2nd Parliament · 2nd Session
Mr. Speaker took the chair at 2.30 p.m., and read prayers.
Assent to the following Bills reported : -
Supply Bill No.2.
Service and Execution of Process Bill 1905.
Mr. R. EDWARDS presented a petition from certain residents of Queensland, praying that stringent legislation be enacted to prohibit the importation and sale of opium within the Commonwealth.
Mr. ROBINSON presented a petition from the Central Council of Employers of Australia, praying the House not to enact the provisions of the Trade Mark’s Bill relating to union labels.
Petition received and read.
– I should like to ask you, Mr. Speaker, whether the petition is in order? It appears to me that it contains certain passages which dictate to and threaten this House, and if a petition in such terms is to be received, it may at some future time form a precedent for the presentation of others of a much more objectionable character. Among other things, the petitioners say that if this House adopt a certain course, it will commit an illegal act. I presume that no petitioners have a fight either to dictate to or threaten honorable members:
– I have had only the same opportunities as have been afforded to honorable members to acquaint myself with the contents of the petition. I shall go through it carefully, and report to the House later on if I find that it is of such a character that it should not be received.
– I desire to ask the Prime Minister a question with regard to the subsidy which the Queensland Government have agreed to pay to the Orient Company in consideration of their extending their service to Brisbane. Will the Prime Minister make provision on the Estimates for the repayment of the amount of the subsidy to the Queensland Government, who have practically been compelled to take steps to secure the extension of the: service ?
– Notice of the honorable member’s question must be given if an answer such as it deserves is to be suppliedI am not yet officially aware of the execution of the contract, of its terms, or the sum which the Orient Company is to receive. Iam, like the honorable member, dependent upon the newspaper reports, anrf the information thus afforded is not sufficient to enable one to express an opinion. As the Government of Queensland have entered into this’ contract for their own purposes, and at their own cost, an application such air that indicated by the honorable member would have to come from them, and if it has been in contemplation to make such a request it would have been better if the Commonwealth had been consulted beforehand.
– I desire to ask the Prime Minister whether his attention has been called to the systematic attempts which are being made by some Austraiian writers for the London press and others to disparage our Australian legislation, and also whether he has noticed a statement contained in an article published recently in the Spectator to the effect that the people of Australia have become ashamed of the Immigration Restriction Act. I wish to know, further, whether he has taken any steps to have proper representations made on the subject.
– Unhappily our attention is being continually arrested by statements made in Great Britain, and also in the Commonwealth, which seem to be the outcome of a campaign of calumny against the credit of this country. No one challenges the right of free speech, or objects to the criticisms, of those who take exception to any particular measure of legislation if they offer reasons for their opinions, but I regret that both our legislation and our circumstances are continually being misrepresented, and that grossly, by those who have the best reason for speaking well of this country.
– I desire to ‘ ask the Prime Minister a question with regard to the following paragraph, which appears in this morning’s Age : -
Inquiries in Europe are to be made on behalf of the Commonwealth Government by Mr. O’. C. Beale, chairman of the Australian Chambers of Manufactures, with reference to foreign legislation designed “ to check and prevent the sale of deleterious drugs and poisons prepared under secret formulae,” and also with reference to infant mortality in foreign countries. Mr. Beale was a member of the New South Wales Birth Rate Royal Commission, of which Dr. McKellar was chairman. He is proceeding to Europe at his own expense, and will fulfil his commission without cost to the Federal Government and Parliament. The Prime Minister has given Mr. Beale an official letter of introduction.
I should like to know what is the nature of the commission that has been issued to Mr. Beale.
– The commission which Mr. Beale has undertaken is exactly set forth in the words which are printed within quotation marks in the paragraph referred to. Mr. Beale is about to visit Great Britain and Europe, and being acquainted with more than one European language, and having learnt, during the time that he was a member of the New South Wales Commission which inquired into the subject of the decrease in the birth rate, that legislation which is said to have proved highly effective, has recently been passed in some European countries, has generously placed his services at the disposal of the Commonwealth in order that he may obtain information with regard to such legislation from the officials charged with its administration. He has undertaken this very useful work without cost to the Commonwealth.
– I should like to know what are Mr.u Beale’ s qualifications and whether, in a matter of such importance, it would not have been better to give a commission to a medical man acquainted with the subject?
– Questions without notice are being multiplied rather inordinately of late, but the honorable member is entitled to an answer to his question.
– I desire to ask, Mr. Speaker, whether ‘ the Prime Minister is in order in saying that questions without notice are becoming multiplied rather inordinately. Is not that statement a reflection on honorable members?
– I- do not think the Prime Minister has made any remark reflecting upon honorable members.
– Did you, Mr. Speaker, hear the Prime Minister’s statement?
– I heard the remark of the Prime Minister, to the effect that questions without notice were becoming inordinately multiplied. If the Prime Minister holds that opinion he is quite justified in expressing it.
– Mr. Beale served a long apprenticeship under Dr. McKellar with a number of medical men in connexion with the New South Wales Birth Rate Commission, and took a deep interest in the subject. He is further qualified, owing to his acquaintance with one or two Continental languages. Therefore, although not able to give a medical judgment, and not being required to do so, he will be in a position to consult medical experts in Europe as. to the efficiency of the legislation which has been passed dealing with the matters referred to.
– I desire to ask the Prime Minister whether he is correctly reported by the press to have said, upon Friday last, that Britishers coming to Aus” tralia under contract did not require exemption certificates?
– I did not say that they did not require exemption certificates.
– The honorable and learned gentleman is reported to have made that statement.
– What I was alluding to was this : that exemption certificates are not generally used in connexion with British subjects, and when the Agents-General in great Britain were authorized to issue those certificates, they were so informed.
asked the Minister representing the Minister of Defence, upon notice -
– The answers to the honorable member’s questions are as follow: - 1.Seventy.
Motion (by Mr. Wilks) agreed to -
That there be prepared and laid on the Table of the House a tabulated statement of all Royal Commissions and Select Committees appointed since the establishment of the Commonwealth Parliament, and showing the cost of the same.
In Committee of Supply: (Consideration resumed from 22nd August, vide page 1240, on motion by Sir John Forrest) -
That the item “ President £1,100 “ be agreed to.
– I exceedingly regret that I am obliged to resume the discussion upon the Budget, in consequence of the indisposition of the right honorable member for Balaclava, who, I am sure, would have made a most valuable contribution to the discussion of the present state of the finances of the
Commonwealth. To me the financial question seems to be more important now than it has ever been in the brief history of the Federation. We are face to face with accumulating problems, the intensity of each one of which is increasing from year to year, and the figures which have been placed before us by the Treasurer, reveal, in all its nakedness, the gravity which some of those questions are assuming. The Committee, I think, can compliment the right honorable gentleman upon the precise manner in which he put those figures before us. The late Treasurer - a gentleman who I am seriously inclined to think ought to be the permanent Treasurer of the Commonwealth - set the very admirable fashion of supplying the Committee with the most complete and tabulated information regarding the affairs of the nation, and all that was in any way connected with our financial existence. The present Treasurer has followed in his footsteps to the extent that he gave the Committee a perfect set of figures, and made a very succinct and clear statement, so that there can be no excuse for anybody failing to understand the position as it is to-day. I think that the position revealed by the Treasurer’s figures is one which calls for very grave consideration at the hands of this Committee. Though I compliment the right honorable member for Swan upon the very clear andi full manner in which he placed the affairs of the nation before us, I regret that I cannot compliment the Government upon the character of the statement which he made. When we come to carefully re-read that statement, to which we all listened with a great deal of interest, we find that it contains nothing in the nature of light or leading - nothing calculated to assist honorable members to deal with national affairs with that wisdom which their gravity demands. Throughout the Budget speech there was no indication whatever of the policy of the Government. There was no light thrown upon the way in which they regard the facts and figures which’ were placed before the Committee. There was no intimation of any measures which they propose to submit, either with a view to carrying on the financial work which has been commenced, or of reforming it, or of remedying any abuses which may exist. There was no indication that the work of economy - so necessary in connexion with our finances - is to be carried on - no indication that we are striving to meet the difficulties that have arisen with the different States in their relation to the Commonwealth, or of the system underlying the increasing expenditure of the Defence Department, or of the attitude which the Government propose to adopt in regard to such great questions as the consolidation of the States’ debts. Certainly, these subjects were referred to more or less briefly, and the facts connected with them were placed before the Committee. But these intimations were of that colourless description which affords no light or leading to honorable members. The facts placed before us were very largely such as any honorable member could have ascertained for himself by reference to statistical records. Indeed, to a large extent, it seemed’ to me that the Treasurer’s Budget consisted of Coghlan and platitudes. There was very little else in it. Although it was a full and complete statement of facts, it contained nothing beyond the facts set forth by Coghlan, and the right honorable gentleman’s criticisms of these were the merest platitudes, with one single exception, upon which I must compliment him, because I most sincerely agree with his remarks in that connexion. I refer to what I may be pardoned for calling his “ breezy optimism” concerning the affairs of Australia. I sincerely agree with his observations concerning those who decry Australia, and who entertain feelings of despondency regarding the great resources of our Commonwealth. The right honorable member did not at all overstate the case. Indeed, the figures which he laid before us confirm his view. They show that equally with other advanced and progressive portions of the world - our sister communities under British rule - we have nothing whatever to fear in the future. Whilst I agree with the right honorable gentleman that our prospects cannot excite alarm - indeed, that they must provoke nothing but renewed belief in the ultimate destiny of this great community - I regret that we have exhibited nothing like statesmanship in developing our marvellous resources, and in regulating those affairs which are now being carried on by private enterprise, as well as ever they can be. It merely requires wise financial arrangements between the States and the Commonwealth to so lubricate the machinery of Government _ as to increase our ratio of prosperity, and to justify the highest hopes of those who were instrumental in bringing about the Federation. I do not see that the Treasurer has put before us anything that will assist in relieving the existing friction, or in removing the precarious nature of the reliance of the States upon the Federal contribution to their revenue. In the first financial debate in this House, I referred very strongly to what I conceived to be the most difficult point in our Federation, and that was the dependency of the States Governments upon the Federal Treasurer fpr knowing how they would stand. This difficulty, great as it was in the first year, seems to me to have been growing more acute with regard to some of the States. I think that from a gentleman occupying his position we might expect something of a suggestion of how to meet the difficulty, which certainly is in great States, like Queensland, and in smaller States, like Tasmania, creating a feeling that the Federation has not been the success it was expected to be. But we have had no assistance in that respect, and no indication that we are going to make savings wherever we possibly can. We all looked upon the late Treasurer as one whom we could safely expect to cut down expenditure in every direction, and so remove the slightest cause of any charge on the part of the States that we were unduly swelling expenditure instead of cutting it down to that which was absolutely necessary; for carrying on the Federal Government. Although the expenditure goes on increasing at a ratio which, I am sorry to say, is far greater than I anticipated, still we have no indication from the present Treasurer that it is going to be kept down. I wish here to refer to a question I put to, I think, at least ‘three Treasurers, and that is as to whether ve could not have a Committee of Public Accounts, which would investigate all proposals for expenditure, and after inquiry from officers known to possess the necessary information, make such a report as would guide honorable members. I believe that such a committee would not only effect an economy in the cost of administration, but would save a very large amount of profitless discussion here on a variety of details in the Estimates, as to which honorable members cannot possibly know anything, and as to which we seek, by a round-about, indiscriminate discussion, to get some information. If the House felt that it could depend upon such a body to investigate the Estimates in detail they would be passed much more rapidly than is now done. If certain items were open to grave exception, the Committee would inquire into them, and in their, report would advise the House accordingly, and so facilitate the passage of the Estimates without that useless and prolix discussion which sometimes has taken place over very small items. I trust that the Treasurer, should he remain in office, will seriously consider whether such a committee would not help the Government of the day to get their Estimates put through, and assist the nation by giving a sort of guarantee that the Estimates had been closely scrutinized by gentlemen in a position to discover what was right and what was wrong about them. For, .apart from asking questions, a private member of Parliament has no possible chance of discovering the right or the wrong of the various minute propositions which are submitted. A Committee of Public Accounts, however, if it sat during the recess, could assist honorable members to come to a wise conclusion about propositions without the waste of time which must necessarilv take place when we proceed in the haphazard fashion we aTe now obliged to adopt, when a set of Estimates is submitted, and we are asked to pass them, or, what is sometimes worse, we refuse to pass them.
– There is a committee of that kind in the House of Commons.
– The House of Commons has had a Committee of Public Accounts for very many years, and from a recent article I was delighted to learn what a very useful institution it has been. It examines, if it thinks fit, the various Under-Secretaries, high military officers, the officers of the Exchequer, and the commissariat officers, and ascertains the reasons which have induced any proposals for additional expenditure, and whether it would not be possible to recommend to the House, and through it to the Ministry, the cutting down of certain items, and so insuring economical working of the machinery of government. I hope that the Treasurer will kindly make a note of my suggestion, and ask the Cabinet to consider whether a Committee of Public Accounts would not greatly assist the House and the Government of the day in regard to the Estimates. “ Economy,” said the great Gladstone - and I think he took the idea from a very much earlier man - “ is a great source of revenue.” In this Federation we cannot commence too early to insist upon the practice of economy. The Treasurer is generally looked upon as one who views everything in “a let it be done well “ sort of style; and I quite agree with him. If we have a great work to be done, and we have ascertained what it will cost, and how it can be done, let it be done well, because that is sometimes a means of economy. On the other hand, in the working, of the public departments, although an outsider cannot always put his fingers upon the weak spots, there must be great opportunities foi economy which should be availed of. Gladstone descended so low as to insist upon the abolition of fly-leaves from the stationery and reports. I forget what estimate was made, but I know that, by taking that course, he saved a considerable sum- to the Government of Great Britain. We might follow such a great example, and see whether we cannot, by making such economies, keep down the cost of government. Take the Budget papers, which are placed . before us every year by the Treasurer. One can see at once that they serve but a very ephemeral purpose. They are placed before honorable members very largely for the purpose of this discussion alone. We cannot get along without them, but then we find that some are also published in Hansard in a more condensed form. As a small matter of ‘economy, I should recommend the Treasurer to get the returns set up in a form in which they could also be used in Hansard, and could be much more conveniently consulted from time to time, because the papers in foolscap form are simply duplicate information published in Hansard, and pass out of existence in the course of a few weeks.
– Does the honorable member suggest that the returns should be set in that very small type?
– Yes. We have to consider whether these things are not worth doing. I think that such little savings would amount in the aggregate to something worth the while of any Treasurer to make, and Would considerably reduce the cost of the government of “the country. During the recess there was .a Conference at Hobart of the Commonwealth Ministry and the Premiers of the various States, in order to see whether some of the great questions which were coming on for consideration could not be approached, and some of the difficulties removed, by a clear understanding between the Commonwealth and the States. I was not altogether in favour of the Conference, although I could not but applaud the right idea underlying it, that some effort should be made to get the States to co-operate with the Commonwealth in such legislation as must necessarily be proposed at no distant date, so as to reduce the friction which sometimes arises when such legislation is proposed, and the States are not consulted. But I do think that the late Government, and the late Prime Minister, who was responsible, carried this idea a great deal too far; and that if the Conference had been completely successful, as it might have been, if all the subjects put down on the syllabus had been dealt with, and determinations had been arrived at, and if such a Conference had been renewed from time to time, we should have seen inaugurated a very unconstitutional practice. Undoubtedly some of the questions referred to the Conference were such that this Parliament, and this Parliament alone, could legislate upon. It is quite in opposition to any of my ideas of the principles of our Constitution, or of any similar constitution upon the British pattern, to establish a consultative body to deal with the large measures with which this Parliament alone has the right to deal. Take such questions as those affecting weights and measures and the coinage, and similar propositions. Under the auspices of the late Ministry such questions were submitted to the Hobart Conference, which was composed of gentlemen who did not find a place in this Parliament, and whatever decisions they might arrive at could not constitutionally bind this Parliament in any way. But it would have been sought to bind this Parliament by reason of the fact that, whatever Ministry was in power, they would have been able to say, “ Such and such was the decision arrived at by this great Conference, which represented the people of Australia.”
– The subjects referred to bv the honorable member, such as weights and measures, were questions as to which merely an intimation was given to the Premiers of the States at the Conference that the Commonwealth intended to take them over.
– I am aware of the fact that, as the honorable member states, those questions were not reached at the Hobart Conference. But they were down for consideration, and they might have been reached if the Conference had had time to consider them.
– The Conference went through every item on the list.
-While I am in favour of removing any possible ground of friction between the States and the Commonwealth, yet I do hope that we shall never constitute an unconstitutional body or tribunal of that kind to take upon itself the responsibility of formulating what measures shall be submitted to the Federal Parliament. That isour own business. It is for the Government of the day, whoever may compose it, to decide upon what measures shall be proposed to us, and for any irregularly constituted and recurrent meeting of States Premiersor States Ministries to consult with the members of the Federal Ministry as to what should be done would be a thoroughly unconstitutional thing, and one likely to give rise to much more friction than arises at the present time. Because it is easy to conceive that, the decisions arrived at by such a Conference not being carried out, would immediately give far greater umbrage to the representatives of the various States than would be the case if the measures proposed to be submitted to the Federal Parliament had never been laid before them at all; and no decisions had ever been arrived at in relation to them. I hope that while any future Government may - as I think it is their duty to do - endeavour to remove any friction between the various States Governments and the Federal Government, the summoning of a Conference to deal with any such measures as this Parliament can exclusively deal with, will never be attempted again. At the Hobart Conference various important questions were dealt with in such a way as to advance them nearer to that point at which some solution of the difficulties they involve might have been proposed to this House. Take such a question as that concerning the States debts, and that of valuing and paying for the States buildings in the transferred departments. The Conference dealt with those matters rather fully; and, although we have since had a change of Government, I did hope that whatever Minister having charge of finance met this Parliament, he would have been ready with some definite proposition. But we have had the Treasurer meeting us with a clear statement of the question and the difficulties surrounding it, giving us the bare facts, relating how the’ question was approached in the Conference, and stating the suggestions that were made for dealing with it ; but he gave us not the slightest gleam of light, nor did he outline any proposal by which the Government itself proposes to ask this House to solve the difficulty. Now. I will admit that this question presents probably more difficulties than any one who has not considered it can imagine. When we did not know the exact figures, we were all very apt to say that the debts of the various States should be consolidated at the earliest possible moment, and we were ready to say that a considerable saving - amounting to, I believe it was variously estimated, from £300,000 or £400,000 up to ,£700,000 or £800,000 - might be made by such a financial operation. I still believe that a very large saving - possibly in the ultimate as large a saving as the highest of the figures I have mentioned - could be achieved if we could devise some just and equitable means whereby the debts of the States could be taken over bv the Commonwealth. But when one looks at the figures surrounding the question the problem assumes the nature almost of a Gordian knot which cannot be unravelled, but which possibly might be cut. And thai seems to me to be the only solution at which we shall ever arrive. When we get a Treasurer or a Ministry bold enough to cut this Gordian knot which seemingly cannot be unravelled the question may be settled. It takes a considerable time for one to obtain a grasp of the problem from the figures which have been placed before us by various financial experts, I have worked it out for myself, and it seems to me that my method shows the. position more clearly and more quickly than any other presentation of the case that I have seen. Taking first the State of New South Wales, the whole debt, not that which can “be taken over by the Federation under the terms of section 105 of the Constitution - but the whole debt as it exists to-day - amounts’ to ,£55 per head of the population of that State. The amount of surplus revenue that the Federal Treasurer will return to New South Wales this year would at 4 per cent, interest meet a debt of £51 per head of the population. In the case of New South Wales, there would, therefore, be little difficulty in taking over the debt, considering that what we now return would pay the interest on that debt. When we come to Victoria, the position is not quite so evenly balanced, because the debt of that State amounts to £47 per heat? - -I am not bothering with fractions - and it is estimated that what will be returned on the present year’s operations, would, at 4 per cent, pay interest on a. debt equal to ,£40 per head. There, again, there is no great variance between thetwo figures. The amount which has to bereturned to Victoria would very nearly pay the interest on the debt, reckoned at 4 per cent. ; indeed, it probably would pay the interest on the debt as it exists at the present time. But in the case of Queensland’ we are confronted with the gravest difficulty. No simple process by which we could take over the debts of the two larger States - that is, larger from the point of view of population - would apply to Queensland, where the debt to-day is equal to £81 per head, and the amount which has to be returned from the Commonwealth. Treasury would, reckoned at 4 per cent., pay the interest on a debt of only £35 per head. There is a similar difficulty met in South Australia, where the debt is equal t0 £77 Per head, and the amount to be returned from the Commonwealth Treasury would, at 4 per cent., pay the interest on a debt of only £32 per head. In the case of Western Australia, which the Treasurer represents, the position is altogether reversed. There the debt is ,£67 per head, and the disproportionate amount of surplus revenue received from the Federal Treasurer would, at 4 per cent., pay interest on a debt of £90 per head. In Tasmania, the debt amounts to ,£52 per head, and the surplus revenue .returned from the Commonwealth would pay 4 per cent, on a debt of only £34 per head. It will be seen, therefore, that the circumstances of Queensland and South Australia practically prohibit any proposition that would be acceptable to the people of New South Wales and Victoria for dealing with the debts on a common basis. A proposal has been made to take over- the whole of the debts, and mortgage some of the States properties as a security.. But that system, even if it were agreed to - and from my knowledge of human nature it is not likely to be agreed to by some of the States - -is one which, in my opinion, would not work out. If we only took over a certain proportion of the debts, we should not get the benefit to be derived from taking over the whole, and there would be. the further complication caused by having to collect the revenue.
– The proposition at the Hobart Conference was to take over the whole of the debts.
– That is so, but if we take over the whole of the debts, the question arises as to how we are going to pay. Instead of giving all the surplus revenue, we should, in the case of some of the States, like Queensland and South Australia, require to receive something back. The late Treasurer, with his usual caution - and I like caution on the part of the gentleman, who has to look after the finances of the country - stipulated, all through, for absolute, tangible, legal security for the payment of any deficiency. I do not think that the late Treasurer was justified in taking up any such position. The private individuals who at present are the creditors of Queensland and South Australia, do not ask for any such security; they do not seek to step in and collect the railway revenue, or revenue derived from any other source, but simply take the facts as they stand, and depend on am honest British community to meet the interest whenever it falls due. If any way could be found of dealing with the States debts,’ the Commonwealth Government could very well take up the same position as the private investors and holders of bonds, and simply say, “ Without interfering with you in any way, we shall debit you with whatever shortage results from taking over the debts, and we shall use whatever balance is derived from the consolidation, as a sinking fund, to gradually extinguish the debt; and when things improve with us” - and I believe, with many others, that things will improve - “ we shall add to the sinking fund, and so gradually reduce the enormous debts which have grown up in Australia.” I do not fear those debts, though in some of the States they have grown more rapidly than there was any reason for - we were trying to force the pace. But I believe that the ultimate progress of these States will enable us to bear all those debts, and to gradually reduce if not to extinguish them if we go the. proper way to work.- But if we go on increasing the debts at the rate we have seen in the past, I think with other alarmists, that the time will come when our indebtedness will prove a serious trouble. Seeing that we cannot make any proposition that would be acceptable to all the various States, it behoves us to find some way to cut the Gordian knot ; and I wish we could find a financial genius to do it. To my mind there is one way, though I do not know whether we shall find a man brave enough to adopt it- My way would be to authorize the Treasurer to buy up the debts whenever he has opportunity at such market rates as he may deem advisable, acting under the advice of the various officers he may consult - whether the stock be that of New South Wales, Queensland, or any other State. He should buy up at a low price whenever opportunity offers, and constantly issue Commonwealth loans to replace the stock. By such means we should, at any rate, be always steadily moving in the direction of consolidating the debts, and reducing the cost of interest, and, further, always moving in the direction of establishing a sinking fund and gradually extinguishing our indebtedness
– Might the States not demur to that?
– There is nothing that I know of to which the States could demur in a scheme of that kind.
– It would increase the price of the stock, would it not ?
