3rd Parliament · 4th Session
Mr. Speaker took the chair at 3 p.m., am! read prayers.
.- There appears in the Age of this morning what purports to be a short report of a speech which I made at Springvale on Saturday last. The report is full of inaccuracies with which I do not propose to trouble you, Mr. Speaker, except in regard to one which, unless I mention it, may lead to misapprehension on the part of honorable members. I am stated to have said that I had the assurance of the Prime Minister that the followers of the Government would not be expected to swallow the agreement with the Premiers whether they liked it or not. That statement seems to indicate that some personal communication was ‘made to me by the Prime Minister which was not made to the House. I desire to say that I did not intend to, nor did I, convey that impression to those who heard me. I did not refer to anything that had not taken place on the floor of the House.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are -
asked the Treasurer, upon notice -
– The answer to the honorable member’s questions is - “Yes.”
Motion (by Mr. Deakin) proposed -
That this Bill be now read a second time.
.- Most honorable members expected that the Prime Minister would avail himself of this opportunity to reply to. the speeches on his motion for leave to introduce the Bill. Apparently he thinks that there is nothing to answer. I differ from him.
– There is nothing that will not he better answered specifically in Committee.
– I am in favour of passing the second reading of the Bill, but, as the debate on the motion for leave to introduce was very full, giving a great amount of information to honorable members, and affording considerable instruction to those outside who- take an interest in these questions, there are many things to which the Prime Minister should reply. In my opinion, great good, and no harm, will come from discussing the morion now’ before the Chair. It was my misfortune to have to speak on the earlier motion before I had read the copy of the speech of the Prime Minister which he has had published. I find many things in the published copy to which I wish to refer briefly. We are indebted to the honorable gentleman for giving us this authentic copy of what he intended to say. The speech has been carefully revised since it was made, and I miss one or two remarks which I thought were uttered during its delivery. That is of no importance. I prefer to criticise a speech after it has been corrected-. I have no wish to take advantage of verbal lapses or imperfect statements. In dealing with an important question, I wish, to know the matured ideas, of my opponents.
– Surely it is not right for an honorable member to publish an altered version of a speech made in this Chamber?
– I am not conscious of having altered anything except defining some expressions.
– If an honorable member’s reported utterance is not what he intended to convey, I think that he does right in altering it.
– Not at all. An honorable member should not alter his speeches.
– I am expressing my own view, and intend to deal with the speech of the Prime Minister as published after revision. Passing by the attack of the Treasurer upon myself, I shall commence by ‘referring to the initiation of the arrangement which has been discussed, with which I did not deal before. A commencement was made by the Premier of New South Wales inviting the attention of the Prime Minister - in a letter dated 22nd June - to a communication regarding the financial question which he had sent to me while in office’. To that the Prime Minister replied on the 30th June in these words -
You are probably aware that, in the opinion of this Government, any attempt to determine, how the future distribution of the revenue from Customs and Excise would, for practical reasons, require to contemplate some fixed period for which the circumstances can be forecast with considerable confidence. This should greatly simplify a task which, under any conditions, will be arduous.
I invite the attention of honorable members to the words used by the Prime Minister in his reply - “some fixed period.”’’ I am of opinion that the present agreement does not fix any period. It is quite contrary ‘to the statement made in the Prime Minister’s letter, to Mr. Wade. . On the 3rd July Mr. Wade replied to the Prime Minister’s letter. It is not necessary to read the whole of this communication ; I shall quote only that part of it which, I think, reveals its full meaning. Mr. Wade wrote -
Your letter contains a reference to the submission of questions to the electors, which I take to mean a proposal for’ ingrafting any agreement arrived at permanently in the Constitution. The second paragraph suggests a temporary arrangement for a term of years. I shall be glad if you can give me further information with regard to these matters.
Here we have an inquiry from Mr. Wade as to the real meaning of the letter which I have previously quoted. He asks specifically -
I shall be glad if you can give me further information in regard to these matters.
The Prime Minister took a little time to reply to that letter. On 9th July he wrote to Mr. Wade as follows : -
With reference to the inquiry made in your letter of the 3rd instant, I have the honour to inform you that the propositions to be submitted to our electors will consist of a general statement in our platform of the views of this Government in respect to what may be termed a permanent settlement of the future relations of the States with the Commonwealth.
Should the preliminary financial arrangement for a term of years, alluded to in my last letter, fail for any reason to pass this session, that also would be submitted, and in a precise shape. As you are aware, neither one nor the other need be ingrafted upon the Con’‘stitution in order to come into full effect.
With regard to our interchange of telegrams as to the date of the Conference of Premiers; though I have not yet received a formal intimation, I assume that you invite me to meet you on Monday, 16th August.
I draw particular attention to the words -
As you are aware, neither one nor the other need be ingrafted upon the Constitution in order to come into full effect.
Those words can convey but one meaning to an ordinary reader. I feel, on the strength of this letter to Mr. Wade, that the Prime Minister went into the Conference after having arrived at a certain determination ; but that he surrendered his position as Prime Minister of the Commonwealth, and abandoned the principle upon which he had determined, as soon as -he met the representatives of the States. That is the view which I take of the correspondence.
– What is the use of a Conference if those who take part in it are to bind themselves to opinions formulated beforehand?
– The honorable member can surely credit the Prime Minister with entertaining a definite view before he went into the Conference. Apparently the Government had made up their mind, . and expressed what they thought through the Prime Minister. If the persons who desired to confer did not agree with the position which he took up, there was nothing to confer about.
– The honorable member has an extraordinary idea of conferences.
– The honorable member thinks the Prime Minister should have issued a ukase?
– He did so.
– Did he?
– The Prime Minister, writing on behalf of the Government, used the plain words -
As you are aware, neither one nor the other need be ingrafted upon the Constitution in order to come into full effect.
– Does not the honorable member think that the Prime Minister could explain those words away?
– That is not the point. I admit that a certain construction can be put upon the words “neither the one nor the other need be; “ but any ordinary man receiving a letter of that kind would say - “ Well, we may confer with ;his gentleman who is attending as Prime Minister of the Commonwealth, but we must go into the Conference knowing full well that we cannot secure anything like a permanent settlement to be embodied in the Constitution.” The other conferring parties must, I think, have arrived at such a conclusion. The Prime Minister may take a different view of the language which he used, and that is a reason why I think we ought to hear him again upon the subject. The ordinary reader of his letter would take it to mean that he would not consent to an amendment of the Constitution. If such was not his meaning when he wrote the letter I have quoted, I shall be glad to hear his statement to the contrary.
– Why need the words which the honorable member has quoted have been used unless that was the meaning ?
– The honorable member for Robertson has a practical mind. Everyone who has sat in this chamber for any length of time must have noticed that he has a practical way of looking at things. If I had written the words which I have quoted, on behalf of a Government of which I was the head, I should have meant by them, “We are quite willing to confer with you, but there is a condition which we cannot discuss, and that is that no agreement can be incorporated in the Constitution. Anything else can be discussed and agreed to, but that is a preliminary objection which we take before entering into the Conference.” Whether my view of the language used by the Prime Minister be right or wrong must be determined by others who take sufficient interest in the subject to read and consider what has been written with regard to it. Perhaps we shall obtain a better understanding of the question after hearing the Prime Minister again. I purpose also to quote the language used by the honorable gentleman after attending the Conference. I quote from page 20 of the authentic reprint of his speech, which is entitled - “ The Commonwealth; the States; and the Finances. Speech by the Hon. Alfred Deakin, Prime Minister, on the Constitution Alteration (Finance) Bill.” The honorable gentleman 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.
Those words were uttered long after the Conference closed, and after the Prime Minister had had an opportunity of hearing the views of honorable members during the debate on the Budget - quite irregularly from my point of view. What is the meaning of the words which I. have quoted? “ The term to be fixed.” What term ? Do honorable members assume that the term was to be fixed in the Constitution so as to be binding as long as the Constitution remained unamended? No such idea is conveyed to my mind. In my view, a “term” means a limited period which might be agreed to and included in an Act of this Parliament, which would have given ample protection to the State Governments. I am sorry to say that we have reached a stage in the history of the Federal Parliament when it is slandered by its leader, the Prime Minister. The honorable gentleman has by inference declared again and again that unless’ this agreement is embodied in the Constitution the State Governments will have no security. I do not believe that. The honorable gentleman can produce no evidence of a breach of faith with the State Governments by this Parliament.
– We have proved the opposite by giving them a great deal of money to which they were not entitled.
– The honorable member for Robertson is quite correct in saying that we have abundantly disproved the suggestion that this Parliament would not be true to its obligations to the States, by the fact that during seven years we returned to the States over . £6,000,000 more than we need have returned.
-We did not know that we might keep it.
– That money was returned at a time when members of the Federal Parliament were clamouring for the construction of necessary public works for the extension of the Commonwealth services. To those who contend that its return could not be prevented, let me say that every child in the Commonwealth must be aware that from the first day the Federation was brought into existence we might have expended on Commonwealth services the whole of our share of one-fourth of the Customs and Excise revenue.
– When we did try to withhold surplus revenue an effort was made to prevent us.
– I do not wish now to go into that question. The history of it is on the records of this Parliament. When it was thought desirable that we should take over the payment of old-age pensions throughout the Commonwealth the proposal was resisted by some honorable members, but I am glad to say that the common sense of the majority was in favour of our undertaking that financial responsibility in the interests of the aged people of the whole of Australia. The Prime Minister said that he entered the Conference without having arrived at a conclusion as to the term to be fixed. “ What happened after he entered the Conference?
– Nobody knows.
– We have no record of the proceedings of the Conference. We have nothing to show how the negotiations were conducted. We have no knowledge of the views expressed or of the’ arguments used to convince’ the Prime Minister that he should adopt an attitude different from that indicated by his letters and by the quotation which I have made from his speech. It is regrettable that the chief Administrators of the Government of the States and of the Commonwealth should have thought it absolutely necessary to meet in secret conference, and not to allow a single word of their discussion on so momentous a question to reach the people. From time to time the charge has been levelled against the party to which I have the honour to belong that they deliberate in private and issue only an official report of their deliberations. I can recollect no instance in which Labour delegates have met in conference without publishing a summary of the discussions which have taken place sufficient to indicate the arguments which have led to the conclusions arrived at. It was left to the present Prime Minister of the Commonwealth and the State Premiers to inaugurate the holding of an entirely secret conference to deal with a matter which, according to the Prime Minister, was the most important which could possibly come before the public of Australia.
– There is an indication of what they were doing.
– The honorable member refers to the agreement.
– They had Mr. Wade by the throat most of the time.
– I am unable to say which gentleman had the other by the throat. I have to be guided by the evidence which has come to hand in an indirect way. I must judge as to what really occurred there by the evidence given from time to time by the Prime Minister, Mr. Wade, and other members of the Conference.
– We can use our imagination a little; we can guess eggs when we see egg-shells.
Mr-. FISHER. - My imagination is not as brilliant as that of the honorable member for Dalley. I can only deduce from the information before me that the secrecy to which 1 refer was wilfully and intentionally designed in order to prevent the people of the Commonwealth knowing the reasons why the members of the Conference arrived at their conclusions.
– The Labour Conference held in Brisbane w’as a secret conference.
– The honorable gentleman is in error.
– They published only what reports they chose.
– An epitome of the arguments used by every speaker is included in the official report of that Conference.
– It was open to the public.
– The honorable member for Boothby reminds me that anybody who desired to hear the debates at that Conference might have been present, and many persons were present.
– Does the honorable member say “anybody”?
– My recollection now is that, quite a number of people were present during the deliberations of that Conference.
– There was an average attendance of over 100.
– People walked in and out freely.
– I can inform the honorable member for North Sydney that admission to the Conference was not by ticket.
– Admission of members ?
– Does the honorable member wish to suggest that what I am stating is not a fact?
– No, I do not say anything of the sort.
– I was President of the Brisbane Conference, and my recollection now is that all sorts and conditions of people were present during the discussions.
– No one was refused admission.
– How were the representatives of the press kept out?
– They were fired out by a special resolution.
– That had reference to deliberations in Committee. But even if it were true that Labour delegates, sitting in conference to consider a Labour platform, thought it advisable to deliberate in secret, how can the honorable gentleman compare that to a Conference between representatives of the Governments of the States and the Commonwealth upon a matter which, according to the Prime Minister, was of the most momentous importance to the people? The heads of the Governments of the States and the Commonwealth had no right to meet in Conference to discuss such matters, except with the confidence of the electors of the Commonwealth and States. That Conference was a very different gathering from that of the representatives of a distinct political party, elected by partisans holding particular views, met to consider how to defeat the objects of another political party that was free to adopt the same course. Does the honorable member for North Sydney ask us to believe that the people who were assembled in that Conference had political enemies outside who might do the same? That assumption is the worst charge that could be made against the Conference. It is one of those defences that absolutely prove the statement, which some people have made, and believe, that it was a political Conference, pure and simple, and not a ‘Conference to assist to elucidate a difficult constitutional question “ between the Government of the Commonwealth and the Governments of the States.
– It was “pure and simple,” certainly.
– Then I should say that the “pure” were the States and the “simple” was the Commonwealth. I never doubted, nor shall I ever doubt, the good intentions of the representatives who went into the Conference. It is not necessary, in criticising a matter of this kind, to doubt any man’s straightforwardness or honesty. I think it weakens a man’s case if he alleges that another man has a bias of such contemptible meanness that he can think of nothing but his own political welfare in a matter of national concern. At the same time, no man is free from that kind of bias, which causes him always tq veer towards’ the course that protects his own political interests and party. That is obvious. Otherwise there would be no Premiers’ Conferences at all. I was dealing with the secrecy of. the Conference, and the state of mind of the Prime Minister regarding public questions when he entered it. We find from his own words, as given on page 20 of his speech, what took place there -
We were driven ….. to some such bargain as has been made.
Who drove the Prime Minister to make this bargain ?
– Facts and figures.
– The Prime Minister’s words convey to me the impression that he was driven against his will and judgment.
– Against my previous expectation.
– I was most careful to say at the outset that I am prepared to take the revised view of the honorable gentleman upon any question that I discuss, but here is the report of his public speech, authenticated by himself. I ask honorable members to consider the words that I have quoted. Does any honorable member think that it is a dignified position for a Prime Minister to take up, to say that he was driven by a number of gentlemen holding important representative positions - the Premiers of the States - to do something that was beyond his expectations and desires?
– Perhaps it was a figure of speech.
– It cannot be a figure of speech, seeing that the Prime Minister now admits that he meant it, and earnestly adds, “ I did not anticipate that it would be necessary to do this.” I think that is a fair interpretation of what he now says. He did not think, when he went into the ‘Conference, that he would come out of it having agreed to proposals of which he never dreamt before he went in.
– Don’t call it a conference; call it a conclave.
– There are names which might fit it better, but I should like to call it a conference because those who took part in it themselves call it a conference, and the Prime Minister referred to it by that term in his previous’ correspondence. There he protected himself as much as any man could, but he seems to have abandoned himself entirely to the Conference after he went into it-.
– Have not the honorable member’s side claimed that the decision of the Conference was similar to that of the Brisbane Labour Conference?
– I have made no such claim. Some members may have said that the proposals were similar to those of the Brisbane Labour Conference, but I shall deal with that point later on. The Brisbane Conference scheme will stand without assistance from any other party. It was dealt with by myself at Gympie, and if honorable members had taken the trouble to refresh their memories as to what I said there, they would have saved themselves a good deal of misapprehension and the making of a number of false accusations that are not to their credit. Further down on the page from which I have already quoted appear these further significant words from the Prime Minister -
I was obliged to say, “ This security rather than none at all.”
Of what security does the honorable member speak ? What security does the ‘Conference agreement give to the Commonwealth ? In my opinion, it gives none whatever. , The whole of the security is given to the States. In those words of the Prime Minister we have again a reflection upon the Commonwealth, if he means, as I think he does, that it was absolutely necessary to place the agreement in the Constitution in order to give security to the States.
– No; the explanation is to be found in the words which the honorable member has passed over - “ Anything less than that (security) seemed legally vain.” That passage appears between the two quotations which the honorable member has made.
– Does the honorable member suggest that I’ should quote the whole of that column? In any case I shall do so, because I do not want the public to be under any misapprehension.
– No, I want the honorable member to quote only those seven words. The honorable member was asking why any security was wanted, and they supply the answer.
– I have read this speech carefully, and, as the honorable member knows, I shall not intentionally put a false construction on anything that he is reported to have said.
Mr. Deakin.^ Hear, hear. I do not insinuate that the honorable member would.
– Going back to the point where the Prime Minister says -
We were, as I am sure honorable members would be under the circumstances, driven to some such bargain as has been made,
I find that this passage follows -
Both parties to that bargain are justified in expecting a measure of security.
Quite true. We are all agreed as to that-
On consideration, I was able ‘to find no other means of security than that I now propose ; anything less than that seemed legally vain.
That is a distinct charge against the honour of this Parliament. It makes the honorable gentleman’s statement worse than ever. It is a direct charge that this Parliament, if it embodied a financial arrangement with the States in a Commonwealth Statute, would not, of its own volition, respect that Statute. No One knows tetter than does the Prime Minister that, by another method, he could, if he so desired, secure to the States the return of. a minimum- sum from the Customs and Excise revenue, namely, by providing for the transfer of the State debts. Yet, he asks us to believe that . it would have been legally vain to adopt any arrangement other than that which he has nowsubmitted for our consideration. I do not agree with him, and I venture to say that very few of the public will agree with him when the real position is placed before them.
– The last quotation made by the honorable member proves the opposite.
– I made that quotation because I think it is the crux of the whole matter. I have purposely made my extracts from the Prime Minister’s utterance as brief as possible, because I have no desire to put long screeds upon our official record; although I do not object, if it be considered desirable, to quoting the full text of the Prime Minister’s statements, in which he has so skilfully shaded his words, that it is almost impossible to understand their meaning. That is my complaint. In replying to questions, where the use of “ yes,” or ‘‘no,” would be invaluable, the Prime Minister is prone to give elaborate answers, which it is difficult to say embody either an affirmative or a negative. I am satisfied that the people of the Commonwealth, who are also the people of the States, would rest just as securely under an Act passed by this Parliament for the term covered by that Act, as they would under an agreement which was embodied in the Constitution. I cannot . illustrate my point better than by saying that the sugar industry, of which we hear so much, has been protected in no other way than by an Act passed by this Parliament from year to year. That industry could have been destroyed at any time, but no honorable member has ever suggested the repeal of the Act under which the payment of the bounty was authorized.
– The same remark applies to all Bounty Acts.
– The honorable member is quite right.
– It also applies to the payment of the Naval Subsidy.
– I think that subsidies are on a somewhat different basis. But if, under an Act of this Parliament, vested interests were, created, I know what the people would say if Parliament attempted to interfere with those interests. I have shown what was the view of the Prime Minister before he entered the recent Premiers’ Conference; I have dealt with the change which came over him whilst the Conference was in progress, and I have quoted what he said when he quitted that gathering. I now propose to read the words of a very great man, who has since passed away, and who was, perhaps, the greatest figure in the movement having for its object the federation of the Australian Colonies. These words are contained in a pamphlet which was issued by the honorable member for Parkes, who is a great admirer of the late Sir Henry Parkes. Speaking as far back as 1890, that Australian statesman pointed out what were his ideas of the scope of the Federal Constitution. Addressing a public gathering in Melbourne during that year, he said -
Now what stands in the way of a federated Australasia ? A common tariff ! National life is a broad river of living water. Your fiscal notions- and I am a Free Trader remember - your fiscal notions on one side or the other, are as the planting of a few stones or the piling up of a sandbank, to divert the stream for a little, in order to serve some local interest, This question of a common tariff is a mere trifle, compared with the great overshadowing question of a living and eternal national existence. Free Trade or Protection, all must admit, is to a large extent but a device for carrying out a human notion ; but there is no human notion at all about the eternal life of a free; nation. I say then, that what I understand by the statement of a united Australasia, is a sinking of all subordinate questions. I speak for my colony, which is as great as the rest of you. We are prepared - and I will answer for the Parliament and the people of the country I represent - to go into this national union without making any bargain whatever - without stipulation for any- advantage whatever for ourselves, but trusting to the good faith and justice of a Federal Parliament.
There we have the utterance of a statesman who was endeavouring at the time to educate the Colonies to the view that a Federal Parliament, vested with national powers, would be the protector of their interests, and that only such a Parliament could adequately protect them. Speaking for the Colony which would be called upon to sacrifice more than would any other Colony of the group, he declared his willingness to enter the Federal Parliament, and to stake all upon the virtue and honour of that body.
