3rd Parliament · 4th Session
Mr. Speaker took the chair at 10.30 p.m., and read prayers.
– I ask, Mr. Speaker, if you have any information as to the whereabouts of His Majesty’s Opposition ?
– From the following paragraph in’ this morning’s Argus, it would appear that the officials of the Postmaster-General’s Department are opposed to placing in hotels telephones for public use -
Inquiry at the Central Postal Administration yesterday disclosed the fact that a public telephone with penny-in-the-slot attachment may not be installed in an hotel, although it is permitted in shops. . . . The PostmasterGeneral (Sir John Quick) said that there were two reasons for the regulation. One was that a public telephone in a hotel would remove the incentive to the licensee to pay for a telephone for his own business purposes. The second reason was that it was considered undesirable to make an hotel the place for a public telephone for use’ by all sections ‘of the public.
I ask if it is the policy of the Government to restrict the facilities of the public in the matter of telephone communication, and, if so, whether this policy is based on moral or- commercial grounds?
– The paragraph fairly summarizes the objections of the Department to placing in hotels public slot telephones. I see no reason to deviate from the established practice in the matter.
– As it will cause great inconvenience if the telephones are removed from various hotels, I wish to know from the Postmaster-General when this action is to be taken. The. revenue does not suffer by the useof pennyintheslot telephones.
– It is. not intended to remove any telephone.. Every hotel - keeper may become a subscriber to a telephone exchange, and have an instrument installed in his premises, and, where the toll system is in force, may allow the public to use it, upon the payment of a penny. The Department, however, will not instal public penny-in-the-slot telephones in hotels.
– Yesterday the Prime Minister, in replying to a question which I asked as to interest charges, said -
Speaking from memory, the fairness of the cash prices charged for agricultural implements was one of the subjects of inquiry on which a good deal of conflicting evidence was taken; this may lead to a reading of the report upon the extreme and exorbitant rates of interest such as some of those to which the honorable member has referred.
Is the honorable gentleman aware that there was no conflict in the evidence taken regarding interest, and that the figures which I read yesterday were prepared by a competent officer of the Treasury, on the basis of price-lists and terms submitted by manufacturers and importing houses?
– The conflict of evidence to which I alluded was as to the fair cash prices to be charged for these implements.
– Will the Prime Minister take into consideration the desirability of getting an expert from the United Kingdom to report whether Irish blight is, or is not, prevalent among the potato crops of the Commonwealth?
– We have already in Australia two or three public officials who are acknowledged and impartial experts on this question. They have had a great deal of experience in, connexion with the disease, and some of them have published special studies upon it. Their knowledge is sufficient to enable it to be determined whether the disease from which our potato crops are now suffering is or is not Irish blight. I recognise the importance of the matter to the Commonwealth. Investigation as to the best methods of coping with this and other diseases of plant life would be a function of the proposed Commonwealth Agricultural Bureau.
Military Staff Clerks - StaffSergeants’ Pay.
asked the Minister of Defence, upon notice-
– The answers to the honorable member’s questions are - 1 and 2. Military staff clerks are soldiers serving under the Defence Act,’ and as members of the Naval and Military Forces are specially exempted from the provisions of the Public Service Act. 3- Yes.
asked the Minister of Defence, upon notice -
– The” answers to the honorable member’s questions are -
asked the Minister representing the Minister of Trade and Customs, upon notice -
Whether the Minister will cause the House to be supplied with a comparative statement showing respectively in New South Wales and Victoria
The . total number of Excise inspectors employed i
The grades of such inspectors, and the number employed in each grade?
The salaries paid to each inspector, together with the length of service of each in the various grades?
The amount of revenue collected from Excise respectively in each of the two States?
The cost of collection, and proportion of cost to revenue collected, in each of the two States?
– The information will be supplied.
Mr.Storrer (for Mr. chanter) asked the Minister of Home Affairs, upon notice -
Does he not consider that the allowance made to divisional returning officers of£26 per annum for the extra work and anxiety entailed is altogether inadequate, and should be increased? -2. Have representations been made to him that the’ sum now paid should be increased to at least ^78 per annum?
If so, is he in a position to . inform the House whether he will approve and give effect to this recommendation f
– The answers to the honorable member’s questions are -
Commonwealth divisional returning officers receive an annual allowance of £26, except in Tasmania, where they receive £40 per annum for acting jointly for both Commonwealth and State, with a. special allowance foi conducting each election, and each officer is provided with the special clerical assistance necessary to enable him to effectively carry out his duties.
I have’ decided to increase the allowance for conducting elections to ^25 in the case of city and suburban divisions, and to ^30 in the case of country divisions.
The general work of the divisional returning officers has been greatly reduced by the adoption of subdivisional registration and the simplification of methods, and it is not proposed to increase their annual remuneration in addition to increasing the special allowance to be henceforth granted to them for conducting elections.
Debate resumed from 28th September (vide page 3850), on motion by Mr. Deakin -
That leave be given to bring in a Bill for an Act to alter the provisions of the Constitution relating to finance.
– I have given the proposed agreement very careful consideration, as I believe other honorable members are doing. Since strong men like the honorable members for Flinders, Mernda, and Parkes, who, it is recognised, possess considerable financial knowledge, have expressed doubt as to the advisability of making the proposed payment to the States perpetual, the Government and the House should carefully weigh their remarks before ratifying the agreement. It has been stated in one of the newspapers that I and others are antagonistic to the Government. While, with those whom I have mentioned, I may hold opinions on this question similar .to those of members of the Opposition, on most of the questions likely to come before the House our views are as far apart from theirs as is the north from the south pole. When the Treasurer spoke on this question yesterday he attempted to belittle the figures of the honorable member for Flinders. Although the latter said that he could not state definitely that his figures were absolutely correct, or were to be taken as proving his case, still, I do not see that any one has produced the slightest evidence as to their incorrectness, or any evidence contradicting them. The figures showed us how the per capita return from Customs duties fell in a number of Protectionist countries.
– The figures have been challenged twice.
– Yes, but the figures have not been proved to be wrong. It is the duty of a challenger to show that the member who gives any information to the House is wrong. But the Treasurer has not shown in the slightest degree that the honorable member for Flinders was wrong. The former said yesterday that he was quoting the opinions of those who were members of the Federal Convention. That does not seem to me to be the way to deal with a question of this kind. Whatever the’ opinions of the members of that body were they were reduced finally into black and white, and that black and white is our Constitution. We must abide by the Constitution without having any regard’ to what was understood or not understood by the different persons attending the Convention. The Treasurer is to blame, to some extent, I think, for our present financial difficulties. He persuaded the House: - and so did his thencolleague, the gentleman who succeeded him at the Treasury - into pledging the Commonwealth to the expenditure of large sums in connexion with the payment of bounties and the taking over of old-age pension systems from the States before they had made any financial arrangement to meet those engagements. That is really what has brought about our present trouble. The Treasurer knew that there was a considerable feeling in this House against borrowing, and in order to get out of the difficulty the Government have made what I consider to be a very bad arrangement’ in the interests of the Commonwealth. The framers of our Constitution felt that the first thing to be done was to provide sufficient funds for carrying out the work to be undertaken by the Federal Parliament, and so for a period of ten years they granted one-fourth of the net Customs and Excise revenue for that purpose. It seems to me that the proposed scheme reverses that provision. It proposes that a first charge of £5*568,700 shall be put on the revenue of the Commonwealth. To my mind, the first charge on our revenue should be the cost of defence. The framers of the Constitution did not contemplate, I’ think, that the Empire would at any time be in. danger. We know, however, that at present there is danger. We would not have had that admirable defence scheme from the Minister of Defence had it not been for the knowledge that the Mother Country requires assistance, and that we have to put our house in order. That scheme has been received with approbation by all parties in the Commonwealth. My view is that the first duty of this Parliament should be to provide money to meet the cost of that scheme and the future defence of the Commonwealth, and the expenditure for that purpose will increase year by year. Just as other countries increase their naval and military armaments so shall we in a smaller degree have to keep pace with them, and with the Motherland. This’ annual charge of £5,568,700 is equal to the interest on a capital or loan of£160,000,000, and we are to pay first out of our receipts the former sum to the States, which will make their position much sounder and much stronger than that of the ‘Commonwealth.
– In doing that we shall only be fulfilling the Constitution.
– No. The provision bearing upon this question is to be found in the Braddon section, which was limited, and wisely limited, I think, for a period of ten years, in order to afford to this Parliament time in which to look round and see what was wanted. Financially the States are a great deal better off than is the Commonwealth. They have magnificent revenue producing properties. They have railways, ‘lands, waterworks, and many other revenue producing properties which the Commonwealth has not.’ What has the ‘ Commonwealth ? Nothing at all. It has taken over the old-age pensions systems, quarantine, the Post Office, which is at present a losing concern, lighthouses, and everything else which was a charge on the States.
– Does the honorable member call the Post Office a losing concern ?
– I do, because no provision has ever been made on the Estimates for the establishment of a sinking fund, or the payment of the interest on the cost of the properties owned by the Department.
– No allowance has been made for depreciation.
– But we are building all new works out of revenue.
– Under the control of the States the cost of post-offices was defrayed with borrowed money, and the Commonwealth will have to pay the interest on the cost of all the transferred properties. I do not think that there is the slightest doubt that, at present, the Post Office is not a revenue-producing asset in the hands of the Commonwealth. If one asks any persons about the Commonwealth, they say, “ Oh,- the resources of the Commonwealth are inexhaustible.” but when the position is examined from the stand-point of an investor I do not find the same point of view. Under this agreement it is proposed that the States shall start with an income of . £5.068,700 from the Commonwealth. They have their railways producing a large revenue, and some of them have a very large area of land for sale or lease which will also produce a good return. Financially the States are sounder and stronger than is the Commonwealth. Some of the States have a larger revenue at present than has the Commonwealth. Now what has the Commonwealth? It has no sources of revenue except the Customs and Excise duties and the Post Office.
– And an unlimited power of taxation.
– Yes, but what has happened ? The States have already imposed a land tax and an income tax, which, of course, are first charges on the lands and the incomes of the residents of the States.
– Is the honorable member arguing that they should double those taxes?
– These are the same people as the Commonwealth would have to tax. Yesterday the honorable member for Franklin -stated that Tasmania has a land tax amounting to 6s. 8d. per head, and an income tax amounting to more than double that sum. Where is the Federal Parliament to come in after those charges are put upon the people? When a land tax of 6s. 8d. per head is levied in Tasmania and a land tax of 3d. in the£1 is imposed in Victoria according to the present Land Tax Bill the lemon will be so squeezed that there will be nothing left for the Federal Parliament to tax. I am satisfied that if, after a land tax of 3d. in the£1 is imposed in
Victoria, further taxation were levied, people would throw up their lands rather than pay the taxes thereon. In France the taxes on the land come to 43 per cent, of the income. What has happened there? Persons are being driven off the land into the cities and large towns. The Government have found out that they have over-taxed the land and propose to reduce the taxation in order to encourage persons to go back to the land. In Australia we are always urging persons to go upon the land, but they are not keen to do so. Look at the rush there is for Government appointments. . Recently there were 9,000 applications “in this State for the position of railway porters. Our best and strongest young men in the country would rather become porters on the railways than work on the land, because the work would be easier and they would have more amusements.
– That is the real reason. They have no enterprise.
– If we tax nien off the land we shall have more people in the towns, and the land will be less productive.
– Where are the States to get revenue from if we do not give them a portion of the revenue from Customs and Excise ?
– I shall, come to that point later. I am now dealing with the taxation of land and income. The Prime Minister interjected that we have an inexhaustible power of taxation with regard to land and income,* but I maintain that there is a limit to the exercise of thai power and that the margin which is left to the Federal Parliament is very little. When all the States have imposed an income tax, we cannot put very much more taxation on to that, and if we should do so what would be the feeling of the people ?. They would say, “ We are over taxed by the Federal Parliament. They are oppressors.” The people would be crying out for the abolition of Federation. They would simply say, “We have quite enough taxes to pay to the States, and we do not want them duplicated by the Federal Parliament.” I contend that on that ground alone the security of the States is better than that of the Commonwealth. Of course, we might levy revenue duties, but do we really want to increase the burdens of the people? At present the annual receipts of the States and the Commonwealth - that is excluding the revenue from the railways and the Post
Office - aggregate £42,000,000. That is a very large sum to collect every year for the government of a country containing only 4,000,000 persons. It is over 30 per cent, of the annual production of Australia in an average year.
– They will be more burdened by the defence policy.
– Of course they will. I consider that the only articles which are left for the Commonwealth to tax are cotton goods; kerosene, and tea, and unless we take over the debts of the States, we shall have competing parties from the same country in the money market for loans. If we are to construct trans-continental railways, ‘build a capital city, compensate the land-owners within the Federal territory, and borrow money for building ships, what shall we require ? Before we know where we are, we shall require to borrow something like £25,000,000.
– What ! are we to borrow money to build ships ?
– Of course we shall have to do so. We cannot build the ships out of revenue.
– Is that the policy of this Government ?
– It is.
– So does every nation.
– That is an extraordinary proposal.
– Our cruisers are to be built with borrowed money. It cannot be done otherwise.
– Is that the policy of this Government ?
– It is the policy of nearly every nation.
– That means that within a very few years we shall have a debt of £25,000,000 in addition to the debts of the States.
– Do the Government say that they are going to borrow in order to build the ships?
– If we are to spend something like £4,000,000 on a fleet Ave must borrow, because we have no surplus revenue. If the Federal Parliament had been wise in the past it would have retained the whole of the one-fourth of the Customs and Excise revenue, and we should now have had in a war chest something like £6.000,000, which would have been sufficient to build the ships required in the next two or three years.
– Think what I have missed !
– Yes; and what we have all missed. Until last year we handed over the whole of the surplus revenue to the Stales, when they really did not require it.
– They are the same people.
– We are the same people, but the money is spent ; and we know that the same care is not exercised in public affairs that is exercised in private affairs. Year after year, when there have been surpluses, not a shilling has been put by for a rainy day ; and when drought occurs more taxation is imposed. Time after time the States have had surpluses ; and Victoria is, probably, the worst offender in this connexion. During all these years the public debt has ‘been reduced to a very small extent, and no ‘attempt has been made to establish, a reserve fund, such as every business man has to establish if he hopes to live. There are two heavy items for which provision has’ to be made by the Commonwealth - old-age and invalid pensions, and defence. Within the next five years we shall require ,£6,000,000 to meet those engagements, which have been taken over from the States. If the Commonwealth - that is, the people as a whole - did nol find the money, the States would have to provide for their own defence, and for their own old-age and. invalid pensions ; and, therefore, we have relieved, or will relieve, the States of an expenditure of £6,000,000 per annum during the next five years. That being the case, it seems to me very unwise to put such a large permanent charge on our revenue as that proposed in the agreement.
– It is an expanding mortgage !
– Quite so. I have not the slightest objection when we can afford it, to treat the States liberally, because as members of the Australian community they are part and parcel of ourselves ; but the question is, who are to manage the affairs of the people of Australia? Are we to delegate our powers to so many State Governments or are we to retain control ourselves? It will be much better for us to limit the term of this agreement. I intend to vote for the second reading of the Bill. I have no desire to do anything to embarrass the Government, and I am quite sure not a single member of the Government has any desire to embarrass any honorable member who does not see eye to eye with him on this question : but in Committee we shall do the wisest thing for Australia if we make the agreement for a limited term, and not in perpetuity.
– We might, for a term of ten years, give the States more than is proposed.
– Perhaps. The revenue of the States in 1901-2 was £28,197,927, and in 1907-8 it was £34,867,648, or an increase of over £6.500,000 in six or seven years. It will be seen that the States, at the present time, have a larger revenue by ,£6, 000, 000 odd than they had before Federation, or at the commencement of Federation. The Prime Minister in his speech stated that we had taken over from the States burdens now amounting to ,£3,800,000 ; and this really means that the States are about £10,000,000 per annum better off than they were at the commencement of Federation. I feel that, with this increased revenue, the States, if the Federation were pressed at any time, could do with less than ,£5,600,000 per annum. The increase in the States revenue in seven years represents 24 per cent. The estimated expenditure of the Commonwealth for next year, according to the Budget statement, is ,£7,867,000. Extra expenditure is to be incurred in connexion with defence ; and there is no doubt that old-age pensions will cost a great deal more than the Government estimated, as is shown by the returns of the number of applicants.
– Thousands of returns have yet to come in for Victoria.
– I know that a great many more returns have to come in for Victoria and other States. It is only a question of time when invalid pensions will have to be paid; and, though it is difficult to estimate their cost, I put it down roughly at ,£1,000,000 per annum; so that invalid and old-age pensions will cost us something like ,£3,000,000. Defence, as I have said, will cost a great deal more than it does at present; and, if we build two overland railways at a cost of, say, ,£10,000,000, the interest. on the money which it will be necessary to borrow will represent ,£350,000 per annum. The States can borrow when they like, with no power of restriction on the part of the Commonwealth, and we shall have to compete against them in the money market. The security of the States is, I think, even better than that of the Commonwealth, and we shall not be able to borrow as cheaply as we thought. I should say that it will cost the Commonwealth 4 per cent, for borrowed -money, and if the States compete, their rate of interest will also be increased.
– Does the honorable member think that six separate States can borrow more cheaply and advantageously than we could with one Commonwealth stock ?
– Not with one Commonwealth stock. If we were to have one Commonwealth stock, and adopt the suggestion of the honorable member for Mernda to take over the States debts, we should be in a much sounder position - that is, if we do not allow the States to increase their borrowing, or, if they do increase it, place them in the same position as are the municipalities. As honorable members know, the municipalities may borrow only in proportion to their income, and a sinking fund has to be provided for the repayment of each loan within a certain number of years. Unless we take over the State debts, however, the security of the States will be better than our own,’ in view of the fact that they have such good assets, while we have none.
– We have the power of taxation.
– We have all their assets as well as our own.
– The Commonwealth cannot take the railways, ot use the revenue of the railways, and we have not an acre of land.
– After all, the main security is the power of taxation.
– Certainly, but there is a limit to the paying power of the people. After the land tax of- 3d. in the £1 has been imposed in Victoria, can we squeeze any more revenue from that source ?
– I am not discussing that point, but merely pointing out that, after all, the main security is the power of taxation.
