3rd Parliament · 4th Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
Defence Bill - Order of Business
– It is reported in last night’s Melbourne Herald that the Victorian District Commandant has called a conference of his permanent officers, to consider and report on the Defence Bill, and that the conference will meet several times before its work is completed. I desire to know from the Minister of Defence whether similar conferences are to he held in the other States, and whether the draft Bill was not under the consideration of the central administration, or some officer in its confidence? What purpose is to be served by getting a conference of the permanent military officers to consider and report on the measure now that it has been submitted to Parliament?
– The report is incorrect. The board referred to will deal with an entirely different matter.
– A similar report is in today’s Argus.
– It is quite wrong.
– Will the Prime Minister say whether he intends to deal with the two measures for the alteration of the Constitution before proceeding with the Defence Bill? I ask because I am particularly interested in the last-named measure.
– The present intention is to take the second reading of. these Bills, and then that of the Defence Bill, if the debate will not occupy an undue period.
– I ask the Prime Minister if he will reconsider that intention, dealing finally with one measure before proceeding with another?
– The desire is, while meeting the convenience of honorable members, to expedite business. When the second reading of the Constitution Alteration (Finance) Bill has been agreed to, it will be necessary to consider in Committee a variety of financial issues, and when the second reading of the Defence Bill has been passed, similar consideration will be needed for particulars relating to defence. However, I am prepared to reconsider the arrangement, which is subject to review, should we find another course preferable.
Mr.FISHER. - I understand the honorable gentleman to say that he will take the second reading of the Defence Bill if the debate does not occupy too long a period. I ask that, when the second reading is entered upon, the consideration of the Bill shall be proceeded with until it is finished. It will be difficult for us to transact business properly if we are to continually go from measure to measure. I shall do what I can to facilitate the passing of the Defence Bill ; but I should like the Prime Minister to. promise, if he can, that a measure shall be proceeded with at least one stage before another is taken.
– As I have said, it has frequently been found at the conclusion of a debate on the second reading of an important Bill, when the Committee stage is certain to be critical, that honorable members are not prepared to grapple with it immediately. I join in the desire to further the passage of the Defence Bill, when there is any prospect of that kind. I thought it only fair to respond to the inquiry of the honorable member for West Sydney, who takes a deep interest in the subject of defence, believing that less time will be lost by an interval after the speeches on the second reading than during Committee. We are bound to adjust the business of the House, to meet its necessities, but, subject to that, as far as possible, the wishes of honorable members opposite.
– Has the Minister yet decided to set apart an hour for the consideration of a small amending Bill to rectify the anomaly in the Invalid and Oldage Pensions Act to which I have drawn attention ?
-The Treasurer has called for certain reports on the subject, which have not yet reached me. I expect them daily, and will give a reply to the honorable member’s question when they have been considered.
– I wish to ask the Treasurer whether he is aware that in the whole of the district known as Eyre’s Peninsula, South Australia, no provision has yet been made for dealing with applications for old-age pensions? I understand that the reason given for the delay is that there is no magistrate in the district who can deal with these applications. I ask the Minister whether he will see that ifthe services of a magistrate cannot be obtained, some other person or persons are appointed to deal with these applications, and that the pensions to be paid to successful applicants will date from the1st July last, so that they may not be put to any loss merely because there has been no officer available to deal with the applications.
– I shall make inquiries into the matter. The date of a pension, as the honorable member is aware, is fixed by the Act itself, and by the decision of the magistrate.I shall see what can be done. I was not aware of the facts the honorable member has placed before the House.
Dorrigo Telephone Line - Personal Explanation : . Slot and Public Telephones - Opening of Post-office Buildings.
– On the 30th September, the honorable member for Cowper asked a series of questions, to which an in terim reply was given. I am now furnished with detailed answers. The questions were these : -
The following replies are now furnished : -
– I wish, by way of personal explanation, to remove a misunderstanding as to my remarks of Friday last. . What has appeared in the press concerning them is of no moment, but I feel it incumbent upon me to take notice of the statements of the officers of the Department. According to the Herald -
A statement in the House of Representatives to-day by Mr. Liddell, that there were only fourteen public telephones in New South Wales, came as a great surprise to the PostmasterGeneral.
I did not say that there were only fourteen public telephones in New South Wales–
The officials of the central administration stated to-day that Mr.Liddell had apparently counted up only the number of subscribers to slot-payment telephones, and had overlooked the real public telephones.
I counted up the number of slot-payment telephones, but did not overlook the “ real public telephones.” My object was to show that the slot-payment telephones are unpopular, there being only fourteen of them in New South Wales. As explained in the Herald -
These slot-payment telephones were instruments which the subscribers made available to the public, who were required to put a penny or a penny ticket into a box kept for the purpose.
There has been an attempt to make it appear that I do not know the difference between slot-payment telephones, pennyintheslot machines, and public telephones. That is not so.I am aware of the distinction between them, though it is difficult to ascertain from the official Guides which is which. My statement that there are only fourteen slot-payment telephones in New South Wales is correct. There are six in Sydney, seven in its suburbs, and one in the country. According to the officials of the Department, there are 863 public telephones in New South Wales ; 61 in Sydney, 172 in the suburbs, and 630 in the country; while in Victoria there are, 31 in Melbourne, and 56 in the suburbs and country, a remarkable discrepancy for which I do not know the reason.
– The honorable member may not go into that matter.
– I wish merely to explain that my statement was perfectly correct, and therefore there was no occasion for the Postmaster-General to express surprise at it or for his officials to contradict it.
– A circular has been issued compelling the use of slot telephones in hotels and other places. This is very inconvenient, and I wish to ask the Postmaster-General if he will reconsider the matter, and see if some other means may be adopted by which the delays arising at present may be avoided. I had an experience in Sydney only the other day, and shortly afterwards I accidentally met Mr. Hesketh, and talked with him on the subject. If what is proposed in the circular is given effect, it will result in great delay and inconvenience to the public.
– I am not aware of the circular to which the honorable gentleman refers. If he will show me a copy of it, I shall be glad to talk the matter over with him, and see what can be done to meet his wishes.
– Seeing that the Department yesterday had the foundation-stone of the Brunswick Post Office laid by a member of this House, is it intended to follow a similar course in connexion with all new buildings, and additions to buildings, and, if so, will the PostmasterGeneral see that the new wing for the Melbourne Post Office is opened in accordance with that practice, and so give the honor able member for Melbourne an advertisement equivalent to that given to the honorable member for Bourke?
– Every case of the. kind will be considered and dealt with on its merits.
– I should like to ask the Prime Minister when it is likely that the Northern Territory Acceptance Bill will be further considered?
– I very much regret that the debate on the second reading of the measure referred to had not been concluded before the engrossing business now before the House was brought on. I have been watching for an opportunity, as soon as these principal measures are advanced, in order that we may take further steps in connexion with that Bill.
Mr. FULLER laid on the table the following paper : -
Lands Acquisition Act - Land acquired under, at Fremantle, Western Australia - For Defence purposes.
Light Horse -: Deniliquin - Appointment of Infantry Adjutants
asked the Minister of Defence, upon notice -
– The answers to the honorable member’s questions are: - 1 and 2. The Estimates do not provide for any additions to the present strength of the Light Horse Regiments in the State of Victoria.
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 -
– -The answers to the honorable member’s questions are : -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are: - 1, 2, and 3. I shall be glad to know Mrs. Fahey’s address. Five pensions of this name are being paid in Victoria alone. A Mrs. Ellen Fahey, housekeeper, 130 Chetwynd-street, North Melbourne, applied on the 29th July. If this is the claimant referred to, replies can be given to-morrow.
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are -
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are : -
Debate resumed from 1st October (vide page 4059), 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.
– When the debate was adjourned on Friday afternoon, I was endeavouring to ascertain what was likely to become of profits derived by reduction in the interest payments to bondholders under a careful management by the Commonwealth authority of the State debts. I pointed out that under the agreement, if carried as it has been submitted by the Prime Minister, any reduction of interest beyond 25s. per head would in no way increase the Commonwealth revenue, and that the Commonwealth officers who might have this matter in hand would have no incentive to secure by careful management the reduction of the interest payments. The Treasurer stated that that was in accord with the view be had always taken ; that the agreement would make no alteration whatever in that respect, and that, under every scheme he has put forward, the States would secure the whole benefit of any reductions brought about in the interest payments on their debts after their transfer to the Commonwealth. I asked the Treasurer if he meant that, if the Commonwealth took over the State debts and gradually wiped out the whole of them, it would still have to pay to the States the amount which it had wiped out by the. saving which it had made. The Treasurer replied, “Certainly; that was part of my proposal.” I said then that that, to me, was an entirely new feature, as I had never yet heard it suggested by anybody who had ever discussed the State debts question.
– The honorable member has not read the subject.
– I have read the whole of the right honorable member’s speech-
– What speech was that?
– I wish the right honorable member would not interrupt me before I have finished my sentence. If any one interjects when he is speaking he at once finds that he is suffering from some severe disability which prevents him from answering, or that the matter is so difficult, and he has to adhere so closely to his notes, that it is impossible for him to do justice to the subject if he answers interjections. I would, therefore, ask him to refrain from interrupting me in the middle of a sentence. I do not mind if he waits until the sentence is concluded. I have never heard - anybody suggest that the Commonwealth, if it took over and wiped out the State debts, should continue to pay to the States what it had formerly paid to the bondholder. No such proposition, so far as I know, has ever been put before the people, and certainly no such idea has been generally understood and accepted by the people. It has never been put before the House. The right honorable member referred me, as a proof that that was his idea all along, to his 1906 Budget Speech, the scheme which he placed before Parliament on that occasion, and particularly section 8 of it, which is as follows : -
That all net profits arising from any conversion or redemption of existing loans should be credited by the Commonwealth to the State concerned,’ and the annual payment by that State reduced accordingly from time to time.
With that, as I told the right honorable member on Friday, I cordially agree; but surely it is not intended that after the payments by the States to the Commonwealth have been wiped out, the Commonwealth should go on for all time paying over to the States the amount which it would have saved by conversions, and very largely by establishing sinking funds, involving, perhaps, great sacrifices on its part. If .the right honorable member meant that, I am certain that it was never understood. Possibly I have been under a wrong impression, but, if so, it is shared in by a large number of other honorable members. I have always been under the belief that, if the Commonwealth took the responsibility for the payment of interest equivalent to a certain amount of debts, when that amount was wiped off, it cut the painter altogether so far as that matter was concerned, and closed the transaction. We should take the risk of whether we could make it a profitable transaction, and we might have to pay dearly for it. We might not be able to convert in such a way as to make anything out of it. We might have to pay more as the result of bad management, or through choosing the wrong time for flotation, and in that case we .should not expect the States to pay. The Commonwealth would have to shoulder the burden. The corollary, therefore, to that proposition is that any savings that we made would mean a gradual increase of the Commonwealth revenue. The Treasurer’s contention, if I have understood it accurately, is absolutely unthinkable, and notwithstanding his assertions last week, I am sure that he could never have meant it, because it would be quite impossible for the revenues of the Commonwealth to stand it, and it would be absurd in itself. If what the honorable gentleman contends for were done, what would be the good of the Commonwealth going in for the business at all? It would be useless for the Commonwealth to take over the debts, if neither conversion nor good management would be nf advantage to its revenues. I have carefully read every word of the speech to which the Treasurer referred me, and the speeches of the honorable members who followed him, and in no case could I find such a proposal suggested. I noted the particular passage which the right honorable member indicated, and also one other sentence which appears to bear on it, to the effect that “ the profits until conversion “ - meaning so long as there remained any State loans, although it is hard to see what profits can arise until conversion - “ would be credited to the States.” Of course, that is right enough.
– I have marked here a passage which made clear what J said all along.
– The “right honorable member has referred me to the following .passage in his speech in moving, in 1906, the second reading of the Constitution Alteration (State Debts) Bill - Hansard, vol. xxxiv., p. 4223: -
If the Bill is passed by both Houses, and the proposed alteration is approved by the electors in the manner provided for by the Constitution, Parliament will have the complete control for which I ask. The object of taking over the debts is to place the borrowing power of Australia on the best possible footing, to enable us to borrow to advantage, and to give an opportunity for the saving of a considerable sum of money. We are advised, and believe, “that, by having one denomination of stock firmly established on the London market, secured on the consolidated revenue of the Commonwealth, a considerable advantage and saving to Australia must eventually result.” The Commonwealth will not gain a penny by the transaction. In the memorandum to which I have referred,- it is proposed “ that all net profits arising from any conversion or redemption of existing loans should be credited by the Commonwealth to the State concerned, and the annual payment by that State reduced accordingly from time to time.”
The honorable gentleman’s concluding words are very different from the statement that the Commonwealth will not gain a penny by the transaction.
– But the States will gain.
– The States will gain by the reduction in the interest which we have to pay upon their debts.
– We shall ‘withhold less from them in consequence.
– I entirely agree with that statement. But a time will arrive when instead of the States having to pay over to the Commonwealth any sum on account of interest and sinking fund upon their indebtedness, the -per capita contribution of the Commonwealth will be sufficient to meet that obligation. Assuming that the Commonwealth takes over the proportion of the State debts which is represented by interest and sinking fund to the extent of 25s. per capita - the balance, if any, will be credited to them. Thus, if as a result of savings effected, the interest upon their indebtedness amounts to only ’24s. per capita, the Commonwealth will be obliged to return to them is. per capita. That is the proposal of the Government.
– It has always been the “proposal.
– Then it has not been generally understood.
– It has been understood bv me.
– I have never heard a single honorable member in this House put the position in that way. Cer tainly the proposal is entirely opposed to the scheme put forward by the honorable member for Mernda. Under his scheme the Commonwealth would assume responsibility for all the State debts, and would gradually recoup itself for extremely heavy expenditure with which it would be confronted by liquidating those debts.
– That . proposal is not in accordance with the Constitution.
– I am not talking of the Constitution: The Constitution provides for the return to the States of threefourths of the net Customs and Excise revenue.
– Only till” 1910.
– The Constitution provides that the States must indemnify the Commonwealth for any payment which it may make on account of the transfer of the State debts. We have now reached a stage at which we must recognise a fundamental difference between the proposal of the honorable member for Mernda and that of the Treasurer. I say that no Nationalist - nobody who believes in the future development of Australia - can lightly face the obligation which the Treasurer seeks to impose upon the people. I ask the honorable member for Hume, who is an exTreasurer, whether he has ever understood that for all time the Commonwealth - assuming that it took over the States debts - was to undertake to pay to the States the equivalent of the interest due to their bondholders?
– I always understood that, when the present indebtedness of the States had been wiped out, the agreement would be ended. But, under the scheme of the Treasurer, the Commonwealth will return to the States 25s. per capita for all time.
– Then what is the incentive to the Commonwealth to do anything?
– lt was never intended that the Commonwealth should make a gain.
– I am quite sure that any proposal under which the State Treasurers will merely be substituted for the British bondholders will be absolutely boycotted by the people.
– I never heard of such a proposal.
– Nor did I. Vet the Treasurer affirms that he has never heard of anything else.
– It was never mentioned until it was mentioned by Mr. Wade in Sydney.
– The honorable member had better read up the subject.
– With the exception of a single sentence which I have quoted, the remarks of the Treasurer certainly did not convey any such impression.
– Let the honorable member read the last paragraph.
– I would point out to the Treasurer that the honorable . member for Boothby is making a speech, and that it is unfair to ask him to read extracts from a speech made by the honorable gentleman. The Treasurer has already spoken during this debate, and it is not competent for him to speak a second time.
– The paragraph to which the Treasurer has referred reads -
That the Commonwealth deduct each year from the amount to be paid to each State the expenditure made on behalf of that State for interest and sinking fund, and, if such an amount is insufficient in any case, the deficiency be paid to the Commonwealth by that State.
That paragraph provides for the indemnity to the Commonwealth. With the exception of that single sentence, the Treasurer’s speech contains no explanation of the position which he now takes up.
– I never heard of any such position
– Every honorable member whom I have consulted has declared that the suggestion of the Treasurer is an absolutely new one.
– The Commonwealth has quite enough obligations to face without assuming this new one-
– There is no doubt about that. Considering the position from the stand-point of the revenues of the Commonwealth and the States, surely, if the Commonwealth assumes a liability for the payment of interest upon the State debts to an amount which is represented by 25s. per capita, that ought to be sufficient. Under any such scheme, if the Commonwealth, by the exercise of careful management, liquidated the indebtedness of the States, it would be making a present to them of their public works. The bulk of the public debt of the States has been expended upon reproductive works, and if their indebtedness were wiped out, they would then have the revenues accruing from those works free of interest. I do not wish to devote further time to that phase of the question; but should like to say that, in my opinion, the scheme propounded by the honorable member for Mernda is infinitely better, from the point of view both of the States and the Commonwealth, than is the proposal made by the Treasurer, or the agreement now before us. Whilst under the scheme of the honorable member for Mernda we should have ‘ to make some initial sacrifices, there would be a distinct advantage to the Commonwealth arising from the transfer to and management by it of the State debts. It offers a distinct incentive to the Commonwealth Parliament to exercise that control efficiently in order to secure the best possible results. Under this agreement, there is no such incentive. I should be glad if time would permit of a fuller explanation being given of the honorable member for Mernda’s scheme, for the more fully it is explained, the better it will be appreciated. One of my reasons for objecting to the embodiment of this agreement in the Constitution is that, if that were done, the honorable member for Mernda’s scheme would be lost to us. The Commonwealth could not be expected to make the initial sacrifices that it would be called upon to bear under his scheme, and to pay to the. States for all time 25s. per head of their population.
