House of Representatives
10 August 1906

2^nd Parliament · 3^rd Session

QUESTION
- PENNY POSTAGE
QUESTION
- GENERAL BUSINESS
BUDGET
- In Committee of Supply:
CUSTOMS DUTIES
- In Committee of Ways and Means:
PAPERS
BUDGET
SPECIAL ADJOURNMENT
ADJOURNMENT
- Order of Business

Mr. Speaker took the chair at 10.30 a.m.

House counted.

LIEUTENANT A J. RUSSELL.

Mr. HUTCHISON asked the Minister representing the Minister of Defence, upon notice -

As Lance-Scrgcant John Hanks, who did not pay £1018s.6d. till he had been sued for the amount, was tried by court-martial and dismissed with ignominy from the Western Australian branch of the Commonwealth Military Forces, why has Lieutenant Alexander John Russell, of the Perth Highlanders, who allowed himself to be sued for £400, and who dishonorably evaded payment by pleading the Gaming Act, and was therefore expelled from the Stock Exchange of Perth, not been similarly dealt with ?

a. Is there a different code of honour in the Commonwealth Forces for commissioned officers and for non-commissioned officers?

Is there any truth in the assertion that Lieutenant Russell escaped punishment because he is a well-known society and business man, a member of the Weld arid Perth clubs, and a personal friend of a leading officer?

Mr. DEAKIN. - The answers to the honorable member’s questions are as follow : -

Lance-Sergeant Hanks was tried by courtmartial for -

Conduct to the prejudice of good order and military discipline in that, on the 24th February,1906, although repeatedly called upon, and, after promising to do so, he failed to account for, or produce, the sum of £10 18s. gd., the property of the officer commanding the nth Australian.- Infantry Regiment, which failure - necessitated action being taken in the Police Court, Perth, in order to recover same, such - recovery being obtained in consequence of an order of the Court, mnde on the 7th March, 1906.

He was found guilty, and sentenced to be discharged with ignominy.

With regard to Lieutenant A. J. Russell, of the Western Australian Infantry Regiment - a cutting from the Sunday Timet, of Western Australia, commenting on the expulsion of Mr. Russell from the Perth Stock Exchange was brought under the notice of the Minister, who referred it to the Commandant of Western Australia.

The Commandant, in reply, stated that he had been watching the case very closely, and had been informed that Mr. Russell has instituted proceedings against the Sunday Times, and recommended that no action be taken until such time as the Court has given judgment.

Mr. Hutchison. - He was expelled from the Stock Exchange.

Mr. DEAKIN. - I understand that that was in consequence of a statement published in the newspaper against whose proprietors he is bringing a, libel action.

page 2673

QUESTION

PENNY POSTAGE

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

asked the Postmaster-General, upon notice -

Whether he will supplement, the information already given as to the loss in each State on the adoption of penny postage, by a statement showing the number of letters, in each case, to which the loss applies?

Mr AUSTIN CHAPMAN:
Postmaster-General · EDEN-MONARO, NEW SOUTH WALES · Protectionist

– Yes ; the information will be furnished on Tuesday next.

page 2673

QUESTION

GENERAL BUSINESS

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

– I move -

That, until otherwise ordered, the Order of the House giving precedence to General Business on each Thursday until half-past six o’clock be suspended, and that Government Business shall have precedence on each day of sitting.

Mr POYNTON:
Grey

.- I, too, have an important _motion on thebusiness paper - I believe the most important there. It deals with the taking over by the Commonwealth of the Northern Territory of South Australia, and I hope that the House will come to some decision! in regard to it. I trust that the Ministry, who I believe are in earnest, will attempt to arrive at a settlement between South Australia and the Commonwealth on the subject.

Mr Wilks:

– How would the appointment of a Royal Commission suit the honorable member?

Mr POYNTON:

– That, in my opinion,, would delay matters. A big effort has. been made in South Australia to prevent the Commonwealth from obtaining control” of the Northern Territory, and if. the matter is allowed to rest, steps may be taken by a section of the politicians of that State which will prevent the Commonwealth from doing anything in regard to it for a long time to come. I believe that, inthe interests of the State and . of the Commonwealth, the Territory should be. under our control. Hence I am anxious that, notwithstanding the pressure of business before us, we should have an opportunity to come to some decision - to make some offer. At present we are standing off from each other.

Mr BROWN:
Canobolas

.- If the motion be agreed to, it will prevent the House from proceeding any further with private member’s’ business. I have some little interest in this matter, because I have obtained permission to introduce a Bill to amend the Public Service Act in a somewhat important particular. I understand that members of the Opposition have some objection to my dealing with the sub- ject, and I should be very glad if the Government would take it in hand.

Question resolved in the affirmative.

page 2675

BUDGET

In Committee of Supply:

Debate resumed from 9th August (vide page 2631), on motion by Sir John Forrest -

That the itenf? “’ President, £1 , 100” be agreed to.

