House of Representatives
10 November 1909

3rd Parliament · 4th Session



Mr. Speaker took the chair at 11 a.m.. and read prayers.

ATTENDANCE OF MEMBERS.

Mr. HUTCHISON. - I wish to know from the Prime Minister what chance he thinks there will be of a fair presentation of the Financial Agreement to the electors by the Argus, a newspaper which is capable of a misrepresentation like the following? I quote from its Parliamentary report of yesterday -

Five minutes before dinner time Mr. Deakin crossed the floor and spoke a few whispered words to Dr. Maloney. Mr. Wise and Mr. Poynton were the only other Oppositionists present.

The fact is that I was sitting in front of the honorable member for Melbourne, and heard what the Prime Minister said to him, while the honorable member for Herbert was seated at the table, and there were, I do not know how many, other members of the Opposition in their places.

REFERENDUM : STATE UPPER HOUSES.

Mr. TUDOR (for Dr. Maloney) asked the Prime Minister, upon notice -

Will the Government introduce legislation this session so as to permit a vote of the citizens of the Commonwealth to be taken by referendum at the next Commonwealth elections as to whether the Upper Houses of the State Parliaments should be abolished?

Mr. DEAKIN. - I answered a similar question yesterday. No referendum, beyond those already on the notice-paper, is proposed.

DEFENCE DEPARTMENT.

Junee and Murray Downs Rifle Ranges - Telephone, Karrakatta Range - Major Carroll.

Mr. McDONALD (for Mr. Chanter) asked the Minister of Defence, upon notice -

What steps are being taken to provide the rifle club and cadet corps with a suitable firing range at Junee?

Mr. JOSEPH COOK.- The District Commandant has been instructed to furnish an estimate of cost of the minimum area necessary to establish a range in the locality, when further consideration will be given to the matter. A settlement will be expedited as far as possible.

Mr. BAMFORD (for Mr. Chanter) asked the Minister of ‘ Defence, upon notice -

Have arrangements yet been made to procure land for a rifle range at Murray Downs, opposite Swan Hill, Victoria?

Mr. JOSEPH COOK . - Negotiations are now proceeding with the trustees of the Murray Downs estate for a lease of the necessary site, and itis anticipated that a satisfactory arrangement will shortly be arrived at. An officer of this Department is at present visiting the district in connexion with the matter.

Mr. HEDGES asked the Minister of Defence, upon notice -

  1. Has his attention been drawn to the following statement which appears in the West Australian newspaper of 1st November,1909 : - “ TRAGEDY AT KARRAKATTA.

School Cadet Shot.

Alleged Departmental Parsimony.

Mr. Jennings said that an hour and a half transpired between the moment of the accident and that of the lad’s admission into the casualty ward at the Perth Hospital. Owing to the removal some time ago of the telephone at the Rifle Range, he had to run to the Karrakatta Station, over half-a-mile distant, in order to communicate with a medical man “ ?

  1. Will the Minister, in view of the fact that the accident took place at the chief Rifle Range in the State, give instructions that a telephone shall again be placed there so as to avoid serious delay in the event of accident?

Mr. JOSEPH COOK. - The answers to the honorable member’s questions are - 1.Yes.

  1. Full inquiry will be made into the matter, and necessary action taken.

Mr. TUDOR (for Dr. Maloney) asked the Minister of Defence, upon notice -

If he will place the papers re Major Carroll on the Table of the Library?

Mr. JOSEPH COOK. - Yes; I shall be glad to do so.

page 5544

QUESTION

KALGOORLIE TO PORT AUGUSTA RAILWAY SURVEY

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

asked the Minister of Home Affairs, upon notice -

  1. Was a dissent by one of the reporting engi neers on the proposed Western Australian railway attached to the report of the Committee of Engineers?
  2. If so, why was such dissent eliminated from the report laid upon the table of the House?
  3. What was the nature of the dissent, and by whom made?
  4. Will the Minister obtain, through the State Government, the full text of the reasons for dissent on the part of their engineer, and lay the same on the table of the House?
Mr FULLER:
Minister for Home Affairs · ILLAWARRA, NEW SOUTH WALES · Free Trade

– The answers to the honorable member’s questions are : - 1 to 4. The unanimous report of the EngineersinChief for Railways, New South Wales, Victoria, Queensland, South Australia, and Western Australia in July, 1903, recommended the adoption of the’ standard gauge of 4 ft. 8½ in. All subsequent reports and estimates have been made on that basis. The report of the11th ult. by the consulting engineer t’o the Commonwealth, and the Engineers-in-Chief of South Australia and Western Australia on the transcontinental railway survey from Kalgoorlie, Western Australia, to Port Augusta, South Australia, was accompanied by a memorandum from Mr. Moncrieff, which reads as follows ; - “On behalf of the South Australian Government,I dissent from the adoption of the 4 ft. 8½ in. gauge for the final estimate for this railway, because my Government objects to an arrangement which involves three breaks of gauge between Perth and Adelaide.”

