House of Representatives
21 August 1906

2nd Parliament · 3rd Session



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

page 3098

PERSONAL EXPLANATION

Mr REID:
EAST SYDNEY, NEW SOUTH WALES

– I wish to take the earliest opportunity to make a personal explanation. I find that, when the motion for adjournment was moved on Wednesday last, the honorable member for Gwydir made these statements -

To-day it is alleged that thousands of pounds have been contributed by the Tobacco Trust, the shipping ring, and various big firm’s in Sydney, to a fund which the members of the Opposition are shepherding, and which is being used by them when travelling through the country with th’eir wives, in the. endeavour to wrest from the Government at the next elections the reins of office….. The leader of the

Opposition is travelling through the country, utilizing the large funds placed at his command for the purpose of injuring honorable members who are here attending to their public duties.

Each of those statements is absolutely false.

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

-Is it parliamentary for the .right honorable member to characterize the words of the honorable member* for Gwydir as false?

Mr SPEAKER:

– I ask the right honorable member to withdraw the remark.

Mr REID:

– I withdraw it, and substitute the expression “without foundation.” During my parliamentary career - and I have been the leader of a party in, I think, live political campaigns - L do not believe that a dozen subscriptions have been place, in my hands to help my party in the fight. The last of those subscriptions was received some years ago ; I think in connexion with the last Federal elections.

Sir William Lyne:

– Have not subscriptions been collected by the Reform League ?

Mr REID:

– That is a State league, with which I have nothing to do. The only body with which I am connected is one for which the honorable member for North Sydney is treasurer, and he has given an emphatic denial to the statements of the honorable member for Gwydir.

Sir William Lyne:

– It has been done on former occasions.

Mr REID:

– All I can say is that it is absolutely false to say that any such funds have been placed at my command, or, so far as I know, at the command of any honor- . able member of the party in either the Senate or the House of Representatives.

Mr Frazer:

– Then who pays the organizers who are travelling through the States?

Sir William Lyne:

– There is a secret fund from which they are being paid, and the right honorable member is getting the benefit of it.

Mr REID:

– I have not received sixpence from any fund. I am afraid that the object of the statement was to frighten persons from subscribing to our league. I wish, therefore, to say that we are ready to accept as much as is sent along. We do not, however, intend to call upon the boys and girls in the factories to contribute from their small wages.

Sir William Lyne:

– The right honorable member has at his disposal already a fund of about ^10,000.

Mr REID:

– I should like to get a little of it.

Mr SPEAKER:

– These interchanges are highly disorderly.

page 3099

QUESTION

DUTY ON HARVESTERS

Mr JOHNSON:
LANG, NEW SOUTH WALES

– T wish to ask the Minister of Trade and Customs a question without notice. Does .he Government intend to proceed at once with the .proposals^ to increase the harvester duties ? If not, will’ they discontinue the illegal collection of increased duties which Parliament has not authorized ?

Sir WILLIAM LYNE:
Protectionist

– The duties recommended by the Tariff Commission are now being collected under the motion which I moved some time since. I have not yet had an opportunity to consult with the Prime Minister and my other colleagues as to when the motion can be proceeded with ; but I shall do so at the earliest possible opportunity.

page 3099

QUESTION

HIGH COURT BENCH

Mr REID:

– In view of the grave urgency alleged for the appointment of additional Judges to the High Court Bench, and the fact that the Bill authorizing the appointment passed through this House some time ago, does not the Prime Minister think that its passage in another place should be facilitated?

Mr DEAKIN:
Minister for External Affairs · BALLAARAT, VICTORIA · Protectionist

– The measure is urgent, but the leader of the Senate has explained that, as it is the practice of that body to, as far as possible, finish a stage of one Bill before considering another, he has not yet been able to bring it forward. I have reason to believe that it will be proceeded with, and, I hope, disposed of this week.-

page 3099

QUESTION

AUDITOR-GENERAL’S REPORT,

Mr WILKINSON:
MORETON, QUEENSLAND

– Can the Treasurer inform the House when the Auditor: General’s report will be presented ?

Sir JOHN FORREST:
Treasurer · SWAN, WESTERN AUSTRALIA · Protectionist

– Very shortly, I should think. I shall endeavour to give the honorable member a definite ‘answer tomorrow.

page 3099

QUESTION

TARIFF COMMISSION’S REPORTS

Mr JOHNSON:

– I wish to ask the Minister of Trade and Customs a question without notice. . In view of the often expressed anxiety of the Government to obtain the reports ‘of the Tariff .Commission, so as to allow prompt action to rectify anomalies and provide relief for alleged declining industries, how do they reconcile their present inaction with their former apparent solicitude?

Sir WILLIAM LYNE:
Protectionist

– I shall not answer that Question.

Mr. JOHNSON. Then I desire to know if the Prime Minister will inform the House when it is proposed to give honorable members an opportunity to deal with the reports of the Tariff Commission?

Mr DEAKIN:
Protectionist

– Immediately. .

page 3100

QUESTION

RABBIT-EATING ANTS

Mr CULPIN:
BRISBANE. QLD

– I wish, to draw the attention of the Minister of Trade and Customs to part of a letter from the Government Entomologist of the Transvaal, to the Government Entomologist of New South Wales, on the subject of rabbit-eating ants. The letter was published in the Sydney Daily Telegraph of Friday last, and in it the writer, says, with reference to the rabbit-eating ants which have appeared in the Transvaal -

I have looked this question up for you, but am unable to give you the scientific name of the ant in question. It is called the red ant by the farmers, and often causes great trouble. They infest houses, bite people severely, will carry away any sort of meat, and it has been reported that they have killed a canary in iti cage. Further, I know of a house, which has a verandah infested, and the ants are very numerous and active; the people cannot stay on the verandah on account of the bite of the insects. They also worry dogs. A case has also been reported to me where these ants have caused the destruction of mice in their nests.

As he promised to obtain some of these ants, and to send them to New South Wales, I ask the Minister of Trade and Customs whether steps should not be taken to prevent their introduction until we know more about them.

Sir WILLIAM LYNE:
Protectionist

– I think that the best rabbit destroyer in Australia at the .present time is Dr. Danysz.

page 3100

QUESTION

TASMANIAN MAIL SERVICE

Mr CAMERON:
WILMOT, TASMANIA

– I wish to know from the Postmaster-General when he will be able- to give”1 the people of Tasmania some information in regard to the tenders for a new mail service?

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

– I hope to look into the matter to-day, and shall inform the honorable member at the earliest possible moment.

page 3100

QUESTION

CONDENSER TELEPHONE RATES

Mr PAGE:
MARANOA, QUEENSLAND

– Some six or seven -weeks ago the Postmaster-General promised to consider whether the rates for using telephones on the condenser system in the. western portions of New South Wales and Queensland could be reduced. Has he yet done anything in the matter?

Mr AUSTIN CHAPMAN:
Protectionist

– The whole subject of telephone rates is now under review, and I hope to give the honorable member, and other honorable gentlemen who have made similar inquiries, full information within a week or two.

page 3100

QUESTION

PACIFIC ISLANDERS IN AUSTRALIA

Mr MAHON:
COOLGARDIE, WESTERN AUSTRALIA

asked the Minister of External Affairs, upon notice -

  1. What was the estimated number of Pacific Islanders in Australia engaged in the sugar industry at 17th December, 1901 ?
  2. How many Pacific Islanders were admitted into Australia to work in the sugar industry between 17th December, 1901, and 31st March, 1904?
  3. Between 17th December, 1901, and 30th June, 1906, how many Pacific Islanders engaged in sugar growing (a) died, (*) quitted Australia?
  4. The number of Pacific Islanders due for repatriation after 31st December, 1906, and the number of Islanders who are to be permitted to remain ‘in Australia ?
  5. Has his attention been drawn to the statement in the report of the Sugar Industry Labour Commission (Queensland) that “ a considerable disparity “ exists between the number of Pacific Island labourers “ subject to repatriation and the number actually known to be in the various districts”; and to the Commission’s finding that “the presence in the State of so large a number of unemployed Islanders (which number cannot but increase) is principally due to the fact that no administrative action has been taken under the provisions of section 8 of the Pacific Island Labourers Act 1901 (Commonwealth).”?
  6. What justification, if any, exists for this charge of administrative neglect against the Commonwealth Government ?
Mr DEAKIN:
Protectionist

– If the honorable member moves for the production of the information asked for in questions 1 to 4 as a return, the Government will not oppose the motion. In answer to question 5, my attention has been drawn to the statement referred to. It was thought undesirable to take administrative action under section 8 of the Pacific Island Labourers Act until the Commission had concluded its very valuable and useful inquiry. Had the Commission not been appointed, the Government would have dealt with the kanakas who are out of employment. In reply to question 6, no justification exists for a charge ‘of administrative neglect against the Government. Our policy is a well-considered one:

page 3100

QUESTION

SILVER COINAGE

Mr CROUCH:
CORIO, VICTORIA

asked the Treasurer, upon notice -

  1. What amount of profit would come to the Commonwealth from the institution of Australiansilver coinage?
  2. What is the reason why it has not beer* established, and for how long will this largerevenue be lost to Australia?
Sir JOHN FORREST:
Protectionist

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

  1. The average amount of silver coins issued to the Commonwealth, in the fifteen years ended 31st December, 1905, was £77,000 per annum. Taking this as a basis for the future, the profit to the Commonwealth will be about £38,000 per annum, or, roughly, one-half of the nominal value of silver coins to be issued. This does not take into consideration the profit (if any) to be derived from the withdrawal of the existing coinage, and the substitution of an Australian coinage, neither does it take into account the cost of rehabilitation of gold coinage. The amount of the existing coinage is estimated at from £1,200,000 to £2,000,000.
  2. It is desired to establish a decimal system of money concurrently with an Australian silver coinage, and to facilitate that end, the Imperial authorities were asked on the 10th March, 1905, to arrange for the withdrawal of £200,000 worth of silver coins per annum. No reply has been received, but the Treasurer during his recent’ visit to England learned that the Imperial Government is unwilling to agree to the withdrawal of more than £109,000 per annum. He found that the question of silver coinage was one of great interest to several parts of the Empire, and that it was considered advisable that it should be included in the subjects to be submitted to the Imperial Conference which is to meet in London next year.

It is hoped that as a result of the Conference the profit on silver coinage will be secured to the Commonwealth on fair terms.

It is not clear that as implied in the question any large revenue is being finally lost. The net import into Australia of silver coins increases the profit which will accrue to the Commonwealth on the substitution of an Australian for the present currency, if the Imperial Government will agree to withdraw the latter at its nominal value.

page 3101

QUESTION

POSTAL DESPATCHING OFFICERS

Mr BROWN:
for Mr. Webster

asked the Postmaster-General, upon notice -

  1. Is he aware that the work of despatching officers is being performed by junior sorters in Sydney ?
  2. .Is he aware that qualified despatching officers are engaged on much less responsible work?
  3. Is it a fact that such work is done by the despatching officers in all States other than New South Wales?
  4. Will he see that these officers are installed in the positions to which their grade entitles them ?
Mr AUSTIN CHAPMAN:
Protectionist

– The following information has been furnished by the Acting Deputy Postmaster-General, Sydney, in connexion with questions 1 and 2 : -

  1. Yes, despatching work is being performed by sorters pending a settlement of the question as to whether despatching officers in mail vans will be transferred to the General Post Office, or forego their title, and remain in their present positions, as some of them desire. Action is now in hand which should shortly result in an earlysettlement of the case.
  2. Pending a settlement of the matter referred to in No. 1, despatching officers are engaged at other mail work which is not, however, considered less responsible.

The replies to questions 3 and 4 are as follow : -

  1. The practice in the other States is being investigated.
  2. See answer to No. r.

page 3101

QUESTION

MILITARY EXAMINATIONS

Mr CROUCH:

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

  1. Is there any difference between the English examination for tactical fitness to command and the examination now established in the Commonwealth for promotion to the position of Lieut.Colonel ?
  2. How long has the examination for Lieut. - Colonel been established in England, and is this examination superior to or more difficult than that in Australia?
  3. Was it necessary for the Inspector-General in England to pass the examination for tactical fitness to command ?
Mr DEAKIN:
Protectionist

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

  1. In the Imperial Army there are two alternative syllabi under which officers may be examined for technical fitness for command - i.e., for promotion to rank of Lieut. -Colonel - namely : -

    1. in which actual troops are employed.
    2. By means of a staff ride or tour.

The examination for technical fitness for command (i.e., for promotion to Lieut. -Colonel) in the Commonwealth does not provide for an alternative syllabus - the syllabus prescribed being practically a reprint of that prescribed in (1) above referred to for the Imperial Army.

Notification has recently been received that a revised syllabus has been adopted for the Imperial Army, which omits one of the subjects nf the examination previously in force, but which is still retained in the Commonwealth syllabus.

  1. So far as can be ascertained, the examination for Lieut. -Colonel was established in England in 1890; the syllabus prescribed is not superior to or more difficult than that prescribed for Australian officers.
  2. The present Inspector-General of the Imperial Forces was promoted to the rank of Lieut. -Colonel prior to the coming into force of this examination, and . consequently was not required to pass the examination for technical fitness for command, i.e., for promotion to rank of Lieut.-Colonel.

page 3101

QUESTION

DUTY ON HARVESTERS

Mr WILKS:
for Mr. Bruce Smith

asked the Minister of Trade and Customs, upon notice - -

  1. Whether he is aware that he (on 9th August, 1905) made the following statement to the House : - “ I believe in fair play, and whilst I am not sure that the right of appeal prevails, I may say at once that if the Massey-Harris Company have any reliable facts or data to bring before me I should like to have them submitted for my consideration. If they then commenced proceedings against the Government, I should be very much disposed not to place any impediment in their way, but to give them every facility. I cannot say anything fairer than that. My only desire is that there shall be a true valuation for the purposes of the Customs, and to see that fair play is meted out to all.”?
  2. Does he consider that the recent attempts by the Commonwealth authorities to hinder the importers from obtaining information on the question of value for the guidance of the Courts is in harmony with the above promise?
Sir WILLIAM LYNE:
Protectionist

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

  1. Yes.
  2. Yes. The action taken recently was with a view to prevent large expenditure being incurred in taking evidence in Canada, which would be rendered useless if the Court subsequently decided on the point of law that the Minister’s valuation under section 160 of the Customs Act is not subject to review.

As the case is now before the Court, the direction thereof is necessarily in the hands of the prof essional advisers of the Department. I may add that if honorable members will read .what I said they will find that I stated that I should be very .much disposed not. to place any impediment in the way of the company. They, however, did not treat me in the way that they should have done from the beginning, and when a company antagonistic to the interests of Australia fights me I shall fight them.

Mr Reid:

– Surely they must stand up for their own rights.

Sir WILLIAM LYNE:

– They did not give me a chance.

Mr Johnson:

– The Minister has done nothing but persecute them.

page 3102

QUESTION

IRON INDUSTRY

Mr RONALD:
SOUTHERN MELBOURNE, VICTORIA

asked the Minister of Trade and Customs, upon notice -

Whether he will present to the House the Tariff Commission’s report on the Iron Industry immediately or at an early date?

Sir WILLIAM LYNE:
Protectionist

– The Government is not in possession of any reports of the Tariff Commission beyond those already laid on the table of the House. I hope that we shall soon have some more.

page 3102

QUESTION

PREFERENTIAL RAILWAY FREIGHTS

Mr HIGGINS:
NORTHERN MELBOURNE, VICTORIA

asked the Minister of Trade and Customs, *upon notice - **

  1. Has he information pointing to any unfair preferences or discriminations existing in railway freights since the Railway Commissioners came to an arrangement?

    1. If so, can he state the instances?
    2. Is it his intention to re-introduce his proposal to appoint an Inter-State Commission ?
Sir WILLIAM LYNE:

– I have seen statements in the press, but the matter has not been officially brought under my notice. I may point out that I have not the information I should have.

Mr Glynn:

– I could give the Minister the information.

Sir WILLIAM LYNE:

– I have on two occasions introduced a Bill for the appointment of an Inter-State Commission, and have been prevented from proceeding with it. I am not going to expose myself to a third defeat. If I find that honorable members are prepared to pass a measure of the kind I shall introduce it.

Mr Glynn:

– The necessary information is available.

Mr Groom:

– It is being obtained now..

page 3102

PREFERENTIAL BALLOT BILL

Motion (by Mr. Groom) proposed -

That, leave be given to bring in a Bill for an Act to amend the law relating to Parliamentary elections.

Mr REID:
East Sydney

– I should like to know whether this Bill includes some new proposal as to the exercise of the franchise?

Mr Groom:

– Yes.

Mr REID:

– Then, as a matter of justifiable comment, apart from any party motives whatever and entirely with a view to the despatch of as much practicable business as possible during the few weeks that remain to us, I wish to say that if such a controversial matter be included in the Bill the few remaining weeks of this Parliament will be frittered away in a prolonged discussion upon one of the most important and intricate questions that could be considered by any Legislature. Unless the Government know beforehand, and I do not suppose they do, that the Bill is sure to be passed, we may spend a large amount of public time in discussing it, with the subsequent mortification of knowing that no practicable result could have followed. It is not as if this matter had not already been considered, because I find that the same project was submitted to the House by the Barton Government, of which several of the present Ministers were members. It” was submitted to this House in 1 901 -1902 - eighteen months before the general election, . when some time would have been afforded for making the people acquainted with it. The history of the proposal is contained in Hansard of the 23rd of July, 1902. When it came before the -Committee, the honorable member for Bland is reported, at page 14,612, to have said - this was eighteen months, and not two months, before an election -

I should like to know what attitude the Government intend to assume with regard to this clause. I believe there is a very strong feeling against the contingent vote, and I, for one, am opposed to the introduction of any of these fancy systems of voting. As it is probable that at the next Federal election the two Houses will go to the country at the same time, the introduction of the contingent voting system would lead to a great deal of confusion.

At the next election the two Houses will go to the country at the same time, and, therefore, it is proposed that there shall be two methods of voting adopted in electing the members of the respective Houses. The ‘honorable member for Bland continued -

I do not know that the object aimed at is of sufficient importance to justify us in unsettling the minds of the electors, and thus, perhaps, disfranchising a very large proportion of them. In certain cases the contingent vote might not attain the object aimed at.

If that was sp, when eighteen months were available within which to prepare the minds of electors, how much more strongly would the remarks apply now that a new and complicated method of voting is submitted within two months of an election ?

Mr McDonald:

– In Queensland the electors were advised not to adopt the preferential voting system.

Mr REID:

– I understand that the Labour Party in Queensland never would use the preferential system of voting.

Mr McDonald:

– It is optional there.

Mr REID:

– It is made optional in Queensland, and the electors have exercised the option by not expressing their preference. I submit that a system of election, which a large and important party neVer takes advantage of, cannot be a good and a proper one.

Mr McDonald:

– The other side, also, sa.ys that it is not a good system.

Mr REID:

– Then the system is doubly condemned if both sides take the same view and refrain from availing themselves of it. The honorable member for Bland went on to say -

On rare occasions, in New South Wales, a candidate has been returned by the votes of a minority; but this has happened to every party in the State, and it is not at all certain that the results would have been altered by the. operation of the contingent vote.

In reply to a suggestion that it might be made mandatory, the honorable member said, “ Yes, but that might result in still greater confusion.” The present Minister of Trade and Customs was in charge of the Bill upon that occasion.

Sir William Lyne:

– Cannot the right honorable gentleman leave me alone?

Mr REID:

– No ; because it is. necessary that I should mention what was stated by the Minister in charge of the Bill, in reply to the statements of the honorable member for Bland. In regard to a proposal exactly similar to that which is now being suddenly introduced, the Minister made a certain statement. Honorable members know that last session the present Government introduced a Bill to amend the Electoral Act. If they had had the remotest idea of applying a new system of voting, such as that now proposed, to the next election, surely it was their duty to make provision for it in that measure, in order that honorable members and the electors might have the fullest opportunity to accustom themselves to the new idea. The matter must have been considered, because in their first measure they had a series of elaborate provisions relating to the contingent vote. This must be a mere political manoeuvre. I do not think that it has been: conceived by Ministers, because they are merely instruments in the hands of the Age. Ministers are simply moved as that organ dictates. They are under the direction of two organs, one inside and one outside of the House, and their lot cannot be a verv happy one. The Age made a rabid statement as to the necessity for an exhaustive ballot. It represented that the House was frantically eager to pass an amending Bill, and that all sides would welcome such a measure. Then a cold current passed through the political atmosphere, and that measure was dropped. A demand for the contingent vote is thenext one that comes from that influential quarter. I desire to read what was stated by the Minister of Trade and Customs, who was then in charge of the former Bill, in reply to the remarks of the honorable member for Bland. He said -

In theory the contingent vole appears sound, but the method proposed here is not quite the same as that adopted in Queensland. In that State, after the first vote the names of all but the first and second candidates are struck out, and the votes are divided between the two remaining. That is in the case of single electorates.

Then he went on to explain the proposal, which was probably the same as that contained in the Bill about to be introduced. He said -

The proposal in the Bill is that if there are four or five candidates, only the last one shall be struck out in the first instance, the votes belonging to the rejected candidate being distributed amongst the others. Then the lowest on the next count is struck out, and so on until only one remains. The system is somewhat complicated, and I took the trouble a day or two ago to work it out with rather astonishing results.

He stated further -

I found that it was possible for the candidate who obtained the largest proportion of No. 3 votes to secure an advantage over his opponent who received the largest proportion of No. 1 votes.

Mr Watson:

– Was not that the Nanson system?

Mr REID:

– No, it was a system under which the voters were to be enabled to express their order of preference.

Mr Watson:

– That was a system of proportional voting in connexion with the Senate elections.

Mr McCay:

– The principle was exactly the same.

Mr Watson:

– But the method of carrying it out was very different.

Mr REID:

– The object was to enable the electors to indicate the order of their preference. There was no suggestion of what is called proportionate representation, as apart from the indication of the wishes of the electors on their ballot-papers.

Mr Page:

– I think this is a Bill to complicate elections.

M!r. REID. - Or perhaps to kill time, to avoid some thorny subjects that may otherwise have to be dealt with.

Mr Higgins:

– What subjects?

Mr REID:

– I think that there are some with which the honorable and learned member is acquainted. The Minister said -

I found that it was possible for the candidate who obtained the largest proportion of No. 3 votes to secure an advantage over his opponent who received the largest proportion of No. 1 votes, and consequently my faith was very much shaken in the scheme contained in this Bill. I think that I accurately gauge the feeling of the Committee when I say’ that we ought not to persist in the proposal for the adoption of the contingent vote.

And the Government withdrew that proposal. The Ministry, of which the present Prime Minister, the Treasurer, and the Minister of Trade and Customs were members, withdrew the proposal, although there was then time to secure a fair and exhaustive discussion of the principle which it involved.’ But now there is a sudden and mysterious intrusion of this question. Can there be the slightest doubt that it has been introduced because the Government believe that it will serve their personal political interests? Do people think that this comet is thrown across the political horizon either to assist the Opposition or to help the Labour Party? Complications are arising in various, places, and I say that to bring forward such a vital proposal -at the close of the session, and within a few weeks of the closing of the Parliament - a proposal which the thousands and tens of thousands of electors are supposed to master before the approaching election - is a most sinister act. The origin of the’ proposal itself is sufficient to condemn it. It has emanated from the office of the Melbourne Age. The exhaustive ballot system was first- projected, but that fell still-born, and now this proposal is put forward. I do not feel disposed to discuss the merits of the que.;tion, because I have always recognised some good points in the contingent vote.

Mr Maloney:

– Then what is the right honorable member’s trouble?