– Our power of taxation is only co-equal with that of the States - we have no superior power. If the Commonwealth imposes a land tax, and the States also impose a land tax, all that can be done is to sue or seize the property if the tax is not paid. We cannot prevent the States, for instance, from increasing their income tax as much as they like ; and if we make this country one in which the taxation is unbearable, we shall drive every penny of capital out of it. If we have two people squeezing at a lemon, there will be very little left for either in the long run. The Federal Parliament should, therefore, retain its control over the Customs and Excise revenue, in order to meet the two big items of expenditure represented by defence and invalid and old-age pensions. While we can afford it, let us be as liberal as we may - in. fact, let us err on the side of generosity - but do not impose a permanent first charge upon our revenue, because, as surely as we are here, we shall rue the day, and desire to have some of the money back at one time or another. Did anybody ever anticipate that the Commonwealth, in the ninth year of its existence, would be in financial difficulties - that there would be a deficit at the end of, this year, if some arrangement were not come to with the States? According to the Budget statement, we shall be short something like £1,200,000 at the end of the financial year; and it is certainly remarkable that, with all our. powers of taxation, we should find ourselves at the end of the ninth year, unable to carry on without borrowing money.
– A large sum is to be expended on new works.
– I do not care how it is to be expended.
– About £5,000,000 has already been expended upon new works from revenue.
– A large amount has been so expended, and now we have not money to meet our engagements. When the Premiers’ Conference was held, I do not believe that the Premiers recognised the difficult position confronting the Commonwealth, or the large amount that would be required for defence purposes. I do not believe that anybody thought of such a contingency some years ago; at any rate, I did not. I knew that we must make some preparation for defence; but I did not anticipate a scheme such as has been presented. It is a scheme which everybody commends, and which I do not think has its equal in any part of the Empire; and we ought to be proud of the Government and the Minister who has submitted it. I feel, however, that the Premiers did not realize the position ; and I ask where the States would be if the Commonwealth could not keep the enemy from our shores. In such circumstances, Ave need not talk about Com- monwealth or States; we cannot defend ourselves without money, and unless the Commonwealth is financially strong in time of trouble, war, or drought, we shall have the greatest difficulty in paying our way. We may experience droughts in the future as we have done in the past. Do honorable members forget that in one year the number of sheep in New South Wales alone decreased by 20,000,000?
– By more than that. It declined from 61,000,000 to 23,000,000.
– We may have to face similar droughts in the future, and yet it is seriously proposed to base the adjustment of our financial relations with the States upon the most favorable season that we have ever experienced - a season in which the largest revenue has been recorded by both the States and the Commonwealth. I think that we ought to consider what will be our position when bad times recur, if we ratify the proposed agreement. Let honorable members reflect upon our position if, in consequence of a drought, our lands became denuded of stock. In such circumstances our revenue from Customs and Excise would probably fall 25 per cent., the amount derived from income tax would necessarily decline, and the land tax - should it press too heavily upon the land-owner - would simply drive settlers off -the country. Rather than sanction the return to the States of 25s. per capita, we ought to adopt a sliding scale under which our contribution to them will be regulated by the manner in which our revenue may increase or decrease. We ought not to give the States a first charge upon our revenue without being afforded an opportunity to undo the transaction. Of course, I have heard honorable members argue that if the people approve of embodying the proposed agreement in the Constitution they will always possess the power to remove it. Undoubtedly they will. But as the honorable member for Flinders and the honorable member for Parkes have properly pointed out, we are here to advise the people what they ought to do. If we advise them to amend the Constitution by inserting the proposed agreement in it, what will they think of us if within a few years we have to advise them to remove it?
– They will tell us that we are asses.
– I should not be surprised if they did. Moreover, it is not an easy task to undo anything of that nature. W,hen the Federal Capital has been established at Yass- Canberra, will the electors of Western Australia, Victoria, Tasmania, or Queensland pay much attention to the proceedings of this Parliament?
– Why not?
– The morning newspapers of the principal cities of the Commonwealth will then contain reports of, perhaps, only half a column in regard to the doings of this Parliament.- The people of Victoria will read the reports of the proceedings of the Victorian Parliament, and will pay little attention to the doings of this Parliament. A similar condition of affairs obtains in the other States at the present time. They see only what is at their doors; for example, at Melbourne Cup time, there is a large influx of visitors to this city from the country, and a newspaper exchange is established here at - which all the provincial journals may be perused. But visitors to this exchange do not consult the Argus or the Age; they read their own local newspaper. They are not concerned with what is transpiring in Melbourne, but only with what is taking place at Dimboola, or Ararat, or any other place from which they may come. In short, they are interested only in the news concerning their own district. A similar state of affairs will obtain when this Parliament is removed to the Federal capital.
– What difference will the removal of this Parliament to the permanent seat of Government make to Queensland or Western Australia?
– The people of those States will merely have regard to the doings of their own Parliaments. The electors in South Australia do not pay much attention to Commonwealth affairs.
– Nor do the electors of Victoria outside of Melbourne.
– The mere fact of this Parliament meeting in Melbourne makes it loom much larger here than does the State Parliament. ,
– In South Australia, too, the Hansard report of the State Parliament is published daily in the press.
– When the Commonwealth Parliament is meeting at the permanent seat of Government, if we have occasion to ask the electors to undo what the Government are now asking them to do, they will laugh at us. They will want to know why they should deprive the States of money to enable the Commonwealth to spend it perhaps in Sydney. In a matter of that sort Melbourne .residents would be just as narrow-minded as we think people iti the other States are narrow-minded at the present time.
– The honorable member favours legislation for Melbourne only ?
– No, I desire to legislate for Australia as a whole. But those who support the adoption of the proposed agreement in perpetuity are desirous of legislating for Melbourne, Adelaide, Perth, and Sydney, viewing the matter merely from a local stand-point. I desire to make the Commonwealth so financially strong that our country will never be in danger. In time of war we shall require to command plenty of money. What has made Great Britain strong? Only her financial power. She has not to send money out of the country in order to pay interest elsewhere. On the contrary, she levies toll on nearly every other country in the world. At the present time- Australia is paying about £14,000,000 annually to Great Britain as interest upon State debts, municipal loans, &c. It would be much better if we had accumulated funds, so that that interest might be paid to our own people. The whole of the British national debt is owned by her own people. If she were not so financially powerful she would not be the country that she is to-day, and we should not be here. During the next twenty years approximately £120,000,000 worth of State debts will have to be converted. If the Commonwealth and the States are competing against each other in the money market will the money lender allow us to effect that conversion cheaply? Certainly not. He will be able to squeeze us. As a matter of fact we never convert a loan now at a less cost than slightly over 2 per cent. That is a big charge to pay upon every conversion.
M.r. King O’malley. - It amounts to £2 12s. per cent.
– Yes, my estimate was rather under the mark. When the honorable member for Flinders was Premier of Victoria he had occasion to convert a loan at a very bad time, and the cost of the operation was about 3^ per cent. Unless the Commonwealth takes over the State debts and establishes a Commonwealth stock, it is bound to be financially squeezed in the future. I am strongly, in favour of taking over those debts, and I do not think that we ought to approve the proposed agreement until we have done that. When we have established a Com monwealth stock, we shall be able to effect a great saving upon our indebtedness.
– We shall be able to save about £600,000 a year in interest.
– That £600,000 annually would nearly cover the cost of maintaining the navy which we propose to establish.
– It would pay the sinking fund upon it.
– It seems to me that the financial relations of the States to thc: Commonwealth should be dealt with simultaneously with the transfer of the State debts. There should be only one transaction. The return of an annual subsidy in the States should be conditional upon the handing over of the State debts. Unless we adopt an arrangement of that sort, we shall never place our finances upon a sound basis.
– There is now a Bill before the House in reference to the transfer of the State debts.
– Under this Bill we do not make it a condition that the money returned to the States shall be applied to the liquidation of interest upon their indebtedness.
– No. There are to be two separate compacts.
– Exactly. My contention is that there should be only one. During the past six years the Customs and Excise revenue has averaged £2 6s. 6d. per capita. Under the proposed agreement the Commonwealth would return to the States 25s. per capita, thus leaving it only 21s. per capita for* its own purposes. In other words, that is the amount which would be available for the defence of the country, the payment of old-age pensions, and the cost of administering the various Departments which we have taken over from the States.
– From where did the honorable member obtain his figures ?
– From some of the papers which were presented to the Premiers’ Conference. In submitting this proposal, the Prime Minister stated that the annual revenue from Customs duties in Victoria amounted to 32s. per head. As under the proposed agreement the Commonwealth would hand back to it 25s. per head of that amount, it is obvious that Victoria would be contributing only 7s. per head towards the cost of the defence of the Commonwealth, the payment of oldage pensions, and the cost of administer- ing the transferred Departments. If these figures are correct, Victoria would not be paying anything like her fair share of the burden. The Prime Minister also stated that the revenue annually derived from Customs and Excise in New South Wales amounted to 36s. per capita. In other words, that State would contribute only ns. per capita to the Commonwealth.
– I think that the Prime Minister was speaking of “the revenue from Customs duties only, and not of that from Customs and Excise.
– I took down his words at the time, but perhaps I made a mistake. But even if the position be that which is suggested by the honorable member, it is clear that under the proposed agreement Victoria would not be paying her fair share of Commonwealth expenditure. There are not very many articles which it is open to us to tax, and I do not think that we should be able to squeeze more than £3,000,000 out of the taxation of tea, kerosene, and cotton piece-goods. But ifthe Government take all the money that they can wring from the taxpayers, nothing will be left for investment by private enterprises. Where would Australia have been but for the enterprise of the people? Let me remind honorable members of what was done in connexion with the Darling country in New South Wales. The Government leased large grazing areas” in that district for sheep-farming purposes, and later on an agitation sprang up for the imposition of heavier rentals. Gradually the rentals were increased, until they were at least quadrupled, with the result that the sheep-farmers, having lost heavily by reason of droughts, were starved out. The rabbits then swarmed over the district; it is now practically a desert; and the Government, instead of obtaining from it a large revenue, are receiving scarcely any return. The people have been squeezed out of the district. And so with the Commonwealth. We can overdo taxation. By excessive taxation we should drive people off the land, and crush out private enterprise which, to my mind, is far better than is. that of the State. If we allow the people an opportunity to make savings, and a chance to improve their holdings, I am quite sure that we shall do well. I propose to vote for the second reading of this Bill, and in Committee will support any proposition that may be made to limit the duration of the agree ment to a reasonable period. Ten years would be a fair limit to fix to its operation. The wise men- who framed the ‘Constitution determined that the operation of the Braddon section should be for only ten years, and, that period having expired, it would be well to provide for a per capita return of 253. per annum to the States for a similar period. The Braddon section has worked fairly well, the States have had ample revenue, and the Commonwealth has been able to carry on its undertakings. Is it reasonable to suggest that the Commonwealth Parliament ten years hence will be less worthy of the confidence of the people than it is to-day? Is it not dealing fairly and even generously with the States at the present time? Are we likely to have, in this Parliament, ten years hence, men who will repudiate any fair engagement, or do anything that may tend to ruin the people of the Commonwealth ?
– The Parliament should be wiser ten years hence.
– And should have a better knowledge of the needs of the Commonwealth than, we could reasonably be expected to have at the present time. It is utterly impossible for any one to foresee what will be our needs ten years hence; but our expenditure, I am confident, will have increased very considerably. .At the inception of Fede-ration, it amounted to something like £3,500,000 per annum, and the estimate for the present year is about £7,500,000.
– If the Constitution provided that the agreement should remain in operation for ten years, it could not be varied before the expiration of that period.
– Quite so; but should the agreement prove to have been a mistake, it is better that the ‘Commonwealth should be pinched for ten years than in perpetuity.
– Can the agreement be. said to be perpetual if it is open to the people to alter it?
– It is absolutely certain that once we embody in the Constitution a provision that the proposed payment shall be made for all time, a variation of that arrangement will never be made. If we attempted to secure an alteration we should have fighting 1.1s on every public platform members of the State Parliaments. What chance should we have, since we are only 112 strong, fighting against the 550 or 600 legislators of the States, supported by the press, in their demand that the operation of the agreement should not be limited?
– The agreement is not supported by all the newspapers.
– Once the States received the benefit of this agreement the State newspapers would fight for its continuance for all time. The only newspaper that we should have with us would be probably the Canberra Gazette, or the Canberra Illustrated. News, which would have no circulation outside the Federal Capital. I think that it would be wise and’ reasonable for the Parliament to limit the operation of this agreement to a period of ten years. We are often told that we should trust the people, but if we cannot trust them ten years hence, should we be justified in trusting them now? Unless we limit the operation of this agreement I am satisfied that it will lead to the Commonwealth being reduced to great financial straits, and that time will prove that it was the most unwise arrangement that could be made for Australia. Let us think for a moment of the mistakes of the past. Did any Commonwealth Treasurer imagine that the Commonwealth would be in its present financial difficulty after financing old-age pensions?
– Is there to be no development of the Federal sentiment?
– Our income is not likely to increase in proportion to our expenditure, and, as the honorable member for Flinders has shown, our -per capita return of Customs and Excise revenue will fall as population increases. That is the history of other countries. That being so, if there is any doubt as to the wisdom of fixing this- agreement for all time - and there certainly is - why should we place ourselves in a false position, and do something which we can never undo? Why should we place the Commonwealth in such a position that it may be called upon hereafter to double its taxation, with the result that it will be abhorred by the people? In such circumstances, the moment we were established in the Federal Capital, every hand would be against us. There would be no respect for the Federal Parliament. The people would regard it as their oppressor, and would insist either upon unification or the dissolution of the Federation.
– The honorable member takes a lugubrious view of the Federal future.
– It is a wise man who dares to be pessimistic in these matters ; it is generally the optimist who vans the ship of State on the rocks. There is, after all, always a temptation to be optimistic, and a man needs to possess some courage to point out possible dangers of the future. Pessimists, however, have come out right here as well as in other countries. Three years ago the honorable member for Flinders told the present Treasurer that the difficulties with which we are faced to-day would shortly confront the Commonwealth. The only answer made to that declaration was that the honorable member was too pessimistic, and took a lugubrious view of national affairs.
– In what regard?
– The honorable member pointed out that the Commonwealth Parliament was pledging the Government to the payment of large sums of money without making any provision, ‘to find the necessary funds. When the Manufactures Encouragement Bill was before the House, he referred to the seriousness of the financial position, and I, too, asked the Treasurer of the day where he was going to obtain the money to pay the proposed bounties, and to make provision for other Federal undertakings. His only reply was, “ We have plenty of money.” To-day the Treasurer of the Commonwealth finds himself without sufficient funds, and he has had to make a very bad bargain with the States, because he did not then look forward, . and recognise the dangers ahead. The States since Federation have increased their loans to the extent of about£40,000,000, and we do not hear any proposal on their part to . economise. Their Departments have increased, instead of. decreased, and their expenditure has increased, notwithstanding that we have taken over from them many services. The more we give them, the more they will squander, and the money will not be as well spent as it would be if we devoted it to the defence of Australia. If we do not have from Customs and Excise sufficient revenue to provide for our defences, the Commonwealth, instead of the States, will be called on to impose fresh taxation. Victoria is increasing its land tax, and will probably obtain from it £1, 000, 000 per annum. I admit that that is not the estimate of the Victorian Government, but I should like to know why the State requires that increased revenue. The Government them- selves do not know. Then, again, they are going to borrow. No savings have been made out of the surplus revenues of the State or the profits of the railways. Every surplus has been devoted to the building of roads and bridges in rural districts, and still more money is to be found by borrowing. In Australia it is with the States a case of “borrow, borrow, borrow.” The idea that a country has inexhaustible resources, however, is that of the spendthrift. Take the position to-day of the Republics of South America. They are practically crippled owing to the debts which they have to carry. I read recently an article with reference to the position of Peru, and was astonished to learn how poor the country is. The Government of Peru over-borrowed, and the interest bill is now found to be almost overwhelming. When we fall upon bad . seasons we shall be in much the same position. Those who talk about State Rights seem to regard the States as entities foreign to the Commonwealth, and to think that we cannot trust each other. Surely we should all recognise that the State and Federal Parliaments represent the same people, and that there should be no feeling of antagonism. The two systems of Government should work in unison, and each should have ample means to provide for its own purposes. But unless we provide in the first instance for the requirements of the Commonwealth, we shall find it in financial difficulties, and shall not have improved the position of the States, since they will probably have more money than they require. We should not hear the cry of State Rights as opposed to those of the Commonwealth, nor of Commonwealth Rights versus State Rights ; but unless we give the Commonwealth ample means to ‘ provide for its necessary services, such as those of defence, the post office, and oldage pensions - all of which have been taken over from the States - we shall place it in a very awkward and unfair position.
.-In the Bill which the Prime Minister . seeks leave to introduce, and which, following his lead, we are discussing on this motion - a most unusual and unsatisfactory procedure, since the Bill is not yet before’ us - the Commonwealth Parliament has placed before it the most momentous question that it has yet had to face. In this motion is involved the great question of State Rights, as against National interests.