On the 20th ult. a communication embodying Mr. Moncrieff’s memorandum was addressed by the Prime Minister to the Premier of South Australia in the following terms : - “This document was duly placed before my colleague, the Minister of Home Affairs, who has writtena minute on the subject in the following terms : -‘ With reference to the accompanying memorandum, signed by Mr. Moncrieff, on the subject of the proposed transcontinental railway between Kalgoorlie, Western Australia, and Port Augusta, South. Australia, I am of opinion that, if the South Australian Government desires to make any representations on the subject, it should be made in the usual and recognised manner by the Premier of the State to the Prime Minister. I would point out that in 1903, the Engineers-in-Chief for Railways of New South Wales, Victoria, Queensland, South Australia, and Western Australia, at the request of the Minister of Home Affairs, met here to advise and report respecting this proposed railway. Amongst other important subjects that of the gauge was considered, and the report, which was unanimous,and which was signed by Mr. Moncrieff, recommended the adoption of the 4 ft. 8½ in. gauge. These reports were laid before Parliament, printed, and circulated, and no exception whatever up to now has been taken to the proposal. Further, all the estimates, the cost of construction, maintenance, and running have been prepared on the basis of the standard gauge, 4 ft. 8½ in.’ “ Under these circumstances, it appears to me that you ought to be informed of the reason why the memorandum of Mr. Moncrieff was not published with the joint report of the engineers.”

page 5544

CONSTITUTION ALTERATION (FINANCE) BILL

In Committee (Consideration resumed from 9th November, vide page 5498) :

Clause 3, as amended - [The] Constitution is altered by inserting after section ninety-four thereof, the following sections : - “ 94a. From and after the thirtieth day pf

June, One thousand nine hundred and ten, sections ninety-three and ninety-four of this Constitution shall cease to have effect, “ 94b. From and after the first day of July,

One thousand nine hundred and ten, the Commonwealth shall pay to each State, by monthly instalments, or apply to the payment of interest on debts of the State taken over by the Commonwealth an annual sum amounting to Twentyfive shillings per head of the number nf the people of the State as ascertained according to the laws of the Commonwealth. “ 94c. - (1.) The Commonwealth shall, during the period of twenty-five years beginning on the first day of July, One thousand nine hundred and ten, pay to the State of Western Australia, by monthly instalments, an annual sum which in the first year shall be Two hundred and fifty thousand pounds and in each subsequent year shall be progressively diminished by the sum of Ten thousand pounds. “ (2.) One-half of the amount of the payments so made shall he debited, to all the States (including the State nf Western Australia) in proportion te the number of their people as ascertained according to the laws of the Commonwealth, and any sum so debited to a State may be deducted by the Commonwealth from any amounts payable to the State under the last preceding section of this section.”

Upon which Mr. Harper had moved, by way of amendment -

That the following words be added to proposed new section 94b ; - “ until such time as such payments amount to the annual sum of Seven million five hundred thousand pounds, and thereafter until the Parliament otherwise provides.”

Mr BRUCE SMITH:
Parkes

– I listened to the speech of the honorable member for Mernda last night with great satisfaction. Its moderation and quietness of tone - remembering the interjections which came from this side of the Chamber - said much forhis self-control. Although the Prime Minister indicated that he wished to treat the matter in the same spirit, he spoke with a vehemence which I have not seen equalled by him before in this Chamber. I strongly indorse the views put forward by the honorable member for Mernda, and think that I shall be able to satisfy both the press and the public that the attitude of some members of the Liberal party towards him last night set a very bad example, seeing that for years past we have been twitting the Labour party with an intolerance and tyranny towards its individual members from which we are desirous of freeing our political life. It has been a complete travesty of Liberal principles. When the position comes to be thoroughly understood, and the public has an opportunity to judge of the merits of the proposal, it will be acknowledged that it is the little coterie which, from a keen sense of duty, has separated itself from the rest of the party that has right on its side. There is a tendency in human nature to adopt phrases, and then to forget what they mean, ultimately attaching to them a signification quite the reverse of the original meaning. I published a work on Liberalism twenty-two years ago - it is to be found in the Library - and the intervening period has served to confirm my views on the subject. In the dictionary sense of the word, a “ Liberal “ is one who advocates greater individual freedom. Being thus driven back to first principles, one naturally wishes to know how much freedom is being allowed to the members of the Liberal party. Is the fact that certain members differ from the rest a justification for charging them with having broken away from their party obligations? I shall show, by criticising the text of the Fusion agreement, and quoting the utterances of the Prime Minister at various Conferences, that what the Government now proposes, and what the honorable member for Mernda, and we who support him, take exception to, is diametrically contrary to the understanding which brought the party together. When, in a party of twenty, fifteen break away from their compact, are they justified in speaking of the five who have remained true to their principles as renegades? It is the fifteen who are the backsliders. This view does not seem to have occurred to some of those who took such exception to the quiet and thoughtful address delivered by the honorable member for Mernda last night in justification of his amendment. The Prime Minister began his speech by admitting - as he could not help doing - that the eight members who voted for the omission of the word “ The” at the beginning of the clause, as an indication that they would support the proposal which has since been moved by the honorable member for Mernda, were quite entitled to do so ; and he even claimed that the admission demonstrated the difference between the constitution of the Liberal party and that of the Labour party. He said, in effect, “ Look at us. We are not caucus bound. We are a party of free men, who can do as we like. So far do I recognise the fact that I take no exception to the action of those who support the honorable member for Mernda.” Had he been content to say no more, I should not have cause for complaint. But I shall not for party or other considerations sink my life- long opinion as to the meaning of Liberalism. I still hold to the view that Liberalism signifies individual freedom. Those who call themselves Liberals have constantly claimed as a merit that they are not bound by the methods of tyranny and compulsion which hold sway on the other side of the Chamber.