Mr REID:

– If the honorable member will listen, he will understand. The argument which was put forward by the honorable member for Bland with reference to the confusion which would inevitably result from the adoption of a new system of voting within eighteen months of an election, becomes irresistible when applied to a proposal which is sprung upon the House and the people of Australia within a few weeks of an election. Has, the Minister of Home Affairs acted upon thi? advice of his officers, who have been assuring us that the 21st November is the earliest date upon which the general elections can be held? Have his officials been consulted as to whether the adoption of these proposals would not have the effect of delaying the elections? At this stage, perhaps, it is premature for me to seek much information, but I wish to point out that these proposals are sprung upon the electors too late. So far as I can understand, they do not apply to the elections for the Senate. But whether thev do or not, the objection to be urged against them is precisely the same. If they do not apply to the Senate we shall be introducing two different systems of voting. The electors at the last election - that of 1903 - became accustomed to placing a cross in a square opposite the name of the particular candidate whom they favoured. If this House adopted the Government proposals within a few weeks of the next election it would place itself in this unfortunate position: that the representatives of the people, whose duty it is to properly adjust our electoral system long before the elections take place, would expose themselves to a charge of having kept these proposals absolutely in the dark instead of dealing with them when the Electoral Bill was under consideration last session. I repeat that they have been deliberately kept in the dark in order that they might be sprung upon the House under the pressure of certain political exigencies, which are only too manifest. I protest against the remaining time of the session being taken up in their discussion. It is unreasonable to expect the electors to understand them in the short space of time that will elapse before the elections take place, and unless the Government have already got the numbers, and know that they will be able to force the Bill through, it would be folly to proceed with it. It would be a matter for extreme regret if we found that, in considering the Bill, we had sacrificed valuable time, without securing any practical result.

Mr GROOM:
Minister of Home Affairs · Darling Downs · Protectionist

– All I have to say inreply to the remarks of the right honorable member for East Sydney is, that the Bill has not been sprung upon the House under pressure of any political exigency. It has been under consideration for a considerable time, and it has not been introduced as the result ofany outside influence, but in the belief that it will be speedilydealt withby a Parliament which is desirous of despatching the necessary business of the session.

Question resolved in the affirmative.

Bill presented, and read a first time.

page 3105

TARIFF

Excise Duties upon Spirits.

Resolution reported.

Motion (by Mr. Deakin) agreed to -

That the resolution be recommitted.

In Committeeof Ways and Means:

That in lieu of the duties of Excise imposed by the Excise Tariff, 1902, on spirits, duties of

Excise shall, from the 2nd day of August, 1906, at 4.30 p.m. Victorian time, be imposed upon spirits as follows : -

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

– The object of going into Committee of Ways and Means is to avoid the insertion in the Bill of the two dates that are named in the resolution as those from which the duties upon spirits shall commence to operate. The resolution was brought down upon the 14th inst., butwedealt with it upon the 15th and 16th inst., and, in view of the fact that the few transactions which took place in the interval involved no complications we think it is only a reasonable concession to date all the duties from the 17th inst., so that whatever changes have been made will all operate as from that date. I therefore move -

That the date named in the resolution be the 17th August, 1906.

Amendment agreed to.

Amendment (by Sir William Lyne) proposed -

That in paragraph 8 the following words be left out, “matured by storage in wood for a period of not less than two years.”

Mr HIGGINS:
Northern Melbourne

.- should like to know the object of the amendment?

Mr Deakin:

– Provision for requiring the spirits in question tobe matured in wood for a period of not less than two years will be made in the Bill which will be introduced to cover these resolutions.

Mr HIGGINS:

– I have learned that there are certain classes of spirits which cannot be matured in wood. For instance, spirit - which the Prime Minister will recognise as gin - is made in Holland from juniper. Square gin is one of those spirits which cannot be kept in wood for two years. The amendment I understand is not designed to absolutely exclude such spirits ?

Mr Deakin:

– I think it is desirable to deal with them, but the honorable and learned member will have an opportunity of discussing that matter when the Bill is introduced.

Amendment agreed to.

Amendment (by Sir William Lyne) proposed -

That paragraph 10 be left out.

Mr.REID (East Sydney) [3.14]– In reference to these amendments, I merely desire to say that in agreeing to them, I am accepting the assurance of Ministers that we are doing nothing in opposition to our previous decisions, but merely putting things in order.

Mr Deakin:

– That is so.

Amendment agreed to.

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

– I do not know whether the last paragraph in the resolutions was accepted by mistake or not. I refer to spirit for fortifying Australian wine, which is subject to a duty of 6d. per gallon. Previously, the Excise duty was1s. per (gallon, and toy proposal was that this spirit should be made free, subject to regulations, on the understanding that the charge for supervision should not exceed 6d. per gallon. I understand that the cost of supervision would amount to about £2,000, and if this provision were struck out, I should have power under the Excise Act to frame a regulation providing that spirit for fortifying Australian wines should be free, and that the actual cost of supervision, which would not amount to more than 4d. per gallon, should be paid by the vignerons.

Mr Watson:

– A duty of 6d. per gallon will not seriously affect them.

SirWILLIAM LYNE.- I wish the Committee to clearly understand the effect of the decision which was arrived at last week. Under it the vignerons are to pay a duty of 6d. per gallon for this spirit.

Mr Storrer:

– -And they are willing to pay it.

Sir WILLIAM LYNE:

– I do not know about that, but I do know that there is no wine made in Tasmania.

Mr Storrer:

– I am speaking, not from the point of view of Tasmania, but in the light of the statements that were made last week, during the debate which took place in the absence of the Minister.

Sir WILLIAM LYNE:

– It is not my desire that the vignerons should be charged more than is absolutely necessary, and. in my opinion, it is unnecessary to impose a duty of 6d. per gallon’. A proportion of thatduty will go into the consolidated revenue.My desire - and the Prime Min ister sought last week to give effect to it - was that the spirit should be free, subject to regulations, and that the charge for supervision should not exceed 6d. per gallon. It may be said by the leader of the Opposition that there would be some difficulty in collecting the Excise, and I repeat that if this item were struck’ out altogether, and my proposal were adopted, the cost of carrying out the regulation would amount to about £2,000 per annum. I do not intend to move an amendment, but I wish to place the facts before the Committee. Honorable members must not forget that under this schedule a duty of6d. per gallon is imposed.

Mr McCay:

– Instead of a charge amounting to 4d. per gallon, as suggested by the Minister.

Sir WILLIAM LYNE:

– The cost would not exceed 4d. per gallon, but I am advised that, as a rule, it would be less than that.

Mr Higgins:

– The recommendation of the Commission was that a duty of 6d. per gallon should be imposed.

Sir WILLIAM LYNE:

– That is so; but I think it isunwise to take from the producers more than is absolutely necessary.

Mr Watson:

– What would be the percentage of this duty to the total cost of production ?

Sir WILLIAM LYNE:

– The ComptrollerGeneral informs me that the total loss to Australia involved in the cost of supervision would be £2,000 per annum.

Mr McCay:

– Then a duty of 6d.per gallonwillrepresentacostof£3,000in respect of the whole of Australia?

Sir WILLIAM LYNE:

– The duty of 1s.pergallonyieldedarevenueofsomething like £12,000, so that if the total cost of supervision amounted to £3,000 per annum, a duty of 3d. instead of 6dper gallon would be sufficient. If in the light of the facts I have placed before them, honorable members still think it undesirable to depart from the decision arrived at last week, I cannot be blamed for the imposition of a charge or duty which is twice as much as I think ought to be imposed.

Mr GLYNN:
Angas

.- I think that the Minister has made a mistake with regard to the revenue collected in respect of the duty of1s. per gallon. On referring to page 9 of the third progress re- port issued by the Tariff Commission, I rind that the duty has been very irregular in its results. The revenue derived from it in 1905-6 was £4,199, whilst in 1904-5 it amounted to ,£12,686. Another objection to the duty is that it bears unequally on the States. For instance, in 1905-6”, South Australia contributed £1,662 out of the total of £4,199 collected in respect of the whole Commonwealth, whilst in 1904-5 she contributed £5.465 out of a total of £12,686. In other words, that State has always contributed nearly half the total revenue so derived. The duty was in force in South Australia prior to Federation, whilst in seme of the other States it was not.

Mr Deakin:

– No duty was imposed by New South Wales.

Mr GLYNN:

– As it was imposed to make good the cost of inspection, we ought to regard it as an inspection duty. The Government, I understand, propose that, instead of there being an absolute duty of “6d. per gallon, there should be a charge to cover the cost of inspection, which in no case should exceed 6d. per gallon.

Sir William Lyne:

– That is exactly what I. desire.

Mr GLYNN:

– I support the Minister’s proposal. Had the honorable gentleman elaborated the argument, which he based on the figures presented by his Department, he might have shown that the dutv is not imposed for revenue purposes, and is open to the objection that it is comparatively small, while it is at the same time unequal in its incidence on all the States. The proposal, therefore, to substitute a maximum charge of 6d. per gallon to cover the cost of inspection is a fair one. The duty of is. per gallon was particularly heavy in relation, to the cost of production and largely interfered with the competition of Australian wines with those of the outside world. That remark will apply, to some extent, to the duty of 6d. per gallon now imposed. If the Minister proposes to reconsider the item in the light of these additional facts, I shall be prepared to support him.

Mr REID:
East Sydney

.- I would suggest that when the Bill is before us we shall have a fair opportunity to reconsider any question arising out of this matter.

Mr Deakin:

– We shall then be unable to amend the schedule, unless we go into this Committee again.

Mr REID:

– I’ seriously object to a “thin” Committee amending a decision, arrived at by a fairly large one. There are obvious objections to the adoption of such a course, but if there is any other way of reconsidering the matter I am sure that if the Government think it worth while doing so, it will be our wish to facilitate their efforts.

Question, as amended, resolved in the affirmative.

Resolution, as amended, reported and adopted.

page 3107

EXCISE TARIFF BILL

Ordered -

That Sir William Lyne and Mr. Deakin do prepare and bring in a Bill to carry out the foregoing resolution.

Bill presented by Sir William Lyne, and read a first time.

page 3107

SPIRITS BILL

Motion (by Sir William Lyne) agreed to-

That leave be given to bring in a Bill for an Act relating to spirits.

Bill presented, and read a first time.

page 3107

BUDGET

In Committee of Supply:

Debate resumed from 17th August (vide page 3050), on motion by Sir John Forrest -

That the item “ President, £1,100,” be agreed to.

Mr BROWN:
Canobolas

.- There is one subject which has been touched on during the debate upon which I particularly desire to express my opinions, and that is the need for increasing our population. The position of the Commonwealth in regard to population is not as healthy as the well-wishers of Australia desire, because for some time past there has not been a material excess of Immigrants over emigrants. In view of the latent possibilities of wealth and production that we possess, the fact that immigrants are not being attracted” to our shores is one that invites consideration. I do not think it will be contended that even the older settled States have reached the limits of their possibilities in regard to the support of population. Even in Victoria, where there has been a decrease, there are enormous possibilities for the support of a much larger population than the State now possesses.

The only conclusion to be drawn from the present state of affairs is that the conditions offered to workers here are not inviting, and before we can hope to attract immigrants, we must take means to induce those who are here to remain; because our population is not likely to increase so long as there is a continuous drain of emigrants. To provide a remedy for the present state of affairs, the co-operation of the States must be secured, and I am pleased to know that special attention is being given to the subject by the States authorities. The need for a larger population is recognised, and the Treasurer has promised to second the efforts of the States in attracting people to our shores. There are now about 4,000,000 souls in the Commonwealth, while our national debt is something like £236,000,000, the annual interest upon it amounting to between £8,000,000 and £9,000,000. In order to lessen the burden of this indebtedness^ we should endeavour to bring about the presence here of .1 larger number of persons to share it, while a larger population is necessary also for the progress and development of the country, and the production of wealth. There a:ie two or three methods by which we might increase our population. We might, in the first place, draw upon the coloured peoples of the islands of the< Pacific, as has been done in the past. Chinese were first introduced into Australia to provide cheap labour, whereby production might be increased’, and the presence of the kanakas on, the sugar fields of Queensland is to be accounted for in the same way. . But, whilst there are a. number who would like to see Australia developed by these means, the verdict of the Commonwealth is against it, the electors as a whole having emphatically voted for a white Australia. Our population might be increased, in the second place, by the introduction of pauper labour from Europe. Pauperism, however, has always a tendency to debase and demoralise, and the experience of America is not likely to make us ready to follow her example by the introduction of paupers. I do not condemn those who are poor, and’, no doubt, even in the ranks of the very poor are to be found men and women who, given reasonable opportunities, could be converted into good citizens. But those who come to our shores must have energy and grit, and should possess some little means, if they are to make a favorable start. The honorable member for Darling, when speaking in this debate, quoted a telegram from New Zealand which seems to indicate that that country is having some experience in connexion with the introduction of ‘paupers. Recognising the need for increasing -her population, she has encouraged immigration, but, according to the information put before us by him, immigrants have recently arrived there who had to be provided, on arrival, with clothes and blankets and the means of subsistence. I do not think that the people of the Commonwealth wish to draw largely from the pauper populations of the old world, and, particularly, not from the pauper populations of Europe. We should prefer people of the race from which we have sprung- good’, vigorous1, healthy stock, who will be able to help to bear the burdens of nation building,. We .are, however, prepared to welcome all desirable immigrants, whether from Great Britain or from other European countries. The present position of stagnation in regard to our population must excite keen consideration. In the view of some honorable members, much of the legislation of New Zealand of recent years has been objectionable because of its socialistic or humanitarian character, but, despite that fact, the population of the colony during the last five years has, according to the statisticians, in creased by 43,000, while the population of the Commonwealth has within the same period increased by only 3,000. I know that a good deal of the New Zealand increase is to be accounted for by emigration from Australia, young men, natives of the State from which I come, and of other States, who have been discouraged and become tired in their efforts to secure employment in Australia which would give them an opportunity to make a decent living here, having gone to New Zealand to better themselves. Generally, they have bettered themselves by doing so, and the encouraging reports which they have sent to their friends have induced others to follow their example. I find by reference to Coghlan that during the decade from 1882 to 1891, when employment and wealth production were not so restricted as at present, we added to our population by excess of immigration over emigration 374,094. In the foi-, lc wing decade our gain by the excess of immigration over emigration was only 2,377. “This was a very remarkable falling off. In regard to this Coghlan says -

If the result of the last twelve years be compared, it will be seen that there was an exodus both from Victoria and South Australia, the former losing 145,227, and the latter 23,222 by excess of emigration, while Tasmania also lost 6,119 from the same source.

Whilst people move about from one State to another, because they conceive that they can better their position, no great concern need be felt. The inducements, offered to persons born in a State to leave it must be very considerable. They must not only have a hope, but a reasonable assumption, that they will be able to improve their position, andi we need not begrudge Western Australia an increase of population at the expense of the other Slates. But when population is lost to the Commonwealth as a whole - when our people are leaving us to settle in New Zealand, South America, South Africa, or the United States - the matter becomes very serious. I gather that in the case of New South Wales, 500 or 600 more persons have gone to Great Britain than have arrived from the old country.

Mr Lonsdale:

– They are merely travellers.

Mr BROWN:

– That may be so, but the honorable member must admit that the balance ought to be the other way. We should be drawing people from the old country, and the addition to our population should more than compensate us for any loss brought about by the departure of travellers from our shores. These figures emphasize my point that we are not attracting population from Great Britain and elsewhere to the extent that we should be doing.

Mr Cameron:

– That is attributable to our legislation.

Mr BROWN:

– I “join issue with the honorable member. . Our legislation has not advanced upon socialistic lines to the same extent as that of New Zealand, and yet New Zealand has gained 43,000 by excess of immigration over emigration, whilst we have added to our population only a miserable 3.000.

Mr Lonsdale:

– Was that difference due to the legislation passed in New Zealand?

Mr BROWN:

– The legislation passed in New Zealand has not prevented an influx of population. Those who are best qualified to express an opinion state that the socialistic legislation of New Zealand has tended to encourage immigration, and that otherwise New Zealand would have been in the same state of stagnation as is the Commonwealth. That brings me to another point. Why do our young men who are born and bred in Australia, after having made every effort to better themselves here, leave for New Zealand and other parts of the world? I contend that the cause is to be found in the fact that the natural opportunities that should be presented to them are being denied. When plenty of land was available, and our mineral resources could be exploited without undue restriction, immigrants were attracted here. Now, however, that most of our lands have passed into the hands of a few persons, and our mineral resources are also under the control of monopolists, it is impossible for the bulk of our population to find here a suitable outlet for their energy. The restrictions by which they are hedged about impel them to go elsewhere to try their fortunes. I had the privilege of listening to the last semi-public address delivered by the late Mr. Richard Seddon. He then dealt with this very subject, and showed to what extent New Zealand ha’d been able to solve the problem. He did not claim that that colony had been completely successful, but he contended that she had done much more than the Commonwealth, and that the line of progress lay in the direction , of making available to the masses the great natural opportunities presented by the country. He said in effect, “ Land is life-. Those who own the land have a monopoly of the life-blood of the people.” No truer words were ever uttered. Those who hold the land determine the conditions under which the people have to live, and it is owing to the extent to which the best and most easily accessible lands in all the States have been monopolized that our population does not increase. This matter has been dealt with by Mr. Rider ] Haggard, .who. although most generally known as a writer of fiction, has given considerable attention to the . question of land settlement, and has been considered worthy to be appointed bv the British Government to report upon it, not only in the British Empire, but in the United States, on the Continent, and elsewhere. He says tthat some people have an idea that land is simply a luxury - something which a rich man only should own, and which should be devoted to pleasure grounds and game preserves. He points out, however, that the land is meant to grow food, and that, more than that, it is intended to grow men and women. My contention is that our stagnation in the matter of population is due to the monopoly of the best lands of the Commonwealth. I have compiled a table showing how the lands of New South Wales are held. I have taken my data from the latest statistics in the Year-Book of New South Wales, 1904-5, edited by Mr. Hall, the Government Statistician. In New South Wales, there are 60,427 holdings qf 400 acres and under, which embrace a total area of 5,500,000 acres. Of this area about 824,000 acres, or about 14 per cent., is cultivated. Of holdings of upwards of 400 acres, and less than 1,000 acres, there are 9,000 holdings, embracing 5,750,000 acres, of .which 658,000 acres are under cultivation. There are 722 holdings which embrace 23,000,000 acres, of which only 300,000, or 1.31 per cent, of the total area, are under cultivation.

Mr Cameron:

– How much of that land is . fit for cultivation ?

Mr BROWN:

– A very considerable area. Only 1,500,000 acres are devoted to wheat cultivation, in New South Wales, whereas Coghlan tells us that there are at least 20,000,000 acres of land in New South Wales suitable for the growth of that product. Therefore, a large proportion of the best land in the State is still being devoted to pastoral purposes. The table from which I have quoted is as follows : -