– He was a nation builder.
– He was. Contrast the position which he took up with the attitude which is assumed by certain politicians today. Our. Constitution empowers this Parliament to deal with the revenue derived from Customs and Excise after the expiration of the Braddon section in 1910 in any way that it may please, in the interests of the people of the Commonwealth, who are also the people of the States. And what is proposed? It is proposed to give away the power which the people have conferred upon this Parliament. This agreement is a declaration that this Parliament is impotent, and cannot exercise effectively the powers that it possesses. The Prime Minister, who was originally a worthy advocate of Federation, is confessing to the world by this agreement that the Federal’ Parliament is incapable of discharging the functions that the people have delegated to it.
– If it is not put into the Constitution, the Prime Minister will have suffered no loss. *
– That is a pertinent observation. This agreement provides for the disposition of revenue received by the Commonwealth on behalf of the people of Australia, and that revenue, whether expended by this or any other Parliament, must be used undoubtedly in the interests of those people. One would naturally think that that part of the agreement which relates to the transfer of the State debts, by which we could make substantial savings for the people, would have been mandatory, and that that relating only to the disposition of the revenue would have been permissive. The opposite, however, is the case. All that we are to have, so far as the transfer of the State debts is concerned, is a far-reaching investigation, which may last for years, or possibly for ever. When the Prime Minister quoted clause i, which provides for this investigation, I remarked “ high falutin’ flapdoodle,” and the honorable gentleman responded, “ those words, if they are words, are inapplicable.” In using them, however, I had in mind the observation made by the skipper to Midshipman Easy, that flapdoodle is that on which” fools are fed, and I thought the interjection appropriate. Clause i is absolutely meaningless and worthless. Why should there be an investigation? When the Constitution Bill was before the people, we were told from every platform that the taking over of the State debts was one of the fundamental considerations, and I venture to say that, at least, 100,000 voters were induced to vote for Federation in the belief that they would be taken over by this Parliament and managed by it better than the State Legislatures could hope to do. And yet we are told now that the whole question is to be investigated ! In the latter part of the clause, it is stated that the investigation is to include an inquiry into the actual cost of the transferred properties as defrayed out of loan or revenue moneys. I understood that a special Board had been investigating that question for three years or more. Experts have been inquiring into it practically since 1904.
– As to the values of the property.
– Those experts have published voluminous reports of their investigations. Whenever a question was asked as to the progress they were making, we were always told that nothing should be said as to what was being done, lest one side or the other should endeavour to grab more than it ought to do. In their report, the experts set forth the actual amount for which the Commonwealth Parliament would have to account in respect of the transferred properties.
– But they did not distinguish between properties built out of loan money and those constructed out of revenue.
– Does the Prime Minister seriously consider that a body of experts, who were capable of valuing buildings worth from£8,000,000 to £10,000,000, were incapable of discovering what proportion was constructed out of loans, and what proportion was constructed out of revenue? The honorable gentleman shakes his head.’ He is apparently surprised at my statement; but I would ask him what body of men could be appointed, either by the State or the Commonwealth, to discover more effectively and fairly the cost of these properties as defrayed out of loan or revenue moneys than the impartial Board which worked for some years on this subject? It is paltry to the last degree to link that question, representing, at the most, a difference of£200,000 or £300,000, with another involving the transfer of debts amounting to£250,000,000. It is for these reasons that I say that clause 1 of the agreement should have been mandatory, and clause 2 permissive. The Prime Minister is proposing that the question of the transfer of the State debts to the Commonwealth should be investigated by those who have openly declared their hostility to such a transfer. There is not, in my opinion, a representative man in any of the State Governments who has declared in favour of the Commonwealth taking over the debts.
– The State Premiers themselves do so in the agreement.
– They will agree to our taking over the debts if we will pay them for all time 25s. per head of their population.
– I am dealing with the agreement. The first resolution begins, That to fulfil the intention of the Constitution by providing for the consolidation and transfer of State debts.”
– And the following words are, “ And in order to insure the most profitable management. of -future loans.”.
– I do not wish to do an injustice to the Prime Minister; and if the honorable member can discover anything that I have said which is in favour of the Prime Minister’, I shall be very glad to make him a present of it. I regard the first resolution as” a mere preamble - nothing more, and nothing else. It has no binding effect, beyond an investigation. Assuming that an investigation is agreed to with avidity by the States, and takes place, what shall we accomplish ? In my opinion, we shall accomplish absolutely nothing. In what position are we now as regards the questions which are to be submitted tothe electors? So far as I can gather from the agreement, one question will be, “ Are you in favour of the Constitution being ‘ amended to enable the Commonwealth Parliament to take possession of and control the whole of the State debts?” That question will be put separately from the question regarding the provision for- a per capita payment of 25s. Speaking on the motion for leave to introduce this Bill, the Treasurer stated that the reason why the Government had determined to have two referenda was that one proposal might be accepted and the other rejected. If the intention of the Government was to put the questions separately, so that one might be accepted and one rejected, I ask honorable members which question the Government had in their mind as the one to be rejected.
– Judging by the letter which the honorable member quoted, I should say the revenue question.
– I had the advantage of seeing the honorable member’s face when he made the interjection: It would, no doubt, be to the interest of the Commonwealth if that were so. But the honorable member knows very well, as his smile indicates, that the Government are aware that the State Governments and many members of the State Parliaments are not in favour of the State debts being handed over to the control of this Parliament.
– We represent the same people.
– I am aware of that. But the Premiers will use their political influence to prevent the insertion of either provision in the Constitution.
– But their influence is not one-half so great as ours.
– -I am not here to determine how much influence they will have ; but to say that it will be used, not to put the amendment with regard to the debts in the Constitution, but to keep it out. Assume, for a moment, that the per capita provision is embodied in the Constitution, and that the other provision is left ‘out, in what position, I ask the honorable member for Mernda, will this National Parliament be? It will be in an absolutely humiliated position. It will be a humiliated Parliament - one which has abrogated its powers and has been sold in the market. It is quite true that the people would have authorized the alteration; it is quite true that they alone could do it; but let it always be remembered that the people are honest and desire to do the right thing. The difficulty of getting them to understand the position is great. Every honorable member is personally aware of the difficulty of understanding the question. Therefore, we can all readily understand the difficult position of the people, when . required to vote on complicated questions of this- kind. The ordinary citizen will ask, “ Why is the Federal Parliament proposing to give up some of its powers ? Is it incapable or incompetent? Has it found the burden too great? Does it desire to transfer to the State Parliaments some powers which were withdrawn from them by the Constitution ?’ ‘ If we authorize these referenda, that will be the most natural assumption for the people to make. That is a position which I ask honorable members to consider. Let me now deal with the second part of the agreement. The second lesolution is all that one should desire if he wanted the Federal Parliament to give up the power which it now has. It is couched in. mandatory terms. There must be this and there must be that. A sum of 25s. per capita must be paid to the States out of the net Customs and Excise revenue.
– Out of anything. I am glad that the honorable member made the interjection, because, in another part of his speech, the Prime Minister stated that the Government have no intention to do other than to collect revenue by indirect taxation. At the moment, I cannot quote the exact words which he used, but their meaning was that it is not the intention of the Government to seek any revenue except by indirect taxation.
– The Commonwealth is not debarred.
– I admit that the honorable member is right in making that remark; but that is a very different thing.
It is quite true that there will be freedom as regards the exercise of the right of taxation whether or not the agreement is adopted. But the point was made by the_ Prime Minister, and made in his best language and manner, that there would be that freedom if the agreement were adopted. The honorable member knows as well as the Prime Minister, that there will also be freedom at the end of 1910 - not freedom to do a wrong to the States or do an injustice to anybody, but freedom for the National Parliament, each branch of which is elected on the broadest possible franchise, to do justice and equity between the parties concerned.
– If the per capita provision is carried, and the State debts are not taken over, there will have to be a land tax to carry on with.
-I am not able, like the honorable member, to see into the future, and say what there will be.
– It is very clear.
– I am correct in stating ‘ that the Prime Minister, speaking for the Government which brought about this agreement, announced that it was not his intention to go’ beyond indirect taxation. The per capita payment of 25s., if put into the Constitution, will be mandatory, and will increase, and, I presume, decrease, with the population if, unhappily it should diminish. -
– The honorable member has not yet answered the objection that the scheme is practically that adopted at the Brisbane Labour Conference.
– I was the President of the Conference at. which that agreement was come to, and had been discussing the question previously, in a committee of the Labour party, for two years before the end of the last Parliament. We were considering a financial scheme which would be equitable and just to all concerned. We had two reasons for doing that - the national interest, and the desire to protect the party from the vilest abuse and misrepresentation that any party has suffered. We knew well that if we went to the country without a prepared scheme, the press of Australia would say, as it has said from time to time, that it was our intention to take the whole of the revenue.
– It is saying that now.
– It is shamelessly saying that now, notwithstanding the statement of the honorable member for North
Sydney that the Brisbane scheme anticipated the scheme of this Government. The Brisbane scheme is being used in the endeavour to buttress up the Government scheme.
– But the Government scheme is only a colorable imitation of it.
– That is so. Even capable men occupying high positions generally make a mull of things when they imitate others. There is no justification for any misunderstanding regarding the Brisbane scheme. The policy of the Labour Ministry was declared in my Gympie speech, when I explained what the Brisbane scheme meant. Let me quote the words which I then used, speaking on behalf of the party -
I was asked at the Hobart Conference to explain more fully the scheme suggested by the Labour Conference held in Brisbane.
The Prime Minister had an. advantage over me in conferring with the Premiers. No one offered to the States a less amount than that which I offered. The Labour party were at a disadvantage in making such an offer, because former offers, which had been rejected with scorn, were of smaller amounts. However, we -offered what we ‘thought best in the interests of the people. Had we, knowing that our political life was not likely to be an enduring one, desired to gain the favour of the State politicians, we should have offered more, but we scorned to do that. Whatever our defects, we placed the interests of the Commonwealth first, conceiving the national interests to be of more importance that even the State interests. Having determined what in our opinion should be the right offer to make to the States, we made it. To continue my quotation -
Perhaps the wording of the proposal was not a* clear as it might have been. The main intention was to discover a fixed sum to be returned to the States on a population” basis, the payment of additional- amounts to be left to the Commonwealth Parliament.
I went on to declare what these amounts were. Practically speaking, the Brisbane scheme on a per capita basis offered 24s. -
Assuming that the system of distribution came into operation in 1909, the aggregate amount to be returned to the States would have been ^5,229,017, which would be.a fixed amount returnable annually to the States. An additional amount, say ^250,000, was to be returned to Western Australia, diminishing annually on a sliding scale.
– Was that to be permanent?
– And to go into the Constitution?
– Then, if Mr. Holman has stated that it was to go into the Constitution, he is not correct? That statement was published in yesterday’s Herald.
– The utterance from which I am quoting was made on the 30th March last, and published in all the newspapers of the Commonwealth.
– Mr. Holman said that that was the understanding of the Conference.
– That was his contention.
– I think that I have the advantage of Mr. Holman in that matter I was not only Chairman of the Committee of the Labour party in this Parliament which sat for some years considering this question, but I was also President of the Conference at Brisbane, and was in attendance during the whole time it was sitting. Never for a moment will I admitthat the intention of the Conference was to make the new arrangement with the States permanent and cumulative. In another part of my speech, it was clearly set out that, in the opinion of the Government of which I was the head, the Commonwealth should guarantee to the States £5,000,000 per annum for all time, to be distributed per capita; whilst, if there were a surplus in the Commonwealth revenue, that also should be distributed per capita- If the honorable member for North Sydney had done me the honour to read my speech, he would have seen that the ,£5,000,000 to be guaranteed meant also that the Commonwealth was to take over the debts of the States. In speaking at Hobart, and also in my address at Gympie, I stated that I viewed with horror - political horror - the idea of a seventh borrower going into the money market. The Commonwealth came into being largely with the idea that we should have’ one borrower. I shall do my utmost to prevent the Commonwealth from borrowing until we stand in the position of having one authority to negotiate in financial matters on behalf of the whole of the people of this country. I think . that it would be disastrous if we were to launch a. seventh borrower upon the market. What a spectacle it would be to the people of the’ world - a new governing authority brought into existence to save money to the people itself entering upon an independent career as a borrower ! What an advertisement that would be for Australia ! It is to be regretted, I think, that various Governments since the inception of the Commonwealth have avoided a frank discussion of the financial question. Now we find ourselves near to the period when the Braddon section terminates, and Ministers, in timidity, as I think, have proposed the very worst thing that could be done. I do not desire to quote further from my speech at Gympie, but I may say that neither I nor one of my colleagues, as -far as I recollect, took any other view than that which I have expressed. I am aware of what Mr. Holman has said, but Mr. Holman knows my views perfectly well. I left him in no doubt as to what they were. I said, when I was Prime Minister, that, rather than agree to a proposal which I believed was not in the best interests of the Commonwealth nor of the people as electors of the States, I was quite prepared to step out of public life. That may have appeared to some to be a quixotic and exaggerated view, but I expressed it quite sincerely. No member of the Labour party has any doubt as to my attitude.
– Not as to the honorable member’s view, but that was not the view of the Brisbane Conference.
– It was not, of course, within my power to prevent ,any other member of the Conference from expressing his own opinions. 1 know that Mr. Dacey made a speech in the Legislative Assembly of New South Wales on similar lines to that of Mr. Holman. If I believed that the interests of the people would be better protected by embodying in the Constitution a provision as to the payment to the States of 25s. per capita per annum, I would not hesitate to support such a project. It is because I hold the contrary opinion very strongly that I have expressed myself as I have done. I now turn to another phase of the matter. I wish to allude to what the Treasurer said in his speech upon this question. He made a number of veiled reflections upon me. He asked the House to believe that, while I was Prime Minister, and was clothed with responsibility, I was very careful as to what I said. I do not think that I was. Indeed, I was even reckless.
– The people at Mudgee thought the honorable member was careful and cautious.
– The honorable member means that the people of Mudgee thought I was the right kind of man for the country ?
– They thought that the honorable member was a very good fellow.
– Most people when occupying a responsible position are careful as to what they say, and, no doubt, it is an advantage for them to be guarded in their utterances. Perhaps one would do well to take warning by what happened to the honorable member for Maribyrnong when he was in office. I felt the responsibility of my position - although I had been in office twice before - knowing that I was speaking on behalf of a great party, and of the Commonwealth. If, while I was Prime Minister, I committed errors, they were errors of judgment, which did not, I hope, arise from any desire to display myself as an individual. When I said to the Premiers assembled at Hobart that I had nothing to say to them regarding the policy of the Government of which I was the head until I had declared it to the people and to this Parliament, I assumed an attitude which was, in my opinion, the right one. I told the Premiers at the same time that I was cheerfully willing to meet with them, and to discuss any matter, so far as I could do so without departing from that principle. It was subsequently said that I had treated the Premiers with some kind of contempt. Nothing of the kind was the case. I simply took up what I consider was the’ correct attitude. I stated that the Federal Parliament had been intrusted with certain powers under the Constitution, and should exercise them. But I also said that I was prepared to act fairly by the States, and believed that the Commonwealth Parliament would not deal with them unjustly. I see that the Treasurer is now in his place. I wish to remind him that, when he was speaking on this question, he took occasion incidentally to re- fleet on my action in dealing with this question when I was Prime Minister. I should not have made that statement i£ the honorable gentleman had not suggested that the attitude which I adopt now differs from that which I took as Prime Minister in dealing with the question of old-age pensions. I have absolutely refuted all that the honorable gentleman said in that connexion by quoting from the official report of my utterance at Gympie on the financial question. My views on the question will be perfectly clear to any one who cares to read that report. There are many matters to which I should like to address myself in dealing with this Bill, and although I do not wish to trouble the House much longer, I feel that I should say something about the question of the transfer of the State debts. In my opinion, the people of the Commonwealth will continue to lose at least ,£1,000,000, if not more, every year that the control of the debts by one authority is delayed. I say that although I am not one of those who believe that the “credit of the Commonwealth will immediately be much better than that of the State whose credit in the money market stands highest at the present time. As soon as Commonwealth control of the debts is inaugurated and financial people understand the position we shall begin to save money to a considerable extent.
– When we manage the debts ourselves.
– When they are managed by one authority. I should like to say here that I do not think it is at all necessary either to alter the Constitution or to pass any Act of this Parliament in order to compel the State Governments to borrow through the Commonwealth authorities or through any financial body that we might set up. I believe that the wisdom of the people would compel the State Governments to float their loans through a financial body set up by the Commonwealth Parliament. On this question I differ from the views hitherto expressed by others who have occupied the position of Treasurer of the Commonwealth and by the Prime Minister. I purpose making what I regard as an important statement on the subject from my point of view. I have read the Prime Minister’s speech with the greatest care. I should like to make a number of quotations from it lest it should be thought that I had misunderstood the honorable gentleman. The quotations would be somewhat lengthy, and in the circumstances I ask the honorable gentleman to be good enough to correct me If in what I propose to say I should mis represent him in any way- Again and again in this notable speech the honorable gentleman stated that while the Commonwealth Parliament has power to take over £200,000,000 of State debts, and deal with them as it thinks fit, the obligation to pay interest and principal will remain upon the States. I wish to say that I have never held that view and do not hold it now. I think it a short-sighted and weak-kneed view to take. If in this Parliament we had men conducting the affairs of the Commonwealth with the grasp of public questions characteristic of the late Sir Henry Parkes they would not hesitate for a moment to take over the responsibility for both principal and interest.
– Assume the whole responsibility besides paying the interest out of the Commonwealth funds from the moment we have taken over the debts ?
– The Constitution does not provide for that.
– The right honorable gentleman is referring to a different question altogether. As I have told him before he does not understand this question. It is a most important question, and I should like to know exactly the views the Government hold upon it. Judging by his speech the Prime Minister has it in mind that when the Commonwealth takes over the State debts the responsibility for the payment of interest will continue to rest on the States, and that the money to be paid to the States from the Customs and Excise revenue will be paid to them in order to cover a certain portion of their responsibility for the payment of interest. He believes that the Commonwealth should assume no responsibility to the creditors of the States, but should act merely as agent for the States, and that the State Governments will still be responsible for principal and interest.
– Am I to understand that the honorable gentleman would pay 24s. per head to the States, under the Labour party’s scheme, and also take over the whole of their debts and pay the interest on those debts ?
– But the honorable gentleman would take over the assets with the debts ?
– No. If honorable’ members will excuse my egotism I will say that in my opinion this financial question has never been properly grasped in this Parliament. I shall make a careful statement of my views so that the Prime Minister may not be under any misapprehension about them.
– I certainly misunderstood the honorable gentleman before. I understand only at this moment that the view he is now stating is his considered view of the question.
– 1 never held any other view. The scheme proposed by the honorable member for Mernda is wholly and solely based on that view, or it means nothing.
– Every time we renew a loan we become responsible.
– The honorable gentleman will admit that the view of the honorable member for Mernda is that the State Governments shall remain responsible until we issue a Commonwealth stock to take the place of ‘the State stock - we should assume responsibility only after conversion. The honorable gentleman would not wait for conversion.
– The difference between my view and that of the honorable member for Mernda is not important. We immediately take possession of an amount of money belonging to the State Governments to enable the Commonwealth to pay the interest on the debts. I say that we should take the bold course of accepting responsibility at once for both principal and interest.
– We cannot coerce the States.
– That is another matter. I am speaking now on the question of policy. I have expressed the view, founded on that expressed by all the experts who have been consulted, that the credit of the Commonwealth will be better than the credit of the best of the States. Let us assume that to be so. We take over .£150,000,000 or £160,000,000 of State debts, as equivalent to the 25s. per head1 that the Government propose to pay the States, or the £5,000,000 per annum which the Government of which I’ had the honour to be the head were prepared to set aside as a permanent guarantee to the States. I would take over the whole responsibility of that £160,000,000, for this reason : Believing absolutely in the power of the Commonwealth to renew and convert those debts at a cheaper rate of interest than they bear at present, I consider that it would be only a matter of time - and a comparatively short time at that - when, by putting the saving in interest into a sinking fund, the whole of the principal would be wiped out. Is that clear enough ?
– Yes; but in the meantime, you have to find the interest out of your own Commonwealth revenue.