– Any reduction which wel could bring about in the cost of those loans to the States Governments: - any plan which would, in however small a degree, reduce the debts by the creation of a sinking fund - should be acceptable, if not to the States Governments, certainly to the people of the States, and it is the people more than Ministries or Governments in whom I place my faith. I have next to deal with what has been in this House the greatest bone of contention amongst us, namely, the Defence Department. I have been charged with many others, en masse if not individually, with having starved and destroyed the defences of this country. My position was that while I was prepared to vote whatever was necessary within our means for the purpose of defending Australia properly and adequately, I was never enlightened as to the measures that were to be taken for such defence - never enlightened as to how the purpose of defending us was to be accomplished. The defence estimates have always been placed before us in such a way that we have had to vote in the dark a lump sum of money, which, in the first instance, amounted to close upon -£1,000,000. That amount, however, has been reduced by the Committee from time to time, and, I think, with very excellent results. We, at any rate, have saved expenditure in the past, and I also think we have saved something by reorganizing on a sounder footing with regard to the future. The items under this head for this year show a growing increase as compared with the items of preceding years. I forget how the Treasurer put them, but putting all the items together, including non-recurring expenses which each Treasurer tries to get out of, but which do recur every year all the same, and therefore cannot properly be called non-recurring expense, I find that for the current year it is proposed to spend £1,022,000 on the defence of Australia. That sum includes expenditure on buildings, ammunition, the ordinary current expenses, and the £,200,000 required under the Naval Agreement Act. The latter, I think, covers the best part of our expenditure on defence, and gives us more for our money than any other part of it. I am not disposed to object to the expenditure of £1,000,000 on the defence of Australia if it is necessary, and I suppose it is, but I do think that we ought to have placed before us - and before the session closes I hope we shall ha.ve placed before us, by the honorable gentleman representing tha Minister of Defence in this House - some definite scheme of defence. We should) have some outline of what it is proposed to do, and some scheme which will show at what we are aiming, and the point at which in a few years time we propose to arrive. We require some such definite outline to give us confidence that we have some one in the Ministry who understands what he is doing, and that we shall not depart from a proper scheme to suit the particular military influence exerted at any particular time. I hope that we shall have some scheme put before us to justify the growing expenditure on defence. I have said that the Treasurer failed to give us any intimation of the Government policy. I was in error in making that statement, because th’e right honorable gentleman, in a bare sort of hint, informed the House that the Government intended to ask Parliament to extend the bounties given for the production of sugar by white labour, for another five years. I think that the right honorable gentleman stated also that as the necessary corollary of that, it is proposed to extend the excise for the same period. This is a very serious question indeed, as it constitutes ona of the biggest disturbing elements in our present financial arrangements. I hope that, if we are obliged to deal with it in such a way as the Treasurer has suggested, we shall take steps to insure that we shall not have to repeat this process, as has been done in Queensland in regard to other legislation affecting this great question, from period to period. I hope we shall not be asked to extend tha time for the payment of the sugar bounties, every now and again for another five years. I am one of those who from the first saw clearly that if one was in favour of that great policy of a White Australia - and however much it may be sneered at, I am still as great an advocate of it as I was at first - we could not carry out that policy in the face of the peculiar circumstances of Queensland, unless we were prepared to pay something for the advantage. I was prepared for one, although it probably affected me personally much more than any other honorable member of this House, to agree to the granting of these bounties. But at the time I felt that this Committee would be asked to extend the period during which they should be paid. I feel now that, even after the proposed extension is agreed to, the Committee will again be asked to extend the period. From the figures placed before us, it is easy to see the disturbing factor which the sugar question is to us in our finances, how greatly it affects the finances of some of the States, and how it affects also the consumers of sugar in the community by reason of the much enhanced price which they are called upon to pay for sugar, If we look abroad, we shall see that this sugar question has been) a very troublesome question for the last four or five years in Great Britain itself, in consequence of th’e operation of the Convention arrived at between Great Britain and France, Germany, Austria, Belgium’, and Holland. It was arranged that the bounty which had been paid by the Continental countries should be given up, and Great Britain paid a quid pro quo by imposing a countervailing duty on sugar imported from Russia or any other country which continued the payment of bounties for its production. The effect of this arrangement in England’ has been most marked. It has cost England, for one or two years, at any rate, the sum of from £8,000,000 to £10,000,000. Prior to the Convention, in consequence of the operation of the bounties which were fixed’ at varying rates, the maximum paid being about £5 a ton, the consumers and manufacturers using sugar in Great Britain were enabled to get the article as low, I believe, at one time, as £6 per ton. Of course, that was less than the price for which sugar could be produced; but Great Britain got the benefit of that. People were crying out in England and on the Continent against these bounties, and Great Britain entered into the arrangement by which the bounties were abolished. One effect of the abolition of the bounties was that the Continental countries were enabled, by reason of the money thus saved, to relieve internal taxation on sugar to such a degree that the Continental consumption of the article increased to the marvellous extent of nearly 50 per cent. I know of no fact in political economy so marked as this increased consumption of sugar on the Continent, due to the reduction of internal taxation on sugar, as a consequence of the removal of the bounties. I do not recollect any instance in my reading where such a marvellous increase in the consumption of a commodity has taken place. I cannot think that this increase is altogether due to consumption by members of the community. I am inclined to believe that a very large quantity of it must have been due to an increase of manufactures requiring sugar. The effect in. England was just as marked in the opposite direction. It is true that in consequence of the removal of the bounty and the interpretation which certain people put on its probable results, there was a slight diminution in the area sown with sugar-beet in Continental countries, and a bad season following the abolition of the bounty resulted in a1 greatly reduced quantity of sugar being produced ora the Continent. As Russia and other sources of supply were shut off from England, the price of sugar rose last year from something like £8 to over £16 per ton. The consumption had gone up 50 per cent, in France, and in England there was a 50 per cent, increase in price. As showing how sensitive taxpayers are to an increase in the price of a commodity, England consumed, in 1901, 87-94 lbs. of sugar per head of population, but in 1902, when the Convention had come into operation, the consumption in that country was reduced to 82.04 lbs., and irc 1903 it was still further reduced to 79 69 lbs. per head. The figures for 1904 are not available, but owing to the immense rise in the price of sugar which took place last year, it is certain that the consumption per head of population must have fallen off still further, and in a greatly accelerated degree. The consumption prior to all this had been steadily .increasing for forty years, and I say that as soon as we have all the facts before us, we shall find that the consumption in Australia has fallen off to some extent, if not as greatly as it has fallen off elsewhere. In 1 901-2 the consumption was from 105 to 106 lbs. per head of the population, and in 1902-3 it was 102 lbs., showing a decrease, at any rate, of 3 lbs. or 4 lbs. per head of population. This sugar question is one of very great interest to the community. We put on a duty, and we give a bounty for the production of sugar by white labour, and the result is that our consumers of sugar, in consequence of our fiscal legislation, will pay £6 per ton more for it than they would otherwise do, and that, on our consumption, amounts to ,£1,122,000. That is the amount which the people pay for sugar in excess of what they would pay if sugar were free in Australia. How much does the Government get from that? If, as the result of our fiscal legislation, imposing a tax on a commodity so widely consumed as is sugar, £1,122,000 a year went in to the Treasury, we could easily understand it. The figures which the Treasurer has put before us deal with the production of sugar for the current year. The Treasurer expects to receive £110,000 from Customs duties, and £514,500 from Excise duties, or £624,500 in all; but from that must be deducted - though we are never told of this deduction in the Budget speech ; we have to turn over several pages of figures to get information about it - £146,000; which leaves the net revenue £478,506’, for which the people of the six States will have to pay £1,122,000. That fact should be sufficient to make us pause to consider whether a time should not be fixed for the termination of the sugar bounty, for which we have been obliged to provide in support of the White Australia policy. I believe that it would be almost impossible to carry out that policy if we suddenly put an end to the bounty system, but, on the ‘other hand, we should examine the broad facts of the case to see if we are not paying too much for our whistle, and to ascertain if there may not be some other way by which assistance could be given to the sugar planters without imposing so heavy a tax on the citizens of the Commonwealth. It is my intention to quote in this connexion some figures from an undated report prepared by
Dr. Maxwell, director of the sugar experiment stations of Queensland, laid on the table, and ordered by the House to be printed, on the 13th August, 1901. He says that the production of sugar in Queensland in 1885 was 55,796 tons, and that there were 10,755 Pacific Islanders in the Colony in that year. In another part of his paper he estimates that white labour costs £1 10s. 1 id., and coloured labour costs 14s. i£d. a week, a difference of 16s. <)Jd. ; so that if in that year white labour had been substituted for coloured labour the sugar produced would have cost £6 per ton more, a prohibitory cost. The kanakas could not all have been employed in the manufacture of sugar. Some of them must have been employed on other work. Then in 1890 Queensland produced 68,924 tons of sugar, when there were in the country 9,689 kanakas, so that if white labour alone had been employed, the cost of production would have been £5 per ton more, also a prohibitive cost. Just prior to Federation, in 1899, Queensland was producing about 123,289 tons of sugar per annum, and there were then only 8,826 kanakas in the country, so that if white labour had “been substituted for black the cost of production would have been only £2 10s. a ton more. The present production of Queensland is still greater, while the number of Kanakas in the country has still further diminished, so that the cost of producing sugar there with white labour must now be less than £2 per ton, which is the amount of the bounty. These facts, to my mind, prove that the bounty will not be needed for any lengthy period, because now that the number of kanakas in Queensland has fallen below 8,000, it would be impossible for them to produce half the sugar produced in the State, and the cost of substituting white labour for coloured labour would be less than £2 per ton, taking the whole State. I will mention some other facts which, I think, show that there are still greater reasons why the bounty should not continue for a longer period ; but before doing so I wish to read the last paragraph of Dr. Maxwell’s report. He says -
It is indicated that invention may be expected to provide mechanical devices for the harvesting of the cane crop and for other work.
When I first addressed myself to this question. I was very hopeful that something would be done in that direction, and I still believe that human ingenuity is such that’ it must, before very long, find out means by which a great deal of the work which is now done by hand, may be done by machines.
– A machine has been invented, but the fact will not be made known until the bounty is secure.
– It has not yet been perfected.
– Yes, it has. There is such a machine in Melbourne.
– Apparently in this instance, as in connexion with the Manufactures Encouragement Bill, those who are to be benefited by the. bounty, have something up their sleeves. Dr. Maxwell continues -
These will further strengthen the current tendency to substitute lower by higher forms of labour, where the conditions of nature permit.
He thought that the tendency had already set in.
This tendency, already very marked, will be accelerated by the settlement of a greater number of white families upon the grain-growing areas, resulting also in a more intense and productive cultivation of the partially exhausted soils. The increment of white settlers upon the sugargrowing lands during the past decade, and the concurrent increase in the volume of sugar produced, with the reduction in the number of islanders employed, demonstrate the present tendency, and indicate that, under the current operation of given natural laws, and particularly in certain latitudes, the Pacific Islander is a relatively declining factor in sugar production in Australia.
Dr. Maxwell, in dealing with this question as far back as 1901, showed that the necessity for employing black labour was diminishing, and that, as a matter of fact, the number of black labourers was falling off, and yet, in the face of these facts, we are asked to renew the arrangement for the payment of the bonus. It behoves us to consider very carefully how far the assistance given to a certain industry will operate adversely to other industries, and, at the same time, overweight the taxpayers for a further period of five years. I alluded just now to the other factors that have played into the hands of the sugar interests during the transition period between the employment of white and black labour in the cane-fields. One of the chief factors has been the abolition of sugar bounties on the Continent, and the large rise in price of sugar in England. I have taken the trouble to ascertain the prices of sugar in bond at Sydney during a series of years, and compare them with the prices of sugar in London at corresponding periods. In January, 1900, the Sydney price of sugar of a quality corresponding with the Colonial Sugar Company’s la. brand was £15 15s. per ton. At the same time the London price for granulated sugar was j£i r per ton, and for raw sugar £9 3s. per ton. In 1 901 the Sydney price was £16 ios., and the London price for granulated sugar, £11 5s., and for raw sugar, £9 5s. In 1902, the Sydney price was £15, and the London price for granulated sugar> 15s., and for raw sugar, £6 ios. In 1903, the Sydney price was £14 ios., and the London price for granulated sugar, £9 5s., and for raw sugar, £8 In 1904, the Sydney price was £14 5s., and the London price, for granulated sugar, £10 5s., and for raw sugar, £8 5s. In 1905, the Sydney price was £17, and the London price for granulated sugar, £16 5s., and for raw sugar, £14 9s. There was a great rise in prices at the end of last year in London, owing to the abolition of the European bounties. Honorable members will see that, contrasting the price last January with the price prior to the establishment of Federation, there was a rise of £4 5s. per ton. The sugar interests received the benefit of that increased price. It went somewhere The price in January, 1900, in Sydney was £15 15s. per ton, and in January, 1905, £17 per ton - that was for sugar equal to the 1. a. brand of the Colonial Sugar Company.
– That was due to Federation.
– No; it was not due to Federation; but was caused by the operation of the stupid arrangement entered into by the British Government, and we are following a similar course. I contend that, as in the case of wheat, the value of sugar will be regulated by the world’s price, and while we give protection to the extent of £6 per ton, those who are interested in the sugar business can always be relied upon to obtain for their article a price equal to that at which sugar can be landed here from other parts of the world, plus the amount of the duty. That will always be done, whether the benefit goes to this or that company, or to the planter or the refiner. In addition to considering the taxpayer we have to pay regard to the interests of those who are engaged in a variety of manufactures, in which sugar is one of the raw materials. We are paying a bonus and affording very heavy protection to those engaged in one industry, and at the same time inflicting a burden on several other industries. We are encouraging one industry and discouraging half-a-dozen others, because sugar is as much a raw material as is iron, for the production of which the Government propose to offer a bonus. What would be thought of the Government if they proposed to give a bonus for the production of iron, and accompanied it with’ a very heavy duty, such as sugar now pays, and at the same time also asked that an excise duty should be imposed upon iron produced here, in order to provide funds for the payment of. the bounty ? That iswhat we are doing in the case of sugar. I suppose that we ought to have done something to bring about a White Australia, but we have certainly involved ourselvesin the most mixed up arrangement of evil fiscal finance that could possibly be conceived. I believe in a White Australia as much as any one does ; but I think we can pay too much even for such an advantage, and it behoves us to consider what methods can be adopted to mitigate to some extent the heavy taxation that is now imposed upon the public, and the great difficulties placed in the way of manufacturers; in other directions, whose combined capita! would represent very much larger figuresthan the total amount invested in the magnificent sugar industry.
– What would the honorable member suggest?
– I am coming; to the only suggestion that I can think of, but we ought to hear still further suggestions from the Government. So far, they have merely intimated that they intend topropose an extension of the bonus period for five years, and to further inflict upon usthe excise for a similar period, simultaneously. At an early stage of this question, I said that as surely as God was inHeaven, the Queenslanders would, at the end of the proposed bonus period, come to us and ask for a still further extension.
– Hear, hear; that is thetrouble.
-Although if would be pretty hard on me, I would be willing to agree to an extension of the bonus period for a further five years, on the understanding that the bonus would begradually diminished year by year, and absolutely terminated at the end of the fifth- year. If, however, we are to continue the £2 bonus and the £3 excise for another li’-e years, the position will be unsatisfactory. I believe that the industry will become exceedingly prosperous. I regard it as one of the most magnificent, and one of the safest industries in Australia. If we continue the bonus for a further five years, we shall surely be asked to extend it further, and possibly may have to agree to do so.
– Give them an extension lor another ten years.
– No, that would be far too long a period. We should deal with the bonus as we have done with the Western Australian Special Tariff - an arrangement very similar in character to that for the granting of the sugar bonus. We had to agree to permit the Western Australian Government to continue to tax goods imported from the other States for a period of five years, in order to assist that State to join the Federation, and to minimize, as far as possible, the loss of revenue it would sustain.
– In that case the limit was fixed by the Constitution.
– Yes, and we are as competent to fix a limit to the sugar bonus as were the framers of the Constitution To restrict the operation of the Western Australian Special Tariff. When the question of extending the sugar bonus comes before us in detail, I shall ask that matters may be so arranged that the bonus will gradually diminish and absolutely terminate at the end of the five-year period.
– Would the honorable member be agreeable to increase the amount of protection as the bonus diminished ?
– wo. that Would be absurd ; but I should be willing to reduce the excise dutv simultaneously with the reduction of the bonus. I think they should both be reduced pari passu, and gradually disappear.
– Then the planter who employed alien labour would be in the best position.
– No, he would not, because we have already provided that the kanakas shall be deported.
– But there is other alien labour employed in the industry.
– I say that when we have a man in our midst - be his skin black, white, or yellow - we have no right by legislation to prevent him from earning a livelihood. With many others, I regret that these persons have been allowed to enter, Australia. But how that they are here, it is inhuman to prevent them from earning their livelihood in their .own way. Let the planters compete for the labour of such coloured men - other than kanakas - as remain amongst us. As soon as their numbers become a little smaller, that competition will bring the wages of the coloured men up to such a point that there will not exist the conflict between coloured and white labour which at present obtains.
– That is a rosy picture to paint.
– At any rate, I can appeal to the honorable member’s heart in connexion with this matter. I maintain that we’ have no right to prevent these persons from earning a livelihoods I admit that it was a mistake to allow them to come here. If we had had Federation fifty years ago - as we ought to have had - they would not have been permitted to enter Australia. On the other hand, the kanakas came under am arrangement by which, at the expiration of a certain term, they were to be deported to’ their homes. We can carry out that arrangement, but we have no right to place any embargo upon the employment of the members of other coloured races who are already in. Australia. In view of the paucity of their numbers, and the competition which will ensue between the planters for their services, the wages of the’ blacks will increase to a point at which they will not interfere with the standard of comfort enjoyed by our white population.
– Would the honorable member agree to pay them the same wages as are paid to white men for doing the same work ?
– I would not object to doing so. The labourer is worthy of his hire. If the black man can earn as much as the white man he ought to receive the same wages. I wish now to refer briefly to New Guinea. I sincerely sympathize with the Treasurer in his references to this white elephant. I say that it is a disgrace to any Ministry to permit the present state of affairs in regard to that Possession to continue. To vote a paltry pittance of £20,000 annually to maintain a small staff of white officials there - men who are producing no result whatever, is a miserable subterfuge for statesmanship. We should either produce something from New Guinea, and make the Territory play an important part in the British Empire, or we should relinquish our hold upon it. If we cannot do better than we have been doing, I am in favour of petitioning the Imperial Government to take it . off our hands. I am informed by those who have recently visited the Possession, that .its capabilities are immense. Now that such a great stir has been made in Imperial circles in the direction of extending the cotton-growing area, perhaps something might be done jointly with the Imperial authorities to facilitate the cultivation of cotton and other tropical products in this new settlement. Certainly we ought not to continue paying £20,000 yearly to obtain the meagre official reports which have hitherto been furnished. Contrasted with what the French and Germans are accomplishing in their colonies, with what the Dutch, or what the British’ are doing in Sarawak, and with the operations of the North Borneo Company, which is developing similar territory at a very rapid rate, and making it a national asset for the race, our efforts have been poor indeed. New Guinea ought to become a national asset for the race. If we cannot accomplish more than we have hitherto achieved with it, it will be better for us to petition’ the Home Government to take it off our hands. Thus far I have omitted to deal with the question of preferential trade. Now that the honorable and learned member for Ballarat is Prime Minister, one would have thought that we should have had some intimation as to whether the Government intended to do anything in the direction of facilitating preferential trade with the Empire. But no announcement in that direction has been forthcoming. I do hot mean to say that I am ready to jump at Chamberlainism but I am prepared to consider proposals of an Imperial^ nature in regard to a reciprocal arrangement in connexion with our taxation. I am willing to consider any proposal by which we can extend a preference to the old country, and not only to the old country, but to our kin in other lands. I should not object if a proposal were submitted to go further, by taking in the great American Union. Indeed, I should like to include the whole of our race in any reciprocal agreement of the kind. But” because we cannot take the initiative in this movement, I cannot see why we should re fuse to take advantage of what has been offered to us by sister dependencies in various parts of the world. Some years ago, when New South Wales was a freetrade State, I know that it enjoyed reciprocal trading facilities with Canada, because owing to the fact that the New South Wales Tariff did not tax Canadian products above a certain amount, the Dominion Government allowed the products of New South Wales to enter Canada at a lower rate than was levied upon those from other parts of the world. That privilege enabled New South Wales to do a very .comfortable trade in some small lines. The same principle still operates in Canada. That country offers to admit Commonwealth products at a lower rate than is charged upon foreign products, if we only choose to take advantage of it. Recently we have heard a good deal in reference to the New Hebrides. Only the other day we agreed almost -unanimously that it was necessary to do something to draw closer the connexion between the New Hebrides and the Commonwealth. The honorable member for Lang suggested that to accomplish our purpose we could not do better than enter into a fiscal arrangement under which the produce of those islands would be allowed to enter the Commonwealth as freely as they are permitted to enter French possessions further afield. If the Prime Minister sympathises with the motion submitted, our relationship with the New Hebrides could be drawn closer in that way. Communities respond to nothing more quickly than- to facilities for trading between them. The Government might have made some proposal of that character. But the greatest charge which I have to make against preferential traders - irrespective of whether they are members of the- present Government or of any other Ministry - has reference to the offer which has been made to us, in common with the rest of the Empire, by the colonies of South Africa. A report was recently prepared by an emissary appointed by the late Government in the person of Mr. H. J. Scott, having reference to the trade of South Africa. That report furnishes very valuable and interesting reading. I drew attention to this subject upon 9th October, 1903, when I asked the present Prime Minister -
Whether the Government would, during the recess, obtain full particulars and returns of interchange between the Commonwealth and the South African colonies, and consider the desirableness of entering into reciprocal Customs arrangements with those colonies without awaiting the development of any larger proposal for preferential trade within the Empire.
The honorable and learned gentleman, with that soft answer which turneth away wrath, said, in reply -
Yes, with pleasure ; it is a very necessary step.
The Government, of which the present Prime Minister was the head, then went into recess, and was subsequently turned out of office. Now, however, he has returned to office, and I say that if he still entertains that opinion! - if he is still a preferential trader - and if we are compelled 1o wait for the initiative to be taken by Great Britain-, we have not to wait for South Africa. That country is willing to give us a preference, and I would like to quote the following paragraph’ from Mr. Scott’s valuable report -
Under the Customs Union, which came into force on the 15th August, 1903, intercolonial freetrade between the British Possessions in South Africa became law, and by removing every Customs barrier facilitated the free interchange of commodities of the parties to the Union, and was the first important step to a future federation of South Africa.
This Convention also introduced the principle of preferential trade with Great Britain, by which it is hoped the first link in the chain of closer union has been forged. To this end a rebate of 25 per cent, of any duty levied ad valorem on goods and articles the growth, produce, or manufacture of the United Kingdom imported into the Union was granted. Certain goods were also placed in a special class, on which a duty of 2^ per cent, extra is levied if of foreign manufacture, and which are admitted duty free if of British origin.
Provision was also made to extend the preferential rate to any British Colony granting reciprocal privileges to the members of the South African Customs Union, and ‘I would respectfully suggest for your consideration that it would be of -advantage to Australia to join in this system of reciprocity. We have everything to gain by doing so, and it will enable our producers to compete with greater advantage over the Argentine, a country at present pouring into Africa supplies of frozen meat, butter, and grain.
In another paragraph he says -
Canada has already entered the Preferential Union, and a line of steamers direct to South African ports is conveying her produce there. One item is worth mentioning ; it is that of frozen pork, which is admitted free. Canada sends £60,000 worth yearly, and a company has been formed in Capetown to smoke and- cure the carcase, and then sell it as bacon and ham, which, under the Tariff, is liable to a duty of one penny per pound.
– What report is the honorable member quoting from?
– From a report by Mr. H. J. Scott, of South Australia, who apparently was appointed by the late Government to report on our trading relations with the South African Colonies. Not only does he express the strong views I have just quoted, but he gives figures which bear out my contention that we have everything to gain from reciprocity. Here is an arrangement offered to us, under which we, the exporters of enormous quantities of produce to South Africa, have everything to gain, and we, the importers of very few commodities therefrom, have nothing to’ lose. Yet we have in office a Government who, with these papers in their pigeonholes, either do not bother to look at them, or, if they do, take no advantage of the opportunity thus offered to vastly increase the trade and -commerce of this country with a sister community.
– Will the honorable member’s party support the views he is putting forward ?
– I do not know that the honorable member allowed my party an opportunity of d’oing much.
– What I wish to know is whether the honorable member is speaking on behalf of his party or not.
– Unlike the honorable member, I never speak on behalf of my party. It is sufficient for me to speak here for myself, or, at any rate, from a non-party point of view, as I shall always do in future. I do not believe in party, but I do believe in doing something to facilitate the trade of Australia. In this report on trade between Australia and South Africa we have a practical suggestion made by a competent officer, who was sent abroad to ascertain how we could extend and improve the relations between the Commonwealth and sister communities. This is in accord1 with principles which have been warmly advocated here by the Prime Minister. Instead of waiting for something to be done in the dim and distant future, why should we not take advantage of an opportunity of this kind to enter into a reciprocal arrangement, which, if it be found to work well, may be further developed? I wish now to refer to a small matter which is rather dear to my heart, and on which I fear I have taxed the patience of honorable members. On two occasions the House has approved of a report from a Select Committee in favour of the adoption of a decimal system of coinage, and getting the advantage of the profit which would be obtained from the Commonwealth coining its own silver. I have not yet been able to induce any Government to practically take up the subject. I have had an interchange of views with some Ministers. The difficulty presented to their mind was, “ How are you to get rid of the existing system of coins; how are you to deport them, so to speak?” My suggestion was a common-sense one, I think. It was that we should arrange with the banks to collect the current silver, ‘and export it to their agents in other British communities where such coinage was used, and then supply the banks with a corresponding amount of coinage issued by the Commonwealth mints. That plan seemed “to me to be quite rational. But these honorable gentlemen said, “You would not get the banks to do that.” When I applied to the banks I was addressed in this way : “ Of course, Mr. Edwards, the banks will do anything if thev are paid.” I asked a banker what would be considered a fair rate of pay for doing this business, and he said, “ It would be very small indeed. It would amount to only the interest on the money while we were out of its use, a certain amount for insurance, and a trifle for the clerical trouble.” This did not have any effect upon any Ministry, and, therefore, I appeal to the present progressive Treasurer, and ask him whether he, with his great belie’f in Australia, with his optimism, which I share with him, will not carry out the twic’e-expressed wish of the House, and so earn an annual profit of £30,000 a year for the Treasury. Canada is doing this very thing now ; it has solved the difficulty just in the way I suggested to the late Ministers it might be solved for the Commonwealth. On the 4th July, the Dominion Treasurer delivered his Budget. According to a short telegram in The Times, he referred to the question of entering into a reciprocal arrangement with South Africa, and then proceeded to say -
It has been decided to get lid of American silver currency from Canada.
While Australia is circulating British money, Canada is circulating the money of the United States -
An arrangement had been made with the banks to give them a commission of § per cent, for collecting it. The result would be a profit on the increased circulation of Canadian silver.
I ask the present Government whether they cannot follow the example of Canada in this regard. I have demonstrated, I think fairly well, that there is a considerable profit - amounting to £30,000 a year - to be made out of substituting our own silver coinage for that of the old country. Canada is making a similar substitution, only that she is sending the coins to the United States, whereas we should have tosend the coins to other British Possessionsin which they are used.