That question has been a stumbling block in the framing of all Federal Constitutions, and was again manifested in the establishment of this Federation. The State Rights parties have always recognised, as the Prime Minister said, that where two parties ride on a horse, one must sit behind; and, being controlled by fears and jealousies, they have done their utmost, in the first -instance, to prevent Federation, and failing that, to tie the hands of the Federal Government as much as possible. I am now talking of the establishment of Federations generally, and not particularly of ours. These parties have always endeavoured to tie the hands of the National Government as much as they possibly could. Sooner or later, however, the great contest between the great National party and the State Rights party has to be fought out, if only to establish the principle that the National Government must be the paramount power, and the States the subordinate powers. Until that principle is established no Federal Government can exercise its functions freely or will probably exist for any great length of time. Take the case of the United States. At the time when the American Federation was brought about the State Rights party was powerful, with the result that such a large sphere of action was left to the States that the very national unity was for many years in peril. The solidity of the Union was only finally established as a consequence of the great and disastrous civil war of the sixties. In the Canadian Federation, and quite recently in the South African Federation, the fight between State Rights and National interests was fortunately pushed to a satisfactory conclusion in the framing of the Constitutions of those Dominions ; and there the National party succeeded unmistakably in each instance in making the National Government the paramount power. Unfortunately, we in. Australia chose to follow United States instead of Canadian precedents; but at the same time it was only reasonable to expect that in the twentieth century, with all our developments and all our learning,, we should have profited by the very unfortunate experience of the American Federation, and have recognised at an early stage that once the Commonwealth was established it could notbe dissolved, and that as long as it lasted the National Government must be supreme. Unfortunately, however, the Commonwealth had not been in existence very long before we realized the fact that such was not to be the case, and that we should have to buy our own experience. It was realized that sooner or later the contest would have to be fought out in this community between the two parties to which I have referred. The first serious crisis in the contest between the National interestand the State Rights party in Australia has arrived ; and it will depend upon this Parliament whether it is going to be the last fight or not. Because if, unfortunately, the State Rights party should win, there is not the slightest doubt that at some distant date, probably when present politicians have passed away and another generation has sprung up, the National spirit will again be revived, the whole matter will be reopened, and the contest will be renewed, probably in a much more serious form. Ultimately, I have not the slightest doubt, the National cause will win, because, when once the foundation is laid of a National form of government, and the National spirit begins to operate, it can never be long suppressed. It will only be a matter of time when that spirit must triumph and become paramount. It therefore rests with this Parliament, representing the whole of Australia - and in the first instance with this House representing the majority of the people, a House elected on a thoroughly Democratic basis in which the majority rules - to say whether the National interests or State Rights shall be paramount. That is the whole question at issue in the consideration of this Bill.
– Not at all.
– I say emphatically that it is, and the Prime Minister himself admitted so much when, in his introductory speech, he made use of these words. He said that the struggle between the National Government and the State Governments is* for supremacy, for the power of the purse, adding truly -
Whoever holds the purse, whichever possesses the money, is the real ruler.
I prefer to take the Prime Minister’s words as to what is involved in this measure, than the opinion of the Minister of Defence. The case for the agreement made between the Government and the State Premiers was ably put - as was only to be expected - by the Prime Minister; and I can only congratulate the State Rights party on having secured the services of so eminent a counsel. The speech, when delivered, however, must have struck honorable members, as it struck the press, as not being up to the level of speeches which on important occasions the Prime Minister has made in the past. The Argus said it was not as brilliant a speech as some which we have heard from Mr. Deakin ; and the same newspaper went on to say that it was “ carefully prepared.” I think that we are all agreed that the speech was not such a brilliant utterance as we have had from the Prime Minister concerning National matters on other occasions. And that is not to be wondered at. The soul was lacking in that speech. No one can make me believe that the Prime Minister was giving utterance to his own sentiments. He was simply speaking as counsel representing the party that had adopted that agreement. The very fact that - as was not in accordance with the Prime Minister’s usual method - the language of the deliverance was so carefully prepared, showed that the amount of preparation spent upon the form of it was so bestowed with the view of preventing the honorable gentleman from getting away from his text and giving vent to his own feelings. We have known the same sort of thing to occur in the case of other public men. Quite recently it was stated that when the late Sir Thomas Bent went to deliver the speech embodying the policy of his Government at Brighton, his deliverance was typewritten for him, and had been previously considered by his Ministry. It was so prepared in order that he might be kept closely to the one line of argument, and prevented from giving expression to his own peculiar modes of thought. The same method seems to me to have been adopted in. reference to this matter. I regret exceedingly that the speech introducing this Bill was not made by the Minister of Defence, and that the Prime Minister was not over on this side of the House to tear it to pieces in the brilliant manner that he would have done had he been free to treat the subject from the National point of view. We know what we should have expected from him had he been handling the subject as the National leader that he used to be.
– He is a National leader still.
– Yes- behind the Minister of Defence ! The most striking feature of the case put by the Prime Minister was this : For the first time, on behalf of the Commonwealth, we have the question of contribution or annual subsidy separated from the question of State debts.
In the next place, for the first time it has been proposed to return to the people themselves the power that has been vested by them in this Parliament. Turning back to the records of the various Conventions since 1891, we find that the question of contribution or subsidy was invariably bound up with the question of the State debts. The delegates, as Sir George Turner said, found that it was not possible to make a scientific settlement ; that they could only deal with the matter in a rough-and-ready way, and that ultimately it must be left for the Federal Parliament to settle. On reading the ‘Convention debates carefully one gets the impression, from the opinions voiced by leading men of all political parties, that they desired to express their absolute trust in the Federal Parliament to do that which was right towards the States. They felt that a temporary agreement was all that could be arrived at, and the great majority of the leading men were prepared to trust absolutely the Federation.
– But they made a permanent agreement.
– Yes; unfortunately, the fears of some of them prevailed, and by a very narrow majority of three - twentyone to eighteen - they succeeded in including in the draft Constitution what was called the “Braddon blot.” Fortunately, however, there was afterwards a Premiers’ Conference, and that Conference decided that the operation of the Braddon section should be limited, leaving it to this Parliament to decide what should be done after a term of years. In that form, and in that form only, was the Constitution adopted by the people of the whole ot Australia. It is very significant that there are two sets of sections in the Constitution, each of which is alterable by a different method. There is one set of sections which can be altered only by the people themselves. The people retain absolute control over those sections. But there is another set which can be altered at any time by the Federal Parliament as it thinks fit - subject, of course, to its responsibility to the electors. Now that, I say, is a very significant fact. The people deliberately adopted a provision in which they resolved to leave the power of altering the section affecting the distribution of the Customs and Excise revenue entirely and freely in the hands of their own representatives. The fact that this question would come up for review at the end of ten years has been in the mind of the Federal Parliament from the beginning, and not a few members of that Parliament have brought forward schemes for dealing with the matter, lt has been discussed from time to time by the State Premiers. They have had various State Conferences to which representatives of the Commonwealth were invited. But at these Conferences the question of taking over the State debts and that of a complete severance of the financial relations of the Commonwealth and the States have always been considered together. Our Commonwealth representatives have always upheld the position given to the Federal Parliament under the Constitution. - that this Parliament was the final arbiter in th< matter. Never, until this agreement was considered, have the States been allowed to dictate, nor has it ever been proposed to take from the Federal Parliament the power intrusted to it and to return that power to the people by embodying in the Constitution such a provision as that now proposed. Quotations have been made from Conference debates, and I also propose to make a few extracts, because it is desirable, in my opinion, to show how completely the Commonwealth representatives on the most recent occasion reversed the policy hitherto invariably pursued by their predecessors. Passing over the Conferences of IQ02 and 1903, I turn to the Melbourne Conference of 1904. Sir George Turner, when it was suggested that the Federal Parliament should give up the power which it is now proposed that it should surrender, said -
You are expecting me, Mr. Irvine, to go to the Federal Parliament and ask its members lo give up what they regard as a very important power that is now in their hands. Tt is a power which a very large number of them, and very likely the majority of them, will claim as their right the right to deal in any way they think fit with the Customs and Excise revenue which the Commonwealth will collect after the ten years fixed’ by the Braddon section have elapsed. When the matter was before the Convention, we fried every means that we could devise tn arrive ai some permanent arrangement, and after being beaten time after time, the best terms we could make were that the Braddon section should extend over a period of ten years. The Federal Parliament could afterwards, under the terms of the Constitution as it stands at present, enter upon any experiment they chose.
At another period of the same Conference Sir George Turner said -
But I cannot go to the Federal Parliament and say, “ I want you to extend the Braddon section for all time.” Parliament would regard the perpetuation of the operation of the
Braddon section as altogether against the principles of the Federation, namely, that the Commonwealth Government should have absolute control, and should be credited with a desire to do what is right and just. In inserting the Braddon provision in the Constitution, we did something which is repugnant to the idea of Federation, and you must help me to go to the Federal Parliament with a moderate proposal; otherwise there will be a strong feeling in that Parliament that a proposal is being made for which there is no justification, namely, a proposal with regard to expenditure after the period for which its hands are tied by the Constitution.
Further on, he said -
I say frankly that in my opinion the Federal Parliament as at present constituted, and as I believe it will be constituted in the future, will not indefinitely extend the operation of the section.
While Sir George Turner was speaking, Mr. Waddell, who represented New South Wales, said - -
Whatever proposal you may put forward must be one that will meet with the approval of not only the Federal Parliament, but of the Slates Parliaments.
To that remark Sir George Turner said emphatically “No.” Coming to the 1906 Conference, the question of parting with the power and control given to the Federal Parliamentunder the Constitution was again discussed by the States representatives with the present Prime Minister and the present Treasurer. Mr. Kidston put the question -
Supposing it was agreed to take this for ten years instead of twenty, but that instead of the stipulation, “ and thereafter until Parliament otherwise provides,” it was “ and thereafter until a referendum of the people otherwise provides “’?
– That would be altering the Constitution.
Mr. KIDSTON. My idea is that there are two parties interested in any alteration that takes place after the termination of the ten years the States and the Commonwealth.
– The Commonwealth has the power at the end of ten years.
Mr. Kidston again said
I know that quite well. It seems to be unfair where there are seven parties equally interested in any alteration that takes place that the power should be left in the bands of one of those parties. I think the present section, 87, as amended in 1900, leaving the power to alter the system in the hands of the Federal Parliament, is unfair, considering that the States are equally interested. … If the Australian people were desirous of altering it in any particular way, it would be done. Would you be prepared to consider any amendment in that direction? That would be putting the matter in the hands of the Australian people. None of us can very greatly object to our case being judged in that way, but to give one Parliament out of seven the power to alter when their interest as a separate Parliament is manifestly against the interest of the other six-
– You have your representatives.
Mr. KIDSTON. Just so, but we are dealing with one Parliament which wants more money, and the other six, which want the return of more.
– The one represents the lot.
At the same Conference the present Prime Minister said -
They have two agencies. In one case they are represented in part by six different agents, and in the other case they are represented as a whole by another set of agents, and as we know in business, even when the interests of the principals are the same, there may be a difference between the interests of the agents. Your proposal amounts to this, that we should amend the Constitution in order to give a sanction in it to any agreement arrived at now in regard to the disposition of the Customs and Excise revenue requiring that alteration to bc hereafter-
Mr. Kidston. Ratified.
– First of all it is ratified before going into the Constitution, but the effect would be that it could not be altered without another appeal to the people. That means the insertion in the Constitution, so far as the Customs and Excise revenue is concerned, of a condition which is not at present there, and so far it is a new proposal…… Personally, I am not inclined to say “no” to your proposal, because you are goingto the one party interested, the people of Australia; still, it is a new proposal.
– Very clumsy, I should think.
He has forgotten all that. At the Brisbane Conference in 1907, and, in fact, right through, the present Prime Minister and Treasurer took the same stand. The Treasurer said -
I am willing to go a good way, and the Commonwealth, I may say, are willing to go a good way so long as we do not infringe what I may consider the basic provisions of the Constitution.
He puts it so strongly as to say that what we are now asked to surrender is one of the basic provisions of the Constitution -
Whatever may be thought as to the moral right, there is no doubt after1910 the Parliament of the Commonwealth has legal power to deal with the revenues of Customs and Excise in the way that it considers fair. . . . The return to the States shall be on such a basis as it thinks fair.
Further on, when the Premiers wanted to include the alteration in the Constitution, he said - and the singular thing is that the head of that Government was the present Prime Minister, and the Treasurer of it was the present Treasurer -
I may say at once on behalf of the Commonwealth that it seems to us to be an unreasonable provision, and one that we could not under any circumstances agree to. It seems to me that it shows a disregard for the constitutional position. ‘ It seems to show distrust of the Commonwealth, and to place the Constitution in fetters which are not in the Constitution.
The Treasurer now puts it that to refuse to include the provision in the Constitution is to distrust the people. But at the Brisbane Conference on that occasion, when one of the State representatives said it was distrusting the people to refuse to put the provision in the Constitution, he made a reply which I shall quote, and I wish he were here to listen to his own words. Yesterday he twitted the honorable member for Hume in his absence from the State with having altered his views on the matter, and I should like to show how the right honorable member has altered the views which he held when he was Treasurer before. I have quoted his statement to the Premiers that they were distrusting the Commonwealth, and wjien they replied that he was distrusting the people, he said -
No, it was decided by the votes of the people of Australia that this shall be the Constitution, and it would be a strange idea for the Parliament of Australia to say to the people, “We are not competent to handle this great power you have given to us, and we want you to take it back and hold it again. Hold it for us so that we shall not do any mischief with it.” We, who represent the same people and the same electors ; we, the Commonwealth Parliament, say - “ Take back this power ; we are not worthy to hold it, and we are not worthy to do justice in the way you desire.”
Yesterday, the tight honorable gentleman, after quoting certain words uttered by the honorable member for Hume, remarked, ‘ Oh, what a fall was there, my countrymen ! The political champion of the States then; the political enemy of the States now.” Similarly I may say of the right honorable gentleman himself, “ Those are the words which he used when he was a great Nationalist. What a falling-off is there when he comes forward as a State Righter ! “ He went on to say -
On reading the Hansard report of the proceedings of this Conference one might fairly come to the conclusion that the attitude assumed by some members of this Conference would seem to show that this Conference was the arbiter of the Commonwealth, and that the Commonwealth was asking for something in these proposals that would be injurious to their interests. Now, as a matter of fact, as you all know, under the Constitution …. the Commonwealth has all the power it requires for itself already.
Throughout these Conferences the present Prime Minister and Treasurer asserted the absolute power of the Federal Parliament to deal with the question, and refused to surrender that power. The right honorable member for Swan in the strongest language possible - stronger than any uttered so far in this debate - absolutely scouted the idea of our handing back the power to the people and telling them that we were not worthy to be trusted with it after they had placed it in our hands. Yet, in face of their present attitude, they expect us to follow them ! The two questions of an annual contribution and the transfer of the State debts have always been considered by the Commonwealth representatives up to the present as inseparable. At the Melbourne Conference in 1904 the whole of Sir George Turner’s scheme was based on that idea. At the Melbourne Conference in 1906, Mr. Evans, who represented Tasmania, said, addressing the present Prime Minister : -
Will you not have to take into consideration the question of the transfer of debts in connexion with this subject?
And the Prime Minister replied : -
Yes. This is one arm of the subject complete in itsel f , but there is another arm ; both are essential. What the Federal Parliament desires, so far as I understand, is, if possible, to clear up all the unsettled financial questions between the States and the Commonwealth. The taking over of the debts of the States is one of the most important provisions in the Constitution.
When the matter was being discussed, so emphatic and firm was the present Prime Minister on that point that Mr. Davies, who was one of the representatives of Victoria, pointed out to his fellow State representatives that it was absurd to consider the two questions apart. He said : -
We will surely make our proposal as to State debts subject to the adoption of other resolutions, and different Federal Governments have all held the same view that the two things should be done together.
Mr. Kidston. They will always hold that view.
Even then Mr. Kidston had no hope that a Fusion Government would be brought into being, and that the Prime Minister and the right honorable member for Swan would both turn somersaults. Mr. Davies said further -
They considered that they were giving up something with regard to the Braddon clause, or the amended proposal that we have now adopted, and they wanted to get the question of State debts settled at the same time. Seeing thatthe present Commonwealth Government is of the same opinion - and we heard what the Prime Minister said yesterday - I feel that we would be jeopardizing the probabilities of our getting the other proposals agreed to if we refuse to consider the question of State debts.
Before the matter was cleared up at that Conference the Prime Minister was called in. Some dispute had arisen as to whether he was firm on the question or not, and Mr. Evans addressed him in these words -
After debate, I withdrew the resolution I had moved, because I was told that it was imperative, so far as Sir John Forrest and the Commonwealth Government were concerned, that the taking over of the State debts should be part and parcel of the whole scheme. It was promised that I should get a reply from you, Mr. Deakin, when you attended the Conference this afternoon, as to this question.
The Prime Minister replied -
But I can set Captain Evans’ mind at rest by saying that he has quite correctly understood the purport of the remarks that have been made by Sir John Forrest and myself. In the view of the Commonwealth, not only the consideration of the debts question, but its final determination, is the essence of the contract. To use Captain Evans’ own words, it is an imperative part of the scheme, and I do not think he needs any explanation from me to tell him why. If you look at the proposals altogether as in every other negotiation, it is a question of give and take. Now, so far as you are concerned, the proposals relating to the Braddon clause and your future revenue from Customs are all “ take “ on your part, and “ give “ on the part of the Federal Parliament. It is only when you come to deal with the debts question that you balance it. You have to ask yourselves the question what you will give up on that point, and what the Commonwealth can fairly take in the interests of Australia as a whole.
At Brisbane in 1907 the right honorable member for Swan said -
Now we have had four previous Conferences, and at all of them the representatives of the people of Australia have said they believed the States debts should be taken over, because they believed, and the framers of the Constitution also believed, that a great saving to the people of Australia would result. I fear that Parliament will not do anything in these great financial matters unless we do it as a whole. They will not do it piece-meal. To deal with one-half of the financial problem, and leave the other half, will not commend itself to them.
Later on he said -
The two matters cover the whole of the financial problems as between the States and the Commonwealth . . . and in the opinion of the Government and the Parliament they should be dealt with together. ‘
At the Conference last year the present Prime Minister, who was also Prime Minister then, and represented the Commonwealth, said -
The point I wish to make at the outset, is that, looking back, one is struck bv the repeated references made during the course of the Convention debates at which the present Constitution was shaped to two things whicli were always considered together. One was the revenue derived from Customs in the Commonwealth, and the other was the interest on the debts which had been incurred by the States of the Commonwealth. . . . Speaking not so much legally, as generally, it appears to me that the clear meaning of the Constitution is that these twomatters should be dealt with together.
He enlarged upon that aspect of the question in these words -
It is never a question between the States and the Commonwealth, but always a question of the States in the Commonwealth. When any difference arises between the States and the Commonwealth it means between the State agency and the Commonwealth agency of the Australian people. It is unnecessary to enter into distinctions, but the point I wish to make…..
Then come the words I have already quoted, and then -
Even before that Convention, if I remember aright, Sir Samuel Griffith had dwelt upon the necessity of considering these two factors together.
He goes on in the same strain through a lengthy speech, and finally says -
The first suggestion I wished to make this morning, was that, at this Conference the time has arrived when the question should be approached from the other side - whether certain difficulties would not be removed, the intention of the framers of the Constitution better fulfilled, and other useful objects achieved, by considering once more the two questions together, that is the repayment of a portion of the Customs duties to the States and the obligations already incurred by the States in regard to their borrowings. In other words, one side of those questions having been frequently considered, and very fully considered, has” not the time arrived when some stress - a great deal more stress than in the past - should be laid on the debt side, and its connexion with the problem ?