– Surely I made myself clear. If we guarantee a minimum of ^5,000,000 per annum to the States, asthe Government of which I had the honour to be the head were prepared to do, that sum will pay the interest for all time upon an equivalent amount of the public debt.
– That is what I thought the honorable member meant, but a moment ago he led honorable members to suppose that he would not only pay the interest out of the Commonwealth revenue, but, under the Brisbane scheme, would also payto the States 24s. per head, which they were to keep and use for any purposes, independent of that interest.
– I will state my position again, and quote the Prime Minister’sstatement, which is repeated twice, if not oftener, in his address. He set out that the Commonwealth would simply be an agent of the States in the matter of the debts.
– Until it specifically assumed the responsibility for them.
– On page 3 of his published speech, the Prime Minister said -
I was mentioning that it is sometimes forgotten, when reference is made to the takingover of the State debts, that, although theCommonwealth can assume the management of those debts, the responsibility would remain,, and is intended to remain, upon the States thathave incurred the liability. A considerablesection of the electors are under the mistaken impression that in some way or other the provision in the Constitution for the transfer of the State debts is accompanied by a provision for a consequent diminution of responsibility on the part of the States. Honorable members are perfectly well aware that this is a misapprehension. There will be no such transfer of theresponsibilities of the States. Even when the debts are taken over, the only difference, sofar as the States are concerned, is that they will have to make their account with the Commonwealth, instead of, as in time past, with their creditors. Under the Constitution, debtsamounting to .£200,000,000 are open to be takenover at any time by this Parliament. One effect of their transfer would be to make a severance of our financial interests. In other’ words, the Commonwealth will no longer be- under an obligation to pay to the States themselves any portion allotted to them from the Customs and Excise revenue. It will pay to that extent the interest upon the debts incurred by the States.
– And the honorable mem-, ber agrees with that?
– No; only in part, because I” then interjected -
The Commonwealth would be responsible for the payment of the principal as well as the in:terest
That is quite different.
– Read what follows.
– The Prime Minister replied -
It would, but the States would remain responsible to the Commonwealth for both principal and interest.
– The States would be primarily responsible.
I should take over all that proportion of the principal which the amount that we intended to allot to the States would cover, and I would relieve the States entirely of responsibility for it, for the reasons that I have given.
– The Commonwealth cannot take over the principal, so as to affect Itself in any way, until the debt falls due.
– As it falls due.
– That is a mere detail. No one will deny that the credit of the Commonwealth, being behind the payment of the interest and of the principal, would be acceptable to the creditors.
– The honorable member knows that the principal could not be converted until it fell due.
– I am not speaking of conversion. I am speaking of taking the responsibility.
– It amounts to conversion.
– I think the honorable member is in error. ‘ All too soon, £26,000,000 odd of the debts fall due. We should very soon have an opportunity of converting some of the loans floated by the States. If the Commonwealth could borrow at a lower rate of interest than could the States, the difference between the amount of -interest now being paid upon their debts, and that which would be paid hereafter, should be devoted to a sinking fund, so that within a reasonable period the whole of the State debts would be liquidated by the Commonwealth. In my view, that is the course which ought to be adopted. If the Commonwealth could effect a gain of 5s. per cent, from the date of conversion, the whole of the State debts, including both principal and interest, would be wiped out in eighty-seven years. Surely that is a result which is worth striving for. Why bother about telling the States that their obligation to repay the principal represented by their debts will still remain with them? ‘ Why not adopt the bold statesmanlike course of saying to them, “ We will take over that proportion of your debts which the amount annually returnable to you from Customs and Excise revenue would suffice to cover by way of interest, and we will leave you with the whole of your assets to do with them as you may think fit.” I am sure that the States would accept that.
– It is questionable, because they may contract new loans in substitution for the existing debts as they fall due.
– They would accept the Commonwealth as sponsor for their debts.. The Government ought to boldly say to the States, “ Give us the interest due upon, your debts, and we will’ take upon ourselves the obligation to liquidate the principal.”
– Is . the honorable member quite sure that the States are willing to hand over the debts? They would not be willing to do so if the transfer were coupled with an obligation not to float further loans.
-This aspect of the matter is somewhat new.
– It is not a bit new.It was talked of at the time Federationwas accomplished.
– I have read the speeches of the various Treasurers of the Commonwealth with the greatest care, and I say that each one of them has held the view that the States ought to remain responsible for the payment, both of the principal and interest represented by their debts. I say that the Commonwealth should adopt a bold course by accepting entire responsibility for the liquidation of those debts. Let us tell the States that they may retain the whole of the assets which are represented by the amount of their indebtednes’s which we take over.
– The amount upon which the -per capita return of 25s. would pay interest ?
– Yes. In my previous speech upon this question, I intimated my willingness to return to the States more than 25s. per capita, provided that the arrangement were accompanied by the transfer of their debts. It is in that connexion’ that we should begin to effect gains. But under the proposal of the Government, we shall make no gains whatever.
– The honorable member forgets that the purpose of the proposed investigation is distinctly defined.
Mr.FISHER. - No question has been investigated more fully than has this one ; and that by the most capable men. Sir George Turner devoted the latter part of his political life to its investigation.
– The first portion of the honorable member’s speech on this part of the question seemed to put exactly the opposite of what he has since put.
– I appeal to the honorable member for Hindmarsh, and the honorable member for Boothby, who were connected with the late Government, as to whether we were not always prepared to take over that proportion of the State debts upon which the amount annually returnable to the States by way of Customs and Excise revenue, would be sufficient to pay interest ? We were- willing to provide, not merely for the . payment of that interest, but also for the liquidation of the principal.
– That is quite clear now.
– The Prime Minister’s interjection evidences the advantage which accrues from one continuing to talk until his meaning is understood. That is the scheme which I always had in my mind ; and I am under the impression that it differs entirely from anything which has been previously put before the House. Under it, the Commonwealth would incur a risk ; but it is a risk which this Parliament ought to incur, because if it fears that its credit will not be superior to the credit of the States, it ought to disband. The Prime Minister knows that money was offered to the late Government at more than a¼ per cent, less than the rate at which the States can borrow to-day. That clearly shows that the credit of the. Commonwealth is better than is that of the States.
– Who made such an offer?
– The associated banks of Australia.
– For how much?
– For £2,000,000. They were prepared to pay that amount net in Australia for its payment net in London. The offer was made this year to the’ Government of which I had thehonour to be the head, at a time when the States were borrowing at a much higher rate.
– What State was borrowing at a higher rate?
– Why did the late Government want £2,000,000?
– We did not want it at all. It was offered to us.
– Did the Government send out “ feelers “ ?
– No; I replied that the money was not needed. The document relating to it was filed, and I presume that the Treasurer is aware of its existence. I wish the Government to take up the position of a great body which is capable of dealing with this question. ‘ But, under the proposal which we are now considering, the Commonwealth would be merely a glorified agency for the States. What a position for the National Parliament to occupy ! Ought we to say to the States, “ We will act as your agent in this matter. If we make a good bargain when, we float a loan, you will gain the advantage, but if we make a bad bargain, you will have to pay for it?” Is that a creditable attitude for the Government to take up ? I do hot think so. The only self-respecting course which this Parliament can adopt is that which I have already outlined.
– But the honorable member would couple some conditions with his scheme ?
– In my opinion, thereare no conditions necessary. The late Government were prepared to guaranteeto the States for all time a minimum return of , £5,000,000 per annum.
– That would not be sufficient to pay the interest on all the debts.
– It would pay the interest on a proportion of the indebtedness of the States.
– What about the rest?
– The remainder of the debts, as the honorable member knows, are in a different category. Let me go further,, and say that if the States would guarantee to the Commonwealth the interest on thewhole ‘of the debts up to the present time,, hypothecating their revenue to the extent of the difference between the£5,000,000 and the interest which has now to be paid, I should be prepared to agree to the Commonwealth assuming responsibility for both principal and interest.
– Not otherwise?
– I misunderstood the honorable member.
– Sir George Turner made a similar proposal.
-No. Sir George Turner, when Treasurer, desired in addition, if I remember rightly, to hypothecate the railway revenue of the States. As I understand the Prime Minister’s statement, he is in favour of restricting State borrowing: At page 5 of his speech, as published in pamphlet form, we find that he speaks of restricting State borrowing.
– State borrowing and Commonwealth borrowing under a mutual understanding.
– That is, direct borrowing.
– Fresh borrowing.
– I do not quite agree with the Prime Minister. When the honorable gentleman was speaking on the motion for leave to introduce this Bill, he was asked by the honorable member for Robertson -
Would the honorable member restrict the borrowing of the States?
He replied -
In the control of future loans, consideration must be given to all the projects to be put for. ward by the various Governments in any year, or, if possible, over a longer period, with a view to their adjustment, under expert guidance, to prevent depreciation of stocks, and to get the best terms. When the market is able to supply all demands, no difficulty will arise.
At that point, I interjected -
Is that ari affirmative or a negative answer?
The Prime Minister replied -
What more can I say now, without occupying time unduly with the consideration of a question which proved too complex to be set out in any of the resolutions of the Conference? When the demand on the money market is greater than it would be wise for Australia to father at any given time, a compromise must be arrived at.
– “ Regulation,” not “ restriction,” is the more appropriate word to employ.
– I said, at the outset, that I was prepared to accept any variation by the Prime Minister of the language used by him. I am not here to quibble on a question of this kind ; but I express regret that the Prime Minister could not have said “Yes” or “No” in reply to the question put to him by the honorable member for Robertson.
– I call what I there describe, “regulation” not “restriction.”
– Too much is being made of the question of restricting the power of the States to borrow. They will undoubtedly borrow.
– If they could borrow more cheaply through the Commonwealth, they would consider the interests of the people, and do so.
– I have been debating that question for nearly an hour. We have not, at present, a constitutional power to prevent the States from borrowing.
– But the honorable member persists in speaking of the restriction of State borrowing. It is not restriction that is spoken of.
– I have quoted from the authenticated report of the Prime Minister’s speech.
– I did not use the word “ restriction.”
– The honorable member for Robertson asked the Prime Minister whether he would “ restrict the borrowing of the States,” and I have quoted his reply. I should think it a good rule of logic that an answer to a question should follow the trend of that question, and that, therefore, the Prime Minister’s reply had reference to the restriction of borrowing.
– Having carefully considered the Prime Minister’s reply, I should say that he meant that there should be no restriction.
– I came to the opposite conclusion. That, however, is not the point.
– I said in the sentence succeeding that which the honorable member has quoted -
When two men ride on horseback one of them rides behind ; and when two borrowers apply for more money than can be obtained, they must be content to share the loan, or one must give way to the other.
That means “regulation.”
– I refrained from quoting that illustration for a reason that I gave earlier in my address. The Prime Minister went to the Conference holding one opinion and came out holding another. This agreement is absolutely in favour of the States. It purports to be an agreement between the representatives of the Commonwealth and the representatives of the States, but it has really nothing to do with the Commonwealth. It is wholly designed to protect the States. It is one-sided. The Commonwealth has to do everything and give up everything, and therefore we may well ask whether the Commonwealth is or the States are riding in front.
– The first applicant in the money market is riding in front.
– The States are at present constitutionally entrenched, and I should like, therefore, to ask whether they are riding in front. I think that they are and will be, unless the Commonwealth takes up a similar attitude. It is for that reason that I come to a different conclusion, from that at which the honorable member for Robertson has arrived as to the Prime Minister’s statement. At page 6 of the pamphlet edition of the honorable gentlemen’s speech we have the statement -
The control of the debts of Australia is the axis upon which our other financial proposals revolve.
That is a very pleasing statement-
If they were ignored it would throw the whole picture out of focus.
– That is the worst of using figures of speech.
– The picture of the financial future of the Commonwealth.
– It is difficult even by the use of figures of speech to show that two and two. make five. This is not an occasion for oratorical flourishes or mental gymnastics. One should express one’s views in such a way that he who runs may read. The Prime Minister- went on to say -
Our crux is the control of future borrowing by mutual consent, in accordance with principles agreed to by our Parliaments and sanctioned by the people.
That is clear, and, if the honorable member will allow me to say so, I think it is the clearest utterance in his speech.
– That is not restriction.
– I am not anxious now about whether it is restriction or what it is. It is a statement of policy which is very much in contrast -with a great many explanations which the honorable member has made. It is more bold, more straightforward, and more far-reaching. I am pleased to find such a concise statement in his speech, and I think that any one can interpret it to mean that there is a latent desire in his mind, whatever action he may have taken collectively, that the Commonwealth should be in possession of full powers to manage the whole of the debts of Australia.
– Hear, hear ; I think that this agreement is the greatest step towards the end whichhas vet been taken.
-That is, I think, a fatal delusion of the honorable gentleman, and it is an important point. On the same page of his speech he referred to the State responsibilities. What are they, compared with the Commonwealth responsibilities? They would be amply safeguarded if we paid the amount of the Customs and Excise revenue to an interest fund. There would be no possibility of the arrangement being interfered with by any Government or Parliament, as the Prime Minister knows well. If this Parliament enacted that a certain sum, whether it be 25s. or 26s. or 27s. per capita, be set aside for the payment of the interest on a portion of the State debts no future Parliament, and no member of Parliament, w ould think of interfering “with the provision, and there would be absolute security to the States. But the Prime Minister went on to make a proposal of not merely a specific amount, but a cumulative amount, which, from my point of view, was an absolute mistake, and would lead to very great mischief, if adopted.
– Does not the honorable member think that a division of the debts between the States and the Commonwealth would lead to a good deal of confusion in the future?
– It could not. We have a choice between two bad positions. The action of the States gives us no choice but to compete with the people who suffer and lose money. Anything would be better than the present position. If the Commonwealth were to initiate a bold course I feel quite sure that the advantage would be to the people of the Commonwealth, and that is why I take the view I do.
– The honorable member proposes to take over about two-thirds of the existing debts ?
– I would take over an amount the interest on which would be covered by the sum that it is proposed to allow to the States. That is clear enough. Everybody admits that the State responsibilities are great, but if they had all their assets covered, by that amount of indebtedness their responsibilities would be no greater than they are now, and their revenue would be as full as it would be under the proposal of the Government. If they were relieved of the interest, undoubtedly that would be equal to a contribution from our revenue, and that brings me back to the old question, that if we were able to make a profit out of the management of the debts it would be to the advantage of the people of Australia. Lastly, the Prime Minister said in his speech that he took a large view of the Commonwealth’s needs and obligations. His recent actions do not prove that. He could have very well dealt with this question in a most statesmanlike way if he had thought fit, but he took another course. I do not know whether he took that course cheerfully or with reluctance. I hope that it was taken reluctantly. I trust sincerely that this Parliament will not be committed to the proposals which the Government have presented in this agreement, because I find that, although the agreement is signed by the Prime Minister, and the Premiers of the States, the numbered resolutions are governed by the following words -
It is therefore agreed by the Ministers of State of the Commonwealth, and the Ministers of the component States in conference assembled, to advise -
It could not ha.ve been put in much stronger terms. The various Ministries have agreed to advise their respective Parliaments to accept this agreement. What view the Commonwealth Government take of their responsibility in this matter is not. for me to say, but whatever view the Prime Minister takes I hope that it will permit honorable members to vote according to their convictions, apart from any allegiance which they owe to him and to the Ministry as a whole, because this question was not brought before the people at the last election. It was not discussed then in a party sense. I invite the attention of honorable members to the fact that this is the only Parliament which need deal with the agreement. It is not an ordinary agreement, because there are not two parties to it. In this case there is only one party, and that is the party who it is proposed should give away the whole of their rights.
– It is a statement of the terms which they will accept.
– Exactly. The legal minds can put the position as they please, but let me state a layman’s point of view. Here are a number of people interested in the welfare of the country. There is a certain amount which they are receiving now, and they ought to receive a considerable amount after this Parliament has complete control of the whole of the revenue. Through the Government they ask to be allowed a certain sum before the due time. “ If you will do that,” they say, “ we will give you £600,000 this year, and allow you freedom six months earlier than the due date.” Am I to imagine for a moment that the general policy of the
Commonwealth has been altered for all time to provide for a mere contingency of six or eighteen months ? I hope not. I trust that the Government will not use it as an argument that our necessities compel them to do this wrong to the Commonweal! h and its people. I have occupied the attention of the House three times as long as I intended to do. It is easy to extend one’s remarks on this important subject; indeed, I despair of the electors getting a proper grasp of the subject, because of the want of discussion. If it becomes a - political question upon which we must go to the country, we shall probably appeal to the electors upon it too soon, because of their want of knowledge regarding it. I have allied myself chiefly with the views propounded in the scheme of the honorable member for Mernda. The criticism of the honorable member for Robertson and others regarding that scheme is well founded, but I was attracted to it by its bold outline, as a possible way of freeing the Commonwealth from its financial chains. I commend to the honorable member the told, statesmanlike …utterances of one whom he admired, the late Sir Henry Parkes, who said that we must not be too careful about our own particular State rights ; that we must be ready and willing to give up something for the welfare of the people of the Commonwealth generally, and the encouragement of the National idea. In my opinion, the Government proposal will make the States more powerful and more strongly entrenched than they are now, and weaken the National idea. The way to encourage that sentiment is- to place in one Parliament the power to execute the mandates of the people in this matter. Instead of taking the view of the Prime Minister that we are now at a critical stage, 1 think that it would have been tetter to allow the Braddon section to mature, leaving it to the new Parliament to deal with the financial question in accordance with the will of the people.
– The speech of the Leader of the Opposition was very temperate and thoughtful, and might well have been delivered bv the Prime Minister. I have no quarrel with the latter in regard to the proposal which he has put before Parliament, but I agree with the Leader of the Opposition that the hand of the States can be seen in every line of it. Both the Prime Minister and his predecessor, the Leader of the Opposition, were independent of the States, and could s?.y to them, as was said at Hobart, what he proposed to do. Indeed, the Prime Minister, when he met the Premiers in conference, told them that the Commonwealth must have an additional revenue of £3,000,000 odd, and that they could have the balance of ,£5,500,000. In my opinion, there is not the disagreement between the Leader of the Opposition and the Prime Minister which the former thinks there is. Under the Constitution the amount payable to the States would go -towards the liquidation of their public debts, while the balance owing, approximating 14s. 3d. per head, would be taken, from them. It is the Commonwealth that has charge of the purse, and if we pay the debts of the States, we may demand from them any deficiency. The Government proposes to strike out of the Constitution the words -
And thereafter the interest payable in respect of the debts shall- be deducted and retained from the portions of the surplus revenue of the Commonwealth payable to the several States, or if such surplus is insufficient, or if there is no surplus, then the deficiency or the whole amount shall be paid by the several States.
The Commonwealth will be indemnified against the States for the repayment of the full amount paid over and above the credit in respect of surplus revenue. The Government proposes te add to the Constitution this paragraph -
The interest aid charges payable by the Commonwealth, in respect of the debts of a State taken over, may be deducted and retained from any moneys payable to the State under this Constitution, and shall, to the extent to which they are not so deducted and retained, be paid by the State to the Commonwealth.
It seems to me that in striking out the words which I have read we shall be striking out a provision which would be beneficial in carrying out either the scheme of the Government or that of the Opposition. The Leader of the Opposition has spoken regarding the restriction of the borrowings of the States. I hold that there cannot be any restriction on their borrowing. They have great territories to develop, and, to do so, must borrow largely. The sanction for the borrowing will be the force of public opinion. As the Prime Minister put it, when two ride on horseback one must sit behind. Similarly, if two States wish to borrow, that which applies first will have priority. There will be a Board to manage the finances, and to advise the Government regarding quotations. Applications by the States will be considered in rotation, preference being given only in respect of priority of application. To my mind, it is proposed to alter the Constitution more than is necessary. It is proposed, first, to alter it to enable the Government to” obtain £600,000 of State money to meet our estimated deficit. What necessity is there for such an alteration, if the States are ready to assist the Commonwealth by accepting their proper liability in respect to old-age pensions? There is one provision of the Constitution which might very well be repealed. I refer to the bookkeeping section. That undoubtedly should come out, because there is no longer any necessity for keeping it in operation. On a former occasion I spoke at length about the proposal to pay to the States 25s. per capita per annum, and I shall not allude to the subject at this juncture. It is well known that I do not approve of the form in which it is proposed. The Commonwealth Government, being in charge of the purse, and having the responsibility of raising the money, should also assume the responsibility for the debts of the States, and pay the interest upon them. When the time came for liquidating any of the debts, the Commonwealth should take that business in hand. The security under the Commonwealth would be no less than it is under the States. It would be the security of the whole of Australia. As a consequence of the Commonwealth assuming responsibility for the debts, the consolidation of them could take place. I believe that they could be consolidated on a 3 per cent, basis, and that to do so would be to confer an immense advantage upon Australia - computed by the Prime Minister himself at something like ,£26,000,000. The Bill before us also contains a provision for putting into the Constitution a section rendering it obligatory for the Commonwealth to make certain special payments to Western Australia. I do not believe that such a proposal emanated from the Prime Minister. Indeed, I cannot see his hand in any part of the Bill before us. The Prime Minister knows very well that if the word of the Commonwealth is given that certain moneys shall be paid, there is no doubt that payment will in due course be made. But here is a State making a demand that an obligation to pay certain moneys to it shall be put into the Constitution. There is no necessity whatever for that. In his correspondence, the Prime Minister made it very clear that it was not necessary to alter the Constitution.