– Should we not lose a good deal by having to replace the worn gold, which is now replaced for us by the British Mints?
– Yes, but I think we should overcome that obstacleWe ought to restore that portion of gold which we have in currency, and which amounts, at the outside, to nineteen or twenty million pounds. But our cost of restoring that for the future would not amount to a very great deal. According to my calculation, it would amount to a little over £4,000 per annum. That would reduce my estimated saving by £4,000, and still leave the Treasury with a profit of £25,000 or £26,000. I am not aiming so much at the profit as at the introduction of a better system. If it would please the Government of the day to increase the subsidy to the Auxiliary Squadron by the amount of the profit from the coinage of our silver, I should be perfectly prepared to vote in that direction. I must apologize for having occupied more time than’ I intended, in discussing many questions which are suggested by the Budget, and which require to be very closely scrutinized, so that we may arrive at a wise determination - one which, I hope, will forward the interests of the Commonwealth as well as of the States.
– The honorable member for South Sydney need not have apologised to the Committee for having taken up its time, because he has contributed some valuable information for the consideration of honorable members on one or two matters to which I intend to make some, I hope, short references. I am glad that- the honorable member drew attention to the report of Mr. H. J. Scott, of Adelaide, because it was at my suggestion that the report was printed, as containing Some very valuable information as to Australian trade with South Africa, showing to what extent it was possible to increase our exports to South African markets. I cannot, however, agree with the honorable member, in one of the deductions which he sought to draw, in common with Mr. Scott, however valuable his report may be - that an extension of British trade with South Africa has resulted from the preference granted in the ad valorem rates to British goods. As a matter of fact, the preference is only 2 J per cent., being 25 per cent, on a 10 per cent, ad valorem fate. It is only on a 10 per cent, ad valorem rate, and there is no preference on fixed duties, which are important. As a matter of fact, although we hear of the value of preferences, when we subject the actual conditions of the trade to close analysis, we find that they cannot possibly have led to that extension of trade with South Africa, which, indeed, is to be attributed to the large imports which always follow war in any country, no matter whether the fixed policy of that country be protectionist or freetrade. There were tremendous imports to America for many years after the American war stopped ; and, similarly, although the sphere of the war in South Africa was comparatively small, and although the trade with South Africa is comparatively not great, there has been an extension of imports since the war ceased. I do not know that it has been kept up recently, but there was an extension of trade some time ago. The honorable member also referred to the Canadian experience of preferential trade. I am afraid that the success of the policy is not so clear in Canada as he seems to think. Some of the provincial Legislatures have carried resolutions in favour of Mr. Chamberlain’s policy, but when amendments were proposed to be added to those resolutions showing that the method of expressing sympathy with Mr. Chamberlain’s proposals should be by lowering the duty on British imports without increasing the duties against the foreigner, and when these amendments were in favour of the reduction of duties thev were ignominiously rejected.
– Has the honorable and learned member read Mr. Foster Fraser’ s book on Canada?
– I have not read the book to which the honorable member refers me. I have extracts from the original records here. I read an extract published in the Times from a resolution passed, for instance, in the Manitoba Parliament, where by, I think, twenty votes to nine, they rejected a proposal for lower duties in favour of England, unless accompanied by a higher Tariff, so that no injurious effects - from their point of view - might possibly follow from concessions made to England. And though the Canadian rebate, which was 25 per cent, in 1899, became about 33.1-3 per cent, in 1900, yet, if we compare the trade between Great Britain and Canada from 1899 to 1903 we shall find that the imports have not been very much stimulated by this reduction of duties in favour of Great Britain. While in 1899 the dutiable goods imported from the United Kingdom were $27,000,000 in value, in 1903 they were $42,000,000 in value. At the same time, in the case of the United States, the dutiable goods - the same class of goods - the value of the imports to Canada ran up without any preference from $44,000,000 to $68,000,000. So that we should be just as likely to be right in concluding that the ‘absence of preference had benefited the imports from the United States, as to conclude that the preference granted by Canada had benefited the imports from Great Britain. Besides, there had been a corresponding increase in the imports of free goods from Great Britain to Canada. So that it is rather dangerous to postulate general statements as to the success of Chamberlainism, because on a close analysis of the figures they are liable to be upset. If we are to judge from what has been said in Canada, and from what has been said here - even, I think, in one of the speeches of the Prime Minister on the hustings - that there must be some sort of reciprocity, we must conclude that there is not much chance of it. While our exportation of frozen meat and wheat to England is a very small proportion of the total imports into Great Britain, it is idle to expect that she will put an embargo upon her own food supplies. Significant figures which have been published ought to be conclusive upon this point. I find that in 1904 Argentina sent to England fresh meat to the extent of 155,000 tons; the United States, 120,000 tons; NewZealand, 90,000 tons ; the Continent of Europe, 15,500 tons; and Australia only 13,000 tons. If we take frozen and chilled beef, we find that the United States sent to England 55 per cent, of the total imported, Argentina 40 per cent., and so on, until we come down to all the other countries aggregated at 5 per cent. Take wheat.
British India sent to Great Britain nearly 6,000,000 quarters ; and we go right down the scale until we come to Australia, 2,400,000 quarters, and Canada, 1,450,000 quarters. It only requires an examination of the imports into Great Britain to see how little likelihood there is of the reciprocity upon which some of our perferentialists are basing their policy being recognised by the mother country. The Treasurer referred in his speech to the question of the States . debts and the transferred properties. I again express my agreement with the suggestion of the Treasurer that perhaps the proper way to deal with these transferred properties is, to pay simply differences. We really are a partnership. The States will have to pay for these properties per head of their population. I think that the proportion that South Australia would have to pay would be about £1,000,000 - about one-tenth of the total of the rough estimate laid before the Convention, which was between £10,000,000 and £11,000,000, as the value of the properties to be taken over. The valuation of the South Australian properties then given was about £1,666,000, so that that State would have a surplus to be credited to her by the Federation. That is a much better way of dealing with, the matter than paying for properties which belong to the people of Australia. All the States, like partners, are handing over something, and it seems to me folly to credit each State with the total value of the properties handed1 over, when the States have to pay for them per head of the population, unless under section 93 of the Constitution the basis of payment be altered. I do not want to elaborate the matter, because I do not think there is much chance of that suggestion being accepted. As regards the debts, even in that way a possible solution of the question on the line suggested for the transferred properties may be found. I made the suggestion once before, and I know there are some difficulties in the way of its adoption, but some modification of the Canadian principle may be applied. In Canada, in 1867, when Federation took place, the average debts were estimated at about $25 per head of-the population. Some of the States, of course, did not owe so much ; Nova Scotia and New Brunswick owing about $22 per head. What was done was to capitalize the difference, and’ to credit those States who were under the average with that amount in the books of the Federation ; and on the amount 5 per cent, is now being paid.
– The Constitution would have to be altered in order to do that.
– No doubt, that is the fault. I brought this matter before the Federal Convention, and’, in fact, tabled a motion, which, however, received scarcely any attention. Whether that motion was defeated on its merits, I shall not say.
– In Canada power to take that action was provided in the Constitution.
– And I made an endeavour at the Convention to have a similar provision made in the Australian Constitution. I then also pointed out that we might make a great mistake in providing for taking over only those debts which existed at the establishment of the Commonwealth. The Treasurer has mentioned that we shall have to amend the Constitution if we wish to take over States debts which have been incurred since 1 90 1 ; and I find, on looking at the official report of the Federal Convention, that I pressed the following on the Committee, somewhat reluctant to give it attention : -
If you are to limit the debts to be taken over hereafter to the existing debts of the Commonwealth, you may subsequently find yourself in this position : That you will be unable to “take over any new debts incurred by the States; or to take over debts, the character of which has been varied.
It is doubtful whether even the debts which have been converted since Federation may be constitutionally taken over; probably they may, and I merely say that the matter is doubtful. However, these are big matters to which one Can make only passing reference. The Treasurer has given us some big figures in regard to the position of Australia, and those may strengthen the reputation of Australia in the English market, if we can only get people to study them. What we really want, I think, is something to reassure the States that we are not quite so extravagant as they think us. There are still statements made on platforms in the States, from which the public infer that the Commonwealth is particularly and exceptionally extravagant. We have done some foolish things, perhaps, in the way of policy, though there may be a difference of opinion
On that point. But I do not think we are quite so extravagant as some States politicians seem to imagine. At any rate, we established a good precedent for the States
– The States have since borrowed some £30,000,000.
– We have reduced the expenditure on defence. I am not quite sure, but I think that four years prior to Federation, the total expenditure on military defence was about £522,000, including the contribution of £95,000 per annum to the Imperial Navy. The amount was increased by about £400,000 by the time the Defence Department was taken over in March, 1901. - increased not by the Commonwealth, but by the States, though the increase appears in the accounts for the Federation for 1901. We then proceeded to deal with Defence Estimates by reducing them by £131,000, and, subsequently, by other amounts which I forget.
– By about £200,000 altogether.
– This ought to stand to the credit of the Commonwealth. If I remember rightly, the expenditure had gone up to over ,£800,000 on 31st March, 1901, when the Departments were taken over.
– There is now very little real difference between the expenditure by the States and the expenditure by the Commonwealth on. defences, after allowing for the different modes of expenditure.
– Perhaps the honorable and learned member may be able to point that out when he addresses the Committee.
– I have the figures.
– The figures I have quoted from memory stand in the Audit Commissioner’s report, and they are significant. At any rate, we began by reducing the expenditure, and that reduction ought to stand to the credit of the Commonwealth. There is another matter to which it is just as well that public attention should be drawn. The Treasurer has shown us that new expenditure last year, caused by Federation, amounted to £312.000 ; and it would be easy enough to mislead the public by telling them that Federation has swollen the “other,” or non-transferred, expenditure by £795,000 in addition. There is “ other “ expenditure, for part of which, no doubt, we are to be blamed, as I shall endeavour to show in a moment when referring to sugar duties. For the Budget papers a sum of £35,300 declared to have been received for work done for the Savings Banks, of which amount South Australia contributed £4,000. I appeal to the Treasurer whether it is fair to retain this money at the expense of the salaries of a great many of the officers. In South’ Australia, several officers were getting fixed salaries under the Civil Service Act of 1874. They were also allowed the amounts paid by the Savings Bank to the Postal Department for doing Savings Bank business. There were other allowances, but I do not intend to refer to them. The State Government told the officers that the status they got by the total of these payments was the status to which they were truly entitled under the Civil Service Act, and not the status represented merely by the salary fixed by that Act. The Savings Bank allowance was therefore regarded, as virtually, though not technically, part of their salaries. The result is that several officers are now, when the Savings Bank allowance is taken from them, practically reduced to the grade of the salary only. There are men who, to my knowledge, in some cases are working from 6.15 a.m. to 9.45 p.m. - they work intermittently, but they are at work during those hours all the same, because they cannot go twenty yards away from the Post-office without finding a substitute, as they are liable to be called on for duty at any time between those hours.
– That is sweating.
– It is sweating. I speak now with positive knowledge, and it seems to me that it is undoubtedly sweating. Under the new arrangement, these men will lose in some cases as much as £50 a year.
– That system was exceptional, I believe, in South Australia.
– Oh no! the right honorable gentleman’s figures show that it was not.
– On what page is the matter dealt with?
– On page 3 of the Budget papers. Of course, I do not know what the local law was in New South Wales.
– I know that in Western Australia they never got anything extra for doing that work. It was a part of their duty, and I thought the same system -was followed in all the States.
– These allowances have been regarded in South Australia as part of the salaries of these officers, although, under the Civil Service Act, they do not appear as part of their salaries. My point is that it is grossly unfair to these officers that owing to the arrangements made by the F ederal Government, they should lose these allowances, when they were told before the Commonwealth Bill was adopted that such things would come under the term of “ accrued or accruing rights.” I ask the Treasurer to look into this matter, and see whether he cannot, at small expense, recognise what it was fairly anticipated might be comprised within the term “ accrued or accruing rights.” The right honorable gentleman must admit that these allowances have’ to be made in all cases of transition, even though we wish to reform the Department. When Western Australia came into the Federation, she asked for and obtained exceptional terms, although she got them under false pretences.
– Under what?
– Under false pretences.
– The honorable and learned member does not mean that?
– The right honorable gentleman astonished us by the figures he gave the other day.
– The prospect did not look so good at the time. Things turned out better than we thought.
– Undoubtedly, that may be so, but these are the figures on the subject. In Western Australia, Customs duties for 1900, the year before Federation, produced a revenue of £944,000.
– That was not so much as we usually got.
– Never mind; that was the revenue at the time the Treasurer was pressing the other States so hard for special terms to induce Western Australia to enter the Federation.
– You all agreed to them.
– In 1904-5 we have a revenue from Customs in Western Australia of £1,029,000, exclusive of the special Tariff. So that in Western Australia there was actually received in 1904-5 a great deal more revenue than was received in 1900, without taking the special Tariff into account.
– There has been an increase of population.
– That is so, no doubt ; but Western Australia has not suffered from Federation. We might leave the whole of the special Tariff results out of account, and Western Australia will be found to be not in a worse, but in a better, position than before Federation.
– It is an extraordinary thing that members of the Federal Convention thought that the opposite would be the case.
– They would then have believed anything from the right honorable gentleman ; he appeared to be so very simple. At the same time, these are the facts, and it is as well to bear them in mind, especially when the right honorable gentleman makes such strong appeals for consideration for his little project for the construction pf the transcontinental railway, which he always puts forward as a sort of compensation for the sacrifices made by Western Australia in coming into the Federation.
– “Understanding” is the word I used.
– To come to something sweeter. The honorable and learned member for Werriwa and myself strongly pointed out in 1902, when the sugar question was being considered, that we were making a huge sacrifice of revenue that was not justifiable. I’ mention the honorable and learned member and1 myself because we stood to the last in opposition to the proposal then made by the Ministry. We both predicted that, as it was proposed that these sugar bounties should be given only until 1907, as sure as possible before 1907 an agitation would spring up for their extension. We also said - and in this connexion I might quote my own words - that - ,
A time will subsequently come when there will be a glut of production. . . . An export bounty will be called for.
That will be the next step, which at present we do not propose to take.
– That time has not arrived yet.
– No; but it is indicated in the Budget speech of the Treasurer. The right honorable gentleman showed that the local supply had overtaken the demand, and that the industry will have to look out for markets abroad. I shall show in a minute what chance the industry has of getting these markets abroad. It is significant that a recent writer in one ‘of the English reviews, the name of which I forget, though I made a note of it at the time
I read the article, points out that when the glut does come there is always some demand for bounties on production and for the encouragement of the export trade. In France, for instance, there was an import duty on wheat, but when there was a glut of production there was a demand made for a bounty on export, and it was granted. The writer I refer to says -
Bounties on export were never heard of while the sugar producing countries depended on outside sources for any material of its supply ; they arose when imports ceased, owing to an increase of home production, simply in response to the clamour of manufacturers for help and encouragement.
That is the statement of a writer who has examined the European sugar question, and his remarks apply with equal force to Australia.
– That is absolutely the case.
– The honorable and learned member reminds me that he and others stated, when the bonus was first proposed, that the time would come when the production of sugar in Australia would equal the consumption, and that then trouble would arise from the -loss of duty. What is the position ? Last year the consumption of sugar in Australia was about 180,000 tons, and the quantity of sugar produced 160,000 tons, while the production of this year is estimated at 183,000 tons, or more than the consumption of last year. What chance is there of finding a market for our surplus sugar outside Australia, which the Treasurer suggests can be found? The world’s production of sugar has increased tremendously of late years, while, during the last century, the cost of production has very much decreased. To take a period of twenty years, the world’s production of sugar in 1882-3 was 3,983,000 tons, and in 1904-5, 9,827,000 tons. Great economies in the production of sugar have recently been effected, although they have not yet been applied to some of the older sugarproducing countries, and the Commission has shown that this non-application of improved methods is the cause of the trouble in the West Indies. In the face of this increasing production, there is not much chance for, Australian sugar in the world’s markets, unless we do what we shall surely be asked to do, give a bounty on export to continue the encouragement which it will be alleged the industry requires.
– Allowing the owners of the richest land to continue to levy on the owners of the poorest land !
– As the honorable member for South Sydney has shown, the price of sugar has increased in the United Kingdom j but that has been the result of Chamberlainism. Mr. Chamberlain began his campaign by some diplomatic notes in 1897, and, on the 30th September, 1903, a treaty which had been entered into at his instance by the non-producing sugar countries, came into force by proclamation in England, with the result that there has been an increase of 160 per cent, in the price of sugar, comparing the price in 1902 with the price in 1905 ; and it has been shown that a rise of id. per lb. means a tax upon the consumers of sugar of -£15,000,000. That has been the result of the policy of stopping importation from Russia, Argentina, and Denmark, in September, 1903, and from the Dominican Republic, in July, 1904. I do not wish to give many instances of the disastrous effect of the- treaty in England ; but I should like to mention that in the confectionery trade it has caused loss of employment to between 15,000 and 20,000 hands. If we coddle the sugar industry here, we shall have a similar result, because our policy will Ho great injury by increasing the price of sugar to industries for which it is a raw material. As our law; stands at present, the sugar Excise expires on the 1st January, 1907. The import duty is £6 per ton on cane sugar, and £10 per ton on beet. Now, when our production, as it is anticipated it soon will, reaches our consumption, if there is no longer any excise, the whole of the import duty will go to the sugar industry. I do not say that it will all go to the producers, because I believe that the bulk of it will not do so, and that we are really wasting a great part of the bounty by paying it to refiners and others engaged in the industry. Now, the revenue from sugar in 1902-3 was £780,000, and the whole of that amount, and, indeed, a larger amount, allowing for the increase of population, will therefore be lost to the Treasury if the law is not amended. This shows the folly of the settlement agreed to by this Parliament two or three years ago, although we were then told that it was a perfect and a fair one. Let us consider the operation pf the duties up to the present time. The revenue in 1902-3 was £780,448, and in 1904-5 £628,511, a difference of £151,937, but it is necessary to add the £128,165 paid in bounties last year, so that the real difference between the revenue of 1904-5 and that of 1902-3 is- £280,102, which is a. pretty stiff payment for the taxpayers of the Commonwealth to make to the sugar industry. The estimated revenue for 1904-5 is £607,500, or £1.72,948 less than the revenue of 1902-3, and, adding the £151,670 to be paid in bonuses, the total payment to the sugar industry next year will amount to £324,618. I am sorry that the honorable member for South Sydney thinks that when the bounties: cease the excise duties must go, because that, will mean the sacrifice of the whole of our revenue from sugar, since the import duties will act prohibitively directly our production is equal to our consumption. If, however, the excise be not continued after 1907, we shall be giving away, on the basis of the 1902-3 receipts, £780,000, or more probably, allowing for the increase in population, £1,000,000, to an industry which, I hope to show, is not entitled to a penny of compensation. If the excise duty is kept on, however, and the bounties continued, we shall get a net return of £1 per ton on a production of 180,000 tons, that being the difference between the excise and the bounty, as all our sugar will by that time be produced by white labour.
– If the honorable member says that the law which was passed three years ago with flying colours is futile, it shows the foolishness of some of the cocksure assertions which were then made. The position will be that we shall be getting £1 per ton on a production ‘of 180,000 tons, and the loss, on the basis of the 1902-3 revenue, will be £600,000 per year. That is the amount which, with a slight deduction for New South Wales growers, will be given to the Queensland sugar industry. Furthermore, of course, the price of sugar will be increased to the consumers, though I am dealing now merely with the effect of the continuation of the bounty on the revenue. According to the statement made by Sir Edmund Barton, in introducing the Pacific Islands Labourers Bill, there are about £6,000,000 invested in the sugar industry, estimating the value of land as capital.
Mr. Conroy. A most extraordinary thing to do.
– I do not now wish to examine that estimate, but I desire to point out that, if the policy of the Government is carried out, we shall be making a present of 10 per cent, on the invested capital to an industry which our White Australian policy has by no means destroyed. Of course, if Victoria likes to do this, it is her affair, because the consideration of the kanaka question is no longer bound up with the Tariff, and she is the biggest loser of revenue among the States. [ do not know the exact amount, but probably it will eventually reach between £200.000 and £300,000. I hold that Queensland is not entitled to one penny of this compensation. Sir Edmund Barton, in introducing the Pacific Island Labourers Bill, on the 2nd of October, 1901, said -
From 1S6S this traffic has-been condemned, not only by the rest of Australia, but by the continued policy and repeated utterances of the statesmen of Queensland. … In introducing the Bill the Commonwealth is carrying out only what has been the declared policy of Queensland for the last twenty years at least.
That Bill was intended to stop the importation of kanakas, and was not intended to confer any special Tariff advantage upon the sugar-growers. in 1877 Sir John Douglas, who was then Premier of Queensland, declared that the policy of kanaka importation was bad, wrong, and utterly rotten, and not one of the Acts passed by the Queensland Legislature contains any suggestion of compensation. The only consideration that was shown to the sugargrowers was given to them by way of an extension of time, which expired in 1902. In 1892 Sir Samuel Griffith, after the importation of kanakas had been stopped for two years, granted the sugar-growers a further term of ten years, in order to enable them to adjust themselves to the new conditions to be brought about by the substitution of white for black labour. At the end of that period the policy of kanaka importation was to stop. There was to be no compensation. I do not see why we should be so generous as to pay Queensland for the abolition of a policy which it had determined to abandon long prior to the establishment of Federation. We know, of course, that various considerations operate to induce honorable members to cast their votes in a certain way, but I really cannot understand how any body of men who had the interests <of the Commonwealth at heart could hand over to Queensland the bulk of £780,000 per annum to compensate her for the abandonment of a policy which she had deter- mined should cease in 1902. Now let us look at the case of New South Wales. I know that the representatives of that State have not asked for any compensation. They are generally sensible in their demands. Under the general policy, however, wherever white labour was found producing sugar it was to receive the, benefit of the bonus, and, according to the figures contained in the Treasurer’s Budget papers, we have actually been paying New South Wales for increasing the production from the black labour employed. In 1902, 19,423 tons of sugar were produced by the employment of white labour, and 1,426 tons by the employment of black labour, the bounty paid amounting to £36,303. That was the state of the industry when the sugar bonuses came into operation - practically the whole of the production was by means of white labour, and yet we gave the planters of New South Wales bounties amounting to £36,000.
– We gave that to the owners of some of the finest land in the world.
– The honorable and learned member can doubtless speak from personal knowledge of the subject. I am merely dealing with the figures presented by the Treasurer. In r.904 the production of sugar by means of white labour amounted to 17,812 tons, or less than was produced in 1902., whereas the production of sugar grown by black labour had increased to 1,838 tons. Nevertheless, we paid to the New South Wales sugargrowers bounties amounting to £36,107. That bonus was intended to encourage the substitution of white labour for black labour, and yet apparently more black labour than ever is being employed in New South Wales.
– We had to do that under the Constitution. We could not treat one State differently from another.
– No doubt, but that shows how bad the policy was - how wretched its operation. Queensland is not entitled to compensation, land New South Wales has never asked for any. If we desire to be generous, we must be just. I contend that South Australia has a far greater claim to come cap-in-hand to the Commonwealth than either of the States mentioned,, and certainly a far greater claim than Queensland has. Yet it has never done so. I will trespass upon the attention of honorable members to the extent of quoting a few figures which, will show the position occupied by South Australia under Federation,, and the expenditure upon which that State has embarked for Australian purposes. South Australia built a railway from Port Darwin to Pine Creek, and prolonged her lines in South Australia proper by pushing them northwards in pursuance of the Australian policy of constructing an iron road right through the ‘continent. According to figures furnished to me by the Commissioner of Audit in 1898. - I do not think they have altered since - the loans floated for the purpose of building these railways amounted to £,2,493,000. In addition to this, South Australia built the overland telegraph line as an Australian project. The amount devoted to that work originally was £517,000, and £50,000 or £100,000 has since been spent upon it. I am not sure as to the larger amount, but I know that an additional expenditure of at least £50,000 has been incurred. In connexion with the railways mentioned, South Australia has been a continuous loser, and as regards the telegraph line, she lost for several years in the interests of Australia. I cannot speak with accuracy as to the present state of affairs, but the line must show diminishing receipts, owing to the competition of the Pacific Cable Company with the Eastern Extension Cable Company. The Eastern Extension Company sends, all its cables over the South Australian line, and when the Pacific Cable took over some of its business, the South Australian telegraph receipts on the overland line fell off to the extent of £13,000 to £i4,poo in. the first year. The actual indebtedness incurred by South Australia in connexion with various expenditures which must be looked upon as Australian - the greatest of which I have already mentioned - amounted in June, 1904, to £3,627,000, and I put it to honorable members that, inasmuch as these large undertakings have not returned am interest. South Australia has made fairly substantial sacrifices in the interests of a policy that must be regarded as Australian rather than of a purely State character. South Australia incurs an annual loss of £106,000 in. connexion with the Northern Territory, and the deficiency is increasing, so that in- ten years a further indebtedness of over £1,000,000 will have accumulated. The loss to South Australia in connexion with the Northern Territory has been increased by the operation of the- Federal Tariff. South Australia had- a special Tariff for the Northern Territory, which, in 1899, yielded £34,.3’47 ; whereas the receipts item Customs and Excise in 1903,-4. amounted to only £14,133. Therefore, the annual loss to South Australia, in connexion with the Territory lias been increased bv -£20,000, a fairly substantial sacrifice, regarding which the South Australian politicians have not made the slightest clamour. I might push matters still further. Under the bookkeeping sections of the Constitution South Australia is losing a good deal of money., because there is not a sufficient number of Customs inspectors along the tremendous frontier presented by the Northern Territory to Queensland, and consequently there is a very great leakage of revenue in favour of Queensland. In other words, duty is collected by Queensland upon imports passing through that State to the Northern Territory, and that duty is retained by Queensland, instead of being, credited to South Australia. In this, connexion, I desire to quote from the last report of the South’ Australian Audit Commissioner. He says -
I have called the attention of the Government to the urgent necessity for taking action to obtain officers to watch the interests of the Northern Territory at suitable places on the borders, especially those of Queensland. These would require the production of Customs certificates of duties collected in Queensland and upon all goods passing the border into the Northern Territory, so as to enable the Territory to claim those duties.