Singularly enough, he lays very much less stress now on that point than he did before. He then said -
Personally, I have been putting that forward, and so has my honorable colleague, the Treasurer, almost since the commencement of the Commonwealth.
His one contention throughout was that this was a matter for the Commonwealth, and the Commonwealth alone, to deal with, and that the two questions must be dealt with together. Even as late as this year the Minister of External Affairs, in the presence of the present Prime Minister, at Toowoomba, before the Deakin-Lyne scheme was abandoned, said -
The first ideal of a settlement of the financial question must be the complete severance between the Commonwealth and State finances. Their plans (Sir William Lyne’s scheme) had that end in view. The next point to be considered in the settlement of the finances was that it must always be kept in view that taxation and representation must go hand in hand. The Commonwealth members must be responsible to the electors for their taxation, and the State members for theirs…..
The only satisfactory solution is that which will make the Commonwealth and States responsible for the money raised by each. That was what their party wanted.
That was the old Deakin party -
He then pointed out that if the Commonwealth determined to take over the State debts and pay the interest thereon, the past national debt would be wiped out in 35 years. . His feeling was that the national power must become greater, and the powers of the Constitution be extended.
As a member of the present Government the honorable gentleman has now cast all that to the winds. I have shown .the position taken up by every representative of the Commonwealth Government from the beginning of Federation, and taken up over and over again by the present Prime Minister and the present Treasurer. This, as the Prime Minister has said, represents not only the view of the Commonwealth Parliament during the whole of this time, but the view also of the framers of the Constitution. Now the honorable gentleman absolutely abandons that’ position. Of course, he has told us that he has not done so. Indeed, he boasted that the position had been established. He said that the first resolution was -
That to fulfil the intention of the Constitution by providing for the consolidation and transfer of Stale debts, and in order to insure the most profitable management of future loans by the establishment of one Australian Stock, a complete investigation of this most important subject shall be undertaken forthwith by the Governments of the Commonwealth and the States. This investigation shall include the question of the actual cost to the States of transferred properties as defrayed out of loan or revenue mont) s.
By the way, it is very singular that the honorable gentleman never seemed to think that this investigation was necessary when he brought down the scheme of the honorable member for Hume based on the scheme proposed by the honorable member for Mernda, and which he put so strongly before the people. After reading that resolution the honorable gentleman went on to say -
My reference is to the undoubted intention of the Constitution, and to the fact that, for the first .time in our experience, the Commonwealth and the States are at one in declaring that the consolidation and transfer of the State debts are necessary to fulfil the i n 1 e n t ion of the Constitution, and that, for the most profitable management of future loans, the establishment of one Australian Stock is essential. Now this admits the whole case for which the Commonwealth has been contending for many years within itself. . . . We, therefore, have, in the frankest fashion, a recognition of the fundamental principle formally accepted by the Convention framers of the Constitution, and now fully, frankly, and unreservedly accepted by our Governments, both Commonwealth and State. We have reached a stage in this regard which many efforts in the past have altogether failed to attain.
In the first place that is hardly correct, as honorable members will see if they look at pages 68 and 69 of a paper prepared by. Mr. Watson, the Clerk of the Legislative Assembly of Victoria, on the financial problems of the Commonwealth and the States.
– Does that refer to the Conference of 1907 ?
– No, to the Conference of 1903. Though the Prime Minister says that this is the first time at which we have arrived at such a stage, it was arrived at as early as 1903. I find that at that Conference Mr. W. H. Irvine, then Premier of Victoria, submitted a memorandum which, after careful consideration extending over several sittings, was agreed to unanimously. I shall make only two quotations from that memorandum. The first is -
This Conference submits to the consideration of the Federal Government the following resolution : - “ Having regard to the fact that the debts of the various States were incurred upon the security of the revenues of the States, and as the greater part of the revenues has been transferred to the Commonwealth in the Customs and Excise duties, and having regard to the fact that the permanent financial stability of the States must depend upon either (a) the continuance of the application of the principal part of those revenues to payment of the interest of the debts, or (4) the imposition of a very largely increased direct taxation in the various States, it is resolved that, in order to secure to the several S’tate Governments the guarantee contemplated bv the Constitution, the provisions of the Constitution with respect to the taking over by the Commonwealth of the debts of the States, or a proportion thereof, should Be brought into operation as soon as possible.
Section 87 and section 105 of the Constitution, the Braddon section, and the section giving power to the Commonwealth to take over the debts of the States are then quoted and the memorandum continues -
The Premiers in Conference feel that they would be neglecting their duty if they failed at this stage to impress upon the Parliament and the people of the Commonwealth the urgent necessity of bringing into effect these provisions, and to emphasize the far-reaching importance of the issues involved.
When that occurred as far back as 1903, of what use is it for the Prime Minister to say that this has been recognised now for the first time? But even if the statementbe correct the declaration, as the honorable member for Parkes pointed out the other night, is absolutely valueless. It means nothing at all. It binds the State Governments to nothing, but an inquiry. It is proposed here that we shall give everything away, and shall then wait for them to give something back to us. I am reminded by the proposal of another matter with which the Prime Minister was concerned. I am reminded of what happened at the time of the adoption by the Fusion of the Liberal policy. We were told that the Fusion’ Government had adopted the Liberal policy, but the Times correspondent said that it was upon the condition of the postponement upon one excuse or another of all the principal planks of that policy. That describes the kind of declaration we have now ‘got from the State Governments. It is a declaration on the condition that what is contained in it shall be indefinitely postponed. Honorable members are aware that if we start an inquiry we may take as long a time over it as we like, and we could discuss it for years afterwards.
– Who is the Times correspondent referred to?
– The ..honorable member must know very well that he must be a man of standing and ability to be selected to represent that journal. I say that the Government have now absolutely separated these two questions. If there was anything in the statement of the Prime Minister that we have something valuable in this declaration, it is all set aside when we remember that the question of the transfer of the State debts is to be dealt with separately. I think it shows that even the persons who are putting forward this proposal - the present Prime Minister and Treasurer - are not genuine in the matter, because they are not regarding the two questions as parts of one. They are not dealing with the two in one Bill. They are deliberately severing them, and proposing to deal with them by two referenda. Honorable members will recollect that the Treasurer, in speaking yesterday, gave away the whole position. The right honorable gentleman was asked a question. “ Why do you not include both questions in one referendum?” And this is what he replied, and I invite the attention of the
House to it, because there is an enormous amount of meaning in it -
We placed them in two referenda in order to give the people greater freedom, so that one may be accepted, and the other rejected.
It has been done deliberately in order that one may be accepted and the other rejected. The fact is that there has been an absolute abandonment of the position which hitherto has always been taken up. I must at this stage say that it is very greatly to be regretted that whilst in connexion with all previous Conferences we are in possession of official reports of what took place at them, the Hansard reports of the arguments that were used on both sides, of the arguments used by representatives of the Commonwealth in maintaining the position that has always been put forward on its behalf, we have in the case of the last Conference no report whatever of the reasons that induced these Ministers to turn an absolute somersault, and go back on their professions during eight or nine years. If there ever was a time when it was necessary that the reasons advanced for the action taken should be published it is this time. No doubt those who took part in the recent Conference wished to God that all the Conferences had been secret, and that their previous contentions should not now be available and rise up before them. It is singular to note that, although we are unable to learn the reasons that were advanced in this secret Conference on our behalf, the representatives of the Commonwealth at that Conference have not condescended to mention in this House the reasons which induced them to change their minds. Both the Prime Minister and the Treasurer have absolutely ignored the fact that they ever gave utterance to different views. One would have thought that out of respect for their fellowmembers in this House, they might have been induced to say, “It is true that we said so-and-so. and that previously we held certain other views, but these are the reasons which have induced us to change our opinions.” It is the more surprising that the Prime Minister should have proposed to sever the two questions, because: in the speech he made in moving the motion now before the House, the honorable gentleman used the following words -
The control of the debts of Australia is the axis on which our financial proposals revolve. If that were ignored, it would throw the whole picture out of focus.
Yet he proposes now to start revolving the machine without the axis. He brings forward the machine first, and keeps the axis back. He sends them in different Bills to the country for the express purpose, as the Treasurer said yesterday, of enabling the people, if they think fit, to accept one and reject the other. Every member of this House agrees with the Prime Minister that . the taking over and control of the debts of Australia by the Commonwealth is the axis on which all our financial proposals revolve. The honorable gentleman’s present position is the more surprising, because, as I say, he last year adopted the scheme of the honorable member for Mernda. He brought that scheme forward then, and even now he describes it as> a bold and statesmanlike proposal. Mr. Kidston, speaking at one of the Conferences, said that it was the only scheme under which finality could be reached. Let us come now to the position as it is actually presented to us at the present time. It constitutes a complete change, not merely of the Commonwealth policy maintained by these gentlemen, and by all representatives of the Commonwealth for the last nine years, but a complete change also of the policy of the present Government, even during the short time that they have been in office. As the honorable member for Parkes stated the other night, the scheme now proposed was not a part of the Fusion policy. It was not a part of the terms on which the present Ministerial party was brought together. What was the Fusion policy on this particular question? It was -
Pending the preparation of a complete scheme adjusting the future financial relation of the Commonwealth and States, an interim arrangement to be proposed under which the Customs and Excise revenue of the Commonwealth shall be dealt with.
That is all the Fusion party were asked to agree to. They came together on a proposal for an interim, arrangement. More than that, the present Prime Minister is president of a party called the Commonwealth Liberal Party, which was launched the night before the Fusion was effected at a great meeting held in the Melbourne Town Hall, to which admission was by ticket only. One of the platforms of that party was -
The assumption by the Commonwealth of the public debts of the States, accompanied by an equitable scheme for providing interest and sinking fund.
Let us now see what we know in this House apart from that policy. I have read the terms on which the Fusion party came together, and I quote this from the Ministerial statement which the Prime Minister laid on the table of this House as setting forth the policy of the Fusion Government -
A brief statement of the business which Ministers are about to submit to Parliament is due to both Houses, though, since the time at our disposal is limited, the references to its particulars must be condensed- to the utmost.
He condenses them into two pages -
To simplify the synopsis, proposals are grouped according to subjects, and not to their relative importance.
Then under the heading, “ Finance,” the Ministerial statement continued -
Above all, the approaching termination of the ten-year period for which the Constitution provides a distribution of the Customs revenue, marks the close of a critical era, and suggests the pressing importance of this great financial problem.
A temporary arrangement for a term of years to replace the existing distribution, in which the obligations of the Commonwealth are recognised, is being prepared for submission.
That is all that was proposed by the Fusion Government. He goes on to say -
The future financial relations between the States and the Commonwealth, taken together, with their present and future loan obligations, are being carefully considered in principle and in detail, in order that a satisfactory and permanent settlement may be achieved.
On the 30th June he addressed the Premier of New South Wales regarding the financial relations of the Commonwealth and the States in these terms - the correspondence has been printed and laid upon the table of the House -
It is highly desirable that this complex question shall be simplified, so that this Government can frame concise propositions for submission to the electors at our general election.
Then he said -
You are probably aware that in the opinion of this Government any attempt to determine now the future distribution of the revenue from Customs and Excise would, for practical reasons, require to contemplate some fixed period for which the circumstances can be forecast with considerable confidence. This should greatly simplify a task which, under any conditions, will be arduous.
Tn reply, Mr. Wade wrote on the 3rd July of this year -
Your letter contains a reference to the submission of questions to the electors, which I take to mean a proposal for ingrafting any agreement arrived at permanently in the Constitution. The second paragraph suggests a temporary arrangement for a term of years. I should be glad if you can give me further information with regard to these matters.
To that the Prime Minister replied on the 9th July -
With reference to the inquiry made in your letter of the 3rd inst., I have the honour to inform you that the propositions to be submitted to our electors will consist of a general statement in our platform of the views of this Government in respect to what may be termed a permanent settlement of the future financial relations of the Slates witu the Commonwealth. Should the preliminary financial arrangement for a term of years, alluded to in my last letter, fail for any reason to pass this session, that also would be submitted, and in a precise shape. As you are aware, neither one nor the other need be ingrafted upon the Constitution in order to come into full effect.
– That was written only a few weeks ago.
– Yes. These extracts are important, because they show that the head of this Government, r’ght up to the time when he entered the secret chamber, and, as the honorable member for Darwin said, seemed to be chloroformed, was uniformly of the opinion that there should be a temporary agreement for a fixed period which one could forecast with certainty. The honorable members for Kennedy, Mernda, and Flinders have gone so thoroughly into the figures that I am satisfied to leave that branch of the subject to them. I do not propose to reply to the attempts of the present Treasurer to make certain deductions from the statistics quoted by the honorable member for Flinders. There can be no doubt that the Customs revenue will decrease as the protective duties become more and more effective. The Prime Minister told us that, having examined the statistics of the world, he was unable to find a law bearing upon the subject, and then took the figures for New Zealand as if they were sufficient to create a general rule. At the Melbourne Conference he said that the future could not be predicted, and he has recently repeated that statement. Yet he proposes now to bind the Commonwealth for all time.
– For all time?
– After what has been said by -Ministerial supporters, I am surprised that the statement, that it is proposed to bind the Commonwealth for all time, should be disputed. Is the Commonwealth or are the States to determine what the Tariff should be? Is the Commonwealth to be compelled to frame a Tariff other than it would frame if it had a free hand? Are we to lessen the protective incidence of duties, or to impose heavy revenue duties, in order to keep up the revenue? If we do not, the returns will fall as the im port duties become more effective. The idea of tying the hands of the Commonwealth has been scouted by State representatives at several Conferences. Speaking at the Brisbane Conference, Mr. Peake said -
We cannot tie the hands of the Commonwealth Parliament sp far that it is not to alter the Tariff to suit what in its wisdom it regards as the requirements of the whole of the Commonwealth.
Mr. J. M. Davies, the representative of Victoria at that Conference, said -
We are asked to tie the Commonwealth Treasurer down to pay the same rate with an increased population, so that if it doubles he would still have to give the States 34s. 5d. per head. I feel quite satisfied that the Federal Treasurer would never dream of committing himself to such a thing.
Now he has not only dreamt of committing himself, but has actually done so. We have been told that to put this agreement into the Constitution is not to make it permanent. Honorable members opposite, who will not trust the Parliament, say that we, on this side, are not prepared to trust the people. We are prepared to trust the people. But an amendment of the Constitution can be obtained only by means of a federal, not of a national, referendum, and the consent of a majority of the States as well as of the people.
– Are all the brains of the Commonwealth in New South Wales?
– No; but the financial interests of one State differ from those of another. As has been pointed out in the Age in some powerful articles on this subject, it is proposed to place the immediate personal district wants of the people in opposition to great national wants. One can hardly realize how much money, the Commonwealth will need in order to do its duty by this vast continent. Unless we are to be content ‘to occupy only its fringe, abandoning the interior, our expenditure must be enormous. We have railways to make, and the Northern Territory to develop, if we do our duty, though I am beginning to be afraid that we shall not. If the gold-fields at Tanami become like those of Kalgoorlie, they will require, not only railway connexion, but great water supply works, such as the Treasurer, to his credit, provided for the gold-fields of Western Australia. An elector in the back country of any State, needing a railway, better roads, telephone and telegraphic communication, and a better mail service than is given in many parts of the Commonwealth, under the Departmental rule which requires that such services shall, if possible, pay their way, would naturally ask, when a proposal of that kind was put before him, “ Why spend money in developing distant districts when that in which I am living has so many wants?” He would think more of his immediate requirements and the demand of the State Parliament than of the demands of the Federal Parliament on behalf of developmental work elsewhere. If the agreement is inserted in the Constitution, it will require a revolution to secure its subsequent amendment. Let me read what has been said by a gentleman who cannot be referred to as a Nationalist, Sir Hector Carruthers. Speaking at the Brisbane Conference, in 1907, he said -
It is a very serious thing to ask the Commonwealth of Australia to commit itself irrevocably to a scheme of finance between the Commonwealth and the States, the results of which no man here can forecast. Just look at our revenue for last year. It is beyond the expectations of any man in Australia.
– It is not irrevocable at all.
The Hon. J. H. Carruthers. - Not irrevocable ; but we know how very few alterations have been made in the equally irrevocable Constitution of the United States. We know how difficult it would be if anything is put in the Constitution to get it amended under the. complicated process provided by the Constitution.
– It would be very easy to amend it if it were causing financial dislocation.
The Hon. J. H. Carruthers. - Take this contingency - that it is found that this arrangement works harshly and unjustly to two States, but works favorably to four States. You have then to ask for an amendment of the Constitution against the interests of .the people of four States, and against the interests of the Treasurers of four States, and you have to get that amendment carried by a majority of the people in a majority of the States. You cannot do it. It will be far easier in dealing with a question of this character to get an amendment made by the Federal Parliament than it will be to get an amendment made by the Federal people, because if you have got four States who are perfectly satisfied with the arrangement, and ; have only to appeal to their sense of honour to give up something for the benefit of others, it will be very difficult to carry the amendment, especially when some people may think that they would have to give up a certain amount of revenue over and above what they are justly entitled to surrender. It will be very difficult to get people to do that in a young country where expenditure means everything - where a settler looks upon expenditure as meaning a road to his land, where expenditure means to another man the keeping up of the rate of wages, or of keeping him in employment. It will be very hard to get people to set personal honour against personal interest, and that is what will be involved in an amendment of the Constitution. The representatives sitting at this table are men of high motives, with no personal interests to serve, and yet they fight hard for what they think are the rights of their own particular States, and that feeling will permeate the whole community. I would sooner rely upon the process of conference with the Federal Treasurer, and the power of amendment by the Federal Parliament, for an alteration of the terms of the arrangement, than on an amendment of the Constitution.
– Three States may block- the proposal.
– Exactly. I have quoted the opinion of a State representative who has been a Minister of the Crown, and has fought the Commonwealth most bitterly, even as in the wire-netting matter, to the point of force. The Government cannot lind a solitary authority, either amongst the State representatives or amongst themselves, to refute what has been said by speakers’ who have preceded me.
– The Treasurer ought to be here to listen to this !
