch:

– What were his objections to the Minister of Defence taking charge of the Bill ?

Mr AUSTIN CHAPMAN:

– I suppose that the Prime Minister will state those reasons to the House. I expect him to speak in this debate, and I hope from some remarks he made to be able to show that he was once in favour of granting a bonus, and that under existing circumstances he ought still to be of that opinion. He will probably be able to explain his reasons for not acceding to my request. At any rate, I am giving the facts, so far as they concern me, so as to make my position clear. What is there in my having charge of this Bill ? No one can have charge of it except nominally. It is the property of the House. The honorable member for Hume has no more right to be given charge of the measure than the right honorable member for Adelaide, the right honorable member for Swan, or the honorable and learned member for Corio, who, I expect, will stand by it strongly. No honorable member has a right to say that he will refuse or accept any particular amendment in connexion with it. That is a matter for the majority of honorable members to determine. I repeat that any honorable member can only be nominally in charge of the Bill, and it would appear to me to be only an attempt to find an excuse for opposing the measure, to give as a reason for opposition to it, the statement that one honorable member, and not another takes charge of it. I wish merely to put my own position clear. I have no desire to jump any one’s claim ; but I assert the same- right as any one else to push this matter forward, and of course I shall welcome support from any quarter. I do not propose to speak at length on the principle of the Bill, because the pros and cons of the matter have been threshed out so often before. We have had them so well submitted in the report of the Commission, that it is hardly necessary that there should be any long speeches made, and we must recognise that, at this stage of the session, we should as far as possible economize time. I expect that those who believe in the measure will not labour the subject by making long speeches, which may result in its being blocked for want of time. I ‘ recognise that the real tug of war will come when we get into Committee. We are all agreed that the matter dealt with is one of national importance, and that the iron industry is the foundation and backbone of all the manufacturing industries of Australia. If we do not all recognise that, certainly the great majority of honorable members do, and I believe they are in favour of promoting the establishment of the industry, and making it what it ought to be in this country. No doubt the bone of contention is whether it should be under State control or in the hands of private enterprise. As to the great principle involved, it can hardly be claimed, even by ardent free-traders in this House, that it is against their policy to vote for a bonus, because we have repeatedly had statements from “ first-rank free-traders in this country that if any encouragement is necessary for an industry it is better, in their opinion, that wherever possible it should take the form of a bonus. They give as their reason, that in that form we know exactly what has to be paid. It is a straight-out payment, and there is an end to it. Consequently, they cannot object to this measure on the ground that it is against their free-trade principles. Besides that, at the stage at which we have arrived in this Parliament, a number of honorable members will be able to view the matter from the stand-point, not of freetrade, but of compromise. If they agree with me that this is really a part of the Tariff, which has been postponed, they will, I have no doubt, be able to view it in a very much more favorable light than they would if we were fighting each other on the fiscal question, when each honorable member would be standing out to the last for what he believed to be the best policy to pursue. I say that the establishment of the iron industry may be favorably viewed from the stand-point of compromise by honorable members who might take strong exception to it if it were viewed from the stand-point of free-trade alone. Let me tell honorable members what the present Prime Minister thought of this matter.

Mr Thomas:

– When ?

Mr AUSTIN CHAPMAN:

– If the honorable member for Barrier will, allow his memory to carry him back, he will recollect that the present Prime Minister was the political friend of the late Mr. Mitchell, who endeavoured to establish this industry in New South Wales. The right honorable gentleman promised consideration of the matter on several occasions, and we believe that but for the early death of Mr. Mitchell the industry would probably have been established in that State by this time. But let us come right down to 1901 to learn what were the views of the present Prime Minister at that time. On tb.e 15th October, 1 901, during the debate on a motion of censure, referring to the . right honorable member for Adelaide, the present Prime Minister said -

The Minister for Trade and Customs was simply immense upon a policy which he hopes to introduce at some future date in reference to the iron industry. I have always been one who would like to see the iron industry firmly established, but my method of effecting this would be by giving it direct encouragement from the national Exchequer. My reason for so doing would be, that as it is a national, industry the nation should pay the expense of encouraging it. “The man who uses the iron ought not to be compelled to do that. A national benefit should be paid for out of the national funds. Why should not the whole community pay this bonus to the iron industry if the establishment of that industry confers a national benefit ? Why should the man who is encouraging the industry, and who is buying the material, be the only person to pay for this national advantage? … A national advantage should be paid for out of the national Exchequer, and not out of the pockets of a particular individual who happens to encourage the production of a particular article.

Mr Thomas:

– We are with the honorable gentleman so far.

Mr AUSTIN CHAPMAN:

– That puts the matter very clearly. The Prime Minister was then in favour of encouraging this industry by the payment of a bonus. I hope we shall find that the right honorable gentleman is still in favour of that. At any rate, I confidently appeal to him, not only to stand by what he then said, but to view the matter from the point of view of compromise.

Mr Conroy:

– The right honorable gentleman merely pointed out that a bonus is less objectionable than is a protective tax ; but both ‘are objectionable.

Mr AUSTIN CHAPMAN:

– The honorable and learned member for Werriwa will have an opportunity of explaining later on. The right honorable gentleman certainly pointed out that the iron industry is a national industry which will provide a great deal of employment, and that if he had his way he would encourage it by means of a bonus.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Has the right honorable gentleman told the honorable member that he will vote for this -Bill ?

Mr AUSTIN CHAPMAN:

– The honorable member for Bourke is busily engaged in asking questions, but I wish he would devote some little attention to the necessity for helping this matter along. This is a measure in connexion with which protectionists, no matter on which side of the House they may sit, should not squabble and fight amongst themselves. We have a right to expect that, no matter on which side they sit, they will render genuine assistance. I take it that there is no necessity to make any appeal to them. It is rather to those who were once free-traders that I appeal. I ask the honorable and learned member for. Werriwa to view this question now from the stand-point of the understanding, as it has been termed, that has been arrived at on this side of the House.

Mr Conroy:

– I -have done so, and I am dead against it.

Mr AUSTIN CHAPMAN:

– Freetraders ‘ have often, on public platforms in this country, pointed out that they are prepared to give assistance to the great primary industries, and I ask honorable members whether this is not the greatest of the primary industries, and to show by their votes that they are willing to respect the understanding that has been arrived at.

Mr Thomas:

– What understanding?

Mr AUSTIN CHAPMAN:

– I ask the honorable member for Barrier to respect the alliance he has made with the honorable and learned member for Indi. We know that that honorable and learned member bases all his complaints against those of us who sit in the Ministerial corner on the fact that they are the protectionists who desire’ to give encouragement to industries. Since the Prime Minister has said that he has no objection to the granting of a bonus, and as we are all in favour of fiscal peace, I think that I can ask even New South Wales freetraders if they are prepared to allow the Tariff, bad as it is, to assist only industries in other States, instead of putting into force that portion of it which would give New South Wales her opportunity. While I ask the honorable and learned member for Werriwa to respect the understanding which has been entered into, I ask the honorable member for Barrier to stand by the alliance of which he is so proud. I think we can all agree that the Commission has proved the importance of the iron industry, and the need for establishing it in this country. When the matter was discussed before, it was doubted whether we had’ sufficient deposits of iron in Australia to make the manufacture of iron here a commercial success; but the evidence taken by the Commission sets that doubt at rest. We know that there are rich deposits o’f iron ore in each of the States, and that there are men who are ready to embark their capital in establishing iron works, if they can get security, and are likely to obtain encouragement which will place the industry on a proper basis. Furthermore, Mr. Coghlan has officially stated that in New South Wales alone there is enough ore in sight to supply the Commonwealth for many years to come. This ore is situated close to large supplies of coal and limestone, and the necessary fluxes. Furthermore, Mr. Jacquet, who is an undoubted authority on the subject, he having given great time and attention to it, has shown that there are extensive deposits of iron ‘ ore in the different

States. Everything points to the fact that the iron industry, which is a’ great source of employment in other countries, may be successfully established in Australia. But it cannot be established with out encouragement. Even in England, the iron industry was encouraged, the duty from 1798 to 1825 averaging £3 12s. per ton, and at times being over£6 per ton, which is ten times the assistance that we ask for. In America, where the industry was fostered, the gross production of iron in 1867 was 2,277 tons; in 1868,6,451 tons; in 1869, 8,616 tons; in 1870, 30,357 tons; in 1880, 864,353 tons; and in 1890, 1,871,425 tons. The importaton of rails of all kinds into America in 1867 amounted to 145,580 tons; and in 1881, to 344,929 tons; but by 1890 it had decreased to 204 tons. Englishmen now find even the home market invaded by Americans. Not only are many English bridges made by American firms, but many new buildings in London are constructed by Americans of Americanmade steel and iron. Let me read what the Times says on this point -

There seems now to be dawning the period foretold, for American makers are sending their surplus product, not only to markets that are common to both this country and themselves, but are attacking us in our strongholds at home. The Glasgow correspondent of Engineering, writing at the early part of November, says - “ Steel rails continue to be very much depressed, most of the export orders being absorbed by the American mills at prices which British manufacturers cannot at present touch. . . . The abnormal demand of the United States for its own engineering products is fast slackening, thus bringing the marvellous increase of American manufacturing capacity of the last five years - perhaps more especially the last three years - to bear on foreign markets. It is a question to us paramount to all others. Even the efficiency of the navy is subsidiary to it, for if -we lose our engineering supremacy our naval supremacy will follow.”

That shows what has been done by the encouragement of the iron industry in America. Great Britain was once supreme in the iron trade, but now, not only America, but even Germany is in front of her.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– As this is an exceedingly important matter, I wish to call attention to the state of the House. [Quorum formed].

Mr AUSTIN CHAPMAN:

– Inboth Germany and America tens of thousands of people find employment in ironworks and kindred industries. The manufacture of iron has been a success in those countries, not because of their large populations, but because of the encouragement which their fiscal policies have given, to the industry. Not only are bounties paid for its encouragement, but cheap freights and other benefits are given to those engaged in the production of iron. Let us take the case of Canada, which possesses a population very little in excess of our own. What does Sir Charles Tupper say of the iron industry there? He says -

My honorable friend stated that the iron industry was one that the Government judged to be of great importance, for the reason that the wealth created by the development of this kind, of industry is almost wholly devoted to payment for labour. Thus it became an industry almost above all others that deserved a fostering care of the Government, if, by public aid, parties could be induced to bring in their capital, and develop the enormous resources which Providence has given us in the vast deposits of iron ore that exist in the different parts of the Dominion. … I know of no measure, after the most careful investigation of this question, that can be adopted - no single points to which my honorable friend can turn his attention as inviting and developing industry, which will give a greater amount of employment, in proportion to the industry itself, to the people of this country - than the protection proposed to be given to the development of our iron industry. Two dollars a ton cost the country something, but they all contribute to it - it will be taken out of the general Treasury. But if we can put thousands of men to work in mining our ores, in a development of our coal, and in converting it into coke, and the smelting of this iron, we create a large industry in the country. We give employment to the people, who will eventually get their stuff as cheaply as before. That is the policy of the Government, and this is the outcome of that proposition.