Also, that for the past three years (nearly) Queensland should repay the Excise and Customs duties that were received bv her on goods that were afterwards sent into the Territory.
I say that upon these figures, there are considerations which justify South Australia in asking for a subsidy, quite as much as Queensland is warranted in seeking an extension! of the compensation payable under the existing Act. If the principle is good for one State, it is good- for another.
– The honorable “and learned member is referring to the sugar bonus ?
– Yes. If any mendicancy is to be indulged in, ‘all Ihe States can share in it upon a similar justification.
– But the honorable and learned member cannot select a State. He has to select an industry ; and what industry would he select in South Australia.
– We kept the kanakas out of South Australia - in Queensland they were admitted. Queensland sinned for a time, and. is to be paid for transgressing, whereas South Australia has not received a penny ‘ for not sinning at all. In 1892, the Parliament of the latter State placed upon the statute-book an enactment which provided for the employment of coloured labour in the Northern Territory, but, under stress of public opinion, it was never put into force. The Commonwealth is compensating Queensland for having employed black labour, but is not giving anything to South Australia for refusing to put into force the statute to which I have referred. I am sure that honorable members will excuse me if I again refer to South Australia, because one has to present statistics in relation to his own State in order to show how the Federation is working. The effect of the operation of the sugar bonus upon South Australia was as follows: - Our revenue from sugar in 1902-3 was £97,000 ; in 1904-5, it was £61,000 - a shrinkage of £36,000. The bonus represented £13,000, so that next year, as against 1902-3, the net difference will be about £23,000. That is not quite a fair comparison, because the revenue from this source in 1902 was rather a large one. It was beyond the normal revenue reaped by South Australia prior to Federation, through a mistake made in the method of giving rebates instead of bounties. Let us take the normal revenue from sugar in South Australia at £60,000, and see what will be the effect of retaining the £3 per ton excise, and of granting a bounty of £2 per ton, as suggested by the Treasurer. Our consumption is about 17,000 tons, arid consequently, we shall be credited with £51,000. But as we have to contribute onetenth of the bounty - that is the proportion of new expenditure which’ is generally assigned to South Australia - we shall be required to pay £30,000. by way of bounty, leaving as the net dutv. under the continuation of this policy of bounties and excise, a s’um of £21,000, as against our former revenue of £60,000. That is a very large sacrifice for South Australia to make, considering that she is just as much entitled to consideration as is Queensland.
– What does the total loss represent?
– About £39,000. I say that what we ought to do is to retain the excise of £3 per ton, and to lower the import duty. The difference between the excise duty of £3 per ton and the import duty of £6 per tori is altogether too great. Six pounds per ton is the maximum import rate in Australia, and I do not think that it has been levied in any but one State. In Western Australia, prior to Federation, they had no import rate ; in South Australia it was £3, and in one State I think it was £6 per ton. So that we have really adopted the maximum rate instead of the average rate. Consequently I suggest that the import duty upon sugar should be reduced to £5 or £4 per ton. Even then we should still be giving a preference to the local manufacturer. I would abolish the bonus altogether. If it be retained,, it ought to be upon the principle suggested by the honorable member for South Sydney, of a sliding scale which would be indicative of the intention of Parliament to absolutely abolish it at the end of the period when it would automatically expire. I do not wish to quote figures showing the burden imposed by the bonus upon our producers, because that task has been most excellently performed by the honorablemember for South Sydney, who knows far more about that aspect of the matter than I do. His figures indicate that, in addition to a, very great loss of revenue, an increased burden will be thrown upon the consumer, aggregating from £1,200,000 to £1,400,000.
– A little more than that, I think.
– It may be so. I have seen it estimated that £5 or £6 per ton represents the increased price, which, under the operation of the Tariff, can be obtained by the local producer, as against the price received in 1900. Upon a consumption of 180,000 tons per annum, that would run into a very large sum. Some time in June last a letter was published in the Age, in which it was pointed out that the Colonial Sugar Refining Company pays £10 per ton to the producers for its sugar, and that, after paying £3 per ton excise, which would make its total outlay £13 per ton, it sells that commodity for £22 per ton. That shows that the producer does not derive the benefit accruing from this policy. The figures which I have quoted, if correct, prove that there is a difference of £9 per ton between the price of crude and refined sugar in Australia, whilst the normal difference in England is about 25s. per ton - a very significant comparison. In the daily newspapers of the 17th June I saw a telegram from Queensland, in which it was stated that, as a result of these duties, the cost of the raw material for the factories was increasing, and in consequence the output of jam was shrinking, and that the consumption probably would be diminished.
The result is that, whilst in June, 1899, the factories in Queensland turned out 5,025,000 lbs. of jam, in 1902 they turned out 2,910,000 lbs., and in 1904 I,357)°00 lbs. - a very singular shinkage to an extent caused by the operation of this Fiscal policy. These are figures which, if not conclusive, seem to me to be so, and which are well worthy of the consideration of honorable members before they accept the policy suggested by the Government of extending a bounty which originally ought not to have been granted.
– I do not know whether members of the Opposition are expected to criticise fully the speech of the Treasurer, but in my opinion the Budget speech has yet to be delivered by him. We certainly heard the right honorable gentleman give a great mass of figures connected with the estimates of revenue and expenditure, but he did not give very much information concerning some of the most important items ‘ of that expenditure. In connexion with the Estimates, there is yet a great deal to be explained, which we were entitled, I think, to have explained when the Treasurer de,livered his so-called Budget. We are left absolutely in the dark in regard to a great many of the most important items on which we shall be called upon to vote by-and-by. I regret that the information has not been given, because if it had it might have considerably facilitated the business to be done.
– If the honorable member will state some points I may be able to explain them when replying.
– I trust that the right honorable gentleman will do so in replying, without making it necessary for me to unduly prolong my speech by going through all the items for the purpose of furnishing a skeleton for his Budget.
– I shall come to the conclusion that the honorable member does not know any if he does not tell me of any.
– The right honorable gentleman has not given honorable members an opportunity of knowing much about them. Certainly he came down here with his Estimates, and made a speech, in which he gave a mass of figures, which are contained in the Estimates, and which honorable members could have obtained for themselves bv a perusal of the printed document. Probably I shall ask the right honorable gentleman to give us some infor mation on several points. A large amount of information is required before honorable members can vote on a number of items, and doubtless it will be supplied when they come under consideration. In my opinion, the Treasurer should not wait until that stage is reached ; he should have afforded the information when he addressed the Committee.
– I submit that I did so.
– In his own opinion the right honorable gentleman may have done sp, but that opinion is not, I think, shared by anybody else.
– All the newspapers in Australia say it is the worst Budget ever delivered.
– They are prejudiced. I take their comments cum grano salis.
– The first item that was- dealt with by the right honorable gentleman was the question of immigration. Undoubtedly this is one of the most important questions which- we can have to consider. Australia is confronted with the fact that her population is not increasing as we had a right to expect it would. In view of the increased taxation which is taking place this raises a very serious consideration. I see that the Treasurer made some reference to the subject in his speech, but he did not indicate how he proposed to deal with it. I propose to read an extract from his speech on that point -
State aid to immigration has ceased for a longer period in some States than in others; but, speaking generally, I think the period is twenty years. In my opinion, and in the opinion of the Government, the population question presents the great problem that lies before us in Australia.
That, I think, is the opinion of every one who thinks at all on the question; but neither the Treasurer nor the Government has proposed any plan for our consideration. . The right honorable gentleman went on to say - ,
It is not the desire of any one, I am sure, *ti** add to the population-
– What have we been doing in the Budgets during the last four years ?
– I am not concerned with what we have been doing during the last three or four years. I am only concerned with this fact, that the Treasurer opened his speech with a reference to a question which, he said, is, above all others, the most important one for the Commonwealth to consider. Therefore it is not a question of what we have been doing during the last three or four years, but a question of what the present Government intends to do when its Treasurer puts the subject in ‘.the forefront of his alleged Budget.
It is not the desire of any one, I am sure, to add to the population of the cities and towns, which are already too large in proportion to the population of their respective States. Sydney contains 36 per cent., Melbourne 41 per cent., and Adelaide 45 per cent, of the population of their respective States. The whole question is a serious matter which we have to face. I have no doubt that every honorable member, if asked, could give his own particular reasons why the immigration has been so small.
The right honorable gentleman went on to state what, in his opinion, is the cause o’f so little immigration into Australia. He said -
In my opinion the principal reason must be looked for in the competition of the United States and Canada. More State encouragement.has been given to immigration in those countries than here, more especially the great encouragement in the shape of a free land grant system, which, for years past, I have been in the habit of saying, was the great factor in laying the foundation of the prosperity of the United States, and afterwards of Canada.
Later on, he said -
Admitting, as we all do, that we must have more people in Australia, three things are, in my opinion, essential - one is cheap passages to the country ; the next is cheap land on arrival ; and the third is assistance from a .Government land bank to work the land. Of course, the Commonwealth has no land ; it has no mines, nor has it any railways or other means of transit under its control. The States have all these agencies. They have railways, mines, and lands. Now, it occurs to us that if the States and the Commonwealth were .to work together in regard to this, matter, recognising that they have a common interest, something very satisfactory might be achieved. It seems to me that the Commonwealth should select the immigrants and bring them to Australia on terms to be arranged, and that the States should provide land for them, and finance them through the land bank.
It will be seen that the Treasurer does not help us much in the way of a practical suggestion. Here is simply a bald general statement, which may mean a great deal or may mean nothing at all ; but. so far as concerns the practical solution of what the Treasurer says, is one of the gravest of the problems that confront us, his remarks are absolutely useless. Certainly, the suggestion that we should have cheap fares to this country is, in my opinion, a good one. But who is going to provide the cheap fares?
– The Government of New South Wales has even complained of my saying that much.
– Is the Commonwealth, or are the States, to provide the fares?
– My idea was that the Commonwealth should do so.
– Now we have something definite.. The Commonwealth should provide fares for suitable selected immigrants.
– That is what I intended.
– The right honorable gentleman did not make that clear.
– It was to be inferred, I think.
– Nothing was stated as to how this expenditure was to be met. It is intended, the Treasurer now says, that the Commonwealth should incur that expense, which, of course, will mean a considerable addition to the expenditure which already has to be met out of our one-fourth of the revenue. However, if it would do any good towards settling the question, I, for one, should not grudge the expenditure; especially as if the immigrants were profitably employed we should get a return from their productions which would recoup the Commonwealth. I do not say that it would do so entirely in the first years of the experiment, but in the long run the Treasury would benefit. The next point that the right honorable gentleman emphasized was that we should have cheap land for the immigrants on arrival. Here we are confronted with a question that opens up the whole land problem. Considering the different land laws that exist in the various States, the suggestion of the Treasurer is simply worthless, unless he is prepared to propound a scheme for the consideration of the States whereby cheap land could be provided, on a sound and proper basis, for the prospective immigrants on their arrival.
– The honorable member will see, further on in the speech, that I proposed to confer with the States to ascertain what could be done.
– To confer with the States may possibly lead to something being done, but to say that the provision of cheap land will be the result is simply conjecture. The Government might have outlined some proposal for .submission to the States as a practical scheme, ft may happen that if a Conference of States Premiers were held for the purpose, some solution might Le evolved of a satisfactory nature. However, I ‘am of opinion that if the Government had taken the initiative and prepared a scheme for submission to the States, we might have reached a practical solution a great deal earlier than could otherwise be expected.
– The Government has been- in office only seven weeks.
– Is the Government prepared to propound such a scheme?
– The honorable member will see what I say lower down in the speech; the Government will endeavour to arrive at an agreement with the States and to work with them.
– “Endeavour to arrive at an agreement.” That does not meet the point that I am submitting. I contend that the Government themselves should Le prepared to propound a scheme, and should not wait an indefinite time for a conference to be held.. Let the Government bring forward their scheme, and, if the States do not approve of it, they can submit an alternative scheme. I .wish ito see the Government take the lead in this matter, which is the very foundation upon which all other proposals affecting the Commonwealth must ultimately rest. Before we deal with the question of immigration however, we have ‘ to consider that of settling the people who are already here. We fmd it difficult to do that. We have a large percentage of our population aggregated (in> cities like Sydney, Melbourne, and Adelaide. That is a most disastrous thing from the point of view of the development of the lands of the Commonwealth.
– And from the financial point of view also.
– And, unquestionably, from the financial point of view also. This population question is also inextricably involved in the defence question. The very first problem we have to solve, even before dealing with the question of immigration, is that of settling profitably on our lands the people who are already here. In every State there are thousands of men who want land, and millions of acres that want men ; and while there remains anything which prevents the men who want the land from having access to it, there is still a problem to be faced. I shall be very much interested to see in- what way this Govern ment proposes to face that problem. I have a way of dealing with it, but I doubt very,.much whether my method would be acceptable to the Government. I am not wedded to any particular scheme, although having a preference for one over others. Yet I am most anxious to see the question faced vigorously, and with a determination to solve it. Because every question that faces us - the question of revenue, the question of the establishment of industries, the question of defence, the question of our very existence as a Commonwealth - depends primarily upon the settlement of this one great question.
– This Parliament cannot intervene in the matter of land settlement.
– ‘ I do not see why it cannot. There is nothing in the Constitution, so far’ as I have been able to discover, which prevents the Commonwealth’ Government from making a suggestion to the States, or to prevent mutual cooperation between the States and the Commonwealth.
– The Commonwealth cannot get a little bit of land that it wants for one purpose.
– I see the point of the honorable member’s remark. But the Commonwealth Government can get any amount of land) - perhaps more suitable than the “bit” referred to by the honorable member - for the purpose of establishing the Federal Capital. The Treasurer, in his Budget speech, goes on to say -
The States have all these agencies. They have railways, mines, and lands. Now it occurs to us that if the States and the Commonwealth would work together in regard to this matter, recognising that they have a common interest, something very satisfactory might be achieved. It seems to me that the Commonwealth should select the immigrants and bring’ them to Australia on terms to be arranged, and that the States should provide land for them, and finance them through the land bank. .
To my mind, a proposal to finance these immigrants through the agency of a land bank is most objectionable, savouring too much of the socialistic idea of the establishment of a State bank.
– Would the honorable member prefer an out-and-out grant?
– I would prefer that” the immigrants who come to this country should not require to be financed by a land bank, but should be of the class who, at the present time, are emigrating to America and Canada, with means of their own.
– In Canada is not some assistance given ?
– Some assistance is, I understand, given.
– Does the honorable member not agree with some assistance being given ?
– I do not think assistance should be given unless under very exceptional circumstances. The immigrants Ave desire arc of the farmer class, who are anxious to find new places of settlement, and who have means to start for themselves, only requiring proper facilities in the way of assistance in selecting land, in the removal of burdensome taxes on the requisites of their industry, in cheap means of transit to market, and other conveniences which minister to comfort and success. But if we get a class of paupers into the country, who rely entirely on the State to finance them, I am afraid that, in the long run, we shall find them flocking’ into the cities, and helping to swell the already large army of unemployed.
– Surely the honorable member does not say a man is a pauper because he has not a lot of capital ?
– It is not necessary for an immigrant to have a lot of capital for the purposes of small settlement, which I think is the best, similar to what we find in Japan-
– What does the honorable member call “ small “?
– I do not desire a class of immigrants whose only object is to add field to field and acre to acre, simply for the purpose of obtaining large estates, and emulating the style of the lord of the manor. Those are not the men we want, but men who are anxious to secure a ‘homestead, and form family groups of settlement.
– Is it not desirable that we should assist such men to acquire homesteads ?
– Certainly ; but, in my opinion, there are in England at the present time men of that type in sufficient numbers who have capital enough to start in a small way. If such people desire to come’to this country, they might be assisted by means of reduced rates of passage, and ‘in a variety of other ways. Such a class as this is preferable to a class which is practically pauperized before leaving the old country for our shores. I would not even debar men of very limited means indeed from coming here, provided they had the other essential qualifications, and also provided we could, be certain that, after their arrival, they would go into the country and develop our resources in the way originally intended. But we have no means of knowing that the immigrants who come would do so; and if we have much of the kind of legislation we have been having recently, which has tended to denude the country districts of the agricultural labouring population, and to attract them to the cities by means of minimum wages, and other artificial methods of remunerating labour, the only result will be that the immigrants, instead of going out, and helping to develop our natural resources in the rural districts, will simply, as I say, join the ranks of tha large army of unemployed in the cities.
– Does the honorable member object to a minimum wage ?
– I think the minimum wage is one of the most absurd laws ever passed. What it has had the effect of doing is to make the minimum wage the maximum.
– Not in a single instance.
– It is (driving altogether out. ofl employment men who otherwise might have been able to earn what is now the minimum wage, and it is bringing the wages of the highest skilled men to the minimum level.
– Does the honorable member not know that not even the average wage is the minimum wage?
– In New South Wales I have the assurances of employers of labour - r-
– Get the official returns.
– I think I know as much of this subject as the honorable member is likely to be able to tell me.
– If the honorable member says that the minimum wage is the maximum, he knows nothing about the matter.
– Then that settles it. The honorable member for Melbourne Ports claims a monopoly of all such knowledge, and no one else can possibly know anything about the matter. . Coming now to the Estimates, I see there is an item of metals and machinery, from which the estimated revenue is £445,000. That is an item on which we ought, I think, to have a little information. What I desire to know, and what the Treasurer has not explained, is whether this estimate of nearly half-a- million is based on the normal values of metals and machinery imported, or whether it is based on a possible inflation of values by the Minister of Trade and Customs, or his subordinate officers. It would be interesting to have the information, because
Ave have lately had some little experience, in connexion with harvesters, of what may be done in this direction. While speaking on the item of metals and machinery, I wish to say a few words on the subject of those harvesters. I hope that this principle of the Minister taking on himself the right to assess the value of imported machinery will not be acted upon in the future. I hope that the practice of officers of the Department, in attempting to get the Minister to make assessments of values, will be discouraged, not only by this House, but by the Government when this House is no longer sitting. As I pointed out the other day, if the Ministry had the audacity to raise the duties on machinery, behind ‘ the back of Parliament, when Parliament is actually sitting, how much more likely are the Ministry to carry that audacity to greater lengths, when Parliament is in recess, and is no longer in a position to bring the acts of the Minister under; review.
– That is very unkind.
– It mav be unkind, but it is a very necessary thing to say. It was unkind of the Minister to try to ruin - perhaps he did not intend to do so, but the effect ‘would be just the same - a deserving firm of importers, who had been conferring very great benefit on the farmers of this country by importing harvesters.
– Thev are pure philanthropists !
– They are quite as much entitled to be considered philanthropists as are McKay and Company. At any rate, their philanthropy is actuated by no less, worthy considerations than is the philanthropy of the’ manufacturers of the Sunshine Harvester. In this connexion I wish to refer to the Canadian report, and to the action of the Collector of Customs for Victoria. It will be remembered that a number of invoices from the Massey-Harris Company were, on the initiative of Mr. McKay, submitted te the Comptroller -General of Customs for consideration, with a view to raising the valuation of these harvesters for purposes of duty at the port ‘of entry in the Commonwealth. Action was taken on the following letter from “Sir. McKay, dated 14th June, 1905, in which the writer says -
The American export price is still less than mine, but I would suggest that you would fix the duty on future lots at ^63, plus 10 per cent., which would bring the cost over the landed cost in Italy of 5ft. machines (which is the size imported here), the freight being somewhat more to Australia than Genoa. Our American friends will probably be importing at an early date, and I ask you to give this matter early attention. Would it not be advisable to charge duty as mentioned above, and let the onus of disproof fall on the importer.
I say that is a most impudent suggestion on the part of Mr. McKay. What right has he, or any other person, to go as a rival manufacturer of these articles to the Comptroller-General of Customs and tell him what he should do in regard to the valuation of these goods at the port of entry? If tha Comptroller-General of Customs had done his duty, he would have told Mr. McKay to mind his own business. That is the reply which should have been given to that gentleman’s letter,, But what did he do? Did he stand on* the dignity of his position and assert his right to be the best judge of the action he should take in his. position as Comptroller-General of Customs ? Not at all ; instead of doing that he tamely bend’s the knee to Mr. McKay, and immediately starts to put his suggestion into execution. Acting upon the suggestion, which virtually amounted to positive dictation and direction, he collected a number of invoices of the Massey-Harris Company, which he sent to Canada with a request that the Commissioner of Customs there should go through them and give him information as to what was the fair market value of Massey-Harris harvesters in Canada. From the papers which were laid on the library table, we have seen that the Commissioner of Customs in. Canada gave these invoices to a special inspector, with instructions to make a full inquiry. After full and complete investigation as to the ruling prices in Canada, a report was furnished absolutely favorable to the Massey-Harris Company, and confirmed the valuation set out in their invoices. Prior to this report from Canada, the following report from Mr. Smart, the Collector of Customs in Victoria, was submitted to the Comptroller-General: -
Upon careful investigation and examination of the books of the Massey-Harris Company, I am satisfied that the invoice price for stripperharvesters, viz., $183 (about £36 2s. 6d.), with $2 -(8s. 4<J.) extra for poles and adjustments, represents a fair wholesale market value of these machines.
That was the opinion of Mr. Smart himself.
– That was not the last opinion he gave.
– That was the opinion he gave before, and, I presume, he had then as much knowledge as when he gave a different opinion: later.
– That is not to be presumed at all.
– Yes it is, or else he would not have made that minute. I should like to know whether any pressure was brought to bear on Mr. Smart to induce him to alter his opinion later.
– Who by?
– I should like to know whether any pressure was brought to bear on him by the Minister of Trade and Customs, or any one else. .
– Why does not the honorable member say that he suspects the Minister,- and then prove his justification.
– I should like this information, because it seems to be a most remarkable thing that, shortly after making this report, a report which was amply confirmed by that received from the Canadian Commissioner of Customs, Mr. Smart should alter his opinion. In the face of the Canadian confirmation of his first report, I should like to know what new light was thrown on the subject, and’ what new evidence was brought forward to induce Mr. Smart to vary his original report, with a view to increasing the alleged value of these machines for dutiable purposes at these ports.
– Why does not the honorable member speak out like a man, and not make insinuations?
– Why does not the Minister act like a man, and not use the power of his position to injure unjustly the business of a reputable firm foi the pecuniary advantage of a rival in business? I say that it is an abuse of his position as Minister of Trade and Customs for the honorable gentleman to go into that office, .and, behind the back of Parliament, artificially raise the duties on these , articles. That is a great abuse of the Minister’s position, and there has also been a gross abuse of the powers of the officers under him.
– Does “the honorable member say that I ever saw. Mr. Smart on the subject? It is cowardly to make these insinuations.
– I say that the action of the Minister calls for very strong comment, and I am prepared to pursue the matter -further.
– I rise to a point of order. The Minister of Trade and Customs has just now,. in effect, called the honorable member for Lang a coward. I am sure that that is out of order.
– I ask the honorable . gentleman to withdraw that statement.
– At the desire of the Chairman, ,1 withdraw the statement.
– The honorable gentleman may be perfectly sure that he will not prevent me saying what I think it my duty to say, whether what I say affects him or not. I say that the honorable gentleman’s action in this matter calls for the most severe condemnation we can give to it.
– We heard something about this before.
– I have read what Mr. Smart reported prior to the report from the Canadian Commissioner coming to hand.
– The Canadian Commissioner will not give information, and the honorable member knows it.
– He confirms Mr. Smart’s statement as. to the probable value of these machines. I. am surprised that the’ honorable member for Moira, as a farmer’s representative, should take the stand which he does in this matter, because it certainly will not assist the farmers.
– - When they require assistance they will not go to swindling importers to get it.
– No; but apparently, according to the honorable member, they will go. to monopolist manufacturers to get mulct in heavier charges than they would have to pay to any firm of importers.
– They know the philanthropy of the importers.
– The best way we can secure to the farmer the benefit of cheapness is to allow the freest competition in the supply of these articles, and not to bolster up any individual manufacturer or any monopoly of the manufacture of those things which the farmer has to use. Above all things, we should consider the interests of the farmer, because he is the backbone of the country. Anything that will assist him in his production is worthy of the most serious consideration by members of this House. Anything that militates against his production by increasing the cost of the implements he has to use, should also receive our serious consideration, with a view to removing all the difficulties that lie in his way.
– We have heard something like that before.
– The honorable member will hear it again, and he cannot hear it too often for his own good, or for the good of those whom he represents. What is required is the freest possible competition in the manufacture and importation of these goods, so that the farmer may be able to get them at’ the cheapest possible price.
– How many farmers are there in the honorable member’s constituency ?
– And not at the exorbitant rates which must follow the establishment of monopolies. I have been to some extent drawn off the track by these interruptions, and I will now go back to Mr. Smart’s report on the Canadian report. Mr. Smart reports on 6th October, 1904 -
I am of opinion that the invoice value shown by the Massey-Harris Company for harvesters is correct. The value is about £12 in excess of the International Harvester Company’s values for similar machines, which would be a reasonable profit.
Then he goes on to say -
Previous analyses of Massey-Harris values for other machines have resulted satisfactorily for the firm.
Mr. Smart’s statement is based not only on the valuation of the machines then, but also upon his experience of the relations of the Department with this firm, which the honorable member for Moira has, in the most unwarrantable fashion, stigmatized as a swindling firm.