– It is only when the Government desire to suspend the Standing Orders that they can have thirty-eight supporters here. I may say that I have been considerably disappointed at the meagre attendance of honorable members opposite. When it is a matter of suspending, the Standing Orders they can have present thirty-eight members out of forty, but when the honorable member for Mernda was speaking there was an average attendance of twelve - never more than fourteen, and sometimes fewer than ten.
– They were about the House.
– I know they were - for the purpose of voting. I do not suggest that the Government and their supporters should be here to listen to every member or to myself, but I do expect them to be here to listen to honorable members who belong to their party and are in full sympathy with them, but who are Nationalists first, and all the time. It was known that the honorable member for Mernda and the honorable member for Flinders would speak, because they had moved the adjournment of the debate; but yet, when these gentlemen took the floor, and also when the honorable member for Parkes addressed the House, it was lamentable to find average attendances of twelve, twenty-three, and twenty respectively.
– The honorable member for Mernda had delivered his speech privately to the Government.
– The whole circumstances fin me with amazement. . The action of the Prime Minister is simply with a view to keeping down the Commonwealth as much as possible, and elevating the States; and an expression of opinion in the Argus of Monday, 23rd August, is worthy of note- -
A great Conference, which will be memorable in the history of Australia, has ended in an. agreement which will probably form the financial basis of the Federation for many years to come. On both sides the momentous nature of the occasion has evidently been fully realized, together with the responsibilities resting upon the two great parties to the Federal bond -
To these words I draw- particular attention - - the Commonwealth with its strictly limited powers, the States with their large charter, comprising all authority not definitely transferred.
Then we heard the honorable member for North Sydney say last week that the States needed” much more money for development purposes than did the , Commonwealth - that the functions allotted to the Commonwealth are not so important as those retained by the States.
– Does the honorable member say that that is not true?
– The functions of the Commonwealth are very great; and I should like to quote what the Prime Minister said on the subject when he introduced this motion -
I take a large view both of the needs and the powers of the Commonwealth ; have always done so, and always will.
That means when he is “on his own” -
I hold that not the mere terms but the plain implications of the Constitution as a whole show that the people of Australia intended, when they adopted . it, and still intend, to make this Parliament their centre of national government. We have not yet exercised all the authority it confers upon us. We have not even fulfilled some of its peremptory duties.
We studied them (the States) at the expense of the funds of the Commonwealth in a generous and wise spirit, and our electors at subsequent elections distinctly approved.
Section 51 of the Constitution shows that there are great powers to be exercised on behalf of all Australia, and sub-section xxxvii. of that section contemplates the exercise of even, greater functions without an amendment of the Constitution. That sub-section gives the Parliament power to make laws with respect to -
Matters referred to the Parliament of the Commonwealth by the Parliament of any State or States, but so that the law shall extend only to States by whose Parliaments the matter, is referred, or which afterwards adopt the law.
Under that sub-section there is no limit to the powers that may be exercised by the Commonwealth; indeed, it absolutely con: templates an extension of our powers, lt is monstrous to assert that our functions are not as important to the development of Australia as are those of the States. Will the Treasurer say that the construction of the railway w.hich he desires to Western Australia is not as great a work as any that that State could do for itself? If Western Australia were able to carry out this work, would the Treasurer press it so earnestly on this House in season and out of season ?
– Is that the only work desired?
– No, but it is a work which Western Australia cannot, carry out herself, and which she appeals to the Commonwealth to execute. The Treasurer has simply turned a complete somersault on his previous professions. The question whether power shall be given to the States, resolves itself into another question - whether or not a Government, commensurate with the exigencies of the Union, shall be established, or, in other words, whether the Union itself shall be preserved. If we . cripple and place ourselves in shackles, which only a revolution can break, we shall obstruct the progress of Australia for many years ito come; and there is no evading the fact that the responsibility will be ours. We are told that we are merely referring this question to the people, butwe have no right to refer to them any question in which we do not believe - any measure that we would not be prepared to pass into law to-morrow. Are we going to say, as has often been said by Legislative Assemblies, “ Thank God there is another place ‘ ‘ ? Are we referring this question to the people in the hope that they will reject the proposal ? That is not the way to face responsibility. There is no blinking the fact that this matter, which should not be a party matter, is being made one so far as the Government are concerned.
– On both sides.
– No, not on both sides.
– What about the Brisbane Labour Conference?
– I have nothing to do with the Brisbane Labour Conference scheme; but I may say that nothing has surprised me more than to find this Government, who came into existence for the express purpose of dishing the Labour party, first adopting the caucus method every Thursday, and then coming forward with a financial scheme, the justification for which is that it is the Labour party’s scheme. It seems to me that the whole of the considerations involved in this agreement are party and political. When the honorable member for Riverina made a remark to that effect Last night the Prime Minister interjected, “ Too ridiculous.” I shall show, however, the authority on which the remark was made; and, if the Prime Minister is sincere, I can onlysay, in the words of Hamilton -
Necessity, especially in politics, often occasions false hopes, false reasonings, and a system of measures correspondingly erroneous.
Sitting suspended from 1 to 7.45 p.m.
– When the sitting of the House was suspended, I was pointing out that this agreement had been made wholly and solely for party political purposes, and that when the honorable member for Riverina made that statement yesterday, the Prime Minister interjected that it was too ridiculous to need contradiction. Notwithstanding that reply, I repeat that the agreement was made for party purposes.
– Does not the honorable member add to the absurdity of the statement by repeating it?
– If its repetition appeals to the honorable member for Indi as an absurdity, then I must be on safe ground. Let us see what was said by the Argus - the principal press supporter of the present Government and of the agreement made at the Premiers’ Conference. Or. the 14th August last, it wrote -
If an amendment of the Constitution is required it must be put before the electors or referred at the Federal election in March. The advantage of such a proposition to the Federal Ministry is manifest. Mr. Deakin will be assured of the support of the State Premiers in his stern fight with the Labour party. The whole influence of the Premiers in the States will be used in favour of Mr. Deakin, as on his continuance in power will depend the permanency of the arrangement.
Again, on 19th August, the Argus made this important statement -
The Prime Minister thinks the political factor is even more important’ than the financial one.
I do not know whether the Argus was in the Prime Minister’s confidence, but that was its opinion of what he thought was the most important factor in regard to the making of the agreement. Does it not justify the statement made by the honorable member for Riverina yesterday, and repeated by me to-day, that the agreement has been made wholly and solely for party political purposes? On another occasion, the Argus wrote -
Issues not merely financial, but of serious political import, hang upon the result of the
Conference. A failure on the part of the Commonwealth representatives to accept reasonable offers may be held to prove the failure of the Fusion -
Australia was not to be considered. There was only one consideration, and that was the saving of the Fusion - and may result in dividing the House of Representatives once more into its three warring and practically helpless parties. This would send the House to the people to fight a threecornered fight, to the great advantage of the LabourSocialists.
There, again, we have the strongest possible reference to party political considerations. As showing that the statement was made not accidentally, but deliberately, I would point out that,’ on the 20th August, the Argus also wrote - “
The agreement was drafted and drawn out ready for signature. It provides Mr. Deakin with a definite something to fight for at the March elections, and it assures him and the Federal party-
It is little short of impudence to describe the Government party as the Federal party - the support of the State Premiers.
There, again, we have the statement that all that was required to be secured was support for the Fusion Government. The assumption that the whole of the Ministerial party, who had been absolutely ignored in the making of this agreement, would blindly follow whatever the three representatives of the Commonwealth Government chose to agree to at the Conference was certainly very cool. The members of the Ministerial party are not children. There are amongst them men of undoubted independence and ability, but the Argus assumed that they would adopt whatever the representatives of the Commonwealth agreed to.
– The Argus wrote some very nice things concerning the honorable member when he was a candidate for the Senate.
– That was nine years ago. I have no desire to go into ancient history, but, at the same time, I do not wish an erroneous statement to appear in Hansard. At the first Federal election, the Argus selected me as one of its candidates for the Senate as a compliment to the Australian Natives’ Association, than which nobody had done more to bring about the Federation. It selected me in such a way that it compromised neither its own political views nor mine.
– The honorable member’s views would not be material.
– The honorable member has never had any political views of any significance. It is unfortunate that I should have to refer to something that occurred years ago, but I do not wish to do an injustice to any one, or to place any newspaper in a false position. I was selected on the occasion in question as a candidate for the Senate without approaching or being approached by any one. The representatives of the Commonwealth Government entered the Conference presumably to carry out the policy which they, as responsible Ministers, had placed before Parliament in their Ministerial statement; and, no doubt, they had a perfect right to expect that if they made an agreement in accordance with that policy it would be supported by their party. The Argus went so far as to say at the time that it would be the first occasion on which Commonwealth Ministers had attended a Conference of State Premiers knowing that they had behind them a majority which would carry out the agreement at which they arrived. That newspaper evidently assumed that an agreement would be made in the terms of the. Fusion party’s compact and the Ministerial programme. As bearing on that point, let me quote a statement which appeared in the Argus on 17th August last -
There is no reason why this Conference should not agree to a division of the Customs and Excise revenue which will provide for the needs of both States and Commonwealth, but which might be regarded as experimental for the three years following the next general election. Then, with such modifications as experience might suggest, it could be embodied in the Constitution.
Evidently the Argus thought, as every one else did, that that would be the basis of the agreement when it declared that it would be. the first occasion on which Commonwealth Ministers had attended a Conference of State Premiers with a majority behind them, which they had every reason to believe would carry out the agreement made. All this has been scattered to the winds. And where? At a secret Conference. The sittings of the Federal Convention were open to the public, and Hansard reports of the proceedings were published, setting forth the reasons - many of which I have quoted to-day- which led the members of the Convention to arrive a’t their- conclusions in regard to the financial position of the Commonwealth. Hansard reports of previous Conferences of Premiers were also published, and representatives of the Commonwealth at those Conferences insisted that the Commonwealth should refuse to part with the powers conferred upon it. At the Brisbane Conference, the Treasurer scorned the suggestion that the proposed agreement should be inserted in the Constitution. He said -
No, it -was decided by the votes of the people of Australia that this shall be the Constitution. And it would be a strange idea for the Parliament of Australia to say to the people “ We are not competent to handle the great power you have given to us, and we want you to take it back and hold it again. Hold it for us so that we shall not do any mischief with it. We also represent the same people and the same electors.” We the Commonwealth Parliament, say, “ Take back this power. We are not worthy to hold it, and we are not worthy to do justice in the way you desire.”
The right honorable gentleman then thought it would be monstrous to hand back this power to the people. List night, he twitted the honorable member for Hume with having been a great State leader at the Convention, and asked, “ Where was he now?” I interjected, “On the National side.” The Treasurer at the Convention was a great Nationalist leader, but where is he to-day? What a fall, my countrymen ! He has drifted and drifted, until now he is prepared to take up a position which he scouted, not on one occasion, but on many, at the Brisbane Conference.
– That is only the honor- able member’s opinion.
– I have quoted the Treasurer’s own words, and it is for honorable members to judge for themselves what his position is to-day. The representatives of the Commonwealth Ministry entered the Conference of Premiers, and performed a somersault in secret. We have not been favoured with, nor shall we ever have an opportunity of hearing, the reasons that brought about the change of front on their part. What was it that made the Prime Minister enter the Conference as a great National leader and come out as a State Rights supporter? What made the Treasurer enter that Conference as a National leader of eight or nine years’ standing, and leave it as a humble servant of the States? It would certainly be interesting to learn the reasons for the change. The arguments that brought it about must have been new, because every effort to induce the Prime Minister and the Treasurer to take up this stand on former occasions failed. Neither honorable member has told the House why he was induced to accept this agreement, and, as I have said, both must have been led to do so by political considerations. The Argus has declared that the Prime Minister thought that the political factor was of more importance than the financial one, and that was undoubtedly the only reason that could have induced him to do. what he has done. He has thrown over every one. He has thrown over his own party for some reason which has not been disclosed, but we are told that political considerations prevailed with him, and that this agreement’ is designed to assure the Prime Minister and his party, at the next general election, the support of the State Premiers in their stern fight against the Labour party. Who is making this a party question? Who, for the first time, has dragged it down from being a great issue to a mere party question, in which the ins and outs of this House are to be the primary, and the country a secondary, consideration? This House has not treated it as a party question, and I venture, to say that honorable members do not intend to treat it as such. We have had honorable members on both sides of the House taking different views, and honorable members in direct Opposition have not, in any of their speeches, made the matter a party one. Similarly, neither the honorable member for Mernda nor the honorable member for Flinders, the honorable member for Parkes nor the honorable member for Balaclava, has made it a party question. They have risen above all parties, and so should we. What does the life or death of any political party in this House, or in the country, matter, if the country is to be shackled ? I have been all my life a strong Liberal and a strong Protectionist, but what is the good of the triumph of Liberalism or Protection if, when it gets into power, it finds itself shackled, and can do nothing? What will its victory avail if it is in a Parliament which has practically no power - a Parliament which has lost its supremacy, the power of the purse, which, as the Prime Minister said, is the object of the great struggle now in progress - a Parliament whose members are net the chief rulers, because they do not possess the money? What will be the good of such a position, whatever Ministry may be in power? Is not this a matter in dealing with which, on the present occasion, we ought to rise altogether above all the parties in this House?
I have been as strong a party man as there is in this Chamber, but I say emphatically that in this great contest of’ National interests and State Rights I put all parties aside. I am prepared to work with any man, no matter where he sits, so long as he is a Nationalist. The honorable member for Wide Bay remarked that the agreement had been brought about by a combination, and that it would probably have to be defeated by another combination. I welcome those words, and hope that they are prophetic of the future. It seems to me that if this fight is to take place the present division of parties in the House must be scattered to the winds, and we must go to the country on the great issue of Nationalism versus State Rights. There is no issue upon which I would go more gladly to the country, or more gladly fight upon. I am prepared to work in that fight side by side with the honorable member for Mernda, the honorable member for Parkes, and the honorable member for Flinders, and any others on that side of the House, and also with every member on this side who is of the same way of thinking.
– What a Fusion that would be !
– I should be prepared to fight with them until this great national question had been fought out. It would, indeed, be a noble fusion - a fusion founded, not for the sake of office, or for a party advantage, or for the purpose of dishing another party in this House, but for the purpose of establishing once and for all in this Federation the paramountcy of the National Parliament. When it had achieved that purpose, it could cease to exist. Whether it lasted a leng or short time it would last, I- hope, until the victory was won, and from that point of view the shorter the time it lasted the better. If I had my way, such a fusion would hold together until the fight was won, and then would break up into its component parts, when each man would be entitled to hold, without any reflection on his colleagues, the individual opinions which he holds now on other subjects. I take up the position that was taken up at the Convention, and* has always been maintained until this year by Commonwealth Governments - that the questions of the transfer of the State debts and of a contribution by the Commonwealth to the State revenues are bound inseparably together, and must be settled at one and the same time. I was asked, as a supporter of the last Deakin Government, to accept the scheme that they put forward, founded as it was upon the scheme of the honorable member for Mernda. His was a business-like proposal, framed and put forward by a financier as a financier. It was just to the Commonwealth and to the States, and was prepared without any consideration of the interests of either Ministry or Opposition. It. was the effort of a man who knew what he was doing. He started from a sound commercial basis, and his scheme could stand any criticism that could be brought to bear upon it. I was expected, and was ready, to accept that scheme as a supporter of the last Deakin Government. I took the trouble, during the last recess and the one before, to explain it and extol it on many platforms. I asked the people to think over it, and to express their approval of it, but now I am asked by the same Prime Minister, who has thrown that. scheme into the waste-paper basket, to abandon every item in it, and take up this miserable political agreement, which proposes to put into the Constitution for all time a per capita arrangement that will operate increasingly to our detriment. Every industry that we build up as the result of our Protective Tariff will reduce importations. Every man we induce to come to this country to enter into those industries, by virtue of our Protective Tariff, will be an extra burden on the Commonwealth to the extent of 25s. per annum, and the result of any successful Protective Tariff will, therefore, be to hit the Commonwealth on both sides, because it will lose its revenue and have its expenditure increased. We can get as great a revenue as we like, if we choose to spoil the protective incidence of the Tariff, or to load it with revenue duties in addition to protective duties. The business-like course for us to adopt is to take up again the scheme of the honorable member for Mernda. He showed us how it would fit into the 25s. per head proposal. He pointed out the difference between his original scheme and that put forward by the honorable member for Hume when Treasurer of the last Deakin Government, the latter extending the number of years in which the contributions should be made by the Commonwealth to the States, and making other variations which did not, however, affect the principle. He showed how the 25s. per head contribution, if continued until the population reached a little over 7,000,000, would amount to the total interest on the State debts, and proved that, with the present rate of increase of population, that point would be reached at just about the same period as was aimed at in the Lyne-Deakin scheme. That is my scheme. It is the scheme I support, and I am satisfied that every business man in the House will support it also,- if he is allowed to have a free hand and to exercise his individual judgment. Honorable members must remember that that scheme was not put forward as a party proposal. It was formulated by a financial man of no mean standing, wholly and solely for the purpose of settling the problem for ever on a financial basis, and of doing justice to Commonwealth and States alike. Carry out that scheme, and you have finality, as the Minister of External Affairs said at Toowoomba in the presence of the Prime Minister. That honorable gentleman called it ‘ 1 the Deakin Government’s scheme “ at that time, and declared that it would, if adopted, put an end to all the existing friction and trouble - :a consummation which is absolutely necessary in the interests of the progress of Australia and of the proper paramountry of the National Parliament. It is well to repeat, as the honorable member for Mernda pointed out, that his scheme did no injustice to the States. I have been sorry to hear honorable members say, by way of interjection, even after the honorable member for Mernda spoke the other night, that his scheme would injure the States. I do not know whether those honorable members heard the honorable member for Mernda. I have already referred to their magnificent attendances when that speech, and the speeches of the honorable member for Flinders and the honorable member for Parkes were being made. I might even add to those the speech of the honorable member for Balaclava to-day. He was honoured, when speaking, with the presence of about eight Ministerialists, and for a quarter of an hour there was not even a Minister in the chamber. The honorable member for Mernda pointed out that the States will not be deprived of revenue if their debts are taken over.
– The honorable member is making a great mistake. I do not think that at any time all the Ministers were absent from the chamber when the honorable member for Balaclava was speaking.