I only wish that I could hear the Prime MinisFer utter similar sentiments to-night. Those remarks apply’ to our present conditions exactly. We have the iron deposits, the coal, the limestone - in fact, everything that is necessary - and we also have men out of employment. Consequently we could not be charged with taking them away from other avocations. In this connexion, what does Coghlan say of New South Wales? He writes -

The iron trade should, in time, form one of the great staple industries of the colony. Every national advantage possessed by the great iron and machinery producing countries of the world - such as England and Belgium - is also present here. Not only are iron and coal deposited in abundance, and in. positions easily accessible and readily worked, but, as pointed out in the chapter on mines and minerals, the local iron ore is exceedingly rich. Scarcely any progress, however, has been made in iron smelting, and nearly the whole stock of pig and wrought iron required for the local manufactories is imported’. The other descriptions of metal works, both for smelting and manufacturing, are in a more forward state.

What did some of our most thoughtful protectionists think of this great question when they met in conference in the different capitals before the establishment of Federation? They arrived at the following resolution: -

That, in view of the enormous benefits which way reasonably be expected to accrue to the Australian Commonwealth from the establishment of iron and steel industries within its borders, this Conference recommends that such industries be encouraged by bonuses from the Federal Government for a stated period, to be fixed thereby, of ras. per ton for every ton of pig iron or steel ingots and bars, rods and sheets, whether of iron or steel, the produce of native ores and fluxes. That in order to encourage the manufacture of iron and steel goods, for two years after the imposition of the Federal Tariff, and no longer, a rebate, equal to the amount of duty paid, should be allowed on all pig iron and steel ingots, puddled bar, and steel blooms, and billets imported and actually used within that period in the manufacture of iron and steel goods of any class and character.

That is the opinion of thoughtful men, who believe in the encouragement of every class of industry. They point out that the iron industry is the base of all our manufacturing industries, and is consequently worthy of some attention. Since the period when that resolution was agreed to, matters have progressed somewhat. Owing to the labours of the Commission which investigated this question, we know a good deal more of the subject than we did, and are therefore in a better position to arrive at a sound judgment. Do not honorable members recognise that in the absence of ironworks in this country, we are upon a very insecure footing indeed?

Mr Mcwilliams:

– Does the honorable member propose to levy a duty upon iron ?

Mr AUSTIN CHAPMAN:

– I am asking that a bonus shall be paid upon the production of iron in Australia. Honoiable members must admit, whatever their fiscal opinions may be - and it does seem to me lamentable that we always have the old fiscal cries introduced - that all our manufacturing industries will continue upon a very insecure footing if we do not establish ironworks in this country. Under the circumstances, what should we do in a period of stress and trouble? What could we do in the way of defending ourselves against foreign invasion ? It was very easy for honorable members to cheer the Treasurer this afternoon when he announced that the Government propose to spend an additional £20,000 or £30,000 upon our guns and defences. But what should we do if our supplies were cut off? I fear that a state of panic would ensue. Consequently, honorable members who oppose this Bill must accept responsibility for their action. Some honorable members advocate the establishment of an Australian Navy. How is that possible, in the absence of local ironworks ? Are we to be satisfied with always having an army of unemployed? In a great industry of this character, we might well compare the position of Canada with that of Australia.

Mr Lonsdale:

– Canada puts its people on to the land.

Mr AUSTIN CHAPMAN:

– It is idle to deny that there are tens of thousands of unemployed in our midst to-day, and that business is bad, whilst in Canada, where high wages prevail, and great encouragement is given to the iron industry, there are no unemployed. In this connexion I should like to quote from the Statistical Year Book of Canada for 1902. It states -

In the session of 1894 an Act was passed providing that the Governor in Council may authorize the payment of a bounty of $2 per ton on all pig iron made in Canada from Canadian ore, or a bounty of $2 per ton on all puddled bars made in Canada from Canadian pig iron made from Canadian ore, and a bounty of $2 per ton on all steel billets manufactured in Canada from Canadian pig iron, and such other ingredients as are necessary and usual in the manufacture of steel billets. These bounties were applicable till 26th March, 1899, in the case of furnaces commencing operations subsequent to that date, but before 27th March, 1899, for five years from the date of commencing. This Act was repealed by Chapter VI. of the Act of 1897, which authorized the Governor- ‘ General to give (1) a bounty of $3 per ton on steel ingots manufactured from ingredients of which not less than 50 per cent, of their weight consists of pig iron made in Canada ; (2) a bounty of $3 per ton on puddled iron bars made from Canadian made pig iron ; (3) a bounty on pig iron manufac;tured from ore, of $3 per ton on the proportion produced from Canadian ore, and $2 on the proportion produced from foreign ore.

An Act of 1898 provided that the provisions of the Act are to be held to have come into force on 23rd April, 1897. An Act of 1899 provides that these bounties shall continue to be paid till 30th June, 1907, at a yearly diminishing rate from 1902-; 90 per cent, of the bounties to be paid in 1902-3; 75 per cent, in 1903-4; 55 per cent, in 1904-5 ; 35 per cent, in 1905-6J and 20 per cent, ia 1906-7.

Active works are carried on by seven companies, and the annual aggregate capacity of all the completed and unfinished furnaces is nearly 1,100,000 gross tons. The Lake Superior Power Company are building a very extensive plant for the manufacture of pig iron, steel, and steel rails, the latter the first established in Canada. The united investment amounts to .24,500,000 dollars, which will be increased to 35,000,000 dollars by new plant now building. Within five or six years the total investment in the iron industry of the Dominion will aggregate, approximately, 50,000,0110 dollars.

That is my answer to those who say that if we grant a bonus we shall create a monopoly ; that is my answer, and I think it is a most emphatic one, to those who say that if we grant the proposed bonus there will be no competition in Australia. Let me make a further quotation. It is here pointed out that -

On December 31, 1902, the unsold stocks of pig iron in Canada amounted- to 20,328^ gross tons, as compared with 59,472 tons at the close of 1901. On December 3J, 1902, there were twelve completed furnaces in Canada, and four furnaces were in course of construction. Of the completed furnaces seven were in blast and five were idle on the date named. During 1902 four new furnaces were erected.

That, again, is my answer to those who say that the success of the industry in the United States, Germany, and other countries is due to their large population. In Canada, with a population but slightly in excess of our own - a population living under a Government practically similar to that of the Commonwealth, and working under the same conditions - this splendid result has been attained. It is no wonder that a number of the young men of the Commonwealth are crossing the seas and seeking employment in Canada. The article continues -

In 1901 the total quantity of iron ore consumed was 517,623 tons, of the value of $1,390,542. The quantity of charcoal used was 1,835,736 tons, of the value of $100,978; of coke, 321^63 tons valued at $1,036,714; while the quantity of coal used was 2,039 tons, valued at $6,117. Of flux consumed, this amounted in the year 1901 to. 169,399 tons> valued at $183,162. The total value of the pig - 274,376 tons - was $3,512,923, or i2’8o dollars per ton. The value of the exports of iron and steel goods manufactured in Canada during 1896 was $522,988; in 1902 it had jumped to $2,460,781.

Mr Conroy:

– That is about £480,000.

Mr AUSTIN CHAPMAN:

– Even if that be so, it would be very pleasant if, besides supplying our own wants, we could export every , year nearly £500,000 worth of manufactured iron goods, thus giving employment to our people, and bringing money here instead of sending it away. We all know that every care has been taken to ascertain whether the industry can be established on a commercial basis if fair encouragement be given and reasonably fair conditions imposed. We know that thousands of pounds have been expended by private individuals in obtaining reportsbearing on this question. One of the best experts in the world visited Australia to inquire into the question. I understand that as high a fee as £3,006 was paid to one expert to visit Australia and report on the extent of our iron deposits and their commercial aspect. He reported in favour of the establishment of the industry, and certain gentlemen interested iri the question had every reason to believe that they could secure the investment of £1,000,000 in the establishment of the industry in Australia if it could be shown that reasonable consideration would be extended to it by the Commonwealth.

Mr Conroy:

– That was prior to Federation, was it not?

Mr AUSTIN CHAPMAN:

– We know that men of enterprise are waiting to see what will be done by the Commonwealth. Are we to keep this matter dangling in front of their eyes? Are we going to say that we ‘think it would be better for the States to take up the industry? This morning’s newspapers contain reports of a meeting, held in Melbourne by a labour union, at which it was decided to suggest to the Government that some provision be inserted in the Bill, giving the Government power to resume the works if the industry be taken up by private enterprise.” We know, however, that the Government always have power to resume.

Mr Crouch:

– That is provided for in the Bill.

Mr AUSTIN CHAPMAN:

– Yes ; but even if it were not, the Government would be able, at any time, to resume the works. The real kernel of the question is whether we are going to give encouragement to private individuals to establish the industry, or really to .defeat the whole thing by asking the States to take up the industry. What would be the use of our doing so? We have already appealed to the States. What was the answer made by the New South Wales Government to the inquiry of the Commonwealth whether it would be prepared to take up the industry? The honorable member for Bland said that the feeling was so strong in New South Wales that, with a little agitation on the part of the public, he believed that the then Government - the See-O’ Sullivan Administration - would take the matter in hand and establish a State industry.

Mr Kelly:

– That Government has disappeared.

Mr AUSTIN CHAPMAN:

– But we received an answer from them. That Government had a strong labour backing, so that they were more likely to make the industry a State-owned one than was any other Government that had been in power in New South Wales for some time. They said that they were not prepared to embark in the industry, and suggested that it should be handed over to private enterprise. I take it that that is the opinion entertained by a great many honorable members. We have had most emphatic statements from the Governments of. other States in regard to the question. The Governments of Queensland, South Australia, and Tasmania are not prepared to take up the industry, and consequently we may well ask ourselves, “ What are we going to do? “ Are we going to give encouragement to private enterprise,or to shelve the whole matter? -We cannot get away from the fact that every honorable member who votes to make this industry a State-owned one, will vote to shelve it.

Mr Thomas:

– Then I am prepared to vote to shelve it.

Mr AUSTIN CHAPMAN:

– The honorable member is not prepared to give any encouragement to the industry, although the miners in his own electorate have been assisted by the Commonwealth. He was willing to ask that they should receive every consideration in the direction of low duties on the timber .required by them - he was ready to advocate that they should be allowed to obtain everything that they required in the easiest manner, but he is not prepared to say to those who want work, and cannot obtain it at Broken Hill, that they shall receive assistance. I shall be astounded if the honorable member finds himself in a position to tell the workers of Broken Hill that his policy is that so long as they are not lacking employment he does not care who else goes without work; that he does not care whether there are j 0,000 unemployed in other districts; that he does not care whether men are idle in my electorate and those of other honorable members. I shall be surprised if he dares to go on- the public platform at Broken Hill and make such a statement, and even more surprised if the support on which he depends so largely for assistance will help him in taking up that position. I, for one, am not prepared to adopt such an attitude.