– That is not correct. What I said was that the farmers do not expect philanthropy from swindling importers. I did not designate any firm.
– But, when the interjection was made, I was referring to the Massey-Harris Company.
– If the cap fits that company, they may wear it ; but I did not designate them.
– I would point out to the honorable member for Lang that it is not necessary to take notice of interjec tions, and I would also ask honorable members to abstain from interrupting the speaker.
– Some interjections are of such a character that one can hardly pass them bv.
– I would remind the honorable member that no notice is taken in the official report of interjections to which the speaker does not reply.
- Mr. Smart’s declaration that previous analyses of the values of other Massey-Harris machines had resulted satisfactorily to the firm, is high testimony to the honour and integrity of the company, and shows that it cannot be properly designated a swindling importing firm. In speaking on this matter, I have no personal bias, because I know no one connected with either the Massey-Harris Company, or their business rivals. ‘ I am dealing with the facts simply as they are disclosed in the papers. When the Estimates are under discussion, I intend to give an opportunity for further debate on this matter by. moving reductions in the salaries of both the ComptrollerGeneral” and the Victorian Collector of Customs, because I consider it necessary to let these officers know that it is the business of Parliament to increase taxation, and that Parliament will not tolerate any attempt by officials to usurp its functions, or to arrogate powers which it was never intended that they should possess.
– It is their business to protect the revenue.
– There are provisions in the Customs Act which give them ample powers for the protection of the revenue without resorting to the extreme course, of increasing valuations. I know that they acted under one of the “sections of the Act ; but I take it that that section was intended to be used by the Minister with the greatest discretion possible, and the manner in which it has been used shows the unwisdom of clothing Ministers with too wide discretionary powers. The time may come when a free-trade Minister will be in office, and what would the honorable member for Moira and others, who support the action of the present Minister in increasing duties, do if such a Minister -decreased duties?
– Surely, the honorable member does not hope to see a free-trade Minister in power again ?
– I trust that I mav see the day when the protectionist fallacy will have been relegated to the limbo of the forgotten and unhonoured past, to which many ancient superstitions have already been consigned, although it, the most ancient of them all, still survives. I am confident that when the lands of this country are open to free settlement, and when our people enjoy the benefits of complete freedom of exchange, we shall not be troubled with the unemployed question, and union labels, tariffs, and other artificial but ineffective means of raising wages and increasing avenues of employment will be considered unnecessary. Coming now to the sugar bounty question, I wish to say that I shall fight against the continuance of the bounty with all the strength at my command. Although the bounty was given only for a limited period, there is now an agitation, before the expiration of the period, for its continuance for a further term, which clearly shows the truth of my remark on the Manufactures Encouragement Bill a few days ago, that, once a ‘bounty is given, there is no certainty of its ever being repealed. No doubt, if we grant a bounty for the encouragement of the production of iron, the iron-workers, like the sugar-growers, will, towards the termination of the period for which the bounty is to operate, cry out that their industry will die unless encouraged by a continuation of the bounty. In this matter I disagree with the remarks of the honorable member for South Sydney, who this afternoon said he would be prepared to support the continuation of this bonus for another five years, provided it were fixed on a diminishing scale. The honorable member must know that when this bonus .was decided on in the first place, there was a time limit fixed ; and it is only reasonable to suppose that what is happening now in the demand for a continuation, will happen again as soon as the further period of five years is about to expire. We shall have the bonus. with us for all time, because, on the self-same grounds, demands will be made for its extension, whenever it is proposed that it shall be discontinued. Honorable members who now vote for a further extension of the term in the belief that at the end of that term the bonus will disappear, will vote on premises which are altogether wrong, as proved by our past experience.
– The honorable member is against all bonuses?
– - No, not all bonuses. I can conceive circumstances when, in the interests of the nation, a bonus might be very useful and desirable. But this particular industry does not comply with any of the conditions which I have in my mental vision at the present time.
– Would the honorable member vote for the bonus on a diminishing scale?
– No j if we have an Act of Parliament declaring that a bonus shall be paid for a certain time only, I am prepared to see that Act carried into effect. But, so far as my vote is concerned, it will not be given for any further extension. As I have already said, if we give a bonus to-one industry, every industry has a right to the same privilege, and if we give bonuses all round, the industries are simply in the same position they would be in if no bonuses at all were given.
– I suppose the honorable member knows that in the absence of a bonus the industry will drift into the hands of black labour ?
– I do not believe that the industry will drift into the hands of black labour, seeing that before any bonus at all was .given, all the sugar grown in New South Wales was grown by white labour. I see from page 6 of the Estimates that, while the estimate for 1904-5 was £100,000, the expenditure was £121,408, and that the estimate for this year is £^146,000, showing an increase of £24,592. Last year the expenditure was £21,408 in excess of the estimate, and the question arises, what guarantee have we that the estimate of £146,000 this year will prove sufficient? May we not reasonably expect to see on next year’s Estimates a further amount added in view of the excess of expenditure this year? Is it not reasonable to anticipate that that will be the case, in view of the fact that the estimate last .year was exceeded by £21,408? It has been suggested that the sugar bonus is necessary in order to obtain a white, labour standard of wages. It may. or may not, be the case that the bonus is required for this purpose; but itmust be remembered that coloured labour is not always the cheapest. I came across an instance of that the other day in the ah of Melbourne, when, in conversation with a well-known manufacturer of furniture, I ascertained that the best and most expensive furniture in his establishment is made bv Chinese labour. The manufacturer, who is a protectionist, told me that the wages of the Chinese workmen are higher than the wages of the white workmen employed in the same trade - that, in some cases, the Chinese will * not work for the wages of the white man.
– Did the manufacturer give the honorable member any idea of the rate of wages he pays to the Chinese?
– I intend to get some further information from this manufacturer, and I shall be glad to place it before honorable members.
– Is the case cited not the exception which proves the rule?
– No; the manufacturer told me that, in preparing an estimate for some furniture to be supplied to the State Government, there was a stipulation that the furniture had to be made by European labour, and he suggested to his son the advisability of giving two estimates, one for European labour and the other for Chinese labour. In making out the estimate, the manufacturer found that it would cost from 16 per cent, to 20 per cent, more to have the furniture made by Chinese labour than it would to have it made by European labour. I am giving honorable members the benefit of a protectionist manufacturer’s own statement in the city of Melbourne.
– What is his name?
– I do not know whether I am at liberty to disclose the name, but the honorable member for New England was with me when the statement was made.
– The manufacturer made no secret of the statement.
– The statement was not asked for, but was volunteered, and of the furniture that was shown to us in the establishment, the highest class was made by Chinese labour. I do not quote this instance as an advocate of Chinese labour, because I advocate a White Australia.
– Has the honorable member any objection to give the manufacturer’s name?
– If I had the manufacturer’s permission, I should gladly do so, but at the present moment I do not know whether or not the conversation was regarded as confidential. The information might, moreover, be used for the purpose of boycotting and persecuting the manufacturer.
– Some of the manufacturing firms in Victoria put a stamp on their furniture to show that it is made by European labour only.
– And manufacturer’s, stamp the furniture so as to show when it is made by Chinese labour.
– That is compulsory under the Victorian Factories Act.
– In any case, the most highly finished and expensive furniture in that establishment was made by Chinese labour.
– Because the Chinese have driven Europeans out of the trade.
– -If so, it must have been because of superior skill, since it could not have been on account of lower wages, for the Chinese wages were higher. I was, at the time, getting an estimate from the manufacturer for an article of furniture for myself, and I found that the expense depended largely on whether I wanted the article made by Chinese labour or by European labour - that, if by the latter, I could get it made more cheaply. I merely give this instance to show that coloured labour is not always synonymous with cheap labour.
– I can assure the honorable member that coloured labour is the cheapest in Melbourne.
– That is not so in this particular line of industry, according to this protectionist manufacturer and large employer of labour. I give honorable members the statement just as it was given to me ; and if, at a later stage, I find I am at liberty to do so, I shall be happy to give the name of the manufacturer.
– Does the honorable member seriously contend that, as a rule, Chinese labour is clearer than white labour ?
– I do not. I have not said so. What I say is that those who contend that the payment of this bonus is necessary for the purpose of maintaining the white man’s standard of wages lose sight of the fact that occasionally the rate 06 wages paid to the coloured labourer is not always necessarily lower than that given to the white labourer. In the case that J have quoted it was actually higher.
– The honorable member would not favour the payment of a bonus even for the purpose of employing the white labourer as against the black?
– No. I would devise some other scheme, for we have the knowledge that the bonus has not decreased the employment of black labour, or the quantity of sugar grown by black labour. Imported sugar pays a duty of £6 a ton, and Australian sugar an excise of £3 per ton. Upon Australian sugar that is produced exclusively by white labour a rebate of £2 a ton is allowed, so that the amount of duty which is actually paid is only £1 per ton. In other words, a protection of £5 per ton is extended to Australian sugar which is produced exclusively by white labour. I wish now to deal with the question of the consumption of sugar within the Commonwealth. At the present time our consumption is about 180,000 tons per annum. Consequently, if the whole of it were produced by white labour, the revenue from that source would be only £180,000. In this connexion I should like to quote a few remarks by the right honorable gentleman. He says - as will be seen by reference to page 12 18 of Hansard -
I now come to a very important matter - the sugar question. As we add to our local production of sugar, our receipts from Customs duties upon that article must fall off, and our Excise receipts increase. The import duty amounts to £6 per ton, and the Excise duty to £3 per ton. In 1902-3, the Customs duties upon imported sugar amounted to ^502,93 1, whereas, according to the estimate for the current year, they, will reach a total of only ^93,000.
Later on, the Treasurer states -
The supply of locally-grown sugar has nearly overtaken the demand, and very shortly the industry will enter upon a new phase, inasmuch as our producers will have to look for markets abroad, and engage in competition with the whole world. It is estimated that at the end of the Current financial year - in about ten months time - 47,500 acres of sugar-cane will be cultivated by white labour.
If the local demand will soon be overtaken by our own production, and if our sugargrowers have to export their surplus to the markets of the world, how will they g;t on seeing that the price of sugar outside o( Australia will be regulated by the price of the article produced in competition with all other countries ? Under these conditions, T fail to see how the industry can stand, and how our sugar-growers can become exporters, except at very great cost to the Com- monwealth. Later on, on page 1219 of Hansard, the Treasurer said -
The foregoing facts, which are clearly set forth in a table in one of the Budget papers, justify the Government in recommending a continuance of the bonus policy. In this connexion it is proposed to introduce Hills extending the bounty for five years after the expiration of the present term - that is until 191 r - upon the same terms as those contained in the existing Act.
As I have already stated, I entertain a very great objection to the continuance of this bounty system, because I am satisfied that just as the sugar-growers are crying out for an extension of the period during which it shall be operative, so they will raise another outcry - before the term for which the bounty is renewed has expired - for a further continuance of that policy. I should like to know where this thing is going to end. When the honorable member for South Sydney declared that he was willing to support the proposal to extend the bounty for a further period of five years, provided that it absolutely ceased at the end of that term, I think he must have overlooked the fact that, at its termination, the question is bound to be brought forward again just as it is being brought forward now. ‘Year after year we see that the sum placed upon the Estimates for the payment of the bounty is increasing. In the end, it must involve the people of the Commonwealth in very heavy taxation.
– The excise pays for the bonus.
– The excise will be wiped out at the end of a certain term, and we shall have to face the prospect of a continually diminishing revenue from that source.
– Every State is getting more by way of excise than it is paying by way of bounty.
– The Vice-President of the Executive Council will have an opportunity of explaining that matter at a later stage. I shall be pleased to have some light shed upon this matter by the luminous mind of the honorable gentleman. I am sure that the Committee will be very glad to hear his opinions, seeing that he represents a district in which the sugar industry is one of very considerable importance. Perhaps, as a member of the Government, he will break through this conspiracy of silence which has been characteristic of the Ministry and its supporters on all these most important matters affectting the vital interests of the’ people of Australia. The annual consumption of sugar in Australia is about 180,000 tons, so that if all the sugar were grown with white labour the revenue derived from that source at £1 per ton - the Excise duty less the rebate - would amount to £180,000. For the year 1904-5 the revenue collected on imported and Australian sugar was £628,511; and for the year 1902-3 it was £780,448. The amount of revenue we should get if all sugar were imported would be £1,280,000. These figures show that through the policy of granting a bonus and levying Excise duty, we are actuallysuffering a loss of ‘ about £100,000 per annum. Looking at the question from a revenue stand-point, it would pay us very much better if we were to import all the sugar we need.
– If the honorable member had his way, there would be no one employed in the- Commonwealth.
– That is where the honorable member makes a mistake. There is a difference between encouraging employment in natural channels, which require no State coddling by tariffs or bonuses, and giving employment in industries which it is declared can only be sustained by artificial stimulus.
– What does everybody else say ?
– I cannot help what anybody else says. My view is that it is far better to give employment in developing the natural resources of the’ Commonwealth without artificial aid - without penalizing all other branches of industry for the purpose of benefiting a few specially singled out for this preferential treatment. Looking at the question from the stand-point of fairness and equity, we have no right to distinguish between one source of production and another. If we intend to give a bounty to the sugar industry, we ought to give a bounty to the farming, fruit, and other industries. As a. matter of fact, the bounty to the sugar industry penalizes other industries which, from a national stand-point, are equally, important.
– Is not the bounty to the sugar industry mixed up with the White Australia policy?
– It has no right to be mixed up with what is purely a racial, and not a fiscal, policy. This attempt to mix up the two questions so as to make them interdependent is an absolutely wrong proceeding. The question of the Tariff and the question of revenue should be separated from the question of race. Surely there are other means which could be. devised for preserving a White Australia? It does not even preserve a White Australia ; but, even if it did, it could only do so at the expense of permanently injuring several industries of first importance to the present and future prosperity of the Commonwealth. As a matter of fact, the consumer does not derive any benefit from the grant of this bounty. He has to pay the same price for his sugar, whether it is grown by black or white labour, or whether it is imported. Notwithstanding the immense sums paid in bounties to the sugar-growers in Queensland, the taxpayer, in addition to having to pay the bounty, is called upon as a consumer to pay an inordinatelyheavy price for his sugar. Before Federation, Queensland had to grow her sugar in competition with the rest of the world; and, after supplying her own market, she had to supply the markets of the other States in competition with the rest of the world.
– For what purpose does the honorable member think Queensland joined the Federation ?
– I do not know. If she simply entered the Federation for the purpose of putting her hand into the pockets of the other States, she acted from a very unworthy motive. But T do not believe that her people acted from that sordid motive. When Sir Edmund Barton talked about the advantages of Federation to the people of New South Wales, and asked them to join the union, he did not say that Queensland desired to join for the purpose of putting her hands into the pockets of New South Wales and the other States.
– Nor did she. She wanted to get into the markets of the Commonwealth.
- Sir Edmund Barton talked about the glorious unity of race under the Southern Cross, and all that kind of high-flown sentiment. That was the kind of pabulum he served up to the electors of New South Wales.
– Tt is a strange thing that the majority took it.
– It was never represented to the people of New South Wales that Queensland regarded New South Wales in the light of a milch cow for the northern State. The sugar question was never put before them. Whatever argument? may have been put before the electors of Queensland to induce them to join, the Federation from a sordid motive - from the prospect of monetary gain at the expense of the rest of the community, and of other industries of equal importance in the Commonwealth - certainly they were carefully hidden from the electors of New South Wales. If honorable ‘members were called upon to pay these bounties out of their own pockets, what would they think of the proposal ? As business men they would repudiate any such suggestion, and laugh it to scorn. Nevertheless, they do not hesitate to ask Parliament to pay money out of the public Treasury for a similar purpose - a proposal which they would repudiate in their private capacities.
– Who pays it if the taxpaver does not ?
– I say that the taxpayer ought not to be called upon to pay it. He is not only called upon to pay the bounty, but also to pay an exorbitant price for his sugar.
– The taxpayers are quite willing to pay it.
– They have never been consulted.
– They have been consulted at each election, and say they are quite willing.
– The honorable member is possessed of a singularly fertile imagination. Another point is that this additional bounty of £2 per ton for white-grown sugar has not lessened the pro.dution of sugar grown bv black labour. That is one of the peculiar features of this business. The bounty was asked for in order to promote the growth of sugar by white labour.
– And it is doing so.
– I doubt that very much, because from the evidence before us we find that just as much sugar is grown byblack labour as was the case previously.
– But what about the whitegrown sugar?
– Certainly, more sugar is grown by white labour than previously, but as a matter of fact, the amount paid in bounty for the encouragement of the growth of sugar by white labour has not had the effect of decreasing the quantity grown by black labour. Indeed. Ave have evidence from some of the north coast districts of New South Wales that it is not profitable to continue to grow sugar under unfavorable conditions. People there weN in the habit of growing sugar in an unsuitable climate; but frosts intervened to divert their attention to other more suit able industries, and Ave now find that many of the farmers are turning their energies and their talents to a more profitable direction by converting their lands into dairy farms. It would be far better if the people in Queensland who are trying to produce sugar by the stimulus of the bounty would turn to some more profitable means of production, where they would not require artificial aids. I object to bounties on principle, except perhaps for some special purpose of great national concern where the interests of the whole community are clearly served bv such means; and then the payment requires to be ‘hedged round Avith A’ery great safeguards in the public interest.
– Does not the honorable member think that the present Minister of Customs would hedge the payments round
Avith sufficient safeguards?
– I feel certain that the present Minister of Customs would do everything he could to raise the taxes imposed on the people of the Commonwealth’. But I ha-e yet to learn whether the honorable member for Maranoa is to be numbered amongst those who will assist him in those operations. We have to consider the effect of these bounties on other industries in Victoria, New South Wales, andi Tasmania.
– The people of Victoria are not objecting to them.
– If they are not objecting they must be a very patient and longsuffering people. It must be remembered that the people of Victoria are so inured to this system of State coddling, that their moral sense has become absolutely blunted to the wrong and the robbery involved in it. But if the people of Victoria have not complained, those in other States have done so. That is notably the case in Tasmania, where I am informed, the duty amounts to a tax on the fruit-grower of about £9 per acre. We, as a Parliament, have no right whatever to place one State at a disadvantage as compared Avith another,- or one section of people at a disadvantage in comparison Avith other sections
– -How much protection does the f fruit-grower get ?
– I have it on the authority of one of the Tasmanian representatives, who knows the industry pretty AA-ell, that about £9 per acre is the penalty the fruit-grower is called upon to bear for the purpose of bolstering up the Queensland sugar-growers.
– The fruit-growers have a protection of1½d. per lb. on jams and jellies.,
– I will show what it means to the jam-producer. If the honorable member has any fresh light to throw upon the subject I shall be happy to hear him when I have finished. I prefer to deal with the subject in my own way, and to expose the shamelessness, the robbery involved, the injustice to every other section of the community, and the absolute indefensibility of the sugar bounty, which, I am sorry to say, this Government has been so weak as to agree to continue under pressure.
– There was no pressure.
– What did the honorable member’s Government do about this matter?
– Unfortunately, I have never had a Government, but I can promise the honorable member that if ever I do have a Government, this kind of business will receive very scant treatment at my hands.
– The honorable member may be very sorry for those words some day !
– If the situation ever arises that I have to eat my words as to matters of principle before forming a Government, I shall relinquish the task from the very jump. Let me take the question of jam production, to which the honorable member for Wide Bay has alluded, and let me show the cost of the bounty on an acre of plums before they can be converted into jam. The bulk of the plums that are grown are produced for that purpose. But before they can be converted intojam they have to bear a burden of£18 5s. 8d. per acre.
– The bounty has not increased the price of sugar by a fraction of a penny.
Mr.JOHNSON. - It has not decreased the cost of sugar by a fraction of a penny, nor has it decreased the quantity of sugar grown by black labour. I am as much in favour of a White Australia as is any member of the Labour Party, but I do not think that that end will be accomplished by means of a bonus and of Tariff conditions such as are now in operation.
– How would the honorable member accomplish the object in view?
– I do not propose to go into that question now. ‘ At another time I shall probably have a chance to do so. Reverting again to the question of the extent to which the jam-making industryis burdened at present, I would point out that the growers of peaches have to pay £19 5s. 8d. per acre; the growers of apricots have to pay£20 5s. per acre, and the growers of quinces £24 per acre before their fruit can be converted into jam. Why should the sugar industry be subsidized at the expense of others, who are called upon to pay large sums of money in the form of taxation ? By penalizing the industries to which I have referred, we are inflicting an injustice on them which, as representatives of the people, we have no right to do. In this connexion I may quote a paragraph from the speech of the right honorable member for Balaclava, delivered when he was the Treasurer in a previous Administration. He said -
New South Wales has undoubtedly received very large benefit from the sugar rebate, because before Federation they were growing nearly all their sugar by the aid of white labour, and, consequently, the bonus has been a little God-send to them.
Even according to the statement of the right honorable member for Balaclava, a most ardent protectionist, the sugar grown in New South Wales prior to Federation was produced by white labour, and it is to be presumed that the growers were not conducting their operations at any loss. Therefore, the bonus has been a little God-send to them. They have, during the last three years, received £114,000 out of the public Treasury, not because they have produced more sugar, but because they have gone on doing exactly what they were doing before any bonus was granted.
– It is only fair to remind the honorable member that the sugar-growers of New South Wales had the benefit of the heavy protective duty that was retained by a free-trade Government.
– The duty had been considerably reduced, and they did not have the advantage of the bonus. We could produce anything in Australia, whether the conditions were favorable or not. We could produce ice-fields and raise Polar bears in Northern Queensland, but what would it cost to do so? In cold countries, products natural to the tropics could be grown, and, similarly, the products of the Arctic regions could be raised in tropical countries, provided that those interested were prepared to pay the cost.
Why, however, should we devote our attention to fostering unnatural industries to the neglect of those which can be carried on withouT any special assistance? Passing away from the question of the bonus, I wish to refer to our Territory in New Guinea. We shall have to provide for the needs of the people who are settled there, and for the development of the Territory in a somewhat better fashion than has hitherto been attempted. At page 1207 of Hansard, the Treasurer is reported as having said -
There is an expenditure also in regard to our only Possession - British New Guinea - of £20,000. We have taken over this Territory, and have promised to provide ^20,000 a year for its government. It is a great responsibility, though perhaps we have not so far felt the burden.
Then he proceeded to refer to the area of the Territory and to other details, and, at a later stage, remarked -
I am sorry to say that I have not the most recent statistics, as, owing to the few facilities afforded for communication with the Territory, it is difficult to get information, but I am able to inform honorable members that the value of the imports for 1903-4 amounted to £77,000
– Mostly grog.
– I believe a considerable portion of it was.
– No, it was not. Grog represented only £3,700.
– The bulk of revenue is derived from other sources. In reply to an interjection by the honorable member for Franklin as to the number of officials being sufficient to supply the information with regard to New Guinea, the Treasurer said -
That is so, but I do not think it is their fault that it has not been supplied. The difficulty is due, I think, to the inadequate mail service between the mainland and the Territory.
Here we have an indication that the residents of New Guinea are not being properly served in the matter of the mail service. In fact, so bad is the service that we cannot obtain particulars such as I think should be before us when we are called upon to consider matters which have a direct bearing on the future of the Possession. It is essential that an efficient and regular mail service should be established between the mainland and New Guinea.
– Would the honorable member be prepared to give a bonus in order to secure it?
– I do not think that a bonus would be necessary ; but, as I have already said, under some circumstances bonuses are defensible, especially when we are dealing with matters of great national concern, or are seeking for means by which we can promote the development of our territory and encourage settlement. It would be interesting to know what is to be done in -the way of developing British New Guinea, but I can find in the Treasurer’s speech no indication of a policy on the subject having been determined on by the Government.
– The first thing to do is to pass the Bill.
– Provision has already been made on the Estimates for a vote of £20,000 to carry on the work of government in that Territory. I hope that the Treasurer, when he comes to reply to the debate, will tell us what is proposed in this regard, and also what is to be done in connexion with produce grown in the Territory after settlement, being encouraged, has taken place there. Are we going to deal with produce imported from the Territory in the same way as we deal with that imported from the New Hebrides? Are we going to place barriers in the way of producers in New Guinea- getting their products to our markets? These are matters on which we are entitled to have Some information, and I hope that, iri considering the question, the Ministry will give attention to the advisability of permitting rebates of duties on produce grown in British New Guinea, or any of the adjacent islands, by British settlers, not from the fiscal stand-point, but with a view, of trying to enlarge our own Territory, and to people it with an industrious Australian or British population. I have dealt very briefly with this subject, and I now pass on to the question of defence, which I regard, next to the question of population, as being the most urgent matter with which this Parliament has to deal. In my view, the two questions are of the first importance, and are co-related. I am not one of those who would advocate the starving of the defences, but I desire that the money voted shall be expended in the right direction. My view of the question is that we have to look to the Imperial Navy for our first line of defence. Our second line of defence must be the proper equipment, and fortification of our harbors and-rivers, and coastal, defence generally ; and our last line of defence should be our land forces. It seems to me from such a study of the Estimates as I have been able to make, without that complete and full information which we; might have expected’ from the Treasurer, that the great bulk of our expenditure is in connexion with our land forces.
– What do honorable members want now ?
– We want definite information about something.
– Yes, we desire some definite statement as to what is proposed to be done. Dealing with the question of naval expenditure, I find that the right honorable gentleman at page 1206 of Hansard is reported to have said -
For this year it is estimated that the naval and military expenditure will amount to £59I,43I, being £32,928 in excess of the actual expenditure last year, hut £696 less than last year’s vote. In addition, there are the following items to be considered : - Naval agreement, £200,000, representing the amount payable for a full year; works and buildings and rent, £30,055 ;> miscellaneous, £2,529; making a total expenditure of £824,0^. Besides there is ex.traordinary expenditure represented by additions in new works, £57,516; arms and special armament and equipment, ,£140,000; making a total of £197.516; whereas last year this expenditure amounted to £200,320.