– I do not know how the Minister of Defence can contradict me, seeing that he was not in the chamber at the time.
– I was in the chamber during nearly the whole of that speech.
– I assert emphatically and deliberately that the Postmaster-General, who was in charge of the Chamber this morning, went out, and was away for at least a quarter of an hour before his place was taken by the Minister of External affairs. I challenge the Minister of Defence, or anybody else, to contradict that statement.
– It is incorrect.
– That assertion shows how little value can be placed on the interjections of the Minister of Defence. I have often paid considerable attention to interjections by him to the effect that certain statements were incorrect, because I assumed that he was speaking with knowledge, but in the future I shall attach no weight to any assertion of that character coming from him. The honorable member for Mernda showed clearly that it is not correct to say that the States require the money it is proposed to give them to carry on their vast and expensive works, because all the money that they have received up to the present from the Commonwealth has not been sufficient to pa: the interest on their debts. If we take over the debts, and apply the money towards the interest,- the States will be no worse off than they are at present. They will have all the rest of their revenue, as they have now, to carry on their developmental works. The interesting balance-sheet prepared by the honorable member for Mernda, and incorporated in Hansard, shows clearly and emphatically, and beyond dispute, that the States have had no money from the Commonwealth that they could apply to developmental works, because it has all gone to pay the interest on the debts. Not even the Minister of Defence would dare to assert that that balancesheet is incorrect - and that is saying a great deal.
– That is a most insulting innuendo.
– I hope that no attempt will be made by the Government to place any of its supporters in a false position in regard to this matter, but that they will be left free to do what they think best in the interests of Australia.
– The honorable member seems to assume that the supporters of the Government do not consider themselves free.
– I assume so because the strong appeals which have been made by Ministerialists have received no recognition from the Prime Minister. He has not even given a nod of his head, though one of them thought that he did on one occasion. It should be realized that the matter in hand is of infinitely greater importance than the interests of parties. What would be the loss of our seats at the next election compared with the injury which would ‘be done to Australia by shackling this Parliament? Leg-roping is too weak a word. A leg rope may be broken, but it would take a revolution to break these shackles. Why should we store up trouble for those who are to come after us ? I have never known a responsibility so great as that which now rests on honorable members. The proposed arrangement is not to be for a day only. We cannot say, “ It will see us through, and, ‘ after us, the Deluge.’ “ The settlement will affect those who follow us. Few of us who voted for Federation hope to see the full accomplishment of the benefits of that step. We voted for it because we thought that it would result in good to Australia. When we become a population of 20,000,000, in the time spoken of by the honorable member for Mernda, what will be the position of the Commonwealth if it has to raise ^25,000,000 for the Governments of the States to spend without the odium and trouble of taxing their people? How will the Commonwealth develop the Northern Territory, construct its railways, and provide for, not merely the conservation of water for irrigation, but also for its supply to such places as the Tanami gold-fields?
– Has the Commonwealth been asked to give a water supply to that gold-field ?
– I do not think it necessary to take notice of a frivolous interjection by one who has not the faintest idea of the seriousness and importance of the question which is being discussed.
– To talk about giving a water supply to Tanami is frivolous enough.
– That is what was said by those who opposed the Treasurer’s action in giving a water supply to Coolgardie. No doubt, when water supplies are needed in the future for places in the Northern
Territory, he will, if in power, be one of the first to say, “ Let them be given.”
– Much of the Northern Territory will be of little use without a water supply.
– Exactly. Central Australia will be useless unless supplied with water. How can the Commonwealth undertake these works if it is shackled in the way proposed? Once the proposed agreement is put into the Constitution, it will require almost a revolution to take it out again. We have no right, in the interests of party, to create such trouble for the future. I hope that the Prime Minister will respond to the appeals which have been made to him, not by children, but by men who have held high positions in the Parliaments of their States, and who knew the weight of their words. They cannot be told to take back their words or put the Government out of office. No vote on this question would do that. It is necessary to have an Opposition willing to take office in order to dislodge a Ministry. The members of the Opposition have not made this a party question, each of them being free to vote as he thinks proper regarding it. The scheme can be defeated by the Opposition only with the assistance of Ministerialists, and such a combination would not be formed for the purpose of getting office. Ministers should either take back their proposal, or ask the country what it thinks of their action. I have already said that I would approve of the adoption of the scheme of the honorable member for Mernda, or, to give it its later name, of the Deakin-Lyne scheme, as a permanent settlement. That scheme should have been put forward by this Ministry, seeing that it has such a strong following. As another scheme has been proposed, I ask the Government to remember the Fusion agreement, its declaration on this subject in its policy statement, the situation outlined in the letters of the Prime Minister to the Premier of New South Wales, and the suggestion of the Argus for an interim agreement for three years.
– Three years?
– I should like that term to be fixed, because it would force the next Parliament to settle the matter. The longer we delay making a permanent settlement, the greater will be the trouble.
– The honorable member is now opposing a permanent settlement.
– The Government proposal does not affect the State debts at all, and the financial question cannot be settled without providing for the taking over of the debts. It is significant that there are to be two referenda. When the Treasurer was asked last night why this is proposed, he said, “ We wish to give the people greater latitude. They may vote for one proposal and reject the other.” They are really being invited to do that. The Premiers, in the political dark hole of Calcutta in which they conferred with the Prime Minister, promised to support the Fusion party and the agreement which is now being discussed, but they were prepared to allow the proposal relating to the debts to look after itself. Why approach the States in regard to these matters? It would be well to obtain a harmonious settlement, if possible, but the Constitution has imposed upon this Parliament the duty of coming to a determination. The people accepted the Constitution on the advice of the Premiers of the day. As the Treasurer said at one of the Conferences, this Parliament represents the same people as do the State Parliaments, and if our legislation seems to prejudice their interests, they can remedy their grievances at the ballot-box. Therefore, we should accept our constitutional responsibility. As a permanent settlement cannot be made now, let us adopt an interim agreement. As I have said, I should like that interim agreement to be for three years, but, for the sake of peace, I would vote for an agreement for five years. That period, however, would be long enough. Nothing would be gained by adopting a period of fifteen or twenty years. There are difficulties surrounding the settlement of this question, and the ship of State ma) be in a dangerous position, but I say -
In spite of rock and tempest roar,
In spite of false lights on the shore,
Sail on, nor fear to breast the sea,
Our hearts, our hopes, our prayers, our fears,
Our faith triumphant o’er our fears
Are all with thee, are all with thee.
– The appeal of the honorable member for Gippsland to the House not to make this a party question is opportune, inasmuch as many members seem so to regard it. The Prime Minister, when speaking to the motion, said that it “ leaves the fate of the Ministry unaffected,” and told us later that “ if we are not honestly convinced that this is the best and the wisest scheme, it is our duty to say so.”
I feel it my duty to say that this is not the best, wisest, or most equitable scheme which could be propounded by any Government or any Parliament. I say “ by any Parliament “ because ] think that Parliament” should be taken into its confidence by a Government in regard to any agreement which is to last for fifty or sixty years. I_ was in favour of the last Conference, although 1 disapproved of all previous ones. My view has been that the. Commonwealth Government should make known its financial policy to the Sitates, and that they should arrange for their financial needs accordingly. The Prime Minister, in conferring with the Premiers of the States on this occasion, had one or two difficulties to face. His Government was confronted with a deficit of £1,200,000, proposed to be met by the issue of short-dated ‘bills, Treasury bonds, or an arrangement with the States. When speaking on the Budget, I said that it was unsound to provide for the payment of old-age pensions with borrowed money, but that I thought that if the Premiers were approached, they would be willing to make provision for the expenditure, seeing that three of the States would be relieved of their obligations in this respect, while the other three would obtain pensions for their citizens much sooner than could otherwise be arranged for. The Minister of Defence scouted the idea, but I am happy to say that the timelysuggestion was acted on, and the Government have the promise of the States to find , £600,000 this year for the payment of old-age pensions. The Prime Minister was confronted with the further fact that next year he will be short £1,000,000; and although this was referred- to by the honorable gentleman himself, it has not, so far, been mentioned in this debate. There has to be provided £1,600,000 in order to keep faith with the poor old people, who have claims on our resources quite as great : as those of our public servants. But the Prime Minister, having stated his requirements to the Premiers, said there must be some definite arrangement, so that the Commonwealth should be able to pay what was required from its own resources, and not be subject to the whims of the States, who might give grudgingly. He told the States that he would require £3, 100,000 forthe future in order to keep faith in regard to the administration of old-age pensions, lighthouses, and quarantine ; and provision is made under the agreement to that end. No preparation, how ever, has been made for future payments under the naval agreement ; and on this point we have yet to hear a good deal. The Prime Minister, having made these facts clear to the Premiers, practically threw his proposals on the table and said, “ You may divide the balance amongst yourselves.” The Premier of Western Australia said that the condition on which that State would find a proportion of the £1,600,000 was the payment to it of £3,250,000 - the capitalized sum of £250,000 per annum, to be liquidated at the rate of , £10,000 a year. Those States which had not Old-age PensionsActs declined to contribute as much as those States which have, although it was felt incumbent on all the States to make provision for the aged poor. Here we see the States grabbing as much as possible; and the State of New Sotuh. Wales has been called upon to pay all the money demanded by the other States. I do not regard this as a fiscal question, but as a financial question pure and simple. The Prime Minister put the matter very fairly ; and, therefore, I cannot understand honorable members devoting so much attention to statistics relating to the raising of revenue tnrough the Customs. The honorable gentleman said that we have the Tariff in our own hands, subject to no conditions and no deductions - that it is for us, when need arises, to make the Tariff more Protective or more revenue-producing.
– That is our position now, but if we adopt the agreement we shall not have the same liberty.
– We shall have just as much liberty whatever agreement may be adopted ; and there is no doubt we shall have to alter the Tariff before very long. The Prime Minister said that, as duties that are Protective become effective, the returns from them will decline, and that the Tariff will be adapted and readapted to the needs of the industries of the country. That is the Protectionists’ contention, and it is sound from their ;;point of view. If it is necessary to raise more money, says the honorable gentleman, we may do so, and in this connexion we have only to consult history and to see what was done in New South Wales. In that State the wageearners were relieved of taxation amounting to £800,000 a year, while the burden was placed on the shoulders of those best able to bear if. If we desire a Protectionist Tariff we can have one, and in the same
Tariff enormous sums of money may be raised on manufactures which do not receive Protection. That position the Prime Minister put very clearly and tersely before the House; but when the honorable gentleman told the States that they could do what they liked with the balance, so long as the Commonwealth received £3.100.000, I think he acted most unfairly to the State of New South Wales, which was at the mercy of the majority. The Premier of New South Wales, when he returned from the Conference, said that his State would lose £660,000 a year under the scheme, according to which Western Australia is to be paid the capitalized sura of £3,250,000 - that, as a matter of fact, New South Wales will have to pay £40,000 a year of this sum which, according to the Premier, will increase her loss to £700,000 a year, although, according to . the Prime Minister, that State will lose £1,066,519 a year. A remarkable feature is that Victoria will lose but £370,053 a year, although the difference between the population of the two States is not great. When we entered Federation, the price arranged upon was the retention by the Commonwealth Government of one-fourth of the net Customs and Excise revenue.
– For ten years only.
– -That was the price of Federation - the cost of starting and lubricating the machinery- to say nothing of the services taken over. The Commonwealth really gets nothing excessive; and what we do is to pay for the services which otherwise would have to be conducted by the States themselves. The States suffer no loss collectively by our taking over the services; some of them may lose more than their proportion, but onefourth of the Customs and Excise revenue is the price of Federation, and it is the balance of the three-fourths with which we have to deal and not with the onefourth. The operation of the Braddon section will terminate shortly; and, with that in view, bookkeeping statistics have been in preparation at the borders for a number of years. It is most unsatisfactory that bookkeeping should be necessary for a longer period than that provided in the Constitution; but the collection of statistics, made at enormous expense, should not go for nothing; the available data should be utilized in the interests of the States rather than thrown aside, as was done when the Conference took place. Whilst the Prime Minister will £et £3»17°,945 under, what is called the Melbourne agreement, that will not carry him far, because next year he will require £1,000,000, which will have to be debited to the year following, seeing that it is anticipatory. That money will have to be deducted in the second year from now, when the balance available to the Prime Minister will be £2,100,000 - indeed, rather less than ,£2,000,000, considering that he has to pay the State of Western Australia a large sum annually for twenty-five years. If an accident happens at the elections, the new Parliament will be confronted with the possibility of having to pay invalid pensions.
– What does the honorable member regard as an “accident”?
– I shall show where the accident may be. I refer to the defeat of the Government. If t’he payment of those pensions be decided upon by a mere stroke of the pen, the Prime Minister, or his successor, will have lost all the advantages he sought from the Premiers at the Conference, and his balance will have gone. As to the interjection by the honorable member for Grey, I may say that the stroke of the pen is not an accident, but the deliberate act of the GovernorGeneral on the advice of his Ministers.
– I was referring to an “accident” at the general election.
– The late Government advised that old-age pensions should become payable, though there was no money available; and I think that it was’, politically, most immoral to gazette the payment when the money was not provided. It has landed us in a deficit of £1,200,000; but the same thing may be done again, and with some excuse, inasmuch as invalid pensions are authorized in an Act deliberately passed with the approval of all sections of the House, and funds may be obtainable. I, personally, am in favour of bringing that part of the Act into operation as soon as we have the money. If it is said that we have not at our disposal the necessary funds and cannot obtain them- the Act should be repealed. We should not pass a measure unless we intend to give effect to it. If at the next general election the Labour party were returned with a majority they would take steps immediately to bring the Act into operation, assuming that the necessary funds were available; but if they were routed, as in all probability they will be-
– The wish is father to the thought. There will be a lot of Labour men in this House after the honorable member has ceased to be a member of it.
– I shall not be here for all time. I desire to deal fairly with this question. Some of the greatest parties in Great Britain have been from time to time routed at the polls. That has been the experience both of the Liberal party and the Conservative party in England, and the Labour party here may be routed at the next general election. If they are, more good will have been done for Australia than would be effected by the people in returning them in a majority. If they are returned in a minority a reaction in Labour and Socialist circles will at once take place, and the moderates of the Labour party will probably seek an alliance with the advanced Liberals on this side of the House. No more advanced Liberal than the Prime Minister could be found. In that respect he is far ahead of most of his colleagues, and I think that the moderate section of the Labour party - I exclude, of course, the Socialists who would nationalize the sources of production, distribution, and exchange - could form an alliance with him. When the Labour Ministry was defeated the London Times stated that such an alliance as I have indicated should be brought about, and I am not quite certain that any great harm would follow from it. The extremists would certainly be curbed. In’ passing, I may say that it is well to have extremists on both sides. The Prime Minister himself is an extremist, and will keep his Ministry well up to the mark. There are advanced Liberals on this side of the House just as’ there are among the Opposition honorable members who, although unconscious of the fact, are Conservatives. Some of the State Premiers who met in Conference and drew up this agreement had not the confidence of their respective Parliaments nor of the electors. The Queensland Premier, for instance, had a majority of one, and immediately after indorsing an agreement which would tie up the Commonwealth for all time he returned to Brisbane and asked the Governor to grant him a dissolution. Having learned from an influential source that he could obtain a dissolution he asked for it, the request was granted, and he has gone to the country in the hope of securing a majority that will enable his Government to carry on. Then, again, the Government of South Australia has a majority of only one, which may disappear at any moment. Surely Ministers so situated are not competent to make an agreement such as that now before us. The Federal Parliament represents the people, and to it belongs the duty of drawing up financial proposals for submission to the electors. The question is not one upon which a Government should be brought into existence or turned out of office. It should be our duty to frame a fair proposition for submission to the people, and, having done so, we should call upon them to support it. We certainly ought not to ask them to support an unjust scheme which has in it the elements of robbery. Tasmania is most anxious that this agreement shall remain in force for all time. The people of that State have gained more from Federation than have the people of any other State of the Union.
– The honorable member is mistaken.
– I know that it will be said that, as the result of Federation, New South Wales and Victoria have gained a largely increased trade with Tasmania, but the question should not be viewed from that stand-point alone. What we have to consider is the way in which the masses of the people have been affected. 1 have the authority of the honorable member for Denison, whom we all respect and revere, for the statement that the masses of the people of Tasmania who do not use intoxicants or narcotics are not called upon to contribute, to the cost of government, more than 135. per head by way of Customs duties. That is something over which we may well rejoice. To provide more for the cost of government, Tasmania has resorted to direct taxation, and has placed the burden upon those who are able to bear it. Those who have gained wealth by reason of the progress of Australia and industry of the masses are called upon by means of a land tax and an income tax to contribute to the cost of government a proportion which they were not formerly called upon to bear.
– The Tasmanian income tax starts at £100. There is not much wealth about that.
– The honorable member for Franklin last night made an appeal to the House on behalf of the “ fat men “ of Tasmania. “ Will you take more money out of the pockets of the fat men of
Tasmania? Should we not rather take it out of the pockets of the poor?” was the burden of his plea.
– He did not say that.
– That was the effect of his statement. When Federation was being advocated some of the principal leaders in the movement declared that if it were brought about one State would not be called upon to pay the debts of another. Each State, it was said, would have to provide for the expenditure within its boundaries. Are we going now to pauperize Tasmania by handing to her money taken from the larger States ? Are we, by means of taxation, to take money out of the pockets of the poor of the larger States so that the rich of Tasmania may not be called upon to pay that which they ought to do?
– The honorable member is quite mistaken.
– Why should we take out of the pockets of the poor of the larger States money to make good a deficiency in the finances of Tasmania? The receipt of such assistance would be unworthy of Tasmania, and would mean breaking faith with the people of Australia, who were told that they would get for all time that which they, subscribed.
– Tasmania has never asked for anything.
– It is almost disgusting to hear honorable members first on one side of the House, and then on the other, clamouring for Tasmanian wants, and yet unprepared to agree to the expenditure of a shilling if it will have to be borne by that State. In the immediate past it contributed largely to the starvation of postal necessities and telephone proposals.
– Tasmania has the highest rate of direct taxation.
Several honorable members’ interjecting,
Mr.- SPEAKER.- I ask honorable members not to interrupt the honorable member for Robertson by suggestions or comments. They may be made at a later stage.