The very fact that an arrangement was made in good faith would be sufficient to cause appropriations to be made. Moreover, any surplus which the Commonwealth might have in any year would be handed over. to the States.
– Does the honorable member really think that we should hand over extra moneys to the States ?
– We should have to do so.
– We might spend the money, and then we should not have it to appropriate.
– The honorable member might as well suggest that we might throw the surplus into the Yarra. The British are a practical people, and every proposal made by this Parliament must be a sound one, if it is to be approved by the electors.
– I merely suggested that we might not have the money to appropriate unless provision were made in the Constitution that we should do so. *
– We could not avoid appropriating any surplus to the States. The Constitution itself requires that we shall do so. If a Free Trade Government were in power in the Commonwealth, it would be compelled to raise sufficient money to meet the requirements of the States. Under a Protectionist Government, the same would take place. The Tariff would have to be revenue producing in either case. There is no difficulty whatever in raising the necessary money if Parliament is bent upon raising it. But, although the Government have made provision in this Bill for an alteration of the Constitution for the special benefit of Western Australia, they have made no provision for the payment of the balance of interest should the debts be taken over by the Commonwealth up to the extent of £250,000,000. Why the Prime Minister did not insist upon the debts being taken over as a condition of making this contribution to the States, I cannot understand. It looks to me as if there was a distinct understanding that the contribution to the States and the taking over of the debts were to be separate proposals, so that the States would have an opportunity of putting up a fight against the taking over of the debts by the Commonwealth. I, however, am quite satisfied that the debts should be taken over up to £250,000,000, and that the people desire that that should be done. I find that the people, wherever I go, are in favour of this course. The national feeling is strong. The State Rights ‘bogey, that is constantly being pushed forward by State politicians, has no effect in the country. If one talks to the people from a national standpoint, one finds that they are in sympathy every time, and right along the line. I believe that the people would support. an alteration of the Constitution in favour of the taking over of the debts by the Commonwealth. I am also of the opinion that in New South Wales and Victoria, this financial proposal would be rejected. I should be very glad to see it rejected, because I do not think it is at all necessary that it should be embodied in the Constitution. If every clause of the agreement, other than the provision for its embodiment in the Constitution, were approved by this Parliament, it might be given effect without any alteration of the Constitution. It is not necessary that I should say very much more at this juncture, as I have spoken at length on the financial question. I shall do what I can to prevent the embodiment in the Constitution of a provision which a majority of the people cannot remove from it. A majority of the people in . the four smaller States, representing only one-third of the population, as against two-thirds represented by the two larger States, could prevent the removal from the Constitution of any provision which they did not desire to be removed.
– A majority in three cf the smaller States could do that.
– I put it in the other way, taking the most favorable view of the position. We have representative government in the Commonwealth, and, in my opinion, the will of the majority of the people should prevail. But the will of a minority would prevail if a majority of the people in the “smaller States thought it undesirable to remove a particular provision in the Constitution. I have stated that I believe the State of New South Wales has been very badly treated in this matter. I do not blame the Federal Government for that. I do not think they had any part in it. They had nothing io gain by supporting one State as against another. They said merely that they must have a certain amount of money, and that the State Governments might divide the balance as they pleased. The representatives of the smaller States insisted upon the terms embodied in the agreement submitted to this
House. The basis on which it is framed was not sound, and the result is, therefore, unsatisfactory. The States deriving the largest amount of revenue from Customs and Excise, and notably, New South Wales, must suffer most severely under the proposed agreement. While New South Wales has a larger population than have the smaller States, it has not a great population above that of Victoria ; but while the cost to New South Wales, according to the statement of the Prime Minister, will be £10,000,000 odd, all Victoria will have to lose will be .£400,000. Without going into any calculation, that is sufficient, on the face of it, to show that something is wrong. That arises from the fact that the agreement is not on a sound basis. I have said that I am opposed to any alteration of the Constitution. I believe that we must return to the States £5,000,000 odd, as proposed by the Prime Minister, and by the Leader of the Opposition, because we have no use for it. But what if we had a legitimate use for it? I remind honorable members that, before very long, we shall have a legitimate use for some millions of money, and we shall have no means of raising what we require. The Prime Minister said that we are not pledged to raise from Customs and Excise the money required to pay the States 25s. per head, because we may resort to direct taxation. I believe that if we follow the policy laid down by the present Government, we shall have to raise money from some source other than Customs and Excise, if we are to make ends meet.’ Next year, we shall be faced with a deficit of ,£1,000,000. The Prime Minister has anticipated that by making an arrangement with the States, which is not to be .put into the Constitution, they will permit him to use that £1,000,000, on our undertaking to pay the money back in the following year, after the agreement comes into operation. In the year in which the money is paid back, under the agreement, we shall have, not ,£3,100,000, but ,£2, 100,000. Our revenue for that year will at once be reduced by one-third. The Government will be expected at about that time to put into operation the provisions for the payment of ‘ invalid pensions ; we shall require to expend money on the development of the Northern Territory ; to carry out the defence proposals of the Government ; on the establishment of a High Commissioner in London ; and on a score of other matters that might be enumerated, and we shall be faced with a deficiency for which the Government have made no provision. I have suggested that the matter should be dealt with in quite a different way. I think that we should take oyer the whole of the debts, and pay the interest upon them. We should make no payment whatever to the States, but, as provided in the Constitution, should ask them to contribute the balance between the surplus revenue payable to them, and the amount payable to, the creditors of the States in the shape of interest on the debts. That, approximately, would amount to 14s. 3d. per head of the population. That would provide for an adjustment of the finances, under which New South Wales would have justice done her, while no injustice would be done to any other State. That, in short, is what I have proposed, and I believe that it can be proved to be actuarially sound. The Commonwealth would be responsible for all time for the State debts. The States would for all time enjoy the possession of the public works constructed with the borrowed money, and the revenues, to the extent of millions of pounds, derived from them. That would be a decided advantage to the States. It seems to me that, granting a desire to do justice as between State and State, such a proposal would be more acceptable to the people than that which is put forward in the financial agreement. The suggestion, by the Leader of the Opposition, that New South Wales, being a rich State, should be plundered for the benefit of the smaller States, is not only unsound, but dishonest. No State is so poor that she cannot pay her way. It is only a matter of shifting the burden of responsibility from one shoulder to another. At present, it is proposed to take from the revenue from Customs and Excise what is necessary to provide for States that are impecunious. But none of the States is impecunious in the sense that it cannot raise sufficient money, or is too poor to pay its debts. It means only that the people of some States resent the shifting of the burden from the poor to the rich. We are told that in those States that have resorted most to direct taxation, its full extent represents only 7s. per head, whilst the lowest estimate of the amount paid by the masses of the people, even though they do not consume narcotics and stimulants, is 13s. per head. If the poor are to pay 15s. per head, and the rich resent the payment of more than 7 s. per head, honorable members will see that an injustice is done to the masses of the people. That is all I have to say at this stage. I consider the proposed alteration of the Constitution quite unnecessary, and that their action would be distinctly beneficial if honorable members were to reject this Bill.
– Having spoken at some length on the subject during the Budget debate, I shall not detain the House long on this occasion.. But I propose to quote the following powerful and remarkable speech delivered as late as the 17th September, 1908, upon the financial question -
If we have now got beyond the region of mutual misapprehension and bickering to a reasonable consideration of the obligations of both Commonwealth and the States, we shall be -qualified to enter upon the consideration of one of the very gravest issues that can confront this Parliament or its immediate successors. Let me so far respond to the invitation of the deputy:Leader of the Opposition -
The Deputy Leader of the Opposition at that time was the present Minister of Defence - by suggesting that the cardinal and governing principle that we will do well to keep in mind in facing all our financial problems of this nature is that which would be supplied by the answer to the question : “ Does this proposition enable ultimately a clear and complete severance of the finances of the Commonwealth and the States?” If it does, it not only means taking a path that will lead to less friction and resistance in the future, but will put the full financial responsibility in each case upon the proper shoulders. A suggestion that at present finds favour with the States is that after the debts have been dealt with they should continue for all time to share to some proportional extent in the Customs revenue of the Common- wealth. It is urged that they should, because with every increase of population the charges they have to bear in respect of the Departments of Justice, Education, and so forth, are incr’eased. It is urged that it is only reasonable that, since the Customs revenue is likely to grow as our population increases, the returns from the Commonwealth to the States should grow also. That appears to be, on the face of it, a reasonable contention, but without disputing its general fairness, its application in that way seems to me dangerous, and, perhaps, fatal.
That is very emphatic -
If the growth of population is to be provided for out of Commonwealth revenues let the Commonwealth, which provides the funds, take the responsibility for the outlay. If the States complain that they have unproductive but necessary Departments that must be maintained at increasing cost as the population increases, let the Commonwealth itself undertake to maintain those Departments.
– As I understand it, the States say that they help to collect our revenue by providing it.
– I do not at the moment see the force of that argument. Let me lay some stress on this point, because I submit as an. almost unchallengeable proposition that we shall never have the best nor the most economic administration unless the Government that spends the money is the Government that raises it. Sepa-rate the two - let one Government have the responsibility of raising funds, and another the responsibility of spending them - and we shall sever the two responsibilities in an unnatural fashion.
– Does that solve the problem?
– I hold that it is not only necessary and desirable, but essential to effective administration that we should not have that separation. What could be more fruitful of misunderstanding, friction, and jealousy, and probably of unnecessary expenditure, than te have a Commonwealth Department when discussing its own ways and means, governed by considerations outside itself in regard to the expenditure of part qf its receipts in ways that it cannot in- any way control ?
– Then it is a mere question of expediency ?
– I am not considering the question of expediency, but of principle.
– The Convention agreed to that scheme without any limitation of time.
– And the Convention unfortunately embodied in the Constitution a financial scheme which, although the best we could devise at the time, has made the re-opening of the whole question at this juncture inevitable. We are obliged to recast the whole of our financial relations. That was made imperative, and remains imperative. This being so, we cannot escape the duty of considering what really ought to be the fundamental considerations governing this question.
– Order ! Does the honorable member propose to quote much more of the speech?
– Only two or three sentences, and as the speech is most pregnant-
-Order! The speech may be very pregnant, but it is rather unusual to have speeches which have been delivered in one session of Parliament reproduced in globo in another. The honorable member might give the House the sense of what he is quoting.
– I am not quoting the speech in globo, nor do I propose to do what the honorable member for Fremantle was allowed to do the other night - to read from my own speech by the hour. I am giving but a brief extract from one of the most pregnant speeches ever delivered in this House upon a great question.
– It is not in order to refer to another honorable member as having been “ allowed “ to do something which may or may not have been proper. I have to deal now only with the matter before the Chair, and I put it to the honorable member, as an old and experienced member of Parliament, whether it is advisable that long speeches should be reinserted in Hansard, where they already appear, or whether it would not be better, in order to save the time of the House, and to meet the convenience of honorable members, that a digest should be prepared and given to the House if it is thought necessary to use the arguments over again.
– I agree with you, sir, but as I have only three or four more sentences to read I hope I shall be allowed to proceed. If the reference had been lengthy I should have prepared a digest of it, but as it was so brief I thought r could quote it. in full, especially as I did not want to spoil it by cutting it down. It concludes as follows : -
And I am venturing to submit my own view that while the States may be right in their claim to be relieved of unproductive expenditure for national ends, somewhat in accordance with our increases of revenue and of population, surely the straightforward and direct manner of doing this is for the States to transfer to the Commonwealth, and for the Commonwealth to accept, as much of this unproductive expenditure as may be a fair charge on the community as a whole, and, therefore, on the Commonwealth itself. Then the Parliament which raises the money would be the Parliament which spends it, and the electors - the same electors, through the same machinery - would control the raising and the spending of that money. If anything can be conducive to economy and efficiency, it is surely the close relation of the responsibility for the management of those particular Departments of the Commonwealth Service, which are unproductive, and which, under the system proposed at the recent conference by the State Premiers, would be financed by them from money which they would have no hand in raising-
Those were the views held by the Prime Minister upon this great question as late as the 17th September last year. I was wholly in accord with them then. I am wholly in accord with them to-day. I see no reason why they should have been changed. Either the Prime Minister at that time was misleading himself, the House, and the country, or he is to-day misleading the ‘House and the country, if not himself. Seeing that not only I, but I believe the bulk of the members of the House are in thorough accord with the Prime Minister’s pronouncement at that time - it being a clear and explicit statement of the correct principle that the Par liament that raises the money ought to be the Parliament that spends it, and that if the States find that they have services with which they are not capable of dealing they should hand them over to the Commonwealth, leaving the Commonwealth to raise the money and carry them out - I think it is due to the House that the Prime Minister should explain why he has changed his views.
– There has been no change.
– There, has been a most remarkable change. The Prime Minister has absolutely reversed, not merely the view which he urged upon the occasion to which I have referred, but that which he had advocated for years previously, and with which his supporters were entirely in sympathy. How is it lhat every other opponent of this Bill affirms that it embodies an agreement which is a distinct reversal of the honorable gentleman’s previously declared policy? The honorable gentleman may make an explanation - nobody is more expert in making explanations than he is - but nobody will ever be convinced that his policy in regard to this question has not undergone a complete change. He has repeatedly argued that, as the Commonwealth is charged with the duty of raising the revenue from Customs and Excise, it ought to exercise control in the expenditure of that revenue. If he would say that, to-day he would command, not only my own support, but that of a great many more honorable members. The Prime Minister has stated that he entered the Premiers’ Conference free and quitted it-
– Yes. But why did he so quit it ? Ought we not be told ? Nobody was more disappointed than I was that he should have departed by one iota from the stand which he had main7tained for years. If he will not tell us the reason why he has done so, we can only think that the interests of the Commonwealth have been sacrificed in order to enable a few of his supporters to retain their seats.
– The Argus stated that he had put the political before the financial factor.
– There is no doubt about that. I should like to hear from the Prime Minister’s own lips that there is another view than that which was put by the Argus. I regret that the Commonwealth is being degraded by the support which is being accorded to the agreement that is embodied in this Bill. I am sure that under it the interests of the Commonwealth will be sacrificed in the years to come. The idea underlying it is that, by the surrender of its spending power, the Commonwealth will be fettered to such an extent that progress will be impossible. How can this Parliament aid the development of the Northern Territory or insure the carrying out of an effective defence scheme, if it hands over so much of its revenue to the States? It is the duty of the Prime Minister to explain why he has changed the views which he held upon the occasion which I have cited, and upon every other occasion on which I have heard him discuss this question.
.- If the Prime Minister would like to explain the speech which has just been quoted by the honorable member for Hindmarsh, I shall be very, happy to give way to him. That speech certainly does require explanation, especially in view of the fact that the agreement embodied in this Bill, which was arrived at behind double-barred doors, evidences a complete change of front on his part. The House must have been surprised that the Prime Minister, in moving the second reading of this measure, ignored the many speeches which have been delivered in opposition to it. It has had to sustain attacks, not merely from this side, but from a number pf his own supporters. The case which was made out by the hon_orable member for Flinders is one which calls for an answer by the Government. Similarly, the indictment of the honorable member for Gippsland demands a reply at their hands. Of course, the Prime Minister may feel that he has the numbers-
– Perhaps the honorable member w,as absent when I said that I thought the proper place to reply to specific points was in Committee.
– I did not. hear that statement. Certainly the previous discussion was somewhat irregular, and should not have occurred on a motion for leave to introduce the Bill’. Withal, this is the occasion upon which the Prime Minister should have answered the case made out against the proposed agreement. It seems to me that the Government has begun at the wrong end of the problem. The first step should have been to take over the State debts. I think that was contemplated by the framers of the Constitution, because in the Braddon section it is laid down that this money shall be returned to the States or applied in payment of interest on the debts of the States. Obviously, it was the intention of the framers of the Constitution, of whom the Prime Minister was one, that those debts should be taken over by the Commonwealth at a very early period of its existence. It is unnecessary for me to dwell upon the obvious advantages that would accrue from the adoption of that course. There is no doubt that the consolidation of the existing debts as they matured would result in a very substantial saving to the States during the next thirty or forty years. But there is another reason why that should be done. While the State Governments have their agencies in London, paying the interest on State debts and floating new loans, we shall not get rid of the idea of State sovereignty. I am not a lawyer; but it seems to me that the plain intent of the Constitution was that, in all external matters, the Commonwealth should act for Australia. That seems to be proved by the fact that the Commonwealth is empowered to deal with defence, and is the sole authority which can impose duties on commodities imported from over seas. There are other proofs that it was intended by the Constitution that in all matters required to be dealt with outside Australia for Australia the Commonwealth alone should act. As long as they retain control of the debts the States will cling to the notion that they are still “ sovereign powers.” They will continue in a course of extravagance, shearing off none of the “ frill “ for which the taxpayers are being, bled. In my opinion, the intention of the Constitution was that the functions of the States should be wholly domestic. If we took over the State debts, the whole position would be at once simplified. The States would then be in the position of making a contribution to us, rather than of our being requested to make a contribution to them. Each authority would then be in its proper sphere, and know what to do. The evident intention of the Government is that the people shall accept the financial arrangement, and reject the proposal to take over the State debts. The Prime Minister has repeatedly asked, “Why not trust the people?”. While I am prepared to trust a majority of the people at any time, this appeal strikes me as curious coming from the Leader of the Government who was afraid of daylight when concocting the agreement which he is now asking Parliament to accept. Perhaps, however, it is not fair to accuse the Prime Minister of that.
– He was a party to it.
– Yes, but his wishes may have been overborne. At all events, the fact remains that the other parties to the . agreement, if not the Prime Minister, did not want to trust the people. They would not trust them with information about the agreement, not to speak of anything more grave. Therefore, I am inclined to discount the appeal to the Opposition to trust the people. Regarding the division of revenue, I have no great objection to urge against the payment of 25s. per head as a temporary expedient. That seems a reasonable amount, so long as Customs and Excise return £2 10s. per head. But it is scarcely wise to bind the Commonwealth for all time to return that specific sum to the States without knowing what we are likely to get from those sources of taxation. I believe that the highest financial authorities in Australia bear out that view. No one can see very far into the future, and five years should be the utmost duration of any fresh arrangement. The forecasts of the Treasurer, predictions of what the population and the revenue are likely to be in 1920, are very uncertain and unsubstantial. If any one wants proof of this let him turn up the predictions made by the f ramers of the Constitution about ten years ago. Scarcely any -of them have been verified, whilst a number of them have been falsified. It is the most difficult thing in the world to forecast the conditions of Australia ten years hence.
– Who, for example, can say what the Tariff will be?
– Exactly. We are wiser than our predecessors, and posterity will probably be wiser than us, because it will have our experience for a guide. If we legislate far in advance we shall probably make more mistakes, and do more damage than if we were to leave posterity to manage its own affairs. The framers of the Constitution were met by the same difficulty that confronts us. They first made the division of revenue permanent, but afterwards limited it to ten years. That alteration was an admission of inability to see very far into the future. We shall be wise, I think, if we recognise that our capacity to forecast what will happen years ahead is equally limited.
– History has proved them right, too.
– Yes. The whole superstructure of the Government case depends upon the Prime Minister’s theory proving correct, that there will be an increase in the Customs and Excise revenue per capita as time passes. Of course I agree with the honorable gentleman that in ordinary circumstances an increase of population will give an increased Customs and Excise revenue. But what he failed to prove - and that is the essence of the case - is that there would be any per capita increase under a Tariff such as Australia has at present. I listened to his speech, which I have since read. If Iremember aright he searched the whole world for facts to prove his contention, But was unable to find a single country save New Zealand that supplied any evidence in support of the position which he look up.