Holdings under 1,000 acres total 69,437, having an area of 11,256,861, representing 5-74 per cent. of. area oi State ; the cultivated area being 1,483,613 acres, equal to 52-32 per cent, of the area alienated. Holdings of over 1,000 acres total 6,234, having an area' of 36,824,443, representing 18 '80 per cent, of area of State ; the cultivated area being 1,018,243 acres, equal to 6-44 per cent, of the are* alienated. One remarkable feature of that table is that 722 holdings embrace about one-half of the total area which has been alienated. A point which is made in this connexion is that whilst the number of this5 particular class of holdings is decreasing, their area is increasing, thus proving that the monopoly of the land by the few is steadily growing. As evidencing how this state of affairs has been brought about, I would direct attention to the fact that whereas during; the twenty-three years from 1882 to 1905 the land, selected aggregated 18,481,880 acres, the land' in which complete transfers were effected embraced 44,352,613 acres. In other word's, during;' that period, there were 25,870,000 acres more transferred than were required for the purpose of new holdings and increased settlement. This evil, I maintain, is still increasing, despite the more drastic measures relating to land legislation, which have since been enacted. In this connexion, I am free to admit that the right honorable member for East Sydney, when he was Premier of New South Wales, in 1895, was instrumental in placing upon the statute-book an Act which put a stop to a considerable amount of trafficking in land in the form of dummying, &c. He institained a system under WhiCh a longer occupancy was required before a transfer could be effected, and he also introduced a permanent form of settlement known ' as " homestead selections," under which a transfer could be made only to a residential holder. But despite this legislation, I find, from **Mr. Hall's** *Official Year-Book of New South Wales,* that between 1900 and 1904 - a period of five years - the area selected was only 2,246,712 acres, whereas the area transferred was 8,654,736 acres, There was thus a surplus of transferred land as against land acquired for- new settlement, of 6,410,024 acres. The number of holdings transferred during that period was 60,069, and ti16 number of new holdings created was 11,905, so that land settlement as represented by .separate holdings, showed a decrease of 48,1.64. In order that honorable members may be satisfied that the statements which I have presented are in accordance with facts, I will read the following quotation from **Mr. Hall's** latest statistics - >A comparison of the areas dealt with in the following table shows how fast the original conditional purchasers of Crown lands are dispossessing themselves of their holdings, whilst the area selected does not exhibit a tendency to increase at anything like the same rate. An examination of the table reveals the fact that since 1SS2 there have been 44,352,613 acres of conditional purchases transferred, as against 18,481,880 acres applied for - a difference of 25,870,733 acres, which have, to a very large extent gone to increase the large estates, distinctly to the detriment of healthy settlement. That quotation will be found upon page 82 of *The Official Y ear-Book of New South Wales* for 1904-5. To-day, instead of there being something like 200,000 settlers in New South Wales, assisting to develop her natural resources, there are only some 75,000. The total holdings of that State - rural, urban, and others - are less than 200.000. In his statistics, *Coghlan* says that the land-holders number approximately, 178,000. What is responsible for this conditions of affairs? First of all, settlement had to take place upon territory in which, vested interests had' been established. The country was held under pastoral leases, and, upon their expiry, these leases were made available for indiscriminate settlement. Further, they were made available under harsh terms. For instance, a specific amount had to be paid by the settler, who was also required to pay survey fees, and to comply with improvement conditions, which considerably increased his outlay. He was then called upon to pay what was equivalent to 9d. or is. per acre per annum as rent for his holding. But it was soon discovered that increased population meant increased land values, and it is the increased value which is imparted to lands by the presence of population that writers of political economy designate the "unearned increment." It was quickly recognised that if large holdings could be secured they would' represent a good investment. Thus the squatter fought the selector in the hope that he would be able to acquire the whole of the territory available, and to blossom forth into the position which is occupied by th'e landlord in the old country. He had many advantages, including a sympathetic Parliament and administration. But, despite these advantages, the fight was too severe for him. Thus it came to pass that the banks invested indirectly in the unearned increments in the various States, but finally the burden became too heavy for them to bear, and the result was the financial crisis that we experienced fifteen years ago. That led to the transfer of these interests to the large investors in the old world. So that to-day the unearned increment in the different States is largely1, in the hands of persons outside of Australia. That, I contend, is a most unhealthy state of affairs. It is Lad enough, to have to contend with the curse of landlordism when we are dealing with an individual who is part and parcel of our population, but the position is much worse when we are called upon to deal with a landlord who, as the' saying is, " has no body to be kicked and no soul to be damned." The real development of Australia has been retarded by an inordinate desire to invest in the unearned increment. Millions sterling has been invested in the purchase of land titles instead of in the development of that land, with a view to making it productive. {: .speaker-KFJ} ##### Sir John Forrest: -- From the honorable member's remarks. one would think that the producers on the land were producing nothing, instead of producing commodities worth £120,000,000 annual! v. {: .speaker-JSM} ##### Mr BROWN: -- I hope that my remarks will not bear that interpretation. We are producing largely, but that production is in the hands of the few who own our lands. My contention is that the distribution of wealth in a country is largely determined by the distribution of its land. Under this heading, I would invite the attention of the Treasurer to some figures which I have extracted from the *Official Year-Book of New South Wales for* 1904-5. I find .that in that State there are 749,000 holders of {: .speaker-KXO} ##### Mr Hall states upon page: -- >Hence it would appear that 1,004 persons, or 0.13 per cent. (one-eighth of one), own property £130,912,700, or 34.84 per cent. of the whole private wealth of the State, and 2,134 persons hold , £169,984,500, or45.21 per cent. of the total. Probably half the entire property of the State is in the hands of not more than 3,000 persons. According to. the foregoing table, 1,004 persons, or thirteen in every 10,000, own from £50,000 worth of property, and upwards; 10,853 persons - or 144 per 10,000 of the population - hold property of the value of £5,000 and upwards, and their wealth is £259,674,400, representing 69.11 per cent, of the property belonging to those coming within this category. {: .speaker-KWL} ##### Mr Tudor: -- Does that return refer only to New South Wales? {: .speaker-JSM} ##### Mr BROWN: -- Yes. My illustrations are mainly drawn from the conditions of my own State. In 1904 there were 749,300 adults in New South Wales, and according to this return there are 195,800 owners of wealth, whilst there are no less than 553,466 who have no accumulation of property whatever. Those who own property valued at from £200 to £5,000 total 123,695; those who own under . £200 worth of property total 61,286, and those who own no property whatever total 553,466. I should like honorable members to say whether these non-property holders are all thriftless, and make no effort to help themselves. Can it be said that the 795,800 owners of wealth in New South Wales represent all the energy and intelligence of the State? I do not think that such a contention could be seriously advanced. Indeed, I think I may very properly claim that of the 553,000 persons who do not own property in New South Wales only a very small percentage does not contribute anything towards the creation of the wealth of that State; the manual labour involved in building up the enormous wealth to which I have referred is largely provided by this vast body of nonproperty holders. The secret of the position is that these men are wage-earners, who are living from hand to mouth, and are helping to create that monopoly of wealth which is concentrated in the hands of the few who are able to take advantage of natural opportunities. This brings me to the question of the development of Canada. Some honorable members have pointed out that the Dominion has been developed on lines that we ought to follow. Twenty years ago only 250,000 acres were under wheat in Canada, and the yield' from that area wasabout 1,200,00 bushels. In 1 903-4, however, the total area under wheat had increased to 4,000,000 acres, and the yield was 110,000,000 bushels. Immigration, meantime, increased in proportion to the increase in the area under cultivation. In 1893, the total number of immigrants to Canada was 10,680, and ten years later - in 1903 - this number had increased to 124,653. Since then the increase in immigration has been proportionately large. The secret of Canada's enormous development is that she has opened up her lands to those who are will- ing to settle on them. She invites desirable emigrants from the old world, and gives, them reasonable opportunities to produce wealth for themselves. She does not invite them to her shores to work under conditions of semi-starvation - to pick up an odd job here and there - she finds land for them to settle on. {: .speaker-JUV} ##### Mr Mcwilliams: -- The Canadian Government does not threaten to nationalize the land. {: .speaker-JSM} ##### Mr BROWN: -- I shall have something to say presently with regard to that point. For about six months out of every twelve the climate is so severe in Canada that her fertile lands cannot be used, as similar lands in Australia are used, for stock-raising purposes. There the stock-raising industry must be carried on at a cost far greater than is involved under Australian conditions! ; the stock cannot be allowed to run at large all the year round, and, therefore, special attention has to be devoted to the cultivation of the soil. The honorable member for Franklin says that land nationalization has not been threatened in the Dominion. I suppose that the honorable member will admit that **Mr. J.** S~. Lark, the Canadian Commissioner in Australia, is am, authority with respect to the lands of the Dominion, and that he is also fairly (familiar with the land laws of Australia. In an address which he delivered some time ago in Sydney, **Mr. Lark** said - >In Canada the Government taxed the land, which made it impossible for persons to hold land for speculative purposes, but here they taxed the man on the land. There was a great difference between the two systems. All land should be brought down to its value as a producing clement. As far as he had been able to ascertain, the system followed here was an admirable one for keeping the people off the land. The results of that system have amply borne out his conclusion. {: .speaker-KIC} ##### Mr Lonsdale: -- Is not the Canadian tax a tax on improvements? {: .speaker-JSM} ##### Mr BROWN: -- I am not an authority on Canadian land taxation. {: .speaker-KIC} ##### Mr Lonsdale: -- The honorable member ought, to be aware that the Canadian tax is not upon, unimproved land values. {: .speaker-JSM} ##### Mr BROWN: -- I am simply quoting the statement of a gentleman who may fairly be regarded as an authority: on this question. He tells us that in Canada the Government tax the land in such a way that it is impossible for any one to hold it for speculative purposes. Such a tax will prove the solution of the land problem of Australia. We must not allow persons to invest in land merely for the purpose of holding it for a rise - to secure the unearned increment brought about by increased population and national expenditure.. Land should be held for productive purposes, and every facility should be "given those who go on the soil to bring it into use. Unfortunately, large areas of our lands are kept out of use, being held purely for speculative purposes. Those who control the, land control the wealth production of the people, with the result that that wealth is unduly concentrated in the hands of the few. I do not think that the honorable member for New England will contend that the 550,000 non-property owners of New South , Wales are nonworkers. He will not say that they have not contributed to the wealth of the community. I have here a very remarkable letter relating to the industrial conditions at present obtaining in Australia. A little while- ago there was a rapid rise in the value of rabbitskins and rabbits for export purposes, with the result that a number of persons, who had been unable for a long time to earn a fair wage, availed themselves of the new avenue of employment thus opened up, and secured handsome returns from the rabbittrapping industry. {: .speaker-L1D} ##### Mr Henry Willis: -- Some of them threw up very good billets. {: .speaker-JSM} ##### Mr BROWN: -- They did so in order that they might engage in a more lucrative calling. If a man can better himself by leaving his usual employment, he is generally ready to do so. What was the result of the improvement in the rabbit-trapping industry? Many families who had been on the verge of starvation suddenly found themselves able to secure some of the comforts of life, and to live under brighter and happier conditions. Small provincial towns also found that there was an increase in the amount of money in circulation, and small shopkeepers, and others, were thus benefited by the industry. But this state of things did not long continue. Owing to various causes, the price of 'rabbits went down, with the result that several, avenues of employment were closed, and that there was a gradual return to the state of affairs previously prevailing. I now propose to read a letter claimed to have been issued by an influential association representing the pastoralists of New South Wales. The letter was as follows : - >Private and Confidential. > >The Pastoralists' Union of New South Wales (Industrial Union of Employers), Important Notice to Members. Hoskins' Buildings, Spring-street, Sydney, 16th July, 1906. Dear **Sir, -** , With the advent of the shearing season, the scarcity of shearing labour has become so pronounced that the executive deem it desirable to again call your serious attention to the urgent need which exists for making every possible effort to improve the supply. While emphasising their previous recommendations on this subject, the executive desire to urge that members should also, as far as possible, refrain from entering into fresh contracts for fencing, tank-sinking, &c, and should otherwise reduce casual station work to the lowest limits during the shearing months. The measures which members are asked to adopt for making labour available for shearing purposes, and for increasing the existing supply, are : - {: type="1" start="1"} 0. To discontinue rabbit trapping. 1. To reduce contract and casual station work to a minimum during the shearing months. 2. To fill at least one-fifth of their pens with learners. In regard to rabbit trapping, the, general feeling of those who have had experience of the matter is that trapping is not an effective method of destruction, and that therefore in your own interest you should not allow it on your run. You are, however, only asked to disallow it during the months of July, August, and September. It is sincerely hoped that you will carry out these recommendations for the general good, even if your own immediate requirements do not necessitate their adoption. The object of union is to secure concerted action for mutual benefit, and in the present circumstances such concerted action is specially requisite. It should be remembered, too, that the difficulties now being experienced by others are sure, unless coped with, to extend to you sooner or later, and that therefore by assisting your fellow members now, you will be' ultimately benefiting yourself. Yours faithfully, That letter shows that concerted action is proposed to be taken by those controlling the natural means of production in NewSouth Wales, to limit the opportunities of the great mass of the workers for making a living under the most favorable conditions, so that cheap labour may be secured to the pastoral industry. {: .speaker-L1D} ##### Mr Henry Willis: -- Shearing is not cheap labour. {: .speaker-JSM} ##### Mr BROWN: -- An effort is being made to have even the shearing rates brought down as low as possible, and the statement which I have read shows that it is being .attempted to close other avenues of employment in the country as much as possible. Those who hold what the late **Mr. Seddon** declared to be a monopoly in the life-blood of the people are organizing to retain the production of wealth for themselves. It is partly in consequence of these attempts that the wealth of Australia is in the hands of a few, the mass of the people living from hand to mouth, unable, despite all their efforts, to accumulate. As I have shown, the wealth of New South Wales is iri the hands of 195,800 persons, while 553, 500 persons possess no wealth at all. It has been said that the proposal of the Labour Party for remedying this evil state of things bv the imposition of a land value tax is confiscation and robber . The honorable member for Grampians recognises that the Commonwealth is suffering for want of population, and, to meet the difficulty, proposes that the States should repurchase annually 1,000,000 acres, to be ultimately divided amongst suitable immigrants, and, in the meanwhile, to be leased to the present owners. He suggests that the land be purchased at its present price, I presume to prevent the expenditure of large sums in anticipation of an increase in price. But, before we can make arrangements for possible immigrants, we must devise means for providing our own people with land. In my electorate there are young men. farmers' sons, who know what hard work is, and are not afraid of it, who cannot discover reasonable opportunities for providing themselves with homes. Most of the Crown land of the State has been parted with under conditions which are not creditable to those who have had the control of affairs there, so that only a very limited area is now available, and when any of that area is thrown open, there are almost as many applicants for it as there are subscribers to a Tattersalls sweep. Men are travelling all over the State, inspecting land likely to be thrown open) and balloting for it, only to become heartbroken on discovering that thev are frittering away what little means thev have in a fruitless effort. These are the men for -whose wants we- should provide before setting aside land for possible immigrants. {: .speaker-KRQ} ##### Mr Skene: -- We should provide for our own people first. {: .speaker-JSM} ##### Mr BROWN: -- I am in sympathy with the honorable member; but I think that 1,000,000 acres will be required to provide land for our own people, so that, if any provision is to be made for immigrants, the purchase of more than 1,000,000 acres will be necessary. {: .speaker-F4P} ##### Mr Reid: -- I am horrified at the neglect of duty on the part of honorable members. Although this is the Budget debate, there are only ten or eleven in the Chamber. *[Quorum formed.]* {: .speaker-JSM} ##### Mr BROWN: -- The experience of New South Wales in regard to the repurchasing of estates has not been entirely satisfactory. When the Government had power to purchase from those who were ready to sell, it was found that they could not obtain suitable land at reasonable prices, and, with a great deal of trouble, legislation was enacted' giving them the right of compulsory purchase. At least one estate has been purchased under that power, and, while some authorities say that the purchase was a good bargain for the Government, the fact that the whole of the land has not been applied for, notwithstanding the large demand for land in the State, shows, that, it is not as desirable as it might be, while a very unpleasant feature about the transaction is that some thousands of pounds were paid in commission to private agents, presumably to bring about the purchase. An area of 1,000,000 acres per annum would not be enough to meet the requirements of both our own population and' immigrants, and I understand that the honorable member for Grampians now suggests the purchase of 5,000,000 acres. But what would be the state of the land market if 5,000,000 acres were annually being purchased by the Government? {: .speaker-KRQ} ##### Mr Skene: -- Land would become cheaper. {: .speaker-JSM} ##### Mr BROWN: -- If it became cheaper, that would be in contradiction to the general rule that as demand increases prices rise. I think that those who own land would ask higher prices for it, and therefore those among whom it was subsequently divided would probably have to pay for it at rates which would make their occupation of it unremunerative, or less profitable than the occupation of land more remote. I wish to get rid of the idea which seems to be held by some that the Labour Party desire to tax the industry of those on the land. Our proposed taxation will fall, not upon the improvements of a holding, but upon the unearned increment given to it by the increase of population, and the development of the coun try. Thus we shall be taxing a value which the owner has not himself created, with the intention of lessening the incentive to invest money in land merely for speculative purposes, and to increase the opportunities of those who desire to get possession of it for the purpose of developing it. Some honorable members object very strongly to the distinction made between large holdings and small ones, but I would point out that the leader of the Opposition was responsible for the introduction of similar legislation into the New South Wales Parliament. The Bill providing for a tax on land values in New South Wales was based upon exactly the same principle that underlies the proposal of the Labour Party, the only difference being that the New South Wales tax is not of a progressive character. It provided for *the exemption of land of an improved value of £240. and a number of other exemptions were also made. Although we had a very hard fight to get that measure placed upon the statute-book, we heard nothing said about confiscation or the unfairness of the exemptions. There are 178,000 land-holders in New South Wales, whereas only 41,000 pay the land tax. According to the latest statistics, it is estimated that the unimproved value of the land in New South Wales is £129,178,000. The land, which is free from taxation under the exemption of £240, represents a value of ,£26,280,000. There are mortgage exemptions amounting to £16,800.000, and conditional purchase balances which are exempted, represent £9,298,000, or a total of exemptions amounting to X52. 378,000. Yet we heard nothing about the inequality of the proposed tax, or of any proposal to confiscate private lands. {: .speaker-K99} ##### Mr Johnson: -- We heard enough about it outside of Parliament, even if nothing was heard inside the Legislature. {: .speaker-KRO} ##### Mr McLean: -- That tax was imposed for revenue purposes, whereas the Labour Party propose to attack the big estates. {: .speaker-JSM} ##### Mr BROWN: -- The New South Wales measure was advocated' on other grounds than that it would produce revenue, in the same way that the Labour Party claim that the proposed progressive land tax, in addition to producing revenue, will have the effect of breaking up the big estates. It will not impose a tax upon improvements, or upon labour and industry, but will make the land-holder give some return for the value which accrues from the growth of the community. We hope that to this extent it will discourage land monopoly, which is sucking the life blood out of the people, and is concentrating the wealth of the community in the hands of a comparative few. The great mass of the people are unable to accumulate wealth, and our popu lation is practically at a stand-still. If this condition of affairs is to be altered we must get rid of land monopoly ; we must present facilities for settlement of such a character that our young men will stay here, and that immigrants will be attracted from other parts of the world. I contend that the proposal of the Labour party will operate in that direction. We have endeavoured to solve the problem which lies before us, which is not of our own making, and it is for those who object to our solution to submit some better proposal. Land monopolists are sucking~he life blood out of the community. In New South Wales there are 178.000 landholders in a population of 1,500,000, whilst there are 553,000 workers who have practically no chance of owning any land. We are endeavouring to deal with the problem, because we wish to see the country develop. We do not desire that the great mass of our people should be condemned to sweated poverty. We may be wrong in the policy that we have foreshadowed, but if so, it is for those who oppose us to suggest something better. I am not tied down to any particular proposal, but shall g l a d 1 v give my support to the best that is brought forward. My objective is the solution of the problem {: #subdebate-19-0-s1 .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- I congratulate the Treasurer upon the frankness which characterizes his Budget statement. I have nothing whatever to say against what has been done in the past. I think that the revenue of the Commonwealth is in a very satisfactory condition, and I hope that it will continue so. I am afraid, however, that if some of the proposals submitted to us are carried into effect, we shall fall upon evil days. The proposed penny postage scheme would' result in a loss of ,£300,000 per annum, which would be keenly felt by those States which already have to meet a large deficiency. Queensland could not afford to have £12,750 added to her present annua! deficiency which will amount to £114,000 per annum. I hold that the Commonwealth should conduct its business upon commercial lines, and make the revenue meet the expenditure. There is no reason why our revenue should' be reduced and our expenditure increased at the same time. South Australia seems to have conducted her affairs upon common-sense lines. In .that State the 2d. postage applies to all parts, and residents in the towns have no advantage over those who live in the country. Why should those who reside in the large centres of population be specially favoured? Those who live in the towns do not make the country, but on the other hand the residents in cities look to the country to sustain them. South Australia has managed to make her postal system pay its way, and I think that the Commonwealth should' work upon similar lines. If our postal revenue is reduced we shall have a smaller amount to return to the States, and so far as Queensland is concerned, I strongly object to the Treasurer'sproposal. No one has clamoured for the proposed change. Those who are now able to send a letter from Thursday Island to the furthermost part of Western Australia for 2d. think that they are being fairly treated, and I do not see the necessity for the proposed reduction. The Chambers of Commerce, the members of which would derive the greatest benefit from the introduction of the penny postage system, have not asked for it, and it is safe to presume that they are satisfied with the present arrangements. **Mr. Frazer.** - This is the only proposal made in this Parliament to which the Chambers of Commerce have not objected. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- Exactly. Penny postage may suit Victoria very well, because her territory is compact, and railways are fairly well distributed throughout that State. She can carry on her postal services at comparatively small expense, because she has not to make provision for the conveyance of her mails by coaches to anything like the same extent that is found to be necessary in New South Wales, . Queensland, and other States. Victoria has found it possible to carry on a penny postage system within her own borders with success - although some years ago the 2d. postage was restored because it was not considered desirable to continue the penny postage whilst the revenue was falling. I strongly object to the proposed change, and I shall vote against it. A large number of schemes have been advocated in connexion with the proposed transfer of the States debts. It seems to me that the Treasurer's proposals are as sound as any, and I think that the sooner we substitute another system for that now in operation, under the Braddon section, the better it will be for all concerned. I do not see how the Commonwealth can offer any better security to bond-holders than that now afforded by the States. Our bond-holders, it seems to me, can obtain quite as good a security from the States as they can from the Commonwealth. The latter has absolutely nothing upon which it can levy, except its one-fourth of the receipts from Customs and Excise. Consequently I fail to see that the Commonwealth is in a position to borrow money more cheaply than it can be borrowed by the States. I am satisfied that if the latter wished to convert their loans, and to reduce them to 3 per cents., 'they would have just as much, chance of being successful as would the Commonwealth. In my judgment there is no necessity for taking over the States debts, because if that were undertaken, although the Commonwealth would have to carry the baby, the States would have to -carry the feeding bottle. I do not know that any of the schemes which have been submitted in this connexion' are any better or any worse than that outlined bv the Treasurer. Indeed1, I am inclined to think that the advantage, if any, rests with the Treasurer's proposals. Upon Friday last the honorable member for Denison, delivered a wailing speech in this House - a speech which reminded me of a black gin crying over a dead piccaninny. He endeavoured to show ,that Tasmania had lost considerably in connexion with the sugar duties. I wish to prove that that State has been verv fairly dealt with. I regret that an impression seems to have got abroad that none of the States except Queensland derive any 'benefit from the operation of those duties. {: .speaker-F4P} ##### Mr Reid: -- Is this an electioneering speech ? {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- No. I would remind the right honorable member that I am always present to discharge my duties. I do not travel all over Australia delivering electioneering speeches as do some honorable members, t wish to prove that Queensland! has been no more favoured hy the operation of the sugar duties than has any other State. In this connexion I desire to show the amounts which the various States have received by way of Excise duty after the bounty has been paid. The amount received by New South Wales *was £666,072* ; by Victoria, £[297,802 ; Queensland, £249,312; South Australia, t.33:57<5; Western Australia, £71,856, in addition to a revenue of £110,000 which was derived from the import duty ; and Tasmania, £69,556. In 1905, New South Wales received £128,943; Victoria, £104,589; Queensland, £78,741; South Australia. £32,102 ; Western Australia, £22,031 ; and Tasmania, £21,453. For a number of years South Australia has been importing sugar, and consequently its people have been contributing to her revenue to the extent of .