– I can only provide honorable members with an argument ; I cannot provide them with an understanding.
– If the honorable member would provide the House with a few facts we should be satisfied.
– I have supported my statement as to Tasmania having benefited by Federation by quoting the statement of the honorable member for Denison that the masses in that State who do not use intoxicants or narcotics contribute only 13s. per head to the Customs and Excise revenue.
– I said that that was the contribution paid by the masses in Australia who did not use intoxicants or narcotics.
– A misunderstanding may have arisen as to the actual figures, but the position I take up is a sound one. Tasmania has a shortage and proposes to make it good by taxing the rich. If there was in operation there a Tariff as high as that which prevailed in Tasmania prior to Federation the rich would not be contributing to the cost of government as much as they do now, and the poor would be paying more. That being so, the poor people of Tasmania are better off under Federation than, they were before. That State has reached the position which New South Wales occupied when the right honorable member for East Sydney, as Premier, reduced the Customs burden on the people to the extent of .£800,000 per annum and called upon the rich to contribute more by way of direct taxation. The rich naturally groaned and were very disagreeable ; but that is always the position when direct taxation is resorted to. No Government worthy of the name would tax the poor. The most commendable form of legislation is that which taxes those who have instead of those who have not-
– Lloyd-George !
– I think the honorable member will find that I have paraphrazed a Scriptural quotation. Possibly he means Henry George, who was a Single Taxer. He would not tax the poor, but he pointed out that the poor did not realize that they were being taxed by this form of indirect taxation. He likened it to plucking the goose without making it cry. He said that the poor were paying taxes on many things on their breakfast tables, although they did not know it, but the rich man knows when he is paying, and he cries. He uses his influence in such a way that few are able to withstand it. That is why the members representing Tasmania are always clamouring against expenditure. They know from the past that in their State the influence of the moneyed class is against expenditure, because it will lessen the amount of Customs duties returned to them. Tasmanian representatives are ask- ing, not for 25s., but for 30s., per head. They want more, so that the rich shall pay less in taxation. They were against the Commonwealth keeping the surplus revenue, because the rich would have to pay more. They are opposed to paying their proportion of 3s. per head for old-age pensions. They say: “No, let the poor people in the large States of Victoria and New South Wales pay 3s. a head, but let us pay 2s. If we pay 3s., the rich people will have to pay more.” I hope that the representatives of Tasmania are now satisfied with my position as regards their State.
– There should be no taxation without representation.
– That principle was laid down by John Stuart Mill. That is why we have manhood suffrage; but what about a State which has overrepresentation, as Tasmania has? According to the Constitution, Tasmania must have not less than five representatives in this Chamber. Even if she had only half her present population, she would not have less than five members ; but to-day she has not sufficient population to entitle her to five members in this Chamber upon the basis of the representation of New South Wales, Victoria, and other States of the Union. Western Australia also came in under that provision, but . she is gaining population, and possibly has now become entitled. Tasmania is over-represented in this Parliament, and yet she not only clamours for a voice in all legislation, but actually claims representation as a State in the Government. She has in the Senate six members who claim to cast’ a vote of equal value -with that of senators from Victoria or New South Wales. Although New South Wales has nearly onethird of the population of the Commonwealth, and, I suppose, nine times the population of Tasmania, she has no more senators than Tasmania has. The people of Tasmania have been most liberally treated. There was a reason for bringing Tasmania into the Union, because she is adjacent to the mainland. Newfoundland, the oldest Colony of Great Britain, was left out of the Federation of British North Ame’rica, and she is still outside it. Tasmania was taken into our Commonwealth so as to avoid that experience.
– The honorable member is right. She was “ taken in.”
– The greatest blessing that ever happened to Tasmania was her inclusion in the Commonwealth. I have heard and read, upon good authority, that if she were out of the Union, and the Germans had an opportunity, they, would take her. She should really have been annexed to Victoria.
– It was a Tasmanian that discovered Victoria.
– Will the honorable member connect these remarks with the financial agreement?
– Yes. Tasmania is one of the six States which are to benefit under the proposed agreement. It is a Customs arrangement, and the people of Tasmania complain, that at present they lose £20,000 a year through the people of Victoria manufacturing for them.
– The honorable member is wrong. It is because goods imported from England pay duty in Victoria, and filter over to Tasmania.
– In that case, Tasmania -loses nothing, because she is protected by the bookkeeping sections of the Constitution. Tasmania., and not Victoria, receives the benefit of goods which are imported into Victoria and consumed iri Tasmania.
– If an Inter-State certificate is not taken, Tasmania loses.
– Tasmania is’ sufficiently wide awake to demand InterState certificates wherever they are necessary. Perhaps honorable members are not aware that the annexation of Tasmania was at one time a live question in Victoria. I would remind the honorable member for Denison that Tasmania was at one time owned by New South Wales, and so were Victoria and Queensland, and a part of South Australia.
– Let me tell the honorable member for Wakefield that a large tract of South Australia was handed over to South Australia after the Northern Territory was handed over to her. I think the representatives of Tasmania are getting a little more gruel than they are able to digest. I hope we shall hear no more whining from that State. I have here two or three tables which I propose to hand to you, Mr. Speaker, for insertion in Hansard. ‘ I shall summarize the figures contained in them. They have been carefully prepared, and I challenge the financial experts of the
House to show any flaw in the scheme which they embody. It is a more attractive scheme than any that has yet been put forward, inasmuch as it will be equitable, and under it States that should pay will be called upon to do so, and Tasmania and other States will not be under the stigma of being pauperized.
I have taken the amounts paid to the States in 1907-8.
-t- That was the biggestyear we ever had.
– Yes, but 1 believe we had another excellent year in 1902-3.
– Because of the introduction of the Tariff.
– I shall be glad if the honorable member for Mernda will allow me to proceed. We have heard a great deal of his scheme, but the bottom was knocked out of it by Senator Pulsford. He has not put the bottom back again, and until he does so I cannot entertain it. My tables show the rates of interest paid upon the loans of the various States, and I claim that the most equitable means of adjusting the finances will be to give to every State the capitalized value of the revenue payable to it. I give those capitalized values in the tables.
– Capitalized values of what ?
– Of the amounts paid to the States in 1.907-8.
– A boom vear.
– It does not matter what year we take. I have taken the year 1907-8 because we have the figures complete. The capitalized value of the sums paid to the States in 1967-8 is £248,000,000 odd, while the sums owing by the States to their creditors amount to £247,900,000 odd. .Honorable members, by referring to the above tables, may judge for themselves whether there is anything unsound in my propositions.
– They can do that without referring to the tables.
– I am afraid that my honorable friend, who is advancing into the sere and yellow leaf, may not see so much as he thinks he sees. I wish now to compare the Government scheme, or what is called the Melbourne scheme, with my suggested arrangement. The estimated population of the States is 4,435,000, and the amount payable to them in 1 9 10- 1 1 under the Melbourne scheme is estimated at £5,668,750. The interest on the public debts of Australia is £^8,839,695 ; and under the Melbourne agreement, if the whole of these debts were transferred to the Commonwealth, it would be necessary for the States to make up a deficiency of .£3,170,945. A contribution of 14s. 3d. per capita would give £3,159,937, the balance due to the States being £9115505, and to the Commonwealth £962,839. The cash value credited per annum to the States would be : To New South Wales, .£516,090; to Victoria, £367,860; and to Western Australia, £27,555 > while Queensland would have to find ,£549>476”; South Australia, £321,223; and Tasmania, ,£92,140. If the States were credited and debited with the sums respectively due to them, New South Wales would pay ,£668,085, not £1,066,519 as proposed (by the Melbourne agreement; Victoria, £55i,977> not ^370,053; Queensland, ^£958,451, not £884,033 ; South Australia, £620,473, not £599,896 ; Western Australia, £lS3>345> not <£”3;°4i ; and Tasmania, £228,940, not £137,403- To sum up, New South Wales would gain under my scheme - as compared with the Melbourne scheme - £398,434; while Victoria would lose ,£181,924; Queensland, £74,418; South Australia, ,£20,577 ; Western Australia, .£70,304; and Tasmania, £91, 537. Under the Melbourne agreement, the other States would benefit at the expense of New South Wales. But under my scheme, which has a proper actuarial basis, and is not based on a mere rough and ready estimate, no State would get more nor less than its due, and justice would be done all round. Obviously it is not right to call upon New South Wales for the sum of £1,066,519, and upon Victoria for only £370,053. The difference between the populations of the two. States does not justify such an arrangement, nor does the difference between their ‘public debts, although New South Wales has borrowed more than Victoria. The public debt of Queensland is very nearly as great as that of Victoria ; and as every State should be called upon to pay the interest on its debts, Queensland must necessarily pay a very large sum. Under the Melbourne agreement, however, no account is taken of the disparity between the indebtedness of the States which is to be wiped out by the Commonwealth, and for which the Commonwealth will become wholly responsible as loans are renewed or consolidated. My proposal, to which I invite attention, will survive criticism. It is actuarially sound, being based on a capitalized value of the amounts paid to the States in 1907-8. That is the date suggested in the Melbourne agreement, but any period would equally well serve for an instance in working out my proposal.” The price to be paid for Federation is one-fourth of the Customs and Excise revenue; but, in regard to the balance, the States should have their just dues. The scheme of the honorable member for Mernda was shown by the criticism of Senator Pulsford to be unsound. When the latter wrote to the public press, the former replied that he would make an answer shortly, but he has not yet done so.
– I did not write to the press at all on the subject.
– I refer the honorable gentleman to the Hansard report for last year for Senator Pulsford’s criticism of his scheme. Senator Pulsford knocked the bottom out of the honorable member’s scheme, showing that it was that of a novice who did not know what he was about, and was past the thinking out of a problem such as this. It was pathetic to see the honorable member for Mernda recently sitting at the table to assist the Prime Minister in the elucidation of his proposals.
– Why has the honorable member for Robertson been so long in bringing forward his scheme?
– If the honorable member consults Hansard of some years back he will find that I suggested a scheme for the consolidation of the States debts vastly superior, perhaps, in the minds of some people, to that which is so highly thought of by him. The proposal I now submit is an equitable one, based on the actual capitalized value of the sums paid to the States in 1907-8, which are the starting point of the Melbourne agreement now under consideration. Under my scheme, the smaller States would not be pauperised, but would have the revenue from the debts assets, which represent hundreds of borrowed millions. The interest and the principal would be liquidated in something like, sixty years by a sinking fund ; and the Commonwealth would gain by the consolidation of the loans. What would the Commonwealth do with the money? Would the people sanction the dropping of the balance into the Yarra? The States would suffer nothing at the hands of the Commonwealth, because when we had money for which we had no use it would be our duty to pass it on to the States, who have the means of spending it? As an earnest of what the Commonwealth will do in the future r refer honorable members to the past. We have paid anything up to £6,000,000 to the States, without being called upon to do so, and we have paid it willingly, as I am sure we would again.
The contribution of 14s. 3d. would be statutory; and I point out to the Prime Minister, who is now present, that, while he talks of giving the States 25s. per head, he, in the same breath, speaks of taking from them the former sum. Instead of conjuring with figures and mystifying the people, why not say at once that the States shall pay the Commonwealth 14s. 3d. per capita? It is not necessary to provide for the contribution in the Constitution, seeing that we represent the same people ; and the arrangement would be re-adjustable, because, as soon as less than 14s. 3d. was necessary, so much less would be paid by the States. The Prime Minister said, on the authority of the Treasurer, that, covering a period of years, there would be a saving of .£26,000,000 by the consolidation of the public debts ; and, if that be so, what would be done with those millions? They would, no doubt, be put to some legitimate purpose for the benefit of the States of the Union. -There would be, under the consolidation gains, money enough and to spare for expanding requirements, so that more than 14s. 3d. would not be necessary. Under the Prime Minister’s proposals we see that, in three years from the present date, if invalid pensions be brought into operation, he will be in the same position that he is in today - on bedrock. The proposal to pay 25s. per head is unsound and unjust, inasmuch as it has no basis, and actuarially will not work to any just conclusion, start where we may. It is a haphazard arrangement - a mere tossing down on the table of the State Premiers so many millions of money and saying, “ Distribute that sum as you think fit.” At the Conference the majority carried the day ; and then Western Australia ,said that she would require £3,250,000 spread over annual diminishing payments during a period of twenty-five years.
– Out of her own contributions to the Commonwealth revenue.
– I have heard of that argument before. It is said that the people of Western Australia pay more per head than do the people of the other States, and, consequently, are justified in asking for a greater return; but the Western Australian people had their cake and ate it.
– We do not ask for the whole of the cake back.
– I beg to draw attention to the state of the House. [Quorum formed.]
– The honorable member for Perth infers that special provision should be made for Western Australia, because the people of that State pay more per head in Customs and Excise. But the reason for the increased sum per head is that the State contains a larger adult male population than does, say, the State of Victoria, and, therefore, more dutiable goods are consumed.
– And it must not be forgotten that £1,000 a day is sent from Western Australia through the Money Order Office.
– If the adult males from Victoria had taken their wives and babies with them to Western Australia, the rate in Victoria would have been higher per head, and that in Western Australia lower, seeing that every infant would be considered in estimating the population. When I visited Western Australia, the party included the Prime Minister, the Treasurer - “ The Emperor of the West”” - and Senator Trenwith, and wherever we went the last-mentioned was greeted bv the Victorians there as an old friend ; and the interjection of. the honorable member for Fremantle only shows what a great number of the Western Australian wage-earners are from Victoria.
– The Western Australian people only ask for a part of what they have paid.
– Under my proposal Western Australia would be given justice ; she would be credited with all the revenue paid through the Customs, and no debit made on account of the families left in the eastern Slates. The Prime Minister urged with much force that we should trust the people, and declared that, on the face of it, his proposal ought to be supported by the House, since it is one which will be decided, not by this Parliament, but by the people themselves. He seemed to think that we should display weakness in refusing to allow the agreement in its present form to be submitted to the people. But the reason why we think that it should not be sent to the people in a form which may subsequently be found to be unjust and unsound is that if it were once embodied in the Constitution, it would not be easy if desired by the majority of the electors, to take it out. It could be eliminated from the Constitution only by the will of a majority of the people, in a majority of the States of the Commonwealth. When the larger States reached a stage of development at which the burden cast upon them by this agreement would be far more “oppressive than it would be at the present time, they would clamour for an amendment of the Constitution, but the smaller States, representing a minority of the people of the Commonwealth, could prevent that amendment being made. South Australia is one of the largest in territory, but from the stand-point of population she is only a small State, and with Tasmania, Western Australia and Queensland, representing only one-third of the population of the Commonwealth, could prevent effect being given to. the will of the remaining two-thirds in New South Wales and Victoria. It is for that reason that I and others object to the agreement providing for the return to the States for all time of 25s. per head of the population being inserted in the Constitution. The smaller States, like Oliver Twist, ask for more.
– And of course poor New South Wales is the milch cow of the Commonwealth.
– I defy the honorable member to prove that she is not.
– She would not enter the Federation until she was squared bv the gift of the Federal Capital.
– And even in that respect, the Federal Parliament has not kept faith with her. Justice must be done to New South Wales. I have done some “ stumping “ in that State in regard to this agreement, and have had with me every meeting that I have addressed on the subject. I have also received letters stating that I have improved my position in my electorate by my expounding the falseness of this scheme. I am surprised that the honorable member for Mernda should be a party to a scheme by which New South Wales, whose population is comparatively little in excess of that pf Victoria, would be called upon to pay £696,466 per annum more than would, that State. I am sure that the people of Victoria, if the position were properly explained to them, would be prepared to do what is fair ; and I appeal to the Prime Minister to place before the Premiers an equitable scheme. The people of New South Wales will expect him, as the mouthpiece of this Parliament, to propound a scheme which has not in it the element of unfairness ; a scheme that will not permit the impecunious States to rob the wealthy State of New South
Wales, a scheme that will not allow Tasmania to receivte large sums of money, drawn from the masses of the people in the larger States, in order that it may avoid taxing the wealthy members of its community. I hope that no one will be so imposed upon as to be led to believe that the scheme propounded by the honorable member for Mernda is a sound one. The Prime Minister, in speaking well of it, can only be patronizing the honorable member. The Treasury officials will tell honorable members that it is unsound and does not provide for justice being done to the larger States. A concise scheme should be submitted, to the State Premiers for acceptance and the payment made statutory. There should be no tinkering with the Constitution. There should, of course, be a referendum to provide for the taking over of the debts of the States which have accumulated since the establishment of Federation, but an arrangement with the States by which the Commonwealth would be indemnified to the extent of 14s. 3d. per head of the population would be but statutory. That would prevent any shortage in the future. Under the agreement now before us, however, the Commonwealth would be faced with a deficit. Invalid pensions must be paid or the provision repealed. As a member of a previous Government, the Prime Minister favoured the payment of invalid pensions, and I pin my faith to him. I believe that he is both progressive and sincere, and that part of the Invalid and Old-age Pensions Act, which provides for the payment of invalid pensions, must either be repealed or honoured. If it is honoured, then, even under the scheme now submitted to us by the Government, we shall have a shortage in the finances of the Commonwealth when proposed obligations are assumed. Under the arrangement that I suggest, however, there would not and could not be a deficiency, and justice would be done to the States. Every pound taken from the States would be used by the Commonwealth in liquidating the cost of a service which would otherwise be a charge upon them. We are one people with one destiny -
Sail on, O union strong and great !