Mr Thomas:

– What does the honorable member think about-

Mr AUSTIN CHAPMAN:

– I would again remind the honorable member that it would be much better for him to make a speech when the opportunity offers, and to refrain from interjecting and irritating other honorable members when they are speaking. I find, on reference to the report, that the estimate of Mr. Jacquet shows that the amount of ore in sight is approximately 50,000,000 tons. There can be very little doubt, however, that there is much more actually in sight in this country. Of course in making official estimates a man who has a reputation to lose is very particular not to make a mistake, or, if he errs at all, he takes care to err on the right side. I find that as much coal has been taken out of England as was estimated to be in sight sixty years’ ago. Yet the supply of coal from England appears to be inexhaustible. In America, the amount of iron ore taken out and used in manufactures exceeds the original estimate. Yet there are 650,000,000 tons of ore in sight to-day. No ‘industry gives greater employment, or causes a larger percentage of money to be expended in wages than the iron industry. Consequently there is no industry that distributes a larger percentage of money throughout the community. It must also be remembered that at least one-third of the total amount of iron used in Australia is used by the States. Probably it may be said that one-half of the total is used by them in one form or another. Therefore, if it is decided to give some of the money of the whole community for the encouragement of the iron industry, a very large amount of the money thus expended goes back into the pockets of the people. Not only do our resources warrant us in expecting that in a short time we shall be able to supply our own needs, but we ought soon to be able to compete in the markets of the world. Because it has been proven that we have in Australia cheap coal, and that suitable limestone flux is to be found alongside the coal and ore deposits.

Mr Conroy:

– What quantity of iron would be required in Australia per annum? Not more than 35,000 tons.

Mr Deakin:

– That is the1 amount at present.

Mr AUSTIN CHAPMAN:

– The amount required at present would probably be more than doubled after a few years. It is difficult to say what quantity would be required when the industry had established itself. The figures from the United States and Canada show that in those countries the iron industry has progressed by leaps and bounds. The facilities for iron production in Australia are so great that there can be very little doubt that the industry will make rapid progress. As a matter of fact coal can be raised at Lith gow and taken to the place where it is proposed to establish the iron works at 3s. per ton. It is well known that iron ore can be raised cheaper in Australia than in America. It is not contemplated that we shall only establish works at an expenditure of ,£100,000 or £[200,000. We require to have properly equipped works, costing, probably, from £500,000 to £1,000,000, together with every facility for producing and treating ore, and dealing with this great iron industry. There is no telling what quantity we shall be able to use and export when we have those facilities.. At present there is a difficulty in the way of freights. The freight from Lithgow to Sydney is 11s. 2d. per ton, whilst it is well known that iron has been brought to Australia from England at freight as low as 2s. 6d. per ton. Consequently there can be very little doubt that some consideration will have to be extended to the industry in the way of cheap freights. That is one of the considerations that has been asked for time after time whenever contractors have placed large orders. Some such system will probably have to be tried as has been brought into existence in the case of the flour industry. For instance, in New South Wales, wheat which is grown out west is sent down as far as Bathurst, where it is treated and turned into flour. It is then sent on its journey to Sydney at a low freight. That system- has been adopted in order to enable such industries to be established in country places. Something of the same kind is necessary in connexion with the iron industry. I should like to point out what were the experiences of Mr. Rutherford, at Lithgow, many years ago. He established iron works on a small scale, though sufficient for the time. After getting everything in order and producing some iron, he made certain offers to the retailers in Sydney. He offered to put the iron bars and other iron work which they required into their racks and stores, and to wait for his money until such time as they had placed the iron with purchasers. At that time the selling price was £14 per ton. Mr. Rutherford asked .£10 per ton, “thus enabling Eis customers to make a profit of 40 per cent. They held a meeting, but being importers, and knowing what it would mean if a local iron industry became firmly established, they declined to take any of his iron. That is one of the difficulties that the industry has had to contend with. It shows that unless those who establish iron works get some encouragement and fair consideration, there is no security for the capital that they invest. They also have to contend with the difficulty of dumping. Honorable members all know what that means. I wish to say s a word or two as to the contention which is bound to be raised as regards the States undertaking the iron industry. I should like some honorable members who support that contention to show that there is any probability that any of the States will take up the iron industry. The honorable member for Melbourne Ports put the matter well on the last occasion when this subject was under discussion, when he said that to decline to pass this measure, because the States were likely to take up the iron industry, was simply to use an indirect method of defeating the Bill. Different estimates have been made as regards the cost of establishing iron works. It is said that works can be established in Australia at a cost of £j 00,000. No doubt it is possible to establish works at any cost. It has been pretty clearly proven that proper works, fitted with an adequate plant and all the appliances for coping with this great industry under reasonable conditions making for success, . would demand the expenditure of at least £250,000, and probably £500,000. I was informed, on good authority, that the estimate of the promoters of the Blythe River Works, included provision for steamers for sending the ore from Tasmania to the mainland, as well as for works, mining appliances, and plant, was about £1,000,000. But even with an investment of £500,000, one can easily understand what work would be given, and what a tremendous impetus manufacturing industries would receive. At any rate, so far as we can ascertain, it will require from £300,000 to £500,000 to establish the industry. As regards the quality of ore, I remind honorable members that iron made from Australian ore was at one time sold in America, and word was received here that the manufacturers there were prepared to take more of the Australian’ article. That occurred some thirty years ago; the ore was from the Fitzroy mines at Mittagong; and the fact is sufficient proof, if any further proof be required beyond .the evidence of experts, that this is an industry which ought to be established in Australia. If we decide, as I hope we shall, to extend, this consideration, those who seek .to enjoy it, besides incurring the heavy expenditure in starting the works, will have to produce £1,000,000 worth of iron, before they can receive the whole of the bonus. That, in itself, should be a strong inducement to honorable members to support the Bill, and there is no doubt that: to postpone the question, or to endeavour to get the States to seriously entertain the idea of undertaking the works, will be throwing away the substance for the shadow. But for the evils of dumping, and of trusts and other combines, it would almost appear as if the prospects were good enough without any bonus; but the latter represents a guarantee from the Commonwealth that reasonable fair play will be given. There is no necessity for. me to weary honorable members with any further evidence, though I should like to quote the following from the Melbourne Age, of Friday, 9th September, last : -

The hostility that is shown in some quarters, and the apathy in others, in connexion with the development of the iron resources of the Commonwealth are in marked contrast to the feeling manifested in Canada towards the similar resources of that country. For some years the Dominion Government has recognised the value of an iron and steel industry, and in 1S97 instituted a bounty system that has proved a great success.

The Agc goes on to point out what the expenditure has been in Canada -

This will be seen by the steady increase in the production of pig iron. In 1898 the total was only 68,000 tons ; in 1902 it had swollen to 319,600 tons, and it is still growing rapidly.

The article mentions the recent action of the Dominion Government in ordering 10,000 tons of steel rails from the local works, and the efforts made to assist the. industry in every way.

Why Australia, with equally rich deposits or iron ores, failed to take advantage of this source of wealth deserves consideration. First, there has been the opposition of the importer, who makes large profits out of foreign manufactures of iron and steel, both in connexion with heavy Government contracts, and with ordinary market supplies. Then the shipping interests that bring these enormous imports over the sea are naturally strong opponents of any innovation that would deprive them of any share of their business. Then, again, there are the faddists, who have an idea that the iron industry should be Government owned. This section fails to understand that it will require millions sterling to provide works in all the States of the Commonwealth, and that none will agree to the proportional expenditure in one that is not shared by all.

The expenditure, to which I have referred is not the expenditure for the whole of the Commonwealth. No one State will have a monopoly of the industry. There are splendid deposits in each of the States, and freight considerations will, doubtless, insure the erection of plant in nearly every one. The investment of money under such circumstances, will, in a very short time, run into millions of money, and I recommend the following to the consideration of honorable members : -

The millennium is still a promise of the distant future, and to wait for the State establishment of Australian iron and steel industries means losing sight of the practical duties of everyday life. Dreamers have no place in this progressive age, And though their Utopian ideas may attract followers, any attempt to work out their system is certain to result in failure. If the representatives of the people in the Federal Parliament have the true interests of the community at heart, and are not biased by personal ideas or influences, action should at once be taken to give to Australia advantages similar to those enjoyed by Canada. Last year the value alone of iron and steel rails, girders and the like, imported into Australia was £2,303,333 ; whilst machinery which could be largely made within the Commonwealth if local iron works were available came to £1,342,332, and subheads another £245,888. A very large proportion of the money sent away to pay for these imports might have been expended locally, with most satisfactory results. There are constant complaints from every State that labour is not employed. In a new country such complaints should r.ot be heard, and the fact that they are heard may be traced to the channels of employment being neglected. Repair and extend these, and lbc answer to the ever raised cry for work will bi found. The Government is aware that there are’ private individuals who, if they receive the same treatment as the Canadians, are willing to embark their money in building up an Australian iron and steel industry. Whether the venture will prove profitable is difficult to determine, but, that its initiation will carry heavy risks must be admitted.

Again I invite the attention of those who are desirous to see the States undertake the work, to the following words from this good commercial authority : -

The bonus cannot be claimed until it is earned, and to earn it a big outlay is necessary. Surely those who take this risk upon themselves are entilled to :he insurance consideration which a bonus represents. Unfortunately Australian politics are not practical in character, consisting to a considerable extent of talk and fighting between the “ ins “ and the “ outs” over matters of secondary interest a.- far as the wants of this suffering community are concerned. Canada, it may be admitted, had te pass through an ordeal much like our own.. Why should .Australia not profit by experience, which, though purchased by a period of depression, has culminated in prosperity and success?

The case is as well put there as it could be put by any one. The article contains suggestions, over which we ought to ponder - it would be very difficult to dispute anything which the writer states. Let us now read an extract from the report of the Chamberlain Commission published in the

Sydney Morning Herald of 28th August, 1904. It says -

Our inquiry has shown (1) that the iron and steel industry of this country has declined relatively to that of other countries; (2) that our export trade to foreign countries has diminished, while that to the colonies has increased; (3) that, although our trade with the colonies has increased, the colonial market is increasing much more rapidly, and that foreign countries are securing a growing proportion of this colonial trade ; (4) that the relative decline of the British iron and steel industry is not due to any natural British disadvantages, or want of skill and enterprise on the part either of British manufacturers or of British workmen ; (5) that it is due to the fact that the manufacturers of the United States and Germany, having secured control of their home markets by means of high tariffs and an organized system for the regulation of their export trade, are in a position to dump their surplus products upon the British and other markets, irrespective of cost; (6) that the practice of dumping could not be carried on by foreign countries but for the British system of free imports.

The article points out that the British system of free imports is bound to induce dumping; and the protection such as this Bill proposes to give, would encourage a better system, and afford that protection to which the industry is entitled.

Mr Crouch:

– Is that an original article ?