£6 per ton. The same remark is applicable to Western Australia and Victoria. Queensland and New South Wales are the only two States which have been exclusively using Australian sugar. When, honorable members examine these figures they will find that the other States have received a considerable amount of revenue from the operation of the Excise duty. That duty is credited to each State, and the bounty is paid out of it. If there had been no Excise duty in operation thev would have received so much less revenue. It is a matter for extreme regret that some honorable members will continue to assert that Queensland has benefited from the operation of the sugar duties more than has any other State. As a matter of fact, she has *lost more than* has any other State. At the present time, the retail price of sugar in London is 2d. per lb. ; in Paris, it is 3d. ; in Berlin, 2^-d. ; in Svdney, 2½d. ; in Melbourne, from 2 1/4d to 2½d. ; in South Australia, 2½d. ; in Brisbane, 2½d. ; and in Perth, 3d. I do not know that it is quite fair to quote what was the price of that article in Western Australia prior to Federation. There ft was admitted free, and its retail price was from 4d. to 5d. per lb. The figures which I have quoted do not show that there has been any increase in the price of sugar consequent upon the operation of the Excise duty. Further, I contend that the bounty is not paid by the consumer. If there were no Excise levied, and there were no bounty in operation, the price of sugar would be the same as it is to-day. The Colonial Sugar Refining Company controls that. In Queensland the price of that commodity at the present time is higher than it has been for many years. Prior to Federation, sugar could be purchased for nearly Jd. per lb. less than it can be purchased to-day. That is due to the fact that before the advent of Federation the production o£ that article had overtaken local consumption. Consequently, the Queensland consumer is worse off now than he has ever been. Nevertheless, he does not complain. The only States which urge any complaint in this connexion are Western Australia, South Australia, and Tasmania. They are always harping upon the sugar duties. {: .speaker-JUJ} ##### Mr Cameron: -- We can distinguish between facts and mere assertions. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- One could not knock a fact into a head like that possessed by the honorable member. Since Federation, Queensland has lost £2,608,208 in revenue, as compared with the amount which she would have derived under her old State Tariff. She has received from the Commonwealth £41,083 less than her three-fourths of the Customs and Excise revenue, whereas New South Wales has received .£2,203,393 more than her three- fourths, Victoria £1,409,705 more, South Australia .£450,115 more. Western Australia £1,077^35 more, and Tasmania £133,628 more. {: .speaker-L1D} ##### Mr Henry Willis: -- That would be unconstitutional. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- Whether unconstitutional or not, it has been done. Queensland has received £41,000 less than her three-fourths, whilst Tasmania has gained. {: .speaker-JUJ} ##### Mr Cameron: -- That is because the money has not been spent in Tasmania. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- I think that honorable members must recognise that, having regard to the large amount of revenue that Queensland is losing, she will not be prepared to agree to any increased expenditure. I wish now to refer to one or two questions relating to the sugar industry. According to the Budget, something like £25,000 has been provided for the deportation of kanakas, and I should like to know what is the source of the information obtained by the Treasurer that Queensland has only some £16,000 available for this purpose. Where has the money gone? I trust that the deportation of kanakas will be facilitated as much as possible, and that it will be conducted on humanitarian lines. Kanakas who have married white women, and. have children attending our public schools, are not, I understand, to be deported. It would be unwise to separate those men from their wives and children, but those having no ties in Australia, ought certainly to be deported. The kanakas who have married and settled down do not, as a rule, work on the sugar plantations. For the most part they have taken up small plots of ground in the neighbourhood of towns, and earn a livelihood as gardeners, wood-carters, and so- forth. The Queensland Government, through their officers, are taking steps to see that the work of deportation is facilitated as much as possible, and through their officers are giving every assistance to the Common - wealth. Another question associated with the sugar industry relates to the wages paid to the white workers. During the last year great trouble has been experienced owing to the refusal of the sugar planters, who are enjoying the benefit of the protection which the Commonwealth has afforded their industry, to pay a reasonable wage. I refer more particularly to those carrying on operations in the neighbourhood of Bundaberg, where the men refused to labour in the cane-fields unless they received a fair day's pay for a fair day's work. All that they asked was that they should receive 30s. a week and their keep. Notwithstanding that these planters have been enjoying a protection of £2 a ton, they refused what to my mind was a most reasonable demand. Next year, under the amending Act, they will receive a benefit of £3 per ton, and if they still refuse to concede the fair demands of the men, I hope that the Minister of Trade and Customs will take the matter in hand and insure the payment of reasonable wages. Any one who has visited the sugar-growing districts of Queensland will admit that 30s. a week and rations constitute only a fair remuneration for working in the cane-fields. I do not think that that work is exceptionally severe, but having regard to the hours of employment, the wage for which the men in the Bundaberg district struck is a very reasonable one. As long as the growers are receiving the protection afforded them under Commonwealth legislation, they ought to be prepared to pay reasonable wages. As a matter of fact, the sugar bonus was granted to enable them to employ white men at a fair wage. We do not desire that strikes should occur; but next year, when the kanakas have to go, difficulties are sure to arise unless we have in power a sympathetic Minister, who will take steps to insure the payment of a fair wage. {: #subdebate-19-0-s2 .speaker-L1D} ##### Mr HENRY WILLIS:
Robertson -- The debate on the Budget last year centred chiefly round the necessity for taking over the States debts. As I then devoted some attention to the question, and have since been deeply interested in it, I avail myself of the present opportunity to congratulate the Treasurer on the steps he has taken to make it a live one in Australia. I wel 1 remember that during the Federal campaign many men - and I was among, the number - were attracted by the statement that the Commonwealth would be able to take over the debts of the States, and thus secure an immense saving to the people. About that time, **Mr. -** now **Senator -** Walker, who was a member of the Convention, wrote a very able paper pointing out the benefits which would accrue to the people of the Commonwealth by the conversion of the States" debts into 3 per cents. He showed very clearly that in that way immense savings would be effected, and that is what the people of Australia have long been expecting. The possibility of effecting such savings was strongly emphasized in New South Wales but I think that until the right honorable member for Swan assumed office as Treasurer, this question was not thoroughly grappled with. It is in these circumstances, therefore, that I desire to congratulate him upon having made this subject his own. The right honorable gentleman went to England and interviewed not only the governors of the Bank of England, and those of other banking institutions doing business with Australia, but also Lord Goschen, and the Under-Secretary of the Treasury, all of whom advised him that a scheme for taking over the debts of the Commonwealth could be carried out with advantage to Australia, but that no hasty step should be taken. They pointed out that whilst we should be ready to avail ourselves of a favorable market, we should continue for some time in the old groove. I certainly think that the Treasurer will not do justice to himself or to this question if he follows in detail the advice tendered by these gentlemen, since they are for the most part financially interested in the continuance of the existing system. - Some of them are connected with institutions and firms which have been in the habit of making a profit of ii per cent, by underwriting the loans of the States ; they have derived a large revenue from the man agement of our public debts, and have also done business in our stocks with trustees. They have practically monopolized the whole of the financial business of Australia, and in these circumstances, we should hardly expect them to enthuse over a system under which the States' debts would practically be taken out of their bands, and converted into 3 per cent, permanent stocks. Lord Goschen, who was consulted by the Treasurer, dealt more successfully than did any other Chancellor of the Exchequer last century with the public debt of England, so that his advice was well worth obtaining. It must be remembered, however, that he .is a statesman, and that the scheme which he fathered in connexion with the public debt of England was in all probability propounded by the permanent Secretary to the Treasury, and that the view of that gentleman would be of even greater value to us. {: .speaker-KFJ} ##### Sir John Forrest: -- I also saw the Financial Secretary to the Treasury. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I read that the right honorable gentleman had an interview with **Sir Edward** Hamilton, the Financial Secretary to the Treasury. That gentleman advised him to convert the debts as they fall due. Several schemes have been put by honorable members before the Committee, each of which contains this objectionable proposal to convert or take over the debts as they fall due. The honorable member for Koovong takes great credit for a scheme which, in my opinion, is most objectionable. He provides, in the first instance, for the creation of a council of finance. That goes without saying. But he proceeds to suggest that they must take security, have power to receive revenue from the railways, to hypothecate the railways, or to establish floating charges over them. In my opinion, those proposals spell the defeat of the scheme. I shall oppose any scheme which throws doubts on the value of the security given to our financial accommodaters in England, and proposes a lien upon the assets of the States. That is not the way in which the question must be grappled with. The honorable member for Mernda has put forward a scheme which is practically the same as that of the Treasurer, though its details are as objectionable in some respects as those of the scheme of the honorable member for Koovong. He seems to have very little -faith in the States, and wishes them to give security for deficiencies. That is objectionable. The honorable member for Canobolas has stated that the States, taken separately, are as good a security as is the Commonwealth, and, in the abstract, he is correct. **Mr. Coghlan** has told us that the people of Great Britain will require some inducement for the conversion of their present stocks to Commonwealth stocks. They know that the States lean on each other at the present time. But, although the people of the Commonwealth are the same as the people of the States, when the debts of the States have been taken over by the Commonwealth thev will be controlled by one authority instead of by. six. According to the Treasurer, there is a feeling in England that, therefore, the Commonwealth security will be better than the present States security, and that, if it were made permanent, holders of States stock might be induced to invest in 3 per cent. Commonwealth stock, for which all the States, strong as well as, weak, would be responsible. In my opinion, that is so, and don version might be brought -a)bout easily, readily, and effectively-. I see through this problem without difficulty, and have a scheme which I consider preferable to any yet brought forward. It embraces the best features of the Treasurer's scheme, as every scheme must, because he proposes to take over the whole of the debts, though he would do so in two processes, while I should do it in one. {: .speaker-KFJ} ##### Sir John Forrest: -- The whole of the existing debts could not be taken over without an alteration of the Constitution. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- No doubt that is so. I shall deal with that matter more fully later on. In **Mr. Coghlar's** very valuable paper are the. germs of many schemes. The principles of the scheme pf the honorable member for Mernda are in that paper, as are also those of the honorable member for Kooyong, which is a very amateurish scheme, that is, a scheme which would occur to an amateur. I cannot see that there is much in the scheme of the honorable member for Mernda which is not to be found in **Mr. Coghlan's** paper. He desires security in regard to future debts, and even goes the length of suggesting that we shall spend the money of the States, and have a lien over reproductive works. He would create a board with power to say when the States should borrow and when they should not. But what State would consent to go cap in hand and with bended knee to an authority of that kind for permission to borrow? These schemes are not sound enough. There is much more in that of the Treasurer than in either of them. The scheme of the honorable member for Mernda differs from that of **Mr. Coghlan** in that the latter has shown what might be done with the debts up to 1904, while the honorable member for Mernda has worked out his calculations for the period ending 1905. A similar sinking fund scheme is in operation in England, and even in New South Wales, in regard to several services, so that it is not new. ~ According to **Mr. Coghlan,** the Australian loans outstanding on the London register on the 30th June, 1904, represented £I90,564,859That sum is 82.61 per cent, of the total debt of Australia, the remaining 17.39 Per cent., or £40,128,012, being on the Australian register. During' the next forty-five years many millions of loans will fall due annually; and that fact has, no doubt, induced the Treasurer to take the matter in hand. He has done so because he takes broad views of large questions. He was the first to open up satisfactory communication between Western Australia and the eastern States, while in Western Australia he carried out a magnificent system of water supply which enables the tens of thousands of persons living in the arid gold-fields districts to draw their water practically from Perth. The carrying out of that scheme shows him to be a man of far-sighted ideas, who is not afraid to face great problems. He has now an opportunity which will not come again in our time. By converting the debts of Australia, he can bring about a saving of millions qf pounds by reducing the rates of .interest-. **Mr. Coghlan** points out that when the debts are converted at par at a charge for interest of 3 per cent, per annum/ the saving to Australia within the period in which the present loans will expire will be £1,375,000 per annum. Between 1907 and 1911 the saving will be £273,000, and between 1912 and 1916 .£390,000, and it will go on increasing during a period of forty-five years until it reaches the amount I have stated. We are nowbeing asked to face a great problem which has hitherto been kept in the back-ground. A man may well make a big reputation by dealing successfully with it. {: .speaker-JNV} ##### Mr Bamford: -- Would the honorable member put his money into Australian 3 per cent, consols? {: #subdebate-19-0-s3 .speaker-L1D} ##### Mr HENRY* WILLIS:
ROBERTSON, NEW SOUTH WALES -- I should be satisfied to take the security of any qf the States. {: .speaker-JNV} ##### Mr Bamford: -- The security is all right; but what about the interest? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The investment would not be a good one if the interest were not certain to be paid; but it always has been paid, and always will be paid. Honorable members, of course, know that Commonwealth stock would be no safer than State stock, and the financiers of England who work our loans, getting per cent, for underwriting and selling our stock, and advising persons to invest in it, know as well as we do that the States' stock is as good as Common.wealth stock would be. But timid outsiders, wishing to invest as trustees, would prefer Commonwealth stock to States' stock, and would be glad to get 3 per cent, stock. Trustees are not like beneficiaries, in that they do not look round for the highest interest obtainable. What they consider chiefly is the security of their investments, and the Commonwealth stocks would be preferred to State debentures. {: .speaker-JUJ} ##### Mr Cameron: -- Has Australian stock ever been taken up at par? {: .speaker-KFJ} ##### Sir John Forrest: -- Yes. Western Australian stock has realized as much as L100 1 6s. per cent. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Why was. that? Because there was a sinking fund. No scheme is worth considering unless provision is made for a sinking fund. Each of the States which, whilst they were languishing, issued loans at a high rate of interest should receive the full benefit derived from the conversion of their stock and the 'reduction of the rate of interest. It appears that the Treasurer has been advised that a favorable time for the conversion of the States loans into Commonwealth stock would be when a considerable amount of States stocks are within a reasonable period of maturity, and that the stocks, when converted should be called Australian consols. That is suggested by the brokers, who desire to have further opportunities of reaping a large reward. They say, " Don't convert the stocks until the loans are due." But that would not be financing. We should be merely playing into the hands of those who have the. money to lend, The bond-holders who had their money to re-invest would know that we were hobbled, and would tell us that our loans would have to be underwritten at a cost of lj per cent. They would inform us, further, that interest rates were not so low as: they formerly were, nor so low as they had expected, and would probably demand at least 4 per cent. The financiers in London take up exactly the same attitude as is adopted by bankers. If they know that you must have money they will make you pay a much higher rate of interest than if you show them that you are in an independent position. Then it is proposed that the consols should be issued at 3 per cent, for a period of thirty years. There is no necessity for fixing a minimum period. If they are to be permanent stocks, there is no need to limit the term within which they can be redeemed. {: .speaker-KFJ} ##### Sir John Forrest: -- That plan is followed in England. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- In England a minimum and a maximum were fixed within which the stocks could be redeemed. ' {: .speaker-KFJ} ##### Sir John Forrest: -- The present Imperial bonds had a currency of thirty-five years. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes, but those are bonds which have been converted in England. {: .speaker-KFJ} ##### Sir John Forrest: -- **Mr. Coghlan** is of the same opinion as I am with regard to fixing a period to begin with. . {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes. I think that he suggested a term of twenty years. He has taken his idea from the English system. I have a better plan to propose, and I say that it is not necessary to fix any term. It is further proposed that the States should pass Acts making a permanent appropriation for the payment of interest on the loans. That is a proper provision to make to safeguard the Commonwealth. It is desirable that an Appropriation Act should be passed for the payment of the balance of interest without any hypothecation, and without the Commonwealth having to act as a pawnbroker, as suggested by the honorable member for Koovong, or without resorting to the plan proposed by the honorable member for Mernda, namely, that loan proposals should be submitted to a board, and that any shortage in the interest payment should be made good by the appropriation of revenue derived from reproductive public works payable to a receiver. The methods indicated by those honorable members are not such as should be adopted in grappling with a great question of this kind. They have never been followed in England, and there is no necessity to resort to them in Australia. The people -of the States and of the Commonwealth are the same, and they will have to pay the interest upon the loans. No security beyond the good faith of the people and appropriations by Act of Parliament has hitherto been given, for the payment of the States debts. If there were any default on our part we should probably have a receiver placed in charge of our revenue-producing Departments - a plan which has been adopted in other countries which have failed' to meet their financial obligations. All the States debts should be taken over by the. Commonwealth as soon as possible. But the Treasurer proposes that the debts as existing at the time that Federation . was established should first be taken over, and that afterwards the balance should be dealt with. {: .speaker-KFJ} ##### Sir John Forrest: -- I would take over the whole of the States debts in one operation, but I could not do that unless the Constitution were amended. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The Treasurer suggests - > That the State debts, " as existing at the establishment of the Commonwealth," amounting to about 202 millions (as provided 'by Section 105 of the Constitution), be taken over as soon as possible. > >That the balance of the total existing State debts., amounting to about 35 millions, be '* taken over," so soon as an. amendment of Section ros of the Constitution, enabling it to be done, is obtained *(vide* par. 8). {: .speaker-KFJ} ##### Sir John Forrest: -- But if the honorable member will look at paragraph 8 of mv proposal relating to the taking over of'the States debts, he will see that I propose that legislative provision should be made for the taking over by the Commonwealth of the whole of the existing States debts. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes; but my complaint is that the Treasurer is going to make two steps instead of one. {: .speaker-KFJ} ##### Sir John Forrest: -- That is because I want to get along a:» quickly as possible, and not wait for the necessary change of the Constitution. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- How will the Treasurer get on if he does not secure the necessary authority from the States to take over the balance of their debts? My contention is that he should not begin until after he has obtained such authority. {: .speaker-KFJ} ##### Sir John Forrest: -- The State loansare continually falling due. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes," arid for that very reason the States will probably: be willing to give the necessary authority at this stage. If the States can get om without us they will do so. The jealousy of the Commonwealth that exists in the States . is appalling. It has reached such a stage in New South Wales that the presence of a member of this Parliament, who, as a citizen, joined in a deputation to a State Minister was recently objected to. I am ashamed to. say this, but nevertheless what I state is a fact, related to me by the honorable member himself. The States will never come to the Commonwealth with a view to obtaining its assistance in regard to their loans if they feel that they can get along without doing; so. If, on the other hand, they do . not enlist our aid, the consequences will be calamitous. A Londonfinancial clique might meet upon an hour's notice and decide to demand a higher rate of interest, and the States would have *no* alternative but to pay it, in order to obtain, a renewal of their loans. If, however, the Treasurer is granted the authority which he proposes to seek, the results will be beneficial to all the States. Then the Treasurer says that the States must pay the interest on their debts until they are converted, and1 that afterwards the Commonwealth shall be solely liable. This is half-hearted, it would be statesmanlike to complete the business at once. When the debts are assumed by the Commonwealth, the Treasurer will deduct each year from the sum payable to the States an amount sufficient to meet the interest on their debts. That is a perfectly sound proposition; but it provides only for the debts existing when the Constitution Act was passed. The Treasurer further proposes that section 87 of the Constitution - the Braddon section - should not be continued beyond the 31st December, 1910. I think that the operation of the Braddon section should terminate at once. {: .speaker-KFJ} ##### Sir John Forrest: -- It would be necessary to amend the Constitution. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I am perfectly aware of that. We are dealing with over £200,000,000 of loans. This is the people's business, and if we tell' them what an amendment of the Constitution will mean, they will readily acquiesce in the proposal. The Constitution is theirs, and it is their business that we are managing, and, as the majority of the electors are sensible men, they will probably see the necessity of agreeing to the proposal. {: .speaker-KYD} ##### Mr Poynton: -- What would the honorable member substitute for the Braddon section ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- In the first place, I should ask the electors to consent to the immediate transfer of the States debts to the Commonwealth, and also to the immediate termination of the operation of the Braddon section. Then I should propose to make to the States a *-per capita* allowance from Commonwealth revenue at a uniform rate, and upon a liberal scale, so that none of them, with the exception of Western Australia, should receive less than they are now being paid. Western Australia is a comparatively young State - her present Constitution has not been in existence for more than fourteen1 years. She has a population largely composed of adult males who have gone over from Victoria, New South Wales, and other States, and have left their wives and children behind them. These adult males consume a much larger proportion of highly dutiable goods than do their wives and children and other relatives, who are in the eastern States. An Honorable Member. - The excess of adult males over the other elements in the community is gradually being diminished in Western Australia. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- And, consequently, the rate of revenue per head will decrease, and gradually come down to the level of that derived in the other States. In mv opinion, the time has arrived when the bookkeeping provisions and the Braddon section of our Constitution should be terminated, so that every State may be benefited by improved conditions of trade. It has been said that New South Wales and Victoria benefit the most from Federation, because goods which are consumed in other States of the union are required to pass through them. Why is that so? Do not the people of the other States obtain their goods cheaper in that way ? If those goods reached them direct, as thev did formerly, they would be called upon to pay more for them. My proposal is that the Commonwealth should take over the whole of the States debts, and convert them into 3 per cents. The Commonwealth stocks, being of that denomination, public opinion in the States would furnish a guar- antee against outside borrowing on their part at higher rates of interest. I hold that any State which required to raise money should come to the Commonwealth for it. It would be to its advantage to do so, because it would thereby obtain it al 3 per cent. Of course, a sinking fund would be established, and that provision would make the security of the Commonwealth more acceptable to the investors in England. I think that the Commonwealth should take "over not only the States debts which ' were contracted prior to Federation, but those which have since been incurred, and I am of opinion that all future loans required by the States should be raised by the Commonwealth. {: .speaker-JUJ} ##### Mr Cameron: -- The States would have to ask the Commonwealth to raise loans for them ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes. But no embargo should be placed upon them in that connexion. It is idle to urge that the States would be able to extravagantly float loans, seeing that t(he interests of the same people would be concerned, and that they would be closely safeguarded by the same press, which would act as a watch dog. They would not be permitted to ask for money recklessly. Public opinion would prevent that. {: .speaker-KYD} ##### Mr Poynton: -- Does the honorable member call the press a watch dog? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I do. The press is a most valuable institution. If it were not for it, the people would be absolutely ignorant of the. events daily transpiring throughout the world. They get their news served up to them at breakfast time in the most condensed and attractive form, and, upon the whole, the newspapers are well advised. Thev could not live if the people were not behind them, trusting them. {: .speaker-JUJ} ##### Mr Cameron: -- How many lines will they devote to the honorable member's speech to-morrow ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- They have given up taking notice of me. However, I am not fishing for any notice in the columns of the newspapers. The press in my own electorate report my speeches in full, and that is all I care about. I suggest that a sinking fund should be established in connexion with every existing debt,' and with every debt which may be contracted in future by the States. Such a proposal is not a new one. The British Government today are advancing £100,000,000 to the Irish people, and are offering a 12 per cent. inducement to the .large land-owners to sell their estates. There is an impression abroad that this money is in the nature of a free gift to the Irish people. It is nothing of the kind. The scheme is that the Irish tenants- shall repay the amount advanced with interest added, and a small percentage to a sinking fund. The Local Government Board in England perform the very same functions as would be discharged by the body the creation of which has been suggested by the honorable member for Mernda. At the present time, any municipality throughout England or Scotland which desires to raise money - and many of these bodies have raised as much as £10,000,000 - are required to make application to the Local Government Board. The purpose for which the money is wanted is investigated, and, if approved, the money may be borrowed ; but a sinking fund has to be opened to provide for the liquidation of the debt. The system has been in existence in the old country) since the eighties. Under the scheme of the honorable member for Mernda, a sovereign State of the Commonwealth would occupy a position similar to that occupied by a municipality in Great Britain. He proposes that a State desiring to float a loan should* make application to Public Debts Commissioners. If there were many applications received about the same period, it would indicate that the time was not opportune for floating a loan, or that the works scheme was not approved of, and the power to borrow refused. Such a proposal the States could not entertain. Under an acceptable scheme the Commissioners would say to the State. " You shall have the money," and the Slate would then b'e responsible to the Commonwealth just as it was to the money lender direct. {: .speaker-KYD} ##### Mr Poynton: -- But who would be di- recti v responsible? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The Commonwealth. T would make the States a liberal allowance *-per capita.* At present the amount averages about £2 4s. We could fix it at £2 6s. if we thought 'it necessary to do so. {: .speaker-JUJ} ##### Mr Cameron: -- How would the honorable member raise any further sum that might be required after the Customs revenue had been exhausted? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I cannot conceive of the Customs revenue being exhausted if we have an increase of population. {: .speaker-JUJ} ##### Mr Cameron: -- The honorable member would not ask for any security from the States ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Certainly not ; no more than is now given to bond-holders in England. With the abolition of the Braddon section of the Constitution, the States would have no claim whatever to the Customs and Excise revenue. It would then be within the discretion of the Commonwealth to allow the States *£2* 6s. per head of population. {: .speaker-JUJ} ##### Mr Cameron: -- What about future loans ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Any future loans required by the States would be raised by the Commonwealth. There is no more likelihood of the former going back upon the latter than there is of their going back upon the bond-holders in England. If a State requires money for developmental purposes, it ought to be in a position to obtain it. We cannot expect the States to abandon a progressive policy of public works. They have the railways, and those railways must be pushed into the country, in order that it may be properly developed. But we must not encourage the States to go into the London market where we shall have a footing and pav more than they need to pay. If they could obtain locally what they wanted at 3 per cent., they would not think of going into the London market. An understanding should be arrived at that they should' take action through the Commonwealth. {: .speaker-JUJ} ##### Mr Cameron: -- The honorable member is taking it as an accepted fact that we should be able to obtain at 3 per cent, all the money we needed. As a matter of fact, we could not do so. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- It is all very well for some persons to make that statement. Those who are at present deriving considerable revenue from the managment of our public debts tell us that we could not hope, by any consolidation, to secure what we needed at 3 per cent. As interested parties, it is natural that they should make such statements, but we know what Canada has done in this direction. She issues *s* per cent, loans, and, although those loans are not floated at par, the price obtained closely approximates to it. If we at once took over all the debts of the States, and issued 3 per cents., it would lae necessary for us to offer an inducement to bond-holders, who think as1 we think, that a State security is as good as a Commonwealth one, or they would not convert their Stocks. {: .speaker-KFJ} ##### Sir John Forrest: -- If we are to offer them an inducement, how are we to effect a saving? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I will explain that point. We must not lose sight of the fact that we have to deal with men who know that their present security is satisfactory. As **Mr. Coghlan** points out, when we ask these men to exchange their 4 pei cent, stocks for 3 per cent, stocks1, we must offer them some inducement. {: .speaker-KFJ} ##### Sir John Forrest: -- Then we shall not effect a saving. When the stocks are approaching maturity, we shall be in a better position. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- What is the inducement we must offer? If we asked the bond-holders to accept a 3 per cent, for a 4 per cent, stock, which had only a year to run. we should give them little more than £100 for their bonds. {: .speaker-KFJ} ##### Sir John Forrest: -- But, supposing that the stocks had still thirty years to run? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- In those circumstances, if we wished the bond-holder to take a 3 per cent, for a 4 per cent, stock, we should have to give '.. something which would in the aggregate raise the same amount as would be raised by the 4 per cent, stock, that is to say, we should offer the actuarial value of a 4 per cent., current for thirty years, in a 3 per cent., stock. {: .speaker-JUJ} ##### Mr Cameron: -- If we did that, we should increase our national debt. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- No, not in value, merely denomination. But does not **Mr. Coghlan** tell us that we must offer an inducement? The inscribed stock would' sell more readily in some quarters and the holders of such stock would benefit on 'Change. We could' not gain on their stocks nor could we lose by the conversion. {: .speaker-KFJ} ##### Sir John Forrest: -- He does not advise us to do so. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Will the bondholders agree to exchange a 4 per cent, for a 3 per cent, without inducement if they think, as we do, that their existing security is sound? {: .speaker-KFJ} ##### Sir John Forrest: -- We do riot propose to convert any loan until it is nearing maturity, unless a satisfactory offer is made in any case. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- It is in that respect that the right honorable gentleman makes a mistake. If we ask the bondholders to accept 3 per cent, for 4 per cent, stocks, we must give them something that will be equivalent to the difference in the ' percentage. {: .speaker-KFJ} ##### Sir John Forrest: -- Then what advan-» take shall we derive? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- We should gain upon every loan maturing from 1907 till existing loans had run their fixed, period under the actuarial valuation,, as from that period the stocks converted would cost the Commonwealth nothing. In respect of every bond current, we should give an inducement on paper by inscribing our stock. We should in that way raise the value of that stock, whilst at the same time we should reduce the interest bill on loans maturing, providing for a sinking fund of per cent., which in sixty odd years would wipe out the face value of the accumulated debt. Under this system we should pay nothing more in respect of interest, although we should appear to pay a little more on paper. When our bonds fell due we should redeem them at their face value. This is not a new scheme of finance in, principle. Let me remind honorable members of the position in regard to banking institutions which are paying 10 per cent, on £25 shares. Prior to the financial crash, the shares of the Bank of New South Wales, , which were issued at £25 each, ran up to about -^"65, whilst those of the Commercial Banking Company sold as high as *£110* each. I well remember having dealings in them at that price. The bank was paying 10 per cent, and 12 per cent, dividends, as well as bonuses, and the security was considered to be as good as was a 5 per cent, or 4 per cent, or 3 per cent. - stock. If the Treasurer followed the proposal T have outlined, his 3 per cents, would be floated at once, and the stock's would increase in value to the consequent advantage of holders. Financial people doing business in Australian stocks would find it to their advantage to favour this inscription and conversion. They would be able to reap a large profit, since the Commonwealth, stock would be held in high esteem by the general public {: .speaker-KFJ} ##### Sir John Forrest: -- We desire to secure some of that profit. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- We cannot possibly hope to benefit in that regard. If I hold a 4 per cent, bond issued by. the right honorable gentleman, I certainly should not exchange it for a 3 per cent, one, unless it were to be made of equal 1 monetary value. {: .speaker-KFJ} ##### Sir John Forrest: -- I should pay off » the honorable member when the bond matured. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes, and probably then have to pay 4 per cent, for the money. Although **Mr. Coghlan** has not worked out his scheme on the lines that I have followed, the same principle will apply to both. Our bonds would be taken at par, or would practically be at a premium. As pointed out by **Sir Edward** Hamilton, the Commonwealth will reap the benefit of the conversions when our bonds become popular, and they certain:] y would become, popular if this scheme were carried out. The Treasurer has told us that a minimum period is fixed in respect of Imperial loans, and he proposes that the Commonwealth should fix a. minimum of thirty years. {: .speaker-KFJ} ##### Sir John Forrest: -- I think that the minimum in England at the last conversion was thirty-five years. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Quite so. **Mr. Coghlan** suggests that we should fix a minimum of twenty years. In dealing with current bonds, we should stipulate that when converted they should have a * currency equal to the period for which they were issued, before the power to redeem could operate, . and at the end of that period we might give six months' notice of our intention to pay. In England a minimum and maximum period was fixed in respect of the issue of 3 per cents., and the stocks were taken up as trustees' investments. It would be unnecessary for us to fix a period in respect of new loans, because they would be dealt with in the same way as are those floated by the Imperial Government. The Treasurer has informed us that the interest on consols is paid > quarterly, while that on the Australian register is paid half-yearly. I think that in taking over the debts of the States, the Commonwealth should agree to pay the interest quarterly. When **Mr. Goschen** proposed his great conversion scheme some years ago, he intimated that he intended that the interest should be paid quarterly instead of half-yearly, and this led many persons to favour the conversion. A man having only a small income naturally desires to secure the prompt payment of interest on any security which he holds. I think that I have made my position clear. If we ask the holder of a bond worth £100 at 4 per cent, which has a year to run, to accept a 3 per cent, stock in exchange for it, we must offer him a little more than £100 for that bond. No doubt such a system would cost us a little more on paper j not more, however, in payment; but the States would be required to establish a sinking fund of J per cent, from the period of renewal, and the result would be that, on the average, they would pay less than they are now doing. According to **Mr. Coghlan,** their present average rate of interest is 3.7 per cent. But what is the position of those States which have launched loans at 6 per cent? What a substantial benefit would accrue to them from the conversion of those loans by the Commonwealth. I hope that the Treasurer will continue to give this question his closest attention, and that the Government will seek the authority of the people for an amendment of the Constitution enabling the Commonwealth to take over all the debts, and abolishing the operation of the Braddon section. {: .speaker-KYD} ##### Mr Poynton: -- How would the honorable member deal with the States in respect of the transferred properties? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- That is a question that I have considered, although I had no intention of referring to it at this stage. *Sitting suspended from 6.JO to 7.30 p.m.* {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The honorable member for Grey has asked me for my views as to what. should be done in regard to the properties transferred from the States to the Commonwealth in connexion with the transfer of certain Departments of Government. I had not intended to deal with that matter at this juncture, but I have looked into it, and am of opinion that these properties should be legitimately valued, and 3 per cent, interest allowed to the States on that value, with a sinking fund of per cent., which, in a little over sixty years, would extinguish the original debt. It must be remembered that these properties were constructed largely out of borrowed money, on which the States are still paying interest. Some of the smaller States cannot afford to lose this interest, and, therefore, the Commonwealth should either pay rent for the properties, or interest in the way I have described. {: .speaker-JSM} ##### Mr Brown: -- Some of the States wish to *be* paid in full at once. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- That would not be a sound financial arrangement. The scheme I suggest would be similar - to that under which the Irish land purchases are being carried on, and the local governments of the United Kingdom are working, or practically the same as that adopted in New South Wales and other States in regard to the conditional purchase of land. With regard to the Northern *Territory* of South Australia, I think that it should be taken over by the Commonwealth, but that the Commonwealth should be responsible only for the loan money actually expended in its development, upon which, it should pay South Australia interest at the rate of 3 per cent., another £ per cent, going towards a sinking fund for the extinction of the debt in about sixty years. I have never declared myself in favour of the Western Australian railway, and shall not do so until I have consulted my constituents on the subject. In mv opinion, however, if the State of Western Australia is really anxious for the construction of that line, it should bear half of any loss arising from its construction, the other half being borne by the Commonwealth, which, as the railway would be of use for. strategical purposes, should also pay £ per cent, on the cost to establish a sinking fund for the liquidation of the debt. {: .speaker-JWA} ##### Mr Carpenter: -- What about South Australia?1 {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Assuming that the people of South Australia are opposed to the construction of the line, I do not know that they should be forced to bear any loss which may accrue therefrom, though, if there were a gain, the State should certainly share in it, as it runs through her territory. {: .speaker-JSM} ##### Mr Brown: -- Would the honorable member apply the same principle to the main trunk lines of the other States? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- So far as the proposed railway from Oodnadatta to the South Australia border is concerned, that would be purely a State undertaking ; but if it became a white elephant through the taking over of the Northern Territory by the Commonwealth, it would be the duty of the Commonwealth to connect with the South Australian border the railway from Pine Creek, and the cost would, of course, be chargeable amongst the people of the various States, per head of population, as new expenditure. In conclusion, my proposal is that the Commonwealth shall take over all the debts of the States to date, converting them at 3 per cent, at par, or at any additional sum that may be required, J per cent, to be paid as a sinking fund for the liquidation of the debt within a certain period, which would be extended a little if the conversion were effected below par. I propose that the bookkeeping system should terminate within the next twelve months, as is provided for by the Constitution. When it terminates, we shall have Inter-State free-trade. It is unthinkable that there should be Federation . without Inter-State freetrade. There would have been no union in the United States, had it not been for the clamour of the public for that boon, and the late **Sir Henry** Parkes, when he stumped the country in favour of Federation, gave as one of the burning reasons for the movement the desirability of doing away with the barriers between the States. The bookkeeping keeps barriers in existence, every export and import being credited and debited like the transactions of a small retail establishment in a most vexatious and expensive manner. I would also wipe out the Braddon section, and give to the States a uniform allowance of 2s. 6d. per head of population. I would provide for the repealing of the Braddon section at the same time as the amendment of the Constitution, to give the Commonwealth power to take over the debts of the States practically to date. The debts having been converted, 'I propose that the States should borrow through the Commonwealth at 3 per cent., with a sinking fund of i per cent. There would, of course, be a certain amount of expenditure incurred in the raising of loans. Even Great Britain has to bear incidental expenses in this matter. This expenditure might slightly increase the period necessary for repayment, which would be a little over sixty years. There can be no question that money could be raised at 3 per cent., and that our stock would be popular in the market. That there should be a Commission to manage our financial operations goes without saying. A Commission of the kind is in existence for controlling the Irish land expenditure, in connexion with which £100,000,000 is involved, together with £12,000,000 for bonuses to landowners. The appointment of the. Commission must be part of any scheme. The Commissioners would manage the loans, advise the Government, collect the Customs allowances for each State, and the balance due in interest upon loans debited to the States. Each State would pay interest on its own debt, and be responsible for its own liabilities only. The Commissioners would do the work which isi now being done by our financial agents in London. The present arrangements there, except in the case of South Australia, are very expensive. South Australia is doing her business in London more expeditiously and economically than any of the other States. {: .speaker-KCO} ##### Mr Glynn: -- The Agent-General's report shows that. {: .speaker-KFJ} ##### Sir John Forrest: -- What evidence is there in regard to expedition? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The work is done in the office of the State, and, although I have not the actual figures with me, I know that the expense is proportionately less than that incurred by the other States, who employ the governors of the Bank of England, the managers of the Westminster Bank, and a firm of financiers who divide the commissions between them. Twelve years ago, when I was in London, South Australia was just having its offices moved from Westminster to the East End, so that its representatives might be in the city proper, and manage the business of the State economically. They now do their work better than the work of the other States is done. {: .speaker-KFJ} ##### Sir John Forrest: -- I do not in the least degree admit that thev do it better. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- They do it at a less) cost. Of course, in any case, there must be a broker to go on the Exchange, and a banker to take charge of deposits, and to do the ordinary banking business. But, although South Australia has managed her business well, the States would do even better under the system which I propose. The financiers df England regard an Appropriation Act as affording ample security. If that is sufficient now, it will also suffice when the Commonwealth takes over the States debts. Therefore, -why should the revenue from railways or other public works be hypothecated, as suggested by the honorable members for Mernda and Kooyong? No such unsound proposals have ever been made by the financiers of England. The holders of the States stocks would be benefited by the proposed conversion, and our stocks would be boomed. We should give them something more in the form of inscribed capital, but pay them . less by way of interest. We should merely capitalize i per cent, of the present interest payment, and- give them the cash value in stock. The present bond-holders would be benefited, but not at our expense. They would make their gain out of those who wished to invest in 3 per cent. Commonwealth stock. Until recently, many persons have not been permitted to invest in States stocks, but they would be in a position to accept Commonwealth stocks as security. All they want is a sound' investment, and this would be provided by a Commonwealth stock. Our inscribed stock would be worth more during the first year than during the last year of its currency, because at the end of that term we should pay over merely ^100 for every £100 that we had borrowed That is all that the holders of the stock would get. If we contributed £ per cent, per annum to a sinking fund, we should be able to meet the loans as they fell due. The period would be variable, and that is why I do not fix any exact date. The Treasurer claims that great benefit would accrue to the States if their stocks were converted as they fell due. But we should not gain anything in the meantime. Why should' we object to the bond-holders making, something out of the stocks they hold, if we can also effect a saving ? If they could be induced to boom the stocks, we should every year derive more benefit, because we should obtain our money at 3 per cent, permanently. I think that I have submitted a thoroughly sound scheme. {: .speaker-L0Y} ##### Mr Wilkinson: -- Whose scheme is it ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- It is a scheme similar to that which has been adopted in Great Britain, Canada, and the United States. It is a thoroughly sound financial scheme, which I have worked out to suit the requirements of the Commonwealth. If our 3 per cent, stocks were boomed they would become popular, and we should not object to some one else obtaining a benefit, not at our cost, but at the cost of the British public. {: .speaker-KXO} ##### Mr Page: -- Was it not with the object of arranging for an advantageous conversion of the States debts that the Treasurer went to England ? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes; and I have given the Treasurer every credit for the excellent work he has done. The underwriters complain that they have still in their safes some of our stocks, which they have been unable to unload, and they urge that we should not place any fresh' stocks upon the market just now, because if we do so they will not be able to underwrite them for us. If our stocks were boomed, however, the whole of the stock now lying in the safes of the underwriters would be placed on the market. **Mr.** Coghlan points out that loans amounting to several millions will fall due every year for forty-five years, and that if the States debts are consolidated at 3 per cent, at par there will be a saving to the Commonwealth when the loans expire of £1,375,000 - that is, if we allow the bond-holders an opportunity to make some profit in the meantime. During the five years, from 1907 to 191 1, the loans falling due, if redeemed at 3 per cent., would represent a saving of £273,000 per annum. During the period, from 1912 to 1916, we should effect a further saving of' £390,000 per annum. So the saving would be increased every year. If we do not adopt the plan suggested, the States will probably have to raise money at 4 per cent. Although I do not think that his proposal is the best, I shall give every assistance to the Treasurer to make the scheme perfect, provided that he goes forward with it. I understand that he intends to cover the whole ground if he can secure an amendment of the Constitution. He will not, however, wait until that change has been brought about. He will deal with the loans as they fall due, and afterwards seek permission to take over the balance of the States debts. Personally, I should prefer to ask the people to adopt a scheme such as I have outlined. I think that they would approve of it, because they would see that it would be to their advantage, and that it would achieve one of the purposes which were held most clearly in view when they were induced to vote for Federation.. {: #subdebate-19-0-s4 .speaker-KYD} ##### Mr POYNTON:
Grey .- I am afraid that at this period of the debate very little interest is being taken in the Budget proposals. Whilst we are basking in the sunshine of temporary prosperity, honorable members are inclined to lose sight of the possibilities of the future, and it seems to me that we shall have to safeguard ourselves against anything in the nature of rash or- improvident financing. I have been very much sur.prised at the want of interest in the Budget statement displayed by the States Treasurers. It is true that there has been a considerable expansion of our trade, and that the community as a whole is apparently prosperous, but I am afraid that that is all the consolation that the States Governments are likely to derive from a study of the Treasurer's proposals. Our boasted surplus .of revenue has practically reached vanishing point. If we paid to the States all that is due to them by us, we should no longer have any money to spare. Our expenditure is increasing out of all proportion to our income. I do not know who is to blame for this, but it seems to me that our present outlook is a particularly dismal one. Of course, I know that some honorable members argue that we should not be called upon to pay the States for the transferred properties - that a mere bookkeeping entry would meet all the necessities of the case. It would be of distinct advantage to the States if they were relieved of the necessity of paying the interest on the loan moneys expended on transferred properties. {: .speaker-L17} ##### Mr Wilks: -- We have not yet taken over all the services that should be carried on by us. {: .speaker-KYD} ##### Mr POYNTON: -- No ; and I realize that we shall have to incur additional outlay, although we shall receive very little additional revenue when the new Departments are transferred to us. I understand that the penny postage proposal will, if adopted, involve us in an annual loss of from £200,000 to £300,000 per annum. To the aged poor who, 'ever since the issue of the manifesto of the first Prime Minister, have been led to believe that a system of old-age pensions was to be instituted, it must be a great consolation to learn that, instead of effect being given to such a scheme, their letters are to be carried for a penny less than they have been carried for hitherto. The question of providing oldage pensions was that upon which the Barton Ministry gained a majority at the first election. But, though five years have since elapsed, no serious attempt has teen made to establish any such system. Now, because an agitation has been promoted by business persons in favour of the adoption of penny postage, the Government propose to sacrifice a revenue of from £200,000 lo £300,000 annually. The business section of a community are naturally very eager to secure the advantage which would be conferred upon them by the adoption of penny postage. In some establishments, it would mean a saving of hundreds of pounds yearly. {: .speaker-KFJ} ##### Sir John Forrest: -- Perhaps, as the re' suit of its introduction, they will sell their goods cheaper. {: .speaker-KYD} ##### Mr POYNTON: -- There is not much likelihood of that. What will be the result? Very soon we shall have proposals submitted by the Treasurer - who does not believe in direct taxation - to raise an increased sum by means of indirect taxation - proposals under which the working man will be called upon to contribute to the deficiency in our revenue equally with the individual who has derived from penny postage an advantage of hundreds of pounds annually. The Budget offers very little consolation to the States Treasurers or to the aged poor of the community. {: .speaker-KFJ} ##### Sir John Forrest: -- Anybody would think that penny postage was not in operation in any State in Australia. {: .speaker-KYD} ##### Mr POYNTON: -- It is not in operation in South Australia. {: .speaker-KFJ} ##### Sir John Forrest: -- In Western Australia, it has been adopted in every municipality for the past thirty years **Mr. POYNTON.-** It will confer very little advantage upon the great majority of the people. In South Australia, the employes of the Postal Department have sufferred more from their transfer to Commonwealth control than have the employes of that Department in any other State. Some officials there have been deprived of many privileges which they enjoyed under State law. Prior to Federation, they were assured that upon the transfer of the Department to the Commonwealth, all their existing and accruing rights would be preserved to them. But what has been the result? Officers who were entitled' to increments in a class in which the maximum salary was *£200* a year, have been placed in a division in which the maximum salary is £180 yearly. Postmasters who - as an addition to their salaries - received a percentage upon the postage stamps which they sold, have had to sacrifice that percentage. Similarly, the amount which they formerly received for acting as agents for the South Australian Savings Banks, has been, taken from them. Further, their duties have been increased. They are frequently called upon to discharge the functions of returning officers in connexion with Commonwealth elections, and for their services they receive practically nothing. They are sometimes required to act as Customs officers, but any money to which they might otherwise be entitled for this service must be paid into the State Treasury. They are called upon to pay rent for residences for which no charge was previously made, notwithstanding that the salaries of some of these officers have been reduced to the extent of £150 annually. Despite all the disabilities under which they now labour, the Government propose to sacrifice a revenue from this Department of £200,000 or £300,000 annually to establish penny postage. Whether Ministers believe it or not, it is a fact that throughout the whole of the postal service in South Australia, very marked discontent exists owing to the injustice to which the officials have been subjected by the Commonwealth. It is true that they discharge their duties faithfully enough, but there is a very wide distinction between a hearty and a reluctant service. One would think that the Government would have seen that these men, upon whom they have to rely to make the Department a success1, received fair treatment at their hands before proposing to sacrifice its revenue. During the course of this debate a good deal has been said in reference to our want of population. I venture to say that the period during which we shall suffer a loss of revenue in consequence of the introduction of penny postage will largely depend upon the increase which fakes place in our population. What encouragement have we to hope for improvement in that direction? After all, we do not want population in the cities. The curse of Australia is that people have been driven off the land, with the result that to-day the cities are congested, to the detriment of rural industries. What proposals contained in the Budget are calculated to bring about a better state of things ? {: .speaker-KFJ} ##### Sir John Forrest: -- From the honorable member's point of view, there would appear to be nothing in the Budget. {: .speaker-KYD} ##### Mr POYNTON: -- I venture to say that the Treasurer is right. {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable member appears to think that he is in the State Parliament. {: .speaker-KYD} ##### Mr POYNTON: -- I know that the Treasurer holds a very strong opinion that we ought not to attempt to deal with the land question. But I maintain that that question is at the very root of the problem of how to attract population to Australia. Until we deal with it, we shall not receive that increase which the States require. {: .speaker-KFJ} ##### Sir John Forrest: -- Then we had better wipe them out altogether. {: .speaker-KYD} ##### Mr POYNTON: -- The Treasurer is altogether too sensitive to criticism. I say that there is plenty of scope for a Treasurer who has the courage to tackle the land question. The other night the honorable member for Grampians outlined a scheme, which he has since elaborated, for the purchase of some 5,000,000 acres of land at a cost of £25,000,000. There is a good deal to be said in favour of that scheme if any system could be applied to the purchase of the land which would prevent it from being rushed up to boom prices owing to the large demand for it. What a farce it is to plead to people in other parts of the world to settle in Australia if we have not the necessary land to offer them? Of course, we have abundance of land in Australia, but, unfortunately, it is held by very large holders. It would be cruel to tempt immigrants to come here upon the mere chance that they would be able to secure land, when we know that at every meeting of the Land Boards there is an average of from thirty to fifty applicants for a single block. {: .speaker-KFJ} ##### Sir John Forrest: -- What does the honorable member want to do? {: .speaker-KYD} ##### Mr POYNTON: -- Accompanying any such scheme as that which has been suggested by the honorable member for Grampians, there should be a system of compulsory purchase, which would enable applicants to obtain land at a fair value. Every common-sense land-holder will admit that the sheep at present upon our large holdings must give place to men. The large holdings must give way to smaller ones, for we must have closer settlement if we are to have a population worthy of Australia. {: .speaker-KFJ} ##### Sir John Forrest: -- That is a matter within the control of the States Parliaments. {: .speaker-KYD} ##### Mr POYNTON: -- Quite so, but the right honorable member knows full well that several of the States are cursed with Constitutions under which only two out of seven have a voice in the election of members to the Upper House. In the State which I represent, legislation dealing with vested interests is blocked from time to time by eighteen gentlemen in the Legislative Council who do not really represent the wishes of the people in this regard. As long as this state of affairs continues Australia will not make much progress, and it is with a view to secure a remedy that the Labour Party has suggested the imposition of a land tax on lines similar to those of the tax prevailing in New Zealand, which has done much to burst up large estates there. I wish now to say a word or two about the consolidation of our debts. I see no particular virtue in the proposal that we should at once take over the whole of the indebtedness of the States, nor do I see any special virtue in the contention that if we do not take over the whole of the debts we must at least take over an equivalent portion from each of the States, irrespective of whether they desire us to do so or do not. {: .speaker-KFJ} ##### Sir John Forrest: -- That is the position under the Constitution. {: .speaker-KYD} ##### Mr POYNTON: -- I am aware of that, and I agree with the Treasurer that we should seek an amendment of the Constitution! which will enable the Commonwealth Government to take over the States debts as they approach maturity. When this is done, an understanding must also be . arrived at that the States shall borrow only through the Commonwealth. We must have control over their borrowings. Unless we do so, the moment we relieve them of responsibility in respect of their present indebtedness they will evince a strong tendency to indulge in further borrowing. The Commonwealth is entitled to take special credit for the fact that, although it has been in existence for nearly six years, it has not yet borrowed one penny. We have constructed out of revenue a great many works for which prior to Federation provision was made out of loan moneys. Whilst I admit that our expenditure in this direction is deducted from the surplus returnable to the States, I am satisfied that the effect of this system has been most beneficial. It has caused us to hasten slowly in increasing our expenditure, and it has had also a wholesome effect in another direction, since a State Treasurer is not so ready to urge the construction of various works when he knows that they must be provided for, not out of loan funds, but out of revenue. I am somewhat disappointed that the Treasurer has not yet indicated an intention on the part of the Government to bring in a. Bill relating to, banking. It seems to me that a Federal banking law is even more urgently required than is the adoption of a uniform system of penny postage. It is monstrous that if one draws a cheque for *I* on a South Australian branch of a banking institution, it costs him is. to cash it in Melbourne. {: .speaker-KFJ} ##### Sir John Forrest: -- The charge would be the same if the cheque were for £10. {: .speaker-KYD} ##### Mr POYNTON: -- Certainly ; but surely an arrangement could be made to obviate the necessity for such a monstrous impost. A reform is also necessary in regard to the issue of postal notes and post-cards. {: .speaker-JX7} ##### Mr Austin Chapman: -- Hear, hear; uniformity is desirable. {: .speaker-KYD} ##### Mr POYNTON: -- But these reforms could be carried out before the adoption of the honorable gentleman's extravagant scheme of penny postage for Australia. {: .speaker-JX7} ##### Mr Austin Chapman: -- They all must come together. {: .speaker-KYD} ##### Mr POYNTON: -- At one time we heard a great deal about decimal coinage, but I am afraid that in the absence of the honorable member for South Sydney the work of the Committee appointed to deal with that question has fallen flat. Evidence was given before the Committee that great savings could be effected in connexion with the coinage of silver and copper. The Treasurer was deputed to deal with this question when in England, but we have heard very little from him. {: .speaker-KFJ} ##### Sir John Forrest: -- I referred to the matter in my Budget statement. {: .speaker-KYD} ##### Mr POYNTON: -- The right honorable gentleman had very little to say about it. I do not propose to further detain the Committee ; at this stage of the session long speeches should be avoided. We have still much work to do. In a very short time honorable members will be anxious to look after those who are seeking to poach on their preserves ; the Ministry will find it very difficult, a few weeks hence, to maintain a quorum. I suggest; therefore, that we should push on with the work before us. {: #subdebate-19-0-s5 .speaker-JUJ} ##### Mr CAMERON:
Wilmot .- Before dealing with the Budget, I desire to refer briefly to one or two statements made by the honorable member for Capricornia, and also by the honorable; member for Darling. When speaking this evening, the honorable member for Capricornia appeared to be under the impression that Queensland riad a distinct grievance against this Parliament, and to believe that it had been wrongfully deprived of portion of the three-fourths of Customs and Excise revenue to which it is entitled. I can only presume that under the Constitution certain charges have been debited against Queensland, and that these have led to the deduction of which he com plains. I was much impressed by his ingratitude to the other ^States, who have so generously relieved Queensland of the burden imposed upon her under the sugar bounty system. {: .speaker-KDF} ##### Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910 -- The honorable member is" not serious. {: .speaker-JUJ} ##### Mr CAMERON: -- I certainly am. The honorable member for Capricornia seems to have forgotten that for twelve or eighteen months after the establishment of the Commonwealth Queensland had to take on her own shoulders the cost of the sugar bounty system. Then the right honorable member for Balaclava, who held offce as Treasurer, told us that, as the people of Australia had agreed to the policv of a White Australia, it was only fair that the other States should share with Queensland the burdens it imposed. An arrangement was then made under which each State has since borne *-per capita* her share of the / cost of this policy. {: .speaker-KFJ} ##### Sir John Forrest: -- -And they ha ve shared the cost of that policv since its inception. {: .speaker-JUJ} ##### Mr CAMERON: -- That is so. I would point out to the honorable member for Capricornia, who was so loud in his lamentations, that the small State of Tasmania, large Victoria, poor South Australia, and rich Western Australia, have all been pouring into the pockets of those engaged in raising sugar in Queensland sums amounting to several hundred thousands of pounds in respect to the bounty. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- That statement shows that the honorable member is ignorant of the whole question. {: .speaker-JUJ} ##### Mr CAMERON: -- My statement is absolutely correct. In the speech" which he delivered last week, the honorable member for Darling was good enough to liken the large land-holders of Australia to the aborigines, who formely occupied this vast continent. He told us that the white men, finding that the blacks were not making proper use of the country, took, it from them, and he suggested that the people should adopt the same course in dealing with the land-holders of Australia, since they were not devoting the land to the use for which it was designed by nature - the carrying of a large population. Might I suggest that the honorable member, and those who think with him, have overlooked the fact that they are proposing to dispossess of these large estates the descendants of those who originally came to this country, and, by thrift and industry - often carrying their lives in their hands - were enabled to acquire property. The honorable member does not propose to take the land from them in a fair manner; he does not propose that the States, shall acquire it at a fair valuation. He and his fellow members of the Labour Party seek to impose a crushing land, tax, and thus to compel these Unfortunate land-owners to sacrifice their property. 1 propose to give a brief example. In the State of Tasmania there are one or two persons who own £50,000 worth of land, and who, under the State . land tax, pay nearly £200 per annum. If the proposals of the Labour Party were carried into effect, this taxation would be increased by £400, and therefore, taking into account other taxation, these land-holders would have to pay to' the State and the Commonwealth nearly £800 per annum, or almost half of the annual value of their properties, which amounts to about £2,000. I need hardly point out that such taxation would mean absolute ruin to land-holders. No man could pay it and meet his other expenditure, too. The object of the Labour Party is to compel the large land-owners to throw their land on the market. But if, as the result of this crushing taxation, the large landholders found themselves unable to live, and their land were all thrown on the market, there would be practically no buyers, as the market would be glutted. As a result, confidence would be shaken, men would not be able to sell or to borrow on land, and the small holders would suffer with the large. The Labour Party, with a large amount of cunning, if I may use the term, though I allude not so much to the members of this House as to those responsible for the propaganda, are saying to the small land-holders, " Do *not* be afraid ; we shall not touch you. Our wish is to get at the big men. By making them pay this large burden of taxation, we shall be able, to get revenue for the establishment of an old-age pension system." Suppose, however, that the old-age pension system is established, and that this crushing taxation has had the desired result of getting rid of the large land-holders, what must happen? The large land-holders, the descendants of the men who pioneered Australia, having, gone, the money necessary to pay for old-age pensions must be found by the small landholders. The large land-owners may be struck first ; but, as sure as God made little apples, the small land-holders will be struck later on. The injustice which is proposed to be done is to be suffered, not by aboriginals or by coloured aliens, but by the descendants of the pioneers of Australia, and for this, among other reasons, I do not think that the scheme of the Labour Party will commend itself to the spirit of fair play which animates most Australian breasts, just as it will not be acceptable to the intelligence of our people. The resumption of private estate by the Commonwealth, or by the Governments of the States, is another matter. Such resumption is already provided for by the Acts of some, of the States, and a Bill is now before the Tasmanian Parliament which will allow the purchase of private estates at their assessed annual value, plus 5 or 10 per cent, for enforced sale. This, in my opinion, is not too large an allowance, in view of the associations and ties which bind land-holders to their properties. I, as a fair-sized land-owner in Tasmania, would not object to the honest purchase by the Government of land thought to be required for the settlement of small holders upon the soil ; but I say emphatically that the system of wholesale confiscation and robbery proposed by the Labour Party ought not to commend itself to the people of Australia. Coming now to the Treasurer's Budget, I wish first to refer to the sugar bounty question. When legislation for the establishment of a White Australia, was introduced into the House, the honorable and learned member for Parkes and myself were the only two members in an assembly of seventy-five who dared to oppose it. I well remember the jeers and unpleasant remarks with which our action was greeted. A little later, when the Sugar Bounty Bill was introduced, as; we were told, a necessary corollary to the Pacific Islands Labourers Act, some half-dozen members opposed it. Under these circumstances, it is pleasing to me to know that the Treasurer, in reply to an interjection by the honorable member for North Sydney, has had to tell the Committee that we must soon seriously consider the position. {: .speaker-KFJ} ##### Sir John Forrest: -- I did not go so far as that. {: .speaker-JUJ} ##### Mr CAMERON: -- The words are in *Hansard.* The right honorable gentleman was a member of the Barton Government, and is therefore responsible for the White Australia legislation and the original Sugar Bounties Act. His remark shows that common sense is returning, if not to the assembly as a whole, at least to himself. Accord- ing to his figures, the production of sugar has enormously increased since the establishment of the bounty system. Australia at the present time is producing as much as she can consume, or perhaps a little more. So many white growers have been induced by the bounties wrung from the people of the States, who have no interest in the matter, to enter upon the cultivation of cane, that the production of sugar has grown enormously, and I should like to know what will be done with the probable future surplus. Thanks to what I may call this cursed system of protection which has grown up in Australia, under which industries are fostered on the plea that we must assist our own people, in the sugar industry production has overtaken, or is rapidly overtaking, the local consumption, and within a very short period we shall be exporting sugar to other parts of the world for consumption by negroes, Chinamen, and other aliens. Further, in aU probability, this sugar will be sold at a lower price than that, ruling in our own market. Then we shall have to consider whether it Is worth our while to continue a system under, which our own people have to pay very dearly for the production of sugar for the benefit of the people outside the Commonwealth. We need only look to the example of Germany. Some years ago, it was thought that it would be a fine thing to encourage the manufacture of beet sugar in that country, and a system of bounties was introduced which resulted in sugar being sent to London and sold at one half the price realized in the local market. Three or four years ago, however, the system broke down. The German people could stand it no longer, and conferences were held with the result that it was decided to do away with the sugar bounty. Does not this show that the Treasurer was perfectly correct when he stated that we soon should have to seriously consider the question of abolishing the sugar bounties. {: .speaker-KDF} ##### Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910 -- The term for the payment of the bounties has been renewed for a further five years. {: .speaker-JUJ} ##### Mr CAMERON: -- Yes, and in all probability, they will be paid for that period. The subject, however, is one that the people of Australia should take seriously to heart. We should seriously consider whether it would not be better, to revert to the old system and permit the kanakas to be brought into Australia for the express purpose of assisting in the growth of sugar, at the same time preventing them from marry ing Europeans, and providing for their repatriation at the end of their period of service. The people of Tasmania, Western Australia, and South Australia, although they have no direct interest in the sugar industry, are being called upon to subsidizeit for the benefit of Queensland. Yet we get no thanks from the representatives of that State, and I think that the sooner the sugar bounties are done away with, the better. Had we been met with some gratitude, we might have been willing to bear the burden. {: .speaker-KDF} ##### Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910 -- We are deeply grateful. {: .speaker-JUJ} ##### Mr CAMERON: -- The honorable member for Capricornia did not show much gratitude. The Treasurer indicated that he intended to relieve Tasmania of the annual charge of ,£5,600 hitherto contributed by that State towards the cost of carrying on the cable service between Tasmania and the mainland. I have not asked that this should be done, but in view of the sacrifices that Tasmania had been called upon to make, I confess that the proposal is only a fair one. The Treasurer also told us that prior to Federation, Tasmania contributed *£6,* 000 per annum towards the subsidy for the mail service between that State and Victoria, and that shortly after Federation had been established, an improved mair service was brought into operation, when the subsidy was increased to £13,000 per annum. He mentioned, further, that New South Wales enjoyed the advantage of a mail service to the South Sea Islands, and that the subsidy payable in .connexion with it was charged to all the States upona *-per capita* basis. It seemed to him, therefore, that in view of the similarity of the circumstances, Tasmania should no longer be called upon to bear the cost of the increased subsidy, but that the amount should be met by a *-per capita* contribution by the States. I should like to know whether this proposal has been brought forward merely because a representative of Tasmania happens to occupy a position in the Cabinet, or whether it has been introduced in view of the general elections, and of the fact that in Tasmania, there is a deep-rooted dislike to the present Administration. Is this merely a " sop to Cerberus " - an effort to placate the people of Tasmania? If not, I should like to know why, bearing in mind the fact that Tasmania has for some years borne her proportion of' the cost of the mail service between Sydney and the South Sea Islands, this act of justice to Tasmania has been so tardily performed? If that State is entitled to be relieved of the payment of the extra subsidy now, she was entitled to be so treated three years ago. {: .speaker-KVJ} ##### Mr Storrer: -- Why was not justice done by the Government which the honorable member held in the hollow of his hand ? {: .speaker-JUJ} ##### Mr CAMERON: -- That Government Gould not do what was necessary, because they had to adopt the estimates of their predecessors. {: .speaker-KXO} ##### Mr Page: -- It was the honorable member's fault - he ought to have " biffed them out." {: .speaker-JUJ} ##### Mr CAMERON: -- If I had "biffed them out," I might have " biffed in " a far worse Administration. The Labour Party " biffed in " a Ministry far inferior to that which preceded it. I always judge men by what they do. The Reid-McLean Administration had no opportunity to show what they could do. They were just settling down in office, and were preparing a programme, which I believe would have commended itself to the people of the Commonwealth to a far greater degree than the programme of this Government has done, when they were turned out of office. If they had not been turned out of office, they would have had the support of an independent majority, even though that majority consisted of only one member. The majority would never have forced the Government to make concessions iri order to retain office ; but would have judged them upon the merits of their proposals. {: .speaker-K87} ##### Mr Culpin: -- They were turned out of office because they had no proposals. {: .speaker-JUJ} ##### Mr CAMERON: -- They left office because they were disgusted with the duplicity and underhand work of some of those who were supposed to be supporting them. Like honest men they faced the music, and took their defeat with a good grace, I. believe that, as the result of the next election, they will again be placed on the Treasury bench, and that they will reflect credit upon themselves and upon the country. If they do not succeed, we shall probably again see upon the Ministerial benches the representatives of that small minority who allow their movements to be controlled in the same way that a dog wags its tail. The members of the present Administration are practically responsible for every Budget that has been submitted since the Federation has been established. The Budget has invariably been submitted by a Barton-Deakin, a Deakin-Turner, or a Deakin-cum-Watson Administration. I submit that if it is fair to relieve Tasmania of the payment of the extra £7,000 per annum in respect to the present mail service, the Treasurer should come down and tell the House that, in all fairness, that State should have refunded to it the amount in excess of the old contract price paid during the past three years. {: .speaker-KXO} ##### Mr Page: -- Why did not the honorable member ask for this before? {: .speaker-JUJ} ##### Mr CAMERON: -- Upon various occasions I have demanded that fair play should be extended to Tasmania, but, unfortunately, I have not commanded the support of as many representatives from that State as I should have liked.' Owing to the way in which its representatives are distributed - two occupying seats upon one side of the Chamber, and three upon the other - there is practically only one voice representing it. Had I been able to command the same measure of support as a representative of Western Australia or Queensland is in a position to command, the fair claim which I have repeatedly urged on behalf of Tasmania would have received more attention. I trust, however, that after the approaching election the representatives of Tasmania will be animated by the same spirit, and will speak with a united voice. In the very near future, I hold that it will become absolutely necessary for the representatives of the smaller States to unite upon all matters directly affecting themselves. I quite recognise that this debate has been already prolonged, and that most of the subjects which have. been touched upon have been wc-rn threadbare. I do not propose to repeat what has already been said, but I do propose to ask the people of Australia to consider the present situation v Within the course of a few weeks, the Government will be upon their trial before the electors. {: .speaker-KZH} ##### Mr Robinson: -- Thev will be convicted. {: .speaker-JUJ} ##### Mr CAMERON: -- -Probably they will be. I would ask the people of the Commonwealth as a whole what benefits thev have received at the hands of the present Ministry? Can the Government point to any legislation which has been conceived in the best interests of the people as a whole? Certainly not. Possibly they may be able to point to certain manufacturers whom they have endeavoured to benefit. Thev may be able to point to certain States which have benefited considerably at the expense of the other States, but can they point to a single Act upon the statute-book which is calculated to benefit the people as a whole? I venture to say that they cannot. When the verdict is demanded from the people, I feel sure that they will say to the present Administration : " Instead of proving yourselves able to control the destinies of Australia, you have allowed yourselves to become the tools of a third party. Upon you, therefore, rests the responsibility for the pernicious legislation which has been enacted at the instance of the Labour Party during the past four and a half years. It is idle for you to plead that you could not help yourselves. You could. If you were too weak to carry on with a minority, you could at least have adopted the dignified and honorable course of relinquishing; the reins of Government to somebody else. As you accepted the responsibility, you must accept our verdict. Our judgment upon yOU is sudden death, and when you are consigned to your political tomb, only the two words ' no resurrection ' will be inscribed upon your tombstone." {: #subdebate-19-0-s6 .speaker-F4P} ##### Mr REID:
East Sydney -- I should not intrude upon this debate at the present stage - having already spoken - but for the necessity which I have just discovered of making a statement to the House and the country. For some years past, I have been systematically libelled in a certain newspaper, known as the Melbourne *Age,* which has charged me with having expressed views in favour of creating a state of misery amongst the Australian people. Certain alleged quotations from publications of mine have appeared in that newspaper year after year, with the same vile insinuation attached to them. This morning I took up a copy of the *Age,* and in it I found certain alleged quotations from a book which I published - I think thirty-one years ago - called ' *Five Freetrade Essays.* These quotations are given in the *Age* as quotations which were used at a recent meeting. The first passage reads as follows: - >Will it not be time enough to manufacture everything for ourselves when we can save, instead of lose, by the operation? Will it not be well to reap the advantages of pauper labour until we are so great a nation that we can create pauper labour of our own? The article in the *Age* says - >That quotation, cited as it was in the course of a strong argument about Australia, aroused quite an excitement, and **Mr. Cock** challenged his opponent with having quoted **Mr. Reid** unfairly. He denied that **Mr. Reid** ever wrote such words. > >The challenge was at once accepted. As to the accuracy of the quotation made by **Mr.** Haekeld, there is not the slightest doubt. The passage appears in **Mr. Reid's** volume of " Freetrade Essays," a copy of which any one can obtain at the Melbourne Public Library. > >But this is not the only passage that proves these shocking ideas to have been definitely held by **Mr. Reid.** That book was written twenty years ago; but he said in the Federal Parliament, on 31st October, I90I, as recorded in *Hansard,* page 6,800, volume 5, something that is of the same identical significance. That is to say, the similar " shocking ideas'." The article continues - >He was speaking on the Tariff, and used these words : - " How . are we going to compete with these underpaid sweated countries until our own labour is underpaid and sweated too? ... It seems to me that the prospect of growing these noxious weeds of sweated industries on this bright continent should cause a man associated with the interests of labour to shudder. In the plenitude of time, when our millions become tens of millions, we shall have a crop of misery which will solve the difficulty in regard 'to cheap manufactures." > >Here are two different utterances, many years apart, both embodying the same idea. **Mr. Reid** looks forward to the time when Australia is to have sweated pauper labour. It is a goal he is working up to, as the precursor of Australian manufactures. Honorable members can see that there is an imputation of a wicked, deliberate design on my part to carry out a public policy which will involve the masses of the Australian people in want and misery. In the most heated political controversies between free-traders and protectionists in Australia, I do not think that any freetrader has ever imputed to any protectionist such deliberate wickedness, and I do not believe that any protectionist has ever imputed to any free-trader such deliberate wickedness. But this imputation of a wicked design to see my fellow human creatures involved in misery is being repeatedly made in Victoria for an obvious purpose. I never dreamed that the wickedness of my opponents would go so far as to forge a quotation from my writings by taking words out of a sentence in order to substitute for them other words, which would convey a wicked idea which was certainly not conveyed in the free- tradeessays. I have never taken the trouble to verify these quotations, in spite of all these wicked attacks. But the statement in the *Age* to-day that a copy of these Essays was obtainable at the Melbourne Public Library led me for the first time to test the accuracy of these alleged quotations from that publication. I found that the book had been removed from the Parliamentary Library, but there is a copy in the Melbourne Public Library, and I have that copy before me. Now I wish to invite the attention of honorable members, and ofthe people of Australia, to the conduct which is being pursued towards me in reference to these quotations. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- Why not summon the publisher of the *Age* to the bar of the House? {: .speaker-F4P} ##### Mr REID: -- I do not wish to do that. I desire now to refer to page 66 of my *Five Free-trade Essays.* These are the two sentences to which I refer: - >Will it not be time enough to manufacture everything for ourselves when we can save, instead of lose, by the operation? That sentence is correctly reproduced by the *Age.* Then the Essay continues: - >Will it not be well to reap the advantage of the pauper labour of other countries until we are so great a nation that we have pauper labour of our own. I was there alluding to the inevitable result which, unhappily, 'has attended the growth of nations from time immemorial. It is recognised that the more the millions expand the more, unfortunately, is the amount of human suffering that seems to exist, and that in young, sparsely-settled communities which have large natural resources to draw upon, there is not as a rule that state of misery which exists in other countries which count their millions crowded on a low and compact small area. What do I find? That the words- have pauper labour of our own have been taken out of the sentence in the form in which it has been reproduced by the *Age,* and other wordshave been inserted to convey the wicked idea that I desired to create *that* misery, this pauper labour. Whereas the Essay from which the *Age* professes to quote says: - until we are so great a nation that we have pauper labour of our own. the alleged quotation appearing in that journal is - until we are so great a nation that we can create pauper labour of own own. It is this wicked forgery of my words, in order to impute to me deliberate wickedness in the sense of creating human misery, against which I protest. The imputation is exactly the same as would be conveyed if one person, in speaking of a man who had a disease, had his words twisted to mean that hehoped he would have a disease. It is like altering a statement that a man has a cancer so as to make it appear that the hope was expressed that a cancer would be created. That fairly illustrates the difference between these two statements. Poverty, old age, or misery is a misfortune which attributes no wickedness to any one, but when a man speaks of creating misery and misfortune he expresses a wicked, deliberate design. We have such a perversion of words in this case. The word "have" has been omitted, and the words " can create " have been inserted. Was ever a meaner or viler act of trickery or villainy known in the public history of this country? But the matter does not rest there. In the very sentence preceding the two I have mentioned, the sense in which I made that reference is shown. That sentence runs in these terms - >Are manufactures so prodigious a blessing, and the high wages which prove unfavorable to their -extension so heavy a curse, that we should con-" trive to tax, worry, and depress the free energies of the people to promote the one at the expense of the other? To promote manufactures at the expense of high wages ! The whole of my argument throughout this essay was that we can never hope, under present conditions, to compete on equal terms in the markets of the world with industries in other countries which employ pauper labour. Instead of regarding the conditions of Australian prosperity as a curse, I was seeking to battle to preserve those conditions in the development of the natural industries of the country. The whole of this work is a laboured argument, intended to show that in the interests of the working masses - in the interests of high wages and short hours of labour - we should do better by developing our great natural resources than we should do in competing with slop-makers in the over-crowded countries of Europe. As a matter of fact, no one knows better than does the honorable member for Melbourne Ports - as the' result of the work he has undertaken in connexion with' the sweating evils of Melbourne - that the worst instances of sweating arise from the competition in the making of cheap clothes with the cheap productions of countries that have an overcrowded population. {: .speaker-KNJ} ##### Mr Mauger: -- That is always our contention. {: .speaker-F4P} ##### Mr REID: -- I was alluding to that state of things not as an evil which I wished to create or bring about, but as an evil which I wished to prevent. However much we may differ in our views on public questions, surely we should stop short of the wickedness of altering a man's language in order to raise a wicked construction against him. Is there one honorable member of this House who could justify such conduct? The Prime Minister was indignant the other day at the action of the *Argus* in reference to..an announcement about a recommendation of the Tariff Commission. Will he notbe equally indignant because of the villainous wrong done me by taking words out of my published work and putting in false words, in order to make it appear that I am a disgrace to my kind ? I should hope that he would. But this is not all. In this same newspaper to-day we have a reference to a speech that I delivered in this House when the Tariff was under consideration some years ago - a reference which is intended to show that the speech in question was a development of the same shocking ideas. If that newspaper had quoted the next fewlines it would have shown that I expressed my absolute abhorrence of such results. The *Age* takes from page 6800 of *Hansard,* Volume V., session 1, a quotation from my speech ending, " solve the difficulty in regard to cheap manufactures." They stop there in order to show the horrible goal of human misery to which I am working up in Australia, and fail to quote another sentence within five lines which would have explained my position. I shall read the whole paragraph - >Will the erection of a fence solve it? Never! We may run a ring around ourown people, but we can not bulldoze the markets of the world. When we come to compete with those markets, we shall have to do as all other nations do. Now listen to the sentence that has been left out- >That is why I have abhorred the policy of producing artificial industries, which belong to a period of human misery and over-population. Could any man more honestly and clearly express the motives which animated him? {: .speaker-K87} ##### Mr Culpin: -- When did we have that period of human misery in Australia? {: .speaker-F4P} ##### Mr REID: -- I say that it has not occurred here, and that it is because of my desire to prevent its occurrence that I have shown' no sort of desire that Australia should enter into competition with industries that are produced by the pauper labour - as it is called by the protectionists- of other countries. These are all matters of opinion ; butthere is, I hope, no difference of opinion in this House on the point that in all our political fights we should refrain from perverting, twisting, suppressing, or altering the language of our political opponents, in order to inflict a wicked wrong upon them. Honorable Members. - Hear, hear ! {: .speaker-K8L} ##### Mr Thomas: -- Is the right honorable member referring to his deputy leader ? {: .speaker-F4P} ##### Mr REID: -- The honorable member ought not to make that statement. {: .speaker-K8L} ##### Mr Thomas: -- I am referring to the way in which he attacks the honorable member for Bland, and seeks to twist his statements. {: .speaker-F4P} ##### Mr REID: -- I have never observed any trace of such conduct in his fighting; but I am sure that the honorable member for Barrier does not desire to justify this attack upon me. We should have reached a very sad time in our history if he did. Whatever our political views may be, I think that, as a body of men, we desire, at all events, to try to be fair to each other, and that we would stop short of tampering with a man's publication, and altering a sentence in it, with the wicked intention of making it appear that that man is an enemy of his fellow-creatures. {: .speaker-L17} ##### Mr Wilks: -- The statement in question does not appear only in the *Age.