Mr Henry Willis:

– When you have lost that you have lost the party.

Mr BRUCE SMITH:

– That is the meaning behind the term “ Liberalism.” In choosing the word “ Liberal “ to designate the party, we did so because we regarded it as signifying its primary principle. It is that which differentiates us from the other side in this respect. The Prime Minister very properly reminded the Committee of the fact that a number of the members of this party were allowed and willingly allowed to exercise a freedom in the expression of their opinions. But his words do not seem to have affected the attitude of certain members of the party, because last night I heard one of them constantly interrupting, in a very impatient way, the utterance of the honorable member for Mernda, who had admitted that he knew of six members of the party who would vote for the amendment if they were only free from party ties.

Mr Mcwilliams:

– That is a very caddish thing to say.

Mr BRUCE SMITH:

– The honorable member had better apply that term to himself for having made such an observation.

Mr Wise:

– They do not like to hear the truth.

Mr Sampson:

– The honorable -and learned member does not take that statement as authoritative?

Mr BRUCE SMITH:

– No. I cannot forget that in speaking on this matter last week one member of the party openly said in the chamber, “ I should prefer to vote-

Mr Poynton:

Mr. Johnson.

Mr BRUCE SMITH:

– I do not want to mention any names. But the honorable member in question said, “ I should prefer to vote, if I were free, for a modification of this proposal to a term of years.”

Mr Archer:

– Because, he said, that would be better for the States.

Mr BRUCE SMITH:

– The honorable member is quite mistaken.

Mr Archer:

– I am not.

Mr BRUCE SMITH:

– The honorable member to whom I refer said distinctly that he would prefer to see an agreement which was for a definite time, and referring to my own State I may say that a good deal of pressure has already been attempted to be brought to bear upon me by members of the very organization which has selected me as a Liberal candidate. That is surely a strange state of things to exist. I wonder whether there is such a thing as a recognition of individual freedom. I am certainly not disposed to suppress whatever individuality I have, merely because a larger number of the members of the Liberal party who have, in my opinion, and as I shall show, retired from their own party allegiance, are now wishing everybody for political reasons to do the same thing. No doubt, political reasons are very often a matter of great consequence, but they require to be very carefully weighed : they should not be approached in an impulsive spirit. I venture to say that if the course which has been advocated by the honorable member for Mernda, and which I thoroughly indorse, had been taken in the first place by the Prime Minister, it would have given him a reputation for statesmanship which the course he has taken will never obtain for him, because one of the first elements of statesmanship, I take it, is a rational consistency. The other night I heard the honorable member for East

Sydney proclaim an extraordinary doctrine. Of course each man will proclaim those doctrines which will fit his own standards; but the honorable gentleman said that consistency was a substitute for intellect or brain power. I have been in politics nearly as long as he has been. It is now twentyseven years since I first entered into political matters, and I am bound to say that the older I grow, and the more I see of politicians, the more convinced do I become that consistency is a virtue which would be well placed in a great many more men than display it at present. Each man is free to choose between a consistent career, which he may look back to with, some satisfaction, and which, believe me, the public remember with equal satisfaction in reviewing a man’s conduct in public life - he may choose between that and doing what I once heard a politician say one ought to do -“ Watch the weather, and trim your sails to suit the occasion, remembering that the public do not take much notice of what you have done in the past.” As we are living in a free country, that is a matter for each politician to think out for himself. If the members of the Liberal party had taken up the attitude which the Prime Minister took up last night ; and if that honorable gentleman and his colleagues had practised that attitude in every case towards the outside world and the members of their party, I should have merely said, “ I am sorry that I differ from the members of my party, but I have nothing to say in regard to their conduct.” When, however, their criticism takes the form of practically charging the few who disagree with them, but who adhere to the Fusion party’s policy, with being backsliders and renegades, and then arrogate to themselves the virtue of being at all events grouped together in a large number ; then I think it is necessary to remind the public of the real position, because, as the honorable member for Mernda said last night, the people outside do not yet understand the issue, and the press either do not understand it or do not allow their knowledge to influence their criticism, as I shall show in a few minutes.

Mr Atkinson:

– Does the Age understand it ?

Mr BRUCE SMITH:

– I can show that only five months ago the Argus, which is to-day publishing partisan and impertinent articles, in regard to this matter, actually advocated the very thing which the amend ment is proposing. Of course, a newspaper is a great power. As an advertising and news sheet it circulates widely throughout the country. We know from the history of the Australian press that newspaper influence has sometimes been very fatal to some politicians. I confess I have never allowed it to frighten me. The man who sits in a newspaper back parlour, with comfortable surroundings, and who, possibly, is quite unknown to the outer world, but who pens an article which, by reason of the advertising value of the newspaper, obtains a very wide circulation, which, probably, cannot be contradicted, no doubt exercises an influence beyond any politician. No matter what influence he exercises, we have a perfect right to expect the same consistency in a newspaper as we expect in a politician. If a newspaper has any influence with certain members of Parliament, they ought at least to look to see whether it has itself been consistent in its furtherance of the particular policy which it is advocating to-day. I was disappointed in the attitude which the Prime Minister assumed with regard to the division the other evening. I had had no interview with him in regard to the amendment. But I heard the honorable member for Mernda say in this chamber that he had consulted that honorable gentleman from time to time over the amendment, and that his reason for proposing to omit the first word of the clause was, not because he thought that would be effectual in altering its sense - I think he said that it would be an idiotic proposal - but because, with the approval of the Prime Minister, it was intended to usher in one of a more substantial character, which could be better understood, and which, if carried, would have a better effect.