Mr AUSTIN CHAPMAN:

– It is the report of the Chamberlain Commission, and it affords evidence which we ought to consider very carefully. There is another matter which I should like to bring under the notice of honorable members. It will probably be said that those who are engaged in this industry will be prepared, if they can obtain certain contracts, to carry on their works without the special consideration offered by the Bill. I have here the terms of an offer made to the Government of New South Wales by Mr. Sandford, of Eskbank Iron and Steel Works, Lithgow. Tenders were called for, and Mr. Sandford, to put the matter briefly, offered, if he were given a contract for five years, to supply the Government with all the rails and iron work required, at the average prices which have prevailed for the last five years. Mr. Sandford, of course, would allow the Government to stipulate in regard to quality - no product need be taken until it is absolutely certain that the quality is equal to that of the imported iron.

Mr Carpenter:

– Is that the English price, or has the freight to be added ?

Mr AUSTIN CHAPMAN:

– It is the price of the article delivered here, I should say. Mr. Sandford goes further, and says that if he could obtain that contract he would be prepared to hand back to the

State whatever bounty might be paid to him on the iron which it bought from him, showing that the industry is capable of being established on almost a commercial basis. He shows his bonâ fides when he makes the proposal. He looks upon a contract as being, to a certain extent, almost as good as a bonus. That I take it is what the Prime Minister believed when ihe encouraged the late Mr. Mitchell to establish ironworks in New South Wales. He was prepared to give that gentleman certain contracts, which, to a very large extent, would be almost as good as a bonus. Mr. Sandford agrees not only to do that, but also to pay the best wages. There is no question as to what wages are paid in this industry. To those who say “ shelve it,” or who do not want it, I commend a copy of an agreement which was voluntarily made by Mr. Sandford with his men at a time of distress in certain branches of this industry, which he had established at Lithgow. It was mutually agreed that certain reductions should be made in the wages, and should be operative for a certain time, so that he might be able to carry on those branches. It took 15 per cent, off wages over 16s. per day, 10 per cent, off wages at 16s. and over 12s. per day, 5 per cent, off wages at 12s. and over 8s. per day. From those figures one can easily gather that good wages were being paid at Lithgow.

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

– What is the honorable member referring to?

Mr AUSTIN CHAPMAN:

– I am talking about the wages paid in certain branches of the iron industry at Lithgow, in the honorable member’s electorate. I have here a statement of the wages paid to sheet mill hands in Lithgow for three months -

Sheet Mills. - For three months from the day of commencing work, the following rates to be paid for a working day of eight hours, such rates to be net, with no percentage deducted or added : -

Sheet-mill roller, 17s. per day, with is. per ton on output for assisting roll-turner.

Sheet-mill furnaceman,11s. per day.

Sheet-mill shearer,11s. per day.

Pile heater, 10s. per day.

Catcher, 8s. 6d. per day.

Screwer and matcher, Ss. 6d. per day.

Bull doger, 7s. per day.

Shearers’ helper, 7s. per day.

Close annealer.11s. 6d. per day.

The two or three lower amounts, I am informed, are paid to boys. That list in itself is sufficient to show what wages are paid, and should, I think, appeal to those who “desire to give employment in this country. In all the offers which Mr. Sandford has made, hehas been quite prepared to agree to the insertion of a clause in any contract to allow the State to resume his works at any time. In this contract he has made a definite offer to the States, that they should be allowed to resume his works at anv time. For. instance, one clause is as follows : -

In the event of the Federal Government giving bounties for the manufacture of iron, such bounties received for each class of material supplied under this contract to be returned in full to the Railway Commissioners.

Of course, it is open to honorable members to ask - “ Why should we give a bounty ?” But I submit that good reasons have been shown outside that consideration. It is held that a large contract would be equal, in some cases, to a bounty. If a man had a large contract like that, he’ would be practically guaranteed, to a very large extent, against unfair competition, in the shape of large consignments being sent in and sold at a loss. It has been demonstrated from their balance-sheets, beyond all dispute, that as regards wire-netting, the Germans lose on their export trade to this country, and make a large profit at home. But immediately an industry has been crushed out here they obtain their own prices, and quickly get a profit.

Mr Kelly:

– Does the honorable member say that the German manufacturers tax their own inhabitants in order that they may make a profit there, and dump goods here at a loss?

Mr AUSTIN CHAPMAN:

– I do not say anything of the kind. What I said was that the Germans, who have a large wirenetting industry, have for some time past been losing on their export trade to Australia, while their balance sheets show that they are making a lot of money in the aggregate.

Mr Kelly:

– That is from their own people, I suppose?

Mr AUSTIN CHAPMAN:

– They can have only one object in taking that course. That occurs not only with wire netting, but with many other things.

Mr Conroy:

– I know many farmers who would be very glad to get wife netting at half the price.

Mr AUSTIN CHAPMAN:

– I should be glad to see the farmers in my electorate get their wire netting at half the price. I maintain that once we established the works in this country the price would soon be reduced. The evidence all points to that conclusion.

Mr Conroy:

– I thought that prices were only, reduced by lowering wages?

Mr AUSTIN CHAPMAN:

– The honorable and learned member thinks a number of things which will not stand analyzing. I do not wish to introduce the protectionist argument, because I expect to receive support from other than protectionists. Otherwise I should be prepared to produce, in a friendly way, some of my honorable and learned friend’s references to bonuses; I hope to hear him speak to-night.

Mr Crouch:

– What is the state of the negotiations between Mr. Sandford and New South Wales?

Mr AUSTIN CHAPMAN:

– The negotiations have been going on. The cry always is, “Wait, wait!” But what “does it matter to us what is the state of .the negotiations between any of these men and New South Wales? We are not advocating this proposal ‘ for the benefit of Mr. Sandford, or any one else. Our desire is to establish the iron industry on a solid footing in this country. I give these particulars, because I think it is evident that there is a desire on the part of those interested in the iron industry, to strain every nerve to get an assurance, as the Age puts it, or a guarantee, that they will not be dumped out of the business, and will be able to find employment for our own people, especially in supplying the States Governments. I believe that the Premier of New South Wales is to give an answer to Mr. Sandford this week. We do not need to consider who is going to make rails, .or do something for its Railway Commissioners, and say, “ Well, it is all right now ; there is a start made.” We desire the industry to be started on a proper basis, as it has been in “ other countries, so that it may grow and flourish, and we may be proud of its success.

Mr Thomas:

– What about zinc spelter?

Mr AUSTIN CHAPMAN:

– I shall say something about zinc spelter, but I take it that that matter is entirely in my honorable friend’s hands. I wonder if he will ask us to “ shelve “’ that. The Royal Commission consisted of the right honorable member for Adelaide, the honorable and learned member for Darling Downs, the honorable and learned member for Corinella, the honorable member for Melbourne Ports, “the late Sir Edward Braddon, the honorable member for Newcastle, the honorable and learned member for West Sydney, Mr. S. W. Cooke, Mr. J. W. Kirwan, the honorable member for Illawarra, the honorable member for Bland, and the honorable member for Parramatta. Although it consisted of six professed free-traders, and six professed protectionists, still, strange to say, the majority report, recommending the bonus, which was indorsed by the Chairman, was signed by five protectionists, and .the late Sir Edward Braddon. The minority report was signed by five professed free-traders, and the present, leader of the Opposition, who is now so strong on alliances, but who, on that occasion, even differed from the honorable and learned member for Darling Downs.

Mr Groom:

– The honorable member will be on safer ground if he will keep to the merits of the case.

Mr AUSTIN CHAPMAN:

– We find the honorable member in very bad company, when he is with the honorable member for Illawarra, and the honorable member for Parramatta.

Mr Tudor:

– What about the company the honorable gentleman was in last week?

Mr AUSTIN CHAPMAN:

– I mean fiscally. If I ‘am asked to account for the vote of the late Sir Edward Braddon, I put it down as the vote of ripe experience, the vote of a man who was prepared to put above a mere fiscal cry the prosperity of a great industry, and the encouragement of the employment of our own people in developing it. I ask in return, how my honorable friends opposite account for the presence of the present leader of the Opposition in the camp in which he was found on this question. I point out also that in the same camp we had another ex-Minister, in the person of the honorable and learned member for West Sydney. If the recent political trouble through which we have passed has done nothing more than bring these honorable gentlemen and the honorable member for Barrier into a fold where they can honestly and sincerely stand shoulder to shoulder with the honorable and learned member for Toowomba, who was on the right side in the Bonus Commission, then the trouble they caused me - and about which I have never complained, though, of course, it was no pleasure to me to walk out of office - will not have been suffered in vain. I hope that the alliance will be found to be very much stronger, and will stand better together in the future than I am afraid can be hoped of some other alliances. This is a question which will test the sincerity of honorable members. We shall see whether they are prepared to give reasonable encouragement to the establishment of a national industry. Paragraph 3 of the report submitted by the Royal Commission, reads as follows: -

The evidence has satisfied us that all the materials necessary for the manufacture of iron from its ores are to be found in various parts of Australia in large quantities and of good quality, and under conditions suitable for the successful establishment ofthe industry under proper encouragement.

Mr Johnson:

– Nobody disputes that.

Mr AUSTIN CHAPMAN:

– I am very glad the honorable member admits it. I presume he will go a little further and agree with what the Commission say, in paragraph 5 of their report -

Little attention has hitherto been given to iron mining in Australia, and your Commissioners are of opinion that future operations are likely to result in further valuable discoveries of iron deposits.

I have no doubt that honorable members will all agree to that. There is no question that we have valuable deposits, and that further discoveries of rich deposits are likely. In paragraph 6 of their report, the Commissioners say -

Iron and steel are largely consumed in the Commonwealth, as appears from the figures contained in the two succeeding paragraphs.

Mr Johnson:

– If they can be made cheaper here, why do they not start their manufacture at once?

Mr AUSTIN CHAPMAN:

– I have given some reasons why I believe iron and steel can be made cheaper here. Eventually, I have no doubt, that they will be. made cheaper. Coal is cheaper, the ore can be raised more cheaply, but we must have some protection for our wages. Until we get a fair start we must get some protection, in the shape of a bonus or contract, against unfair competition. When we have wonderful iron resources in this country, and there are tens of thousands of people looking for work, I ask why we should refuse to give encouragement to the establishment of the industry in the way of a bonus of , £250,000, distributed over a number of years - because I suppose it will take from eighteen months to two years before £1 of this monev can be claimed, and £1, 000, 000 worth of iron must be produced before the whole of the proposed bonus can be claimed ? Paragraph 7 of the Commission’s report reads as follows : -

The following are particulars of the iron and steel imported into the Commonwealth during the years 1902 : -

Pig iron, 28,029tons, valued at £98,373.

Bar and rod, 38,282 tons, valued at £334,636.

Plate and sheet, 22,627 tons, valued at £178,548.

Scrap, 10,408 tons, valued at £32,907.

Galvanized iron, 44,538 tons, valued at £739,596

Rails, valued at £391,822.

Wire (plain), valued at £369,383.

Wire (barbed), valued at £71,426.

Wire netting, valued at £135,169.

Pipes, valued at £298,183.

In addition, iron and steel machinery to the value of £2,022,515 was also imported during the same period.

The total value of these importations is £41675,538. The figures speak for themselves, and require no argument.

Mr Thomas:

– Those imports include machinery.