The item of £140,000 for arms and special armament and equipment is one on which we should have complete information.
– There is complete information, in the Estimates and Budget papers.
– I think the right honorable gentleman might have explained these items when making his Budget speech. He ought to have shown why this expenditure is necessary.
– So I do, further on.
– I have not seen the explanation so far, and I apologise if the right honorable gentleman has furnished it, and I have inadvertently overlooked it.
– It is jail before honorable members, every bit of it.
– I admit that the Estimates are before us, and while they are all very well in their way, they require a certain amount of explanation as regards details. Questions may arise when the items come before _us for consideration in detail later’ on. and they will then have to be explained more fully than. they have been so far. All that discussion might have been saved, if the Treasurer had supplied us with this information in the beginning. Dealing with the expenditure under the headings fortifications, barracks,1 rifle ranges, and drill halls, I find that the total amount required for New South Wales is £5,718. Some of this is for new works and some for additions to existing works. The total for Victoria under the same headings is £4,726; Queensland, £1,325; South Australia, £549; Tasmania, £303; and Western Australia, £21,292. To put these figures in another way, the amount proposed: to be expended under .these heads in Western Australia is nearly twice as much as that proposed to be expended in all the other States put together.
– And it is being expended at the wrong port; it should be expended at King George’s Sound.
– I believe the observa-. tion of the honorable member for Wentworth to be a very pertinent one. The explanation given of the proposed expenditure in Western Australia by the Treasurer is as follows: -
The fortifications at Fremantle, which are’ to consist of two forts - one at Arthur’s Head and one at North Fremantle - are being pushed on with, and the efficiency of existing fortifications is being improved. The difficulty with regard to fortifications is that improvements are constantly being required, and that a fort which may be efficient to-day is considered to be out of date in a few years time. We have had experience to that effect already in Australia. There can, I think, be no doubt that a much larger expenditure will be necessary in order to place our fortifications on an up-to-date footing, as also with regard to our naval defence.
– Is it in order to read from the Hansard report of this session?
– The honorable member is in order.
– To continue the quotation -
At the present lime the people of Australia, who are a self-reliant and progressive people - as I shall be able to show before I sit down - pay only one-fifteenth per head of the amount paid by the people of the mother country for their naval defence. That being so, the matter only requires to be put before them in a way that is acceptable to them, when I feel sure that it will have the attention that it deserves.
I think that the people of Australia desire to make an adequate contribution towards the upkeep of the Imperial Navy, having regard to the protection which they receive from it, and the interests to be conserved ; but if our f fortificati)ns become out-of-date when only two or three years old, I should like to know what is the condition of the defences of Sydney and Newcastle, and other places along the coast of New South Wales and of the other States. Although the vast sum of £21,292 is to be expended on two forts in Western Australia, only a comparatively small vote is proposed for the coastal defences of New South Wales and Victoria, although each of these States has a much larger population than that of Western Australia, and has cities. which are more exposed to attack. I do not know whether Western Australia is receiving a disproportionate vote because she is represented in the Ministry by the right honorable member for Swan, but the next largest sum on the Estimates for a similar purpose is less than . one-fourth of the amount proposed to be voted to Western Australia, and is to be spent in the State of New South Wales, which is very much more .populous. If our fortifications are not in a thoroughly satisfactory condition, it is time that we made provision for making them what they should be. I should like to know if provision is made in the Estimates for the purchase and maintenance .of submarines, torpedo destroyers, and other means of defence for our harbors and rivers against hostile attacks. Our attention should riot be concentrated on our land forces - which constitute our last line of defence - to the neglect of our coastal and naval defences.
– As the Government are not able to speak on this subject, they might keep a quorum to listen to those who do speak.
– The honorable member, I take it, wishes to direct attention to the state of the Committee. This is the first time that that has been done during the present session, ‘ and I wish, therefore, to point out that the Chairman of Committees is not empowered to cause the bells to be rung, the procedure provided for in the Standing Orders being to call in Mr. Speaker. Last session, however, .that procedure was bv general consent dispensed with. I will, therefore, put the question. Is it the pleasure of the Committee that I cause the bells to be rung?
– Hear, hear ! Anything to save time. [Quorum formed.”]
– I do not believe instarving the defence vote, so long as the money voted is to be expended for the bene- fit of the Commonwealth in the most effective and necessary direction. In speaking of the need for looking after our coast defences, I had in mind the fact that there are, I believe, no fewer than sixteen foreign naval stations within easy striking distance of Australia. In considering the Estimates, we ought to keep that fact amongst other facts steadily in view. It is only of late years that Australia has been placed in this position ; and: it would be a position of serious import to us as a Commonwealth, should Great Britain at any time be involved in war with any of the great European naval power?. Let us hope that we may never see the probability realized, but there is always the possibility that we may be placed in that position at any time ; and it is of the first importance that we should be prepared to make adequate provision in our Estimates year by year for the defence of the coast of Australia. So far as I am concerned, I do not grudge any reasonable expenditure for this purpose. There is much matter in these Estimates for hostile criticism ; in fact, there is enough material to occupy one for five hours at the very least. But I do not propose to deal with any other subjects at the present time, because I am anxious, as far as I can, to expedite business. Where legitimate expenditure is involved, I shall offer no obstruction to the passing of the Estimates.; but where vital principles in which I believe are violated,. I shall oppose each item with the full strength of whatever powers I possess. As to the continuation of the sugar bonus, the iron bonus, and proposals of that kind, I declare to the Committee’ that thev must look to me for the strongest opposition. I consider those proposals absolutely wrong in principle. To dip our hands into the public Treasury for the purpose of enriching certain favoured sugar-growers, or other individuals engaged in any particular industry, to the detriment of other producers, and the general disadvantage of the rest ‘of the community, is unjust and wrong, and involves the imposition of wholly unnecessary burdens on the back of the taxpayer.
Mr. HIGGINS (Northern Melbourne).I intend in this very devious debate to confine myself to the one subject of the States debts. This is the only opportunity which honorable members have to deal with the important discussion which took place in Hobart last February, and in Melbourne in
February, 1904. I conceive that we shall have ample chances hereafter of dealing with the questions of the harvesters, the sugar bonus, defence, and the Public Service; and that the eternal fiscal question, important as it is, need not always be dragged into our debates. I must say “that at the Hobart Conference, the Premiers of the different States and the Federal Treasurer appear to have been further apart than they were in February, 1904. The clause for taking over the debts, which was carried at the Treasurers’ Conference in Melbourne, in 1904, was struck out at the Conference in Hobart in February, 1905 ; and, I think, it was properly struck out. The scheme had not been sufficiently matured ; and, in other respects, I think the Conference at Hobart achieved great results. The leading men concerned made appreciable advance towards agreement, in that, for instance, they decided on the postponement of the appointment of an Inter-State Commission, so as to save expense.
– Parliament had tacitly agreed to that before.
– I was not aware ot it; but, at all events, a resolution to that effect was put on record at the Hobart Conference. I may say that at the beginning of Federation I suggested, in an article in the review edited by the honorable and learned member for Parkes, that an InterState Commission was not required at present. That idea was scouted by those who then said that “both the High Court and the Inter-State Commission were mandatory in the Constitution. The High Court has been established, but now we hear no more about an Inter-State Commission being mandatory, and we get on very well without such a body, by means of a Conference of the heads of the various Railway Departments. With regard to the transferred properties, it appears, as it ought to have appeared from the first, to be more a bookkeeping matter between the States than anything else, though there are practical difficulties as to the valuations. As to the income tax,, there has been a resolution carried that there ought to be an alteration of the Constitution for the purpose of making Federal officers and Federal members of Parliament pay the same tax as others ; and I cordially concur with that idea, whether it be carried out by means of an alteration in the Constitution or not. As to the States debts, some of us remember the reckless promises made by advocates of the Constitution. The people were assured right and left that there would be a material reduction of interest almost as soon as Federation was established; but those promises have not been carried out, and there does not appear to have been any definite move towards carrying them out, except it were in the discussions to which I have referred. Yet this is a very material point. If we Could reduce the’ interest on our debts of £234,000,000 by 1 per. cent., we should reduce the expenditure each year by £2,340,000. Even if we were to reduce the interest by only per cent., it would mean a lightening of the burden on our revenue by £1,170,000. If we could only conceive how much of our difficulties would be avoided, or how we should be able to do good in the way of enterprises and works all over the Commonwealth, by the saving of nearly one million and a quarter per annum, we should recognise at once that any effort and ingenuity would be justified in solving the problem. Such a saving would be a great relief in view of the ever-increasing expenditure and diminishing receipts of the Federation. We shall shortly be in :a very uneasy corner-
– The Treasurer stated in his Budget that we had not enough revenue to meet the interest charges.
– I think that the honorable member must have misunderstood the Treasurer. What the right honorable gentleman said was that the interest charges amount to more than the net Customs and Excise revenue returned to the States.
– Of course the deficiency is made up by the States from their own systems of taxation. I have read with very great interest the contributions to the discussion of this subject by the right honorable member for Balaclava, the honorable member for Kooyong, Mr. Irvine, and Mr. Speaker, and I do not think that the paper written by Mr. Speaker, which was submitted to the Treasurers’ Conference, held in Melbourne in February, 1.904, has received half the attention which it deserves. That paper covered only three pages, but I do not find that in the discussion which took place either in Hobart or in Melbourne any direct reference was made to what Mr. Speaker pointed out.
– What was the date of that contribution?
– It was written in February, 1904. No doubt there is an excuse for the fact that it has not received the attention which it deserves, because the problem of the transfer of the States debts presents so many faces that each individual is very likely to look only at one face of it, and to ignore the others. I wish to divide what I have to say on the matter into comment on the position as regards the existing debts, and as regards future borrowings, and then to deal with the constitutional restrictions upon what we should like to do. In Australia we have debts which are repayable at all kinds of dates from the present time till 1950. Indeed, since the Constitution came into force some new debts have been incurred which will not mature till 1952. Unless” some change is effected the States will continue to incur more and more debts, and we shall obtain no reduction in interest charges. The States will continue to borrow for themselves, and the rate of interest will remain as it is. The position I take up is that the only way in which we can induce a bondholder to accept a lower rate of interest is by offering him a bond that is more desirable in other respects. After all, that is a mere truism. We may have bonds which are more desirable in other respects, and in return for them we may secure a reduced rate of interest, in the same way as British consols by virtue of the position of British credit bear only i per cent, interest, whereas a South American Republic can borrow money only by paying 8 per cent, or 10 per cent.
– Because there is a danger of repudiation in that case.
– That fact is obvious. The way in which we can make our bonds more desirable to the present bondholders is first by giving them a better guarantee or security - the bonds being on a sounder basis - and, secondly, by making the bonds or stock more negotiable, more useful for more purposes, and more attractive to more persons. It seems to me that we can achieve both of these results. We can give the Federal backing - we can nut the Federal credit behind the debt’. We can also give bondholders a more desirable bond by having a uniform stock, and by making it - if necessary - interminable, so that it can be redeemed only by purchase in the market, and we can create a sinking fund which shall be securely placed in the hands of independent trustees.
– What is the Federal backing worth just now ?
– I shall deal with that matter in due course. It must be remembered that we have a separate contract with every bondholder, and when the Constitution declares that we may take over the States’ debts, it does not mean that we may simply say to our bondholders - “ We will become your debtor now in lieu of the States, and at such interest as we choose to pay.” We have a separate contract with every bondholder, and any exchange from a State to a Federal bond must be voluntary on both sides. For instance, we cannot make the holder of a £100 Tasmanian bond at 4 per cent. - there is a Tasmanian loan of £1,000,000 which will fall due in 191.1 - exchange it for another bond carrying only per cent, interest- We must offer some inducement to him, if we wish to effect an exchange. The point put by Mr. Speaker is as follows : -
The utmost care, as i then pointed out, must be taken to avoid the giving of any Commonwealth guarantee in respect of any State stock, as to either principal or interest, without securing for the Commonwealth from the holders of the State stock some adequate return for the added value which must follow the guarantee, which added value should be secured for the people of the Commonwealth.
He then points out how in Canada, which is the nearest analogous case that we can get to the Commonwealth, because in Canada there is a Federation and there are Provinces - there is always a big margin between the price of Dominion stock carrying, say, 3 per cent., and any provincial stock bearing the same rate of interest. So it is with all the percentages. Mr. Speaker continues -
Judging from precedent in Canada and elsewhere, and under normal conditions, the difference in market values between average State stocks and Commonwealth stocks of similar denomination may be expected to be in a tight market about 8 or 9 per cent-
At present we have a tight market, although it is getting easier every day - and in an easy one from 4 per cent, to 6 per cent., though, of course, the stocks of different States might vary over a range of even 3 per cent, or 4 per cent.
Assuming that Quebec stock was worth £95 in the market, Dominion stock for the same term, and at the same rate of interest would be worth about .£103, or £8 more in a tight market. Mr. Speaker goes on to say -
To illustrate, dealing first with 3 per cent, stocks : - While Commonwealth stock at 3 per cent, for a certain term should command par (and Canadian Dominion 3 per cents, are even now quoted in London at ths over par, and have been much higher),
Dominion stocks were £100 15s. at the time mentioned here -
New South Wales stock of similar denomination (i.e., same rate of interest and term) are on the same day (31st July, 1903) quoted also in London at £89, while the stocks of the other Australian States are quoted at about the same figure.
So that on the same day, bearing the same rate of interest, and for the same term, you have Canadian stock worth £100, and New; South Wales stock worth only £89. I referred to the last quotations I could find, and obtained some figures which I beg honorable members to consider. From The Times of the 24th July last, I find that on the 21st July, Canadian 3 per cents, were £97 buyers, and £98 sellers, that is to say, they could be got for about £97 ios. On the same date, Quebec 3 per cents, were £87 buyers, and £89 sellers. There was a difference of nearly £10 on each £100 between the value of Dominion stock and that of Quebec stock.
– Perhaps that was because some interest became due in one case and not in the other.
– I took stocks for the same term and excluded those cases in which it was ex-dividend.
– In Canada, there are very few provincial debts. Most of the provincial assets were taken over with the debts.
– I admit that the honorable and learned member will be able to find differences, in some cases considerable and in other cases not very serious. But I am coming to the nearest analogy I can get. We have no Commonwealth stock, and we cannot say at the present time what Commonwealth’ stock for a certain term and bearing a certain rate of interest would fetch in the market. At the same time, we have good reason to believe that as the value of Canadian stock is much higher in the market than the value of the stock of any province, so our Federal stock would be worth more in’ the market than the stock of any one of the States, however great. I find that while on the same date Canadian 3 per cents, were £97 buyers, and .£98 sellers, New South Wales 3 per cents, were £87 buyers, and £88 sellers, and Victoria 3 per cents, were £87 buyers, and £88 sellers. I may mention that Canadian, New South Wales, and Victorian stocks are stocks in which trustees may invest.
– It is not so many years since Canadian and New South Wales 3 per cents, were almost at the same figure.
– I am speaking of their value at the present time.
– Still, Canada was a Federation then.
– The mere fact of there being a Federation affects the value of stocks in the case of our States. On the same date, New Zealand 3 per cents, were £87 1 os. buyers, and £88 ios. sellers. On the same date, Canadian 3J per cents, were £100 buyers, and £102 sellers, while Nova Scotia 3J per cents, were £94 buyers, and £95 sellers.
– Something would be due to the fact that Canada borrows very sparingly, I think.
– Her debt is £55,000,000 at the present time.
– -Yes, but proportionately it is much smaller than our debt.
– It must be recollected, that the Provinces of Canada borrow very sparingly, too. I admit frankly that we shall find differences; but the point I wish to establish is that the mere fact of the credit of all Australia being behind the Tasmanian debt would give value to that debt. That is enough for my purpose.
– The price of Australian stock has been very much higher. Three per cents, have been up to £101.
– Of course, the Treasurer, who was Premier of Western Australia for such, a long time, will recognise that the value of all stocks has fallen since the South African war. We all know that our States are absolutely solvent. What we have to consider is not what we know, but what other persons think. In London it would add to the value’ of a stock in the market very considerably if it were known that the credit of all Australia, was behind that stock. The very name of Australia, although this may be sentimental, would have an effect on the stock, and gives it a value. Persons who wished to invest in these stocks would get skilled advisors connected with the exchange, who would look into the matter, and see that the Commonwealth had unlimited powers of taxation, both direct and indirect; that it had exclusive power to impose Customs and Excise duties, which, of course, is the most flexible weapon of taxation. That, of itself, would give tremendous strength to any Federal stock that might be offered. If, in addition to these advantages, you were to make the .stock interminable, you would attract a great many persons who have long trusts to fulfil, and who do not wish to be continually thinking of how to replace their investments.
– Interminable on both sides ?
– Yes. Of course, I should prefer, if it were possible, that we should have the option of terminating the stock, and paying off the debt.
– That is often done.
– At the same time, on the balance of advantages you would find it best to make the stock interminable, because you would get more persons to compete for it. A great many persons do not wish to be called upon suddenly to find new investments.
– With interminable stock, a sinking fund would appreciate the value.
– The honorable member has hit the point. In tine old days here, we used to stiffen the shares) of certain banks and companies by buying them in the market. But this is perfectly legitimate in regard to stocks. If you have a debt of £100 to pay, and you buy it for £99, it is good business. Supposing that the stock were interminable, a man would feel, “ I have not to part with the stock until I wish to sell it.” At the same time, there would always be a sufficient quantity of stock in the market, in purchasing which the sinking fund could be used. The mere existence of a sinking fund would be a tremendous strength to the stock. The advisors of the investors would see that. The sinking fund could be vested in trustees, and many would be attracted to exchange. Another advantage is that the larger the stock the more valuable it would be. It is a very curious thing that in most matters the larger the quantity of stuff you have the smaller price you can command. But in the case of stock, the larger the quantity you have the more valuable it is. If in London a man of business wishes to get credit, what does lue do? He simply makes use of the fact that he can get British stock and British consols at a moment’s notice, as long as he has the money. He often gets a bill discounted by attaching thereto the stock certificate, which is held until he repays, arid he pays at a very low rate of interest in the meantime. Supposing that he got the bill discounted at 1 or rj per cent., he would make 2§ per cent, from the stock which he holds as a debt of Great Britain. A large uniform interminable stock would be of tremendous value in the market. There are, briefly speaking, two classes of people ‘who go in for stock. One is the ordinary investor - trustees and the like; the other is the speculator and dealer, who wants stock for financial purposes. We want to attract the latter class as well as the former. I say that a large stock, uniform, always to be had in plenty, easily understood, and not to be repaid, except by purchase, which could be used freely for discount and advance purposes, would attract a number of people whom State bonds never attract now. Just to give an instance - assume that a Tasmanian bond at 4 per cent., becoming due in 19 11, is worth ^99-
– I think that the importance of the figures which are being quoted by the honorable and learned member for Northern Melbourne entitles him to have a quorum present. [Quorum formed.]
– Of course, my assumption with regard to the Tasmanian bond is merely hypothetical. Assume that a Commonwealth bond at 3I per cent, was worth £100. That is quite possible. There is, then, a difference of £1 between the value of the Tasmanian bond at 4 per cent, and the Commonwealth bond at 3J per cent. But there are very many who would prefer to exchange the Tasmanian bond for the Commonwealth stock, because for each £100 they would get £1 of profit, the difference between £99 and .£100 ; and, on the other side, we should reduce the interest, and Tasmania would be relieved to the extent of i per cent. She would be paying 3J per cent, instead of 4 per cent, for the remainder of the term of the loan. There are many people who would be glad to exchange on that basis, which would mean a profit to- both sides ;. but there are many who would not, or could not, perhaps, because their trusts would not let them. But, at the same time, there would be a considerable saving of interest. Take another instance. Take a Queensland loan. There is, in 1915, a Queensland loan coming due of £11,405,300 - a huge loan to meet. The interest is £456,212 a year. If a Queensland 4 per cent, bond we’re worth £100 at par, and the Commonwealth 3J per cent, bond were £102, exchange would be very probable; because the man who held the State bond would get a bond worth £102’ for his £100, and, at the same time, the interest would be reduced by £57,000 a year. Queensland would be relieved of interest liabilities to that extent. What has been proposed by the ex-Treasurer? What he has been fighting for is to take over all the debts of the States at once, and to give the Federal backing of the bill for nothing. So that we should, as it were, be indorsing the bills of Tasmania, and of Queensland, and of the other States for nothing, and the Commonwealth would have to look to the States to indemnify it against all those payments. That is to say, as to the Tasmanian loan, the holder would get his 4.per cent, as before, but guaranteed by the Common- “ wealth ; and if the Commonwealth backing made the Tasmanian bond rise from £99 in value to £105 in value, the holder would get £6 for nothing. That would be simply madness, and I am amazed that the late Treasurer - whose absence to-day we all deplore - should lend his name and the weight of his authority to a proposal for giving the Federal backing for nothing.
– Did not the Hobart Conference consider this question ?
– I cannot find, in any part of the report of the proceedings of the Hobart Conference, any reference to this point, which was first raised in the Convention by our present Speaker.
– I mean that it considered the general question.
– The general question, yes. If we look now at what the exTreasurer proposed with regard to the debts - it was not accepted, I may say, by the Hobart Conference - it was “ that section 87 of the Constitution be amended by extending the term of ten years therein mentioned to thirty years.” That is to say, he proposed to extend the operation of the Braddon section till the year 1931.
– The States representatives now require.it to be interminable.
– Yes, they have asked for that. But I desire honorable members to keep their minds directed to what the ex-Treasurer proposed, because it is all one whole. He wants to extend the operation of the Braddon section till 1931, and thereby to postpone the problem till the next generation. The next part of his proposal is that, “ subject to the foregoing and following stipulations the whole of the State debts be taken over by the Commonwealth, when arrangements can Le macle.” That is clear enough - to take over the whole of the debts. The exTreasurer was working upon the basis of section 105 of the Constitution, which permits the taking over of the whole of the debts, or else a part relatively to population.
– The whole of the debts to date, or the debts when the Commonwealth was f ormed ?
– The whole to date. He holds That we are not to confine ourselves to the debts that existed at “the time of the formation of the Commonwealth, but ought to include the £32,000,000 which have been borrowed since the Commonwealth was established. And I agree with him. But, at the same time, I want honorable members to observe that the ex-Treasurer proposes* an amendment of the Constitution. I hope that that will be borne in mind when I come, a little further on, to deal with my own suggestion.
– Could we not do it with the consent of the States, without an amendment of the Constitution?
– No, we could not. The extension of the Braddon section to 1931 would leave the Federal Parliament hampered in its Tariff arrangements as well as in its development for another generation.
– It would hamper the whole fiscal policy.
– Exactly. We should have to collect in Customs and Excise duties £4 for every £1 that we required, and I think that we should exhibit lamentable weakness if we extended the operation of the Braddon section for one year longer than is provided for under the Constitution. That section was intended to operate for ten years merely to give us breathing time, and an opportunity to look about us ; and surely it will be a scandalous thing if we are not in a position to bring forward some better device after we have had an opportunity to ascertain how our finances shape themselves. In spite of that provision in the Constitution, the threefourths of the Customs duties which is returned to the States is not sufficient to enable them to meet the interest
– What chance would the Commonwealth Treasurer have of buying stocks on favorable terms if the bondholders knew that he wanted them ? If they knew the Treasurer wanted to buy, they would hold out for bigger prices.
– We all know that the bond-holders would naturally hold out for the biggest price they could get, but the Treasurer would not be under any obligation to buy at any particular time.
– But would the bondholders sell?
– If you have the cash.
– Yes; and a sinking fund would provide the cash. I understand that the right honorable member for Balaclava proposes to amend the six States Constitutions in identically the same way in three different matters, and in addition to amend the Federal Constitution in three or four distinct matters.
– What does the present Treasurer propose to do?
– I have absolute confi:dence that when the present “Treasurer has had time to bring his good sense to bear, he will put forward a good proposal, but I think it would be absurd to expect him to present to us a cut-and-drie’d formula after having occupied the position of Treasurer for only about six weeks. The honorable and learned member for Angas very properly called attention to the doubts which exist as to the exact powers conferred by section 105 of the Constitution. Having regard to what has occurred since Federation, I have doubts as to whether that section could be applied at all, because some of the States have borrowed further, and some have renewed old loans since the Federation was established. It is quite certain that the section cannot be applied to the £32,000.000 which has been borrowed since Federation ; and I think I have established the fact that if we are to deal effectively with the problem of the States debts, some amendment will be required. I feel that upon a matter in which no strong party feeling need be exhibited, and in which it should be easy to arrive at a consensus of opinion among the financial statesmen who are responsible to the people of Australia, we could induce the public, even under the conditions prescribed in the Constitution, to sanction an amendment. There need be no party feeling exhibited in this matter, because it stands upon a footing utterly different from that of the fiscal question ; and surely we should be able to devise some scheme to which all parties could agree without any acrimony, and put it before the public and ask them to sanction it. There must be an amendment of the Constitution, or else Tasmania and all the other States will have to go on paying the interest on their debts as at present. Now I desire to deal with the subject of future borrowing. The right honorable member for Balaclava says that all moneys required by the States upon loan should be raised through the Commonwealth.
– I do not understand that the honorable and learned member has put forward any plan.