– I cited some evidence; but not enough. There is some evidence from Canada and a little from the United States.
– The position of Canada differs so materially from that of Australia as to render valueless a comparison of the Customs and Excise returns of the two countries.
– Except that the Canadian statistics show, as the honorable member for Flinders also pointed out, that with rapid settlement and opening, up of the land there is always a high per capita return of Customs and Excise revenue.
– I admit that, but it is unreasonable to assume that the experience of New Zealand in respect of its per capita returns from Customs and Excise is likely to be repeated here. The Prime Minister must be aware that New Zealand has been scouring the civilized world for money ; and that its efforts to attract capital from Australia ‘have excited very unfavorable comment.
– New Zealand raised a loan the other day on very good terms.
– At no time during the last five or six years has New Zealand been unprepared to pay 4 per cent, or even more for money. Apart from regular loans, New Zealand has been borrowing money in small sums through Australian agencies. In the circumstances, therefore, I do not think that New Zealand should be held up as a pattern for the Commonwealth, nor do I think its position in regard to Customs and Excise revenue is really sound. Since New Zealand is borrowing largely, it must be importing more than it would do under normal conditions j and as it has also in operation heavy revenue duties its high per capita return from Customs and Excise is purely fictitious.
– It has lasted for twenty or thirty years.
– There are many reasons to account for that fact. There are, for instance, the discoveries which have led to the constant shipment of frozen meat to the Old World, and also the phenomenally good seasons that it has enjoyed for some time.
– Its exports are and will be at the base of it.
– Its export trade is the highest per head of any country in the world. But New Zealand’s experience alone does not enable the Prime Minister to deduce anything like a certain law in regard to the increase per capita of Customs and Excise revenue. If he has not done that, then his case for making for all time a fixed payment to the States necessarily falls to the ground.
– That does not follow.
– Surely it does. The Prime Minister, in support of the agreement, which provides that we shall pay to the States for all time 25s. per head of the population, attempted to deduce from the operation, of Protective Tariffs in other countries a law showing that the per capita return under the Commonwealth Tariff would increase. He endeavoured to show that the return of £2 10s. per head under the existing Commonwealth Tariff was not normal, and that it would increase with the settlement and development of the country. If he has not established that, I submit that he has failed to prove what is absolutely necessary to recommend this agreement to the Parliament. I am surprised that the Minister of Defence, who possesses an acute mind, should dispute that statement.
– I do not follow the honorable member’s deductions.
– While it might be safe to return to the States 25s. per head of our population as long as our Customs and Excise revenue amounted to £2 10s. per head of the population, how could we do so if the per capita return fell to 40s. or 35s. per annum - If the Prime Minister has failed to establish the central fact that the existing return from Customs and Excise will be maintained, his whole superstructure falls to the ground. The Minister of Defence will surely not deny that that is so. Despite the honorable gentleman’s professed doubts, it will be admitted also, I think, that under a Protective Tariff there is a tendency for the Customs revenue to fall j indeed, the object of imposing Customs duties is to foster native industries, so that’ importations either diminish or cease altogether.
– Imports of articles that are dealt with, certainly ; but not necessarily over the whole range of the Tariff.
– I do not know whether the Minister of Defence has already been converted to the Protectionist views of some of his colleagues, but he must know that their object is not merely to maintain, but to extend, the existing Protective duties. If that is done, we must expect in the future a per capita return, not of 50s. per head, but of an amount approaching that secured by other countries where Protective Tariffs prevail.
– I suppose that any country that destroys one source of revenue must make good that loss from another source?- Government must be carried on.
– The honorable member probably has in mind the imposition of revenue duties on tea and kerosene.
– Not at all; I was not thinking of anything at the moment.
– Then I am at a loss to know what the honorable member meant. Is he thinking of the single tax, of which in the long ago he was an advocate? Or has he in mind some other scheme for adding to the burdens of the masses? I recognise the difficulty which confronts the Government in framing a policy that will meet with the approval of the honorable members for Maribyrnong, Batman, Bourke, and Corio, and at the same time be acceptable to other Government supporters holding the political views of the honorable member for Fawkner, exPresident of the Employers’ Federation, and the honorable member for Parkes. That is the great and pressing problem which the Government has had to face, and I am afraid that they have not yet found a solution of it. I am at a loss to understand how honorable members who strongly advocate Protection can vote for an agreement which will undoubtedly tie the hands of this Parliament in imposing further Protective duties or increasing those already in operation.
Sitting suspended from 6.30 to 7.45 p.m.
– It is clear from the information at our disposal that the Prime Minister’s estimate of future Tariff returns is not reliable, and that therefore it would be dangerous to agree to pay permanently so large a sum as 25s. per capita. Should the Customs and Excise revenue diminish, it would be necessary, to find the money with which to pay the States, to impose further taxation. Some honorable members might like to make up the deficiency by taxing ‘kerosene, tea, and other commodities used by the poor man. Such a solution of the difficulty would be most unsatisfactory, and would place the extreme Protectionists in a very awkward position. Indeed, I commiserate with the honorable members for Maribyrnong, Batman, and Corio in the predicament in which they find themselves. Unquestionably the adoption of the agreement would prevent this Parliament from giving future Tariffs, the Protectionist incidence which, as Protectionists, they would wish, and would compel the imposition of revenue duties. Without pressing that point further, I would draw attention to the fact that some of those who are now contending that the agreement should be made perpetual have only recently been- converted to that view. It is the present desire of some of the newspaper champions of the Government that the agreement should be embodied in the Constitution, so that it will be practically impossible to alter it. I need not quote the decisive and emphatic statements of the Argus, which alone of the Melbourne daily journals supports the Government. They must be familiar to every honorable member. But let me read what was published in that journal so recently as the 27th February last-
The consideration of what arrangement should be made for the distribution of revenue between the Commonwealth and the States, in view of the provisions now made under the Braddon clause, should be undertaken without bias, and with no desire to steal a march on one side or the other. . . . Further, it would be foolish to expect that any arrangement which may be made can be final and unalterable.
This is the journal which now urges Parliament to make an agreement for all time.’
Light is every year being gained by experience, and nothing but experience will enable an adjustment to be made that will meet the requirements of the case.
That was just before the Conference met at Hobart. In the same issue the view is expressed that -
The Federation has not yet completely found itself, and therefore it will be impossible to ascertain exactly what a fair distribution of the revenue will be. Nevertheless reasonable approximation could be reached by the aid of the statisticians, and be held to be variable from time to time as experience dictates.
But now we are told that we ought not to take advantage of experience. We must make an arrangement which will tie the hands of our successors ! If ever a speech made in this Chamber demanded an answer from a responsible Minister that of the honorable member for Gippsland requires one from the Prime Minister. He showed that up to the time the Conference met the Argus pleaded merely for a temporary arrangement. For instance, the Argus of 17th August, a few days before the Conference met, contained this statement -
There is no reason why this Conference should not agree to a division of the Customs and Excise revenue which would provide for the needs of both States and Commonwealth, but which might be regarded as experimental, for the three years next following the general election. Then, with such modification as experience might suggest, it could be embodied in the Constitution.
So that up to the commencement of negotiations, the idea of a settlement for all time was entertained neither by the newspaper champions of the Ministry, nor by Ministers themselves. That establishes a strong case for an explanation of what occurred at the secret Conference with the Premiers. In an earlier part of my speech I promised to quote perhaps the highest financial authority, in Australia in proof of the unwisdom of -any permanent arrangement with the Premiers. I have here the Australian Insurance and Banking Record, an exponent of high finance respected by Government supporters. I believe that the editor of this journal is, or was, also the financial editor of the Argus.
– What is the date of the article ?
– The date is 20th February, 1909 - about the same time when the Argus pleaded for an arrangement that should not be final and unalterable. The editor of the Insurance and Banking Record wrote as follows: -
The Conference of State Premiers which is to meet next month to consider the financial re-. lations between the States and the Commonwealth, will have to face rather difficult problems. From the close of1910 the “ Braddon Clause “ of the Constitution will become obsolete. It provides that the Commonwealth must return at least three-fourths of the Customs and Excise revenue which it collects, to the State Treasurers. For seven years and a half the provision was honorably observed, but by the adoption of the expedient of appropriating revenue for future expenditure (that is, not for expenditure within the current year), the effect of the arrangement is greatly weakened. But it is generally recognised that the “ Braddon Clause will not be renewed, and that the Commonwealth will from1st January, 1911, have the power to take from the revenue whatever money is necessary for its services.To meet this contingency, it is thought that some limitation can be imposed upon the Commonwealth expenditure, or that an arrangement can be effected under which the Commonwealth would undertake to return a fixed sum to the States. Neither alternative is sound.
What follows deserves particular attention.
The Commonwealth cannot engage itself either to limit its expenditure at the possible cost of crippling its services, or to return a given amount annually, without running a risk that it is not called upon to assume. The Commonwealth is not responsible to the State Governments, but only to the people of Australia for its expenditure. On the other hand, it ought hot to undertake to supply the States with a fixed sum when it cannot’ be certain what its revenue will be from year to year.
The true position of the National Government is herein accurately outlined. I believe the bulk of the members sitting behind the Government would, under ordinary circumstances, indorse these sentiments by their votes. The writer goes on -
If it made a mistake in this matter, it would! have to levy direct taxation of some kind. But such a course would be intolerable, for two Governments would at the same time be collecting taxes of a similar description. The Labour party would be encouraged to persevere in their efforts to impose a penal land tax, partly for the purpose of despoiling the large owners, and partly to provide means for a costly defence service.
Evidently, this journal shares the hostility of Conservatism to find means for an effective system of defence for Australia.
– That is not the opinion of a Labour journal.
– No; if it were, it would not carry the weight which it is to be hoped it will have with the Government and their supporters.
The better course to follow would in the long run be to allow the Commonwealth Government to take what it wants from the Customs and Excise revenue, and to refrain from clashing with the State Governments in the matter of direct taxation.
I see that the honorable member for Fawkner, who has just retired from the position of “President of the Employers’ Federation, is in his place. I believe that he will agree with me that the Insurance and Banking Record is a very high financial authority.
– Quite right.
– Occasionally, this journal takes the honorable member and the federation to which he belongs under its patronage.
– The honorable member might read what it has. had to say about me.
– I do not happen to be equipped with all the flattering notices which the honorable member obtains from the press. But I may read for his benefit, and for the benefit of those around him, in whose hands the ratification of this agreement rests, another extract from the same authority. On the 20th March, 1909, after the meeting of the Premiers- in Hobart, the Insurance and Banking Record wrote as follows concerning the resolutions, adopted : -
The resolutions are merely proposals which, cannot be accepted by the Commonwealth unless the State Governments can secure their acceptance by an amendment of the Constitution in the manner set forth in the Act. In the meantime it must be admitted that the Commonwealth is to be governed according to the provisions of the Constitution.
The Constitution may not be a perfect one. But the people of Australia agreed to adopt it. Certain powers are conferred upon the Commonwealth, and in their exercise expenditure is necessary. Should the expenditure be extravagant, and the claims of economy disregarded, it will be the duty of the Commonwealth electors to bring the Government to book. But the States, as States, have noihing directly to do with the matter.
Nevertheless, we have the Premiers of the’ States conferring with the Prime Minister, and through him usurping the functions of this Parliament. I believe that a large number of Government supporters are under the impression that this is a party question, and that, whether they approve of the proposed agreement or not, they are obliged to vote for it.
– This evening’s Herald says that the question is not a party one.
– I hope that it is not. The Insurance and Banking Record went on to say -
By a constitutional fiction they -
The States- are supposed to be represented by the Senate, and their shadowy status ends there. The Commonwealth cannot rightly be controlled in the, exercise of its constitutional powers by the State Premiers and Parliaments.
I think that that is sound Federal doctrine, to which the -Postmaster-General would readily subscribe. At any rate, I think I have read something from his pen which was very much on the same lines. The journal from which I have been quoting went on to say -
It is to be admitted, however, that the administration of the public finances of the States is being made difficult by the duality of the position, and that the Premiers and Treasurers have good cause for anxiety. The Commonwealth has control of the greatest source of revenue, viz., the Customs and Excise duties, and it can spend what, in reason, it likes upon the Departments it has taken over or will create. It was sought to impose a check upon its expenditure by providing that for the first ten years it might not apply annually “ towards its expenditure” more than one- fourth of the net revenue from Customs and Excise duties. At first sight the provision appears to be an ingenious one.- In reality it is mere surplusage and delusive, for if the Commonwealth ,wants more money than the one-fourth of the Customs revenue, it can levy taxation in other forms. Its powers of taxation are not restricted. It can impose an income tax, or a land tax, or stamp duties, or raise revenue in any way it may please.
After quoting the Commonwealth Statistician in support of the same view, the Insurance and Banking Record concluded as follows : -
The term of the restriction on the use of the Customs revenue is running to a close, and from ist January, 1911, the Commonwealth will have absolute control of the whole amount collected The State Treasurers are very excusably existing in a state of alarm as to what will happen,’, especially as it is becoming clear that a large increase in Commonwealth expenditure will take place, while it will be difficult to effect substantial economies in the expenditure of the States. They wish to be assured that a certain fixed proportion of the Customs revenue shall be handed to them. But all experience shows that it is impossible to exactly forecast either the revenue or the expenditure of a country.
I commend that sentiment to the Prime Minister.
A Commonwealth Government might (backed by an amendment of the Constitution) agree with the State Governments upon certain figures, but if it promised too much it would have to impose special taxation, and the Australian taxpayers would not be released by the agreement. If the Commonwealth and the States together incur expenditure to a given amount in any year it will not very much matter to the public who imposes the necessary taxation, provided the same kind of tax is not levied by both authorities….. The best thing, as it appears to us, is for the Commonwealth to take its own financial course, abstaining from imposing new taxation, and returning to the State Treasurers the surplus revenue from Customs and Excise duties, whatever it may be, from time to time. It cannot take instructions from the State Governments with regard to its expenditure.
That is precisely what the Government did when they entered into conference with the State Premiers. Can it be doubted that this agreement is virtually an instruction from the State Premiers? Referring to the expenditure of the Commonwealth, the article continues -
That is a matter resting between itself and its constituents. That a dual control of the public finances of Australia cannot last may be predicted with safety. But for the difficulties that are now looming the leaders of the Federation movement are responsible. They shirked what was the most important question of all, viz., the financial. The South African unionists have been better advised, for. they have determined that when the union is consumated no financial’problems between it and the provinces shall remain for solution.
I was sorry to notice, and 1 think the House will regret, the change in the position taken up by the Prime Minister in this matter. To my thinking, the honorable gentleman has stepped down from the position of a great national leader, and has become, in a measure, the advocate and champion of the State Rights party.. I remind him of the sentiments he has previously expressed as a national leader. I have here a Parliamentary paper ordered to be printed on the 10th October, 1906. When the Prime Minister was approached in a somewhat dictatorial manner by the then Premier of Tasmania, he made a very different response to that which he made on the floor of this House in recommending this Bill. The Premier of Tasmania, Captain. Evans, wrote -
It is abundantly evident to me that although the Constitution meant to safeguard the payment “to the several States” of at least three-fourths of the net receipts from Customs and Excise, your Government is preparing to return, for the first time, less than three-fourths to Tasmania in this financial year, and to leave it to my Government to make good, by direct taxation, deficiencies arising from Federal designs. That this policy is within the strict letter of the law, and that it may be expedient for a Cabinet existing under the three-party system of legislation, need not be questioned, but it is none the less a departure from the spirit of the union or partnership into which we entered by federating.
Captain Evans further remonstrated with the Prime Minister, and, referring to the then Deakin Government, wrote -
May I venture, from the arithmetical point of view,’ to say that it would be a clever statistician indeed who could determine what proportion of the people the present Federal Government does represent. But this is by the way. My object is to demonstrate that it will be a breach of compact if the financial rights of the State Governments are subordinated to the wishes of the Federal Cabinet. That it was intended by the framers of the Constitution that there should be co-operation and consultation is evident from section96.
I do not think that consultation with the States can be inferred from section 96, or from any other section in the Constitution. Section 96 merely provides that during a period of ten years after the establishment of the Commonwealth, and thereafter until this Parliament otherwise provides,. Parliament may grant financial assistance to any State upon such terms and conditions as it thinks fit. It will be seen that the terms and conditions are to be fixed by this Parliament, and not by the State Premiers, although, of course, they would be parties to the agreement. The Premier of Tasmania advised the Prime Minister further as follows : -
I venture to say that the true spirit of union dictates that you should, in the initial stages of the working of the Constitution, be so advised. Knowing from State Ministers what the effect of your proposals might be, you would be able to shape them upon really Federal lines, instead of making rough-hewn demands, careless of the effect of those demands upon the taxpayers.
I read these extracts to direct attention to the fine national note which the Prime Minister struck in this correspondence with the Premier of Tasmania, and in order to contrast it with the subdued key which he has recently adopted. The Prime Minister at that time wrote to Captain Evans as follows : -
To imply that the Parliament of the Commonwealth, though directly elected by the whole people of Australia, cannot, and ought not to, deal with the Australian interests with which they are specifically intrusted, except with the assent of every State Government, would be to reduce Federation to a nullity.
– That is- what the Government are now doing.
– The honorable member only pretends to think so, or rather he merely says so.
– I am sorry to hear the Prime Minister say that. At any rate, I agree with the honorable member for Gwydir. In the correspondence to which I have referred, Captain Evans was objecting to the introduction of penny postage, and surely he had as much right to say whether penny postage should be. established, seeing that it would affect the finances of his State, as to demand some say in the allocation of the surplus revenue of the Commonwealth.
– He had no say in the allocation of the surplus revenue ‘of the Commonwealth.
– His successor had.
– Not at the Premiers’ Conference ?
– The honorable gentleman refers to an agreement which we proposed, and which we should carry out, independently of the State Premiers.
– After consultation with the State Premiers, which is exactly what the Prime Minister repudiated in the despatch which I have quoted.
– If the honorable gentleman can explain away the plain language he used in that despatch he will be even more skilful than I believe him to be. He then specifically denied the right of a State Government, or even the Premiers of all the States, to interfere in any matter delegated to the Federal Parliament by the people. The allocation, of this revenue after the expiration of the Braddon section has been absolutely and unconditionally delegated to this Parliament. Yet the Prime Minister does not come to this Parliament with some scheme propounded by himself, but goes first to the Premiers of the States, arranges a scheme with them, and then comes to us. That is what I complain of. That is where I say that the honorable gentleman has departed from the national views to which he gave expression in the correspondence I have referred to.
– We come to this Parliament, and no Parliament other than this has any voice in the matter.
– The honorable gentleman did not come to this Parliament until he had previously secured a ratification of the agreement by the State Premiers. If he had come to this Parliament first, and carried the agreement through, and then or concurrently had consulted the wishes of the State Premiers, the position would have been different.
– It would have been too late to consult the State Premiers after this Parliament had adopted a scheme.
– In saying that, the Prime Minister merely makes matters worse. My contention may be a verv slight one, but, such as it is, I hold to it. It is that the honorable gentleman has departed from the position which he took up as a national” leader, and is content to be guided, by persons who have no constitutional status in Federal affairs. He goes on to say in this memorandum -
It would also transform our Federal Union into a confederation of the clumsiest and most ineffective kind, and would give rise to the most conflicting action on the part of the States, with a certain result of contentious feeling and action on their part.
Here, also, he makes a statement which I am sure will be re-echoed throughout the House -
The Commonwealth is, and always must be, guided upon Australian questions by majorities representing a majority of the people of Australia, and mindful of their own obligation, as they always are, to act justly to that people; wherever they may be grouped together. It is quite evident that we cannot be guided by the opinions of a State Ministry, or even of all the State Ministries together.
The honorable gentleman there says that he will not be guided by the opinions of all the State Ministries together, but, supposing the State Ministers at the recent Conference had refused to accept this agreement, what would he have done?
– Proposed one of our own.
– Then this agreement originated with the Premiers? Just now, the honorable gentleman said that it was his own.
– So it is.
– I am unable to reconcile the honorable gentleman’s statements.
– If they had differed from this, we should yet have proposed it.
– I am still unable . to decide whether the agreement was formulated by the Premiers or by the Prime Minister. At any rate, he seems to have gone into the Conference to consult the Premiers about a matter which it is undeniable that this Parliament was entitled to decide far itself.
– And is’ deciding for itself.