Mr AUSTIN CHAPMAN:

– That is so; and one can understand what a tremendous impetus to employment the establishment of this industry would give. Honorable members must be aware that iron enters into almost every manufacture and every industry. The production of watches, machinery, ships, guns, agricultural implements, furniture, fences, and many other things, are all dependent on iron to a certain extent, and therefore nobody will dispute the fact that the industry should be established if by some means of encouragement we can secure cheap iron. The honorable member for Lang has asked why we should demand this bonus when persons are almost prepared to carry on without it, but I ask the honorable member whether it is not better that we should stimulate the industry?

Mr Thomas:

– We cannot understand why no Government will take up the industry if it can be carried on profitably.

Mr AUSTIN CHAPMAN:

– I agree with the honorable member that if we cannot get private enterprise to take up the industry, we should, if we can, get a Government to take it up, but, unfortunately, we cannot Of what use is it for the honorable member to contend that a State Government should take it up when we have had an emphatic “ No “ from all the States Governments? The imports referred to in paragraph 7 of the report are not for an extraordinary year, because we find in paragraph 8 ofthe report that the average iron and steel importations into the Commonwealth during the five years ending 31st December, 1902, were valued at £4,517,139.

That is to say, that in five years we imported between £20,000,000 and £25,000,000 worth of iron and steel to this country. Can any one wonder that we do riot progress as we might, when we are wrangling over the question whether this great industry should be established by State or by private enterprise? I ask honorable members whether it is not better to allow private enterprise to take up the establishment of the industry under the provisions of such a measure as we have how before us, which would give the States power to come in at any time, and take over the works, even though they had proved to be a success? I admit that it is open to argument that it might scarcely be fair to those who put money into the enterprise, to have it left to them if it fails, and to have the Government step in and take it over if it proves a success. But we find that there are men who have the trust which most of us have in the spirit of fair play in this country, and are willing to take the risk. I do not wish to quote at length from the report of the Commission, because I suppose honorable members have looked into it themselves.

Mr Thomas:

– There is something in the report about zinc which the honorable gentleman might quote.

Mr AUSTIN CHAPMAN:

– The honorable member will be able to quote that for himself presently. Paragraph 3 of the minority report reads -

The Bill provides for the payment of £324,000 of the people’s money to private individuals engaged in an enterprise for their private gains. There can be no guarantee that the bonuses proposed would permanently establish the industry, tho ugh it is probable the inducement offered might be instrumental in forming speculative companies.

That seems to me to be a rather peculiar clause to appear over the signature of the present leader of the Opposition, and especially as the £324,000 is not for pig iron alone. Only £250,000 of that amount represents the bonus proposed to be granted for the production of iron. The balance is intended to be disbursed by way of encouraging the production of spelter, and the manufacture of wire-netting, and reapers and binders. I should like honorable members to compare the statement which I have read with paragraph 7 of the minority report of the Commission, which says -

The evidence failed to show that there was any commercial necessity for the bonuses proposed. Mr. Sandford said he could produce pig iron at

Lithgow under 35s. a ton. Allowing for freight to Sydney, Melbourne, and other parts of the Commonwealth, he could, on this showing, compete favorably with any imported pig iron. Other witnesses, who, however, had less experience than Mr. Sandford, doubted the correctness of his estimate of cost. But, on the supposition of his having made an under estimate, he would still, even without a bonus, be in an excellent position as compared with the imported commodity.

That is a curious method of reasoning. In paragraph 3, the minority report, which was indorsed by the leader of the Opposition, who, no doubt, wishes the industry well, emphasizes the fact . that there is no certainty that the granting of a bonus will result in the establishment of the iron industry, whereas paragraph 7 affirms that the prospects of such an enterprise are so good that no bonus is reouired. I repeat that the passage of this Bill would provide a large measure of employment. It is estimated that 1,000 men would probably start work immediately.

Mr Conroy:

– Who estimates that?

Mr AUSTIN CHAPMAN:

- Mr. Sandford’s estimate was that within one month he would be able to start 400 men at Lithgow. We have the testimony of quite a number of experts that, if the industry were properly established, it would mean the employment of 12,000 men.

Mr Conroy:

– Why not 12,000,000 ?

Mr AUSTIN CHAPMAN:

– Does the honorable and learned member know tliat £4,500,000 worth of iron manufactures is annually imported by Australia? How many men would be employed by the expenditure locally of only a portion of that sum? I dare say that the time will come when more than 12,000 men will be engaged in the iron industry in Australia, but that will never happen if we do not develop our own resources. Is the honorable and learned member for Werriwa aware that more than 12,000 men are engaged in one of the iron establishments in Germany?

Mr McDonald:

– And does the honorable member know that one up-to-date furnace would supply the wants of all Australia?

Mr AUSTIN CHAPMAN:

– I am not merely referring to the men who would be engaged around the furnace, but to those who would be employed in the production and manufacture of iron and the products of iron. What about the individuals who would be required to mine the coal and to get the necessary limestone? What about those who would be employed upon the railway ? What about the freight which would be paid by these works? Are we to continue to send to England hundreds of thousands of pounds for the purchase of guns and all sorts of warlike stores,, which might be made in this country ? Are honorable members prepared to depend indefinitely upon other countries for these materials, or are they willing to wait until somebody embarks upon the enterprise of his own volition? In speaking at a public gathering yesterday, the honorable member for Newcastle said -

There were too many hungry men in Australia to let Mr. Reid get into recess and go to sleep.

There is something in that statement. But do not let us continue in session for the mere sake of talking. Let us do something. I do not desire to weary honorable members, but I should like to say a word or two in reference to wire netting industry and spelter. As honorable members are aware, the netting is made from imported wire. We all know the result of our having refused encouragement to that industry, in which £150,000 has been expended in plant. In Lysaght’s establishment, in Sydney and Melbourne alone, about 500 men were employed. Honorable members are aware that the works in Victoria have been closed down, and that the Sydney works are upon the point of closing down. Unless some consideration is extended to this industry, it is only a question of weeks, or, at the outside, of months, when the great works upon the Parramatta River will be closed. We shall then find a marked difference in the price which we shall be called upon to pay for wire netting.

Mr McDonald:

– When the Tariff was under consideration, New South Wales was held up as the shining example of a country where no duties operated.

Mr AUSTIN CHAPMAN:

– Upon that occasion a number of things were held up as examples, but they were very bad examples. In the light of experience, it would be well for us to face facts in a plain, straightforward way. It was demonstrated by a deputation to the late Prime Minister that unless some ‘consideration is extended to this industry, the works to which I have referred must be closed down. It has been shown beyond doubt that the reason for the decline in their trade is that Australia has become a dumping ground for Germany. Not only does Germany give bounties to encourage this industry, but it offers cheap freights over the railways, and subsidizes ships to bring its goods here. Unless we do something to counteract the policy of that country, these works will discontinue operations. The honorable and learned member for Werriwa will then find that farmers in his district will be called upon, to pay an increased price for their wire netting. The honorable member for Barrier seems to regard the proposal to assist the production of spelter as a good subject for a joke. I am inclined to think that an expenditure of £20,000 would help it very materially. At any rate, I shall be interested to learn from him why the proposal should be omitted. If he can show why it is not necessary-

Mr Thomas:

– Does the honorable member think that it is necessary ?

Mr AUSTIN CHAPMAN:

– Yes. I do not wish to introduce any protectionist or free-trade arguments into this matter, because by so doing I should perhaps create an awkward position.

Mr- Webster. - Why do not the Government take up the measure ?

Mr AUSTIN CHAPMAN:

– It is difficult to understand the attitude of some honorable members who continually ask ‘ that question. Why did they not ask it while the late Government held office? Why do they desire to introduce party bitterness into this discussion? It seems to me that it would be a good thing for .this country if we could induce the Government to regard more of these great questions as open questions, so that we should not be dragooned into moving always on party lines.

Mr Webster:

– What becomes of responsible government under such circumstances ?

Mr AUSTIN CHAPMAN:

– The responsibility rests with this House. It does not rest with me. What more have I to do with this Bill than has the honorable member himself?

Mr McDonald:

– Absolutely nothing.

Mr AUSTIN CHAPMAN:

– Quite so. It is for honorable members to express their opinions, and for the majority to determine whether the iron industry shall be established in this country, and whether they are desirous of providing work for the thousands who are unemployed. All the evidence taken by the Commission shows that this industry would be the greatest employer of labour in Australia. Moreover, it is the base of many other industries. Consequently, we have to ask ourselves the question, “ Are we disposed to give the people work?” If so - and I believe that a majority of us are - we must necessarily ask, “Who should undertake this work? Should the State, or should we give some encouragement to private enterprise?” If we adopt the latter course, we are likely to secure an early establishment of this great industry. By granting a bonus for the production of iron, we should induce competition, and we should probably have works established in every State. We were told that with the accomplishment of Federation the market of the States would be broadened, so that in time the cost of our products would be reduced. That being so, why should we introduce provincialism? We know that it would be very difficult to induce any of the States to take up the industry. What would be the use of asking the Tasmanian Government to establish works on the Blythe River, or of requesting some of the other States to take up the industry? Some of them have not been able to deal with what, from the point of view of the States, are more legitimate undertakings. The great States of Queensland, South Australia, and Tasmania have not even been able to provide for old-age pensions. In these circumstances, would it not be useless to ask them to establish ironworks which would involve the expenditure of large sums of money. Would they not hesitate to do so? Why should we not take a practical step? I would again quote the remark made by the honorable member for Melbourne Ports, when the matter was before the House on a previous occasion, that every honorable member who votes to hand over the establishment of the industry to the States will vote for the defeat of the project. I would have no strong objection to one of the States taking up the industry, if any of them would do so, but I believe that the work can be undertaken with greater advantage by private enterprise. We all know that private enterprise is ready to step in, and I ask honorable members to join with me in passing the Bill. The measure is entirely in our hands, and I appeal to honorable members to pass it, and so help the establishment of the industry- It may be established with a comparatively small measure of encourage- ment. The Bill, as it stands, is very fair, and although some amendment of the schedule may be necessary in order to make it clear, that is a matter which may be dealt with in Committee. I appeal to honorable members not to view this question from any party stand-point- -not to say that because some of them have been free-traders in the past, they are free-traders still, and therefore must oppose this measure. I appeal to them to remember what a vast industry this will be; to remember the extent of our resources, the number of men who want employment, and the capitalists who are ready to invest money in the undertaking. I call upon them to bear in mind that the Government may, at any time, resume control of the industry, and, remembering all these facts, I cannot understand why any honorable member should say that he is not going to agree to ,the spending of the money of the country in this way - that he favours the sending of our money across the seas to give employment to the people of other countries, rather than to find employment for our own.