Mr KELLY:
Wentworth

.- Last night I was endeavouring to show how the principle applied by the Minister of Wax to Great Britain’s second line of defence might be applied with equal reason to -that of the Cornmonwealth. There was nothing new in the proposition, but I think I should be able to show that the risk to Australia, if ever her second line of defence is called into requisition, will be much more considerable than has been enerally apprehended. There is very little danger at any time for the next decade or so of the Imperial command of the seas being absolutely lost, but it is possible that a combination of the whole of the naval powers of Europe against Great Britain might compel the latter to so concentrate her forces in a particular place, as to render it necessary for her to temporarily surrender her control of the eastern seas. It is by no means certain that in such an event the Asiatic powers that might be involved would trouble Australia. There are other points of the Empire in the eastern seas that might be more vulnerable and of greater importance from a military point of view, especially whan one considers that control of the eastern seas by such powers would be only temporarv. and that as soon as the menace to England by the European Powers had been removed, she would once more assert her supremacy in the East. Therefore, an Asiatic power might not care to embark upon . 1 large expedition with the object of” territorial occupation so far from her base. We must, however, be prepared for all eventualities, and, therefore, I would suggest that what is needed as a second line of defence is the skeleton of a vast citizen force - a skeleton which, in the event of an outbreak of war, could be rapidly clothed with flesh and blood. I should like to quote from a French technical paper called Armee et Marine, which expresses itself as follows: -

Le detroit de Malacca, passage si fréquenté, porte des mers d’Extreme-Orient, est un des points strategiques les plus importants du monde. Sur ses bords, Singapore est devenu depuis longtemps” un port commercial et un entrep6t de premiere importance. L’Angleterre va l’eriger en station navale, point d’appui de la flotte et grand dep6t de charbon pour la marine.

II etait encore depourvu de docks pour les reparations des grands croiseurs et des cuirasses; on va les lui donner.

L’agrandissement des docks de Singapore va donner une valeur toute nouvelle a ce port splendide qui pourrait reunir toutes les flottes britanniques. II etait deja le point de rendezvous oil les chefs des escadres angiaises de Chine, d’Australie et d’Extreme-Orient se plaisaient a concerter leurs plans devolutions et de manoeuvres. Desormais, port ‘de guerre de premier ordre, flanquant le passage le plus commode et le plus frequente entre l’Oc£an Indien et les mers de l’Asie Orientale, ce point va devenir un centre strategique incomparable et dont l’importance depassera celle de Gibraltar.

Pour qui cherche a penetrer les desseins de l’amiraute britannique, il est curieux de noter que ce renforcement de puissance coincide avec le renouvellement du traite d’alliance anglojaponais et l’entente cordiale de la France et de l’Angleterre.

La Grande-Bretagne, libre d’intervenir partout, se reserve de pouvoir sans danger concentrer ailleurs tous ses efforts.

I think that this clear testimony to the value of Singapore from a military point of view indicates that in the event of the control of the eastern seas being temporarily surrendered by Great Britain, Australia might still remain immune, because of the greater opportunities open elsewhere to the enemy. If we neglect our first line of defence upon which our security will depend, we shall expose ourselves to undue risk. If, on the other hand, we endeavour, in addition, to maintain- a large standing army, our Treasury will soon be exhausted. Therefore, I suggest that we should not relax our efforts to bring about a proper system of naval co-operation between the various portions of the Empire. So far as the second line of defence is concerned - the provision of an army to repel invasion - I suggest that only such parts of that organisation as cannot, be readily brought into existence should be kept in a state of preparedness. This organisation would include the staff, the administration, the military stores, the higher officers, and a pattern force, upon which others could be modelled. All these things could be provided for without incurring exceptional expense, and we should be able to put the flesh on the skeleton when a time of crisis arrived, and turn out the rank and file in a thoroughlv efficient state. There is one side of our land defences with which I have not yet dealt. I refer to the coastal defence force. At the present time, practically the whole of our defence forces might be included in that definition. These forces must always- be ready, because coastal defence is complementary to sea power, and is liable to be put to the test even while command of the seas is still held. The honorable and learned member for Northern Melbourne, perhaps in his anxiety to follow the opinions of his political patron, the honorable member for Bland, fell into a curious error. At page 2431 of Hansard he is reported as having stated -

With an islan-1 continent the first thing to be looked for is coastal defence. Notwithstanding all the rifles, guns, and forts, nothing compares in importance with coastal defence.

– I should like to know what instructions would be given to the Australian torpedo flotilla in case of the outbreak of hostilities. Certapnly, they ought to partake of the nature of the advice which was given by Dogberry to the watch in the third act of Much Ado About Nothing. There, Dogberry, addressing the commander of the watch, says -

You are thought here to be the most senseless and fit man for the constable of the watch ; therefore, bear you the lantern. This is your charge : You shall comprehend all vagrom men ; you are to bid any man stand, in the Prince’s name.

Thereupon, the second man of the watch inquires -

How if he will not stand ?

To which Dogberry replies -

Why then, take no note of him, but let him go; and presently call the rest of the watch together, and thank God you are rid of a knave.

I am sure is shared on all hands, at the general prosperity which has come at last all over Australia. It is a subject of gratification, particularly after the terrible pictures that were drawn of the fearful suffering brought about in Victoria through the closing up of factories, owing to the operation of the Federal Tariff. It is very gratifying to know that there is already a turn of the tide in Victoria. Whatever our views upon the fiscal policy may be, we must all be delighted. I say that a man in New South Wales, who is not as delighted at the prosperity of Victoria as with that of his own State, is entirely deficient in a proper comprehension of what Federation means. I look upon the undoubted increase of the prosperity of Victoria as one of the most gratifying signs in the circumstances of Australia to-day. As so many gloomy pictures were drawn by the Melbourne Age in connexion with the alleged strangling effects of the Tariff, I should like to quote, some remarkable testimony given by that newspaper as to the glorious prosperity which has come upon Victoria, even under the present unfavorable conditions. The Age of the 22nd June, referring to the statement made by Messrs. Mann and Fleming, that there were 5,000 unemployed in Melbourne, said -

That is a most serious statement. If it were capable of being substantiated, the prosperity on which we have been priding ourselves of late would be proved a hollow sham, and we should then have occasion to doubt the accuracy of the statistics recently published concerning our expanding trade. The Customs returns show that for the first five months of this year our oversea agricultural exports have increased by £1,159,000, compared with the corresponding period of 1905. The wheat yield for the past season has been estimated at 24,000,000 bushels, an average of more than 12 bushels to the acre, and at the same time, notwithstanding our steadily increasing population, general imports from abroad have notably diminished.