* There is an exactly similar quotation in a leaflet issued by the Protectionist Association. {: .speaker-F4P} ##### Mr REID: -- I do not know the source of this villainy. {: .speaker-L17} ##### Mr Wilks: -- It comes from the one factory. . {: .speaker-F4P} ##### Mr REID: -- I was not present when it was concocted ; but I notice that there are two pencil marks on the leaf of the book from which I have been quoting, and which comes from the Public Library. To show how utterly wrong these statements are, I should like to make from this work one or two quotations, which indicate over and over again the meaning of my references. I was discussing this question - >We now come to the last proposition : "4. That the protective industries will eventu ally be able to do without protection, and that the Colonial will sell as cheaply as the imported article." We are often assured that Australian manufactures and the " native " industry engaged in them, only require protection for a limited period, after which they will be able to compete in open market with foreign handicraft. That was the position with which I was dealing : the statement that if these industries had protection for a limited period they would become sufficiently strong to compete in the open markets of the world with those of other nations. I examined that proposition under these headings: - " A fall in the price of raw material " ; "Improved working and machinery"; "A fall in the price of money " ; and " A fall in the rates of wages." As honorable members will see, if we are ever to be able to compete on the open markets of the world on equal terms with other nations, we must study one or other or all of these factors - improved machinery, the price of raw material, the price of money, and the rates of wages. I addressed myself to that question in 0:der to see whether there was any reasonable prospect' of our ever meeting these overcrowded countries in the fields of open competition. I discussed the question of raw material : If we obtain cheap raw material, every other nation obtains it. . I discussed the question of improved machinery : If we secure improved machinery, every other nation must obtain it. Then, too, I discussed the price of money, and pointed out that it is not only very unlikely, but that it would be a sad thing if money were as cheap a commodity in a young country as it is in the older countries of the world. Then I proceeded to discuss the important question of rates of wages. Instead .of viewing the higher rates of wages which exist in Australia as a curse, I always referred to them in this work as the greatest possible blessing and sign of prosperity. I put the question of wages in this way - >So long as Colonial labour is in demand at its present high rates, and works eight hours a day only, we cannot hope, and are foolish if we try, to compete in the vast majority of the branches of manufacturing industry with countries far more favorably ' situated for such industries, that is to say, where labour is less valuable, wages lower, work longer, capital more abundant, and markets larger and more accessible ; and we have tried to show that those who attempt to neutralize the prosperity of the working men of Australia by heavy protective duties betray surprising ignorance of the real nature of wealth, and the true sources of national greatness. These views are shared by such honorable members as the honorable and learned member for West Sydney, and no one would say that he is anxious to pose as an enemy of Australian labour. He holds these identical views, which may be right or wrong, and I think I may say that, in his case, as in mine, the desire is to study the interest and welfare of the great masses of the people. {: .speaker-L17} ##### Mr Wilks: -- The same views are also shared by the honorable member for Barrier. {: .speaker-F4P} ##### Mr REID: -- And also by the honorable member for Canobolas, the honorable member for Maranoa, and others. They are the last men in the world who would wish to involve the people in misery. It is our desire to avoid misery, and we thinkthat all these artificial encouragements, in the long run, are a burden instead of an advantage to labour. We may be wrong, but the views that we hold are, at all events, prompted' by right motives. It is a sad thing that hatred so persistent as that which has been- shown towards me in Victoria should exist in an Australian community. No such ideas as have Been attributed to me by the *Age* would be attributed to me by any organ in New South Wales. In that State, no one has ever dreamt of imputing to me such wicked intentions in regard to those of my fellow countrymen who are poor as have been imputed by the *Age* in Melbourne. {: .speaker-009MD} ##### Mr Deakin: -- Perhaps hot; but similar ideas have been attributed to me. {: .speaker-KWL} ##### Mr Tudor: -- And to the members of the Labour Party by both the free-trade and the protectionist newspapers. {: .speaker-F4P} ##### Mr REID: -- I do not think that any newspaper writer- in New South Wales ever took one of the honorable arid learned member's books from the. Public Library and altered the statements he found there. {: .speaker-009MD} ##### Mr Deakin: -- They have done worse. They have put into my mouth words which I have never uttered. {: .speaker-K99} ##### Mr Johnson: -- Is that' a justification for what has been done by the *Age ?* {: .speaker-009MD} ##### Mr Deakin: -- It shows that there is no; difference between the people of Victoria and those of New South Wales. {: .speaker-F4P} ##### Mr REID: -- I do not wish to suggest that there is any difference between the people of Victoria and those of New South Wales. These things are not done by the people of Victoria. If the honorable and learned member has been treated in the villainous way to which he refers, he, cannot denounce it more emphatically than I do. If such a thing has been done by any human being, on the press or off it, it was mean, wicked, and villainous, and the honorable and learned gentleman has my complete sympathy. Until to-day, I have not taken the trouble to verify these quotations ; but the statement about the book being in the Public Library suggested to me that I should send for it. Having done so, I was horrified to discover that a forgery had been perpetrated. In the case of spoken utterances, all sorts of mistakes may occur through misreporting, without there being any deliberate intention to deceive. But no man can sit down in a public library, or elsewhere, and omit words from, or put words into, a passage which he is copying without a deliberate and wicked intention to injure some one. It remains to be seen whether these tactics will help the cause in which they are used. I shall very soon have an opportunity to visit a large number of centres in Victoria, and I shall then expose, as I have a right to do,, the wicked means which have been used- by the Melbourne *Age* to discredit me. I hope that the tactics of that newspaper will have the same result as similar tactics had in regard to **Senator Trenwith.** If the pamphlet, to which the honorable member for Dalley referred, has been issued by the Protectionist Association, the blame must fall upon the proper shoulders. These quotations have been made time after time in the Melbourne *Age,* and it it stated in that newspaper this morning - >As to the .accuracy of the quotation made by **Mr.** Haekeld, there is not the slightest doubt the passage appears in **Mr. Reid's** volume of freetrade essays, a copy of which any one can obtain in the Melbourne Public Library. It is there stated that the passage has been correctly quoted, and that the accuracy of the quotation can be verified on reference to the book in the Melbourne Library. That statement is absolutely false. It may have been made carelessly, the writer relying on the accuracy of some other publication ; but if it appears in any publication of the Melbourne Protectionist Association, and was mot taken from the Melbourne *Age* - because no one could blame the association for regarding the *Age* as accurate - if those responsible for such publication have invented this wicked wrong, the 'blame will fall on them. That is a point which I hope will be cleared up. I made the discovery to which I have referred only this evening, and I hope that honorable members will feel that I was therefore justified in saving what I. have said. I am much obliged to the honorable member for Herbert in kindly giving way to me. **Mr. BAMFORD** (Herbert) [9.34L - T should not have spoken to-night but for the speech of the honorable member for Wilmot. As a rule, the members of the Opposition who represent the Tasmanian electoral divisions, when they speak about the sugar duties, set up a wail as if Tasmania were paying an undue amount. They lose sight of the fact that, prior to Federation, Queensland paid practically no duties on sugar, the amount so paid in 1899 being only £92, and in 1900 £106. Last year, however, the people of that State paid over £^80,000 in Excise and Customs duties, the amount paid in duty being very small; while this year it is estimated that they will pay about £81,000. In Tasmania, however, prior to Federation, the people were paying more in sugar duties than they are paying now, the amount so paid in 1899 being £46,200. and in 1900 £47,066, whereas last year the people of the State paid only £34,202 in Customs, Excise, and bounty, and their estimated payment for this year, is only £39,492, or £8,000 less than was paid prior to Federation. {: .speaker-KVJ} ##### Mr Storrer: -- The complaint made is. ' in regard to the loss by the Treasury. {: #subdebate-19-0-s7 .speaker-JNV} ##### Mr BAMFORD: -- No. Honorable members speak as though the people of Tasmania were paying more now in connexion with the sugar industry than they were paying prior to Federation, whereas they are paying £8,000 a year less, the position of the people of Queensland being relatively worse than their position prior to Federation, and the position of the people of Tasmania being better. I do not think it fair that this wilful perversion of facts should be persisted in so continually. It has also been made to appear that r.o benefit has resulted from the payment of the sugar bounty ; but that is not so. The figures put before us bv the Treasurer show that the position of the sugar industry is better now than it has been heretofore. Not only has the number of white farmers increased, but the acreage under white labour has also increased. It is estimated that, of 131,000 acres under sugar this year, 96,000 acres, or 70 per cent., are being cultivated by white labour; while about the same percentage of the sugar produced is being produced by white labour. Therefore, it is wrong to say that no benefit has accrued from trie sugar bounty. I wish now to say a word or two in regard to the proposed land tax. The honorable members for New England and Lang, who are professed single-taxers, condemn the proposal of the Labour Party as not extreme enough, although generally it is considered as too extreme. The honorable member for New England said the other night that it is silly to think that the proposed tax would break up the large estates, because it would be inefficient and abortive. The leader of the Opposition, however, and some of his followers, have objected to our proposal on the ground that it is the introduction of the thin end of the wedge, and, as such, it should commend itself to the honorable members to whom I have referred. Only recently the Melbourne newspapers of two consecutive days contained two very remarkable statements. It was stated, in the first instance, in the *Argus* that the estates belonging to **Sir Rupert** Clarke at Keilor Plains, Sunbury, and another the name of which I forget, comprising over 100,000 acres, had been offered to the Victorian Government, and these estates were valued' for taxation purposes at £98,000. Next day, however, it was stated in the *Age* that the land in question is estimated to be worth something like £1,000,000. Those two statements show, first, that land is being held in very large blocks, so that many who desire to settle upon it are unable to do so, and, secondly, that the country is being defrauded of legitimate revenue because taxation is not paid upon fair valuations. Some of this land is worth from £15 to £20 per acre, and the whole of it is good land. The honorable member for Wilmot claims to be the son of a pioneer - one of those men who, during the time that the blacks were very aggressive, carried their lives in their hands. No doubt they had to put up with many hardships, but they have had the advantage of a very good thing for a sufficiently long time, and should be content to let some one else have a look in. The Labour Party have put forward their land taxation proposal, because the States Parliaments have not the courage to legislate in the desired direc- tion, or have not the power to do so. So long as the States Legislative Councils are representative of the propertied classes, it will be impossible to carry through a reasonable measure of land taxation, and it, therefore, rests upon this democratic Parliament to fill the breach. Thirty years ago there was a much larger population in some of the western counties of Victoria than is to be found there to-day. In the interval, millions of pounds have been spent in building railways and affording' better means of communication and improved facilities for the carriage of produce. The honorable member for Wilmot says that if we need the land now held by private individuals, we should pay them the market price. I would point out, however, that the additional value has been given to the land by the construction of railways and other public works, and the people are asked to buy this land at a high price, the added value being created by the people themselves. For example, who created the City of Melbourne and the high values of property in that metropolitan centre to-day ? When the site of the city was first sold, the land realized £273,000. To-day it is valued at between £9,000,000 and £[10, 000,000. Who gave it that added value? Not the people living on the land, not the purchasers of the property, but the general public. {: .speaker-F4P} ##### Mr Reid: -- That does not justify a tax varying according to the area of land held - a progressive land tax is not justified from that point of view. {: .speaker-JNV} ##### Mr BAMFORD: -- I fail to see how the honorable and learned member can take that view. {: .speaker-JUV} ##### Mr Mcwilliams: -- The honorable member is arguing for the nationalization of land. {: .speaker-JNV} ##### Mr BAMFORD: -- The honorable member never heard me mention anything about nationalization of land. {: .speaker-F4P} ##### Mr Reid: -- The honorable member may not have said it, but that is what it meant. {: .speaker-JNV} ##### Mr BAMFORD: -- The right honorable gentleman is now doing that which he strongly objects to on the part of others. He is putting words into the mouths ofthe Labour Party. {: .speaker-F4P} ##### Mr Reid: -- I was going to quote the New South Wales Labour platform, which has, as one of its special planks, the nationalization of land. {: .speaker-JNV} ##### Mr BAMFORD: -- The Labour Party in this House is the Federal Labour Party, and we are responsible for our own platform, and for no other. {: .speaker-JUV} ##### Mr Mcwilliams: -- But the gun is a double-barrelled one all the same. {: .speaker-JNV} ##### Mr BAMFORD: -- Yes ; and I think that it will go off. Now I wish to say a few words with regard to the right honorable member for East Sydney. He has been good enough to visit the electorates of Wide Bay and Capricornia, and has also done me the honour to visit my electorate {: .speaker-F4P} ##### Mr Reid: -- Not on the honorable member's account. I wanted to see a little of Queensland. {: .speaker-JNV} ##### Mr BAMFORD: -- The ostensible purpose of the right honorable gentleman was to arouse the people to the necessity of going to the poll. He besought them to go to the poll, and record their votes, whether they voted in'" favour of his party or some other. {: .speaker-F4P} ##### Mr Reid: -- Was not that perfectly right? {: .speaker-JNV} ##### Mr BAMFORD: -- -Yes, but I wish to point out that the right honorable gentleman ought to have stayed at home and aroused the electors of East Sydney. He went into the Wide Bay electorate, where 67.26 per cent, of the electors on the roll recorded their votes. This was the highest proportion in the Commonwealth. Then he visited the electorate of Capricornia, where 59 per cent, of the electors on the roll recorded their votes. After having aroused the people there, he extended his travels to my electorate. {: .speaker-F4P} ##### Mr Reid: -- The honorable member will never forgive me for that. {: .speaker-JNV} ##### Mr BAMFORD: -- I bear the right honorable member no enmity. If his visit has the effect of inducing a larger number of persons to vote, they will probably render my majority all the larger, and, therefore, I can freely give him my blessing. The right honorable gentleman went up to North Queensland, where the climate is supposed to be so warm that the people have not sufficient energy to even take a drink, in order to beseech the electors to go to the poll. Although the electors in Herbert have no facilities such as exist in more populous localities for reaching the polling places, and have no trams or omnibuses to convey them from place to place, the second largest average of votes was recorded - 63.23 per cent, of the electors on the roll went to the ^ poll. The third highest record was obtained in the Wentworth electorate, in which 62.62 per cent, of the electors voted. There, however, they have every facility for reaching the polling places. Now, I wish to point out how much more profitable it would have been for the right honorable gentleman to have remained in his own electorate to awaken the people there to the necessity of exercising the franchise. At the last election for East Sydney, only 38.76 per cent, of the electors recorded their votes. {: .speaker-F4P} ##### Mr Reid: -- I ran a bye - there was no serious opposition. {: .speaker-JNV} ##### Mr BAMFORD: -- There was no bye about it. {: .speaker-F4P} ##### Mr Reid: -- The opposition was not good enough to "extend" me. {: .speaker-JNV} ##### Mr BAMFORD: -- The right honorable gentleman polled 6,191 votes, and **Mr. Harry** Foran polled 2,139 votes. There were two other candidates named Cleary and Toomey. The right honorable gentleman, who is always complaining about representatives being returned to this House by minority votes, was supported on the occasion referred to by only 23.14 per cent, of the electors on the roll. Under these circumstances, I think that he would have spent his time to greater advantage by impressing upon the electors of East Sydney the desirability of performing their duties as citizens. {: .speaker-F4P} ##### Mr Reid: -- I intend fo rouse them up, too. {: .speaker-JNV} ##### Mr BAMFORD: -- Honorable members may recollect when the right honorable gentleman approached the Speaker in the most dignified manner, and handed in his resignation, declaring that no longer would he put up with the gerrymandering operations of the Government, who were making such a hash of things that the elections could not be fought out upon a fair basis. Then he went to East Sydney, and banged' the political drum for all it was worth. The honorable member for Macquarie was sent for to assist in bringing electors to the poll. And what was the result ? What had the *Sydney Morning Herald* to say about it? In their issue of the 25th August. 1903, these head-lines appeared in regard to the honorable member's opening meeting - >Great Concourse of People : Tremendous Enthusiasm : The Electorate's Bungling. Scathing Indictment of the Government. Then it was stated that the meeting was to start at eight o'clock, but - by half-past seven the Town Hal! was more than crammed with humanity. From that time onwards the seemingly impossible task of compressing some hundreds of people into a space which was already strained to the utmost proceeded. Then the following phrases were used : - >Whole-hearted Electrifying Enthusiasm : Magic Power of Swaying Audiences. After the election, the *Herald* stated that a much larger vote had been expected, but explained that probably the deficiency was. accounted for to some extent by the fact that the polling day was not a holiday. Now, let us see what the results were. There were 13, 763 "electors on the roll, and after all the electoral drum-beating that had been *going on,* how many votes do honorable members think were polled? {: .speaker-F4P} ##### Mr Reid: -- I had no one worth mentioning against me. {: .speaker-JNV} ##### Mr BAMFORD: -- The right honorable gentleman had two opponents^ one named Macguire, and another named Blake. The former polled 259 votes, and the latter 96 votes, whilst the right honorable gentleman had 1,697 votes cast in his favour. Yet he had the temerity to go into my electorate with a view to inducing the electors to take some interest in the elections. {: .speaker-L1D} ##### Mr Henry Willis: -- He won by six votes to one. {: .speaker-F4P} ##### Mr Reid: -- Yes, and I was perfectly satisfied. The honorable member will not secure such a sweeping majority. {: .speaker-JNV} ##### Mr BAMFORD: -- I would counsel the right honorable gentleman to give a little more attention to his own electorate, and to leave alone those in which a much higher percentage of votes has been recorded. {: #subdebate-19-0-s8 .speaker-L17} ##### Mr WILKS:
Dalley .- The Treasurer has been complimented upon having brought in the rosiest Budget that has ever been, presented in Australia. It is all very well to say that the Budget is a marvel of accountancy, but it is not very rosy when regarded from the stand-point of the general public. Fortunately, we are on the up-grade, and we can congratulate ourselves upon tlie signs of progress which are to be found amongst us. Australia must be a great country when it can afford to maintain so many Parliaments as it does. Not a single honorable member during the course of this debate has touched upon' the economy which we were assured would be practised under Federation. Instead of savings having been made in the cost of government, the expenditure1 in this direction has been vastly augmented'. When the honorable member for Parramatta men:tioned that fact the other day the Treasurer brushed it aside with the remark that the difference was due to an increase in the cost of certain services. I maintain that there has been an all-round increase so far as the governmental machine is concerned, and' I am not at all surprised that the States are closely watching the actions of this Parliament. The more necessitous States naturally feel the financial pinch more acutely than do the other States of the Union. This evening the honorable member for Grey availed himself of the opportunity presented by the Budget debate to deal with the question of land reform. I have no desire to be at all personal, but there are some honorable members who use the word " finance " very frequently during their speeches as if it had a magic ring about it. If they can only succeed in introducing the word " national " before it, they appear to think that other honorable members should be prepared to accept their dictum. I am not willing to do anything of the sort. In the course of his Budget, the Treasurer presented certain proposals in reference to taking over the States debts. I believe that the Government will father those proposals in due time, but so far they have not done so. {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable member was evidently not present when I delivered my Budget. {: .speaker-L17} ##### Mr WILKS: -- Then I understand that the Government do accept the scheme of the Treasurer? {: .speaker-KFJ} ##### Sir John Forrest: -- Certainly. {: .speaker-L17} ##### Mr WILKS: -- Then I am justified in asking when they intend to submit those proposals to the House in a concrete form ? In my judgment no honorable member has presented a scheme for the transfer of the States debts which would be nearly as satisfactory as the Braddon section with some modification would prove. In this connexion my remarks have special reference to Western Australia, South Australia, and Tasmania. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- How about Queensland ? {: .speaker-L17} ##### Mr WILKS: -- In New South Wales and Victoria old-age pensions systems already exist. The only States in which similar provision has not been made are Western Australia, South Australia, and Tasmania. With a modification of the Braddon section, I claim that their particular circumstances might be fully provided for. I cannot understand what is to be gained from the Commonwealth taking over the States debts. In the ordinary walks of life I have never discovered an individual who was anxious to shoulder another's obligations. Certainly I have never found anybody who was eager to relieve me of mine. {: .speaker-K8L} ##### Mr Thomas: -- Can the honorable member understand the States objecting to the transfer of their debts? {: .speaker-L17} ##### Mr WILKS: -- I cannot. When I am assured that the States debts can be converted by the Commonwealth at a profit, I am asked to believe that the brokers in London are so blind to the conditions of Australia that they will permit that to be done without receiving any consideration. I cannot believe that they will surrender their stocks merely for the purpose of pleasing the Treasurer. {: .speaker-KFJ} ##### Sir John Forrest: -- We do not propose to ask them to convert their stocks until they are nearing maturity. {: .speaker-L17} ##### Mr WILKS: -- Exactly. The honorable member for Mernda built his entire scheme upon the assumption that the Commonwealth would be able to borrow at 3 per cent, when these loans matured. But that is all a matter of pure speculation. At the same time, I cannot see why we require a High Commissioner in London if he is not to be vested with power to deal with the debts in Australia. The more honoured and capable he is, the more desirous will he be of obtaining powers the exercise of which are essential to his high office. His most important function will be to deal with the finances of Australia. But I rose chiefly for the purpose of referring to the Labour Party. The le? der of that party, in the course of his remarks upon the Budget, declared that a Federal progressive land tax was not intended to raise revenue, but was designed to burst up large estates, so that the landless Door might be afforded an opportunity of coming into their heritage. I am one of those who believe that the land question is at the root of the industrial troubles of Australia, but I am not prepared to accept a scheme of that character as a solution of the problem. The Labour Party propose to exempt all lands the unimproved value of which is less than £5,000. It seems 'to me that their proposal is merely a revival of the old scheme in reference to land values taxation, with evils which did not attach to it when its adoption was advocated in New South Wales. Upon estates the unimproved value of which is more than £.5,000, and less than ,£10,000, a tax of id. in the £1 is to be levied. Thus *-C.io* 8s. 4d. would have to be paid upon an estate the unimproved value of which was £10,000. The honorable member for Bland wishes the country to believe that the lucky holder of such an estate would relinquish his holding rather than pay that amount. {: .speaker-JSM} ##### Mr Brown: -- The honorable member's leader says that our proposal amounts to confiscation. {: .speaker-L17} ##### Mr WILKS: -- The leader of the Labour Party affirms that the effect of the operation of such a tax would be to burst up large estates. This afternoon the honorable member for Canobolas raised a pitiful wail on behalf of the landless poor of New South Wales.. I am endeavouring to show the absurdity of the idea that an annual tax of £10 8s. 4d. would compel the holder of £10,000 worth of unimproved land values to sacrifice his holding. {: .speaker-K8L} ##### Mr Thomas: -- The honorable member does not think that that is confiscation? {: .speaker-L17} ##### Mr WILKS: -- I do not. The Labour Party themselves admit that very little revenue will be derived from such a tax. In his Budget speech the Treasurer entirely ignored the subject of a Federal progressive land tax. {: .speaker-JUV} ##### Mr Mcwilliams: -- He does not agree with it. {: .speaker-L17} ##### Mr WILKS: -- No ; but the Prime Minister, since the Budget speech was delivered, has intimated that He favours such a tax. He recited his own action in the Victorian Parliament in support of it. {: .speaker-KFJ} ##### Sir John Forrest: -- I Have never read anything of such a statement. {: .speaker-L17} ##### Mr WILKS: -- I would not wittingly make a statement which was not correct. I repeat that the Prime Minister Kas declared himself in favour of a progressive land tax. {: .speaker-KFJ} ##### Sir John Forrest: -- When? {: .speaker-L17} ##### Mr WILKS: -- Quite recently. The Labour Party have put before the country a proposal to levy a tax upon improved land values for Federal purposes. {: .speaker-KJ8} ##### Mr Hutchison: -- The honorable member is in favour of that? {: .speaker-L17} ##### Mr WILKS: -- Does the honorable mem' ber wish the public to believe that a man holding £10,000 worth of unimproved land values would have his estate burst up