– Does the honorable gentleman say that he will accept an amendment by this Parliament of any portion of the agreement? He. knows very well that he could not.
– It would not be an agreement then.
– Exactly, and this is how the Prime Minister has tied our hands. We can only take the agreement as a whole or reject it. This House has powerto add to or omit something from every Bill or motion that comes before it, but here is a measure from which we dare not omit a comma, as the honorable gentleman admits. However, if the honorable gentleman’s conscience is clear that he has not lowered his national ideals, I have no more to say upon that point. But I wish to point out to the House - and I really think it is. time that somebody did it - the enormously growing expenditure of the States. I drew attention to this matter about eighteen months of two years ago, and presented to the House a table which had been compiled by the Treasury officials. It was necessarily incomplete, owing to the fact that certain information could not be obtained from the State Governments, but since then sufficient information has been obtained to make this House and the country pause in regard to the growing expenditure of the States. I am not speaking now of the total cost of governing this country, which of course includes the increased expenditure due entirely to Federation, but of the growth of expenditure in carrying on identical functions of government. Both the loan expenditure of the States and the new expenditure due to Federation are excluded. The comparison shows that, although we have relieved the States of the transferred Departments, they have increased their expenditure enormously. In the year before Federation, 1899-1900, the total State expenditure from the Consolidated Revenue Fund, including the expenditure upon the Departments subsequently taken over by the Federation, was , £28,331,040. In 1907-8, the total State expenditure from the Consolidated Revenue Fund - not including in this case the Departments transferred to the Federation - had risen to £32,088,040, or an increase of £3,757,000. And this despite the fact that the States were relieved of, amongst others, the Departments of Defence, PostmasterGeneral, and Trade and Customs.
– The PostmasterGeneral’s Department is nearly selfsupporting.
– That does not enter into this calculation. According to the right honorable gentleman’s own figures, there will be this year a surplus of . £256, 000 upon the accounts of that Department, but that does not affect the point which I am making. I am not taking into account the revenue in either year. The estimate of expenditure for this year upon the transferred Departments mentioned - I take the figures from the last Budget - is as follows: - Defence, £1,264,624; PostmasterGeneral, . £3,294,051 ; Trade and
Customs. £349,538; or a total ot £4,908,213. That is the cost of the Departments which in 1899-1900 were paid for out of the total State expenditure of £^8,331,040 which I mentioned. Therefore, despite the fact that we are now spending nearly £5,000,000 on those transferred Departments, the State Governments have increased their expenditure by nearly £4,000,000.
– Some of that increase on the part of the States is probably for interest on loans.
– Very probably; but I am not touching loan expenditure. Of course, if the States have spent loan money, they must expect to pay interest on it. I do not think that redeems the situation in the least.
– The interest has to come out of the Consolidated Revenue.
– I am well aware of that
– What are the State Departments in which the increases of expenditure have taken place?
– I gave the honorable member for Grey the full figures, and I dare say there will be an opportunity of laying them before the House, it necessary, later on. This is in no sense a party matter, and I merely wish to draw the attention of the House to the increase as very significant.
– There has been an enormous increase of expenditure upon railways.
– I suppose the honorable member is thinking of the increase due to a larger population, and I shall come to that point. What I wish to stress is that no new function of government has been introduced to account for this gigantic extension of expenditure.
– The expenditure upon railways and education has increased very materially.
– Of course the expenditure upon education has increased. But my point is that no new service is rendered to the country for this increased expenditure other than existed during the year immediately preceding Federation.
– Not by the railways?
– I am not dealing with the railways at the present moment. I am referring to the enormously increased cost of carrying on certain specific functions of government.
– Do not the honorable member’s figures include the expenditure upon railways ?
– Yes. It is extremelyunfortunate that railway accounts should be mixed up with the other expenditure of the country. We shall never be able to obtain a clear glimpse of Australian finance until our trading accounts are kept entirely separate from administrative accounts. This large increase of expenditure, I repeat, has occurred, notwithstanding that no new function of government has been introduced.
– But the functions of government may have been extended.
– That brings up the question of increased population, to which I shall refer presently. The cost of certain functions of government during the year immediately preceding Federation was £28,331,040, and the cost of those functions to-day is £36,996,253 - an increase of £8,665,213.
– I do not think much of the honorable member’s argument unless he can show how that increase is made up.
– I have a list which shows how a portion of that increase is accounted for. In New South Wales the interest payable in respect of her indebtedness has increased by £638,745, and in Victoria it has increased by £69,839. Then in Victoria the expenditure upon works and buildings has increased by £304,458, upon education ‘by £105,911, upon the AgentGeneral’s office by £r,554, and all other increases represent £178,978. In New South Wales there has been a heavy increase of the expenditure upon police - an increase of nearly £100,000. The cost of education has increased by £266,090, that of Parliament by £28,000, and that of the Agent-General’s Office by £4,106. All other expenditure has increased by £584,645. These comments have no party aspect. I merely wish to show that when the State Governments demand a large and permanent subsidy from the Commonwealth we have a right to look into their expenditure with a view to seeing whether they have been as economical as they ought to have been.
– Does the honorable member call it a “ subsidy ‘ ‘ ?
– The Minister of Defence may call it a division of the revenue if he chooses, or a gift, which is entirely within the control of this Parliament.
– It is a fair allocation.
– The Treasurer knows that upon the expiration of the Braddon section of our Constitution we are entitled to divide that revenue as we think fit.
– We are entitled to bring about a revolution if we like.
– It may be urged that this expansion of Government expenditure is justified by the increase of our population. The figures upon this point are interesting. In 1900 our population was 3,765,340, and at the end of 1908 it was estimated at 4,275,000, an increase of 509,960. Of this increase, I find that 475,000 represents the excess of births over deaths - our natural increase - so that our increase of population from abroad during a period of ten years was only about 35,000.
– The honorable member will agree with me that there has been justification for an increased expenditure upon railways and education.
– Some eighteen months ago I carefully examined the loan expenditure, and I was only able to account for half that year’s expenditure upon railways and reproductive works. I think that we are entitled to draw attention to these facts without laying ourselves open to’ an accusation of unfairness. I wish now to quote an extract from an article which appeared in the Age some time ago, and which puts the position very fairly from my stand-point and from that of those who wish to see due economy practised by both the State and Commonwealth Governments It reads -
The growth of the National Government is not unnatural. The misfortune is that for every new Federal Department created, the States, instead of retrenching to save their people the added cost, coolly create another, as if running a race with the National Government for predominance. Between 1899-1900, the year immediately before Federation, and 1907, the number of public offices in Victoria increased by fifty-nine, exclusive of the rajlways, the police, the school teachers, and the” officers of Parliament. The increase in New South Wales was over 100. Before the establishment of the Commonwealth Meteorological Department, at an annual cost of £19,935 the Victorian Observatory, that did the work for this State, cost£4,200 a year; it costs £4,200 still. The State Public Works Departments prior to Federation, attended to all the public works - post-offices, custom ‘houses, defence buildings, &c. - now undertaken by the Commonwealth ; at present there is a Commonwealth Department for the supervision of works, at an annual cost of£11,000, yet the State Public Works Departments are still as large and costly as ever they were. In most cases they are larger. In Victoria the number of Public Works officers has increased since Federation from 187 to 193. A new Quarantine Depart ment is just developing, but so far the State Health Departments, which were supposed to do the work, are rubbing along as before, without, even a thought of possible retrenchment. Still another new parallel department is provided for in a Bill now before the Federal Parliament - a Bureau or Department of Agriculture. The Federal authorities are about to create a host of new billets, as if there were no State Agricultural Departments in existence, and on their parts the State Governments are quite as indifferent. They intend to keep their Agricultural Departments up to the full standard, even if the Commonwealth rob the agricultural clerks and experts of all their employment. Presumably, too, a High Commissioner’s office will be established in London at a cost of about £25,000, and the whole of the useless State Agent-Generals’ offices will be maintained as befo’re.
It is our duty to remember that one of the chief reasons for entering into the Union was that of more economical government, especially in the State sphere. The promise of economy has evidently been overlooked by the States, as is shown by the duplication that still exists. A consideration of this fact, as well as the fact that revenue must diminish -per capita under our Protective Tariff, should have great weight with the House. This Parliament has many great enterprises which must be launched at an early date. One cannot fail to observe that recently the Treasurer has not been as active as he was formerly in connexion with the construction of the proposed trans-continental railway.
– I received a report in refeience to it only to-day.
– The undertaking was included in the policy speech of the Prime Minister.
– But the Treasurer is not evidencing much solicitude in regard to it. Up to the present his financing has not been of such a character as to warrant the hope that funds will be available for the early construction of that line. I notice that he is prepared to recommend the adoption of an agreement with South Australia under which the construction of another line in priority to that from Port Augusta to Kalgoorlie will probably be undertaken.
– It does not provide that.
– The right honorable gentleman knows that the people behind . that agreement are insisting upon that railway being made first; that is one of the conditions which they attach to the transfer of the Territory.
– We shall see about that. Why should the honorable member attack a fellow representative of Western Australia?
– I desire to induce the honorable member to be a little more active in his efforts to further that great enterprise. I fail to see how the honorable member for Maribyrnong, the honorable member for Batman, and others who share their views, can support this agreement unless the party whip is- vigorously cracked ; although, doubtless, the newspapers and those outside who are supporting the Fusion Government care infinitely more for the preservation of the Ministry than for any other interest. In conclusion let me say that if my vote prevents it there will be no permanent incorporation in the Constitution of an agreement which, in my opinion, would undoubtedly prevent the development of the. Commonwealth and hamper the National Parliament in the exercise of those functions which the people of Australia committed to its care when they resolved to enter into the union.
, - I did not speak on the motion for leave to introduce this Bill, although under it I should have had more scope than the motion now before us affords me. But as a citizen of Australia and quite apart from my position as a representative of the people, I wish to avail myself of this opportunity to make known my views.
– I hope the honorable member is not going to make another nine hours’ speech.
– I should speak for even more than nine hours if I thought that by doing so I could prevent the right honorable member and his colleagues from sacrificing the people of the Commonwealth. Nothing short of death would prevent my doing so if I could thereby deter the right honorable member and those who are supporting him from giving legislative effect to a diabolical agreement. My views on this question must be shared by all who have regard for the welfare of Australia. We are here, not to save Governments ; not to do that which is designed merely to safeguard the welfare of the party., to which we belong; not to pass legislation which will bind the people for all time merely to save the political scalps of those who are afraid of the opposition of the State Righters at the coming election, but to do that which is best for the people. The import of a proposal of this kind is far beyond that of the political existence of a Ministry or a - party ; it strikes at the very root of the liberties of the people, who have no voice in what we are doing to-day. I do not propose to discuss the relative merits of a per capitareturn of 25s. per annum to the States, or of making them a fixed payment. What I object to is the perpetuation of this agreement for all time by embodying it in the Constitution. That is the bone of contention to-day, as it was years ago when the people were asked to agree to the Constitution Bill. I well remember the time when a number of gentlemen- who had followed that eminent statesman, the late Sir Henry Parkes, in his desire to bring about Federation, were doing their utmost to persuade the people of the wisdom of agreeing to the ‘Constitution Bill. I think that I was the first in New South Wales to make a written protest against that provision in it, which practically overrode the principle of majority rule and took out of the hands of the people the power to determine wh’at Constitution they should live under, or by what Constitution, the children who followed them should be governed. I described the Bill at that time as an iron-bound one, and the principle to which I refer is the black mark that disgraces the Constitution under which we live to-day. It is because I know that the Constitution cannot be altered by the will of the majority of the people of Australia that I urn determined at this juncture to enter my protest as strongly as I can against the proposition now before us. If it were possible for the people of. Australia to amend the Constitution when they found it was. irksome and hampered the progress of the Commonwealth, I should not object to this proposal as strongly as I do. But since, if this agreement were embodied in the Constitution, it could not be amended except by the will not only of a majority of the people of the Commonwealth, but of a majority in each of the States, there is good reason to object. In New South Wales there are 766,539 electors; in Victoria, 646.201;- in Queensland, 257,076; in South Australia, 191,910; in Tasmania, 92,170; and in Western Australia 142,461. In the three larger States there is a total of 1,669.816 voters, a majority of whom would be 834,909. In the three smaller States there is a total of 426,541 electors, a majority of whom would be 213,271. Although the three larger States might poll a majority in favour .of an alteration of the Constitution, and that majority might represent nearly. 850,000 electors, yet 213,271 electors in the three smaller- States could frustrate their will.
– They could nullify the votes of 1,600,000 electors.
– Undoubtedly. Although the three larger States might cast an overwhelming majority in favour of the alteration, the smaller States, with their smaller populations, could override their will.
– The three larger States could be unanimous, and even then .the proposed alteration could foe defeated.
– The three smaller States could defeat the will of the whole of the people voting in the three larger States. The alteration of the Constitution could only be made if it was supported by. a majority of the electors in a majority - -say four - of the States. To my mind, that is a bogus Democracy. I have always claimed that the constitutional provision for a referendum is a mockery of our Democratic institutions. When some Ministers and Government supporters say to us, as they do, ‘ Your party believe in the referendum and in trusting the people, and yet you decry the proposal of the Government,” they well know that the referendum provided for in the Constitution is not a referendum from our stand-point. At the first referendum on the Constitution Bill, that provision was fought. all along the line by Labourites as well as by others. Some honorable members on the opposite side of the House were then found fighting against that very res’trictive provision. When the Constitution Bill was first presented to the people for their acceptance, the honorable member for East Sydney came to the decision that its one great blot was the Braddon clause. His objection was not necessarily to the provision itself, but to it being given perpetuity. Being a strict Free Trader, he felt that it would practically fasten upon Australia a fiscal policy opposite to that which he was fighting for, and had always maintained.
– What he said was that the Commonwealth would have to raise £4 in order to get £1 for itself.
– Yes j and that bymaking very heavy taxation necessary, the Parliament would assure a- Protective policy, which of course has largely been the result of our legislation. The right honorable gentleman took up the position against the Braddon clause, mainly because it. would produce a certain fiscal result. The Prime Minister recommended the people of Victoria to accept the Constitution Bill, although it contained this provision, unalterable for all time, except by means of a bogus referendum. What would have been the result to Australia if his advice had been followed, and no one had interrupted the progress of the Constitution Bill? today we should have found ourselves practically in an impossible position, and later, as our difficulties increased, there would have had to be either a revolution, or an alteration of the method by which the Constitution could be altered.
– But people will not revolt against each other.
– People will revolt against tyrants. When people find that, fox some purpose, the Government have embodied in the Constitution an irksome provision- a provision which is hampering the development of the country, strangling the industrial workers, and practically limiting the advance of our new nation - they will awake. It is under such conditions that revolutions have been, and will be, perpetrated. The honorable member for East Sydney was the gentleman who threw down the apple of discord, with regard to the acceptance of the Constitution Bill. Undoubtedly, lie was actuated by a consideration for the effect which its acceptance would have upon his pet fiscal policy. What would have been our position to-day if the provision had been enacted for all time? In view of the fact that we are now faced with a proposal for a re-arrangement in the interests of Australia, of what value was the judgment of those members cf the Contention who sought to fasten the provision upon the Commonwealth for all time? The very history of the Convention, the solemn declaration of the selected delegates who, in their wisdom thought that they were doing the right thing for the Federation, shows the danger, of tying up this Parliament under any constitutional provision relating to a matter like that of finance for other than a limited period, when, no doubt, experience will have taught us the exact needs of the Commonwealth.
– Has our ten years’ experience of the Braddon section been of no good, then?
– Yes, it has- proved the folly of the action of the members of the Convention who tried to impose upon the people a financial provision to last in perpetuity, and not for a limited period of ten years’. After the Convention rose, the honorable member for East Sydney became the head of the Federal movement. He obtained a Convention of the Premiers, such as has been recently held, to sit behind closed doors so that the public should not know the why and wherefore of any decision. He resorted to the modern method of hiding from the people the real reasons which underlie the actions of public men. That is a procedure which should not be tolerated in a Democratic community ; because those who are intrusted with the conduct of the affairs of the people should always have the courage to express their opinions in the open, so that the why and wherefore of any decisions may become known. The right honorable gentleman got together a Convention of Premiers, and he succeeded in limiting the operation of the Braddon section to a period of ten years. What was his motive? Was- it not to safeguard Free Trade, which has been his pet hobby, and to hamper Protection? In any case, experience proves that he did right. The example is one which we should imitate now. We have not yet had sufficient experience of the relations between the Commonwealth and the States to be able to make a permanent arrangement. Only a few Departments have been transferred to the Commonwealth. We have not entered upon many of the heavy expenditures involved in the due performance of our duties. We have set in motion the machinery of some of our Departments, but we have done only a fraction of what will have to be done in the future. What our future expenditure will be, no one can estimate. Yet the pseudo-Liberals and the Tories are trying to give us another dose of what would have killed the Federation, had it been forced on the people when the agitation against the Bill was proceeding. They wish to kill Protection. The right honorable member for East Sydney was unwilling to tie the hands of the Commonwealth for all time, when there was a possibility of Protection becoming the policy of the Commonwealth. He tried, by -his action in Parliament, and out of it, to make the first referendum ineffective, and, having succeeded, he carried, in a Conference of Premiers, an ^ amendment limiting the operation of the Braddon section to a period of ten years,
– It was Senator Neild who moved the provision requiring a certain minimum affirmative vote at the first referendum.
– I know the history of what occurred, because, at the time, I was prepared to do anything to prevent the Bill from passing. I am in earnest in this matter, as in every matter upon which 1 address myself to this House. I am not here to sacrifice the interests of the people for my own aggrandizement.
– Really !
– This is not a matter for levity. The honorable member could not truthfully say what I. have said. He is never in earnest. The right honorable member for East Sydney now sees that to bind the people for all time would kill Protection, which he has always bitterly opposed. What thought has he for the welfare of the people, or the advancement of Australia? He has not spoken on the subject now under discussion. For years, whenever any great problem- required elucidating, he was always at his post to give the country the benefit of his opinion. Why is he dumb now? Why did he not think it necessary to speak on the motion for leave to introduce the Bill, when nearly every member gave the House the benefit of his views ? The people are asking what has become of him, and why he is silent. He is silent because he is hoping to get what he has been angling for for many years. Let me read part of a letter which he sent to the Premiers, suggesting what should be done. Strangely enough, the Conference did what he desired. He said to them -
I am more responsible than any man for the termination of the Braddon clause, but I never wished to allow the States less than a fair share of Customs and Excise revenue, which is the only way in which the States can receive revenue from the masses of their inhabitants. The object of this letter is to make that sure for all time.
He wants to make it sure for all time that the bulk of the revenue shall be raised by Customs and Excise duties, which fall most heavily upon the masses. Of the taxation of the Commonwealth, Federal and State, 75 per cent, is indirect, falling most heavily upon the breadwinners, and only 25 per cent direct, and levied upon the property which the Government protect*. The right . honorable member for East Sydney desires that the burden of taxation shall, fall on the masses for all time. He wishes to load future generations, so that the interests and privileges of the land monopolists and the wealthy may not be assailed.
– Yet the honorable member says that Protection is in danger.
– Yes. It is marvellous to me how some men get into a deliberative assembly of this kind. The right honorable member for East Sydney, in the letter to which I have alluded, practically dictated to the State Premiers what he wanted ; and they, in their wisdom, with the assistance of the pliable Prime Minister, practically indorsed the conditions laid down by him. Why is Protection in danger ? For this reason : The agreement provides that 253. per head of population shall be paid out of the Customs and Excise revenue to the States in perpetuity.
– The agreement does not say that.