– I shall do so afterwards, and shall afford the right honorable gentleman an opportunity to criticise it. In clauses 3 and 6 of his proposal, the right honorable member for Balaclava proposes that the States shall not borrow in London except through the Federal Treasurer ; but that if a State so desires, it shall be at liberty to raise loans within the Commonwealth. In clause 8 he provides that any debt incurred by a State within the Commonwealth may at or before maturity be taken over by the Commonwealth Treasurer as if it were a transferred debt. The proposal, which is perfectly right, would involve an amendment of the Constitution. We ought to have only one borrower in London, and that should- be the Federal power. It is of the very essence of Federation that we should present one face to the foe and “one front to the financial world.
– Would that exclude all borrowing by the States?
– Yes, in London,. It is important that in London investors should have to deal with only one borrower.- Of course I admit that if this proposal were carried out it would diminish the importance of the States Ministries to some extent, and I am sorry to see, arising out of the discussion which took place at Hobart, too much of the spirit which is expressed in the words, “ Oh, we shall be very small potatoes if we cannot go to London, and float loans for ourselves.” We have to look at Australia from a different point of view. If it is necessary in the interests of Australia that we should present only one front to the financiers in London, let that be done; and I think the people of Australia will back us up in doing it. We should be able to show people in London that we have an unbounded power of taxation, direct and indirect ; and we should be able to show the advantage of having one great uniform Australian stock. Then, again, the fear of States Premiers that they would have to come cap in hand to the Federal Treasurer for leave to borrow for public works, is quite exaggerated. I think that was the view taken by the Premier of New South Wales particularly. He said, “ Am; I to go cap in hand to the Federal Treasurer to ask leave to borrow, and have him criticising my proposals for the construction of public “works “ ? The late Treasurer never proposed that. The right honorable gentleman had no idea in proposing to leave the matter to the Federal Treasurer that he should say whether this or that public work should be constructed. All he wanted to provide for was that he should have complete security that the Federal Treasurer would be paid any excess of interest which could not be met from the borrowing State’s share of Customs and Excise revenue. That is what he desired. In just the same way, a mortgagee, when he is asked to lend money, as a rule does not ask what the money is to be spent for, .but sees that he has good security for his loan. So it would be with the Federal Treasurer. And what he would say would be, “ So long as I can see my way to a reasonable certainty that I shall get back any deficiency of interest from the State, of course I shall borrow for you.” The right honorable member for Balaclava tried hard and manfully to secure the assent of the six Premiers to this proposal. Apparently he seemed to think that he could not go on with his proposal for further borrowing, unless he had the assent of the six Premiers. But I feel that if he waits for the assent of the six, he will never get it. I think that it will be the duty of the Federal Treasurer, if he can secure the assent even of four out of the six, to go on with the scheme. I fully agree that it is very advisable that the Federal Treasurer should consult the wishes of the States Ministers. I fully agree that it is the duty of the Federal Treasurer, if he can, to get them all to assent to any policy he proposes with regard to finance ; but at the same time, there is a certain limit. The Constitution gives the Federal Parliament, and the Federal Ministry, certain powers and responsibilities, and I feel sure that if the people of Australia are asked to. sanction the giving of certain powers to the Federal Treasurer which will result in benefit, in the reduction of taxation, to the whole of the States of Australia, they will give that power in spite of any State Ministry. The late Federal Treasurer’s proposal No. 9, is as to a sinking fund to which he refers in this wa -
Upon all loans raised or renewed there shall be provided a sinking fund of £ per cent. Provided, that where a sinking fund already exists ia a State, the total, whether arising therefrom or in respect of loans or renewals, shall not be required to exceed £ per cent, per annum.
I may say that that seems very sound. I think that the amplest powers should also be given to buy the stock of a State or of the Commonwealth at any time when the market is favorable. It is apparent, from what I have said, that there must be, if the scheme of the late Treasurer is to be carried into effect, several formidable constitutional changes. There will further be no reduction of existing debts, and there will be a present made to existing bondholders. But if we are to change the Constitution, let us have a chance which will cover the whole ground. What is required is a radical change of section i.05, giving the Federal Treasurer the power of bargaining with individual bondholders. That is the essence of the whole change that is required. What is wanted is not a swooping down of the Federal Treasurer to take over all the debts of the States, but power to bargain with individual bond-holders.
– Is that the only amendment of section 105 which the honorable and learned gentleman would suggest?.
– That is the main part of it.
– Does the honorable and learned gentleman propose the taking over of a part of the debts, or of all the loans of the States?
– What I propose would mean that the Treasurer would have the power to select and take over such debts or such portions of debts as he thought advisable, when a good opportunity offered to do so.
– I understand that; but is he to take over a proportionate amount of the debts of each State, or to take over the whole of the debts?
– I do not at all agree that there is any need for equality in taking over the debts of the States. At the Convention there was much jealousy between the States . which was quite unfounded. It was held that, as one State had borrowed more than another, it would be unfair to take over the debts of a State that had borrowed to the extent of £81 per head of its population, and also to take over the whole of the debts of a State which had borrowed, say, only to the extent of £47 per head of its population. There are these differences in the Commonwealth. Victoria has borrowed £47 per head of its population, whilst Queensland has borrowed £81 per head. It was thought, therefore, after long discussion, that there must be some means provided to secure equality .in taking over the debts of the States, whether the whole of the debts were to be taken over, or only a rateable proportion of them. However, these things will not work. My feeling is that we shall not find a Federal Treasurer, in .the face of the Commonwealth Parliament, ever venturing to do any injustice to any of the States. He will be watched closely as to what he is doing, and will feel in duty bound not to do anything that will not be best for all the States.
– The honorable and learned gentleman has just asserted that he will., unless he is watched.
– It must be understood that there would be nothing to be gained by any inequitable arrangement of the kind, because the State concerned would still have to find the interest. The only point is that in one year the Treasurer might take over more of her debts from Qeensland than he would take from Tasmania. In this way Queensland might secure a greater reduction of interest payment than Tasmania. That is all ; and there would be nO putting of an additional burden upon any State. It would simply mean less benefit to the State which has least taken over.
– The present constitutional provision will not work anyhow.
– The proposal which I submitted through the medium of the Sydney Daily Telegraph and the Melbourne
Age was stated in this way : -
That an amendment of the Federal Constitution should be submitted to the Federal Parliament, and the Federated States, in the manner prescribed in section 12$ of the Constitution. Substantially it. should provide for the repeal of section 105 and the substitution of a new section. The new section should enable the Federal Treasurer from time to time to give any holder of State debentures Australian stock in exchange.
I think the Treasurer will agree that a uniform Australian stock will be the proper thing. I go on to say -
This power should apply to all State debts, whether existing on the ist January, 1901, or not. The Federal Treasurer should be empowered to borrow money for a State at the request of the State Treasurer, and to keep the amount borrowed in the same way as a debt taken over for the State. The latter part of the existing section should be re-enacted, making it incumbent on the States to indemnify the Commonwealth in respect of the debts taken over, and enabling the Commonwealth to retain the interest from any surplus revenue payable to the respective States.
– There would not be likely to be any.
– In some States there would be.
– We might say that there are none now, except in the case of Western Australia, perhaps.
– If you reduced the interest, there would be a surplus. At all events, it would be practically re-enacting the last part of section 105. I say further-
Then should follow such provisions as may, on advice, be found advisable for securing payment to the Commonwealth of any deficiency in the interest, or for stopping the mouths of critics of our finances, or for making the Australian stock safe and attractive.
I can see, from what the right honorable member for Balaclava said, that he has had skilled advice from London as to what precautions are to be taken in regard to Australian stock, and I should lean a good deal upon that advice. He expects a good deal from confining the borrowing to the Federal Government. I then proceed -
Either enact that the revenue of every State shall be deemed to be permanently and irrevocably appropriated to the payment of any deficiencies ; or enact that in case of failure to pay a deficiency, the Federal Treasurer may put in a receiver of the gross railway revenue until his claim be satisfied. Also provide that from the time that any debt is taken over for a State, or that a State Treasurer requests the Federal Treasurer to borrow for him, regular payments, at a rate prescribed, be made into a sinking fund to be kept under proper control, and that the State revenue be irrevocably appropriated for the purpose; and that the States shall have no power thereafter to borrow outside Australia except through the Federal Treasurer.
– That is pretty stiff.
– Yes ; but it is worth while being stiff, if you can thereby make our stock higher in price on the London market.
– It would be difficult to enforce.
– I refer only to a change in the Constitution. There would be no enforcing, but merely a carrying out of what the Constitution provides.
– To put in a receiver would be stiff.
– I agree that the power to put in a receiver is beyond anything that we have known, and it is only because the right honorable member for Balaclava informed the assembled Premiers that he was advised that the mere power would be of great advantage to Australian stock, and would improve our . credit, that I should support it.
– The existence of the power would render unnecessary its exercise.
– The existence of the power is the important thing; the exercise of it is very unlikely. As in the story of the coon and the colonel, when the coon in the tree, knowing the colonel to be a dead shot, said, “Don’t shoot; I’ll come down “ ; so in this case, if there were power to put in a receiver, a State would see its way clear to make up any deficiency. I have only said that you should have such provision as might be found from expert advice to be essential, and useful, for the purpose of making your Australian stock valuable. The Braddon provision cannot be continued, though, I think, that the exMinister of Home Affairs was the only one present at the Conference last February who saw clearly the position as I have been putting it. “ He is reported, at page 52 of the report of the Conference,* to have said -
If there is in future, after the Braddon clause expires, danger of great extravagance in Commonwealth expenditure, then it is well, for the States that they should be secure; and the best way to be secure is to put certain present State liabilities upon the Commonwealth. In the meantime, there may be this security given to the States, which I think they are entitled to ask for, that during the period whilst the liability is growing, tut before sufficient debts have been transferred for interest to absorb the surplus revenue, there should be an extension of the Braddon clause- I believe it to be a reasonable proposal ; but, at the same time, I am of opinion that the Federal Parliament might take a different view. The most solid vote in that Parliament is the most strongly opposed to in any way curtailing the powers of the Commonwealth.
-There is a million and a half short at the present time.
– I think a million and a quarter.
– More than that this year.
– That deficiency hardly represents the true position, because it is not a lump deficiency when you come to the bookkeeping provisions.
– The book-keeping provisions do not expire in October, 1906 ;’ but the Federal Parliament may alter.them from that date, and the Braddon provision will be in the same position in the year 19 11. My proposal is to leave it as it stands until the financial circumstances of the States more nearly approximate. It would not be fair to Western Australia that £428,397 of her revenue should be given to the more needy States; but if the distribution among the States were on a population basis, Western Australia would get during 1905-6, ,£428,397 less than she would get under the present system.
– How would Tasmania come out?
– Tasmania, South Australia, and Queensland, under a per capita system of distribution, would get more than they get now.
– That is because there are so many abstainers from beer and tobacco in Tasmania.
– It is owing to the intoxication of the Western Australians that that State has so good a revenue. At Kalgoorlie I have seen men four-deep at a bar. It is that kind of thing which swells the revenue of which the Treasurer boasts so much.
Mr.- Carpenter. - They are consuming less in Western Australia now.
– In the course of time the conditions of the States will become more alike. The Hon. John Henry, who was one of the most thoughtful members of the Convention, and whose words on finance I value very much, does not, perhaps because he is not a lawyer, look at the constitutional points involved as some of us would, but his mind has been running in the same way. He says -
It will always be in the interests of the States to do their borrowing in London through the Federal Treasurer, and it is obviously desirable, in the interests of all Australia, that there should be no conflict in so important a matter between State and Federal Treasurers. There is every probability (taking Canada as an example) that our Federal bonds would rank higher in London than State bonds. To secure an advantage for the people of Australia in this and other matters will be the aim of Federal and State Treasurers alike. As to when a conversion of our State bonds into Federal bonds can be effected, and how to our advantage, is a question for future settlement under the advice of experts. The holders of our- State bonds will not part, unless to their advantage, and the difficulty is, how are we to reduce our annual interest charge by conversion and give the holders of our bonds an inducement to part ?
That is exactly the problem I have tried to meet. Many people would be very glad to exchange State bonds for Federal bonds if they could only see that the value in the market of the Commonwealth bonds was something greater than that of the bonds of the State - if they could see that the holder of Commonwealth bonds had a certain advantage, and that, although we reduced the interest, they could get £101 for a bond which otherwise would be worth only £100. And it must be remembered that we should not pay the extra ,£1, but that would be paid by the buyer.
– Has the honorable and learned member given any attention to the Canadian fixed-payment system?
– Yes, but I do not wish to confuse that with the matter I am now considering. I may say that an arrangement of that sort is, I think, possible consistent!)’ with the position taken up by the right honorable member for Balaclava, as well as wilh “my position..
– The difficulty is to arrive at the sum to be fixed.
– I do not wish, as I say, to mix up my proposal with a very wide question, which would lead to a great deal of extra controversy, and which may be discussed independently. We have a most difficult financial position to face. It is quite certain that with the present taxation the one-fourth of the Customs and Excise revenue is not sufficient for the Commonwealth, if we have regard to expenditure which is contemplated. We have, problematically perhaps, a transcontinental railway to provide for, in addition to old-age pensions, and penny postage. We certainly have to provide for a Federal Capital, and for the undergrounding of telegraph and telephone wires, and new Departments and functions to take over, including quarantine, lighthouses, meteorological matters, and: banking. Then we have to provide for a sugar bonus, and bonuses for manufactures, and for a. High Commissioner, and we may perhaps have to undertake the locking of the Darling. We have also to provide torpedoes and torpedo destroyers, in addition to the £200,000 for the naval subsidy. We have to pay £50,000 or £60,000 a year for weather telegrams, and there is an increasing Public Service expenditure. At the time of the transition, the Public Service expenditure in the Federal Departments was only £3,733,218, whereas now it is £4,606,273.
– Against that there is an increased revenue in the Post and Telegraph Department.
– I am glad to hear that, but, at the same time, we cannot expect to get increased revenue without increased expenditure.For my own part, I do not grumble at giving people an ample means of living if they work for us ; the King’s service ought to be honorable, and, within reasonable limits, a sufficiency ought to be given to every person employed. I am speaking now only as to the facts.
– The increase of expenditure, so far as the Post and Telegraph Department is concerned, is not a net increase.
– I am very glad to hear it. Debts are becoming payable in the different States. For instance, next year a debt of . £2,183,000 will fall due in Victoria; in 1907, debts of over £5,000,000 will fall due in the States; while in 1908 over £7,000,000 of debts are payable. I know perfectly well that the States, which have to meet debts at fixed dates will be subject to a “squeeze,” such as Victoria experienced two or three years ago, when debts belonging to that State were converted. Victoria had to carry out the work of conversion in the most unfavorable state of the marketever known; she had to borrow £5,000,000 in the process, and add more than £500,000 to her debt. That is what we cannot stand, and ought not to stand. We ought to set to work at the earliest possible stage to see if we cannot reduce the burden upon our people. I am very glad to say that there is a fact which will give a great deal of confidence in our finances. Some financiers in London, who are by no means in sympathy with present-day views, have been amazed to find that the only party which appears to be increasing in Australia - the Labour Party - is the party which is against borrowing. That is a party which favours sound finance; and but for its aid there would have been a stupid loan floated two years ago in London.
– The Labour Party in New South Wales supported Mr. O’Sullivan for allitwas worth.
– I am now speaking of the Federal Labour Party. The fact I have cited is far-reaching and important, and it has also been observed that since the party I refer to came into power the borrowing on the part of Australia has decreased.
– The Labour Party will have to borrow when they begin to nationalize industries - the tobacco industry, for instance.
– In conclusion I may say that I have never known the present Treasurer fail to master a problem to which he applied his mind. I do not wish to flatter the right honorable gentleman in his presence, but I think that all he has to do is to apply his mind to this problem as he has applied it to novel and grave problems in Western Australia. I am quite sure he will come to a good, practical conclusion, and I hope sincerely he will be able to associate his name permanently with a great scheme for the conversion of Australian debts.
– It is a great relief to honorable members on this side to at last see the conspiracy of silence broken in regard to all matters connected with Government business. We know that the honorable and learned member who has just resumed his seat is not one who can be too easily kept under the Government whip or under Government control. That may, perhaps, be the reason that on this occasion the honorable and learned member has not hesitated to break the general rule and’ address himself to the House on questions connected with the Budget. It is quite appropriate that the honorable and learned member should have specialized from the Government benches on the question of debts; for we on this side, at any rate, hold that the party on that side of the House is bankrupt in almost everything except the possession of the Treasury benches, and we can only regret that those benches are of such importance in our dealings in this Chamber. The honorable and learned member for Northern Melbourne has referred to “ the problem of reducing our interest,” but I think he would have to rack his brains very considerably if he had to solve the problem of how further to reduce the interest which this House appears to take at present in public affairs.
– While the honorable member for Wentworth is speaking it is difficult to maintain interest.
– I was not indulging in any little badinage; I was referring to the most learned address of the honorable and learned member for Northern Melbourne. It certainly does seem strange that in the middle of such a disquisition, containing figures so important, it should have been necessary to wake the Government up to their duty to keep a House. The question to which I propose to devote myself this evening is a question which the Government, to judge from the Treasurer’s Budget speech, have evidently not very seriously considered. I refer to the defence question. It will be clear to everybody who has read the Budget speech that the Government have no defence policy. If that fact had not been made sufficiently apparent by the Treasurer’s deliverance, I should merely have to refer honorable members to a memorandum which was circulated to-day in regard to the Defence Department. That memorandum, I believe, is intended to carryout the tradition in this Chamber, that a report of the doings of the Department should be circulated each year coincidently with the delivery of the Budget.
– Not at all; it is merely intended to explain the Estimates.
– Is it not designed to afford us any information in reference to what is happening in the Department?
– The information which it contains is infinitely more scanty than that which was embodied in the last report. The Committee wish to know something of the workings of the Council of Defence.
– That matter is not dealt with by the paper at all.
– No; the paper does not give us the information to which we are entitled. We have had a Council of Defence in existence since January last.
– If the honorable member wishes to gain information upon that matter, why does he not ask questions?
– Because the VicePresident of the Executive Council was specially selected for his present office on account of his ability to dodge giving answers to questions, and he accomplishes his task very well. Ministers have been specially placed upon, the Council of Defence in order that they may obtain a knowledge of the policy which that body deems it necessary for Australia to adopt in regard to defence matters, and yet, Ministers will not’ tell us anything in reference to the defence of the Commonwealth. If they will not, or cannot, tell us, surely the Committee, in considering the Estimates, are entitled to some report setting forth the proceedings of the Council of Defence, its recommendations, and what has occurred in the Department since the last Estimates were passed. The scantiness of the report submitted might lead one to suppose that the Government had no intention of circulating, it until they were asked to do so by the honorable and learned member for Corinella. I am informed, however, that the report was in print when that request was made. It is distinctly a waste ‘of money to print a report of this character, because it is merely a resume - and a poor one, too - of the Estimates which are under consideration.
– It contains a lot of information, and its compilation involved a deal of trouble.
– I could gather all the in- formation that it contains merely by looking through the Estimates. The Treasurer, at odd moments during the deliverance of his Budget - because his statements were never connected - spoke of the Imperial Navy and of our contribution thereto. But even in regard to that matter, which has been a hobby with the right honorable gentleman, we look in vain for that definiteness which we have a right to expect in a Budget pronouncement. He said -
There can, I think, be no doubt that a much larger expenditure will be necessary in order to place our fortifications on an up-to-date footing, as also with regard to our naval defence. At the present time the people of Australia pay only one-fifteenth per head of the amount paid by the mother country for their naval defence. That being so, the matter only requires to be put before them in a way acceptable to them, when, I feel sure, it will receive the attention it deserves.
For the moment, it looked as if the right honorable gentleman’s great Imperial soul was about to lift him beyond all petty considerations of place or dependency upon labour support. It looked as if he were about to throw off all restraint, and roundly chide his masters in the Corner upon their parochial view of an Australian Navy for Australian Defence. However, those who expected such a relapse from the Treasurer were doomed to disappointment, for the very next day he went back upon the view which he had almost definitely expressed in his Budget speech. On the occasion to which I refer, the deputy leader of the Opposition was speaking, as follows : -
The Treasurer told us last night that he was strongly in favour of Imperial defence, and that we ought to pay more for our defences.
The report proceeds -
– I did not say anything about the Imperial Navy. I am not taking back anything I said, but all that I asserted was, that we should have to spend more on our own defences. I did not say in what way that expenditure should be made.
The following dialogue then occurred : -
– Am I to understand-
– The honorable member is to understand only what I said.
– As the right honorable gentleman refuses to vouchsafe any explanation, I must proceed in my own way. I amindebted to him for his courtesy in declining to assist me to understand what he had in mind.
– It is all in Hansard.
– But Hansard is not available to me at this moment. The right honorable gentleman, at all events, told us distinctly last night that we require to spend more for the purposes of Imperial defence.
– For the purposes of defence.
– I think the right honorable gentleman used the word “ Imperial.”
– I refer the honorable member to Hansard.
And yet I have just read in Hansard the right fhonorable gentleman’s own words, in which he distinctly mentions what ought to be done in regard to our contribution to the Imperial Navy ! I regret two things : first, that, in regard to Imperial defence, he should have gone back upon his statement ‘ at such brief notice, and, secondly, that he should have so singularly short a memory of his own words. At any rate, the Treasurer seems to recognise the necessity of an Imperial Navy, even though he obviously lacks the public spirit or the pluck to advocate it for two days together, and so to dare members of the Labour Party in the corner. What the right honorable gentleman seems to lack, however, is an appreciation of what an “ Imperial Navy “ means, and the immense difficulties in the way of creating one. He seems to think that Australia has merely to pay a few million pounds, and the thing is done. During the course of the Treasurer’s speech, some honorable member interjected -
We ought not to pay more for naval defence until we have a voice in deciding in questions of war and peace.
I do notagree with that interjection, but only wish to suggest that the Treasurer’s reply was significant. He said -
I have often said that if we wish to have convtrol we must pay, and we have never yet offered to pay our due proportion. I have not the slightest doubt for my own part, although I was sneered. at some time ago for saying so, that those who are willing to pay will always find that they will . be allowed a good say.
– What did he mean by a “ good say “ ?
– I presume that he meant a “ good say “ in the management of the navy.
– But we do not desire that.
– The Treasurer seems to think that the whole question of contribution without representation would be solved the moment we paid, because by some miraculous intermediary we should be granted that control to which we would most certainly be entitled - that is, if we paid - not, of course, what we pay now, or three or four times that amount, but a large subsidy per capita or according to the protection we receive.
– They would give us representation in the House of Commons, I suppose.
– I hope nothing of the sort would be necessary, as” I shall explain presently. The Treasurer seemed to recognise the dependence which each section of the Empire must necessarily place in every other section when a national crisis came. He recognised, as all thinking men must recognise, that help could not come from member to member of our family unless wecontrolled the seas in tme of war, that, the ocean highways are the Empire’s linesof communication, and that if those lines be broken no help could come from section to section of the Empire, and that the enemycould, therefore, concentrate at its leisure on each point to be attacked. No doubt the Treasurer recognises, as all honorable members who consider this subject must recognise, that the length of our coastline and the sparseness of our population, which make it impossible to easily concentrate our land forces on threatened points of attack, make it trebly imperative that Australia’s battles must be fought out on the sea. I have no doubt that the right honorable gentleman also recognised that the need of each member of our family of nations is identical, and that the effort of all must be put forward unitedly. On this point Captain M’ahan’ says -
To have the greater force and then to divide it, so. that the enemy, can attack either ot both fractions with, decisively superior numbers, is the acme of military stupidity ;. nor is it the less stupid because in practice it has been frequently done.
– Where is this enemy to come from ?
– That is the opinion of a distinguished countryman of the honorable’, member.
– We have no enemies; we are friendly with the whole world.
– What is his country?
– The honorable “member for Darwin has been a citizen of many States in Australia, and I think of many States in the United States; but I am referring to the country of his birth.
– But he is a Canadian.
– I cannot believe that. That is the opinion - and it is obviously founded on- the merest common-sense - of the greatest naval authority, whom, I suppose, we have ever had. Recognising, however, all these points, and being as ardently desirous as any honorable member that Australia should soon realize her duties to the Imperial Navy, I cannot see that the position is quite as simple as the Trea- surer would have us believe. He tells us to pay our share, and that everything will be all right. The question is, will it be all right? Let us suppose that Australia contributed her fair proportion, and that ‘ that doughty Imperialist, ‘ Sir Henry Campbell Bannerman, who is very anxious to reduce the naval vote, were in power in England at that particular time. What would be easier than for that statesman to reduce the burden of the English tax-payer by an amount corresponding to that which we had contributed? Consequently, what we had contributed would not be an increase to Imperial protection, but’ would only be a lightening of the burdens of the British tax-payer. At the present time - England undertakes sole responsibility for the naval defence of the Empire, although that certainly is not creditable to her outlying dependencies. Every party in England, however, now recognises this responsibility, although they have different ways of honouring it. But let contributions once begin to come in before any proper basis of contribution or allotment of responsibility is decided, and then what was previously the responsibility of one, infinitely the stronger section, becomes the responsibility, not of all, for there is no responsible head, but of none. Would this failure to allot responsibility conduce to the general security of the Empire? Most obviously not. Then there is the difficulty of contribution without representation - a difficulty that is mainly serious for the way the case may be misrepresented. Persons who take this line of argument point, to the loss of the American Colonies by England, and say it was due to the same principle of contribution without representation. These gentlemen are begging the question, for what lost the American Colonies to Great Britain was not voluntary contribution without representation, but enforced contribution without representation. What Australia is asked to do is to voluntarily contribute ; she is not compelled to contribute. The principle of compulsion has never been authoritatively even hinted at. But this difficulty will no doubt become a serious one when our contribution is in any way proportionate to the services rendered to us. This question of constituting the Imperial Navy on a true Imperial and representative basis is a problem which must be tackled in the near future, not only by the Imperial authorities, but by the responsible heads of all sections of the British Empire. Then, again, comes the point of how we are to arrive at the best representation of contributors to the Imperial Navy. The problem to the new Imperial authority would be not “ How is the money contributed to be used?” - for that would be entirely for the professional executive’ to decide - but “ When is this money to be used ? “ If we are to have representation on the Empire’s councils as to when the money is to be used, it is obvious that the fairest way in which this could be done, if it we’re possible to be done, would be for us to have representation on its Foreign Councils, that is, the councils that would decide when war should be declared and the Navy brought into requisition. Well, to show how almost impossible of attainment this is at first sight, I have only to quote three or four figures. Say, for the sake of argument, that Great Britain was contributing her last year’s amount - £36,000,000 - and that Australia was contributing what the Treasurer, I understand,, thinks it should contribute, ,£3, 000,000.