Mr CONROY:
Werriwa

– I must, at the outset, congratulate the honorable member for Eden-Monaro on the eloquence and fervour which he has displayed in moving the second reading of this Bill. I am quite sure we must all recognise that if he is unsuccessful in passing the Bill, no one else could have succeeded with it. I trust that it will not pass, and I hope to give satisfactory reasons in support of my opposition to it. I must first express my regret that a measure involving the expenditure of no less a sum than £324,000 should have been placed in the hands of a private member. The reasons for the action taken by the Government are obvious. It cannot be denied that one-half of the Ministry do not think that a measure of this kind should have been introduced, while the other half agree with it. That is one of the very best reasons why such legislation should not have been introduced at the present stage. After all, we are not here to force our views on any section of the community, and if legislation is to be passed at all, it should be passed only when there is a very clear majority in favour of it. I hope that, even at this late stage, the honorable member for Eden-Monaro will see .the propriety of refraining from establishing a precedent that would allow private members to take up a measure involving sums of this magnitude It seems to me that it is better for .the House itself that we should insist that measures of this kind shall be taken in hand only by the Ministry, and then only when all the members of the Ministry are thoroughly agreed upon it. There is no doubt that at present the adoption of that course would mean the relegation of the discussion of this Bill to a date subsequent to the next election. I, for one, should be glad if that were done. The honorable member has given us a great many reasons why the bonuses provided for in this Bill should be granted. I am bound to say, in the first place, that I learned to-day with astonishment .that some honorable members who pride themselves on being anti-Socialists are yet prepared to support a Bill which would grant a bonus to a certain number of men who are prepared to take up the industry on no other ground than that those men have a large amount of capital to invest. In other words, they say that the moment men become capitalists, they become worthy of the consideration of Parliament, but that workers are not to be considered for one moment. Such a doctrine ought to be reprobated by every one of us. One is astounded that honorable members professing to hold anti-socialistic views are yet prepared to grant a bonus ,to a big capitalist who has control of half-a-million of money - that they are prepared to grant £324,000 out of the public funds to such a man, and to allow the money to filter through his pockets to the workers, instead of direct from the Government. If Parliament, by the mere passing of a resolution, can make wealth, then the sooner we have three parliamentary shifts of eight hours per day the better it will be. If wealth can be created in that way, let the Parliament sit in eight hours’ shifts, and pass resolutions establishing wealth as fast as it can. It is monstrous that honorable members should be asked to agree to pay a sum of £324,000 - collected as it is in such unjust proportions - to any private individual to establish the iron industry. If honorable members would support an amendment which I intend to move, the position would be different. Clause 3 provides that -

The Governor-General may authorize the payment out of the Consolidated Revenue Fund, which is hereby appropriated for the purpose- and so forth. I propose to move the insertion of the words, “ of any sum collected only by direct taxation,” after the words “ Consolidated Revenue Fund.” Mr. Thomas. - That would be fair.

Mr CONROY:

– If honorable members wished to give a guarantee to capital invested in any particular line, we should thus insure that capital only should pay the guarantee to capital, and that the money should not be collected from the workers, as it would be under the present system by which we collect £.10,500,000 from the poor, and only about £2,250,000 from the wealthy people of the Commonwealth.

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

– Does direct taxation fall only on the capitalist?

Mr CONROY:

– I admit that every penny raised by way of taxation lessens the amount which might otherwise be used for productive purposes. I have never urged that any unnecessary sum should be taken from any one, and if I would object to money being taken unnecessarily from the capitalist, how much more strongly should I object to even a penny, being taken unnecessarily from the workers? That question is involved in the consideration of this measure. Does the honorable member for Eden-Monaro mean to say that the whole of this vast sum should be paid on an output of 450.000 tons? From the figures before me, I find that 2S. 6d. in the ,£1 is all that is paid in wages in connexion with the output of iter,, so that it is proposed to hand over £324,000 to private enterprise in order to obtain that result But let us go still further, and say, that a greater ratio than any which has yet been achieved will be reached, and that one-third of this money will be paid away in wages. If that be so, we propose to hand over to those who are fortunate enough to have the capital necessary to establish so great an industry, a sum of £324,000, so that they may hand back to the workers £100,000. Will any. one argue that that is what we ought to do?

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

– Where is the honorable and learned member’s data for the assertion he has just made?

Mr CONROY:

– I take it from Mr. Jeans’ book, which is in the parliamentary Library. Mr. Jeans was the secretary of the Iron and Steel Association, and with several other gentlemen visited America in order to inquire into the working of the iron and steel manufactories of the States. He says that -

The average cost of producing pig iron in the Southern States of America to-day is 33s. 4d. per ton, although it was claimed that one, or perhaps two, of the smaller firms, who are specially well placed, may produce it for a dollar less. In Alabama, it is claimed that pig iron is made at the very low cost of six and a half dollars. The following for one month, covering a production of 12,000 tons from two furnaces, fairly represents the work over a period : -

Cost per ton - Limestone…… o 8

Mr Austin Chapman:

– What about the men wHo hew the coal ?

Mr CONROY:

– I doubled the rate in order to include them. Mr. Jeans goes on to say that -

I may add that I have had brought under my notice within the last few months an important proposal to establish in the Midlands - where they had an enormous royalty - works on modern lines, where it appears probable to produce pig iron at 30s. per ton, and steel billets at 67s. per ton.

When I heard the honorable member talk of the enormous number of persons who would find employment in this industry, I interjected that he was surely making some mistake. He replied that he was not - that some 10,000 or 12,000 men might be employed in the industry. Let us see from a perusal of the figures taken, not from any imaginary source, but from a statement relating to the Duquesne blast furnaces - one of the great iron works of Pittsburg - what reason there is for such a belief. The number of men employed there is 477. These figures include clerks, telegraph operators, draughtsmen, police, bricklayers, those engaged in loading and unloading, and construction men engaged in new works.

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

– But they do not include those engaged in the hewing of the coal, or in getting out the ore.

Mr CONROY:

– I am speaking of the number of men employed at the iron works. It is in respect of the iron works itself that we would pay the bonus.

Mr Hughes:

– What is the output at the works to which ‘the honorable and learned member has referred? Mr. CONROY.- About four times as much as would meet the requirements of the Australian trade for twelve months. It amounts to 620,000 tons a year. If the work were carried on in Australia in the same way, we should not employ more than 120 men in producing sufficient pig iron to ‘ supply the whole of the requirements of Australia. I am speaking, of course, of the number of men who would be directly engaged in the manufacture of the pig iron. In view of these figures, will the honorable member for Eden-Monaro persist in his assertion that the establishment of the h> dustry in Australia would give employment to thousands of persons.

Mr Austin Chapman:

– If we manufactured only the wire-netting required for the Commonwealth we should employ a thousand.

Mr CONROY:

– I am dealing simply with the manufacture of the pig iron. Surely, the honorable member will admit that he has not given any proper consideration to the matter, and, in the light of the figures I have presented, will turn right about face, and vote against the granting of any bonus?

Mr Austin Chapman:

– Does the honorable and learned member know anything of Mr. Sandford’s wages-sheet?

Mr CONROY:

- Mr. Sandford stated when before the Commission - after calm, quiet deliberation - that he could produce pig iron at 35s. per ton. But, say, for example, that it would cost him £2 10s. per ton to produce it. As local manufacturers know to their cost, ‘ when they have to make machinery, pig iron is not brought to Australia for less than about £4 10s. per ton.

Mr Austin Chapman:

– Does the honorable and learned member know what are to-day’s quotations?

Mr CONROY:

– The quotations are but slightly below that which I have stated. Two years ago the price was about £6 10s. per ton.

Mr Austin Chapman:

– At present the quotations are from 60s. to 80s. per ton.

Mr CONROY:

– We must not lose sight of the fact that the inevitable result of the granting of this bonus would be that we should be called upon to grant still larger sums to assist the industry. I call upon honorable members on all sides of the House to vote against a proposal of this kind. If we have to establish the iron industry - if it is shown that it is absolutely the life-blood of the community - then comes in one* of the few arguments which can be used for assuming control of it by the ‘State. Otherwise, if only one iron works be established, we shall tend to create a monopoly. That is exactly what we do not want to do. Consequently even the strongest individualist would agree that this would be one of the few lines on which State interference ought to be allowed, because State interference, by preventing a monopoly, would prevent inroads upon human liberty in other directions. I do not desire to dwell upon the fact that in other countries where iron industries have been established, the bulk of trie people’ appear to have been so misled that some of the greatest fortunes in the world have been built up in connexion with them. The fortunes of men like Flick, Schwab, and Carnegie, have been built up out of iron, at the expense of the mass of the workers, who have contributed to the fortunes of these men out of their hard earnings.

Mr Ronald:

– We should require a minimum wage and a Factories Act in connexion with the industry.

Mr CONROY:

– If we grant a bounty of this sort, I shall take care that every restriction that can be imposed shall be imposed, and shall also see to it that the bulk of the money goes into the proper pockets - that is, those of the workers. It has to be remembered that, when we vote large sums of money for purposes of this kind, we are appropriating the earnings of the people of the community for the benefit of a few other people. If any evidence were required as to the effects of bonuses, we have only to consider the revelations in connexion with the Butter Commission in Victoria, where it was found that the bulk of the producers, for whom the bonuses were intended, got very little of the money, which went into the pockets of a few of the larger firms.

Mr Hughes:

– Would the honorable and learned member favour a clause providing for a minimum wage?

Mr CONROY:

– Considering that only 2s. 6d. out of £.1 in this industry goes in wages, I should certainly be favorable to insuring that at least 19s. nd. of every £t of the bonus voted went direct to the workers. But I feel sure that the amendment which I have already” suggested in clause 3 - that if these sums are to be voted, they shall come out of direct taxation - will commend itself to most honorable members. If we succeed in carrying that amendment we shall encourage every man to rely upon himself, instead of trying to create in this Australian Commonwealth a body of cringers and crawlers, coming to the Government for everything. It should be remembered that it is only by the industry of the citizens of the country that wealth can be produced. Parliaments cannot add to the wealth of the country. All’ that they can do is to withdraw something out of the general fund. I shall leave the honorable member for Barrier to deal with the question of spelter. I feel sure that he can give the House valuable information on the subject, and that honorable members will then have no hesitation in voting against the proposal in that regard also. As to the question of reapers and binders, I am astounded - absolutely astounded - that any member of this House should get up and propose to make a present of £4,000 to any firm. There are perhaps only two firms in Australia at the present time who are making reapers and binders. They make, perhaps, 500 per annum. Because they happen to have started, we are to make a present to them of £4,000- not of our own money, -which we should be entitled to do, but of other people’s money. Can there be any justification for that? I shall say no more at the present time, but certainly when we get into Committee I shall move the amendment which I have suggested. nd if any further sums are to be paid to the capitalists of this country, I shall endeavour to see to it that they are paid only out of moneys collected by direct taxation. By that means we shall insure that the capitalist class will contribute to the capitalist class in respect to these ventures.

Mr RONALD:
Southern Melbourne

– I sincerely hope that the proposal which has been brought forward bv the honorable member for Eden-Monaro, will receive the very careful consideration ‘ of the House, and that honorable members will realize the advisability of establishing the iron industry in Australia as speedily as possible. When the matter was previously before the House, I took the liberty to break away from my party and to oppose the proposal to make the iron industry a State monopoly. I did so for what I considered to be a good reason, believing that the proposal thus made was simply another way of indefinitely delaying the establishment of the industry.