– The agreement says that 25s, per capita shall be paid to the State Governments in perpetuity, or until the people alter the Constitution, which is the same thing. It has been shown by other speakers that before very long we shall be short of revenue for Commonwealth necessities. If our policy is to be Protective, our revenue must fall. If our revenue falls, the balance after the payment of the 25s. per capita paid out of Customs and Excise must become less and less. But, while our share of the revenue decreases, the necessities of the Commonwealth will grow. Therefore, if with a declining revenue a Protective policy is to be maintained, we must necessarily find some other way of raising money. That means that the Government will be compelled to raise revenue by means of duties which are not Protective. In other words, there will be duties on such articles as tea, kerosene, and rotton goods, which are consumed by the poor of this country. The masses will have to bear the burden ; and that was what the right honorable member for East Sydney meant when he told the Premiers in Conference that he wanted taxation to be raised from Customs and Excise, because that .is the only . means pf extracting revenue from the masses of the population for all time. The Prime Minister was formerly regarded as the banner-bearer ot Federation. He was the man whose picture in pre-Federal days was drawn holding aloft the flag of our national aspirations and ideals. But to-day we find him advocating, not the policy which he has espoused throughout his political life - the policy of Protection, which has returned him to Parliament year after year, and kept him in office. He has abandoned that policy at the instigation of the right honorable member for East Sydney. He ‘has sacrificed the future of Australia as a Protectionist country. He has sacrificed its industrial future to the idea embodied in the agreement. I feel strongly upon this matter, because I realize how our industries have been built up under a Protective Tariff. It is not a perfect Tariff, but no words of mine are needed to prove that it has been effective. One only needs to turn to the statistical records of the States to find that our industrial enterprises have progressed by leaps and bounds since the imposition of the Federal Tariff. Millions of money have been invested in factories and new industries.. Thousands of hands who were not formerly employed now find profitable -occupation. Millions of money have been realized in the production cf articles in our own country which formerly were purchased from the foreigner. This is the policy which the supporters of the new agreement are going to kill. It cannot be otherwise, because the Government supporters do not propose to raise revenue from direct taxation. They do not propose to tax the land. They do not propose to interfere with the prerogative of the States to exercise the power of direct taxation. Nor does the right honorable member for East Sydney propose anything of the kind. He simply desires’ to lav burdens upon the backs of the masses for all time. The Prime Minister went so far as to tell us that already the States are rushing in to get upon their statute-books measures of direct taxation. He stated that they are retrenching their expenditure owing to the limitations placed upon the revenue received from the Commonwealth. It is true that a Land Tax Bill has been introduced in Victoria. But who can say that it is going to be effective? I say unhesitatingly that it is a bogus Bill so far as relates to real land taxation.
– Order ! The matter to which the honorable member is referring is not connected with the subject,
– Do I understand you to rule, sir, that these matters are not relevant to the matter under discussion ?
– I fail to see the connexion between a Land Tax Bill introduced by a State Government and the matter under discussion.
– The Prime Minister when dealing with this question-
– I remind the honorable member that the Prime Minister has not spoken on this question.
– The Prime Minister dealt with this question in submitting his motion for leave to introduce the Bill. On that motion the honorable gentleman made what might be regarded as a secondreading speech on the Bill. He claimed that the State Governments were proposing land taxation and the reduction of State expenditure as a result of the agreement arrived at by the Premiers’ ‘Conference; If the Prime Minister is allowed to tell this House that the State Governments . are doing certain things as the result of the agreement, surely I should not be prevented from endeavouring to show just how much reliance can be placed on the honorable gentleman’s words.
-Order ! Will the honorable member take his seat. The honorable member misapprehends the position. The Prime Minister may or may not have spoken on this subject, but he spoke on a different question from that now before the House, which is the second reading of a specific Bill. The Prime Minister’s speech to which the honorable member refers was delivered on a motion. No Bill was at the time before the Chair, and the contents of this Bill were not then known to the Chair. I tell the honorable member that he is not now in order in discussing the merits or demerits of land tax legislation which may be before a State Parliament.
– I bow to the ruling of the Speaker, of course, but I have never done so more reluctantly. I say that with all respect. I do not care to say what I feel on the matter, because if I did I should possibly commit a greater breach of the rules than that with which I am now charged. However, some day I suppose we shall have an opportunity to debate these rulings. The Prime Minister has told us that land taxation is a matter which should be left to the State Parliaments, and that as a result of this agreement the State Parliaments are now endeavouring to deal with that subject. If the Prime Minister hopes that the State Governments will raise revenue to meet their expenditure by the imposition of an effective land tax he is indulging in a more extravagant flight of imagination than usual. Any person who imagines that the State Parliaments as at present constituted are likely to pass effective land taxation legislation in order to bring about closer settlement, to increase our population, and to secure our safety from the point of view of defence reposes a confidence in them which is not warranted by the history of those Parliaments in the past. They are just as likely to do that as I am to fly. We cannot do what is claimed to be possible under this Bill, that is to increase our population and settle the waste places of Australia, unless there is, not in one State, but in every State of the Federation, an effective land tax which will bring into use the land which is now monopolised by those who are not putting it to proper use. The right honorable member for East Sydney takes up practically that view. He . does not speak on this proposal, and why ? Because he has got all he wants without speaking. The right honorable gentleman is practically the dictator of this policy to the House. He is the man who dictated it to the Premiers’ Conference, whose dictation was accepted, and whose advice is embodied in the agreement which we are now asked to accept. The Prime Minister has turned his back on the policy of Protection, and is now at the behest of the enemies of that policy, advocating the passage of a Bill which will involve the strangling of the industries of Australia. The honorable gentleman is not the man he was. He is not thechampion of Protection, the man who it is alleged has done so much for Protection in Victoria. He is merely a mediator between the Free Trade party that dominates the Fusion on the other side, and those people who at any cost would save the privileged classes from what would inevitably happen to them should the people be given a free hand to work out their own destiny. Nothing more cruel was ever proposed in any Legislature in the world than to tie up a free people for all time under an agreement of this kind. What has become of our free institutions and the freedom of which we boast ? We have been accustomed to boast that Australia is the freest land under the sun, because hitherto we have had the makingof our Constitution.
Unhappily, we have not also the breaking of it. The weak point of the Constitution is that it cannot be altered by a majority, but only by a majority of the people in a majority of the States. To that extent our freedom is limited. The framers of the Constitution never intended that the desire of the people for freedom should be given full effect, and in order to give protection to the interests of the privileged class they framed the Constitution in such a way that it might be used to tie up the people under irksome and unjust conditions, and prevent them from giving expression to their will in the laws of the country. When the honorable member for Coolgardie was speaking, the Prime Minister, referring to an interjection of mine, said he did not think that I meant what I had said. How often a man’s character is disclosed by his utterances. The Prime Minister was at the time measuring me by his own yardstick. When we take a division in Committee on certain provisions of the agreement we shall discover whether the Prime Minister is as sincere in his desire that the agreement shall be accepted as I am in my opposition to it. A number of honorable members representing Federal constituencies and sworn to carry out the Federal Constitution in the interests of the people, have spoken here as if the Federation were of no importance, and as if the States had to be considered first in every matter. As soon as the disaffection in the Fusion party became known we found the Premier of New South Wales cracking the whip in giving the whole secret of the Premiers’ Conference away. He says that unless this agreement is embodied in the Constitution for all time faith will be broken with the Premiers, because the Prime Minister and his colleagues who were present at the Conference induced the Premiers to accept a payment of 25s. -per capita only on the condition that it was to continue for all time. He says that any breach of that condition will be regarded by the State . Governments as a breach of the compact entered into with them by the representatives of the Federal Government. What are we to think of it ? The Premier of New “South. Wales goes further and says that if a limit is put to the duration of the agreement it is possible that when that time limit expires the States will not get as much from the Commonwealth. That is to say, he estimates that the Commonwealth will npt be able, at the end of ten years, if we decide upon a ten years’ period, to pay to tr:e States as much as it is proposed to pay to them now. In saying that he gives the whole case away. He admits that he can see plainly that the States have leg-roped the Commonwealth, as the honorable member for Flinders said, and that if they do not obtain this arrangement for all time they will in future get less, because the Federation will not be able to pay them the amount now proposed. That is a confession on his part. He says in effect, “ I have got the best of you. I have induced you to give me this amount tor all time. 1 know that you cannot afford to pay it, but that has nothing to do with me. 1 am fighting for the States. I admit that if you arrange to pay it to us for only ten years we shall have to take less at the end of that period.” That indicates that Mr. Wade knows that the Commonwealth will want later on a greater sum than it is taking now. To that extent the effective government of Australia in the future by this Parliament is being undermined by the agreement. It affects not only .the fiscal but many other questions. The fiscal question lies at the root of the progress and development of all countries. No country has ever made itself self-reliant and independent except by adopting Protective duties sufficiently high to induce the people to establish manufactures and to do for themselves work that had hitherto been, done abroad. The history of the world shows that the Protective policy has been the basis of the growth and development of every nation worthy of the name. The same will apply to Australia to-day, and yet we find the Prime Minister, the champion of Protection, the honorable member for. Maribyrnong, the honorable member for Bourke, the honorable member for Corio, and others on that side of the House, who were returned as Protectionists, prepared to sacrifice, if they vote for this agreement, the very policy which for years they have professed to support - the very policy upon which they succeeded in obtaining the votes of the electors, and without the advocacy of which they would never have been seen inside this chamber. They are like dumb driven cattle. They sit here unable or unwilling to express their views, for fear that they may make a mistake, and unready to say which side of the fence they are on until they see how many are going against the Government upon this question. They sit silent, and the people whom they represent get no statement from them as to what they intend to do to carry out the policy which they have professed to support for years. Not one of them has a word to say against the strangling of the industries of Australia, which this agreement spells if it spells anything at all. Why this silence?
– Does the honorable member want us to interrupt him?
– No, but I am quite willing to sit down if some of those honorable members will rise and express their views as the honorable member for Parkes has done. I appreciate the honorable member for Parkes. I appreciate any man who has the courage of his opinions and is not afraid to stand upon the floor of the House and tell the Government that a certain policy will be detrimental to the welfare of this country. The honorable member for Parkes is a Free Trader, and I have been a Protectionist for twenty years. But, although a Free Trader, he sees the enormous danger to future generations of Australians involved in this proposition. He does not want to tie the people up for all time. Those other members have a greater need to speak out now than the honorable member for Parkes has. They professed Protection while it suited them, but, when it comes to saving their political scalps at an election, they are prepared to sit silent, waiting to see which way the wind blows before they give a definite expression of opinion upon the most important question ever discussed in this chamber. It is the most important question ever discussed here, the most farreaching in its comsequences, and the most terrible to contemplate in its effects upon people yet unborn. It concerns not only the fiscal issue, but also the financial stability, the development and social expansion, and the national well-being of the Commonwealth, and the future effectiveness of this Parliament. It affects also the political integrity of every member of this Chamber, yet men who in the past were never silent when they alleged that the welfare of the people was being attacked by Free Traders trying to undermine the Protective policy, to-day are dumb. Possibly the electors will take notice of their silence when the time comes for them to explain why they allowed the Commonwealth to be dragooned in this manner without entering a protest. The States, they say, have indorsed the agreement. Of course they have. Nothing is more natural. The States have obtained what they want. They have secured the big end of the stick. They have more than they are entitled to, and they know it. But why should the States be allowed to dictate to this Parliament ? We have the power in our own hands. The people have given it to us. because they decided that at the end of ten years, when the Braddon “ blot “ ceased to operate, the matter of making future arrangements should be left in the hands of the Federal Parliament. They did not say that it should be decided by themselves by means of a referendum. We, therefore, have the dutycast upon us, and it is we that should attend to it, without any dictation from State Premiers or other outside sources. Yet we are dominated by the State Premiers, and the State Premiers are dominated by considerations of their future political security. They know that if they do not work in unison - this has been stated openly in the press - and bring their supporters into line with the Federal Fusionists, there may be perpetrated upon them at the next election a revenge that would cast them into political outer darkness. Although they have fought each other for years, and one would have thought that they never could come together, they have come together into one troupe, for the sake ot political selfpreservation. I do not say that it is even for the preservation of their own reputations. During the past few months political reputations have been shattered in this House in a way that has never previously occurred. Apparently the shattering of political reputations is to be regarded as nothing, but the political salvation of honorable members is to be considered everything. The Government are prepared to sacrifice the interests of the Commonwealth to those of the States, merely to insure that a united force shall face the electors when . the next trial of strength between rival political parties takes place. As the Argus has declared, the proposed agreement is a political and not a national one. It is one which no honorable member with any regard for his country will support for a moment. Whether honorable members lose their seats is a matter of no importance. But surely it is a matter of importance that the Commonwealth should not be strangled by an unsympathetic body of men who are merely studying their own instead of national interests. I feel the keenest regret for the position which is occupied by the Prime Minister. His many noble services to the cause of Nationalism have hitherto stamped him as one to whom any person might well look for guidance in the- matter of voicing Australian aspirations. To me it is not a source of pleasure to find such a prominent figure in our political life sacrificing himself practically for the men who have dragooned him into the position which he occupies to-day. We must all recognise that he is not now a free man. He is Prime Minister without portfolio’ and without the power to sign a single document relating to the administration of the affairs of the Commonwealth. He is merely the medium of those who are behind him, and when they work the figure moves. It is lamentable .to find a gentleman who has held such a prominent position in our public life falling from his high altitude and subscribing to the Fusion agreement. I have never been able to understand the change which has taken place in -his attitude.- Only to-day honorable members have read extracts from most convincing speeches delivered by him in reference to the adjustment of the future financial relations of the States and the Commonwealth with a view to showing the ideas which he entertained in this connexion a few months ago. At that time he was undoubtedly a strong Nationalist. Yet he declared by interjection this afternoon that there has been no change in his views. I am sure that nobody can convince himself that there is not a -vast difference between the views which the Prime Ministerholds to-day and those which he expressed in September, 1907, and which was- quoted by the honorable member for Coolgardie. No person other than the- Prime Minister could have attended the recent Premiers’ Conference, and have done what he did. Before he- entered that gathering he agreed with . a certain political party that their forces should be fused upon the basis of a financial arrangement being made with the States’ for a term of four- or. five years. Neither he nor -any -of his colleagues had authority ‘to go beyond’ that. When the Conference met I did not for a momentbelieve that the delegates to it would do more than conclude a tentative arrangement. Experience has shown that as yet the Commonwealth is merely in the ex’perimental stage, and manifestly it would be folly- to enter into a compact the result 4 of which we cannot foresee. Yet the Prime Minister ‘emerged from’ that gathering committed to an agreement under which the Commonwealth will be bound for all time. We have no right to be faced with any such proposal,- arid- ‘the members of the
Fusion party are under no obligation to support it. I hope that the speeches upon this question which have been delivered by the honorable member for Mernda, the honorable member for Parkes, and the honorable member for Flinders, will have the effect of persuading a sufficient number of honorable members opposite to protect the Commonwealth from the machinations of the Premiers’ Conference backed up as they are by the silvery eloquence of the Prime Minister. Many schemes dealing with the> adjustment of the future financial relations of the States and the Commonwealth have been submitted to this House. The Treasurer submitted one some years ago under which he was content to return to the States a good deal more’ than he favours returning- to them to-day. The honorable member for Mernda also propounded a scheme in 1906. Even his scheme is preferable to that which is embodied in this Bill, inasmuch as it would permit the Commonwealth to enjoy a greater degree of freedom in judging of its financial necessities. A later scheme was brought forward by the honorable member for Hume, who proposed that the Commonwealth should make ‘ a fixed payment to the States for a certain time, and take over the debts. This Government does not propose that they shall be taken over. They propose to secure constitutional power to take over some, but not the whole of the debts, and they do not seek the power necessary to enable the Commonwealth to control them. It may be said that the inference to be drawn from this Bill is that they intend to do so. But something more than a mere inference is necessary.. We should have a: definite proposal to appoint a competent) body to manage and control the State debts, on behalf of the Commonwealth. It hasbeen said by honorable members opposite, that the Government are merely adoptingthe lines laid down by the Brisbane Labour Conference, which propounded a scheme providing for a per capita payment for all time. That statement is not correct, and no warrant for it can be found in anydocument relating to the Conference. 1! do not say that I wholly agree with all - that the Brisbane Labour Conference proposed. Indeed, I am not bound to agreewith it i I am- bound only by the pledges that I gave to the electors when I was returned to this Parliament. I do not recognise the necessity for any party to propounds scheme in all its details when? it is not in power, and able, therefore, to give effect to it. Such a course is unwise from a political stand-point, and is certainly unnecessary from the point of view of responsibility. But since a scheme was propounded at’ the Brisbane Labour Conference, it is well that it should be known that it did not provide for a per capita return to the States for all time. It simply declared that a per capita distribution was the proper system to adopt, and that a certain per capita return should be made to the’ States until the necessities or the Commonwealth rendered it necessary to reduce the amount. Under that scheme, the Commonwealth would have power to regulate its finances from time ‘ to time. That was a reasonable proposition. My leader, the honorable member for Wide Bay, at the Hobart Conference, offered to return to the States a fixed sum of £5,000,000 per annum. That was somewhat less than was offered under any previous scheme. He agreed, not only that that distribution should be made on a per capita basis, but that any surplus remaining after the necessities of the Commonwealth bad been met, should be distributed every year on the same principle. Therein lay the security of the Commonwealth, and we thus see the difference between a reasonable workable and just scheme and the unworkable and unjust proposition embodied in this agreement. Whether this agreement be adopted or not - and I hope it never will be - the proposal made by the Labour .Government at the Hobart Conference will be regarded, as the years roll on, as having been as prophetic as was the statement made by the right honorable member for East Sydney, that if the Braddon “ blot “ were to remain far all time, it would cripple the Commonwealth. I do not know that I shall be able to influence some honorable members opposite to vote against, this agreement j but I believe that the honorable member for Wentworth has felt the spirit move within . him during the last week. 1 am inclined, to think that he .does not. like to express his opinions on this question. He is going to remain silent until he ascertains how many of his party do not intend to vote in a certain way. It is humiliating to think that, there are on the other side honorable members who are carefully weighing the possibilities of this debate before they will give utterance t’o their thoughts.
– -They are waiting for the honorable member to cease, in order that i-they-may do so. ‘’’
– I will cease at once if the honorable member will speak to this question for an hour. If he cannot do so, he has no right to be here.
– He spoke for five hours against the union label provisions of the Trade Marks Bill.
– He could put up a ten-hours’ speech against any proposal relating to trade unionism ; but he thinks that an hour would be too long to devote to the discussion of this all-important question affecting, as it does, every man., woman, and child in the Commonwealth. In fact, he does not want to speak at all. He is anxious to ascertain how the vote on the important clauses of the Bill will go. We shall then know exactly where he is. The honorable member for Wentworth,’ and others sitting opposite, feel that it is easier to explain away a vote than a speech.
Mi. Kelly. - I hope the honorable member does not hold that view in regard to the speech he is now making.
– The honorable member is .one of those conundrums that are the’ result’ of over-education. Experience is_ the best teacher. Education, after all, is a poor substitute for the experience which should guide all men in’ determining a question, of this’ kind. ‘
– That ‘is’ why we are ali financial critics.
Mr.’ WEBSTER. Some honorable members pose ‘as military critics, although they have never handled a gun or drilled for an hour. . In conclusion, I desire to warn those who are capable of accepting a warning, that if this agreement is embodied in the Constitution,’ it will not be in accord ‘ with ‘ what was ‘proposed to be done when ‘ the Constitution Bill was before the people. ‘ I object to the embodiment of this agreement in the’ Constitution, because there is no power iri the Constitution whereby the people by a majority vote can get’ rid of the fetters which it is now proposed to place upon them. I feel that when the burden becomes too heavy for them to bear, we may anticipate the possibility of a civil war, such as took place in America under somewhat similar conditions between the northern and southern States. We have history to ‘ guide us, and we should pay heed to that guidance. Ministers tell us that the revenue will not decrease, and that, therefore, we have no need to fear. They cited New Zealand’s experience as a, reason . why the. revenue should rise to £3 5s. or , £3 10s. per head. That is absolutely unreliable, because New Zealand has had a revenue Tariff for the last ten or fifteen years- . It is the only country from which Ministers can quote in corroboration of their argument. When we review the effects of a Protective Tariff upon the revenue of other countries than New Zealand, we find that the evidence is against them every time. The experience of every country which has been quoted here practically indicates that the Commonwealth is about to step into a position which we shall regret by-and-by. There is no solid data in support of the proposal which we are asked to adopt. I appeal to the House to pause, because I do not want my children to have to fight for the removal of the disability which it is now sought to put upon them.
– The honorable member has only daughters.
– I have sons, too. Some honorable members on the other side do not even know where I am in that regard. Thank Providence, I have one or two sons, who would be ready to shoulder a gun, or take any other part which might be necessary to defend the liberties which they possess to-day. They are not very old, but they understand the value of those liberties, and are prepared to fight for them in the field, if need be, or elsewhere. I do not desire to see ‘fetters made for the people of the Commonwealth, and for that reason I am entering a protest against the peculiar machinations which are at work. I have tried to indicate that this is not a national proposition which the House is asked to adopt. It is not based upon a consideration for the welfare of Australia, but is dictated absolutely by the political necessities of the variegated partv known as the “ Fusion “ party. It is political salvation that they are seeking, and Commonwealth damnation must follow.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Debate resumed from 3rd August (vide page 1950), on motion by Sir John Quick -
That this Bill be now read a second time.