– But if the scheme is limited, as I now propose, to a payment of 25s. per head until the population amounts to 7,200,000, the same results will follow.
– I should be prepared to support the honorable member’s proposal as recently modified by him, rather than the agreement now before us, since it would hold out some hope of an ultimate benefit to the people and the revenue of the Commonwealth. On the other hand, all that we are promised if this agreement be accepted, is that the proposal to transfer the State debts shall be investigated. The Prime Minister uttered some pretty sentences in this connexion.
– The honorable member said that the Commonwealth control of the State debts was the axis upon which everything revolved.
– He also spoke of the picture being out of focus. When the honorable gentleman, quoted from the agreement the words -
This investigation shall include the question of the actual cost to the States of transferred properties as defrayed out of loan or revenue moneys. the Leader of the Opposition interjected - “High falutin’ flapdoodle!”
The Prime Minister replied -
These are words, if they be words, wholly inapplicable. My reference -
And this is the point to which I desire to call special attention - 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 intention of the Constitution, and that, for the most profitable management of future loans, the establishment of one Australian stock is essential. . . . 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.
If ever a statement was worthy of being described as “ flapdoodle,” that is. It is simply alliterative flapdoodle. As a. matter of fact, as honorable members will find recorded in Hansard, Vol. XXXII., pages 2039-40, the Premiers at the Hobart Conference actually agreed upon a scheme for the transfer of the State debts ; so that the occasion referred to by the Prime Minister was not the first on which they fully, frankly, and unreservedly, accepted the position that it was the intention of the Constitution that the State debts should be taken over. At the recent Conference, they merely decided that the question should be investigated, whereas, at the Hobart Conference, in 1906, it was decided -
That subject to the foregoing and following stipulations the whole of the State debts be taken over by the Commonwealth when arrangements can be made.
The scheme there agreed . upon dealt with future borrowing ; made provision for a sinking fund in respect of all loans raised or renewed, and covered the questions of payment of sinking fund and interest. All that was agreed upon a few weeks ago, so far as this phase of the questions is concerned, was that the proposed transfer of the State debts should be investigated; whether the State Premiers will ever go beyond that point is quite another question. As to the crux of the question, just now referred to by the honorable member for Dalley, I am not quite certain - though I put the point with all humility, because I do not pretend to be an expert - that the Commonwealth, before it undertakes the management of the debts, must have control of future borrowing. We have, of course, no past experience, but I think that there is an unnecessary insistence on that view, though I know that the honorable member for Mernda differs entirely from me. It is asserted that there should be only one borrower on the London market, and that, if the States are at liberty to raise money, the Commonwealth will not be able to deal advantageously with loans. But, if it be a fact that the Commonwealth can borrow on better terms than the States, then it follows that the States, who will, of course, borrow in the cheapest market, will transact their business through the Commonwealth Debt Commissioners. Is it conceivable that any Parliament “ or people would permit their Government to oppose the Commonwealth on the London market, and thereby be under the necessity of paying more for the issue of its stock than if it used the channel provided by the ‘Commonwealth? It appears to me that the same practical result will follow, in “the way of control, even without any definite arrangement. If we can take over the debts without laying down in black and white the terms and conditions under which the States will be permitted to borrow, we shall get rid of much objection and difficulty. If there be any control, it must be in the form of veto, and a veto means the possibility of preventing the development of a State in the way in which the State might think it ought to be developed ; and any means of surmountingthis difficulty would be worth trying. The Prime Minister, in his speech, said that one of the great advantages of this agreement is that it will give a great impetus to immigration arrangements by the States. The honorable gentleman said -
In Australia, the difficulty is not to find land, but to find land put to its full and proper use, and to find the hands that will enable that tobe done. Under this scheme it will become the interest of every State, as it certainly is the interest of the Commonwealth, to secure a egitimate increase of the population of Australia. That increase they are now willing toobtain under the supervision of Commonwealth officers, the Commonwealth undertaking the necessary advertising in the Mother Country,, and joining with them to bring out suitable settlers to those parts that are crying for them. In this arrangement, I believe, we have the means of sweeping away the hesitation of the States, and of getting from them the full exercise of their influence in adding to the population of Australia.
I commend the last few words to the attention of the honorable member for Maribyrnong as of great interest to his consti- tuents. The Prime Minister, in every speech which he has made On the question, and in every letter that he has written to the States - and he has written a .good many - has contended that it is essential that land should be provided by the States; and to that end it has been suggested, chiefly from this side, but also from the other side, that, before anything -worth doing can be done, it will be necessary to impose a progressive land tax, so that land may be available for settlers when they arrive. We have found the Prime Minister using this argument over and over again; but, in the agreement before us, he drops all suggestion about the provision of suitable land, and says straight out that, under the scheme, it will become the interest of the States to secure an increase of population. He urges that one of the reasons why we should support the scheme is that the States will be induced by the payment of 25s. per head to adopt schemes of immigration, while the Commonwealth will pay for the advertising - that it is made especially the interest of the States to encourage immigration, apart altogether from the necessity of finding land. This shows how the Prime Minister has declined from his former position as the Leader of the National party; because he how adopts proposals, which he scouted as utterly absurd, unless some means were adopted to provide for the land for new settlers. I desire to refer to the assertion that the Labour Conference at Brisbane carried practically the same proposal as that now submitted by the Government, and that that proposal is binding on honorable members of this House, if not now, at any rate after the next election. As a matter of fact, I succeeded in having a resolution passed at that Conference against the decision being regarded as binding. The Finance Committee submitted a scheme which would have been very much more binding than that which was ultimately adopted. I moved the following resolution -
That this Conference expresses its approval generally of the scheme outlined by the Conference Committee as a basis for the complete adjustment of the financial relations between the Commonwealth and the States, and recommends it, together with Mr. King O’Malley’s “banking proposals, for the consideration of the State Labour organizations.
That motion was actually carried as an addendum to the report of the Committee on the financial relations between the Commonwealth and the States. So that honor able members will see that what was agreed to was anything but binding. What the Conference did was to express its approval of a scale of payments, and of the scheme outlined by the Committee, as a basis for an adjustment. It also expressed approval of the scheme of the honorable member for Darwin, and submitted the whole proposals-for the consideration of the States Labour organizations.
– The question of limiting the new scheme for a term of years could not have been seriously considered.
– The question of inserting an amending provision in the Constitution was never discussed at the Brisbane Conference. The proposals of the honorable member for Mernda found some supporters. The proposals of the honorable member for Kooyong had some advocates. The Treasurer’s own proposals were also discussed. The scheme drawn up by the Committee was merely a basis for the consideration of the various organizations. Finally, the whole subject was sent back to the Committee for them to revise their scheme and formally engraft my motion upon it. I also desire to say that throughout the discussions at Brisbane we expected that nothing more than an interim agreement would be necessary. We had no thought of including a new provision in the Constitution. There was a general understanding that when the time came for the Commonwealth to take over the State debts the whole subject would be reviewed. Consequently no permanent agreement was thought of. Personally, I am quite prepared to agree to the scheme submitted by the Government as an interim agreement. I am not sure that it is quite the best scheme that could be devised; but, at any rate, it represents what for the moment appears to be a fair thing. I do not find fault with it as an agreement. But the insertion of a provision in the Constitution embodying .the new scheme will be a cause of trouble. It will be a great mistake for this Parliament to accept the agreement in ignorance ot what the effect will be after a few years have passed. Its ratification will mean that for all time, so far as we can tell, the national development of Australia, so far as this Parliament can effect that development, will be hampered and hindered. Consequently the ratification of the agreement in its present form would, in the light of what we know, be nothing more nor less that a national betrayal.
–The honorable member who has just sat down was the thirty-second speaker upon the question under consideration. I draw attention to that fact, because it is unusual for so long a .debate to take place upon the motion for leave to introduce a Bill. It cannot be said that the debate has been protracted with any idea of obstruction, because each honorable member who has addressed the House has made a serious contribution to the debate. In fact, I would go so far as to say that those honorable members who have spoken have practically been voicing their intentions with regard. to the recommendations they will make to the public if a referendum is taken upon the question at issue. An honorable member who supports the Bill at the present stage must intend to recommend the electors to vote in favour of the contemplated alteration of the Constitution.
– Not necessarily.
– The public of Australia look to their representative men for light and guidance in this matter.
– That is right.
– The guidance which representative men give must surely be followed up by action on the same lines. If an honorable member announces in Parliament his intention to support this measure, it seems to me that in all honesty he is in duty bound to advise the electors to support an alteration of the Constitution in accordance with the measure. If, on the other hand, an honorable member thinks that such an alteration of the Constitution is not in the best interests of Australia, it is, it seems to me, his duty to oppose the Bill at the present stage. Some honorable members opposite have represented that this is a party question. I feel bound to say that no member of the Ministry, and no member of the party on the Ministerial side, either by hint or otherwise, has suggested to me that this is a party question. I say that openly, because I do not think that any Minister is so foolish as to attempt to make a question of such far-reaching importance a party issue. As far as I am aware, that has not been done. Of the sixteen speeches delivered on this “side, ten, including’ that of the Prime Minister, supported the proposal, while six strongly, I might say, wildly, opposed it. I can. thoroughly understand the anxiety of any Ministry to secure, finality. I can understand that the Prime Minister desires to get the arrangement with the Premiers ratified; but I cannot understand honorable members who are prepared to be live fighters at the next election refraining from exercising their individuality in regard to the measure. The Prime Minister certainly did so in his address. He said that probably the two ballot-boxes would disclose this peculiar feature - that while one disclosed a majority in favour of a particular candidate, the” other would reveal another tale as regards the subjects of the referenda. That suggests that there may be some who, for some reason or other, are not prepared to take the responsibility of canvassing for, or opposing this measure, at the referendum. Just imagine some of the elaborate, and well thought out addresses which have been delivered here being presented to the public. The public would not thank- the candidate who was foolish enough to occupy their time in that way. They would say, “ If, after ten years’ experience of Federal government, men, who are accustomed to deal with large questions, and understand the effect of financial proposals, are not prepared to act in the ordinary legislative manner, why should they put the responsibility of deciding the question on the average elector?” A. struggle on a big question, the settlement of which would affect: generations to come, will be made the mere play-toy of party organizations and press agencies. In some States, certain newspapers will advocate or oppose the adoption of the agreement, according to the view they take, probably with some good effect, and so it will be with party organizations.
– That is how the “honorable member for East Sydney got his “yes-no” reputation.
– I do not desire to be drawn aside by personal references, or even/ by party reflections.
– I was only supporting the honorable member’s contention.
Mr.- WILKS.- If I were to reply tothe honorable member’s interjection, it might affect an honorable, member who is not in the Chamber to defend himself. But I certainly think that the statesman .he refers to gained that undeserved reputationby taking a judicial stand, and he affords a powerful illustration of what I am coming; to. Like all other public men, the honorable member for East Sydney was a learner on the question of Federation. He required almost as much education as did the average elector or newspaper, and if he took a judicial stand at all, il was to point out what he considered the advantages and disadvantages of a certain financial scheme, but, instead of being honoured by the community, he earned the reputation of having a forked tongue, and of speaking with two voices. And so it will lue with regard to the financial scheme before the House. It should be threshed out before the public on the platform, and the average elector will be governed either by a party organization, or by some powerful press direction. The speeches which have been made on this Bill are reminiscent of the early days of our Federation. At that time, party views were not known. In this matter I certainly, think that party views should be’ cast into oblivion; although I intend to take a strong stand according to my views, I do not intend to present them dogmatically. I have listened to all the speakers on this measure, and noticed many changes, and justifiable changes, of opinion on the part of honorable members, as they have acquired further information on the question. To try to trip up an honorable member because he, by reason of fuller knowledge, advocates a different view “from what he did a few years ago, is going too far. I think that honorable members, like the people, are in the melting pot on this question. In regard to matters of finance, affecting futurity. I have no appreciation for those who use dogmatic terms. I believe that some honorable members, when they try to peep into the future, look through the wrong end of the telescope, while others seem to have an extraordinarily powerful magnifying glass, and predict certain conditions of affairs as much nearer than they probably will be. That, after all, is only speculation. The honorable member for Dalley has as much right as any honorable member to speculate as to what will take place in the future. If ever Australia has had a serious question to consider, it is this one, and it is simply because of its serious character that I am compelled to take an attitude which I will presently define. Colton said;, “ Imitation is the sincerest form of flattery,” but Greville put it, “ The mark of a little mind is a slavish imitation of others.” I think that Greville is nearer to the truth than Colton. I have listened carefully to the speeches, and have tried to ascertain the! reasons why such a great change should be proposed by the Prime Minister. So far as I am concerned, party interests are unknown to me in this connexion. No Minister has approached me, either directly or indirectly, and no member of the party has insinuated to me .that this is a party question. I cannot conceive that the Ministry would be so insane as to attempt to make it a party question. As the PrimeMinister said, “ Finance is government, and government is finance.” It occurs to my mind that finance spells taxation, and that taxation spells the people. As to whether the existing arrangement is the most suitable one or not, there seems to be very little difference of opinion. The average elector understands the Braddon “blot” to-day, though it took him some years before he attained to that position. When the acceptance of the Constitution Bill was being advocated, it was astounding to notice how many well-informed persons were misinformed as to the operation of that provision. It was only after repeated addresses by certain public men, two referenda, and a general election, that its real meaning dawned upon the people. The scheme now before the House is nothing more nor less than a reduced copy of it. The Braddon section provided, as an experiment, that out of every £1 worth of revenue raised by Customs and Excise, the Commonwealth could retain 5s. What do the Government ask us to do to-day? They ask) us to agree to a return of 25s. per capita to the .States. If the States get 25s per capita, they will receive practically one-half of the sum which represents the actual return from Customs and Excise revenue in the year 1908-9. Therefore, the Government propose to retain, instead of 5s. in the £1 - the one-fourth allowed under the Braddon section - 10s. in the £1, ot’ onehalf. It is realized that 5s. in the £1 is not now sufficient to meet the requirements of the Commonwealth, and the Premiers of the States agree that it will be fair for the Commonwealth to retain 10s. But I do not know why the arrangement should be made perpetual. The Government says that it is not to be so, but we know that, if it is inserted in the Constitution, the States which are weak financially can successfully resist any subsequent amendment. The trend of population, and the way in which business has increased, show that Tasmania, South Australia, and Western Australia are likely to continue to be financially much’ weaker than the other three States, and should the proposed arrangement be embodied in the Constitution, their people, although a minority of the population of the Commonwealth, will be able, if they so desire, to prevent any subsequent alteration, because an amendment of the Constitution can be made only after it has been assented to by a majority of the people and a majority of the States. While I credit the Government with having proposed an equitable distribution of the Customs and Excise revenue, I cannot conceive why Ministers wish to embody it in the Constitution. That might suit the convenience of the present State Treasurers, but Ministers do not remain in ( office for ever, and what suits those of the present day might not suit their successors. Obviously the Commonwealth must have a larger revenue. We are already outrunning the constable. One of the finest speeches made in this Hou.se was the justifiable attack the right honorable member for East Sydney made on the last Deakin Government, which he showed had not provided .for the services which had been and were being taken over the revenue necessary to carry them on. His criticism failed in effect at the time, but the Treasurer of to-day estimates a deficiency of 200,000 on the operations of the present year. Both the Commonwealth and the States should have learned a lesson from the events of the last nine years, and should have set their houses in order. The States were content to live in a fool’s paradise while they were receiving threefourths of the Customs and Excise revenue, and the balance of the remaining onefourth which, until quite recently, the Commonwealth paid to them. The Braddon section, however, had only a ten years’ currency, which has nearly expired, and I refuse to allow the Commonwealth to be controlled in the future by the States. The more we can separate the finances of the States and the Commonwealth, the better will it be for both. The public, of course, does not concern itself much as to who spends its money. What the average elector troubles about is whether taxation is to be increased, and what is to be its incidence. When the honorable member for Balaclava was referring to defence expenditure, the Minister of Defence interjected that we should have to borrow to provide for defence, thereby suggesting that one-half of the Customs and Excise revenue will be insufficient for Commonwealth purposes. The Minister said that very few nations have provided for naval defence without borrowing. Great Britain, how- ever, pays for her defence out of revenue, and, in any case, I do not know why Australia is compelled to follow the old- lines in a matter of this kind. I realize that both direct and indirect taxation is limited, but rather than allow the Commonwealth to borrow, I would give it control of the whole of the Customs and Excise revenue, leaving it to the States to provide funds for their functions by levying direct taxation. If the State Governments are to draw upon the Customs and Excise revenue to the extent of 10s. in the £ the Commonwealth Parliament will be compelled to impose direct taxation in order to find the money necessary to carr)’ out its defence proposals. I can well understand honorable members who believe in unification being opposed to the agreement, even though its operation should be limited to ten 5’ears. Although I am not now prepared to support a unified system of government for Australia, I do not believe in closing the door on the electors and preventing them from adopting such a system of government should they desire to do so in the future. The honorable member for Parkes has referred to what he regards as the sanctity of the Constitution; but whilst we may toe admirers of it we should not be worshippers of it. I consider that I should not be justified in taking any action now which would prevent the adoption of a unified system of Government in the )’ears to come if the people desired to take that course. It is not the duty of Parliament to put obstacles in the way of giving effect to the will of the people; if is rather our duty to keep the way open for the assertion of public opinion. The Prime Minister has said that if the States- gain in population they will benefit by this bargain. If their population does not increase beyond a certain rate he hopes that the Commonwealth will gain. If our Customs and Excise returns increase in a greater ratio than the increase cf population the revenue of the Commonwealth will be increased under this proposal, but the -reverse will be the case if the population increases at a greater ratio than the increase in our Customs and Excise returns. Various schemes have been put before us for dealing with this matter. We know that the proposed return of 25s. per head of population to the States will not enable the State Treasurers to meet the interest payments on State debts. The return to the States of 25s. per head will give them a total of about j£6, 000,000 whilst the interest payments amount to ^9,000,000, and these must be paid by the Commonwealth or by the State Governments. If the State Governments are to pay the interest on the debts they will have a fund of £6,000,000 with which to do so in the return of 25s. per head of their population from the revenue from Customs and Excise, and they will require to find .£3,000,000 from some other source. They must draw upon the revenue from railways or other public services that are returning a profit, or they must impose direct taxation. The State Governments, as well as the Commonwealth Government, have a certain amount of developmental work to do. There is no desire on the part of a majority in this House to in any way cripple the development of the States. I certainly have no such desire, but at the same time I am not disposed, merely for the convenience of the State Treasurers or of any party in the States, to insert a provision in the Constitution which would prevent us financing Commonwealth proposals in the future.