Mr Harper:

– And which I indicated.

Mr BRUCE SMITH:

– On that occasion the honorable member read the amendment which he has since moved, and he stated that he had interviewed the Prime Minister from time to time, and that the latter had desired the amendment to take that form, because the omission of the first word I understood him to say, would not throw any serious responsibility upon the Government. I understood him to say, further, that if the amendment were carried, it might, by indicating the opinion of the Committee, lead to steps being taken to obtain a modification of the agreement with the Premiers of the States. The amendment was carried, and the Prime Minister now contends-

Mr Deakin:

– Does the honorable member claim that the amendment was carried because a vote was given after a tie for the purpose of securing further consideration ?

Mr BRUCE SMITH:

– I am coming to that, if the honorable gentleman will allow me.

Mr Fisher:

-It is a mere quibble.

Mr BRUCE SMITH:

– The honorable gentleman at the head of the Government says now what he did say at the beginning of his speech yesterday. He does not consider that the amendment was carried. Well, it was carried sufficiently to make it law. The House has its rules, and one of them provides that if any matter in legislative form is carried in that sense, it becomes the law of the land.

Mr Bowden:

– Not then.

Mr BRUCE SMITH:

– The honorable member knows that if a Bill were carried in that way, it would become law.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– But there are other stages.

Mr BRUCE SMITH:

– I did not say at that stage. I am talking of the effect of such a vote, because what will carry one thing will carry another. I am talking of the thing in its generic sense.

Mr Wilks:

– A majoritv of one carried many items in the Tariff.

Mr BRUCE SMITH:

– Yes, very-many. I think it will be generally admitted by those who are now carping at my statement that if a Bill were in its last stage, and it were carriedby the vote of the Speaker, it would became law.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– The honorable member is dealing with a contingency.

Mr BRUCE SMITH:

– The honorable member does not seem to grasp the principle which I am. trying to inculcate. It is all very well in such circumstances to say that the proposal is not carried. That stage of the proposal is carried, and that is the stage which, if carried, the Prime Minister said he would consider as indicating the will of the House, and that it might lead to him being able to obtain a modification of the agreement.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– The honorable member said that it became law.

Mr BRUCE SMITH:

– Nothing of the kind,I said it was such a carriage of that particular stage of the Bill as would, at another stage, have made it law.

Mr Mcwilliams:

– That is not the legal effect.

Mr BRUCE SMITH:

– I am not speaking of the legal effect. I am objecting to the exception which the Prime Minister has taken in saying that he is absolved from his undertaking because it was not such a passage as he approved.

Mr Deakin:

– How can the honorable member ask a Committee, which is evenly divided, to alter the course which it has taken? He would have one-half against him in either case.

Mr BRUCE SMITH:

– How can the honorable gentleman say that the Committee is evenly divided? The Chairman has an option.

Mr Deakin:

– Which he exercised for the avowed purpose of securing further consideration.

Mr BRUCE SMITH:

– He exercised it in the direction of carrying the proposal.

Mr Deakin:

– To secure further consideration.

Mr BRUCE SMITH:

– Had the vote-

Mr Deakin:

– He could have voted with us, and yet have observed the same principle.

Mr BRUCE SMITH:

– Then the honorable gentleman would have been a little more literal if he had asked the Committee to reverse its decision when the proper time had arrived. He now claims that he succeeded.

Mr Deakin:

– No. It was a tie.

Mr BRUCE SMITH:

– The honorable gentleman calls upon the honorable member for Mernda to re-move his amendment. It can have no effect. I pass it by.

Mr Sampson:

– He has now moved his amendment.

Mr BRUCE SMITH:

– He has moved the amendment which, in effect, he moved before. He has moved the . very amendment which he indicated when he proposed to omit the first word of the clause. But I do not intend to spend further time over it. I think that the attitude which the Prime Minister has taken upand I do not agree with it - is not a fulfilment of that which he undertook to endeavour to obtain, namely, a modification of the agreement. Even if the Committee is evenly divided, does he for that reason want to pass a measure which would affect for all time the Commonwealth? Surely he wants a bigger majority than one or two. I pass it by. I was disappointed, because I thought from the way in which the honorable gentleman’s attitude was ex plained, that he was prepared to go to the Premiers, remembering that the agreement had been approved of by them and himself subject to the approval of this Parliament. Does the honorable gentleman say that that division indicated the approvalof Parliament? Was it not rather a failure to secure the approval of the Committee? And. that being so, was there not cast upon the Prime Minister an obligation to go to the Premiers of the States and to say to them, “ The approval which was a condition precedent to the acceptance of this agreement has not been secured” ?

Mr Wilks:

– Or reverse the position, and say that the Premiers should have gone to the Prime Minister.