This must ‘have been gratifying news to the protectionists of Victoria, who have told us that the Tariff was swamping Victorian industries. The Age continued -

These figures testify that in every department of our industrial life we are forging ahead. Our agriculturists are thriving, and our manufacturers, despite the handicaps they have at present to fight in the shape of ineffective protection, foreign trust competition, and many lamentable holes in our tariff fence, are beginning to overtake and supply the wants of the people with the products of Australian labour.

Yet, although we are now producing at a rate in excess of all past precedent, we are asked to believe that we have more unemployed in the city to-day than ever. Public prosperity does not reveal itself only in statistics. It is quite apparent that we are a prosperous people. In many parts of the country there is a call for unskilled labour, which halts to be satisfied. Almost all our trades are flourishing, and the demand for skilled workmen is at least equal to the available supply.

Mr REID:

– I approve of that, because it mav lead to the right honorable gentleman some day coming our way. I do not like fixed quantities. One is reminded of the difference between an old bullock in a team and a stray one. One never knows when the latter will come one’s way - it is the bullock in the team of which one cannot obtain a hold. This is what the Age, in its issue of Tuesday last, says of the party that is keeping its Government in office -

It is thus that we have a Labour Party, ignorant, inflated, infatuated and uninformed, chartered libertines in the political arena -

Fancy this progressive Government ignoring the Labour Party. It is a pitch of political idiotcy that only a leader-writer of the Age would be capable of -

Not only has this Labour Party run wild and spoiled the orderly development of liberal and progressive thought, but by means of the split vote in the State -

And this is where the Federal party comes in- just as in the Federal sphere -

The honorable member for Herbert cannot get over that - it has led to complete political misrepresentation, to the representation of mere minorities, and the disfranchisement of majorities.

We come now to the remedy -

If we have a compulsory voting law,, and an amendment of the Electoral Act providing against the split vote, so that all parties may be represented according to their true strength, the Labour Party, judging by the last returns, will be very lucky if it secures a dozen members in a House of sixty-five.

That reference applies particularly to the State Parliament -

These are invincible reasons for an amendment of our electoral machinery in the State in the same way that the Federal Government has decided.

Next day, having abused the Labour Party in a way that even its bitterest enemy could not fairly do - having gone beyond the range of legitimate abuse -

Mr Hughes:

– What is the range of legitimate abuse?

Mr REID:

– That beyond which the Prime Minister or I would not go. The next day this infantile series of editors, having pointed out to the Labour Party that they could get seven seats through the present ineffective state of the electoral law, published the following statement : -

It is manifest, then, that, not alone does a great political, principle depend on the passage of this Exhaustive Ballot Bill-

-We have officers who have commanded regiments - I do not think that any Australian officer commanded more than a regiment.

Mr REID:

– That is my impression. An officer commanding a regiment might be a possible Napoleon or a Wellington, but in the absence of the power of inspiration to enable us to detect that, we cannot with safety arrive at a judgment of his qualifications. The officer who has command of a regiment has to work under the brain of another man. He receives orders to move his men according to dispositions made by his superior officer. When we have offered to us the services of men who have controlled the movements of large bodies of troops, their claims ought to be considered, not in the interests of the officers themselves, but in the interests of the men whom they are to command. If two officers submit themselves, one having commanded a regiment and the other having had experience in commanding brigades of regiments, and having gone through the arduous necessities of war, the latter should, other conditions being equal, be preferred, on the ground of experience, for the position of commander-in-chief. We cannot indulge in speculations as to how men would turn out. The matter is too serious for “that. I wish to enter my strongest protest against the proposed appointment, unless the Government have taken some expert advice, the result of which is that the appointment has been pronounced a desirable one. When I speak of expert advice, I do mot refer to our own officers. No doubt they would all consider that they were equal to the task - any man worth his salt would think that. If the Government, in making the appointment, act upon expert advice, I shall have not another word to say, and all my objections will be removed; but if the officer is to be appointed because, in the judgment of the Minister - a very worthy citizen - he is competent to fill the position, the course adopted will be one of which I cannot approve. How can it be said that the present Minister is competent to judge of the military qualifications of the candidates for the position? The whole thing is preposterous. Surely, if it is important that the Government should obtain the advice of the Imperial Defence Committee with regard to the pattern of fort they should construct in connexion with our defences, it is still more important that they should obtain expert advice in regard to the appointment of a commander-in-chief for the whole of the forces of Australia. I have to thank the Committee for having permitted me to deal with these matters. I have no prejudice against Australian sol-, diers, and if Colonel Head is appointed as the result of expert advice, I shall be glad to hear the statement made, and to express my perfect approval.