– And cripple the Commonwealth .
– We have to think of that. There is no reason why the Customs and Excise taxation should continue to be equivalent to £2 10s. per head of our population. Why should not the amount per head be reduced ? When I was a strong advocate of Free Trade I was not concerned so much with the establishment of commercial freedom as with the removal of taxation from those least able to bear it, and its imposition upon those most entitled and best able to bear it. The fact that the proposed scheme will be practicable so long as our Customs and Excise taxation amounts to not less than £2 10s. per head does not recommend it to me. I view with concern the proposals involving expenditure by the Commonwealth, but I view with more concern the sources from which the money required to carry out those proposals is to te obtained.
– The agreement postulates no system of taxation.
– I admit that; but it will put the Commonwealth in a very awkward position. The idea of the Minister of Defence is that we should borrow to make up any shortage in the revenue at our disposal for giving effect to the defence proposals of the Government. But, if that course were followed, interest would have to be paid on the money borrowed, and it would be a charge on the Customs and Excise revenue. I do not believe that the poorer classes should escape all taxation, or that the wealthy should pay all taxation. But I cannot favour any proposal which would interfere with the just and proper incidence of taxation. If, at the end of ten years, it were found that the anticipations of those who are opposed to the agreement were not realized, and that it proposes a good scheme in the interests of both States and Commonwealth, there would be nothing to prevent the Commonwealth Parliament, by legislation, continuing its operation for another ten years. The State elector is the same as the Commonwealth elector, and there is no reason why he should not trust himself. I am sure that the electors, as State electors, do not desire the adoption of an agreement which would tie up the Commonwealth Parliament. The honorable member for Flinders borrowed an expression from the stockyard, and said that if we adopted this agreement we should be leg-roping the Commonwealth. I say we should be hamstringing the Commonwealth. Why should we do so? Is it because of some mistrust of the Commonwealth Parliament, and, if so, who is it that mistrusts this Parliament? I would ask honorable members to say whether they know of any considerable number of electors in any State who have shown any tendency to mistrust this Parliament. If. I am told that the State Treasurers mistruct us, I must say that they are going beyond the bounds of decency, and are impertinent in doing so. What right have they to mistrust this Parliament? What evidence is there that the Commonwealth Parliament has not treated the States -well ? All the evidence that can be produced goes to prove the contrary. We have, in the past, returned to the State Treasurers each year various sums, over and above the three-fourths of the Customs and Excise revenue to which they were entitled. If in this Parliament we had had any desire to be unfair to the States, we should have withheld the yearly balances, instead of returning them to the States, as we have done. There is every evidence that the Commonwealth Parliament has been actuated by a desire to be fair and just to the States. I therefore cannot understand why sostrong and urgent an appeal is now made’ to honorable members to place this agreement’ in the Constitution. If the Government obtained a general expression of opinion from members on all sides of the
House to the effect that they had made the best arrangement in the circumstances, they might well strip the question of all party considerations, and agree to limit the operation of the agreement to a term of, say, ten years. I see nothing to fear from such a course. I do not wish to go into the various schemes that have been put forward ; but I notice that the Prime Minister said that, “ the control of the debts of Australia is the axis upon which our other financial proposals revolve.” 1 thoroughly agree with him in that ; but it is, after all, a mere declaratory statement, and we have no reason to believe that it will be acted upon. There is this to be said in favour cf the scheme of the honorable member for Mernda for the taking over of the State debts by the Common.wealth : that it does aim at the ultimate extinction of the public debt of Australia. It therefore offers a- very healthy prospect in the interests of the people. Its adoption would mean, according to the honorable member, that a time would ultimately arrive when the State debts would be extinguished, and the interest charge would be abolished. This would be a great relief to the people of Australia, whereas, so far, all the State Treasurers and other State financiers have, apparently, acted upon the principle that the interest is to be a perpetual charge upon the people. That is a monstrous proposition. Instead of offering fancy schemes of finance to the public, we should rather be concerned to put before them a proposition which will insure, first of all, that the incidence of taxation shall be just; and, secondly, that they will always have the power of expressing, through the ballotbox, their opinion as to whether or not the taxation proposed fulfils that condition. If, in addition to that, we took the commonsense view that we should adopt a scheme of finance which will ultimately abolish the debt, and year by year reduce the interest charge to the vanishing point, we should be giving to the people some permanent, solid relief. Without that, of what concern is it to the people what scheme we adopt? If they find that the interest charge is to remain the same, and that they have to contribute the same amount towards it, it will be of no interest to them whether this Parliament or the State Parliaments conduct the opera.tions. They will say to the members of the Commonwealth and State Parliaments : “ You are paid to do the work, and we look to you, as members of our various agencies, to arrive at a clear and just solution of the difficulty.” The idea of the honorable member for Mernda is that, by the consolidation of the debts, and the renewal of loans on better terms, and by the Commonwealth securing better credit, economies can be effected which will ultimately extinguish the debt. 1 do not think that the financiers of the Old World lend upon what are called “liquid assets.” They know that the spirit of repudiation does not exist in Australia. There has never been any suggestion yet of repudiating a loan in this country, and what they lend upon is the character of the people, plus the character of the country, not upon the tangible security of a railroad, or a road, or a public building. If Australia defaulted to-morrow in meeting its interest charges, do honorable members suppose that the money-lender would care to take over the securities and work them? He lends, as I have said, upon the character of the people, plus the character of the country, and the character of Australia, with its potentialities of agricultural power, and pastoral and mineral wealth, is established, while the character of the people of Australia is in the same position. Without pretending to be the son, or even the grandson, of a financial expert, I feel that any scheme which embodies the abolition of the National debt, and the extinction of the interest charge, makes an appeal to my common sense, and will go a long way toward attracting public attention and support. It will certainly attract my vote as long as I have the honour to be a member of this House.
– The honorable member means, of course, the present public debt.
– Yes ; I suppose the Minister of Defence is looking to the future. I think that the Commonwealth ought to assume responsibility in regard to future borrowing. I am not prepared to go into that question now ; but the establishment of what will be- practically a Board of National Directors, has already been foreshadowed. The suggestion is that, just as bank directors might meet in the boardroom to advise a bank as to its operations, a Board of National Directors should meet and advise both Commonwealth and State Governments in regard to their financial transactions, having, of course, no other concern than the establishment of a system of sound finance, and a reasonable assurance that the country can carry the burden. I should like to quote certain figures, which appear to me to have some weight in the consideration’ of this question. The Commonwealth took over certain functions, and the experience of ten years has taught us, among other things, that there has been, in the demands upon the Commonwealth revenues, a rapid growth which was not anticipated nine years ago. The defence policy advocated in this House, for instance, eight years ago, was absolutely the reverse of that proposed to-day. I remember the time when an honorable member, who urged that defence expenditure was useless, and moved the reduction of the defence vote by ,£140,000, received a favorable hearing in this Chamber. The defence expenditure has been climbing up again in the last eight years; but you, sir, will remember* as an active advocate of the Constitution Bill, that when it was submitted to the people they were told that one .of the savings to be effected by the establishment of the Commonwealth would be a reduced defence expenditure. That view was accepted by the public; yet, to-day, we are on the eve of an increased expenditure for defence purposes, greatly in excess of any yet anticipated, although, in my opinion, that increase is a wise one. I think it is only necessary to show the electors that the demands made upon our revenue by the exercise of the powers originally handed over to us, have increased out of all proportion to what they were eight or nine years ago, when they will give us the necessary authority to meet those demands. I have prepared figures bearing upon that question, which I wish to have embodied in Hansard. I have taken the financial years 1901-2 and 1908-9. Our expenditure in the first of those years, as shown on page 6 of the Budget Papers, was £3,932,746, whereas last year it was £6,419,364. That is actual, and not estimated, expenditure, and the increase is £2,486,618. That is for ‘new” expenditure, transferred expenditure, and new works. I might point out, in passing, that the State Treasurers, in all their calculations, ha ve omitted to notice that not only has the Commonwealth been punctual in returning to the States the proportion of Customs and Excise revenue which it is obliged to return under the Constitution, and also a large proportion of its surplus revenue, but it has been generous in providing them with £2,750,000 worth of new works out of revenue. In 1901-2 our expenditure upon defence, exclusive of the outlay upon rifles, equipment, &c. ,. amounted to £877,381, as against £916,757 in 1908-9 - an increase of approximately £39,000: Of course, our expenditure under this heading under the Defence Bill will amount to many hundreds of thousands of pounds more.
– The Treasurer estimates our future defence expenditure at 10s. 6d. per head.
– Yes. At the present time it represents 5s. 3d. per head, so that under the Government scheme it will be doubled. I have already pointed out that when Federation was established it was anticipated that our defence expenditure would be reduced, instead of which it has been increased. I do not complain on that account, because I recognise that upon the subject of defence, we, as members of the Empire, have at last awakened from a long sleep.
– That statement is scarcely correct. We are merely beginning to wake the boys up.
– There will’ be plenty of time for the honorable member to urge party views when the Defence Bill is under consideration. I come now to the Postal Department. Unfortunately that Department has not proved self-supporting, though as a matter of fact, I do not think that it ought to bc more than self-supporting. But when the amount which has been expended by the Commonwealth- upon the erection of new buildings is taken into consideration, even the position of that Department does not work out so badly as one might anticipate. In. 1901-2 the expenditure upon the Postal Department was £2,424,767, as against ,£3,027,048 in 1908-9. These figures evidence a large increase. Our total revenue for 1901-2 - our sources of revenue other than from Customs and Excise are of a very minor character - amounted to £11,302,959, as against £14,349,835 in 1908-9 - an increase of £3,046,876. Upon whom does that increase represent a tax? Undoubtedly half of it is derived from- stimulants and narcotics. The bulk of the remainder is collected upon apparel, textiles and food products - in other words, it is paid by the masses. Upon this matter Free Traders and Protectionists can see absolutely eye to eye. The Protectionist does not desire to heap taxation upon the people by means of Customs and Excise duties, and surely the aim of the Free Trader is to relieve them from similar taxation. As a Free Trader,
I have always held the view that the masses should bear only their fair share of taxation. We all recognise that the ablest pens and the most eloquent tongues have fought battle after battle upon the fiscal question. At the moment I cannot recall the remark of Edmund Burke in this connexion, but honorable members will doubtless recollect the powerful appeals which he made in regard to matters of taxation. Why do the State Treasurers ask us to embody the proposed agreement in the Constitution and thus to tie our hands ? If, after ten years, the Commonwealth finds that it requires to retain 12s. 6d. out of every £1 collected by means of Customs and Excise duties in lieu of 10s. why should it not retain it? Or if Commonwealth necessities demand the retention of even 15s. out of every £1 thus collected, why should it not retain it? If the experience of another ten years should prove that the fears which are entertained to-day are groundless, an Act of Parliament will be sufficient to continue the arrangement which is embodied in the proposed agreement for another ten or fifteen years. I cannot conceive of the other Chamber acquiescing in this Bill. I cannot conceive of it thus abandoning its own powers. This is not a party question, and I do not -believe that any Government will be insane enough to make it one. Honorable members must themselves accept responsibility for their actions in reference to it. They do not wish the Prime Minister, in effect, to stand godfather for them upon the public platforms of the country.. We all recognise that the revenue which the Commonwealth is permitted to retain under the Braddon section of the Constitution is not sufficient to meet its financial needs, and we are now asked whether the retention of 10s. out of every £1 collected under Customs and Excise duties will be adequate for those needs. At the end of ten years, we shall be in a position to answer that inquiry. Seeing the large obligations which confront us, I cannot fail to recognise that, by so much as we limit the Commonwealth revenue, by so much shall we compel it to resort to a borrowing policy. And, if we borrow for Commonwealth needs the people will have to bear the burden of the interest payable upon the loans. That fact will be a direct incentive to the Commonwealth to collect a larger revenue by means of Customs and Excise duties than it collects to-day. I do not suggest that it will prove an inducement to collect a larger amount per capita). I have no desire to embody in Hansard the fallacy that a large Customs revenue necessarily implies the imposition of high Customs duties. The very reverse is the case. My remarks have reference to the amount derived and not to the rate of the duties.. What I fear is that under this scheme there will creep in a resort to other methods of Customs and Excise taxations such, for instance, as the imposition of duties upon tea, kerosene, and other commodities. In the interests of the masses I am opposed to a duty being placed oneither tea or kerosene. Why should I advocate a scheme under which if the solvency of the -Commonwealth is to be maintained such duties would have to be imposed ? The only alternative would be” a resort to the policy of borrowing. I quoted just now the figures relating to the total revenue of the Commonwealth, and I propose now to deal with the increase of Customs and Excise revenue. In 1.901-2. we derived from Customs and Excise .£8,894,319, and in 1908-9 £10,843,985, an increase ot £1,949,666. Had there been a relative increase in population there would be little cause for complaint; but, unfortunately, whilst .we have been piling UP Customs and Excise taxation we have not beensecuring a corresponding increase in our population. 1 am taking the figures for 1901-2 and 1908-9.
– The honorable member for Mernda will say that the returns for the two years quoted by the honorable member were, with the exception of those for 1907-8, the largest received since Federation.
– I have not chosen return* in regard to these particular years from any ulterior motive. The population of the Commonwealth on 31st December, 1908, showed an advance of only 509.967 on the returns for 31st December, 1900, or an increase of 1.60 per cent. The postal revenue in 1901-2 was ,£2,372,861, and in 1908-9 it amounted to £3,409,007, an increase of £1,036,146. The particulars to which I have referred are set out in the following table: -
My only object in quoting these figures is to emphasize the point that experience has shown that the services of the Commonwealth require a larger expenditure in order that they may be efficiently conducted. The expenditure which we took over from the States has increased far beyond any estimates formed at that time, and shows a tendency to increase at a still greater ratio. Take the defence expenditure alone. According to the Treasurer’s estimate the defence expenditure, apart altogether from what will be required to carry out the provisions of the Defence Bill, will amount this year to about £1,100,000, as against about £800,000 some six or seven years ago. That expenditure does not include the cost of new equipment or the establishment of the cordite and small arms factories. In the circumstances it would be cruel to tie up the Commonwealth any further. The Senate is the States House. If there is any possibility of the popular House in the near future attempting to do the- States an injury what better protection could they have than that which the Senate affords? Instead of being, as it is unfortunately, a party Chamber it should be essentially the defender of the rights of the States.