Mr BRUCE SMITH:

– I do not go so far as that. I go only so far as to say, that the Prime Minister would have taken a more judicious step had he gone to. the Premiers and said, “ I cannot obtain the consent of Parliament to this agreement, which is contrary to the Fusion arrangement. I made it with you without consultingmy party, and subject to the condition that it should be approved by Parliament. I will not undertake to drag my party after me, and to ask them to agree to something upon which they have never been consulted, and which was arrived at by a Conference, the proceedings of which have never been published.”

Mr Atkinson:

– But how could the Prime Minister go to the Premiers in view of his statement that if this agreement is not carried, he will take it to the country ?

Mr BRUCE SMITH:

– It is to the agreement itself that we must look primarily, and it has appended to it the statement, “ Subject to the approval of Parliament.” Has Parliament approved of it? Has not this Committee on a test vote failed to approve of it ? Figuratively speaking, I throw the Chairman’s vote to the winds, so far as his opinion on the recent division is concerned, and say that the voting was equal. That being so, the Committee failed to approve the agreement, and there- was thus thrown upon the Prime Minister the obligation to go to the Premiers and to speak in the terms that I have just stated. In view of the result of the division, he should have said to them, “Rather than drag my party behind me in connexion with an agreement concerning which they were never consulted, I shall ask you to modify it by declaring that it shall operate for only a limited period.” He might well have said to them, “Fifteen or twenty years will see you all out. It will1 provide safely io: all the States for at least fifteen years, and it is problematical whether, fifteen years hence, half-a-dozen of us will be here. “ If that were done, we should leave with the Commonwealth Parliament intact the obligation which the people put upon it. There have been many observations with regard to changes of opinion upon this subject, and 1 have found in the Hansard report of a speech delivered by the honorable member for Gippsland, on this Bill, an admirable collection of the utterances of different public men upon this matter, which has saved me a great deal of trouble. I shall avail myself of the honorable member’s industry. I desire the Committee to see where we are with regard to the Fusion agreement. I hope that honorable members opposite will not think that 1 am attempting to win their applause. They know exactly the value that I put upon it. I am speaking with the object of vindicating myself and those with whom I have co-operated on this side of the House. I desire to show where we, as a section of the so-called Liberal party-

Mr Wilks:

-“ Stalled ?” That is an unfortunate observation.

Mr BRUCE SMITH:

– The party may resume its reputation-

Mr Archer:

– When it agrees with the honorable member.

Mr BRUCE SMITH:

– When it abides by the Fusion arrangement, to which the honorable member himself was a party. Let me now quote from the Fusion agreement on this subject - to which the honorable member who interjects was a party - in order that we may see how far it is in keeping with this proposal -

Pending the preparation of .1 complete scheme adjusting the future financial relation of the Commonwealth and States, an interim arrangement to be proposed, under which the Customs and Excise revenue of the Commonwealth shall be dealt with.

I have heard several observations from this side of the House with regard to that paragraph, some honorable members contending that it is not clear, and others that it contemplates only a temporary agreement conditionally. So it does. I shall show what it proposes, and how my interpretation of it harmonizes with all the utterances of the Prime Minister and a number of other politicians who’ have been associated with this movement. It proposed in former speeches that the- scheme for allocating the Customs revenue should be coupled with the ‘ equally important proposition for a definite arrangement with re gard to the transfer of the State debts, the establishment of a sinking fund, and theunification of loans. Until all those proposition1: could be dealt with in one movement for a settlement as between the States and the Commonwealth, an interim arrangement was to be made with regard to the allocation of the Customs and Excise revenue. I do not think that all members of the Committee have studied this matter ascarefully as ought to’ have been done in order to understand its real merits. If the statement I have just quoted stood alone, one might differ over it, and say that it was not sufficiently clear to bind a party. But if honorable members will look at the report of the utterances of the Prime Minister, when promulgating the policy of this same Federal Liberal party in the Melbourne Town Hall, they will find that he said that one of the platforms of the Fusion party was -

The assumption by the Commonwealth of the public debts of the States, accompanied by au equitable scheme for providing interest and sinking fund.

The Fusion agreement was made in May last, and in June we had the following statement in the Ministerial announcement -

A temporary arrangement for a term of years to replace the existing distribution, in which the obligations of the Commonwealth are recognised, is being prepared for submission.

We are now in November, and on 30th June last the Prime Minister addressed a letter to the Premier of New South Wales, in which he said -

Tt is highly desirable that this complex question shall be simplified so that this Government can frame concise propositions for submission to the electors at our general “election.

He also said1 -

You are probably aware that, in the opinion of this Government, any attempt to determine now the future distribution of the revenue from Customs and Excise would, for practical reasons, require to contemplate some fixed period for which the circumstances can be forecast with considerable confidence

Mr Wilks:

– That sounds like a paragraph from a speech by the GovernorGeneral .

Mr BRUCE SMITH:

– It is an extract from a letter addressed by the Prime Minister to the Premier of New South Wales, in the month following that in which the Fusion agreement was promulgated.

Mr Fisher:

– The letter was sent to the Premier of New South Wales inviting him to attend the Conference.