Sitting suspended from 1 to 2 p.m

Progress reported.

page 2695

CUSTOMS DUTIES

In Committee of Ways and Means:

Sir WILLIAM LYNE:
Minister of Trade and Customs · Hume · Protectionist

– I move -

That from the10th day of August, 1906, at a p.m., Victorian time -

in addition to the duties of Customs imposed by the Customs Tariff1902 on

the following . goods shall be free of Customs duty : -

Manufactures of Metal, viz. : -

Hand-worked rakes and ploughs com- bined, hay-tedders, maize harvesters, maize binders, maize planters, mouldboard plates in the rough and not cut into shape, potato sorters, potato raisers or diggers.

I submit this resolution in consequence of an announcement which, appears in the Argus newspaper of this morning. It is very evident that somebody has given correct information to that journal regarding the recommendations of the Tariff Commission, and this fact has forced the Government to take immediate action, with a view to protecting the revenue. I wish also to announce that, as the Government have not had an opportunity to discuss all the details connected with the recommendations of the Commission, it may be found necessary hereafter to modify the resolution which I am now submitting. But, in view of the information which has been published in the Argus, there was no other course open to us than that which I am now taking. The resolution embodies the complete recommendation of one section of the Tariff Commission.

Mr Fowler:

– It is not complete.

Sir WILLIAM LYNE:

– I understand that it is. I am about to read some other recommendations, which I could not embody an the resolution, but which will be. acted. upon by the Government. The first is as follows : -

Providing that if the retail or selling price of any implement or machine made in Australia, similar to that upon which the additional duty is hereby imposed be raised above such prices ruling in Australia during 1905 the GovernorGeneral may, in pursuance of a joint Address by the Senate and the House of Representatives, suspend the collection of such additional duty upon any machine or implement for such time as may be deemed advisable.

The second recommendation of the Commission reads -

That if the majority of manufacturers of the machines and the implements made in Australia similar to those upon which additional duties are hereby levied do not, after the expiration of one year -from the passing of this Act, pay their workmen engaged in making such machines and implements a fair and reasonable rate of wages, the Governor-General may, in pursuance of a joint Address by the Senate and House of Representatives, affirming that such fair and reasonable wages are not being paid, suspend the collection of such additional duty upon any machine or implement for such’ time as may be deemed advisable.

The third recommendation reads -

Provided that if within two years after the passing of the Act the retail price of stripperharvesters made in Australia has. been raised above £81, or if after the expiration of two years from the passing of the Act the retail price of stripperharvesters made in Australia has not been reduced to £70, the Governor-General may) upon the receipt, of a joint . Address from the Senate and the- House of Representatives certifying to the foregoing effect, by proclamation, suspend the collection of such additional duty of 12½ per cent. for such period as may be deemed . advisable.

.- All this trouble has arisen owing to an attempt to delegate executive functions to a Commission. I indicated when the last motion relating to the revision of the Tariff was submitted that I knew of no method whereby the revenue could be fully protected as long as the decisions of the Commission had to be arrived at prior to the Government receiving its recommendations. While the Tariff Commission has done good work, it has! had cast upon it functions which it cannot carry out as well as can the Executive, which is charged with the administration of the Commonwealth and the protection of the revenue.

Progress reported.

page 2699

PAPERS

MINISTERS laid upon the table the following papers : -

Progress reports of the Tariff Commission on agricultural machinery and implements and stripper-harvesters, and minutes of evidence, vol. IV., division VI., metals and machinery.

Ordered to be printed.

page 2699

– On that bright and shining morning when the honorable member shall move in this House that land taxation without exemption shall be the method by which the Commonwealth, shall obtain her revenue or burst up the big estates, he will find - if lie has the courage to call for a division - that I am sitting beside him. I always have been, and always shall be, in favour of that. But since we believe that it would be an admirable thing to burst up the big estates, and think that a man has enough when, he holds land worth ,£5,000, we propose to tax all those whose holdings exceed that value. How much would a man with £10,000 worth of land have to pay by way of taxation under the proposed scheme? I have here a newspaper article which contains an extract from a circular issued by a Mr. Cameron, in connexion with the Queensland Anti- Socialistic League. He says -

I need hardly point out the necessity for action to be taken in this matter (Federal Land Tax). Already the Federal Premier, Mr. Deakin, urged thereto by the leader of the

Labour Party in the Federal Legislature, lias expressed his approval to the introduction of a Federal Land Tax. .

That is news to me, but no doubt it is all right.

It is suggested that the amount of this tax should be is. in the £1.

That is the usual exaggeration.

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

– The honorable member for Bland stated that, if necessary, he would impose a tax of is. in the pound.

Mr Webster:

– He is not the Labour Party.

Mr HUGHES:

– I am not responsible for what the honorable member for Bland may have said.

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

– He is the leader of the Labour Party.

Mr Fisher:

– He has never fathered the statement.

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

– Yes he has. He did so at the Sydney Labour Conference.

Mr Fisher:

– He was misreported.

Mr HUGHES:

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

– I do not think it is; but still Western Australia is not deriving as much benefit from Federation as some of the other States are. . I have prepared the following statement of my proposals : -

That the book-keeping system terminate on the completion of the five year period, and the distribution among the States of surplus Customs and Excise revenue on a fer capita basis be adopted.

The book-keeping system was only intended to be in operation temporarily. Its usefulness as a safeguard against the too severe dislocation of the finances of some of the States, and as an indicator of the course of trade, can now be estimated. Its cost to the Department of Customs and to the public ; the enormous labour and worry involved ; the complexity of analysis when the component parts of some manufactured article of Inter-State trade are subject to different duties; the difficulty of attaining even approxi- mate accuracy in the returns rendered to the Customs, and the impossibility of any thorough check by the Customs without a large staff, and border Custom-houses, can also be appreciated. As a precaution, when what was regarded as more or less a step in the dark was being taken, its adoption was justifiable, but its continuance after it has yielded its information is not desirable unless it be shown that, without it, seriously inequitable results would arise.