– ‘And that it has never been.
– The Senate is elected as a States House. If its members do not conserve the interests of the States, for what are they returned? As long as another place, is conducted on party lines its true powers will be neglected. We are asked to embody this agreement in the Constitution, in order that a guarantee may be given, not to the people, but to the Treasurers of the various States, that their finances will not be disturbed by a rash expenditure on the part of the Commonwealth. My reply to any fear expressed in that regard is that the States have the protection of the Senate, and that no betterprotection could be afforded them. There, Tasmania, the smallest State in the Union, bas representation equal to that of the most populous States, and, if any greater surrender of the popular right to control taxation is desired, I am not prepared to give it. I am not one of those who consider that the States should be strangled, nor do I appeal for a unified system of government; but I feel that the electors have surrendered to the smaller States all that they could be asked to give. My experience as a member of this Parliament teaches me that the State Governments discharge many functions which could not be so well carried out by the Commonwealth, and that it would be dangerous to intrust them to the Commonwealth Parliament. The time may come, however, when the people will ask for unification. Even the bitterest opponent of such a system has no right to deny the electors the opportunity to give effect to such a desire, and the most ardent Federalist has no right to prevent future generations giving effect to their opinions. All these matters must be regulated by common sense, and the common sense which directs the actions of the average member of this Parliament in relation to important questions of this kind is that which directs the average elector.The whole thing is a matter of confidence. As to the submission of this question to a referendum of the people, I have no desire to cast any reflection on the electors, but, at the same time, I do not believe that the people would thank any one who told them that they should be prepared at any ordinary public meeting to solve a big financial problem of this nature. It is said that “ When flatterers meet, the Devil goes to dinner.” I do not believe in being a flatterer, or in allowing the Devil to go to dinner, and while there may be a few of a statistical turn of mind, who are prepared at election meetings to deal with such a question as that now before us, I think it would be the basest flattery to say that the electors, as a -whole, could attend public meetings fully prepared to solve such a big national problem. If this question is submitted to a referendum, subscribers to the Age, the Argus, the Sydney Morning Herald, the Daily Telegraph, and other influential newspapers, will vote according to the views expressed by them ; and others will be largely guided by the opinions of their representatives. The honorable member for Flinders, for instance, if he holds his seat, will probably lead a large number of his constituents to vote in accordance with his ideas on this question. He certainly would not desire that the ballot-box should speak with two voices, and he will, I have no doubt, appeal, as an honest man, to the people. Then, the Prime Minister will appeal to his constituency, not only as the head of the Government, but as a candidate, and he cannot escape advocating the agreement. On the other hand, the honorable member for Flinders is going to oppose certain propositions very strongly. The honorable member for Gippsland seemed to be very much concerned about honorable members on this side being “ whipped “ into supporting this proposal. All I can say is that, if honorable members have as much freedom as I have, they have no ground of complaint on that score against the Government, because I have seen no evidence of any whip. The language cf the honorable member for Gippsland may be all very fine in a debate, but the fact remains that thirty-three honorable members have already addressed the House, and this, so far from showing any cracking of the whip, indicates that they appreciate the serious import of the question so much that they address themselves to it now, instead of waiting until the second-reading stage is reached. If I am cautious, mine is caution of a Scotch nature that will do no harm. Why should State functionaries or State agencies be concerned with the Commonwealth Parliament or Parliamentarians? There seems to have been a very sudden awakening on their part ; because, for years, the New South Wales Parliament has steadfastly stood aloof from interference in Federal politics; and I hoped that that attitude would be continued. I have no desire for any State interference in my candidature; and 1 do not think that any intimidation of electors is necessary on the part of the Premier of any of the States. Why should we, as Commonwealth representatives, be mere echoes’? Surely it is time that the Commonwealth Parliament had a voice of- its own, though, according to the proposal before us, we are but the echo of an echo. The State Treasurers and Governments see the time slipping by, and they know that in 19 10 the Commonwealth comes into its birthright, and will then have power to make any provision it chooses for the future arrangement of the finances. The Braddon section does not, as some suppose, automatically disappear in 1910; but - and this shows the wisdom of the Federal Convention - remains in operation until some other provision is made. By whom? By this
Parliament. For some reason or other - and I see none, except a desire to pay tribute to the State Governments - we are asked to surrender the power we have under the Constitution. Nine years ago, the people foresaw the difficulty ; and, not wishing either the States or the Commonwealth to become insolvent, agreed to the Braddon section. Are we to now surrender the power that section gave us? I have no desire to see the whole of the Customs and Excise revenue annexed by the Commonwealth Parliament ; but only to see the States fairly treated. Let us say to the States, “We will take the whole of the indirect taxation, and leave you all the direct taxation; but, if we are not allowed sufficient, we shall have to invade your domain.” Of course, we know that the power to pay taxation on the part of the people is limited; and the public, if they find that we conduct the business of the Commonwealth in a proper manner, will, as years roll on, place more confidence in the National Parliament. The people today speak mare as Australians than they did nine or ten years ago; and we are fast losing the foolish idea attaching to the demarcations between the States. The finances of the Commonweath should be absolutely separated from those of the States; and we shall not have proper freedom until that separation is brought about. I do not deal with the alternative schemes, because they will not be presented to the public - it will be this scheme or none. Personally, I shall take advantage of every opportunity to vote against the proposal to embody this agreement in the Constitution. I see no reason why the second reading should not be passed on the voices; but I hope that in Committee honorable members will have the good sense to impose a time limit of not more than ten years. If those who support that view are defeated in Committee, I hope they will vote, against the third reading, so as to insure that the Bill will not be carried by the necessary statutory majority. What is the use of the honorable member for Mernda, the honorable member for Flinders, the honorable member for Parkes, and about six others, pointing out certain weaknesses in the proposal, if they do not follow their arguments to their logical conclusion, which, is that the agreement is, as I think, dangerous. But the danger can be overcome by a compromise limiting the agreement to ten years. If the honorable members I have mentioned are attempting to- direct public opinion, they ought to do so fully and honestly, and vote against the Bil! on the third reading, in the event of a time limit being rejected in Committee. I see no reason for any personal considerations in this matter. It may be said that we ought to “ save the face “ of the Prime Minister ; but why should we do so any more on this proposal than in the matter of the Northern Territory? The Prime Minister, according to his lights, entered into an agreement, which he probably thought a good one, with the late Premier of South Australia, for the taking over of the Northern Territory ; but he did not ask the House to make a party measure of the proposal. Why should the honorable gentleman attempt to make a party matter of the agreement with the States? The mere fact of six Premiers, instead of one, signing an agreement, does not make any difference. I admit that this is a troublesome problem ; and the Prime Minister was quite right when he said (hat finance is government and government is finance. I am only sorry that we in this Parliament have so frequently departed from that principle, seeing that in all the three Parliaments, we have continually passed Supply Bills, which have, in effect, deprived us of our proper control of the purse. I see a great danger in tying up the people for all time, .as proposed under this agreement. Neither in this House nor on the platform would I advocate the starvation of the State Treasurers; because I am utterly opposed to such a policy. I am not opposed, however, to men who believe in unification, because, if they think they can gain a majority,- why should they not be at liberty to advocate their principles? This payment of 25s. -per capita, with £3,000,000 added, would amount to the interest charges on the loans, and the honorable member for Mernda hopes that, under his scheme, the payment would disappear when the population has reached a certain stage. The scheme of the honorable member is very attractive; but, whether it. would work out satisfactorily or not, I cannot say. Whilst the honorable member is very shrewd, there are also shrewd men at the other end of the world. The brokers know very well what is going on, and I do not think that they will consider that Commonwealth stock will be better for their clients, the investors, than State stock has been. In my opinion, we should get rid of this incubus of debt as quickly as possible. The
States have not devised a means of getting rid of it, but I should be inclined to favour any scheme- that would relieve Australia of this burden altogether. I do not know by what steps the Prime Minister arrived at a determination to submit the present agreement ; nor do L care. I suppose that the honorable gentleman did his best to carry out his own view. If the agreement had been arrived at an open Conference, it would have been more satisfactory. But I suppose that there was a good deal of human nature in the Conference, as, indeed, there is in this House. Some of its members had to reverse their previously expressed views, and no doubt they thought that they could go back upon those opinions better in a secret Conference than they, could do had the proceedings been open. They did not want the public to trace their retrocession. But I see no charm in secrecy, especially in relation to such important proposals as these. The Prime Minister is fighting for his ideas as best he can, but I certainly hope that the agreement in its present form will not gothrough. While I am prepared to believe that. the Commonwealth will be better off for the time being, inasmuch as it will get more’ money than it has had in the past, and while I recognise that the scheme is a good one in that respect, still, I also recognise that it involves the imposition of heavy taxation upon the masses. T should like to see that taxation reduced. Since the idea of- new Protection has been launched, I have no qualms with regard to fiscalism. The chief reason I had for supporting Free Trade was that I desired to take taxes off the necessaries of life. I certainly am not going to surrender any possibility of reducing taxes upon the masses by supporting a permanent scheme such as that proposed, and I earnestly trust that other honorable members will not relinquish their efforts in the same direction. But what is the use of some honorable members criticising the scheme unfavorably, and then making up their minds to support it? I believe thescheme to be harmful and iniquitous in its effects, and I shall therefore vote against it on the third reading of the Bill if it isnot limited in its operation. I should not have spoken so long except that I am afraid that the scheme will get to the referendum stage. If it does, I shall oppose it before the electors. We aretold that if we do not support the scheme, State members will take part in the contest. Well, they can do so. It will be refreshing; to find State members sharing in Federal election contests. But it will have to be understood that they are not doing this in the interests of the masses. They can only support this scheme in the interests of the classes, who fear the imposition of direct taxation. When an appeal is made to the electors, it will be found that those who are opposed to the scheme will take good care that the public are reminded of what it means, and that the picture is boldly drawn, with full scenic effects. They will be assured that what is being fought for is not the interests of the masses, but, as is clear to my way of thinking, solely the interests of those who are best able to contribute towards the taxation of the country
– I have listened with considerable interest to the whole of the speeches delivered during this debate. I agree with the last speaker that those speeches have attained a high level of excellence. One rises almost in fear and trembling to express opinions upon a matter which has been the subject of special study for so many years by some of those who have preceded me. Nevertheless, I have some solid convictions with regard to what the proposal of the Government means. The fifty delegates to the Federal Convention were the architect’s of the Federal structure. We who have since been returned to this Parliament are the builders who are carrying out the plans of those architects. A very responsible duty is cast upon us in carrying out our functions ; and that is to see to it very carefully that we do not allow anything to be put into the Constitution that is likely to hamper the development of a national policy. Personally I should have liked to see the discussion conducted entirely free from party considerations. But, alas, that has not been the case. The scheme now submitted to us had its birth at a party meeting. It was baptised under party auspices. The State Premiers and Treasurers, together with representatives of the present Federal Government, met with closed doors, and left no record of their proceedings. This was the first occasion on which a gathering of ^representatives of the States and of the Commonwealth has been held without leaving on record an account of its debates. The Prime Minister has admitted that he held different views when he first approached the consideration of this great national question at the secret meeting. He said -
I went into the late Conference without having arrived at a conclusion as to the term to be fixed, and am free to confess the fact. A decision to place the agreement in the Constitution was arrived at only after having been brought face to face with the public records of the various States, showing their current obligations, their taxation, and what they required for their people.
Is it not fair to ask that each member of the House should be put in a similar position? The Prime Minister claimed that his views on this subject were changed as the result of the deliberations of, I presume, the speeches which were made .at the Conference. Yet no other member of the House has an opportunity of knowing what occurred there, what was said, or what led up to the change in the proposals of the Government. In each State Parliament there is an Opposition, who represent a very large proportion of the taxpayers of the States. Why were they not taken into consultation ? Why were the Leaders of the Opposition denied the right to be at the Premiers’ Conference, and to express their views on this great question, which is claimed to be above party politics? I remember reading in the press that there was a proposition from Western Australia that the Leader of the local Opposition should be invited, and that the Premiers of the other States were communicated with. Are we to understand that the latter, when they were appealed to, refused to admit the representatives of the minority to their gatherings, although in some cases the Opposition represent more electors than do the Government party? I venture to say that in South Australia that is the case. Yet, on this great financial question, not only was the Leader of the Opposition denied the right to take part in the deliberations of the Conference, but the very records of its proceedings were destroyed. The framers of the Constitution intended that the States should have a protector in the Senate, and for that purpose each State was granted equal representation in that Chamber. Otherwise, on the basis of population, one State would be represented by three senators. Although New South Wales returns twenty-seven representatives to this House, it returns only the same number of representatives to the Senate as does Tasmania, but that concession was made with a view to protecting State rights. The Government have deliberately submitted a proposition to shackle this House for all time. I deprecate very strongly the innuendoes that those who may oppose this scheme want to wreck the States. I claim that I have as much interest in the State I represent as has any honorable member who is taking the oppo- site stand. Before one can support this agreement, he has to arrive at this position : that the members of this House are not capable of being trusted. If the agreement means anything, it means a censure of this House and of those who will follow us. Although the members of this House would have had the right next year to deal with the Braddon section, yet the Government deliberately say either that we are not capable of dealing or that we are not sufficiently honest to deal justly between the States and the Commonwealth. Was ever a graver reflection cast on this Parliament than is done by this very agreement? Have we ever done anything which would warrant the passing of this severe censure? Have we not starved our services in order that a little more money might be returned to the States while they were undergoing hard times? We could have withheld from the States no less than £6,500,000. The post, telegraph, and telephone services were in a most discreditable condition when they were transferred, and, just prior to their transfer, the salaries, the emoluments, and the status generally of the officers were increased, so that on the following pay-day the Commonwealth had to find a much larger sum than did the States the month before. The evidence which has been given before the Royal Commission shows that hundreds of thousands of pounds ought to have been spent on the services before they were handed over. Yet, notwithstanding the dilapidated state of those services, the Commonwealth has handed back to the States £6,500,000 - which it might have retained and usefully applied. In addition to that, the Commonwealth has constructed out of revenue nearly £3,000,000 worth of public works, which, under the State regime, were provided out of loan account. We are faced, I venture to say, with a most exceptional position in the history of the Commonwealth. In nearly all the metropolitan areas, great expense has had to be incurred in the undergrounding of telephone wires - in many cases, because of the electrifying of tramways - long before the overhead system was worn out. In no case has any attempt been made by the Commonwealth to injure the States, though, on the other hand, State authorities have instructed their police :to break into the Commonwealth Customs House, and take away dutiable goods. Had it not been for the coolness of the Commonwealth authorities of the day, we might have had civil war on the occasion to which I refer. Are we, then, to hand over the destinies of the country to such men as have ruled the States, and to shackle this Parliament for all time for their benefit? Does not every one admit to-day that it was wise to limit the operation of the Braddon section? Is there, in either House of this Parliament, any one who would advocate the continuation of its operation ? We have discovered, during the last nine years, the difficulties which it has created. What would be the position of this Parliament had no term been set to its operation?
– Does the honorable member regard the Constitution as unalterable?
– No, but I know that it is very difficult to alter it. T would have no objection to the proposal of the Government could the Constitution be altered at the will of a majority of the people; but what is required is the consent, not merely of a majority of the people, but also that of a majority of the States. Thus the three smaller States, whose total population might not equal that of any one of the three larger States, could, by voting against an amendment, prevent it from being carried. The Prime Minister, dealing with the proposal to embody the agreement in the Constitution, said -
To say . that the people of Australia shall not keep the control of any arrangements between their two sets of agencies in their own hands separately and entirely is a rather startling proposition. Yet we have no choice, practically, between putting this agreement in the Constitution, subject only to the people’s will, or leaving it a mere Act on the statute-book of this Parliament, to be altered by any future Parliament at any time and without notice or special mandate from the people.
– Could the arrangement not be made for a number of years?
– Yes, but the Act which contained such an arrangement .could be repealed1 by an Act passed next week or next month. As I have said, no Act fixing a term of years could be given higher surety than any other Act already on the statute-book; and this means that the same, or any subsequent. Parliament may at any time amend it vitally, or absolutely repeal it.
Did the honorable gentleman wish it- tobe inferred that, if this Parliament passed* an Act sanctioning an arrangement for ten years, a succeeding Parliament would be so dishonest as to repeal it? If so, his; remarks were a grave reflection upon honorable members. Have we not passed an Act whereby the sugar industry is protected, under which certain bounties are to operate until 1912, and has any honorable member ever suggested, much less proposed, its repeal? The Prime Minister said -
We have no choice practically between putting this agreement in the Constitution, subject only to the people’s will, or leaving it a mere Act on the statute-book.
No Parliament would dare to do what the honorable member suggests might be done.
– Such a thing would be repudiation.