Mr McDonald:

– Rubbish j the honorable member has no reason to attribute such motives to other honorable members.

Mr RONALD:

– I admit that the honorable member is a great authority on rubbish, but I am not. It was patent that no State would take up the industry. I ventured to prophesy so much at the time, and it has been fulfilled. The amendmentthen made was merely a free-trade attempt to stifle the creation of a native industry.

The free-traders of New South Wales were unfavorable to the establishment of the iron industry within their State, and this was their method of postponing it indefinitely. We are urgently in need of the iron industry in Australia, because it has been well said that iron is the vertebra, or backbone, of all industries. The thing which has made America the great manufacturing country she is to-day “is her iron industry; and we know perfectly well that no country has ever attained to prominence as a manufacturing country, where the iron industry has not been a success. Iron has been well described as being more useful than gold. Undoubtedly, it is on account of the innumerable things for which it is used. The value of iron cannot well be over-estimated. So far as I am concerned, I see no difficulty at all in regard to the establishment of the industry, nor do I see grounds for any of the fears and the evils which have been prognosticated by the honorable and learned member for Werriwa. All we have to do to protect the workers is to insert a minimum wage clause in the conditions under which we grant the bonuses, and that will lead to a proper distribution of the money.

Mr Conroy:

– I doubled the wages paid in America, and that left only 6s. 8d.

Mr RONALD:

– We will quadruple them, if doubling is not sufficient. It is simply a matter of insisting upon a minimum wage clause being inserted in the conditions. That will lead to a fair distribution of the money granted by Parliament. But the great point that is made is that the bonus system has been tried, and, to some extent, found wanting in this country. The system has been found wanting, because the conditions imposed have not been sufficiently severe. In this case, it is proposed to pay by results - no iron, no bonus. That system will prevent the national exchequer from being exploited by any firm. Until they produce a certain quantity of pig iron they will receive no payment from the Government. When the proper quantity l£ iron is produced, the Government nill be in a position to -pay them. Thus there will be no danger of the national exchequer being exploited for the benefit of private employers. I would also point out emphatically that at the present time our pig-iron industry in Australia is in a very bad way. Honorable members are aware that what is known as scrap iron, if worked up over and over again, becomes at last almost useless ; and that is the state in which we find our selves. At the rolling mills in my own electorate, scrap iron is worked up over and over again. Consequently, iron may be used in machinery when it is dangerous to use it. That time must arrive sooner or later. Therefore, we require - if one may use the term - new blood for the iron industry. We require new pig iron to add strength to the industries in which iron is used. Hence the urgency of this proposal. So long as we are dependent upon America for the bulk of our iron, we shall be continually obliged to work up our scrap iron, and to over-work it. But when we have native iron employed, there will be a continual supply of fresh pig iron. I sincerely hope that we shall not go on wrangling in regard to the creation of this great industry. It is time that something definite was done. Some honorable members believe in making the industry a State monopoly. But all that can be secured by means of a State monopoly, in connexion with the iron industry, can be secured through private ownership. I should be favorable to granting a lease of from twenty to thirty years to the capitalists who embarked upon the industry. I should be prepared to treat them liberally. Though I am as staunch a State Socialist as any man, I am prepared to admit that the State in the initial stages of any enterprise does everything at a maximum of expenditure with a minimum of utility. But let us employ private capital in order to initiate this industry. Then we can step in with advantage, and conduct the industry by means of the agency of the State. It can be understood that in the initial stages of such an enterprise, great difficulties will attach to working it by means of the State. But if the industry is started by private enterprise, those who engage Tn it will know that they will have only a limited time in which to make their profits, and, with due regard to the utilitarian aspect, commence in the most economical way. At the expiration of their term, the works become the property of the State, just as the tramways in Melbourne, and elsewhere, become the property of the municipalities at the end of a given period. I believe- that people would be prepared to start the industry on these terms ; but, of course, there must be rigid labour conditions. The urgency of a measure of this kind is manifest. We have no iron shipping, or armament, and on an island continent where, at some time, though, I hope, it may be far distant, we may have to be on the defensive, we would soon realize the advantage of having the raw material within our borders. If we wait until the States choose to take the initiative, we shall wait until the day after doomsday. And, again, would it be fair to tax all the States for the sake of the State in which it is admitted the great mass of our iron deposits are to be found? Such a course would raise the old cry of State jealousy, which we are trying ,to stifle in this House. My opinion is that, in the initial stages, this industry would be better in private hands if proper safeguards are provided. There must be proper labour conditions, and payment by results; and, with these, there could be no danger of exploitation of the public purse. No doubt, there have been great scandals . in connexion with bonuses. The butter bonus, and the beetsugar tonus, were failures, and why? It was for want of what is known as State Socialism rigidly applied - for want of strict State supervision. But we learn by past experience, and I am quite sure that if we have a minimum wage, an eight hours’ day, sanitary conditions in the works, and payment by results, no men will be able to use the bonus for their personal aggrandizement. If a State is prepared to take up the industry, I am in favour of a State monopoly; but I should like to know what the price is to be. In the electorate which I represent, there are a. large number of occupations in which iron is an incidental or an essential, and a bonus would impart new life to them. Industries are at the present time in a very low state in Australia. We are fast reaching the point when we shall be mere hewers of wood, and drawers of water - workers on farms and stations. If this country is to be made great, it must be by manufactures. America is our great exemplar ; and had it not. been for manufactures and protection, that country would not be the hive of industry it now is. . I should be quite prepared to impose a duty of 25 per cent, in favour of the iron industry, but it is an absurdity to protect what does not exist. I sincerely hope the question will receive the earnest consideration of honorable members, who will take care not to lose the substance for the shadow. We ought to at once grant a bonus to any firm, or company, prepared to produce the article under such conditions as I have indicated. I have reason to believe that my constituents are with me in the belief that this industry is urgently needed. I hope that the Labour Party, with which I am associated, will see how much the solution of the labour problem depends on this question, and will recognise that we have full power to prevent any exploitation of the public purse by private’ individuals. The proposal that the States should take the initiative was only a subterfuge to enable the matter to be shelved. I havealready stated that honorable members who voted for a State monopoly do not believe in a bonus.

Mr Tudor:

– I do.

Mr RONALD:

– I am not speaking of individuals. The proposal was a free-trade move to cause indefinite delay.

Mr McDonald:

– The honorable member himself voted to remit the question to a Select Committee.

Mr RONALD:

– I voted against a State monopoly and for an inquiry in order to prove, as the report of the Commission does, that the matter ought to be left to private enterprise. I am in favour of State monopoly, though I am not anxious, by taking a short cut, to spoil the whole thing. Private enterprise has exploited labour long enough.

Mr McDonald:

– And the honorable member would give further power to private companies?

Mr RONALD:

– Let us now exploit private enterprise, by allowing it to take the initial steps, and when the works are a paying and going concern, let us take them o’er.

Mr McDonald:

– The honorable member must think that people are “ flats.”

Mr RONALD:

– Those who started the enterprise would have had an opportunity to make it pay then.

Mr Conroy:

– What competition woulJ there be when 120 men can make all the iron required in the Commonwealth?

Mr McDonald:

– The honorable member for Southern Melbourne is prepared to give a monopoly?

Mr RONALD:

– Certainly not. I would grant a bonus to every firm who produced iron. We may. be quite sure that there will be plenty of competition.

Mr McDonald:

– One modern blast furnace would supply all the iron we require.

Mr RONALD:

– It would for a limited period ; but the industry would create its own demand. I do not think that one modern blast furnace would supply all we require, when we consider that we are without bridges or iron steam-ships, or any iron except scrap, which is used over and over again. The day will come when Australia will be a hive of industry, and iron mills will be found all over the country.

Mr Spence:

– In another thousand years !

Mr McDonald:

– That is the sort of thing we read about !

Mr RONALD:

– I am speaking from experience. My native country, Scotland, h one of the poorest I was ever in, and yet, owing to its great iron deposits, it is perhaps the best manufacturing country in the world.

Mr McDonald:

– But what are the conditions of the people?

Mr RONALD:

– That has nothing to do with the output, or the activities of the people. The conditions of the people are not good, owing to the free-trade system. If there had been protection in the old country wages could have been kept up.

Mr Johnson:

– Then, why are wages not kept up in continental countries, where there is so much protection ?

Mr McDonald:

– What are the conditions of the workers in Germany ?

Mr RONALD:

– In Germany protection is one-sided and conservative. In that country protection is for the capitalist, pure and simple ; there never has been any attempt at industrial legislation. There must be conciliation and arbitration combined with protection.

Mr Spence:

– Protection does not raise wages.

Mr RONALD:

– The honorable member ought to have known that long ago. Protection, plus conciliation and arbitration, does raise wages, and maintain them - one is the complement of the other. In Australia there is no danger from monopoly incidental to protection, because we have a system of conciliation and arbitration. A free-trade labour man, who believes in conciliation and arbitration, while opening the ports to competition, represents a flat contradiction in terms. The protectionist labour man, on the other hand, who believes in conciliation and arbitration, with reasonable protection for the employers, is at least logical, I have no hesitation in giving my earnest support to this proposal to grant a bonus to a private firm under the conditions I have named. If a private firm is prepared to accept a bonus on those conditions - payment by results - it will redound to the credit and profit of Australia, and go a long way to remove the chronic difficulty of the unemployed,

Mr McDonald:

– These statements are always made when a concession is wanted.

Mr RONALD:

– These are not statements, but convictions. If the honorable member has any capacity for reasoning from cause to effect, he will see that it is the inevitable sequence of creating an industry, which is the basis of .many others. Why should we linger in this matter ? Along the coast of Australia, in various places, we have immense tracts of the finest hematite iron. In New Guinea and New Caledonia, there is an immense tract of hematite iron, which is easily workable, and which, if necessary, could be shipped here. We have abundance of iron ore in Tasmania, New South Wales, and Northern Gippsland.

Mr McDonald:

– And in Queensland.

Mr RONALD:

– I am not sure about Queensland.

Mr McDonald:

– It has more than all the rest of Australia, so far as discovery has gone. - Mr. RONALD.- So much the.’better. All that is needed, is that an initial fillip be given in the form of a bonus or a duty. The bonus will, I believe, be very short-lived, because as soon as the industry is established we can resort to the time-honoured and tried method of protecting at the Customs House. I am strongly in favour of a bonus being granted to give an initial fillip to the iron industry, with the promise of a substantial protection as soon as it is called into existence.

Mr Johnson:

– The honorable member is not satisfied with a bonus, he wants protection as well.

Mr RONALD:

– I am going to protect the iron industry after it is created.

Mr Johnson:

– It is well to know that.

Mr RONALD:

– Surely the honorable member ought to know that we cannot protect what does not exist. To impose a duty of 20 per cent, on iron would be an absurdity, but to give a bonus at the start, and protection afterwards would create an iron industry which in its turn would create one hundred and one other industries, and go a long way to solve the unemployed problem. Mr. McDonald. - The honorable member proposes to give ,£324,000 to start these industries.