Mr BRUCE SMITH:

– Yes. When the Fusion agreement had been drawn up, and had been impliedly assented to by this party, the Prime Minister addressed this letter to Mr. Wade, in which he reminded him as late as 30th June last that, to paraphrase his letter, the Fusion could consent to only a temporary scheme for the distribution of the Customs and Excise revenue until some wider arrangement was made for dealing with the whole financial question. Again, the Prime Minister, writing on 9th July, in reply to a letter from Mr. Wade, stated -

The propositions to be submitted to our electors will consist of a general statement in our platform of the views of this Government in respect to what may be termed a permanent settlement of the future financial relations of the States to the Commonwealth. Should the preliminary financial arrangement for a term of years - alluded to in my last letter - fail for any reason to pass this session, that also would be submitted, and in a precise shape As you are aware, neither one nor the other need be ingrafted upon the Constitution in order to come into full effect.

That discloses an extraordinary position. Here we find the Prime Minister, who is leading a party, ‘some members of which are twitting five of their number who happen to have differed from them over this matter, proclaiming in June, not only that an arrangement with regard to the distribution of revenue should be of a temporary character, pending a settlement of what I in my previous speeches spoke of as the big outlying problems between the States and the Commonwealth, but that it need not be ingrafted in the Constitution ! Honorable members will recollect that I gave as one of my reasons for objecting to a permanent settlement of tHe question that we “had in this agreement a. statement of what the Commonwealth was going to give, but that what it was going to get in return had never been defined. The Premiers of the States, under this .agreement, have consented only to an investigation with regard to the transfer of certain of the State debts, and honorable members will doubtless recall my comment, that to “consent to an investigation “ is about as vague as a promise by a Minister to a deputation to “ take the question into consideration.” We thus find that the Prime Minister not only informed the Premier of New South Wales, when inviting him to attend the Conference, that any arrangement made must be of a temporary character, pending the settlement of the bigger problems, but that he also said that there was no reason why the arrange-

Mr. Bruce Smith. ment should go into the Constitution.

Mr Wilks:

– We are the only loyalists to that agreement to be found on this side of the Chamber.

Mr BRUCE SMITH:

– Had the Prime Minister come to his party and said, ‘ Gentleman, . I have declared myself in favour of a limited arrangement. It is an arrangement that need not necessarily be embodied in the Constitution, but for party or political purposes I have come to the conclusion that it is desirable to make a permanent adjustment of the financial relations of the States to the Commonwealth, and to embody it in the Constitution ; “ and if his party had then discussed the matter and consented to the adoption of that course, the position would have been different. But the recent Premiers’ Conference which was attended by the Prime Minister was a secret meeting. Its proceedings have never been published. It is true that a document has been published, which, if my memory serves me accurately, is called The Proceedings of the- Conference. But I have read that document from beginning to end, and from the first cover to the last it does not contain the slightest indication of what took place at that Conference. The press have not been vouchsafed even a summary of its proceedings, such as even the most secret Conferences in England are accustomed to supply to it. Honorable members will recollect that when the Imperial Conferences are held in London, a sort of -precis is handed tq the press, which contains the substance of their deliberations. But nothing of that sort has been vouchsafed either to the pre»s or the people, or to the members of the party who are now asked to be bound by its conclusions, quite regardless of the contrary principles to which they have already acceded. Honorable members ‘ must recognise that at more than one Conference of Premiers the principles for which I am contending have been contended for bv the Prime Minister, and by his Treasurer. Sir George Turner’s name stands very high in the estimation of Victorian people, and I propose to quote what he said at the Premiers’ Conference in 1904 as throwing light on this problem. Honorable members’ will recollect that over and over again the Premiers of the States have urged that the control of the Customs and Excise revenue should be taken out of the hands of the Commonwealth, or that that revenue should be allocated in such a way as would very much modify, if not entirely abro- gate, that control. Upon the occasion in question, Sir George Turner said -

But I cannot go to the Federal Parliament and say - “ I want you to extend the Braddon section for all time.” Parliament would regard the perpetuation of the operation of the Braddon section as altogether against the principles of the Federation, namely, that the Commonwealth Government should have absolute control and should be credited wilh a desire to do what is right and just. ….I say frankly that in my opinion the Federal Parliament as at present constituted, and as 1 believe it will be constituted in the future, will not indefinitely extend the operation of the section.

We all recognise that Sir George Turner’s name is a power in Victoria, because he is credited with having extricated this State from a position of very great financial difficulty. I come now to the principles which were enunciated at the same Conference by the Prime Minister. He said -

They (the people) have two agencies.

I ask honorable members to listen to the quotation which I am about to make, because it contains a piece of very close reasoning. In it the Prime Minister did not talk, as he has done lately, of this Parliament disregarding the future, because the people of the States are identical with the citizens of the Commonwealth. He recognised that in the future politicians would have the handling of this question before it was remitted to the people, and that occasions arise - as I shall show presently - when politicians fight, not for what is best for Australia, but for what is best for the body politic in which they are immediately concerned. He said -

They (the people) have two agencies. In one case they are represented in part by six different agents, and in the other case they are represented as a whole by another set of agents ; and as we know in business, even when the interests of the principals are the same, there may be a difference between the interests of the agents.

The Prime Minister continued. That is where the politician comes in.

Your proposal amounts to this : that we should amend the Constitution in order to give a sanction in it to any agreement arrived at now in regard to the disposition of the Customs and Excise revenue, requiring that alteration to be hereafter-

When the Prime Minister had reached this point, Mr. Kidston completed the sentence for him by adding the word “ ratified.” That gave the cue to the Prime Minister, who, as we all know, has a very quick intellect; and he then said -

First of all it is ratified before going into the Constitution, but the effect will be that it could not be altered without another appeal to the people.