– Absolutely. The speech of the Prime Minister contained much beautiful theory, and some excellent platitudes, and but little of it was practicable. Some of his propositions might lead one to think that he had not given the question the consideration which it requires, or that something has been concealed from honorable members. If the States are given 25s. per capita, the Commonwealth will have about 23s. per capita to meet its own requirements, supposing the Customs and Excise revenue continues undiminished. The Prime Minister, by citing New Zealand statistics, tried to show that it would increase, but, to my mind, where Tariff duties are protective the Customs revenue must necessarily decrease. It is true that we can fall back on other sources of revenue than Customs and Excise duties, and, as the Prime Minister indicated, we can pass a Tariff which will yield any sum that we may require. The honorable gentleman must admit that, in order to do that, we must either destroy the Protective incidence of the Tariff, load the raw material required by the manufacturers of Australia, or impose revenue duties on articles which are not required as raw material by our manufacturers. This is a very serious matter for the consideration of the great masses of the people, especially in view of what we heard recently from the Minister of Defence. It is quite possible that our revenue from Customs and Excise might fall to as low an amount per head of population as that of the United States. Let me say that the comparison with New Zealand was not a fair comparison at all. In New Zealand, some time ago, they abolished their Excise duties on spirits. They repealed their Distillation Act as the result of a Commission which inquired into its operation. They found that it resulted in a loss of revenue te the extent of £70,000 or £80,000 a year, the difference between the amount returned as Excise on locally - manufactured spirits and the amount which the same quantity would ;have returned under the duties levied on imported spirits. The Commission inquired into the question of labour in the industry, and found that only about 8 per cent, of the value of the products of this industry was spent on labour. The Parliament was so satisfied of the folly of continuing at a loss a semiprotected industry, employing comparatively very little labour, that they abolished the Excise duties, and compensated the few local distilleries affected. Now every gallon of spirits consumed in New Zealand pays the full rate of import duty. In Australia, we consume, every year, an increasing quantity of locally-manufactured spirits. The Excise duty paid is, in some cases, less by 4s. per gallon than the duty levied on. imported spirits. Every gallon of wine consumed in New Zealand is subject to an import duty; whilst, in Australia, very large quantities of Australian wine are consumed, on which, of course, no duty is paid. In many other respects the position in New Zealand is entirely different from that in Australia. It might be clearly demonstrated, and time will show, that the revenue we are now receiving from Customs and Excise will fall off considerably. Should our revenue per capita from these sources fall to that of Germany or the United States, this Parliament will have to impose direct taxation, not for the development of the Commonwealth, but in order to find the money which, under the proposed agreement, we shall be obliged to pay over to the State Governments.
– And which will be used for the development of the Commonwealth.
– I wish now to refer to another of the Prime Minister’s abstract statements. The honorable gentleman said that there is no limit to our powers of taxation. That is true in the abstract, but, if heavy taxation is to be imposed by the Commonwealth, and also by the State Parliaments, we shall soon reach a stage-
– When the worm will turn.
– Exactly. The Prime Minister was referring to the power of the purse, and we know that whoever has control of the purse is master of the situation. I venture to say that in a few years’ time, under this agreement, we should find the State Governments masters of the situation. The honorable member for Darwin has referred to the proposed payment to the States, under the agreement, as an expanding mortgage, and that truly describes it. The State representatives at the recent Conference have reason to be very proud of what they have been able to do. The agreement represents one of the cleverest and ablest moves made since the establishment of Federation to extend the importance of State Premiers and Treasurers. Any man who has kept his eyes open must have noticed that, from the inception of this Parliament, it has been viewed with envy and jealousy by State Ministers. They recognise that their importance and their power were greatly minimized by the establishment of Federation,, but, under this agreement, they are placed on a pedestal. They will crack the whip, and this Parliament must respond. We have to raise the money, whilst they will have the pleasure of spending it. We must bear the odium of imposing taxation, whilst these gentlemen, backed up by the supporters of State Rights, will go amongst our constituents and insidiously sympathize with them. They will tell the electors that it is really very hard lines that they should have to bear increased taxation, but that the Commonwealth Parliament is to blame for it. They will not tell them that we are obliged to impose additional taxation, solely in order to raise money for them to spend. This is not an extravagant statement of the case. We have realized its truth already. Only a little time ago, when, I think, Mr. Butler was Premier of South Australia, in announcing his policy at Gawler, he deliberately stated that the increased land taxation of Jd. in the £1, which he was proposing was necessary because of the extravagance of the Federal Parliament and the reduced amount returned to the State from the Customs and Excise revenue. He did not tell the people at the time that the States were receiving more from Customs and Excise under the control of the Tariff by the Commonwealth than they had ever received when Customs and Excise taxation was levied by the State Governments. I wish now to refer to the promises made by Federalists when advocating the adoption by the people of the Constitution. The delegates to the Convention issued manifestos - at any .rate those representing ‘ South Australia did so - stating that con siderable savings would be made in State expenditure. A number of people who were not against Federation, but who were against entering blindly into the scheme embodied in the Constitution Bill, knowing that it would mean increased expenditure through the creation of another big political machine, with 111 members, an additional Governor and Ministry, and all the paraphernalia and expense attendant thereon, wanted to know what savings were to be made. The reply in general terms was that there would be great savings, and that the State Parliaments would be considerably reduced. But what has occurred ? I venture to say that the savings which have been made are so small that they are not worth enumerating, and this agreement will put the State Parliaments in a position to actually defy their constituents, because it will supply them for all time with a large amount of money from the Commonwealth. Australia is a wonderful place and its people are a wonderful people. Just imagine 633 members of Parliament, seven Governors, seven Ministries, and a Judiciary, itself costing over half a million, to administer the laws of slightly over four million people ! Savings will have to be made, retrenchment will have to take place in the State Parliaments, and the State- Premiers know it. Hence their anxiety to fix in the Constitution provisions which will secure to them, without any effort on their part, the continuous payment of a large amount of money, and enable them to stave off the time when local savings will have to be made. I believe that if a strong leader arose to-day in Australia, and took up the question of the large reductions that should be made in State expenditure, he would sweep the country. During the period that this Parliament has been in existence. It has not borrowed a penny. If we had borrowed, we should have loaded the taxpayers with a considerable interest burden. I am not one of those who say that we must not borrow for any purpose, because there are some great public concerns for which we must borrow if we .want to get the work done. There are, however, a lot of other works, such as those which we have been constructing, which ought to be paid for, not out of loans, but out of revenue. That brings me to the question of the State debts. They have increased by about £48,000,000 since Federation. It has been suggested that there is nothing to be gained by the Commonwealth taking over the debts and meeting the interest on them, instead of handing back a proportion of its revenue to the States. But is it seriously contended .that there should be seven borrowers representing Australia on the London market, seeing that from all appearances the Commonwealth itself will very shortly be borrowing ? Are we to have them competing with one another to get in first and manipulate the market, and watching each other like foxes? Should borrowing not rather be done exclusively through the Commonwealth ? We could make considerable savings if we adopted the course suggested by the honorable member for Mernda. Under that honorable member’s scheme, we should not take up the position of forbidding the States to borrow in the future, but we should tell them that if they did want to borrow they must, de so through the Commonwealth. A great saving could be made by the transfer of the State debts to the Commonwealth, but if we agree to pay the States 25s. per head in perpetuity they will exhibit no anxiety to hand over their debts to us. They are very reluctant to do so even now. The proposition of the honorable member for Mernda is very liberal to the States. By it we should give the States the whole of their, properties unencumbered, take over the debts, and undertake to pay the interest. In fact, the proposal is astoundingly liberal, especially having regard to the powers of raising revenue .which the States have. If no effort is made to obtain control of the State debts now, while we are dealing with the Braddon section, so that we may arrive at some arrangement in that regard as definite as the one now before us, I am afraid that nothing will be done; because, once this agreement is adopted, the States will be quite independent. Some of them assert emphatically that they do not wish the Commonwealth to have control of their debts. Another fact which I should like to mention is that, up to the present, the States have taken up a very pronounced attitude against the imposition of direct taxation by this Parliament. In one sense, their opposition is quite logical ; because, as they put it, a duplication of taxation would be involved. It would not be desirable to have a Commonwealth income tax and a State income tax, or a Commonwealth land tax and a State land tax. I should like, therefore, to ask those who support this scheme - because they must know that we shall be compelled to impose direct taxation if we surrender to the States the amount of revenue which they ask for - whether they think the States will be less hostile afterwards to the imposition of direct taxation by the Commonwealth. Will not the States as much as they possibly can sow seeds of discontent with the Commonwealth Parliament, as they have done in the past when a Commonwealth land tax has been suggested? I venture to predict’ that the passing of this agreement will not in any way alter the opposition of the States to direct taxation. I could understand honorable gentlemen if, in order to avoid the duplication of taxation, they asked the States to leave to the Commonwealth the Customs and Excise revenue, and to retain direct taxation for the purpose of raising revenue for their own development. That would be logical, but it is not logical for the States to ask for a_ large share of the Customs and Excise revenue for all time - as they say for the payment of interest on their debts - and also to object to the Commonwealth imposing direct taxation. . One would also have thought that in any proposal to pay the States 25s. per head for all time, there would be included a provision that the amount should contract or expand according to the Commonwealth revenue. For instance, if our revenue fell below a certain amount, ought not the States to participate in the loss? Under this agreement, it is a case with the States of “ Heads I win, tails you lose “ all the time. Even if our revenue fell to half what it is to-day, the States would still have a claim to the payment of 25s. per head. Two years ago, when Mr. Moore, the Premier of Western Australia, was returning from the Hobart Conference of State Premiers, I suggested to him the wisdom of allowing the Commonwealth contribution to the States to be regulated by the increase or decline of its Customs revenue, and he admitted that my suggestion was a. fair one. When the honorable member for Wakefield was speaking the other evening, he emphasized the growl h of settlement which has recently occurred at Pinnaroo in South Australia. His statement in that connexion was perfectly accurate ; but he omitted to tell the House the whole of the facts. As far back as 1893, as a member of a Select Committee of the South Australian Parliament, 1 inspected that country. For ten days we camped upon dif- ferent portions of it, and upon our return to Adelaide we recommended the construction of a line of railway with a view to its development. Year after year, a Bill authorizing that undertaking was carried through the House of Assembly, only to be just as consistently rejected by the Legislative Council. The honorable member for Wakefield omitted to tell the House that the settlement which has recently taken place at Pinnaroo would have taken place years previously but for the action of the Upper House.
– Did the settlers come from outside South Australia?
– A majority of them were previously resident in that State. The use of superphosphates upon the poorer lands of the country has been no inconsiderable factor in aiding its development. The adoption of the proposed agreement will not promote settlement in any way. The States will still retain control of their own lands, and it will still be within their power to impose a progressive land tax for the purpose of bursting up large estates which constitute the biggest barrier to successful settlement. This year it is estimated that the Commonwealth will have to face a deficit of £1,200,000. It is quite true that, under the proposed agreement, the States will relieve us of the payment of £600,000 on account of oldage pensions. That such an offer can be regarded as generosity is, to my mind, simply amazing. The Commonwealth has relieved three States oft he payment of those pensions, and the others of the obligation to pay them. That several of the States had failed to enact such humane legislation long ago was really a grave reflection upon them. In reply to the offer of the States to provide the Commonwealth with £600,000 this year towards meeting the claims of old-age pensioners, I say, “ Thank you for nothing.” At the very least, they should have permitted the Commonwealth to deduct from its annual contribution to them the expenditure which will be incurred in the payment of oldage pensions.
– Those pensions will cost the Commonwealth only £650,000 this year, seeing that we have previously withheld £850,000 from the States.
– It would require many times that amount to efficiently organize our services, which have been allowed to fall into disrepair, as the result of returning so much revenue to the States.
I never dreamed that the State Premiers would have the hardihood to suggest that the Commonwealth should withhold this year only £600,000, as a result of our having relieved them of the obligation to pay old-age pensions. Then I would ask, “ Why should South Australia be obliged to contribute only 2s. per capita in this connexion, whilst New South Wales, Victoria, and Queensland contribute 3s. per capita?” Surely the States should be liable to an equal amount per head. Is South Australia suffering from a depleted revenue? During the past five years, has she not enjoyed substantial surpluses? As a matter of fact, no State is in a better position to contribute her justproportion towards the payment of old-age pensions. But, allowing for the deduction to which I have alluded, the Commonwealth will still be confronted, at the end of the financial year, with a deficit of £600,000. It must not be forgotten, too, that the cost of giving effect to the present proposals of the Government will amount to more than £3,000,000. We have proposals for various developmental works. If, for instance, the proposal of the Government that the Commonwealth should take over the Northern Territory is not a mere placard for the political shop window, it will mean a large expenditure. Then, again, we have the projected construction of the Western Australian Transcontinental Railway. Surely we must assume that honorable members who have declared that the Federation will not be complete until the eastern States are linked by rail with Western Australia are sincere? And where are we to find the funds to enable us to carry out these undertakings? Is it seriously suggested that we are to borrow to provide for old-age pensions ?
– Surely no one has made such a suggestion !
– The Government proposed to make good the deficiency in the finances of the current year by the issue of short-dated Treasury bonds.
– That was merely in anticipation of the additional revenue coming in after 1910.
– I think that the honorable member showed very conclusively when speaking to this question, that unless special revenue duties be imposed, our Customs and Excise revenue will diminish.
We have abundant evidence that the imposition of effective Protective duties leads to a decrease in Customs revenue. That has been the experience of many countries, and it will be the experience of the Commonwealth. It is also proposed to borrow for defence purposes. Is that a healthy proposition? It is from the masses that we shall for the most part recruit our forces; and if they find the bone and sinew of our army and navy, surely property should bear some share of the cost. We should provide for defence other than through the Customs or by means of borrowing. Reference has been made to the position of the smaller States, and I w.ould remind the House thai last year South Australia had a surplus oi £^291,000. She has indeed enjoyed a surplus during the last five years. Last year her railways in which ,£14,158,481 have been invested, returned 4.95 per cent, of net profit over and above working expenses ; her waterworks 2.05 per cent, on the capital cost, over and above working expenses; sewers, 4.55 per cent.; jetties and light-houses, 5.57 per cent; improvements on pastoral leases, 1 per cent. ; land re-purchase and homestead blocks for closer settlement, 3.43 per cent. ; and verminproof fencing on which loan money has also been expended, 3.52 per cent. The whole of South Australia’s public works, including railways, representing an expenditure of £22,731,535, - returned’ last year an average of 4.04 per cent, net profit on the capital cost. According to the Commonwealth 11 ear-Book the whole of the railways of. Australia, after providing for working expenses and interest and other charges, showed a profit of £807,725 for the year 1907-8.
– And a still large profit for the preceding year.
– For the year 1906-7 they made a profit of £977,276, and in 1905- 6 they showed a profit of £379,462. In three of the States the railways did not show a profit last year, but their total debit was only £200,735. In my own State, renewals are paid out of revenue. Every new station that replaces an old one, is built out of revenue, and the cost of renewing the rails is also provided for in the same manner. Nevertheless a handsome profit is made.
– The honorable member said just now that South Australia had shown a surplus during the last five years. According to the Y ear-Book in 1906- 7 she had a deficiency.
– I may be wrong, but I think she has enjoyed a very substantial surplus for several years, and that she has devoted a large proportion of her surplus moneys to the reduction of loans which were accumulated in connexion with some of her previous deficits. It is said that the States require the amount proposed to be returned to pay off their loans ; but they are in a much better position than the Commonwealth is to raise the necessary money. The revenue from their reproductive works is sufficient to pay interest on the capital expenditure. In many cases large sums have been expended on the construction of main trunk railway lines, and, as branch lines or feeders are constructed, the railway revenue must increase; On the whole, the States have, in their railways and other public works, a very handsome asset as against their debts. I have no sympathy with those who constantly refer to the debts of the States as if all the money borrowed by them had been wasted. They have many reproductive works to show for their loan expenditure, and, even where no visible assets exist, the people have been indirectly benefited by the expenditure. Large sums have been expended in making roads which were but the forerunners of railway lines, and in that way the country has been opened up. And so with our waterworks. Even if they do not return 3 per cent, or 4 per cent, upon the capital expenditure, there is the indirect gain to be taken into account.
– They are all developmental works.
– Quite so. Notwithstanding that some blunders have been made in connexion with the expenditure of loan money, the States to-day can present such magnificent assets as against their indebtedness that I am confident that a syndicate of financiers could be formed tomorrow to take over the debts if, at the same time, the assets could be secured. The public debt of Australia has not been accumulated like that of England, whose only asset in respect of loan expenditure is represented in her Suez canal shares.
– Our loans have not been expended on wars.
– No, they have not been fired away in powder and shot; they have been expended in building roads and railways; and in the construction’ of many important public works that will serve generations as yet unborn. Australia is yet in her infancy, and practically two- thirds of her public indebtedness has been incurred in respect of public works that are paying interest on actual cost.