Mr RONALD:

– I am1 making no such proposal. I am willing to pay by results ; no iron, no bonus. I hope that the Bill will be earnestly considered, and that a doginthemanger policy will not be followed. My conviction from the first moment was that a State monopoly would only mean delay on the part of foreign traders, who do not wish the iron industry to be established in this country.

Mr ROBINSON:
Wannon

– I had hoped that this important proposal to give away £324,000 of the people’s money would have been debated at greater length. I think that a proposal of this kind deserves serious consideration from a full House. I feel rather despondent about the manner in which a larger number of us view our responsibility to the States Treasurers, when we see an important proposal of this kind, which will lead to very serious depletion of the States revenues, taken in a most casual wanner. I have listened to most of the speeches on the proposal, and I am sorry that I was unavoidably prevented from hearing all of them. My predecessor in the representation of Wannon happened to be a member of the famous Royal Commission

On the iron bonus. He was one Of those gentlemen who signed a report, which was prepared by the honorable member for Bland, and the then member for Kalgoorlie, all of whom did not believe in giving an iron bonus. As honorable members are aware, there were six members of the Royal Commission who did. My predecessor took the view which was set out in the minority report. The grant of a bonus was opposed by the honorable member for Bland, the honorable and learned member for West Svdney, the then member for Kalgoorlie, the honorable and learned member for Illawarra, the honorable member for Wannon, and the honorable member for Parramatta. I entirely indorse the decision which thev came to, and which, it seems to me. was warranted by the evidence and’ the financial position of the States. The grant of this sum of £324,000 would mean another large increase in Federal expenditure. Honorable members must not forget that the other night we agreed to the expenditure of £20,000 on the survey of a railway to Western Australia. We were told by the Treasurer to-day that, in connexion with the sugar question, there will be a great falling-off in Federal revenue, which means that a lesser sum will be returned to the States. We are, therefore, confronted with the position that this proposal must lead to a further depletion of the money returnable to the States, a further impoverishment of the States Treasuries, and consequently increased retrenchment in the various States Departments. . As one who was a member of the State Parliament when retrenchment had to be undertaken, I have no wish to see such a state of affairs brought about again. But I am confident that the granting of this sum, together with the loss of revenue which will occur in other directions, will inevitably impose a very severe strain on the finances of the States generally, and particularly, I believe, on those of Victoria and Queensland.

Mr Carpenter:

– They have not suffered vet.

Mr ROBINSON:

– I can assure the honorable member that they have suffered a good deal. The experience of Canada in connexion with these bonuses shows that as soon as the sum provided for in the first Act is paid away, a demand arises that a further sum shall be granted, and that has been the experience in other parts of the world. The Canadian experience speaks volumes for the habits of mendicancy that bonuses produce on big manufacturers. They have been consistent beggars at the doors of the Canadian House of Commons, consistent log-rollers and lobbyists to get further money out of the pockets of the people. I am not one of those who believe that the whole of the people should be taxed for the benefit of a small section. I look upon this proposal as a method of taxing the whole of the people for the benefit of a very small section. The sum proposed to be expended seems to me to be outrageously excessive. I have given notice of some amendments which, if carried, will have the effect of reducing the proposed expenditure by £190,000 - that is to what seems to me an enormous expenditure, namely, £134,000, instead of £324,000. I see no justification for paying as much as £1.34,000. The only recommendation it has is that it is less than £324,000, and will- not injure the finances of my State so much, or injure the finances of some other States which, as we know from the press every day, are being strained very severely. One has only to read the financial statements of South Australia and Queensland to know .that their Treasurers must have before them a verv difficult task. I do not wish to .make their task any more difficult by giving away money in this manner to one of the wealthiest sections in the community. I therefore intend to oppose the second reading of the Bill, and, if it is carried, I sincerely hope that the sense of the Committee will be in favour of placing the expenditure on a far more moderate scale, In view of the financial exigencies of the States, I feel that to spend a large sum would be a very serious- injury to them, and would not be likely to render Federation any more popular ,than it is in some of the States Parliaments. For these reasons I enter my protest against the Bill.

Mr GROOM:
Darling Downs

– I ask the Prime Minister to allow the debate to be adjourned until to-morrow, as there are several honorable members who, I understand, wish to speak. I move -

That the debate be now adjourned.

Mr REID:
Minister of External Affairs · East Sydney · Free Trade

– I am very reluctant to consent to adjourning the debate at this hour, but, at the same time, I do not wish a division on the second reading to be taken when so many honorable members are away, as it would not be a fair indication of the feeling of the House. Therefore, if no honorable member wishes, or is ready to speak to-night I feel compelled, by my disinclination to allow a division to be taken on such an important matter in such a thin House, to comply with the suggestion. But I would appeal to honorable members who are not here, to endeavour to avoid this slack way of conducting public business. It will be quite a calamity, if we are unable to get on with business in a more earnest fashion than we are doing. I would ask the House, when this debate is adjourned, to go into Committee, and deal with the three postponed clauses of the Papua (British New Guinea) Bill.

Mr Webster:

– Surely, not to-night.

Mr REID:

– These postponed clauses do not involve any matters of great importance, and will not occupy our time for more than a few minutes.

Mr Webster:

– This is rather sudden.

Mr REID:

– The prohibition matter will not come up to-night, as I do not intend to ask honorable members to discuss new clauses.

Mr Webster:

– There is a constitutional matter.

Mr REID:

– I should like to go into that matter, and see whether we can do something.

Mr Carpenter:

– Why not take the Committee stage of the Bill to sanction the survey of a railway to Western Australia?

Mi. REID. - There is no object in proceeding with that Bill in a thin House.

Mr Carpenter:

– It could be put through Committee to-night.

Mr REID:

– I can assure the honorable member that I am speaking ,in the interest of the proposal itself.

Motion agreed to; debate adjourned.

page 5702

PAPUA (BRITISH NEW GUINEA) ‘ BILL

In Committee (Consideration resumed from 14th September, vide page 4681) :

Postponed clause 28 (Legislative Council). ‘

Mr REID:
Minister of External Affairs. · East Sydney · Free Trade

– I may explain that this clause relates to the constitution of the Legislative Council.

Mr Robinson:

– I direct your attention, Mr. Chairman, to the fact that the- mace is on the table of the House.

The mace having been removed,

Mr REID:

– Under clause 21 there are six Executive Councillors provided for, and it is set out that all these Executive Councillors shall be members of the Legislative Council. There is a provision for nonofficial members of the Council, who are to be appointed in some sort of proportion to the number of the white resident population. The provision is -

So long as the white resident population is less ti an two thousand the number of non-official members shall be three; but when the white resident population is two thousand or more an additional non-official member shall be appointed for each one thousand of such population in excess of one thousand.

Provided that the total number of non-official members shall not exceed twelve.

That provides for a maximum of twelve non-official as against six official members of the Legislative Council.

Mr MAUGER:
Melbourne Ports

– I would urge that exactly the same objection may be made to the further consideration of this Bill as has been taken to going on with the Manufactures Encouragement Bill. Honorable members were not aware that this matter was coming on, and it is most objectionable to spring so important a matter upon us at this hour.

Mr Reid:

– I do not propose to ask the Committee to finish this stage of the Bill.. For instance, notice has been given of an important new clause, and I do not propose to ask the Committee to consider that at this stage.

Mr MCDONALD:
Kennedy

– I am prepared to suggest an amendment to this clause, to provide that one-half of the nonofficial members of the Council shall be elected.

Mr Reid:

– Twelve is the maximum number, but there are only to be three to begin’ with.

Mr McDONALD:

– Had we known that this Bill was to be gone on with to-night we should have been better prepared to discuss it. We were told last week that as soon as the Budget statement was made, the Manufactures Encouragement Bill would be taken up, and its consideration would occupy the rest of the evening.

Mr Reid:

– Does the honorable member wish to raise the question whether nonofficial members should be elected?

Mr McDONALD:

– Yes. From a num ber of letters which I have received from New Guinea, I learn that people there are not satisfied with the form of administration proposed. The diggers who risk their lives in the pioneering work which will render the Territory suitable for white men in the future, are given no representation. They do not believe that, non-official members of the Council who will be appointed will represent them, and they desire representation ‘ in the Council. I think that even if it were necessary to pay some persons to act as members of the Legislative Council, that should be done, because the pioneers, to whom we must look for the future development of the Territory, should be represented in its administration. It would be wise to further postpone the clause.

Mr HUGHES:
West Sydney

– Before I left the Department of External Affairs, some representations had been made by certain persons professing to represent one section of the white population of the Territory, in which they mentioned a proposal similar to that which has been briefly outlined by the honorable member for Kennedy. I am bound to say that these representations were not at this time sufficiently definite to justify the late Government in taking .any steps. But I am sure honorable members would like to hear some fuller explanation of .the constitution proposed for the Legislative Council than the Prime Minister appears to be able to give us this evening. We can readily understand that the white population of the Territory, if they so desire, should have some sort of say in the government of the country. However much the right honorable gentleman in charge of the measure may differ from honorable members on .this side, I have no doubt he is sufficiently in favour of the principle of representative government to be prepared to give facilities to the white population of the Territory to express their views. Personally, I had no idea that this measure had been dealt with to the extent it had, and I think .the Prime Minister might agree to further postpone the clause.

Mr REID:

– When I asked honorable members to go into Committee on the postponed clauses of this Bill, I must confess that I did not anticipate that such an important question as that of elective members of the Legislative . Council would be raised. I quite admit that the matter is one of very great importance, and I have no desire to ask honorable members to decide it off-hand. As I have no wish to take honorable members by. surprise, I am willing that the clause should be further postponed. I think, however, that the Committee might agree to help me in dealing with clause 36, which is to be found in the Constitution of every State of Australia, and, indeed, of every country having representative institutions, and with clause 40, which deals with the assent to ordinances, on lines followed by all countries.

Mr Groom:

– It follows the Governor’s instructions practically.

Mr REID:

– Yes, it does exactly. The clauses to which I refer deal with matters with which honorable members are familiar, and .they follow the lines which have been adopted in all the States, and in the Commonwealth. I am prepared to further postpone clause 28, in view of the important question raised by the honorable member for Kennedy, as it is worthy of careful consideration.

Clause further postponed.

Postponed clause 36 (Prohibition of import duties discriminating against the Commonwealth),

Mr. HUGHES (West Sydney). - I know we had agreed to insert a clause to provide for reports, at not longer intervals than six months, being made to the Department of External Affairs, ‘for the purpose of enabling the Department to be fully seized of what the Government of New Guinea is doing. If that clause has not already been inserted, no doubt the right? honorable gentleman will have no objection to afford an opportunity for its consideration. ‘

Mr Reid:

– No.

Clause agreed to.

Postponed clause 40 agreed to.

Mr REID:

– I am much obliged to honorable members for helping me to get rid of these ‘two clauses. I shall not proceed further to-night.

Progress reported.

House adjourned at 9.40 p.m. °

Cite as: Australia, House of Representatives, Debates, 18 October 1904, viewed 6 July 2017, <http://historichansard.net/hofreps/1904/19041018_reps_2_22/>.