if he were required to pay an annual tax amounting to £10 8s. 4d. ? {: .speaker-KJ8} ##### Mr Hutchison: -- In South Australia the verv fact of an increased land tax being proposed caused some holders to part with their, lands. {: .speaker-L17} ##### Mr WILKS: -- If the honorable member were the lucky owner of an estate the unimproved value of which was £10,000, would he burst it up rather than pay a tax* of £10 per annum? {: .speaker-KJ8} ##### Mr Hutchison: -- The honorable member is referring only to that part of the tax which is designed to provide for oldage pensions. {: .speaker-L17} ##### Mr WILKS: -- In the case of estates having, an unimproved value of £60,000, it' is proposed that a tax equal to 3d. in the £1 should be imposed. {: .speaker-F4P} ##### Mr Reid: -- That, would be equal to 5s. in the , £1 on the annual income. {: .speaker-L17} ##### Mr WILKS: -- On an estate' having an unimproved value of £60.000 the tax would amount to £572 8s. 4d. per annum. {: .speaker-F4N} ##### Mr Fisher: -- The statement as to the tax being equal to 3d. in the £1 is not accurate. {: .speaker-L17} ##### Mr WILKS: -- I am prepared to back my own figures, and should like the leader of the Labour Party to say whether this tax is proposed for revenue or for reform. {: .speaker-F4R} ##### Mr Watson: -- I have answered that question times out of number. {: .speaker-L17} ##### Mr WILKS: -Would the owner of an estate having an unimproved value of £60,000 burst it up rather than pay an annual tax of £572 ? {: .speaker-F4R} ##### Mr Watson: -- Will the honorable member explain our proposals to the farmers' unions ? {: .speaker-L17} ##### Mr WILKS: -- Yes; I could do so far better than the honorable member could. He has changed his opinions with regard to this question on two or three different occasions. In the first place he favoured a substantial exemption ; then he considered that there should be no exemption ; and he now comes forward with a proposal that all estates, the unimproved value of which is £5,000, and under, shall be exempt. {: .speaker-F4R} ##### Mr Watson: -- When did I change my views? The honorable member is romancing. {: .speaker-F4P} ##### Mr Reid: -- But the present scheme proposes a £5,000 exemption. {: .speaker-F4R} ##### Mr Watson: -- That is so. {: .speaker-L17} ##### Mr WILKS: -- I do not own even a sheet of bark, whereas most of the members of the Labour Party are fortunate enough to be landed proprietors. While they speak on behalf of many of the squatters of the community, I am putting forward a plea on behalf of the landless poor. I fail to see how such a tax as is proposed would lead to the breaking up of large estates. {: .speaker-F4R} ##### Mr Watson: -- Does the honorable member suggest a more drastic tax? {: .speaker-L17} ##### Mr WILKS: -- If it wore a tax proposed to be imposed by a State Parliament, I certainly should. I should say at once that all exemptions should be abolished. The honorable member for Bland is aware that, as a member of the State Parliament of New South Wales, I was always opposed to exemptions of any kind. Land taxation is within the control of the States, and it would appear that the Labour Party are proposing a Federal land tax as a short cut to unification. They say that the States Parliaments will not pass a sound, progressive land tax. {: .speaker-K8L} ##### Mr Thomas: -- The right honorable member for East Sydney, on the occasion of his great Sydney speech, promised to introduce direct taxation proposals in the Federal Parliament. {: .speaker-F4P} ##### Mr Reid: -- Never mind what he said. {: .speaker-L17} ##### Mr WILKS: -- I could understand such a proposal on the part of a State Government, but I feel satisfied that the States Parliaments will resist the imposition of such a tax bv the Federal Legislature. If the public of Australia considered that this was an attempt to secure unification, the proposed tax would certainly not meet with the approval' which the Labour Party anticipate. In New South Wales, we already have a land tax and a municipal tax, and we shall also have a shire tax. {: .speaker-JSM} ##### Mr Brown: -- The shire tax is handed over to the shire councils. {: .speaker-L17} ##### Mr WILKS: -- I regard the progressive land tax proposed bv the Labour Party as being unlikely to effect the purpose for which it is intended. It will be revenue producing, and certainly will not lead to the bursting up of large estates. The party have carefully provided for the exemption of all estates having an unimproved value of£5,000 and under, feeling sure, no doubt, that as the result of this, they will add largely to their voting strength. They believe, also, that the scheme will secure the support of thousands who do not own any land. As a- matter of fact, there is not a block of land in my electorate to which the exemption would not apply, so that if I chose, I might safely pose as an advocate of the tax. But I am prepared to accept the responsibility of refusing to follow the Labour Partv proposal. {: .speaker-KJ8} ##### Mr Hutchison: -- Does the honorable member complain that we do not propose to tax land in his electorate? {: .speaker-L17} ##### Mr WILKS: -- The honorable member will admit that it is something in the nature of a novelty to find an honorable member resisting a tax which will net affect his own electorate. No one knows better than I do what could be said in favour of such taxation by a candidate who was addressing those who would not be affected by it; and no one knows better than I do that this proposed tax is a sham and a piece of political hypocrisy. {: .speaker-KJ8} ##### Mr Hutchison: -- One of the biggest of the land monopolies exists in my electorate. How would the honorable member deal with it? {: .speaker-L17} ##### Mr WILKS: -- If the proposal were introduced in the State Parliament of New South Wales, no one would more strongly support it than I should do. I have no desire to prolong my remarks. The present debate has been availed of by some honorable members to make policy speeches, and I felt that the opportunity to discuss the land taxation proposals of the. Labour Party was an opportune one. The honorable Treasurer has been congratulated upon his Budget statement, but I find in it nothing which will be gratifying to the public. It contains no promise of reduced taxation. On the contrary, it intimates that increased' services and a consequent increase of expenditure must be provided for. If the expenditure of the Federation continues to increase, it will cause the electors of Australia to feel more convinced than ever that we have too many Governors, too many Governments, and too many Parliaments. {: #subdebate-19-0-s9 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist -- I regret that I am called upon at this late hour to reply to the debate, but as it is the desire of the Government that the debate shall conclude tonight, I shall endeavour to so condense my remarks that I will occupy the attention of the Committee for only a very short time. I thank honorable members for the way in which they have criticised the Budget. I think that the statements which have been made as to increased expenditure, and in regard to supposed extravagance on the part of the Commonwealth, are not well founded. A great deal has been said about the estimated increase of £525,374 in the expenditure this year, but when honorable members analyze the figures, thev will recognise that all the increases are justifiable. The estimated expenditure this year is £413,942 in excess of last year's estimate. We have to remember, however, that we saved last year £111,000, and that, as has been the case every year since the establishment of Federation, we mav find at the end of the financial year that our estimate has not been reached. The estimated increase of £525,374 is made up as follows : - Sugar bounties, as provided by law, .£130,394; defence - owing to changes in the cadet system and increases in other directions - £72,451 ; new works, defence material, &c, .£160,004; elections and electoral expenses, which do not occur every year, £55>9°o ; repatriation of kanakas, which is new expenditure, £25,000 ; increase in the estimates of the Post and Telegraph Department, set off by increase of revenue, £68,714; and difference between sundry increases and decreases, £12,911. None of these items could have been avoided, and the charge of extravagance cannot be applied to am of them. For my own part, I think that the more closely honorable members examine these figures, the more readily they will agree that the increase is what might have been expected. The debate has centered principally round the proposals of the Government in regard to penny postage and the taking over of the debts of the States. With regard to the former, it must be remembered that more than half the population of Australia already enjoys penny postage to a limited extent. Except in South Australia, where the rate is uniformly 2d., the people living in most of the cities and towns of the Commonwealth are charged only id. for. the delivery of letters within those centres of population, while the rate is only id. throughout Victoria. We have already made uniform and reduced our telegraph rates, with the result that the community has benefited, and the revenue has been increased. To those who say that we cannot afford penny postage, I would submit the following figures : - Thus it will be seen that, after allowing £157,000 for possible loss of revenue by the adoption of penny postage, the estimated revenue for this year is .£131,000 more than the estimated revenue for last year, while the estimated expenditure for this year is only £88,687 more than the actual expenditure for last year. The actual postal revenue received in 1905-6 was £[2,824,182, and the expenditure was £2,637,516, leaving a profit on the year of £186,666. For the financial year 1906-7 the estimated revenue is £2. 813, 000, and the estimated expenditure £2,726,203, an estimated profit of £86,797, and this profit is after allowing £157,000 as the loss of revenue due to the penny post. {: .speaker-KVJ} ##### Mr Storrer: -- The Deputy PostmasterGeneral for Tasmania ' has estimated the loss to that State at £22,000. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- My figures were obtained from the Postmaster-General. The proposal to establish penny postage was objected to for various reasons, but chiefly because the Governments of the various States want more money. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- There is already a loss on the working of the Postal Department in Queensland. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have just shown that the estimated postal revenue of Queensland is £11,000 more this year than it was last year, notwithstanding an allowance of £29,000 for penny post, and our contention is that the expansion of revenue in all the States is a justification for our proposal. Moreover, it is a liberal and generous proposal to make, and will undoubtedly be acceptable to the people. It is not equality of treatment that the inhabitants of Victoria should enjoy penny postage throughout their State, and the inhabitants of the various cities and towns in four of the other States should enjoy penny postage within certain areas, while the toilers, who are the backbone of the country, are not permitted to share those benefits. {: .speaker-KVW} ##### Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP -- It would be better to raise the postage in the towns. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- My desire is to take off burdens, not to impose additional ones. I wish I had more time in which to reply to the criticisms levelled against our proposals for taking over the debts of the States, and particularly to deal with the scheme of the honorable member for Mernda. In my opinion, he has, to a large extent, ignored the provisions of the Constitution. If we were the members of a Convention, engaged in devising a scheme for the taking over of the debts of the States by the Common- wealth, untrammelled bv the provisions of the Constitution, we might be able to act on different lines from those proposed' to be followed by the Government. But the Constitution will not allow us to take over all the debts of the States, and section 94 of the Constitution to which the honorable member for Mernda referred as being of a temporary character is of a permanent character, and will have to be observed unless it is amended. Then, again, the honorable member proposed that we should at once arrange to return a fixed sum to the States; but that can only be done after the 31st December, 19 10, because section 87, the Braddon section, meanwhile stands in the way. Unless the Constitution is amended, that section must continue in operation until the date mentioned, and thereafter until Parliament otherwise provides. Then, again, the Constitution makes provision of the most definite character, in section 105, as well as in section 87, which the honorable member for Mernda seems to have ignored. It is there laid down in the most absolute terms that each State shall pay its own debts and the interest due upon them, and shall indemnify the Commonwealth for any payments made by it in respect to interest or principal in connexion with such debts. The honorable member for Mernda seemed to infer that I wished to take over only. £103,000,000 of the States debts. I have been misunderstood by him in this matter, and the press seem to have also misunderstood me - although paragraph 8 of my memorandum reads as follows: - >I recommend that legislative provision be made for taking over by the Commonwealth of the whole of the existing State debts, which amounted in the aggregate on 30th June, 1965, to ^236,680,739; but, as by section 105 of the Constitution only the State debts " as existing at the establishment of the Commonwealth," which on the same date amounted to ^201,983,386 *(vide* Tables D and F herewith), can be legally dealt with, and, as it must take some time to obtain an amendment of the Constitution, I advise that the legislation should provide for dealing with the ^201,983,386 at once, and that the balance of £34,697,353 be dealt with so soon as the required amendment of the Constitution is obtained. By adopting this course the conversion or redemption of loans approaching maturity could be dealt with at once by the Commonwealth. Then I go on to say in sub-paragraph (1) of paragraph 8 that I recommend - >That a law be passed enabling the whole of the State debts to be converted before maturity, or redeemed at maturity by the Commonwealth (subject in regard to debts incurred since. 1st > >January, 1901, to the necessary amendment of the Constitution), by such successive operations as may be thought fit. It is also objected that the proposals of the Government are of a temporary, and not of a permanent, character. So far as I am personally concerned, I am quite willing that they should be made to extend, if not indefinitely, at any rate for a long period ; but I still think that it is unwise to make any such provision. It is not in the interests of the States that any permanent arrangement should be made now. The limitation as to time is in the interests of both parties, and especially in the interests of the States. I think that .fifteen years hence we shall be in a far better position than at present to finally deal with this matter. In the meantime, we shall be working under the plan proposed, and shall have opportunities to judge as to its suitability or otherwise. My own opinion is that it will work well, and continue in operation for many years. At any rate, this Parliament will retain all its powers, and will be able to deal with the whole question far more effectively, and, I believe, far more wisely at the end of 1920 than at the present time. The proposals of the honorable member for Mernda and of others who have been good enough to criticise the proposals of the Government, are that the Commonwealth should at once take over the whole of the States debts, and -become at once responsible for the payment of interest and the repayment of the principal. This proposal would confer upon the present holders of stock any profit that might arise from the transfer. In mv memorandum I expressed my matured opinion on this proposal, after having consulted eminent financial authorities in England, in the following terms : - >The financial authorities whom I consulted in London were unanimous in the opinion that it would be disadvantageous to place the Commonwealth brand on State stocks before conversion, as such action would prevent the possibility of any profitable conversion, and would be making to the existing holders a present of any increase in price caused by the additional Commonwealth security. {: .speaker-L1D} ##### Mr Henry Willis: -- Of course, it might, but how could we obtain the profit? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- We would be likely to derive a profit, because the holders of stock would come to us. It is always better to be sought after than to go seeking. If, when the existing State bonds are approaching maturity, or even when they are a long way off maturity, the bond-holders find that the Commonwealth stocks of the same denomination and currency are more negotiable, and are bringing a better price than similar States) stocks, they will come to us and seek to exchange stock for stock, *vide* paragraph 6, sub-paragraph 6, of my memorandum. Should this occur, we shall then be in a position to indicate the terms on which we would be prepared to exchange Commonwealth stock for the State stock. {: .speaker-L1D} ##### Mr Henry Willis: -- Will thev give £4 for £3? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I listened very attentively to the honorable member, but his observations, I regret to say, did not carry conviction to my mind. I think that the authorities whom I consulted may be relied upon in this matter., I have had in writing from the Secretary of the Imperial Treasury the very substance of the paragraph which I have last read, and I fully rely upon his great knowledge and experience on this matter. In my opinion until we convert the loans, we should not pay the interest, but should leave that responsibility on the shoulders of the States. That is a far better plan than for the Commonwealth to pay the interest and to look to the States for the money. Difficulties might arise if we attempted to do as has been suggested. When one person has to find the money for another, difficulty sometimes arises in procuring the necessary funds at the proper time. On the other hand, if persons have to find money for themselves they generally do it much more readily. It has been complained on several occasions during this debate that the proposals of the Government are too liberal to the States. I am glad that our proposals are considered liberal to the States, as I recognise most thoroughly that this is a time when we should treat the States as liberally as possible, and recognise also to the full the great obligations that rest upon them. They have to provide for the maintenance of law and order, and Courts of Justice, for the development of the land and mines, and for all kinds of settlement. Thev have to make roads, and construct tramways and railways and other means of transit; they have to provide for water supply and harbor works ; and, in fact, for everything connected with the every-day life of the people. All these matters necessitate a large expenditure, and in these early days we must do our best to assist the States in every way that we can. A great deal has teen said by the honorable member for Mernda and the honorable member for Bland regarding what would happen if, after the Commonwealth had guaranteed the return of a fixed sum to the States, the revenue declined so that we had not the funds to permit us to carry out our compact. I would like to ask them what all the States have to do - and they have obligations to meet amounting to hundreds of thousands of pounds - when bad times come upon them? They have to effect all sorts of economies, and to furnish funds for their needs. The Commonwealth will have to do the same. If hard times come upon us, we shall have to curtail our expenditure, and to provide other sources of income. The argument that having guaranteed the return of so many million pounds to the States we might not be able to pay it, has no weight with me. If we undertake to provide a certain amount we shall have to find it in the same way that the States have to face their obligations. Although I do not anticipate any difficulty in that direction, I say that we should occupy exactly the same position as is occupied by anybody else, whether a private citizen or a Government, who enters into an obligation. It seems to me that I put the position very clearly in paragraph 12, which reads - >The effect of this plan would be that the Commonwealth, having arranged its taxation so as to provide sufficient funds to pay annually the required contribution to the States, and also sufficient to provide for all its own general and special expenditure, would then be free from any further financial obligation to the States. The States, on the other hand, would be free from uncertainty as to the amount they were to annually receive from the Commonwealth, while both Commonwealth and States would know their exact financial positions and obligations, and would have the burden separately placed upon them of making both ends meet. This is not the case at present, since any extra expenditure by the Commonwealth means a diminution of the amount returnable to the States. Some honorable members have asked, " What is the object, of taking over the States debts? Why should we be in a hurryto take over their obligations, especially when the States themselves do not seem anxious for us to do so " ? My reply is that it was part of the understanding upon which the Federation was established. We believed then - and we still believe- that a great saving would result to the people of Australia if such an undertaking were pro- perl v managed. To my mind, the object which we should keep in view is that of affording relief to the States as soon as possible. That can best be done by applying any savings which we may make to a reduction of the annual payments by the States. The honorable member for Mernda is of opinion that any savings which we may effect should Le devoted to a sinking fund. My idea is that what the people of the States require is early relief. They desire that as a result of the taking over of the States debts they should pay less interest than they are at present paying. It must always be remembered in connexion with this matter that the Commonwealth would derive no benefit from any such saving. Every single sixpence of profit which might be' made would be placed to the credit of the particular State concerned. That was the intention of the Constitution, and was the main reason why provision was made for the transfer of the States debts to the 'Commonwealth. The honorable member for Mernda, under his scheme, hopes to make a large profit, but instead of devoting that profit to the particular States concerned, he would hand it over to the other States. I submit that that is not only unfair, but is not in accordance with the Constitution. {: .speaker-F4N} ##### Mr Fisher: -- Where does he say that? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- He says that ' the profit should be applied to paying off the debts of the other States. {: .speaker-F4N} ##### Mr Fisher: -- Does he not calculate that their population will have greatly increased ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- After the States debts have been paid he does not say what will happen, but the assumption is that nothing whatever from Customs and Excise revenue will be returned to the States. But he proposes that in the interval any profits which might be made should be devoted to paving off the debts of the other States. In effect, his proposal broadly is that the Commonwealth should take over the whole of the Customs and Excise revenue for ever, and in return should assume responsibility for and pay off the States debts, amounting to £236,000,000. In fifty or sixty years after their taking over those debts would be liquidated, and then the Commonwealth would have all the Customs and Excise revenue, and return none of it to the States. I would point out that even in Canada the return to the States of a *per capita* amount is secured for ever, and that it was never intended that the whole of the Customs and Excise revenue should be retained by the Commonwealth. {: .speaker-F4R} ##### Mr Watson: -- The States would be very glad to forego their Customs and Excise revenue if they could get their debts paid. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Would they be prepared to forego it for ever? {: .speaker-F4R} ##### Mr Watson: -- Yes. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am positive they would not think of agreeing to such a proposal. Speaking for my own State, I say that Western Australia would not look at such a proposal. I have here a table which has been prepared by the Treasury officials, which shows that under the scheme of the honorable member for Mernda the people of New South Wales, Victoria, and Western Australia would contribute no less than £26,353,478 for the redemption of loans belonging to Queensland, South Australia, and Tasmania. The table reads - {: .speaker-F4N} ##### Mr Fisher: -- That is a. valueless table, and it is not accurate. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It was prepared by the Acting-Secretary to the Treasury, and he assures me that it is absolutely accurate. {: .speaker-F4N} ##### Mr Fisher: -- It is based upon the assumption that the population of the States will be the same sixty years hence as it is now. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am quite sure that it is correct. If we are going to take over the debts of the States, and to ask each State to liquidate its own, why stop with taking over the present debts? It would be just as reasonable to ask one State to pay the debts of another State in the future for all time as to expect one State to pay the debts of another incurred in the past. {: .speaker-F4R} ##### Mr Watson: -- Does the right honorable gentleman contemplate that the States shall continue to borrow as they may desire? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I believe that the States will have to continue to borrow in order to develop their territories. {: .speaker-F4R} ##### Mr Watson: -- But without limitation ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- They will be limited by their power to pay interest and sinking fund. All I am saying is that the whole proposal is absolutely opposed to the bargain when Federation was established. It was clearly understood, and set forth in section 105 of the Constitution, that each State should pay its own debts and interest, and indemnify the Commonwealth for all moneys paid on its behalf. It is too late for me to add any more, though I am very glad to have had the opportunity to make these remarks. I wish to clearly state that, in my opinion, any attempt to sad'dle on one State the debt of another, will be regarded as a breach of faith under the Constitution, and any proposals which seek to interfere with the operation of section 105 of the Constitution would be regarded as most serious. {: .speaker-KVJ} ##### Mr Storrer: -- There is no provision in the Constitution for building railways. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- There is provision for building railways in any State with the consent of that State. That, however, is not the question at the present moment. In dealing with all the matters to which I have referred, one has to keep in view the provisions of the Constitution, with which I hope there will be no desire, for some time, at any rate, to interfere. Any interference, except in temporary or very small matters of convenience, would give rise to much dissatisfaction and trouble. I hope, therefore, that we shall all do our best to work out the problem as nearly as we can on the basis of she Constitution, though no doubt there will be difficulties. We cannot take over the whole of the debts unless there be an alteration of section 105, It would mean that instead of taking over the debts as they existed at the commencement of the Commonwealth, we would take them over as they exist now. {: .speaker-F4R} ##### Mr Watson: -- There is another alteration required to allow of debts as they mature being taken over. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is a legal matter, on which I am not called to give an opinion. I think, however, that section 105 sufficiently covers the ground. {: .speaker-F4R} ##### Mr Watson: -- I think the right honorable gentleman will find that he is mistaken. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The section is pretty wide, providing that theCommonwealth may take over the debts. {: .speaker-F4R} ##### Mr Watson: -- In equal proportions. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The section says : - >The Parliament may take over from the States their public debts as existing at the establishment of the Commonwealth, or a proportion thereof..... And so forth. {: .speaker-F4R} ##### Mr Watson: -"Or aproportion thereof." {: .speaker-KFJ} ##### Sir JOHN FORREST: -- There is the word "or." If, instead of taking the debts over as existing at the time of the Commonwealth, we take over the whole of the debts, we must take them as they arenow. The section goes on : - and may convert, renew, or consolidate such debts or any part thereof. {: .speaker-F4R} ##### Mr Watson: -- The right honorable gentleman has left out an important part, to which I referred in my interjection. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is an alternative provision. {: .speaker-F4R} ##### Mr Watson: -- It is one of, the blocks. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not think it will act as a block. {: .speaker-F4R} ##### Mr Watson: -- If we take over the whole of the debts, we shall make a present to the bond-holders of a large increment of value. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- As I clearly stated, it is not intended to take the debts over, except as they mature. I pointed out that the proposal is to take the debts over, but not to take possession of them until they mature. At this late hour I shall not do more than thank honorable members for the attention they have given to, and the criticism they have bestowed on, my proposals. Whether we- agree or not, the result of the debate must be good: We all have the same object in view, though seeking to reach it by different roads, and the more we study the matter, the more likely are we to arrive at a solution acceptable not only to ourselves, but to the Parliaments and peoples of the States. {: .speaker-F4N} ##### Mr Fisher: -- Will the right honorable gentleman undertake to afford time for a debate upon this matter before the session ends?' {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I cannot answer that question, though I promise to speak to the Prime Minister on the subject. {: .speaker-F4N} ##### Mr Fisher: -- It ought to be discussed, apart from every other question. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- There will probably be another opportunity for discussion. Question resolved in the affirmative. Item agreed to. {: #subdebate-19-0-s10 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist , - I have to ask honorable members to adopt the procedure we followed last year when considering the Estimates. It was then found convenient, at the conclusion of the Budget debate, to consider the Works and Buildings Estimates before dealing with the other Departments. The object, of course, is to obtain authoritv to proceed with the works, and to remove any difficultv which might arise. Progress reported. {: .page-start } page 3151 {:#debate-20} ### ADJOURNMENT {:#subdebate-20-0} #### Order of Business {: #subdebate-20-0-s0 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I move - >That the House do now adjourn. The first business to-morrow will be the Lands Acquisition Bill. Then it is proposed to take into consideration the Validation of Electoral Districts Bill, a short and merely technical measure, which ought to pass through all its stages -without difficulty. The remainder of the sitting will be devoted to the consideration of the Estimates. Question resolved in tbe affirmative. House adjourned at11.10 p.m.

Cite as: Australia, House of Representatives, Debates, 21 August 1906, viewed 22 October 2017, <http://historichansard.net/hofreps/1906/19060821_reps_2_33/>.