Sitting suspended from 6.31 to 7.45 p-m.
.- This discussion is slightly irregular in being taken at. this stage instead of, as usual, on the second reading; but as so many members have taken advantage of the present opportunity - although no doubt some may desire to supplement their remarks later - I desire to say a few words. I regret very much that the Treasurer, when requested by some honorable members on this side, including myself, did not prepare for our use a set of figures showing the operation of the Tariffs in various countries, and gathering together in one paper the figures which have been used on both sides of the House. This would have relieved the Statistician’s Department of a great deal of trouble. Many honorable members, in the exercise of their right, have written to the Department for information on various phases of the subject, with the result that, in several cases, figures have been duplicated unnecessarily. In the future, if we desire to quote these figures, we shall be compelled to practically go through the whole of the speeches ; and many honor - able members have had to mutilate their copies of Hansard in order to preserve the returns. Honorable members, including myself, have been asked by more than one person, and some of them members of the general public, for the figures which it was supposed the Treasurer had supplied in compliance with the request made. Honorable members opposite have asserted that the Government’s scheme and the scheme adopted at the Brisbane Labour Conference are identical. While I am not prepared to admit that the schemes are the same, it will be seen that, if the Government, at a secret meeting in the State Parliament House, and with the assistance of the Premiers and Treasurers and their skilled officers, were only able, after ‘five days’ conference, to evolve a scheme equal to that arrived at by the Brisbane Labour Conference, in, 1 think, a day and a half, the Labour party are receiving from honorable members opposite the best of testimonials. But the scheme adopted at Brisbane was not the same as that adopted at the Premiers’ Conference ; the manner and method of dealing with the subject were in each case vastly different. The Brisbane Conference was open to any outside person who cared to attend, and the proceedings were reported by the representatives of the Labour press; whereas the Premiers’ Conference was private, and the anti-Labour press, although it was an antiLabour gathering, was not invited. Why were the Leaders of the Opposition in the various State Parliaments, and in the Commonwealth Parliament, not invited to be present at the Premiers’ Conference ? Simply because it was known that in each case the Leader of the Opposition is a Labour leader. Had the leaders of the Opposition been anti-Labour in their views, they would have been invited, as they were to the. Premiers’ Conference in Melbourne in
– Did the Western Australian Premier not suggest that the press should be present?
- Mr. Moore, the Premier of Western Australia, suggested to Mr. Wade, the convener of the Conference, that the press should be admitted, but the latter gentleman absolutely objected. I suppose that the reason for all this secrecy was the same that led, as we are told, to the burning of the blotting pads.
– That was not a bad idea, was it?
– I do not think there is “ much in it.” It would require a highly skilled man to make anything of a mass of figures as disclosed by blotting pads.
– Does the honorable member say that the two schemes are alike?
– No, I do not; I simply point out that that is what is said by honorable members opposite. If, as the honorable member for Wilmot has stated, the schemes are alike-
– Quite so; and can the honorable member not see what a magnificent testimonial he is giving to the Labour Conference, constituted of a number of untrained men, who were able to produce such, a scheme in a day and a half? The two schemes are not alike. As I have said the Brisbane Conference was open and the Labour press was represented. It is not to be supposed that we would invite the enemy there to ridicule the efforts of the Labour men ; but, strange to say, the anti-Labour press was not invited to the Melbourne Conference, which the Employers’ Federation claims was under its auspices. The difference between the two schemes is that, while the Brisbane scheme considered the needs of the Federation first, and proposed to distribute what was left per capita amongst the States, the Government scheme puts the States first, and gives Federation the balance.
– One scheme works out at 24s. per head, and the other scheme at 25s. per head.
– That is not so.
– And the Brisbane scheme was for all time.
– No. If the honorable member can show me that the Brisbane scheme was to operate for all time, I shall be prepared to vote for the Government scheme. The first lines of the Brisbane scheme are -
That this Conference approves the general outlines of Mr. O’Malley’s scheme relating to the establishment of a national bank.
Do honorable members opposite claim that their scheme is the same as that? Can they say that they approve of the proposition which I have quoted ? The honorable member for Echuca in the course of this debate interjected that the Premiers’ scheme is the same as the Brisbane Conference scheme.
– The honorable’ member is quite mistaken as to my interjections.
– At any rate, many honorable members have made interjections to that effect. The honorable member for Wilmot will not deny that he .has done so. Is there one line in the Premiers’ Conference scheme that expresses approval of a national banking system? If there were, the Employers’ Federation would not be supporting this scheme to-day? Every vested interest in the Commonwealth, including the whole of the banks, would be opposed to it. But they are supporting it now, because they know that it will be the means of putting off the day when a national banking system will be adopted by the Commonwealth in the interests of the whole of the people. The Brisbane Conference further affirmed that the States should continue to receive a share of the Federal revenue. Every one is agreed upon that. And why ? Because we believe that the States are entitled to consideration. Honorable members opposite cannot say that any member of the Labour party is less careful of the interests of the States than they are themselves. We represent constituencies which are parts of States. We have to fight for our political lives just as keenly and hard as do honorable members opposite. Further, we have not the backing which they receive. It is very easy to fight an election when you know that both the leading newspapers are barking for you every morning; printing your name in every issue in big letters, and giving you full publicity, whilst absolutely ignoring your opponents. We are just as anxious to consider the needs of the States as is any honorable member opposite. Several honorable members have quoted various resolutions of the Brisbane Conference, and they have been copied into Hansard,. The honorable member for North Sydney, and1 the honorable member for Cook, for instance, have done so. Consequently it is not necessary for me to go over the same ground. But I may remind the House that the Brisbane Conference resolved that -
The proportion of revenue allocated to the Commonwealth must be sufficient to cover (a) all existing expenditure apart from reproductive services; (i) old-age and invalid pensions throughout the Commonwealth ; (c) an additional sum not to exceed £1,000,000 for the expanding necessities of the Federal Government such as the creation of a Federal capital, railway undertakings, and the development of the Northern Territory.
Did the Premiers’ Conference provide for those objects? Is there one single word in the Ministerial scheme with reference to old-age and invalid pensions being provided for, before the States receive their 25s. per head? Not a single supporter- of the Government scheme has laid emphasis upon that point. All that they are anxious about is that the States shall be provided for. I say distinctly that if a vote could be taken on the Government proposal on its merits, not twenty members out of the seventy-five members in this House would support the scheme as it stands.
– The honorable member will find that there will be thirty-eight members who will vote for the scheme.
– If that be so, the scheme will be carried. But honorable members opposite cannot convince me that there are thirty-eight members of this House who believe in the scheme. If there are, certain honorable members have been trying to fool this House and their constituents.
– My electors know my attitude, and I think I am doing right in putting my views on record. Some honorable members have claimed that the scheme as drawn leaves the States in an equally good position to that which they occupied under the Braddon section. The honorable member for Capricornia pointed out that the estimate of the Treasurer and his officers was that the expenditure on old-age pensions would be ,£2,000,000, or, roughly, 1 os. per head of the population of the Commonwealth. Adding that sum to the 10s. per head defence expenditure, it will be seen that while the States will be as well off as they were under the Braddon section the Commonwealth will suffer. It has been asserted that Mr. Holman stated at the Brisbane Conference that the sum payable to the States under the scheme there fajvoured would be 24s. or 25s. per head. I will quote a portion of Mr. Holman’s ‘ speech to which the supporters of the Government scheme have not referred. He said -
A certain sum would be determined on for every unit of the population of Australia after providing for Commonwealth expenditure - apart from reproductive services - for old-age and invalid pensions, and an additional sum not exceeding £1,000,000 to meet the expanding necessities of the Federal Parliament, such as the capital site, railway undertakings, and the development of the Northern Territory. The necessities of the Commonwealth, of course, had to be met.
That passage throws an entirely different light upon Mr. Holman’s opinions. I desire, therefore, to place on record what his idea regarding this matter really was. It has also been . alleged that the honorable member for South Sydney asserted that the Brisbane Conference’s scheme would mean that the States would receive 25s. per head. What the honorable member did say, as reported on page 35 of the Official Report of the Brisbane Conference, was -
The proposal meant, in effect, that. £1 or 23s. per head would be paid to the States out of Commonwealth revenue, no matter from whence it was obtained by the Commonwealth.
Honorable members who have made use of his remark relative to the 25s. per capita return have not also quoted his remark that the amount might be only £1 per head. It is but right, in justice to an honorable member who is absent, to place upon record what he really did say. The honorable member for Dalley said this afternoon that in the very first session of the Federation Parliament, the defence expenditure of the Commonwealth was reduced from £700,000 to £500,000 per annum. It was the late Sir Edward Braddon who submitted a motion to that effect. To-day, instead of talking of a vote of £500,000, honorable members talk of a vote of £2,000,000 in order to make Australia safe. These facts were not known to the Brisbane Conference, and had they been known probably an additional amount would have been set down for the purpose. But as it was the Brisbane scheme was left elastic enough to provide for the necessities of the Commonwealth. I candidly admit that I am not very keen on defence. Some honorable members are able to raise a great amount of enthusiasm over the creation of engines for the destruction of human life. I have never been able to enthuse at all on the subject. But so long as the people say that the Commonwealth must be defended, it is far better for us to defend it adequately than to make a farce of the whole thing.
– I think that the honor.orable member should have referred to machines for the defence of human life.
– I admit that the thought might have been better expressed in that way, but in preserving human life a great many persons must be destroyed. I do not intend to deal with the question of defence at this stage. In their scheme the Commonwealth Government and the Premiers say that the needs of the States must be first considered. We have an entirely new condition to-day. We have the Treasurer by interjection and statement backing up a recent observation by the Premier of New South Wales, that when we pay the interest on the whole of the debts, and even when the debts have been paid, we are to continue to pay 25s. per capita to the States. The honorable member for Bendigo - the only .member of the Convention who happens to be present now - knows full well that the Braddon section was placed in the Constitution for the express purpose of guaranteeing the bondholder. When honorable . members advocated the acceptance of the Constitution Bill they urged that that section would give a guarantee to the bondholders that the interest on the debts would be paid, and that that was necessary because we were taking away from the States their principal source of income, the Customs and Excise revenue. It was represented that after the expiration of the Braddon section the debts, if they had not already been taken over, would soon be transferred. I ask, Who are the true nationalists in this Parliament - the men who intend to bind the Commonwealth for all time or those who, on this side, are endeavouring fo prevent, not a leg-roping or a shackling of the Commonwealth, but a complete tying of it up for all time? In the absence of a provision for a straight out referendum - a majority vote of the people - it .will be absolutely impossible to alter the financial provision, because of the very favorable terms granted to the smaller States. This agreement is practically a bribe to the two smaller States, Tasmania and Western Australia. It proposes to give to Tasmania more per head than it has received, that is, in proportion to the amount received by the other States. The honorable member for Franklin will admit that whereas we have hitherto handed over to Tasmania 4s. or 5s., less per head than the average amount paid to the other States, it is now to receive an equal amount. Where New South Wales has received 6s. or 7s. a head more than has Tasmania, under this agreement the latter will receive exactly the same amount as the former.
– How much more than Victoria has New South Wales received ?
– A great deal more.
– Why is not the agreement a bribe to Victoria?
– Because Victoria has always received more per head than has Tasmania.
– Not much.
– What has been the great complaint in Tasmania? That it has, under the bookkeeping system, been paid from £20,000 to £40,000 short per annum. It has been assumed that a number of Tasmanians or persons going to that State have been smugglers, taking over goods without paying duty thereon.
– No; there has been dumping.
– Dumping has nothing to do with the question, because goods made in Australia are duty free. If the honorable member is wearing an Australian coat, no duty was paid upon it, but if it happens to be an English coat duty was paid, and his or some other State reaped that advantage.
– But the honorable member does not approve of a per capita return ?
– The honorable member cannot interject from the Treasury bench. I am in favour of a per capita return, as it is the only true Australian method. On that side of the House we have some of the most Conservative public men in Australia.
– Not very many.
– I mean when they take the trouble to enter the Chamber. I presume that they think that the debate has been strung out so long that it is not necessary for them to listen to any one. All the “ big guns,” all the financial authorities, all the men who carry any weight, think that when they have spoken the debate should be closed, but I intend to have my little say, though it will not be very much, because I have an equal right to speak. Some of the most Conservative members of the House are exhibiting a new-found admiration for the referendum. They are asking to-day, “Are you afraid to trust the people )” I, for one, am not afraid to trust the people. But under this Bill shall we get a straight-out referendum ? A proposed alteration of the Constitution must be affirmed by a majority of the people in a majority of the States. I anticipate that after vested interests have grown up under this measure it will be absolutely impossible to again alter these provisions of the Constitution. That is why T, in the interests of Australia, am using my best endeavours to prevent this agreement being embodied in the Constitution. I doubt if it will receive the support of the statutory majority. If the honorable members for Mernda, Flinders, Parkes, Batma.ii, and others object to this scheme in parts they certainly must vote against the third reading of the Bill if their amendments have not been incorporated therein. Otherwise they will have only been talking to the air. If, however, the agreement does go to a referendum I intend to do my test to see that the people are made acquainted with the full facts. I shall endeavour to prove to them that it will hamper us for all time, owing to the difficulty of obtaining an alteration of the Constitution. In 1902 or 1903, in company with the honorable member for Darling, I was one of a deputation from a Trades Conference, then sitting in Melbourne, which waited upon the present . Prime Minister, asking him to submit to the people a proposal for an alteration of the Constitution which would enable the Commonwealth Parliament to deal with all industrial disputes, removing the qualification that the disputes must be such as extend beyond the limits of a State. The honorable gentleman then told us that it would be extremely difficult to obtain an amendment of the Constitution. Should this agreement be inserted in the Constitution, it would remain therepractic ally for all time. I ask those who have this new-found love for the referendum whether they are prepared to submit other questions to the people. Are the Premiers prepared to ask us to submit to the people the question, “ Should the State Parliaments be abolished”? It is said that we are not prepared to trust the people. I am prepared to trust them by submitting to them any question upon which they can clearly express their opinions, and which can be fairly stated to them. I do not think that the proposed agreement will be so submitted. The metropolitan press of Melbourne is divided on it, and I understand that the large dailies of the other States are in favour of it. How, then, can those who are opposed to it obtain expression for their views? Will the arguments against the proposal be put fairly before the people? I do not think that they will. I hope that the House will reject the proposal. The honorable member for Franklin said that if the Government consented to any alteration of the agreement it should leave office.
– I say so now.
– Why should it do so, unless Ministers are riding for a fall?
– I do not think that it should do so, and I am as keen a party man as any in this House. Would the honorable member for Franklin say that the Government should take the same attitude regarding the transfer of the Northern Territory ? He would not. He is one of the most bitter opponents of that proposal, and therefore thinks that it should be treated as an open question. This, too, should be treated as an open question. The whip should not be cracked to compel honorable members to vote against their honest convictions. According to the calculations of the honorable member for Dalley, I am the thirty-fifth, member who has spoken on the motion before the Chair, and of the seventeen Ministerialists who have spoken, only ten have supported the proposal. The seven who have spoken against it carry as much weight as any other seven, excluding Ministers, on that side of the Chamber, and are men who have devoted a great deal of time to the study of these questions. If in a party of forty-four; only ten, including two Ministers, can be got to speak for the agreement, the Government position cannot be very strong. ‘No doubt there are honorable members who will not speak in ‘favour of the agreement, and yet will vote for it. They know that it is easier to. explain away
Cms] a vote than a speech. Like Brer Fox, they are “ laying low and saying nothing.” They hope that in the confusion of issues at the general election their votes on this question will be forgotten. The honorable member for Franklin interjected this afternoon that the result of the Queensland elec tion shows that the agreement is popular iri that State. I say that it does not. The Labour party there is opposed to the agreement, and it has gained seven seats, whereas the Ministry have gained only three.
– Was the acceptance of the agreement an issue?
– -I doubt if it was mentioned at one meeting out of ten.
– Then the honorable member has not read Mr. Kidston’s speeches.
– I have enough to do to read the speeches made in this House, and I have taken the trouble to read all which I have not heard on this subject, because I think that every honorable member should post himself up on it, whether it is or is not to be submitted to the people. It is not my intention to go largely into figures, though I desire to prove that the effect of a Protective Tariff is to reduce revenue. The Braddon section was placed in the Constitution as a guarantee to the bond-holders. As the Commonwealth was to take control of the Customs and Excise receipts, the chief source of revenue, it was thought that the States should be guaranteed the return of three-fourths of it, so that they would have sufficient to pay the interest on their debts. When the Treasurer was speaking I interjected that, in my opinion, not 10 per cent, of those who voted for the acceptance of the Constitution understood many of its provisions. I reiterate that statement. Every honorable member knows electors who thought that Federation meant the abolition of the State Parliaments, or, at any rate, a great reduction in their expenditure. But tables have been published from time to time in various newspapers showing that, notwithstanding the fact that the Commonwealth has taken over some of the most expensive Departments of government, the State expenditure has increased. Some honorable members have shown that the expenditure of New South Wales is as large now as it was before Federation ; and an article which I read two or three months ago - I think in the Age - showed that the expenditure of Victoria is larger today than it was before- Federation
The expenditure in all of the Departments has increased. I do not say that there was not room for an increase of expenditure in some. It is possible that in the past the Education Department had been starved. Honorable members of all political parties are agreed that expenditure on that Department might very well be increased.