– I never said anything of that sort.
– Does the Treasurer say he has never said that it should be ^£3, 000, 000 ?
– I have never named any sum.
– I at once withdraw the statement.
– The honorable member should not have made the statement when there was no foundation for it.
– I think the right honorable gentleman has talked time and again of what we should contribute. I was not eager to do any injustice to him, for I have sufficient of his misdeeds to talk about without trying to attribute to him things which he has not done.
– That would be very much better than inventing.
– The Treasurer has hinted that I have been inventing for a purpose. That insinuation is unworthy of the high office which the Minister occupies. When the deputy leader of the Opposition was speaking on this matter the other evening the right honorable gentleman did something which amounted to a misleading of the Committee, whether intentional or not. I have quoted from the right honorable gentleman, “and have shown that he has a memory which is singularly deficient ; but, however deficient it! may be, I think that at least he might pay the courtesy to honorable members to suppose that they, at any rate, are honest and open in their methods of dealing with these subjects. I did not, however, wish for a moment to imply that he had stated any definite amount. I had a recollection that some such amount had been named by persons who are anxious that in time, not immediately, Australia should realize her Imperial responsibility to that extent.
– The honorable member knows that that is simply a calculation based upon population, which no one maintains is reliable.
– I am only putting a case from that particular point for the purposes of argument. I am at one with some few honorable members on the other side of the House to have Australia recognise her responsibility.
– The Treasurer has referred to it time and again.
– In any case, I do not wish to bandy words with the Treasurer on this point, but I shall take the figures as I was giving them when his most uncalled for interjection was made.
– The Treasurer would not have denied it if he had not begun to “ smoodge “ to the Labour corner. That is the plain English of it !
– I confess there is a great deal in what the honorable member says.
– The honorable member is always very polite.
– I beg to call attention to the state of the Committee.
Tb. CHAIRMAN. - Have I permission to ring *ihe bells?
– I think that Mr. Speaker should be called in.
Mr. SPEAKER, having taken the Chair. [Bells rung; quorum formed.’]
– At the time when the honorable member for Melbourne Ports seemed to think that it was necessary to waste some five minutes-
– Order ! The honorable member is not in order in saying that.
– I can only say this, that I, at any rate, had no intention to waste time by having Mr. Speaker called in.
– The honorable member will confine his attention to the subject before the Committee. The fact that Mr. Speaker was called in is not the question before the Chair.
– I was pointing out, when this lamentable break in the proceedings took place, the almost impossibility of any arrangement for any representation of contributors to the Imperial Navy on a Foreign Council of the Empire. Let us presume for the moment - only for the sake of argument - that Great Britain was contributing some £36,000,000 per annum to the Imperial naval war chest. Let us suppose that Australia and Canada were each contributing some £3,000,000; South Africa, £1,000,000 ; and Newfoundland, £250,000. It is obvious that Newfoundland could not have less than one member ; and if we take it that Newfoundland had one, and that the Commonwealth and other sections had their proportionate representation, a very short calculation will show that that Foreign Committee would consist of no less than 173 members. It will be obvious to every honorable member, and to every person who considers the subject, that a Committee of 1.73 members would not be a workable body. Such a Committee would necessarily have to deal with most intricate subjects, which would unquestionably be better dealt with under one executive head. This is only another of the difficulties in the way of conceding representation to us in respect of our contribution. However, it is of no use beating the air at the present time with this subject. We are all anxious to see the question definitely faced. We are all anxious to see the naval defence of Australia put on a proper footing. The first step must be to hold am Imperial Conference, specially to consider this Imperial question; and I do regret that the Treasurer, instead of saying a thing one day which, in deference to the clamour of honorable members in the Ministerial corner, he had next day to withdraw, did not definitely commit his Government to the almost non-committal course of seeking a conference on this great question. While the Treasurer seemed to recognise the Imperial necessity for an Imperial Navy, he did not apparently realize the importance of whatany ordinary student of these matters regards as an obvious complementary adjunct of a navy, that is; coastal defence. The Treasurer certainly spoke, in his Budget speech, a great deal about coastal defence ; but we cannot find, in the Estimates, a single benefit that this Government proposes to confer on> an arm which they themselves admit is grievously undermanned, and grievously inadequate for the important duties it may be called upon to execute. Captain Mahan says of coast defence that -
Proper coast defence, the true and necessary “Complement of an efficient navy, releases the latter for its proper work - offensive, upon the open seas, or off the enemy’s shores.
In that passage Mahan lays it clearly down that any country which regards its navy as its first line of defence - as this island continent of ours must do- must regard its coastal defence as complementary to its first line. Without coast defence, the navy is not free to devote itself to its proper work.
– Does the honorable member think that he could get out a scheme of coast defence in a few days, or in a week or two?
– I think I could do more than indulge in a little talk, which costs nothing, in a few days or weeks. I think I shall be able to show my honorable friend one thing that he might have done, without committing this Commonwealth to an expenditure of more than a few thousand pounds, and which would mean all the difference between having our principal seaport and naval base made absolutely secure, and leaving it open to raid by any torpedoboat. Now, it is quite possible that some honorable members may confuse the idea of carrying on a defensive war by taking the offensive, with the idea that is so hateful to all Anglo-Saxon peoples - of declaring war aggressively. This confusion of ideas is again admirably explained by the same naval authority whom I have previously quoted- Speaking of the .United States, Captain Mahan says -
The view that the United States should plan its navy - in numbers and in sizes of ships - for defence only,” rests upon a confusion of ideas - a political idea and a military idea - under the one term of “ defence.” Politically, it has always been assumed in the United States- and also in Australia, of course - and very properly, -that our policy should never be wantonly aggressive ; that we should never seek our own advantage, however evident, by an unjust pressure upon another nation, much less by open war. This, it will be seen, is a political idea, one which serves for the guidance of the people and Of the statesmen of the country in determining - not how war is to be carried on, which is a military question, but - under what circumstances war is permissible, or unjust.
That, I think, clearly shows the difference between waging war offensively for, defensive purposes, and declaring war, aggressively and unjustly. Having then decided that coastal defences are a necessary complement of a navy, what are we to understand by coastal defence? We all know that it is not proposed to fortify every harbor or river mouth. Captain Mallan indicates what is required in the way of coastal defence, as follows: -
If the great coast cities are satisfied of their safety, a Government will be able to resist the unreasonable clamour - for such it is - of sma towns and villages, which are protected by their own insignificance.
In the general question of preparation for naval war, therefore, the important centres and internal waterways of commerce must receive local protection, where they are exposed to attack from the sea; the rest must trust, and can in such safely trust, to the fleet, upon which, as the offensive arm, all other expenditure for military maritime efficiency should be made.
That clearly sets forth the coastal defence policy that should govern all peoples who depend for their first line of defence upon naval action. What are the important centres in the Commonwealth, which, according to the principles laid down by Captain
Mahan, should be protected? Our important centres of trade are Sydney, Newcastle, and Melbourne - though not in that order. Strategically, Sydney, as the naval base of the British fleet in these waters, is the most important port in the Commonwealth. Other important strategical points are Newcastle, because of its coal, and Thursday Island and King George’s Sound, because they are coaling stations which must be kept up to meet the requirements of the Imperial fleet in these waters. Our most important port, both from a trade and a military point of view, is Sydney. Can any one say that the centres I have mentioned are reasonably defended? We know that the coastal defences of a country must vary according to the reliance it places in its navy for its protection. With our Empire everything depends upon the navy. If that arm of our defence collapsed all would .be lost. Our coastal defences are subsidiary to the navy, and must be made efficient in order to leave the navy free to do its work. If this be done with absolute efficiency the enemy’s’ fleets will be blocked up in their own harbors, and only single ships, or, .at most, very small squadrons will be able to roam the seas, and that only at great risk to themselves. Before the command of the sea can be gained and the enemy’s fleets can be penned up in their own harbors, ‘hostile vessels will no doubt roam at large - I do not think they will roam long - and their object will be, whilst avoiding the British squadrons, to do as much damage as thev can to our commerce, and our strategical centres. If an enemy’s ship, or small squadron, saw a chance of destroying our naval base in these waters it would no doubt be prepared to take considerable risks to carry out its object. On this point, I should like to quote the authority of the British Empire on garrison defence, namely, Garrison Artillery Training for 1Q04, volume II. This authority lays it down that the class of vessels likely to be used in such raids as I have mentioned are -
Torpedo boats, and torpedo-boat destroyers, perhaps accompanied by a larger vessel for the purpose of breaking through obstructions at the entrances to harbors.
We have made no provision for presenting such obstructions, and therefore the larger vessel mentioned would not be required. Hence, we may expect that any attack upon us would probably be made by means of torpedo boats which’ would be carried. here on the decks of cruisers. As for the torpedo-boat destroyers, they are not likely to pay a visit to these waters, unless they come from one of the naval bases which foreign powers are now establishing in the’ South Pacific. The same authority points’ but that the attack would probably be made “ by day or night, or in thick and dirty weather. “ In order to show that this danger from raid is real, I need only remind honorable members that within the last few days it has been reported in the press that one naval power - Germany - is’ contemplating the building of large commerce destroyers of 1.5,000 tons and upwards. These ships can only be destined for use on distant stations, and as Germany is devoting her attention to the development of her interests in the South Pacific, it is fair to assume that these commerce destroyers are designed for service in these waters. Each of these ships would carry a torpedo boat of the type to which’ I have referred, and would be able to make a raid such as has been indicated. Now, what defence should be provided against such an attack? I propose to again quote from Garrison Artillery Training, in which it is stated -
As briefly indicated in section II.,’ the form of attack to which the ports of the British Empire are most liable is raid by torpedo boats, with the object of destroying shipping or docks within the defences. The object of such an attack may be attained by one boat getting through the defences unharmed, though the remainder may be sunk in the attempt; and the essence of success lies iri surprise. It is therefore probable that a torpedo boat attack would be made either at night, just at break of day, or in thick weather; and it is quite possible that it might take place even before the formal declaration of war. Under these circumstances it will be evident that the defence must be so organized that surprise shall be impossible, and that when an attack is made the probability of any boat getting through unharmed shall be a minimum.
I may mention here that the necessity for preventing surprises affords the explanation of the desire of the late General Officer Commanding that we should have at least two reliefs for our quick-firing armament -
Since the conditions which obtain at every port are more or less different, a set scheme cannot be laid down ; but the general principles can be enunciated, and these must be applied locally to the preparation of schemes for defence. The defences provided against torpedo boat attacks are generally as follow : - Electric lights, quickfiring guns, and, in some cases, booms and mines. Electric lights are usually arranged so as to illuminate as brightly as possible the whole water area for a distance of at least 1,000 yards from the narrowest part of the entrance to the harbor, r from the outer edge of the boom if one exists-
We have made no preparations for the construction of a boom at any of our ports -
In advance of this illuminated area it is, of ten possible to place other lights to throw a beam across the entrance, so that any boats approaching the harbor must be seen as they pass through. These are termed sentry beams-
We halve no preparation for sentry beams so far as Sydney is concerned - and are placed sufficiently far in advance of the illuminated area to allow of due warning being sent from them to the inner defences before the boats can pass over the intervening distance.
The main gun defence is concentrated on the illuminated area, and it is here that the torpedo boats are to be sunk or disabled j the sentry beams are not fighting lights, but merely for purposes of warning, and even if guns are mounted in such positions that they can fire on boats passing through them, too much dependence must not be placed on their fire for the purposes of defence.
With respect to armaments, this authority lays down the following : -
Armaments. - The r2-pr. Q.F. is the gun mostly used for defence against torpedo boat attack; 4’7-inch Q-F.’s will be found in some places mounted for this purpose, and where this is the case they will be treated, though not classed, as Light Q.F.’s.
Then I recommend this passage to the VicePresident of the Executive Council, as representing the Minister of Defence - 6-pr. Q.F.’s also remain in many places, but they cannot be relied upon to stop a torpedo boat.
Yet these are the only guns that we have in the port of Sydney in :the way of anti-torpedo boat armament ! I have asked the Minister whether the light, quick- firing armament in Sydney is efficient for its purpose, and he has not seen fit “in the public interest” to answer the question. Now this authority to which I refer definitely lays it down’ that 6-pr. quick-firing guns cannot be relied upon to stop torpedo boats, and this authority further lays it down that raids will in all probability be undertaken by torpedo boats. Therefore I say that, on the best authority in the British Empire, -our principal naval base is at the mercy of the first raider who pays it a visit. Of course, other guns besides light, quick-firing guns are necessary for the protection of a place of the importance of Sydney. If we had only light quick-firing guns, and no others, raiding ships could afford to take what peppering, they might get from these light guns, and come in in spite of them. If we had only artillery of different calibres and no submarine mine fields, a fairly powerful ship could still run the gauntlet of our batteries, and, getting inside, do what damage she afterwards could. Consequently, we require a definite system of mine fields, light Q.F. guns to protect them, which would also be anti-torpedo boat guns, and heavier guns to keep ships at a respectful distance. I have already shown the Committee that at Sydney, at any rate, we have no quickfiring guns of the type laid down by the best authority extant as essential for the purposes of defence.
– What have we got in Sydney ?
– I do not wish to waste the time of this Committee, and I am therefore trying to curtail my remarks as much as possible. I may say that we have a fair number of guns of heavier- kind, but we have only five guns of comparatively up-to-date type. We have a considerable number of guns on hydro-pneumatic mountings, which ‘are still hard-hitting guns, though there are some who do not think them up-to-date. Still they are hardhitting guns, and I am not complaining of them. The guns which we require at Sydney at once, and without waiting for another year, or to enable the Ministry to consider the serious expenditure necessary to put our coastal defences generally on a sound footing are 12-pr. quickfiring guns. These guns can be landed in Australia, including the cost of mountings, at ,£1,200 a.-piece, so that the defence of Sydney could be put in something like reasonable order, so far as armament is concerned, for a very small outlay, which, however, the present Ministry do not seem to be prepared to make.
– What would the honorable member call a small outlay?
– Six or eight of these guns might be secured, but probably ten would be better, and with an expenditure of from £8,000 to £10,000 on this armament, the defence of Sydney might be made fairly secure; and though it would not be as it should be, it would not ‘be the scandal which it is at the present moment.
– Would not the honorable member protect any other port than Sydney ?
– I am dealing with Sydney only in order to show, by the absolute unpreparedness of one city, the condition of all the others, as there is not one other in a better position than Sydney.
– Money was voted for the defence of Hobart last year, and the late Government would not spend it.
– I have shown the position of Sydney so far as guns are concerned, but in the matter of men our position is even more scandalously unprepared. The men we have are good. The results of their firing have been good. They have devoted themselves cheerfully to the work they have had to do, and that work has been over and above their ordinary work as garrison soldiers. But there are absolutely too few of these men. I have asked questions in this House on the subject, and1 the. answers that I have received to those questions prove conclusively that, even with the defective armament we have in Sydney, we have not enough men to man the guns we already have. It is a public scandal that such a state of affairs should be allowed to continue. The Prime Minister, in an interjection during the course of a previous speech of mine dealing with this matter, admitted that during the last few years he, at any rate, has known of our serious unpreparedness and lack in this respect. I do say that it is by no means a tribute to the honorable and learned gentleman’s patriotism that he is prepared, now that he is in power, to allow this condition of unpreparedness to continue for a further period of twelve months. What is absolutely essential, so far as the personnel of the Sydney defences goes, is that we should have at least sufficient men to man the guns we already have, and an additional relief for our quick-firing guns. When honorable members are informed that probably one relief for the quick-firing guns could not work them for more than seven minutes at a stretch, they will recognise the supreme necessity for having more than one relief for those guns. Speaking in an ordinary sense, and not in a technical sense, the bald fact is that we have not men to man the guns we have got, and that this is a most serious state of affairs, and one which the House should not allow to continue. In the matter of guns we are deficient; and we have not enough men to man those we have. I propose now to deal with the question of the ammunition for the guns we have, and the possibilities for practice afforded to the guns’ crews. In Sydney, it is a peculiar thing that these ineffective 6-pr. quick-firing guns, on which we have to rely as anti-torpedo-boat guns, have never yet been fired in practice. They, point over the harbor of Sydney, and cannot, therefore, be used on account of the damage that might be ‘done to passing vessels. We have no practice battery of light quickfiring guns in Sydney, as we should have, and as hese guns cannot therefore be used in practice, they cannot be as effective as they otherwise would be when the time comes for their real use. The next point ‘ is that the only really up-to-date guns we have of heavier ordnance have never been used in practice. These guns are such that black powder cannot be used in them. To make use of them, cordite ammunition is required, and it is a singular thing that this Commonwealth, which can afford to meet the expense of picnics all over the country, cannot afford to provide cordite ammunition for its modern guns to enable them to be used in practice for the crisis of war.
– It is not a very slight outlay.
– I only wish the Government to provide 400 rounds for each gun, which will cost nothing like the expenditure which is proposed in connexion with the field artillery, an expenditure which cannot be made use of until the Imperial Navy and our coastal defences have failed. The Imperial Navy is the first line of our defences ; the second line is our coastal defences ; and, lastly, we have to fall back on our field forces. The Government are prepared, lightheartedly, to spend £70,000 or £80,000 on field artillery, although that expenditure is not so urgently required as is expenditure on ammunition for the guns of our coastal defences, the complement of which - the Navy - must have failed before the field guns can be called into use. I think that the defences of Sydney are in a worse condition than that of those of Mel-‘ bourne. . They certainly are worse off in the matter of light quick-firing guns, and the picture I have drawn is by no means overdone. It is, indeed, only an outline of the true position. The Committee should not tolerate the continuance of this state of things. Had I time, I could show that our submarine vote is such that the submarine mining force in Sydney has to devote itself to either the training of i’ts men or the upkeep of its material; it cannot carry out both these essential services. In respect to guns, men, ammunition, and practice, the policy of the
Government denudes the great city of Sydney and other large cities of the Commonwealth of that protection to which such important centres of population are entitled. It is clear that an island continent must depend for its defence on naval action. That fact was put clearly before the House in 1 901 - so that - honorable members have no excuse for apathy in connexion with it - when the memorandum by the Colonial Defence Committee on the Defence Forces and Defences of Australia was printed for the information of the Parliament. This memorandum lays it down first that -
The maintenance of British supremacy at sea is the first condition of the security of Australian territory and trade in war. Such supremacy implies that no organized attack will be directed against any part of Australia, and that the maritime communications between Australian ports and the rest of the world will be kept free from sustained interruption.
The report goes on to point out the necessity that exists, in spite of this Imperial naval effort, for coastal defences against raids -
It is recognised, however, that while His Majesty’s s ships are engaged in destroying or disabling the enemy’s squadrons they may not always be in a position to prevent raids by hostile cruisers on places of such importance as to justify, in the opinion of the enemy, the very considerable risks which an attack on them would involve.
This statement shows that although, while the Imperial Navy can dispute the command of the sea, Australia will be secure from invasion, yet we shall at all times be subject to the marauding visits of raiding cruisers, and goes on to point out that -
As such attacks reveal the position of the raiding vessels to the British ships, whose duty it is to bring them to action, they must necessarily be of a hasty and fugitive character.
There, in a nutshell, is the military position of the Commonwealth. We must rely -on the Navy to save us from a national calamity, by which I mean the invasion or occupation of our territory. We must establish defences at all important coastal towns, first to free the Navy to pursue unfettered its operations upon the seas, and, secondly, to prevent any chance cruiser of the enemy from doing serious damage to our all-important and vital centres. It is, therefore, the duty of the Commonwealth Government to examine into the conditions and circumstances under which Australian naval protection is assured by the mother country’s self-denying and practically unassisted efforts ; to see whether the mother country will be able to continue bearing unassisted this burden ; and to endeavour to arrive at some just basis of Imperial cooperation and defence which will, in time of war, insure that the whole Empire shall put forward its united strength for the good of all its members.
– Is the honorable member in order in reading his speech ?
– It is not in order for an honorable member to read his speech.
– I should have thought that you, sir, could see that I am not reading my speech. I am naturally keeping to my notes, because I am traversing a many-sided subject, and I do not wish to be led astray into by-paths, or to deal out of their order with the various questions to which I am directing attention.
– I accept the honorable member’s statement.
– The first duty of this Government, and it is a duty which they can carry out without consulting any other part of the Empire, is to put our coastal defences in order. We have seen in the Treasurer’s speech a reference to the necessity for doing so, but we look in vain through the Estimates for any earnest that the Government will act ‘according to their expressed intention.
– The Estimates are practically those which were prepared by the preceding Government.
– I am not blaming this Government for- the present position of the defences of Australia ; but it is clearly their duty to give an earnest of their anxiety to put the defences on- a. proper footing.
– That is what we are doing.
– I am glad to have the Prime Minister’s assurance that he will put these defences on a safe footing. To put the coastal defences of Australia in proper order will require the expenditure of a considerable amount of money. Mr. Goschen, when Chancellor of the Exchequer, once said -
Every Chancellor of the Exchequer for the last ten years has been burdened with the ever increasing burden of the old man of the sea. I do not complain of it, because, in the first place, I believe the expenditure to be necessary. I know that it is far more economical that we should incur it at a time when we have leisure to think out a systematized plan on which it can be made, than to defer works which we ought to do ourselves, to be attempted some day, perhaps too late, by our successors, and to allow to be passed votes of credit amounting to enormous sums, most ofwhich might be too late for the object for which it wouldbe required.
That I think is so clearly commpn-sense t hat this Parliament and the country will consent to act in the same way. Almost as much as the money, what is required for the Commonwealth is a proper appreciation of the way in which it is best to expend the money we have. I do not think for one moment that the money we are spending at present is spent with the best possible result, and in support of that view, I shall give a few instances. On the present Estimates - and I do not blame the Government for this - an amount is set aside for pom poms for our field forces; and the same amount would put in fair order some of our coastal defences, which is the branch that most wants putting right, and which must come into action before the pom poms can be ever required. Another illustration pf how the money is npt spent to the best advantage in defence matters, is one which will appeal to all honorable members whp are concerned in votes; I refer now to rifle clubs - and I have myself told the clubs in my electorate that it is essential that our coastal defences shall be. made efficient before we can consider grants for the third line of defence. There is, nevertheless, not the slightest use in voting large sums for rifle clubs on the supposition that those clubs may be afterwards used as a sort of general conscriptive land force, if we dp not provide the members with uniforms. “I am not asking the Government to provide these uniforms, until the more necessary work has been dpne; I am npw merely pointing out that all themoney spent on rifle clubs with thatobject in view will be wasted if uniforms are not provided. Without uniforms, the men would, if captured, be shot at sight as Franc Tireurs, and the knowledge of that, as all honorable members will recognise, would impair the usefulness of the rifle clubs if they were ever calledupon for service.
– TheBoerswerenotshot in that way.
– The British did not sp use the Boers, but pther powers have not been so extremely humane as we were in South Africa. The history pf the FrancpGerman war shows what treatment we must expect if ever we are brought intp conflict with a European power. The needs of Australia from a defence point of view, approximate very closely to the needs of everv other section pf the Empire. Each and all of the Possessions are bordered by and most easily attackable from the sea,, and. it is obvious that . each and all must have the same defence ; and that being so, they must all join together for a common effort. That fact makes it clear that unless some action is taken by this and the Governments of other’ self-governing possessions, there must eventually grow up within the Empire a series of separated local navies, none of which would be in a position to be combined for the common good, and all pf which would be open to be crushed in detail by whatever power made a serious effort to gain command of the sea. There is a plain duty before the Gpvernment, and it is a duty which, if properly carried put, will make the existence of thisGovernment a matter for congratulation by Australia in time to come, as a Government that initiated a new principle and started a new epoch in the history of the Empire. The same naval historian I have before quoted, says -
Elements long estranged, but of the same blood, can in no way more surely attain to community of interest and of view than by the development of an external policy, of which the benefits and the pridemay be common to all. True unity requires some common object around which diverse interests may. cling and crystallize. Nations, like families, need to look outside them, selves, if they would escape, onthe one hand narrow self satisfaction’, or on, the other, pitiful internal dissensions.
The Gpvernment have a doubleopportunity in this regard. The Commonwealth of Australia is divided, State from State; pur local jealousies are becoming more embittered day by day, mainly, I must say, owing, tp the actions of the Commonwealth Gpvernments, and partly to other causes. The develppmenf pf an external policy - and what external policy could be so worthy as a policy of common defence forall?- will unite the several parts pf the Commonwealth, until in timethey become, npt, as they are at present, six States banded together by a. legal compact, but six States welded into one united people.
MINISTERS laid upon the table the following papers : -
Memorandum bythe Minister of State for Defence on the Estimates of Defence Department for the financial year 1905-6.
Notification of the acquisition of land under the Property for Public Purposes Acquisition Act, at: Randwick, New South Wales, as an addition to the Rifle Range.
House adjourned at 10.49p.m.
Cite as: Australia, House of Representatives, Debates, 29 August 1905, viewed 6 July 2017, <http://historichansard.net/hofreps/1905/19050829_reps_2_26/>.