It is submitted that any reasons which can be given for its continuance now would be almost certainly applicable to any future proposals for abolition, and, if they are to have sway, a most objectionable handicap on Inter-State exchange will be permanently grafted on “to Commonwealth finance. On these grounds, as well as for the simplification of the financial system, the removal of the present uncertainty as to the amount which the States may expect to receive from the Commonwealth, and the cessation of the necessity for the Commonwealth - when requiring extra revenue - having to raise four times the amount, and to hand over three-fourths to the States, which the latter may not need, the following is proposed : -

That there be a -per cafita distribution of Customs and Excise revenue after the expiry of the book-keeping period. This is a distinct proiosal independent of any decision regarding the Braddon section.

As a further proposal dealing with the Braddon section, it is suggested that when the fer cafita distribution begins, the operation of the Braddon clause be suspended, if it can be legally done by agreement with the States; or failing such agreement, it be allowed to lapse at the end of its present currency. When it is suspended, or lapses, a fixed sum of, say, £6,783,959 of Customs and Excise revenue be returned to the States. This is a sum between the Treasurer’s estimate of the three-fourths share of the States of Customs and Excise revenue in 1906-7, and his estimate of what they may actually receive in the same year.

As the Commonwealth must soon absorb all its quarter of the net Customs and Excise revenue, and as, in the proposed distribution, what will probably prove, during the next few years, to be three- fourths or over, has been allotted to the States, the latter are not likely to lose by this arrangement, especially as without agreement the Commonwealth can use, or deal with as it sees fit after the Braddon clause expires, the three-fourths now allocated to the States, and that even without making any provision for the debts. The effect on the 1906-7 estimate is shown in the following figures : -

Under my proposal, as opposed to the Treasurer’s estimate of distribution, New South Wales would lose , £351,190.

Sir John Forrest:

– That is a big loss.

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

– And, as a representative of New South Wales, I am supporting it. Then, again, under my scheme, Victoria would lose £25,225. On the other hand, Queensland would gain £103,582, South Australia would gain £100,101, Western Australia would lose £59,136 and Tasmania would gain £66,542.

Sir John Forrest:

– Why should Western Australia lose anything, as compared with South Australia and some of the other States ?

Mr Higgins:

– She could well afford it.

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

– She would lose under a Tariff of herown, because her population is changing.

Mr Higgins:

– I have come to the same conclusion as the honorable member has in regard to a sliding scale for Western Australia.

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

– I am pleased to hear it. My statement continues -

The foregoing comparison is based on a lower return to the States than that estimated by the Treasurer for 1906-7.

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

– There would be no annual distribution, but an amount would be devoted for the purpose at the rate of £1,000,000 per annum. We might have to wait two or three years for a debt to fall due which would absorb the amount available. We take up the debts of the States until the whole of their claims for their transferred properties are obliterated. They will become the Commonwealth debts, and the interest and sinking fund will be provided for out of the Commonwealth share of the revenue. I do not go as far as the honorable member for Mernda in the provision for taking over the interest of the State debts, because I think that,, with the developments which are likely to take place in the future, we should be unduly hampered. I think that we could carry out the scheme I propose without any difficulty. If therevenue largely increased in the future we could be liberal in distributing among the States the money that we were not bound to hand over, in the same way that we have been liberal in the past in distributing our surplus over and above the three-fourths of the Customs and Exciserevenue to which the States have been entitled.

Sir John Forrest:

– But the States refused to accept a lump sum for all time.

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

– As the time for the expiration of the Braddon! section approaches, the States must recognise that unless some special arrangementis made there will be no liability on thepart of the Commonwealth to do anything. I wish to secure to the States the liberal amount of £6,700,000 for the payment of the interest on their debts. We should absorb the great bulk of the interest on their debts1, and the whole of the loans would be taken over as they fell due. The Treasurer further suggests that the period during which the Government should undertake to guarantee an annual payment to the States should extend till 1920, and thereafter until Parliament otherwise provides. All the Treasurer really proposes is to continue thebookkeeping period, and to extend theBraddon section, with one variation, namely, that the Commonwealth should bein a position to ear-mark certain revenue, and devote it to any purpose desired’.

Then he suggests that if there be any surplus after that purpose is fulfilled, threefourths shall still go to the States The ear-marking of revenue should only be resorted to when no better proposal can be made. The system would be very complex, and might be attended with some extraordinary results. First of all, antagonistic interests might be created. Suppose, for instance, that a duty were imposed upon kerosene, and that the revenue derived from it- were ear-marked for the use of the Commonwealth. Suppose, further, that a proposal - such as has been acted uponin the United States, and which it ds said ‘has proved the greatest blow to the Standard Oil Trust - were made for freeing from duty all denatured alcohol used in the arts and manufactures, and for driving and propulsion. It would be manifestly against the interests of the Commonwealth, but it might admirably suit the States, if the duty were abolished. That is only one instance, and hundreds of a similar character might be quoted. We should not create rival and differential interests between the States and the Commonwealth dn regard to the revenue. Again, I would point out that if a certain duty were increased from 15 to 20 per cent., and the 5 per cent, additional duty were ear-marked for Commonwealth purposes, the. higher duty might bring in no more revenue than that realized by the lower impost. I should like to know whether the Treasurer would still annex one-fourth of the total amount raised.