Humanity with all its fears,
With all the hopes of future years,
Is hanging breathless on thy fate ‘
– Irise to address myself to the subject under discussion with a great deal of diffidence, because, in the first place, I have not yet become properly acclimatised in the atmosphere of the House, and consequently feel a little nervous ; while, in the second place, I recognise the far-reaching importance of the question before us. It is undoubtedly greater than any other question that has engaged the attention of the Federal Parliament. The lucid and illuminating exposition of the financial position given by the Prime Minister has, in my opinion, raised Federation immeasurably in the public estimation. It has kindled hope and expectation in the minds of many people who were fearful lest with the cessation of the operation of the Braddon clause, there should be eliminated altogether from the Constitution that protection which it afforded the States, and without which there could have been no Federation. I have listened with very great interest to the analytical . and instructive speeches of the honorable member for Mernda, the honorable member for Flinders, and the honorable member for Parkes. I readily admit that their criticism demands our most earnest and careful attention, because of the authority with which they speak on financial questions; but I cannot by any means accept their conclusions. I wish particularly to congratulate the honorable member for North Sydney upon his magnificent, practical and forcible address on this question. That speech came from an honorable member who enjoys the confidence of every member on both sides of the House. It was entirely free from party bias or party considerations, and was similar to a statement which he made to the public press of Sydney many months ago before any idea of the combination which resulted in the Fusion on this side of the House was entertained at all. I congratulate my honorable friend all the more, because he voiced exactly my opinions on the matter, and I feel that his splendid speech will be highly appreciated throughout the length and breadth of the Commonwealth. I range myself by his side and intend to follow him in support of the agreement entirely as it stands. We have had a good many policies propounded during the debate, but there can be only one agreement, and I stand with the honorable member for North Sydney in his support of that submitted by the Government, because it is the best solution yet offered of the difficulty. I believe that throughout the Commonwealth, and particularly in the producing districts, it is catching on. It is going to be an extremely popular policy, because it meets pressing needs and breathes the true spirit of nationhood, in spite of what many professed Nationalists may say to the contrary. A good many of those who use the high sounding title of “Nationalist” were at one time, it should be remembered, anti-Federalists tight up to the hilt, and there is, there foa1., every reason to accept their present devin ration of faith with a considerable amount of suspicion. The Braddon section U pretty well understood by the people from one end of the Commonwealth to the other, and is particularly understood by the producers, at all events in South Australia, [ believe the farmers are more interested in the Braddon section than they are in anything else outside the Bible. If you speak to them about politics, they are bound in nine cases out of ten to introduce the Braddon section and to express their intense anxiety as to what rr.ay happen at the termination of the ten years’ period. As has already been pointed out, that section was, in the first instance, intended to permanently continue the return to the States of three-fourths of the Customs and Excise revenue, and not only 25s. -per capita, which is a very different thing. That section is the axis upon which all financial considerations turn. It is the crucial test to which the attention of the . people was invited, and it was the security which it offered to the people of the States that won the fight for the Union. The original intention of the framers of the Constitution undoubtedly was that it should be for all time, and the limitation that was put upon it was a compromise adopted in order to secure Federation at that time. The leaders of political thought, when the Constitution was put to the people with that limitation in it, urged the people to trust the National Parliament .to do ample justice to them at the end of the ten years’ period when that section became alterable. The prospective Commonwealth elector pledged the future of the country upon that trust. We should be recreant to that trust if we allowed any political or party consideration to prevail against the permanent continuance of that financial security which was paramount in the minds of those who framed the Constitution under which we are now governed. So far as the idea of Nationalism as against State Rights is concerned, the truest path to nationhood is the encouragement of the vigorous growth and development of every State of the Union. If we realize aright our obligations in this Parliament, they should lea3 us not only to defend the rights of the National Parliament, but just as earnestly to give the individual States a fair and honest deal. A national sentiment can be created only by a National Parliament which uses its powers in the direction of a discriminating interpretation of the people’s needs, and iri the faithful and conscientious discharge of public duties in a way that will win public confidence. I maintain that any such attitude as is altogether too manifest in the National Parliament to-day, instead of tending to promote the supremacy of that Parliament in the good will and affections of the people, will rather continue the friction which is now altogether too apparent from one end of the Commonwealth to the other. After all the stress that was placed -by the framers of the Constitution upon this principle of protection to the States, it is inconceivable that before ten years of the life of the Federal Parliament have passed by there should be such a strong and unreasoning desire on the part of so many in that Parliament to control the whole of the Customs and Excise revenue. The expression of that desire by so many members, in spite of the fact that the Federal Parliament has the whole field of taxation to cover, while the resources of the State Parliaments are exceedingly limited, is a striking comment on the foresight of the late Sir Edward Braddon in suggesting section 87. The experience of the United States- if we want an example from experience - should lead us to affirm the desirability of continuing to the States the protection which was afforded under that section. Throughout the history of that country the trouble of the National Parliament appears to -have been an embarrassment of riches, whilst the States have experienced a corresponding degree of poverty and difficulty. The fear of Federation in the minds of the people of Australia at the beginning was its cost, and that fear is not yet removed. I believe the majority of the people cling as tenaciously to the principle embodied _in theN Braddon section as they did at the beginning. I am sure that the most ardent Nationalist in this Parliament must admit that had it not been for the provision of the Braddon section Federation would have been impossible. The expectation on the part of the people of the States that, following the establishment of Federation, there would be a corresponding reduction in the cost of the Governments of the individual States, has not been realized.
– Hear, hear.
– I would remind the honorable member that from his point of view it is not likely to be realized, and it is a good thing for the Commonwealth that it has not been. On the contrary, the field of operations of the States has been extended from time to time, and, through the altered conditions, the present and prospective developments in the States must involve increasing financial provision. That very position constitutes the greatest hope for the future of the Commonwealth and of the National Parliament. The sharing of the Customs and Excise revenue between the National Parliament and the States, which was recognised as necessary at first, is a principle which ought to be recognised now. For every argument that could be advanced at the inception of Federation in favour of providing this safeguard, as a fair, prudent, and cautious thing to do, at least two arguments can be advanced now. The position of the States to-day shows how greatly they need this assistance from the Commonwealth revenues. Some speakers have urged the readjustment of the financial relations between the Commonwealth and the States to meet the necessities of the situation, from time to time, and a five-year, and even a threeyear, period has been mentioned. Such an arrangement would not promote the growth of a national spirit, but would intensify the distrust of this Parliament, if such distrust exists.- There is every reason for the equitable sharing of the Customs and Excise revenue between the Commonwealth and the States. The framers of the Constitution were the leading statesmen and the biggest minds in the political life of Australia at the time. They had had long training in the Parliaments of the States, and had had much administrative experience. They did not think for a moment that the Commonwealth Parliament would ever demand the control of the whole of the Customs and Excise .revenue, and were prepared to provide that threefourths of it should go to the States for all time. That provision was subsequently amended to give it force for ten years only ; but if it is to be contended that a -per capita return of 25s. is unreasonable, and likely to destroy the future supremacy of this Parliament, the position must be thoroughly investigated from every point of view. In this matter I follow implicitly the lead of the honorable member for North
Sydney, who has had wide experience, and possesses great practical knowledge. It will be in the interests of the National Parliament to do justice to the States. Those who propose periodical adjustments, and particularly the honorable member who has suggested a readjustment every three years, would place the States in the position of mendicants, making them come as suppliants to the Commonwealth for what properly belongs to them. It will pay the Commonwealth to recognise this right of the States to a share in the revenue. The miserable spirit which has prompted the suggestions to which 1 have referred is keeping alive the irritation in the States, whereas the proper settlement of the difficulty will greatly affect, both directly and indirectly, the future prosperity of the Commonwealth. Uncertainty regarding payments is of grave consequence to every State, and especially to the smaller ones. Each State has undertaken large liabilities, and, in the future, will have still greater obligations to face. But a State Government must hesitate to incur expenditure, so long as there is uncertainty as to the financial arrangements with the Commonwealth. The present position of affairs is retarding development. 1 know that that is so in South Australia, and have no doubt that it is so in every other State. It handicaps the settlement of land by the re-purchase of large estates for subdivision into smaller holdings. Do honorable members opposite wish to put any impediment in the way of land settlement ? The Governments of the States cannot vigorously prosecute this policy while they are uncertain what their returns from the Commonwealth will be. An adjustment for five years would not remove that uncertainty, because there would remain the possibility of a reduction in revenue at the end of that period. At the present time the State Treasurers must exercise great caution, and, no doubt, many undertakings are being postponed indefinitely pending a settlement of the financial relations between the Commonwealth and the States. This is not a party question. It is much bigger than a party question, and goes beyond considerations of the fate of a Government or of individual members. It is a question whose proper solution is vital to the best development of the Commonwealth. Not only is money required by the States for the repurchase of large holdings with a view to subdivision; it is also required to stimulate the occupation of
Crown lands which are at present unused. This can be done only by railway construction. South Australia has ahead of if a policy of railway construction which should be carried on uninterruptedly for seven or ten years. The Government of to-day, and every country representative in the local Parliament, feels that it is of the highest importance that a definite and continuing policy should be submitted ; but how can such an undertaking be entered upon while the State is uncertain as to what its return from the Commonwealth will be. An agreement covering a period of five, or even of ten, years would be no good. Of course, the States would have to bow to the inevitable, but those who have so much to say about the supremacy of this Parliament are striking a bigger blow at Federation than they are aware of. The increase of settlement by the subdivision of large estates, and the occupation and development of the unused Crown land, will ultimately mean an increase in revenue, and great material advantage to the whole of Australia. I should like to give one illustration as to the possibilities of development in this direction. During the last five years South Australia has opened up the Pinnaroo country. Six years ago the whole of that magnificent area was occupied by only three families, and did not return a penny into the Treasury, whereas to-day, as a consequence of the construction of a light line of railway, there is a population of about 2,500. That railway was unique in South Australian history, inasmuch as during its first year’s running it paid every penny of working expenses and interest, and, over and above, returned money into the Treasury. I know that some pin their faith to the subdivision of big estates, and desire to interfere with the State control in order to achieve that end; but the settlement of the Pinnaroo country has provided for as many families as has the expenditure of £1,000,000 in South Australia in the repurchase of estates. And what has been done at Pinnaroo is proposed in the district represented by the honorable member for Grey, with land of three times the area. Is that not the best possible policy, not only for the States, but for the Commonwealth? All these undertakings enlarge the scope and increase the need of the State Governments. Those needs are as great - indeed, in my opinion, they are greater than they were in pre.Federation days ; and such development as
I have described will add to the national prosperity, and supply the financial, needs of the Commonwealth Treasurer.
– There is similar development going on in Western Australia.
– I am reminded that in the western State the development and prospective development is as great, if not greater, than in South Australia; and what applies to those two States applies with infinitely more force to Queensland. Whereas in South Australia there are left 3,000,000 to 4,000,000 acres in the rainfall radius, there is five or ten times that area in Queensland, and the same may be said relatively of New South Wales, and of Victoria. Which is the more statesmanlike policy - to seek to provide the Treasurer with all the money he now needs by increasing the taxation of an already overburdened people, or to encourage the States, as this agreement will encourage them, to continue to bring large areas under settlement, and increase production again and again? With this increase of production will be opened fresh avenues of wealth-contributing forces, which will enrich, not only the State Treasurers, but the Federal Treasurer. I remind my honorable friends opposite that, in order to undertake these developmental works, the State Treasurers need all the encouragement which can be extended to them, and, on every ground of reason, deserve the concession proposed. Personally, I do not regard it as a concession, but as a matter of business. We are one people in partnership, and I have no time for a man who, calling himself a Nationalist, does- not recognise the needs of every State, and realize that assistance extended makes both States and ‘Commonwealth stronger and more prosperous in every direction. I’ see from the newspapers that the Victorian Government require 800 men for the railway service in the near future, and that for the 800 vacancies there are 9,000 applications. I am informed, and I make the statement, subject to correction, that 6,000 out of the 9,000 applications are from the country districts. That is a shocking state of affairs, and represents one of the problems that must be solved - the problem of the centralization and congestion of population in the cities and big towns. The six capitals of Australia today contain something like 36 per cent, of the whole population of the Commonwealth, and, according to the illustration I have just given, the evil, instead of being arrested and remedied, is being aggravated. What is the reason ? It is because the country is less attractive than are the cities to the young men. That .should not be so, because there are better chances of success by far on ihe land than could be found in the city. If the wages be higher in the city, the savings banks books in any State show larger amounts to the credit of the men working on the land. The prospects offered to-day by reason of the improvement in the conditions of country life, and the greater rewards offered for the cultivation of the soil, ought to reverse the stream. Another point of view is presented in the fact that a larger proportion of men who, with practically no capital, are able to go into business on their own account, are to be found in that position on the land. Land settlement throughout Australia, which is giving promise of a new and brighter future than was ever anticipated, ought to be encouraged in every way. This policy is involving the States in larger responsibilities, and it is making infinitely stronger the reasons which were good when the Braddon section was originally introduced into the Constitution. I hope that from that point of view - from the point of view of land settlement and development - this House will follow the Government, and will not only support the agreement, but will especially uphold its principal virtue so far as the States are concerned, and that is its permanence. I now wish to direct attention to certain statements made by the honorable member for North Sydney. He said that the Customs revenue- will be after 1910 a financial stream in regard, to which there are no riparian rights, and the Commonwealth has possession of the source. Without a very definite agreement it is extremely doubtful how much and for how long any of the tempting waters will be allowed te flow to those beyond.
That is the position, as affecting the States, which I wish to emphasize. Three or four honorable members have evolved a theory in regard to what should be done with reference to the agreement. Now I have to say that, in my opinion, only one agreement is possible, and that is the agreement submitted by the Government ; because, if this Parliament amends that agreement in any material direction, it ceases to be an agreement.
– Is that so?
– I should say so. If this Parliament amends that agreement without the concurrence of the other parties to it, it is no longer an agreement at all. What do honorable members propose to do if they practically kill the agreement by making material alterations in it? It simply means that fresh proposals would have to be submitted; and the submitting of fresh proposals means another Premiers’ Conference and consideration by another Parliament before the question can be permanently settled. Are honorable members prepared to make themselves responsible for that position? On what ground do certain honorable members appear so timid as to the ability of the National Parliament to carry out the agreement ? Much has been said about the possibility of the Customs and Excise revenue in future being insufficient to pay to the States 25s. per capita. I have indicated, not merely the possibility, but almost the certainty, of a larger development in the way of land settlement than we have known in Australia for the last thirty years. The places that I have enumerated do not exhaust the possibilities. There is also the northern portion of Australia, concerning which I would say that if that territory is not taken over and developed by the National Parliament within twelve or eighteen months of this date, it will be developed by the Parliament of South Australia. There is no doubt about that. In saying so, I am talking about what I know. I am expressing the determination of the Government and the majority of the Parliament of South Australia. But I shall have more to say on that subject when the Bill relating to the Northern Territory is under discussion. I simply mention the matter now in order to emphasize the point that extended land settlement will provide additional revenue, and will in future make both the States and the Commonwealth richer. Here is a means of solving the unemployed difficulty, and of creating fresh avenues from which will flow into our coffers wealth in the shape of taxation. The honorable member for Flinders quoted elaborate figures, no doubt very carefully and industriously prepared, in order to institute comparisons between the revenueproducing powers of the Tariffs of different nations. In justice to him, I must say that he admitted candidly and honestly that he merely quoted the figures for what they were worth. He did not claim that they were absolutely a reliable guide as to what might happen in regard to the Customs and Excise revenue of the Commonwealth in the future. The honorable member, in my opinion, was very wise when he did not claim too much for his argument, lt is often said that figures cannot lie, but it is also true that people who manipulate figures can make them tell almost any tale they please. The Treasurer has submitted figures in opposition to those quoted by the honorable member for Flinders. Those submitted by the right honorable gentleman were, I suppose, not merely furnished on his authority as Treasurer, but on the authority of the expert officers of his Department. The Treasurer says that that is so. We have, therefore, the expert mcn of the Department who not only casually have to do with these big questions, but whose everyday life is devoted . to their consideration, contending exactly the opposite of what was urged - though certainly not strongly - by the honorable member for Flinders. The honorable member for North Sydney also gave evidence of a good deal of research in his study of this question, and he admitted fairly and honestly that such comparisons were entirely valueless. We are thrown, therefore, on our own resources and experience in determining how these Tariffs operate according to varying conditions. What is the use of comparing the Customs and Excise return per head of the population in old, settled, and immensely populous countries with that of Australia, with its totally different conditions? Even in respect of population, in regard to which the conditions are somewhat similar, we must thoroughly understand and investigate the Tariffs from beginning to end. We must know all the surrounding conditions and the ability of the people to pay taxation before we can institute a comparison that would be anything like a reasonable guide to us in determining the prospective returns of an Australian Tariff. We all know, however, what an influx of population into Australia means. We have the history of Broken Hill and of other large mining centres in Western Australia to guide us’ in this respect. An influx of population, not only in mining centres, but in. agricultural districts, means a big augmentation of the Customs revenue and a buoyant revenue far above that of a country where the conditions are stationary and normal. Let me refer again to the Pinnaroo settlement in South Australia. For the last two years heavily-freighted trains have been passing along the Pinnaroo railway line three times a week, a large proportion of the loading consisting of new agricultural machinery. All the necessities incidental to new settlement mean very considerable Customs revenue. If in the future we should remove by settlement the stigma of the big vacant spaces from the map of Australia - and settlement schemes will not exhaust the country even should they continue for fifty years - there would be revenueproducing forces all along the line giving continuously and increasingly. Therefore, instead of being disconsolate as to the prospects of the future ability of the National Parliament to return to the States 25s. per capita, I believe that we should be on the contrary very hopeful. Australia has never had brighter times or brighter prospects. The story of the enormous expansion which has taken place during ths last few years in our production of staples, and particularly of wheat, reads almost like a fairy tale. We are only just beginning to march ahead. With the advance of science as applied ‘ to agriculture our best country is not only increasing, but is nearly doubling its yields, and our inferior country is doubling and trebling the yields that the most sanguine of us ever thought possible. Then, again; with the advent cif the science of dry farming which is being powerfully advocated by Senator McColl, there is no telling, and the most sanguine cannot realize, what the future is going to be. Dry farming is not only going to restore and re-establish the dry limitedrainfall areas throughout the Commonwealth which have been forsaken as unreliable and unprofitable for wheat production, but is going to bring under cultivation and to turn to profitable account throughout the Commonwealth millions of acres that the most practical and expectant people of Australia never thought would be so utilized. There are other possibilities- to be taken into account. In to-day’s newspapers we have the remarkable statement that if the prices obtaining at the Melbourne wool sales are continued throughout the season there will be returned to the people of this continent in respect of our wool production for the year no less than , £27,000,000. That is a record of which Australia has a right to be proud. I realize that the conditions of to-day are only indicative of greater development and brighter prospects in the days to come. As the hour is getting late I should like leave to continue my remarks tomorrow.
Leave granted ; debate adjourned.
House adjourned at 10.59p.m.
Cite as: Australia, House of Representatives, Debates, 29 September 1909, viewed 22 October 2017, <http://historichansard.net/hofreps/1909/19090929_reps_3_52/>.