That is the Number two situation which the Prime Minister slid over so skilfully last night, as if it were very thin ice. He was eloquent and vehement in regard to Number one situation, as to the giving up of revenue, because all would be in agreement with him. We were waiting for him to come to Number two fence in regard to the termination of that allowance. I was anxious to see how he would, as the Americans say, “negotiate” that” fence when he came to it.

Mr Wilks:

– He stumbled at it.

Mr BRUCE SMITH:

– No, his voice was louder than ever when he reached it, but his logical display was entirely wanting. He skimmed over it as a skater skims over thin ice. When Mr. Kidston, in his anxiety to get his proposal adopted, completed the Prime Minister’s sentence for him by adding the word “ ratified,” the Prime Minister said -

First of all it is ratified before going into the Constitution, but the effect would be that it could not be altered without another appeal to the people. That means the insertion in the Constitution, so far as the Customs and Excise revenue is concerned, of a condition which is not at present, there, and, so far, it is a new proposal….. Personally, I am not inclined to say “ no “ to your proposal, because you are going to the one party interested - the people of Australia ; still, it is a new proposal.

Then the valiant Treasurer, Sir John Forrest, interjected -

Very clumsy, I should think.

Further, at the Brisbane Conference in 1907, the Treasurer said -

I am willing to go a good way, and the Commonwealth, I may say, are willing to go a good way so long as we do not infringe what I may consider the basic provisions of the Constitution.

Mr Sampson:

– Have we not. heard all this before?

Mr BRUCE SMITH:

– The honorable member is such a regular attendant that he could not well avoid hearing everything that is said. But all the members of the Committee are not so regular in their attendance as is the honorable member, and therefore, I propose to again recite the facts. The Treasurer further said -

Whatever may be thought as to the moral right, there is no doubt, after 1910, the Parliament of the Commonwealth has legal power to deal with the revenues of Customs and of Excise in the way that it considers fail…..

The return to the States should be on sucha basis as it thinks, fair….. I may say at once, on behalf of the Commonwealth, that it seems to us to be an unreasonable provision, and one that we could not under any circumstances agree to. It seems to me that it shows a disregard for the Constitutional position. It seems to show distrust of the Commonwealth, and to place the Commonwealth in fetters which are not in the Constitution.

Mr Wilks:

– Who said that?

Mr BRUCE SMITH:

– The identical Sir John Forrest who was the Prime Minister’s colleague. But I intend to quote still more matter of equal interest if the Committee will grant me their indulgence. At the same Conference the Prime Minister said -

No, it was decided by the votes of the people of Australia that this should be the Constitution, and it would be a strange idea for the Parliament of Australia to say to the people - “ We ore not competent to handle this great power you have given to us, and we want you to take it back and hold it again. Hold it for us so that we shall not do any mischief with it.” We. who represent the same people and the same electors; we, the Commonwealth Parliament, say - “Take back this power; we are not worthy to hold it, and we are not worthy to do justice in the way you desire.”

Is there any alteration in the logic of the situation in 1909 as compared with 1907?

Mr Deakin:

– The honorable member is wrong both as to the person and the dates. I did not attend the Premiers’ Conference in 1907.

Several Honorable Members. - It was the Treasurer.

Mr BRUCE SMITH:

– I see I should have quoted from the Treasurer instead of the Prime Minister. At any rate, the quotation seems to me to express exactly the principles’ for which the Prime Minister contended two years ago. It was then recognised that this question is a complex one, and that the people are busy. It is an easy matter for honorable members to exclaim, “ Trust the people.” But those who urge that, do not speak of supplying them with a copy of the Constitution, or of taking them away from their ordinary avocations, and of instructing therm as to the meaning of all this mass of technical verbiage, and as to what its effect is likely to be on the politics and finances of the States. They do not do that, but they repeat, in a general and advertising manner, “ Trust thepeople ! “ I have no doubt that the local politician, in a country town, will reply, “ That is the man for me; he wishes to trust the people.” But that type of local man has probably never looked at the Constitution in his life, and, if he did look at it, he would in some case’s not understand it. I should think he would be foolish to leave his business in order to engage in a study of it, unless he had some political ambition. But that is not the whole. I now desire to show that the interpretation which the words in the Fusion compact unmistakably bear, is the same interpretation which the Prime Minister has always contended for. The words are -

Pending the preparation of a complete scheme adjusting the future financial relation of the Commonwealth and States, an interim arrangement to be proposed under which the Customs and Excise revenue of the Commonwealth shall be dealt with.

At theConference of 1906, when. Mr. Evans was Premier of Tasmania, the Prime Minister had something to say in answer to that gentleman. He observed -

That is one arm of the subject complete in itself, but there is another arm; both are essential. What the Federal Parliament desires, so far as I understand, is, if possible, to clear up all the unsettled financial problems between the States and the Commonwealth. The taking over of the debts of the States is one of the most important provisions in the Constitution.

Mr Deakin:

– No doubt about that.

Mr BRUCE SMITH:

– Further-

Hut I can set Captain Evans’ mind at rest by saying that he has quite correctly understood the purport of the remarks that have been made by Sir John Forrest and myself. In the view of the Commonwealth, not only the consideration of the debts question, but its final determination, is the essence of the contract. To use Captain Evans’ own words, it is an imperative part of the scheme, and I do not think he needs any explanation from me to tell him why. If you look at the proposals altogether as in everv other negotiation, it is a question of give and take.