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

– Yes.

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

– Then the right honorable gentleman would be compelled to pay less to the States.

Sir John Forrest:

– But the States would have a fixed sum.

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

– There would be constant disputes between the States and the Commonwealth in regard to such questions as I have indicated. The States might say that the Commonwealth had no right to deduct the extra 5 per cent, duty, because the increase of the duty had not resulted In an addition to the revenue. I would point out, further, with regard to the Treasurer’s proposal relating to the payments to be made to the States, that he might create a deficiency in the Commonwealth finances in one year, and be precluded from making dt good out of a surplus during the next year. If a State had a de ficiency one year, it could make it good out of the next year’s surplus, but the Commonwealth Treasurer could not do that, because he would still have to distribute the revenue amongst the States in the proportion set forth, and to add threefourths of all surplus over that. I am sorry that I have not been able to deal with the Treasurer’s proposals as fully as I should have liked. ‘I have, however, compiled a condensed statement of my suggestions, which is as follows: -

Transferred Properties

Looked at from the stand-point of the people of the Commonwealth being the owners of these properties, and the Governments merely trustees, it would seem only reasonable that when a service is taken over from a State, the properties necessary for conducting that service should pass, as would properties in an ordinary change of trust, without any claim’ for value by the first trustees. The States, however, urge with some reason that as there is a difference in the value fer cafiia of the properties passing with the services in the various States, it is necessary in equity to adjust that difference. Sir John Forrest’s scheme of writing off the lowest fer cafiia value of the transferred properties of any State from the values of every State, and settling on the balance, properly met that claim. But the States also point out that they have borrowed money for much -of the transferred property, and it is only right they should be relieved of the debt, not merely above the fer cafiia equality, but the debt covering the whole value, which debt should become one of the Commonwealth, and cease to be a liability of the States. The desire of the States might be met without reducing the return to them, or increasing taxation, or straining the finances of the Commonwealth’, by taking over debt, of the States, equal to the value of the properties, at the rate of ^1,000,000 per annum, and converting it, as State debts came due, into a special debt of the Commonwealth, till the full value of the transferred properties was covered. This would mean that as each sum of£1,000,000 was converted, the interest on it would come out of the share of the Commonwealth, not of the States, in the Customs and Excise revenue.

Public Debt

That all the debts be transferred to the Commonwealth as they fall due, unless prior to that a very favorable opportunity arise’ to convert. That responsibility for interest to the amount of£6,783,959 be undertaken at once, if it can be arranged, or on the expiry of the Braddon clause, by the Commonwealth, thus absorbing the amount proposed under a previous heading to be set aside for return to the States. This security having been given to the States, the Commonwealth to be unfettered in the management of its finances. With that end the Braddon clause to be suspended by agreement, or to lapse in 1910.

The responsibility for interest thus assumed would be on debt beyond that being gradually taken over in cover of transferred properties. In this connexion it has to be remembered that, although the net Customs and Excise revenue might increase, the Commonwealth would propose to find, in addition to interest on debt taken over for transferred properties, interest on further debt as converted, as well as to meet the deficiency on services yet to be transferred from the States, the expenditure on which largely exceeds the receipts; and would also require revenue for additional undertakings, such as the proposed old-age pensions, London representation, &c.

The Commonwealth to borrow for the States on Commonwealth stock, bearing 3 per cent, interest, and to have the right of borrowing outside or within Australia. The States to confine their borrowing, not effected through the Commonwealth, to Australia. The Commonwealth to provide a sinking fund of £ per cent, on all loans it issues, whether new loans or renewals. The States to provide a sinking fund of½ per cent, against money borrowed in Australia. Debt Commissioners to manage the loans and sinking funds. Commonwealth stock to have a fixed term, and be subsequently interminable, except by the Government, on notice.

A further safeguard against excessive borrowing and assurance to creditors would be an arrangement by which any State increasing its loan indebtedness _ beyond its fer cafiia rate at the establishment of the Commonwealth, should pay a sinking fund of 1 per cent, on the excess.

The Treasurer’s Other Proposals

Generally, I agree with the other proposals in the Treasurer’s memorandum, except those to which objection is taken in the following : -

Clauses 9 and 10. - While the States may properly expect reasonable security for the payment from Customs and Excise revenue of interest on at least the bulk of their loans, the hampering provisions and complex effects of the Braddon clause, even as the Treasurer proposes to vary it, should not be continued for a day longer than necessary..

Clause 13 (1) The Treasurer proposes “to pay annually to each State for ten years after 31st December, 1910 (the date on which Section 87 (the Braddon clause) becomes alterable), a fixed sum equal to the average annual amount of three-fourths of the net revenue from Customs and Excise which that State has contributed during (say) the five years preceding such 31st December, 1910 (not including the special revenue in the case of Western Australia).”

This would mean that, did the present duties yield an increase of revenue before 1910, or special new taxation be necessary before then, not only would three-fourths of the proceeds for that period go to the States, but, irrespective of Commonwealth requirements, three-fourths of that increased revenue would be taken by the States for the following ten years.

Clause 13 (2) reads -

” If three-fourths of the total net revenue received by the Commonwealth from Customs and Excise in any year after. 31st December, 1910, exceeds the aggregate amount of the annual fixed sum guaranteed to all the States, any such sum in excess to be distributed among the States fer cafiia.”

This would guarantee a further payment to the States, irrespective of Commonwealth requirements, should there be an increase of nonearmarked revenue, and practically extends the Braddon clause to 1920. The proposal is all against the Commonwealth, as a deficiency may have to be created one year to- pay the fixed amount to the States, and the surplus of the next year cannot be taken to make it good.