– I should like to know whether the
Postmaster-General has any explanation of the Bill to offer.
– I made an explanation in moving the second reading of the Bill.
– The adjournment of the debate was moved by the honorable member for Barrier, who, I suppose, had some purpose in taking that course.
.- The debate on the second reading was adjourned at my instance, but, having looked through the provisions of the Bill, there does not seem to me to be anything in it to object to.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Clause 2 -
In this Act, unless the contrary intention appears - “ Emergency “ means any emergency in the nature of war, or danger of war : “ Submarine cable “ means any submarine cable used or capable of being used for telegraphic purposes, and includes all stations, instruments, land wires, and appliances used in connexion with any submarine cable…..
– In his secondreading speech, the honorable member for Corio suggested an amendment extending the operation of this clause to cables used for telephonic as well as for telegraphic purposes. After consulting with the draftsman, I think that the proposed addition will be useful, and, therefore, I intend to ask the Committee to agree to it.
– I have a prior amendment to move in the definition of “ Emergency,” which contains the phrase “ danger of war.” On a previous occasion, I took exception to the phrase as one which is not recognised as having any very definite meaning, and suggested that “ declaration of war “ was a term- which was recognised among diplomatists, historians, and politicians in regard to a measure of this kind. I pointed out that when the Committee stage was reached it would be well for the Minister to substitute that phrase for the one which is used in the clause. In most Acts of Parliament, “declaration of war “ is recognised as a phrase which is capable of a more definite meaning. “ Danger of war “ may involve a matter of opinion on the part of politicians of others who are likely to be interested in the question. But “ declaration of war “ is a definite and recognised phrase which will be more completely understood. In the Defence Act of 1903, the Minister will find this definition - “ Time of war “ means any time during which a state of war actually exists, and includes the time between the issue of a proclamation of the existence of war or danger thereof and the issue of a proclamation declaring that the war or danger thereof, declared in the prior proclamation, no longer exists.
The expression “ time of war,” would, I submit, be a better phrase than that in the Bill.
– I do not think that there is the analogy between the two measures which the honorable member for Parkes sees. One relates to the extraordinary steps taken in time of war, when men otherwise exempt may be called upon to serve in defence of their country, and the other to proceedings at an earlier stage. It is very desirable that the Government should then have control of these means of communication. In my opinion, the clause as it stands gives the wider control which is necessary.
.- I approve of what the honorable member for Calare has said, and suggest to the Minister that the emergency anticipated will almost invariably arise long before there is any formal declaration of war. I cannot remember any outbreak of hostilities of recent years which has been preceded by a formal declaration of war. Indeed, an act of war in the future may precede even the breaking off of diplomatic relations. But I would suggest that the phrase “ danger of war “ may be inconvenient, since any action under it might be interpreted by a power, otherwise disposed to remain friendly, as a hostile act. I do not know how the measure could be framed so as to give the Government of the day broader ground for taking over the service than that of actual danger of war, but to say, during a time of diplomatic crisis, that we apprehend danger of war, may hasten the disaster which we would avert. But certainly the power retained should be wide enough to enable the services to be taken over long before . any declaration of war is made.
– On looking at the Bill again, I see that the matter is within the discretion of the Governor-General, which means the GovernorGeneral with the advice of the Execu tive Council. Therefore, perhaps, the clause might be allowed to stand as it is.
Amendment (by Sir John Quick) agreed to-
That after the word “ telegraphic,” line 6, the words “ or telephonic “ be inserted.
Clause further amended, consequentially, and agreed to.
Clauses 3 and 4 agreed to.
Bill reported with amendments.
– I move -
That this Bill be now read a second time.
The measure comes to us from the Senate, where it has been well considered, and I submit it to the House with the recommendation of that Chamber that it. be favorably received. Its object is to legalize the use of a machine to impose stamp impressions upon postal articles, and to record the postage value of each impression. The machine stamps upon the postal article, whether letter or telegram, the amount of the postage to be paid, and by some wonderful internal mechanism records the value. Its use will make a fundamental change in our postal system. Hitherto letters and postal articles have been franked by means of adhesive stamps. The Bill legalizes the use of mechanical stamping, making provision for the subsequent collection of the revenue earned bv it. Adhesive stamps will be unnecessary where the stamp recording machine is used. The Bill places no obstacle in the way of the use of any other mechanical stamping machine than that the employment of which is now contemplated. The machine simply furnishes an alternative method of stamping by a mechanical process, instead of by the use of single adhesive stamps. It was invented in New Zealand, where it has been experimented upon and developed. Most satisfactory evidence has been received from that Dominion concerning its efficiency and value. I have perused the reports of the New Zealand Government, though I need not take up time by reading them. We also have the testimony of the Secretary of our own Department of External Affairs. The machine was used in that Department for several months, and Mr. Atlee Hunt bears witness to its absolute, reliableness as a stamping instrument, and one which effectively records the value of each stamp. The machine records stamp values from one-half -penny to is., but it can go on recording stamp values up to £400. Having recorded stamp values up to the latter amount, it automatically reverts to zero. But a peculiar feature of the mechanism is that, having recorded stamp values to .£400, a permanent record’ remains which is not obliterated by the reversion to. zero. Indeed, the machine will go on recording, if necessary, up to a stamp value of £1,000,000 sterling. The machine is made by a company formed in New Zealand; but any other company which may own a machine complying with the requirements would, under this Bill, be enabled to have its machines used. The Bill does not confer a monopoly on any particular company or machine. Any machine, of a pattern approved by the PostmasterGeneral can be used. But the PostmasterGeneral has to be satisfied that the machine is safe and reliable, and that the revenue is not in any way endangered or prejudiced. The Postmaster-General also has to satisfy himself that the machine when used is fixed in a proper place, and that all the requirements as to safety are complied with. The company owning the machine lets it out to various large firms, which, perhaps, conduct large postal operations. These firms pay the company for its use, or buy it outright. I believe that the cost of a machine is from £30 t0 ;£35- A machine having been let out to a firm, or purchased, is bolted down in a secure manner. One end of the bolt is fastened inside the machine itself, which is locked, so that the bolt fixing the machine to a table or counter cannot be removed, except, of course, by breaking open the machine itself.
– What is the object of that?
– The object is to prevent the machine from being moved about. It is not a portable affair. It has to be placed in a position approved by an officer of the Department, so that it may lie examined by him from time to time, and the records taken. The records are taken from week to week, or from month 10 month, as may be considered convenient by the Department. There are two points about the machine to which I wish to direct particular attention. The first has reference 10 the dies used in the internal mecharism to imprint the stamps. These dies are to be made by an approved engraver. It is an offence, under this Bill, for any person not approved to make a die. Any person found in possession of a die without authority is guilty of an offence. The dies, when made, become the property of the Postmaster-General. The second point is that the keys to the machines are also the property of the PostmasterGeneral. The holder or user of a machine has no control over the key by which access is gained to the internal mechanism.
– What is to prevent a person having a duplicate key?
– There is a seal.
– Yes; the seal is an additional security.
– Who will make the dies ?
– They will be made by an engraver under the sanction of the Postmaster-General.
– Is it to be understood that only firms approved by the PostmasterGeneral will be able to use these machines ?
– Only firms approved by the Postmaster-General will be able to use the machines, so that they will not get into the hands of any person except those in whom the Department has absolute confidence.
– Has any one to give a guarantee ?
– Yes; the company owning the machine gives a guarantee to the .Postmaster-General against any improper use of. a machine, or against loss. So that if a machine were destroyed by fire, or were burglariously taken away, the Department would be able to demand from the company giving the guarantee any assessment of postal value which might be estimated to have been recorded in the machine between the last reading and the date of the destruction by fire, or the abstraction.
– In the event of a machine being stolen, would the Department be able to identify the postal articles stamped by it?
– The postal articles would have been posted in due course.
– Would not the dies be numbered ?
– Each machine is to bear a number, and each stamp made by a machine would bear a number upon its face.
– Would not each die have a private mark upon it?
– Yes. . Each die would bear a registered number, and a secret mark by which it could be identified ; so that each stamp made by a machine would be capable of being identified, and the Department would know whether a stamp was genuine or not.
– Could not an expert engraver make a die?
– Perhaps; but to do so would mean forgery. It is possible for persons to forge stamps at present; but we must not assume that felonies would be committed.
– It is not so easy to forge stamps as it would be to forge a die such as would be used in one of these machines.
– In actual practice it has been found that it is possible to forge postage stamps.
– Such a fraud as has been mentioned would soon be discovered, because trie letter would be identified as having passed through some machine that would be registered in the Post Office.
– Quite so. Every human device is liable to error. We cannot provide safeguards against every possibility of crime, but as a device for stamping and recording the value of stamps, I consider this machine as perfect an instrument as was ever invented by the wit of man.
– Would it be possible to secure an impression similar to the impression made bv one of these machines?
– In order to dp so it would be necessary to make dies and to know the secret of those in use. The risk of manufacturing the dies would have to be undertaken and the difficulty of placing them upon the market. It would be necessary to consult people who desired to purchase such a machine, and very soon information concerning it would become public.
– We know that the Butter Commission discovered that some persons were able to use Government stamps.
– That was soon found out. As a general rule the career of a particular crime is a very short one. The safeguards in connexion with this machine are as complete as I think they could be in connexion with any human device. I. should like to refer honorable members to the saving to be effected by the use of these machines. The saving to the Government would be two- fold. First of all we should be saved the cost of printing postage stamps, and secondly the cost of the commission paid on the sale of stamps. Those are two very important economical considerations to the Department.
– We shall still have to sell stamps.
– Yes, but to the extent to which these machines are used there will be a saving to the Department on the printing of stamps and the commission which would have to be paid on their sale. The machines provide a safeguard against fraud such as sometimes occurs in connexion with the use of cancelled stamps. They would lessen the opportunities for fraud in the stealing of stamps and the use of cancelled stamps, and would prevent the peculation of stamp cash by clerks and others. These machines, it should be remembered, would only be used by persons trusted by the owners or lessees. I need noi take up time in quoting a mass of testimonials in the possession of the Department, but honorable members can see them if they are sufficiently interested. One of the latest recommendations is dated 7th October, 1909, and is addressed to me as Postmaster-General by the Associated Chambers of Manufactures of Australia, as follows : -
I have the honour by direction of the Prest* dent to inform you that at the Annual Conference of the Associated Chambers of Manufactures of Australia, held in November last, the following resolution was carried : - “ That the advisability of adopting an automatic postal stamping machine be placed before the Federal Government with a request that it should be given effect to at the earliest possible opportunity.”
– Will the PostmasterGeneral say whether the machine is in use in any other country ?
– It is used in New Zealand only, where it originated. The New Zealand postal authorities give the highest possible testimony of the value of the machine, and recommend its use. Our own postal officers also recommend the use of the machine. Mr. Charles Bright* Deputy Postmaster-General of Victoria, and Mr. J. Massey, the Acting Accountant, who were members of the Board of Inquiry, and Mr. J. Hesketh, the Chief Electrical Engineer, consider the machine a useful and valuable one, and recommend its use to Parliament.
– Does this not savour somewhat of a monopoly?
– No, it is not a monopoly, because, as I said just now, any stamping machine of an approved pattern might receive a licence. There is no limitation to a machine of a particular pattern. For instance, a second machine has recently been manufactured in Victoria, for which it is claimed that its use would be equally advantageous, and that it is, in fact, better than the New Zealand machine.
– Would not the honorable gentleman give a preference to the Victorian machine?
– We give a preference to no one. Every machine of the kind is given a fair field and no favour, so long as they comply with the requirements, of safety and efficiency.
– How would the standard of these machines be determined?
– We should have to refer each to our postal experts and engineers, and if they reported that, on examination, a particular’ machine worked well, and might be trusted to efficiently record stamp values, the Department would be justified in giving it. a fair test.
– Under the proposed new section 65B, if one of these impressions were cut off an envelope and gummed on to something else, the Department would have to carry the article to which it was attached ?
– No. What we are dealing with in this Bill ‘ is an impressed, and not an adhesive, stamp. The proposed new section, to which the honorable member refers, reads -
Postal articles and telegrams, intended for transmission to places within the Commonwealth or any other prescribed place, bearing thereon an impression, made by a lawfully issued recording machine,
The reference there is to an impressed stamp, and not to an adhesive stamp. If the postal article bore an impression made by one of these machines as an adhesive stamp, it would be rejected by the Postal Department. Without further taking up the time of honorable members, I recommend the Bill to the favorable consideration of the House.
.- I rise to say that I am strongly in favour of this Bill. Whilst I was Postmaster-General, a Bill which was practically the same as that now under consideration was submitted to this Parliament.
– I should have mentioned that.
– It was introduced in another place, but at the time there was some objection to its being passed. I believe that the chief, if not. the only, reason why the passing of the Bill was objected to in the Senate at that time was that the. Fisher Government had introduced it. 1 had an opportunity of going into this matter thoroughly. Personally, I. am strongly in favour of the use of these machines. I regret that a similar measure was not carried eighteen months or two years ago, when it was first introduced. I should have been glad if the present Ministry hadtaken action in the matter before. I think that the use of these machines would lead to great convenience to the commercial classes, and would be a very good thing for the Postal Department. Having said so much, I need not take up any more time. I shall certainly support the Bill.
– I am not disposed to accept this Bill without a little consideration. I understand that the object of it is . to facilitate the conduct of business in large establishments and in Government Departments. The consideration which, more than any other, should weigh with honorable members in dealing with a Bill of this description is the necessity of conserving the public revenue. The Bill may facilitate the conduct of postal business, but once we initiate a system that allows a stamp to be imprinted without reserving the manufacture and use of that stamp for public departments, we immediately open the door to fraud. Apparently under the Government proposal some private individual or individuals are to have the right to make the dies for the stamps in the first instance. If they can make the original dies, are they not capable of making duplicates? Whilst the machine may faithfully record the business that is conducted through it, yet, if it gets into the hands of private individuals - although I do not say that in the main they will have any felonious intention to defraud the Government - the opportunity will be there for fraud. I have seen some of the imprints made by the machine, and I believe that it will be possible to get a rubber stamp at a cost of eighteenpence to faithful lv reproduce any original die inserted in the machine. If the machine is to be placed, although not indiscriminately, in the hands of a number of people who will be, comparatively speaking, free from the direct control and supervision of the Department, who can say that (hey may not have a duplicate stamp made which will give as clear an imprint as the machine itself will, but without .putting the record on the back of the instrument^ as is provide’d for in the wonderful mechanism about which the Postmaster-General has spoken? The Postmaster- General should reply to that aspect of the question before the Bill is advanced any further.
– The honorable member suggests that the stamp may be forged. That is provided for. It is a criminal offence.
– Does the honorable member imagine that a man who intends to indulge in forgery, by obtaining a duplicate of the die attached to his machine, will announce his intention to the Department and ask them to send an inspector round to catch him in the act? Surely not ! This appears to be a fatal objection to the adoption of this measure, and unless the Postmaster-General can successfully reply to it T feel disposed to vote even against the second reading of the Bill. If the machine were intended only for use in post-offices or in the Commonwealth Departments generally under the supervision of Departmental officers, there could be no possible objection to it ; but if we allow it to go out to the general ‘ public, where the opportunity of fraud is placed under their eyes, the Commonwealth revenue may suffer to a degree which honorable members cannot contemplate ‘with equanimity.
– And can the Department keep track of all the machines?
– Even if it could, is there anything to prevent the man who’ makes the original die from making fifty duplicates?
– Is there anything to prevent fifty machines being used where only twenty are recognised?
– The honorable member presents another difficulty!, but all ‘that it would be necessary to provide for purposes of fraud would be a duplicate die. I will not name any particular firm, because I am not suggesting that any firm would engage in that sort of fraud, but we must always provide against it, and I take it that this Bill has been introduced in order to provide against fraud in the use of stamps, and because of the clumsiness of present methods. Supposing, therefore, that a firm doing a stamp business to the extent of £50 a week obtained one of these machines and got an engraver to supply them with a duplicate of the die - the Postmaster-General himself states that the engraver is to be intrusted with the making of the dies for the machines, and it is certain that duplicates will have to be ordered, because one die nill not last for ever - they could then put it on ‘the end of a stamp and stamp it’ down without the letters going through the machine at all.
– Any of their employes might do that for there.
– That is quite true. Sp long as they obtained a duplicate of the original die - and it would not need to he a very carefully made duplicate to avoid detection - they could use it indiscriminately .and defraud the Commonwealth revenue to a considerable extent. That appears to be a fatal objection to allowing this instrument to go outside of the Commonwealth Departments. If it is reserved, us I have said, to facilitating business at the post-offices, or in the public departments, where no person has a pecuniary interest in misusing it, I am prepared to support the Bill. But if the machine is to be handed ‘ out to the general public, and opportunities for fraud are to be created at very small cost and almost without the possibility of detection, it will constitute a danger to the Commonwealth revenue which personally I am not prepared to sanction.
.- I can hardly compliment the Minister on the way in which he has placed the Bill before the House. He professes to have received reports from his Department, and also to have received very full information from members of the Postal Department in New Zealand. Before we pass a measure of this kind we should consider the matter very carefully, and also be perfectly satisfied that the machine is exactly what it professes- to be. We should be cautious about what we are doing. I have not seen the machine myself. I believe it has been in the lobby of the House, but there is nothing before the House to-night in the shape of a machine, or of the impressions which the machine produces. I understand that the marks differ as to their respective . values, and that it is a trial to the eyesight to decipher them. The present postage stamps have different colours for different values, and so are readily distinguishable, but these marks are only about the. size of asixpence, or, perhaps, a little larger, and . are all of the same colour. I presume that when they pass through the Post Office they will be obliterated in the way that ordinary stamps now are, and the result will be that their face value will be indistinguishable. Apart from that, I quite agree with the honorable member for Kalgoorlie that it is dangerous to allow any private company or persons to make money by exploiting the resources of one of the Government Departments. The sole Australian rights of this machine, of its manufacture and control, should be in the hands of the Commonwealth, and not be left, as is now proposed, in the hands of private individuals. If these machines are placed in the hands of a private company there is great danger that the public will he exploited. The Post masterGeneral has declared that the use of these machines would be sanctioned only in the case of reputable firms. But who is to decide as to what firms are reputable ? To my mind there is a grave danger of fraud in connexion with the use of the machines. In this matter we ought to act with extreme caution, because we are breaking new ground, and consequently do not know what risks we may be incurring. The machine should be more thoroughly tested before its use is countenanced by the Government.
– I think that the Government are courting trouble in this matter. The PostmasterGeneral seems to be afflicted with an overwhelming desire to convenience those who are engaged in a large way of businessPersonally, I think it is just possible that we may go too far in that direction. In the. first place upon a machine of this character we cannot get that distinctiveness which characterizes the ordinary adhesive stamp. We can not get its serrated edges and- the variations in colour which are now the greatest aid to the Department in assessing the value of the stamps used. In addition, there is a danger that the dies used in these machines may be copied, as the designs are very simple. It is a fact that the ablest frauds are those which are not detected, and it is only reasonable to assume that if we offer facilities for wrongdoing they will be eagerly availed of. We must also recollect that those who chieflv use the post for the purpose of disseminating advertisements are not usually burdened with too many scruples.’ Any improvement that may be adopted in the matter of the stamping of letters should be in the hands of the Government. We know that no amount of’ supervision can be absolutely effective in the prevention of fraud, but I maintain that under Government supervision there ‘will be less liability to fraud. The present proposal seems to be an instance of individualism run mad.
Debate . (on motion by Mr. Henry Willis) adjourned.
Mr. FULLER laid upon the table the following papers : -
Lands Acquisition Act - Land acquired under, at Weston, New South Wales - For Postal purposes.
Public Service Act - Home Affairs Department -Public Works Branch, Central Staff- Appointment of Major A. J. Pinchen as Assistant Militory Engineer.
The Clerk laid upon the table the following paper : -
Public Servants, receiving less than £110 per annum - Additional Return to an Order’ of the House dated 31st August, 1909. ‘
House adjourned at 10.53p.m.
Cite as: Australia, House of Representatives, Debates, 12 October 1909, viewed 22 October 2017, <http://historichansard.net/hofreps/1909/19091012_reps_3_52/>.