– Let the honorable member consider the money spent on irrigation and railway construction.
– I do not refer to expenditure on public works, but to expenditure on the upkeep of the various public Departments. That has not been reduced as it was thought it would be as a result of Federation. In his anxiety to prove that we ought to make this contribution to the State Governments, the Prime Minister searched the whole world for an example of a country deriving a large amount of revenue from Customs and Excise. The honorable gentleman hit upon the example of New Zealand during the last few years. He said that there was no reason why the Commonwealth should not raise a. revenue equal to that of New Zealand, and he stated the New Zealand revenue from Customs and Excise at £3 10s. per head. I have been supplied, through the Treasurer, with figures compiled in the Statistician’s Office, and they show that, in 1908, the New Zealand revenue from Customs and Excise amounted to only £3 4s. per head. The figures supplied to me may cover the calendar year, whilst those quoted by the Prime Minister may cover the financial year ; buthonorable members will note that there is a big discrepancy between them. According to the figures supplied to me, the highest revenue per head raised from this source in New Zealand was £3 9s. 7d. in 1907, and the amount was as low as £3 3s. 4d. in 1905. Every member of the House is aware that, during the last few’ years, New Zealand has indulged largely in borrowing. Many honorable members do not believe in a borrowing policy. They believe that we should pay as we go. I do not say that it might not be advisable, in certain circumstances, for the Commonwealth to borrow ; but I think that the majority of honorable members are agreed that it is well that this Parliament has in the past been against borrowing. It has been stated that, during the last seven, or eight years, NewZealand has borrowed £17, 000,000 or£18,000,000. If the Commonwealth had borrowed at the same rate per head as New Zealand, we should have borrowed, during the last eight or ten years, about £80,000,000. Had we done so, we should have had plenty of money to expend; but I think it was far better to have followed the course we did than to have followed the example of New Zealand in this respect. Though the Prime Minister did not do so, several other honorable members have quoted the revenue raised from Customs and Excise in countries other than New Zealand. It should not be forgotten that New Zealand is a small country . The honorable member for Flinders quoted the Customs and Excise revenue, and the value of imports per head of population, in some twenty or thirty different countries, and honorable members will have noted that, out of the big list the honorable member gave, the small countries, such as Denmark, Holland, and Switzerland, showed the largest value of imports per head of population. A small country like New Zealand cannot produce what is required by its people to the same extent as wecan in Australia. Our Tariff was framed by a Ministry which was led by the present Prime Minister, and of which the Minister of External Affairs was a member. It was bitterly opposed by some honorable members that I now see on the Ministerial side. That Tariff was framed with the intention, not only of protecting established industries, but for the encouragement and assistanceof some of our producing industries, such as the sugar industry. They were carefully considered ; and I do not complain of that I voted as readily for the duty of £6 per ton on sugar as for any other item in the Tariff and I should be prepared to do so again. According to the latest figures available, and supplied to me by the Statistician’s Department, through the Treasurer, Canada raises a revenue from Customs and Excise, not of £3 4s. per head, as New Zealand did last year, but an average, for the last five years, of £2 4s. 2d. per head. We can produce, in Australia, a greater variety of things than can be produced in Canada. Canada has no tropical products at all Honorable members who have had the privilege and pleasure of visiting the Dominion are aware that, during from three to six months in each year, the greater part of the countryis under snow. Although they cannot produce many things that we produce , in Australia, they raise from Customs and Excise only £2 4s. 2d. per head. In the United States, where they have tried, as we have done’ here, to make their Tariff protective in the interests of the whole of the people, they raised an average revenue for the five years from 1903-4 to 1907-8 of only £1 6s. 8d. per head. I think it will not be denied that, when our Tariff becomes really protective in its operation, the revenue derived from it will be well under ,£2 per head. I have here the latest bulletin issued by the Bureau of Census and Statistics. I received my copy of it, as I suppose other honorable members did, only to-day. I propose to refer honorable members to the revenue for the first seven months of last year and this year, under a few of the items in connexion with which we have tried to impose Protective duties. The revenue during these periods is not likely to have been inflated as the result of any unusual withdrawal of goods from bond, due to a desire to stockup in anticipation of the delivery of the Budget. If such a cause operated to inflate the revenue, it would have been more likely to operate this year than last year, because, as honorable members are aware, we adjourned at the end of June last year until September, in view of the visit of the American Fleet. I find that, for the first seven months of 1908, our importations of ale and beer amounted in value to £250,000. Our imports for the corresponding period of 1909 amounted to only £212,000, showing a reduction of £38,000 on that item alone. Our imports df apparel and all descriptions of soft goods, for the first seven months of last ye.ir, amounted in value to £7,220,000, and this must include many items that are on the free list ; and, for the corresponding period of this year, to only £6,741,000, a falling off of about £500,000. These figures show thai we are producing certain lines of goods.
– Only one section of the Commission.
– I am speaking of the Protectionist section of the Commission. For the year 1903-4 the amount raised in Customs and Excise duties was £2 5s. 4½d per capita ; next year it had declined to £2 3s. 5jd. ; in 1905-6 it was £2 4s. o£d., and in 1906-7 it had increased to £2 6s. 9jd. But what was the reason underlying the last mentioned increase? Simply that in anticipation of higher duties being levied importers had stocked up. During the period that the 1901-2 Tariff was operative the amount raised from Customs and Excise decreased to less than £2 4s. per capita. Now, there is an old saying that one cannot have his cake and eat it, too, and it is equally true that we cannot foster Australian industries and have a large Customs revenue. It is obvious that if we are to have an effective Tariff we shall receive considerably less than £2 4s. per capita. The Treasurer estimated his receipts from this source last year at £2 ns. 7d. per capita, but his actual receipts were only £2 ros. 8d. per capita. During the current year he expects to receive only £2 9s. 7 Jd. per capita. Honorable members will note by reference to the Budget papers that it is estimated that this year there will be a shortage in the Australian sugar crop of about 40,000 tons on account of the weather conditions which have obtained. A few frosts in the southern portion of Queensland, or a grub pest in the north, have the effect of seriously disturbing production in that industry. If the Treasurer has not taken into account the anticipated shortage in the sugar output his receipts from Customs and Excise this year will be only about £2 8s. per capita. Should our revenue from this source decline - as I think it will - we shall not be able to return to the States the amount stipulated in the proposed agreement. In response to a request, preferred by me, the Treasurer has had a return prepared showing the revenue derived from Customs and Excise by the whole of the States for the five years immediately preceding Federation. At that time, as honorable members are well aware, Victoria and South Australia were the two most highly protected States of the group. In the former, the average amount raised during the period I have indicated was only £1 15s. nd. per capita. Do Protectionists believe that a larger amount can be collected under a Tariff which is truly protective? If my memory serves me accurately, Victoria levied a duty of £6 per ton upon sugar, and granted a rebate of 3s. per cwt. upon sugar used in certain manufactures. In other words, every person in this State was taxed to the extent of 4s. annually by means of the sugar duty. Victoria also levied a duty upon tea, but kerosene was admitted free. Had tea been exempt from duty, it is clear that the Customs and Excise revenue of Victoria would have been reduced to about 30s. per capita. That is approximately the amount which I anticipate an effective Tariff will produce, having in mind the duties which are levied upon narcotics and stimulants. In South Australia the amount collected by way of Customs and Excise duties during the five years immediately prior to Federation was £1 13s. 1 id. per capita. I am sorry that the Treasurer declined to accede to my request to have these figures printed in the form of a Parliamentary paper, because, although they are already embodied in Hansard, honorable members would like to have them in a handier form for use upon the public platform. I am indebted to the courtesy of the Chief of the Hansard Staff and of the Government Printer for the twenty-five copies of them which I have obtained. I trust that the proposed agreement will not be embodied in the Constitution. Should it be placed there, I have no hesitation in saying that we shall be compelled to resort to a revenue Tariff. The honorable member for Denison has stated that we could raise £3,000,000 by taxing softgoods alone. That would be equivalent to a tax of 15s. per head of our population. It would also mean the adoption of a revenue Tariff. If that is the dominant idea of honorable members opposite, I hope that they will not be slow to express it. Some honorable members have already declared that the proposed agreement was arrived at only for the purpose of enabling the States to avoid levying direct taxation. If that be so, I take it that this Parliament will not shrink from the discharge of its duty. I hope that the members of the Commonwealth Parliament, whoever they may be, will resort to direct taxation rather than sanction the imposition of a revenue Tariff. The Federal Parliament is as competent to impose direct taxation as is any of the State Parliaments. Under this agreement, however, we are to raise, every year, £5,000,000 or more, according to the population of the States, and hand it over to the States Parliaments, saying, “ Spend this as you please.” At every Conference of State Premiers, with the exception of the last one or two, and whenever this question has been discussed in the Federal Parliament, it has always been urged that, with the transfer of the State debts to the Commonwealth, this payment to the States should cease. If we embody this agreement in the Constitution for a term of five or ten years, or without any limitation whatever, we shall express a direct want of confidence in those who are to represent the people in this Parliament in future. Why should we be discussing this question to-day? The Braddon section is in operation, and will npt cease before the end of next year. A new Parliament will have been elected before then.
– The Braddon section will continue to operate after 19to, until the Parliament otherwise provides.
– That is so. We shall have to face our constituents before the end of 1910, and it is said that the next general election will be fought largely on the question of finance. I am afraid that a number of other issues will be raised, and that in many electorates the question of finance will not be heard of.
– -In my electorate alone, will the next election be fought on the financial question.
– And that is the only electorate in which the financial question will be properly explained.
– There may be something in that contention; but I repeat that so many Other issues will be raised, that the question of finance is not likely to receive very much attention. If the majority of the people desire that the Braddon section shall be continued, either as it Stands, or in a modified form, they will return to” this Parliament men who will give effect to that desire. Why should honorable members opposite wish that this agreement shall be embodied in the Constitution, and that in that way, want of confidence should be expressed, either in themselves, or their successors? Is not the Federal Parlia-ment as fully representative of the people as is any State Legislature?
– It is more so.
– No State Parliament is so truly representative of the people as the Commonwealth Legislature is. Every member of this Parliament is elected by the direct vote of the people, whereas the members of some of the Upper Houses of the State Legislatures are nominated for life. Some honorable members have indicated that they intend to vote for this Bill, so that the agreement may be submitted to the people ; but I hold that, every one who believes that the agreement will be harmful and injurious to the people of the Commonwealth, should take care that it is not submitted to them. Believing that this Parliament is truly representative of the people, I contend that it should deal with this ‘question ; and that as the Commonwealth has to raise the money, it ought to expend it. We should not give away to the States a larger sum than we can afford to return if the Protective policy of Australia is to be maintained.
– I approach the consideration of this question with a considerable degree of diffidence, because it is one of far-reaching importance. It has a very important bearing upon the future relations of the Commonwealth and the States, concerning which I gave expression to my opinions in no uncertain manner, when I first entered this Parliament. As a result of further investigation and inquiry as to the operation of the Braddon section during the life of the Commonwealth, 1 see no reason to alter the opinion which I then expressed. I regret that the Government should have come forward with a proposal which means, practically, the continuation of the Braddon section in a modified form. This was one of the most intricate problems with which, the Convention had to deal ; and, after lengthy negotiation, a compromise was arrived at in the shape of the Braddon section. The then position can be readily understood, when it is remembered that some of the States depended very largely upon Customs and Excise taxation for their ordinary revenue, and that their Customs and Excise legislation was so drafted as to operate against their entering the Federation on equal terms with those outside the Commonwealth. It was agreed that there could be no complete and lasting Federation unless Free’ Trade operated as between State and State. That in itself involved a considerable curtailment of revenue, and also the transfer to the Commonwealth Government of the Customs and Excise revenue. That meant a considerable loss of revenue to several of the States ; and the framers of the Constitution found themselves confronted with the problem of how that loss was to be met. Ultimately, the Braddon section was devised to meet the then obtaining conditions.. It provided that out of every 20s. raised by means of Customs and Excise taxation, the States should have a special claim on 15s., while the Commonwealth was limited to 5s. for expenditure on Commonwealth purposes. In the Constitution, as originally drafted, this provision was a perpetual condition ; but the State of New South Wales, and those who desired what was just -as between the taxing Government and the taxpayer,^ and those who wished the new Federation to assume the important position to which it was entitled, favoured a modification. The vote in New South Wales, at the referendum, was largely influenced by these considerations; and the federation of the States was not at first realized. It then became imperative that there should bt some modification of the Constitution, and the matter was considered at the Premier’s Conference which met in Melbourne under the presidency of the Premier of Victoria, Sir George Turner. The result of their deliberations was that the draft Constitution was resubmitted to the people in a modified form, and the Braddon clause, instead of being permanent, was to operate only for the first ten years. That provision has so operated, and will continue during the remainder of this financial year. But the section does not necessarily cease to operate, though, at the end of the term, it will be no longer a constitutional principle. During its operation, the Premiers and politicans, whose views are largely coloured by State considerations - who look at matters, possibly, more from a State stand-point than from a Commonwealth stand-point - are now found advocating the continuance of the provision in the Constitution, although some of them were originally strongly opposed to its incorporation. Up to the present time, some five or six Premiers’ Conferences have been held, and” the discussions have centred on this question. On the States’ behalf, it has been strongly urged that the Braddon section should be continued in’ the Constitution; and there are very strong reasons why the State Parliaments should desire to perpetuate it. For the past eight years, the Braddon section has been very much like the goose that laid the golden eggs; and the States have been deriving very large incomes. The States have not had the odium of imposing taxation - the Commonwealth has been the taxing machine, and the States have had the privilege and advantage of spending the money. During eight years, hot counting the present financial year, the States have received from this source something like £65,000,000, or about £6,000,000 over- and above their three- fourths, as representing the ‘ unexpended balances of the Commonwealth. The attitude of the States towards the Braddon section can be very well measured by their attitude towards the unexpended balances. The Constitution provided, in clear and’ specific language, that the States should be entitled to three-fourths’ of ihe revenue only, and that, until the Commonwealth utilized the whole of its one-fourth, there should monthly, during the bookkeeping period, and, thereafter, until the Commonwealth decided to use the whole of the one-fourth, be paid into the State Treasuries any remaining sum. It is under this provision that the States have received £6,000,000 over and above the threefourths to which they were entitled. When the Commonwealth, last year, decided tb exercise its rights, and appropriate the whole of the one-fourth, in order to make provision for the humanitarian policy of old-age pensions, and to make more adequate provision’ for defence, the State Premiers were up in arms ; .and the criticisms’, they levelled at the Commonwealth were of -a: very uncomplimentary- character. So strong were the views expressed that a number of the electors were under ‘ the impression that the Commonwealth was endeavouring to filch from the States the three-fourths to which they were entitled under the Constitution ; and the State Premiers, after talking about the “ burglarizing” disposition of the then Commonwealth Treasurer, appealed to the High Court on the technical question whether the Commonwealth was entitled to appropriate and hold moneys for future purposes, or whether its rights were limited to the money actually expended. The Judges of the High Court were unanimous in their decision that the Commonwealth was within its right. Some very strong comments were made with respect to the rights of the Commonwealth in this matter, and the attitude of the States with respect to the unexpended balance of the Commonwealth one-fourth. Judging by the action and attitude of the States on that occasion, we can well understand that they would be strongly disposed to resent any curtailment of the three-fourths Customs and Excise revenue that was provided for them under the Constitution. The States were quite within their rights in endeavouring to make as good terms as they could. But this Parliament has to remember that it is clothed with national powers, and that under the Constitution the Braddon section no longer continues to be operative after the end of the current financial year. Its determination is wholly within our hands. If the Federal Parliament considers the principle of the section to be a good one, there is no reason why we should not continue it. No legislation is required to do that. The section continues automatically. But if this Parliament considers that in the national interest the provision should be modified, we are quite within our rights, and no one except the electors dare say us nay, in so doing. As I said before, at the beginning of Commonwealth history many were of opinion that the provisions of theConstitution in the matter of expenditurewere vicious. It has been held as a sound principle of British taxation that the spending power should be the taxing power, and that the Treasurer incurring expenditure involving increased taxation should face the taxpayers and give them an opportunity to say whether the expenditure was justified’ or not. But. our Constitution brought in- a new principle. It made the Commonwealth Treasurer the taxing power, whilst clothing the. State Treasurers with the right to expend. There was nd need for’ If Kern “‘fo concern themselves as to whether the taxation imposed was justified in the view of the electors. All that they required to do was to bring pressure to bear upon the Commonwealth Parliament, and by that means secure the increased taxation that they required. As I have indicated, up to the end of the last financial year, the States had received the enormous sum of £65,000,000. My own State has benefited to the extent of something like £24,000,000. I undertake to say that under pre-Federal conditions the Treasurer of New South Wales would never have ventured to submit proposals to the country to raise so large an amount of revenue. If he had he would have had to do a large amount of educating, and to convince- the people of that State to adopt a different form of fiscal belief from that which had’ obtained, and I believe largely obtains at present, before he could have persuaded the electors to consent to so large a sum being raised through Customs and Excise. However, New South Wales is only a part of the Commonwealth, and the voice of the majority prevailed, with the result that the State Treasurer has benefited by an enormous increase of revenue. He benefited so largely that he was not disposed to look elsewhere for means to take the place of this taxation, should it be decreased, or should the Commonwealth Parliament be disposed to use the money obtained for national purposes. The States are desirous that, failing the continuation of the Braddon section, they should at least be guaranteed to the extent of 25s. per head of their population. Until recently they demanded that the payments to them should be maintained at the rates prevailing heretofore. But the fact that the Constitution limited the operation of the Braddon section to ten years indicated a desire on the part of those who were instrumental in bringing about a revision of the Constitution before its adoption that this unsound principle of taxation and expenditure should not continue any longer than could possibly be helped. It was felt that time should be given to the States to adapt themselves to altered conditions, and that ten years would be a reasonable time within which to enable them to make the necessary readjustment. But it was intended that within that period a better financial relationship between the Commonwealth and the States should be brought about.