Clause 13 (3) reads -

“Provided that after 31st December, 1910, the Commonwealth may impose additional Customs and Excise duties for specific purposes, and may specially appropriate and retain and ‘ ear-mark ‘ the whole of the revenue -
1. Derived from any new items of duties imposed solely for specific purposes ;
2. Derived from any additional duties on existing items of duties imposed solely for specific pur- poses.

If any surplus remains in any year after providing for such specific purposes from the revenue derived from such special appropriations, threefourths of such surplus to be annually returned to the States fer cafiia.

These arrangements to continue for ten years, viz., after the 31st December, 1910, up to 31st December, 1920, and thereafter until the Parliament otherwise provides.”

This is the only real modification of the Braddon clause, and does not operate until after ig’io, at which time the Commonwealth will be free to make this or any other provision. It is objectionable, because it divides the Customs and Excise duties into two classes, the one benefiting the Commonwealth, the other the States, and it thus, to some extent, creates rival interests. In providing, if a special duty is an increase of an existing one, for proportional divisions, it may raise endless complexities.

The whole of clause 13 simply postpones the adoption of a system possessing any elements of permanency for 14 years, to a time when the circumstances may be more unfavorable for reasonable adjustment than they are to-day. It refuses to approach nearer to what must be the financial goal, and, while conferring no benefit sufficient to justify it on the States, it continues to hamper the Federation. Only if a better and more federal system is shown to be impossible now, or proved to be far more readily realizable in the future, should there be postponement. The Treasurer declares as one reason for delay that the people do not yet think federally. It is hard for them to do so, when, instead of their interests being merged in those of Australia, State distinctions are allowed, without good reason, to remain, although it was intended they should disappear in union.

Turning briefly to one other matter, as there is not time to deal with others as I intended, I cannot agree with the proposal for the introduction of universal penny postage. Personally, I am very strongly in favour of the system, but, having regard to the finances of the States which have most severely felt the strain of Federation, I cannot see my way to support the present proposal. It would be very desirable if we could introduce penny postage into New South Wales, where the present system is rather mixed.

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

– I do not think that we should be justified in doing so in our present financial position.

Sir John Forrest:

– Why should the people in the cities have the advantage of cheap postage, while those in the country are denied a similar benefit?

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

– Because that is the law, and we cannot afford to alter it. The Treasurer admits that the introduction of penny postage would involve a loss of £200,000, and, at the same time, he is proposing to increase the expenditure of the Commonwealth to the extent of £535,000. He would thus make a very big hole in our one-fourth of the Customs revenue, and leave very little available for other purposes. It must be remembered that we shall have to provide for a number of non-revenue producing Departments, which have still to be taken over from the States. We must not attempt too much whilst we are hampered by the financial provisions of the Constitution. The introduction of the penny postage system, after all, would not confer such a very great benefit upon the masses of the people, and we should not bring about such a reform until we are satisfied that the States whose finances have been most strained can bear it. Further than that, it is preferable that we should first deal with matters of greater urgency. I refer more particularly to the approaching termination of the bookkeeping period. Surely, after five years, we ought to be able to devise some scheme for supplanting the present bookkeeping system. The figures I have given - and I can vouch for them, because I had them checked by the Treasury officials - show that at this moment, if we adopted a per capita method, there would be no more difference in the result than would be likely to be brought about at a later stage. I ask honorable members when we shall ever reach a stage at which there would be less disruption by abandoning the bookkeeping distinction as to Customs and Excise between State and State. Any additional burden would be thrown almost entirely, for the time being, upon New South Wales, .and I have already stated why I believe that State could bear the burden, and why the present opportunity is a favorable one. Her finances are flourishing, and she has a large surplus, and she will subsequently reap advantages which will repay her for any present loss. The Treasurer complains that the people have not yet learned to think federally. How can they be expected to do so when their leaders, instead of bringing thiem into closer union, and instead of attempting to distribute the taxation of the State upon a per capita basis, leave them as they are. With regard to the entries for Inter-State goods, we seem to be more separated than we were before the Union. The time has come when we should face the situation. It is more urgent that . we should consider the bookkeeping provisions of the Constitution than that we should discuss the Braddon section, or the transfer of the State debts. Unless the bookkeeping provisions are extended they will cease to operate in October next, and we ought to apply ourselves to the consideration of some method of distributing the revenue which will not be seriously injurious to any State, but which will benefit those States whose revenue has been most affected besides Western Australia, namely, Queensland and Tasmania. If there is any good in Federation at all, and if it is desired to equalize the burdens of the States, we should act in that direction now, when we can effect the change with perhaps less loss or disturbance than at any other time.

Mr Fisher:

– Does not the honorable member think that the Braddon and bookkeeping sections should be discussed at the same time?

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

– It is highly desirable that that should be done. That is why I have discussed the two matters together.

Mr Crouch:

– Both matters can be discussed, but both cannot be legislated upon.

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

– We could deal with any restrictions imposed by the bookkeeping provisions-

Mr Fisher:

– We could do that in the case of Queensland, owing to the increasing amount which that State ‘has to pay year by year.

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

– I say that the finances of States like Queensland and Tasmania have been hard hit by Federation. I am aware that it is often said - and with some degree of truth - that when the people of any State do not contribute to the revenue as much as they would do under other circumstances, the money is in their pockets. But in the case of Queensland and Tasmania that is not so to the full extent, because their revenues have been reduced by goods from the other States upon which they have had to pay the higher rates imposed under our protective Tariff, although they will not - when the bookkeeping period has expired - be credited with those duties. In addition, we must recollect that they lose by non-recording under the bookkeeping conditions. I do hope that the Treasurer will not think that I have put forward these proposals from any party motive. The only State which would be injured by them - with the exception of Western Australia, which would be injured to a slight degree - is New South Wales, and that only temporarily. I feel sure that if he will give careful consideration to the matter he will conclude that when the bookkeeping provisions have expired they should not’ be renewed, but that some arrangement should be made under which we can approach nearer to the intention of Federation.

Progress, reported.

page 2715

SPECIAL ADJOURNMENT

Mr DEAKIN:
Minister of External Affairs. · Ballarat · Protectionist

– I move -

That the House at its rising adjourn till 3.30 p.m. on Tuesday.

The visit to Mahkoolma, and other suggested sites for the Federal Capital, is taking from our midst to-day a number of honorable members who . will not return, at the earliest, until 1.45 p.m. on our next day of sitting. Under the circumstances, I think that we might postpone our meeting till a later hour than usual.

Question - resolved in the affirmative.

page 2715

ADJOURNMENT

Order of Business

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

– In -moving -

That the House do now adjourn,

I wish to intimate to honorable members that our first business upon, Tuesday next will be the consideration of the proposals of the Tariff Commission in reference to spirits, wine, and industrial alcohol. Upon these items the propositions of the Government have already been formally submitted to the House. Owing to the extraordinary circumstances under which we find ourselves at this stage of the ses sion, discussing Tariff proposals which, were not presented till after the delivery of the Budget, it was not possible to include in our estimates any forecast of the probable effect of these proposals upon the revenue. As honorable members are aware, the opinion of experts is that the duties upon spirits, as they have been amended by us, will, if agreed to, involve no change in the revenue,- and affect no alteration in the Treasurer’s forecasts. But I hope honorable members will clearly understand that the action which has been taken to-day affecting the duties on agricultural implements, was forced upon the Government before members of it - with the exception of the Minister of Trade and Customs and myself - had even read the recommendiations of the Commission in reference to the items with which they deal. The proposals are simply the recommendations of that body, and not purs. Whether we shall increase any of the duties proposed, or decrease others, I cannot say. As I have already remarked, the whole position is extraordinary. The information which honorable members still lack of the intentions of the Government and of the results which will flow from giving effect to our alterations of the Tariff,. either by way of increase or decrease in the proposed duties, will be made known at the earliest moment. I think that honorable members will be able to obtain proof copies of the reports of the Commission, which have been laid upon the table of the House this afternoon, before they leave for their respective States, and am hopeful that thev will also be supplied with copies of the bulky report, six or seven inches, containing; the evidence relied upon to support the recommendations of that body.

Question resolved in the affirmative;

House adjourned at 4.7 p.m.

Cite as: Australia, House of Representatives, Debates, 10 August 1906, viewed 22 October 2017, <http://historichansard.net/hofreps/1906/19060810_reps_2_33/>.

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House of Representatives10 August 1906

QUESTION

PENNY POSTAGE

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

Mr AUSTIN CHAPMAN:Postmaster-General · EDEN-MONARO, NEW SOUTH WALES · Protectionist

QUESTION

GENERAL BUSINESS

Mr DEAKIN:Minister of External Affairs · Ballarat · Protectionist

Mr McWilliams:

Mr DEAKIN:

Mr REID:East Sydney

Mr HUTCHISON:Hindmarsh

Mr JOHNSON:Lang

Mr HUME COOK:BOURKE, VICTORIA · PROT

Mr JOHNSON:

Mr Deakin:

Mr STORRER:Bass

Mr Wilks:

Mr STORRER:

Mr McWILLIAMS:Franklin

Mr MAUGER:Melbourne Ports

Mr Wilks:

Mr MAUGER:

Mr Thomas:

Mr MAUGER:

Mr Thomas:

Mr MAUGER:

Mr Johnson:

Mr Reid:

Mr MAUGER:

Mr Thomas:

Mr POYNTON:Grey

Mr Wilks:

Mr POYNTON:

Mr BROWN:Canobolas

BUDGET

In Committee of Supply:

Mr KELLY:Wentworth

Mr Bamford:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Batchelor:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Watson:

Mr KELLY:

Mr Batchelor:

Mr KELLY:

Sir John Forrest:

Mr KELLY:

Sir John Forrest:

Mr KELLY:

Mr REID:East Sydney

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

Mr REID:

Mr Watson:

Mr REID:

Mr Watson:

Mr REID:

Mr Watson:

Mr REID:

Mr Webster:

Mr REID:

Sir John Forrest:

Mr REID:

Mr Frazer:

Mr REID:

Mr Mauger:

Mr REID:

Mr Harper:

House of Representatives
10 August 1906

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

Mr AUSTIN CHAPMAN:
Postmaster-General · EDEN-MONARO, NEW SOUTH WALES · Protectionist

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

Mr REID:
East Sydney

Mr HUTCHISON:
Hindmarsh

Mr JOHNSON:
Lang

Mr HUME COOK:
BOURKE, VICTORIA · PROT

Mr STORRER:
Bass

Mr McWILLIAMS:
Franklin

Mr MAUGER:
Melbourne Ports

Mr POYNTON:
Grey

Mr BROWN:
Canobolas

Mr KELLY:
Wentworth

Mr REID:
East Sydney

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

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

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