- It was hoped that our finances would be placed upon a sounder footing and a more logical basis than was provided for in the Constitution. At the time, it was thought that what were termed the more necessitous States would have to be specially provided for. In the Convention, those States were the strongest in insisting upon the Braddon clause being embodied in the Constitution. But what has happened since? The more necessitous States - those that have not benefited very largely by the provision - do not seem to be over-anxious about it at present; but the greatest support which it received in the Premiers’ Conference came rather from the States which have received the major amount of benefit from its operation. To some of the States, it has been in the nature of a goose which lays golden eggs. They want this arrangement to continue indefinitely, if not to the same extent as hitherto, as near to that as possible; and they have agreed with the Commonwealth Government to fix the amount returnable at 25s. a head. I do not propose to disagree with the per capita basis. That is a basis of allocating taxation which presses heavily on my particular State. Its people contribute more largely to the revenue than do the people of some other States. We shall receive less than we do under the bookkeeping system, which, of course, credits the duty to the country of consumption. That, however, was only a temporary expedient to allocate the revenue. But it is a most cumbersome system, and to some extent it is a negation of the principle of Inter-State Free Trade; for, although no Customs duties are collected, it entails the maintenance of complicated and expensive machinery in order to trace the .consumption of imported goods. It has been a source of considerable friction between State and State, particularly in the early years of Federation, when there ought to have been the freest communication. The only alternative to- that system of distributing the Federal surplus is the adoption of a per capita basis. Whilst I recognise that at present, and possibly for some years to come, it will inflict a loss upon New South Wales, still I think that its taxpayers recognise that that basis of distribution must eventually obtain; and, therefore, they are prepared to make some sacrifices in order to bring it into operation as speedily as possible. With respect to the fixing of the amount to be returned per head of the population, the Government made their proposal appear to he practically the same as the scheme devised by- the Labour Conference in Brisbane last year. Whilst the scheme adopted at the Premiers’ Conference is a colourable imitation of the Brisbane Conference scheme, and adopts its proposals to a certain extent, it contains some vital variations which make it a very different proposition. Under the Government scheme, the States are to receive first consideration. Commonwealth interests are to be met to a certain extent; but, when it comes to the question of distributing the surplus on the basis of 25s. per capita, then the State interests to that extent are to be supreme, and the Commonwealth interests to take second place. The proposal of the Brisbane Labour Conference was to preserve and promote Commonwealth interests, and to arm the Commonwealth with a reasonable control of its taxing powers, so as to enable it to meet national engagements. The Brisbane Labour Conference had in view the taking over of old-age pensions as a function of the Commonwealth Government. It also had in view the need of the Commonwealth to provide more efficient defence, and it recognised that that could not be done unless the Commonwealth was armed with sufficient funds to enable it to meet large engagements. It recognised the further fact that the Commonwealth might be called upon to provide for the control of the Northern Territory, the construction of several transcontinental railways, and so forth. Its aim was to undo the leg-rope that has shackled and restricted the Commonwealth during the first years of its history, and to enable- it to obtain greater powers over the control of its income from taxation ; and when these requirements were reasonably met, to provide for the distribution of the surplus to the States on a per capita basis. There is a very vital difference between the two schemes in that respect. Under the scheme of the Labour Conference, the interests of the Commonwealth were to be conserved and promoted, and those of the States to be reasonably met ; but, under the scheme of the Government, the interests of the States are to be guaranteed to the extent of 25s. a head’; and then the Commonwealth interests are to receive —.. measure of consideration. I submit to the House that there is a vast difference between the two schemes. Again, in connexion with the Brisbane scheme, it was never provided, and never contemplated, so far as I can ascertain the general views of those who took part in devising it, that their determination should be grafted on the Constitution. They considered that, like the original provision of the Constitution, the scheme should continue as an honorable arrangement between the States and the Commonwealth, and should be subject to review whenever the conditions might rendel that necessary in the interests of both these powers. That presents to me- a verywide difference between the two schemes. The financial relations of the Commonwealth and the States should be strictly limited. In my first address in this Chamber, I suggested that it would be a good thing to transfer to the Commonwealth unproductive and expensive departments of government, such as that providing for the needs of the destitute and the aged, to be administered out of surplus revenue. That would have relieved the States of a considerable expenditure. I have no wish to do injustice to State Rights or interests. Neither Commonwealth nor States should be extravagant. Parliaments should see that their taxpayers get full value for their contributions towards the cost of government. I shall always resist extravagance. If money is not needed, it should be left in the pockets of those who earn it by the sweat of their brows. I am willing that any Commonwealth surplus should be returned to the States ; if you will, on a per capita basis ; but the Commonwealth should not be hampered by the obligation to provide a large part of the revenue required for financing State needs. The intention of the framers of the Constitution, and of those who” were instrumental in securing its enactment, was that the Commonwealth and the States should be independent in their financial relations. It cannot be the desire of the electors that the rights and privileges of the National Parliament should be curtailed for the advancement of State interests. Those who voted for the Constitution approved of the limitation of the operation of the Braddon section to a term of ten years, which, it was thought, would give the States an opportunity to adjust their requirements to their altered circumstances. I took some part in bringing about the modification of the draft Bill which limited the operation of the Braddon section, and I should be false to those who supported me were I now to vote for the proposal of the Government to place in the Constitution for all time a provision whereby, whatever may be the financial needs of the Commonwealth, it will be required to return 25s. per capita per annum to the
States before spending a shilling for the advancement and protection of the national interests. In my opinion, what it is desirable to do now is to continue the Braddon section, in the modified form suggested by the Brisbane Conference and the Government, for five or ten years. We are legislating, not merely for ourselves, but for those who come afterwards, and cannot forecast the future. Before Federation, estimates were made of the probable position of the Commonwealth ten years from that time, but we have only to refer to them to see how much at fault were those who were then considered competent to make them. Those who were strong advocates of State Rights and the limitation of the Braddon provision realize that. They agree now that the taxpayers should have the right to review the position. The fact that the representatives of the States and of the Commonwealth have agreed that the Commonwealth, instead of continuing to return three-fourths of the Customs and Excise revenue to the States, should return only 25s. per capita, which is much less, is ample justification of the action of those who resisted the proposal to make the Braddon section perpetual. What I ask now is that it shall be equally open to the Commonwealth and the States to review the terms of the agreement now proposed in five or in ten years from the present time. I think I can appeal in support of this proposal to the Liberal and Democratic electors outside and to all who are not so blinded by their desire for the preservation of State Rights as to be unable to regard the Commonwealth Parliament as other than an evil. There is no need to embody the terms of the proposed agreement in the Constitution. I am aware that there are those who ask what guarantee we can give that the agreement will be maintained during the life of even the next Parliament. Every one must know that the next Parliament would not attempt to alter its terms except for some very weighty reason. Parliaments are within their right in altering previous legislation to meet altered conditions j but they can always be trusted, within reason, to carry out the obligations imposed by the legislation of their predecessors. I refer honorable members to the instance mentioned the other night. The different Commonwealth Parliaments have honorably stood by the Naval Agreement under which Australia guaranteed the payment of a certain subsidy in connexion with the Aus- tralian Squadron for a fixed period of ten years, although it has been open to them to have modified,’ or even to have terminated, that agreement. If we, in this Parliament, agree to pass a Bill embodying the agreement with the States for a period of five or ten years, the State Governments can depend that our undertaking will be honorably observed by those who succeed us. Whilst we can easily and readily make this agreement a constitutional principle once we have done so it will be a very difficult thing to undo. I ask honorable members to recognise the extent to which those who think the terms of this agreement should be embodied in the Constitution would shackle the Commonwealth. The Constitution is carefully safeguarded from interference, unless with the practically unanimous desire of the electors of Australia. If the agreement were made a part of the Constitution as the Government propose, and in years to come it were found to be highly necessary that its terms should be modified in the interests of Australian nationality and of the progress and good government of the Commonwealth it would have to be submitted to the referendum provided for in the Constitution for securing the modification of constitutional principles. To be given effect the proposal would need to be supported by not only a majority of the electors of the Commonwealth, but by a majority of the electors in a majority of the States. If, for instance, the Braddon section had not been modified ten years ago, and instead of its operation terminating at the close of this year, as it does, it continued as at first proposed as an unchangeable constitutional principle, and it were found, as it has been on the admission of the State and Commonwealth Governments, that its terms should now be modified in the way proposed by , the agreement before us, what would be the position? We have at present in the Commonwealth a population of 4,275,306, and in order to bring about the desired modification, we should have to poll, within the Commonwealth, votes representing a population of 2,137,654 at least in support of it. But if we secured that number of votes, or even a much larger vote in support of it, the desired alteration would still depend upon the re-“ suit of the referendum in the different States. The smaller States of Western Australia, South Australia, and Tasmania have a population of 850,111 out of the total of over 4,000,000 in the Com- monwealth, and if they were opposed to the proposed modification of the section, and votes representing 425,056 were cast n those States against it the section would stand as a constitutional principle. The great mass of the voters in the more populous States of Queensland, New South Wales, and Victoria might vote in favour of the proposed alteration of the terms of the section; but if a negative vote representing 425,056 of the population were recorded in the three smaller States effect could not be given to the national sentiment as expressed by the majority vote in the larger States. If this proposal is incorporated in the Constitution, and in five or ten years’ time is found to operate to the detriment of the National Government, it will be possible to change it only under the conditions which I have pointed out. That is a negation of the nationhood of the Commonwealth, and the Government who propose, and the members who support, this agreement, .are subordinating Australian nationalism to State interests. They are giving the State Governments a supreme power which they do not possess now. The Prime Minister, when introducing the measure, said in answer to an interjection that if two men were riding on a horse one must ride in front and the other behind. Every one knows that in such a case the man who rides in front determines what the man behind shall do, and where he shall go. That simile’ is very expressive of present conditions, and I shall adopt it. The original intention of the little State Righters was that the States should ride in front and the Commonwealth behind ; but the good sense and patriotism of the people, who wanted to see a nation founded in Australia, reversed that position and put the Commonwealth in front and the States behind. The States have been fighting ever since to get in front, and honorable members opposite, who claim to have the rights and privileges of Australian nationhood in their- keeping, think so little of the supremacy of the Commonwealth that they ask this Parliament to vacate the front position on the horse and take the rear seat. I totally disagree’ with that. Whilst I am prepared to consider State interests and State conditions, I am not prepared as a patriotic Australian to give to the States the first place that has been secured to the Commonwealth, and put the Commonwealth in a secondary position. The question of State debts is inseparably bound up with that of allocating the Com- monwealth surplus for State needs. Those who drafted the Constitution considered that the State debts should become a Commonwealth concern, and inserted a provision that the Commonwealth should be empowered to take over and consolidate the debts. It was apparent]) supposed at the time that the States had exercised their rights of borrowing to the fullest extent, or that the matter would be settled so speedily after the inauguration of the Commonwealth that there would be no new debts to deal with. But no action has been taken, with the result that a large additional indebtedness has accrued, which can only be dealt with by the Commonwealth by the consent of the States, or by means of a referendum. It would not be wise to deal with the question in a piecemeal way. According to the Prime Minister, the State debts to-day amount to about £250,000,000, upon which the annual interest charge is £8,800,000, although it is true that a large amount of the money borrowed has been invested in reproductive works. Whilst it would not be possible for the Commonwealth to float a loan of £250,006,000 and convert the State obligations immediately into a Commonwealth obligation, there is a great necessity, for the Commonwealth to step in and deal with the matter as the State debts mature. That can only be done if the Commonwealth is armed with the necessary powers. The necessity for Commonwealth intervention in that matter is pressing. We have six States competing with one another upon the London market without consideration of each other’s needs. They are watching each other to seize favorable opportunities, and monopolize any advantages that may offer. That, state of things cannot go on for ever, and we are approaching a time when the States will have, to borrow largely, not for the purpose of new works, but in order to liquidate their maturing obligations. Loans are falling due, and no provision has been made in the shape of sinking funds to wipe them out. Consequently the only way in which they can be met when they do mature is bv the States floating fresh loans. That means that there will be greater competition between State and State in the near future, and also that the- States will be at the mercy of the money lenders of the Old Country. In the past they have been able to determine when and how they shall place their loans, but in the future, when loans fall due, they must be prepared to meet them at definite times, Those conditions are well known to the money lenders, and it will be possible for them to so regulate the market as to place the competing States at a great disadvantage. That is another reason why the Commonwealth should step in and provide for the re-flotation of the loans as they mature. According to the best authorities, the Commonwealth is in a better position to float those loans to advantage than any of the competing States could hope to be. The honorable member for Hume put forward a scheme under which the State debts would be taken over, and liquidated within a period of from sixty-six to eighty-seven years, without any strain being imposed upon the taxpayers. During the next ten years - that is, up to the end of 1920 - New South Wales will be called upon to provide for £31,578,429of maturing indebtedness; Victoria for £20,381,860; Queensland for £14,335,300 ; South Australia for £8,155,495; Western Australia for £2,299,610; and Tasmania for £3,687,746. In other words, during the next decade, the States will have to convert, at specified periods, . no less than £79,868,450 of maturing indebtedness. During the subsequent five years, New South Wales will have to provide for further loans aggregating £21,141,811, or for a total of £52,720,240. Victoria, during the same period, will have to meet loans to the extent of £7,809,795, or a total of £28,191,655; Queensland will have to provide for £12,793,864, or a total of £27,129,164; South Australia will be called upon to meet loans amounting to £3,233,738, or a total of £11,389,236; Western Australia will have to arrange for the conversion of . £1,267,855, or a total of £3,567,465 ; and Tasmaniawill have to provide for £309,729, or a total of £3,997,475. During the next fifteen years, the States will have to provide for the liquidation of debts to the extent of £127,607,243. If the States are forced to go upon the London money market, and to compete with each other under such circumstances, they will be compelled to convert their loans under very disadvantageous conditions. In a single year, New South Wales will be called upon to meet loans aggregating £16,000,000. The other States, too, have large commitments confronting them. The framers of our Constitution foresaw that it was absolutely necessary, inthe interests of the solvency of the States, that the debts which they incur should be placed under Com monwealth control, and that the Commonwealth should be called upon 10 devise a means of liquidating them. But, under the proposed agreement, the transfer of the State debts is kept quite apart from the financial arrangement under which the Commonwealth would return to the States 25s. per capita. Until the States become financially pinched, they are quite prepared to let matters drift. The State Premiers do not look ahead. They live merely for the present. Their term of office is usually of short duration, and they are not prepared to sacrifice present advantages for future gains. During the past eight years, notwithstanding that New South Wales has received from the Commonwealth the enormous sum of £25,000,000, she has added to her indebtedness to the extent of over £20,000,000, without having made any provision whatever for liquidating it. Why should the transfer of the State debts be kept separate from the proposed financial agreement ? It is highly desirable that the two things should be dealt with simultaneously. I should be glad if the Government would consent to my obtaining leave to continue my remarks to-morrow.
Leave granted; debate adjourned.
House adjourned at10. 16 p.m
Cite as: Australia, House of Representatives, Debates, 5 October 1909, viewed 22 October 2017, <http://historichansard.net/hofreps/1909/19091005_reps_3_52/>.