I ask the Committee to listen to these few words in particular. The honorable gentleman continued -

Now, so far as you ore concerned, the proposals relating to the Braddon clause and your future revenue from Customs are all “ take “ on your part, and “ give “ on the part of the Federal Parliament. It is only when you come to deal with the debts question that you balanee it. You have to ask yourselves the question what you will give up on that point, and what the Commonwealth can fairly take in the interests of Australia as a whole.

Honorable members will see that the Prime Minister was here recognising what he indicated in the Fusion agreement, and what most of us understood by it, namely, that “ all “ these financial questions must ultimately be dealt with, and that until they were embodied in some scheme for a final settlement, the allocation ofthe Customs and Excise revenue should be for a limited time, or, as said in the agreement, there should be “an interim arrangement.” I have already quoted one observation of the Prime Minister, to the effect that there was no need to put the agreement in the Constitution; and the honorable member for Swan, at the Conference in Brisbane, in 1907, said -

Now we have had four previous Conferences, and at all of them the representatives of the people of Australia have said they believed the States debts should be taken over, because they believed, and the framers of the Constitution also believed, that a great saving to the people of Australia would result. I fear that Parliament will not do anything itf these great financial matters unless we do it as a whole. They will not do it piece-meal.

Do honorable members note that ? -

To deal with one-half of the financial problem, and leave the other half, will not commend itself to them.

The two matters cover the whole of the financial problems . . . and in the opinion of the Government and the Parliament they should be dealt with together.

The Prime Minister said -

The point I wish to make at the outset, is that, looking back, one is struck by the repeated references made during the course of the Convention debates, at which the present Constitution was shaped, to two things which were always considered together. One was the revenue derived from Customs in the Commonwealth, and the other was the interest on the debts which had been incurred by the States of the Commonwealth. . . . Speaking not so much legally, as generally, it appears to me that the clear meaning of the Constitution is that these two matters should be dealt with together.

Even before that Convention, if I remember aright,Sir Samuel Griffith had dwelt upon the necessity of considering these two factors together.

The first suggestion I wished to make this morning, was that, at this Conference the time has arrived when the question should be approached from the other side - whether certain difficulties would not be removed, the intention of the framers of the Constitution better fulfilled, and other useful objects achieved, by considering once more the two questions together, that is the repayment of a portion of the Customs duties to the States and the obligations already incurred by the States in regard to their borrowings. In other words, one side of those questions having been frequently considered, and very fully considered, has not the time arrived when some stress - a great deal more stress than in the past - should be laid on the debt side, and its connexion with the problem?

Personally, I have been putting that forward, and so has my honorable colleague, the Treasurer, almost since the commencement of the Commonwealth.

These quotations, and many more which I could give, should satisfy the Committee that the meaning to be attached to the

Fusion agreement is clearly that for which I have contended.

Mr Fisher:

– I think there ought to be a Minister in the Chamber - not one is present.

Mr BRUCE SMITH:

– That is possibly how the Ministry show respect to a supporter who does not agree with them ; but I am quite reconciled to the position. It will have its effect on honorable members, who will see how much the Government’s regard for honorable members depends on the support that they give.

Mr Wilks:

– It is not the way to get the third reading through !

Mr BRUCE SMITH:

– It certainly is not, though, of course, the absence of Ministers may be an accident.

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

– Ministers have many engagements in the morning.

Mr Thomas:

– It was Ministers who asked us to meet in the morning.

Mr BRUCE SMITH:

– I am not complaining. I only know that the extracts before me show the opinions held by. Sir George Turner, the Prime Minister, the Treasurer, Mr. Peake, Premier of South Australia, and Mr. Davies, AttorneyGeneral of Victoria. There is also an expression by the Argus, which is an interesting journal, or claims to be. In August of this year, after the editor of the Argus had read the Fusion agreement, and before the Conference of Premiers, an article appeared. Of course, the Argus knows nothing of what took place at the Conference, or we may be sure it would have been published, because if a newspaper be given useful information, that information appears. What the Argus, which is now red hot in desiring a permanent allocation, then said–

Mr Harper:

– Less than three months ago.

Mr BRUCE SMITH:

– Less than three months ago, the Argus said -

There is no reason why this Conference should not agree to a division of the Customs and Excise revenue which will provide for the needs of both States and Commonwealth, but which might be regarded as experimental for the three years following the next general election. Then, with such modifications as experience might suggest, it could be embodied in the Constitution.

So we see that the gentleman in the back parlour, who writes these articles - if it be the same man - then admitted that a little experience would be useful at the end of three years, whereas to-day he does not care a snap for experience, but says, in effect, “ Let things come, and never mind; we should do it for all time without any further experience.” And we are supposed to bow meekly to this sort of guidance.! I desire the Committee and the public to know this fact - that three months is quite sufficient time for even a great organ of this character to completely reverse its attitude on these two questions - on the placing of the agreement in the Constitution and on the enactment of it for all time. I now desire to read a most valuable and practical utterance by Sir Joseph Carruthers, who was present at the Brisbane Conference in 1907. Sir Joseph deals with a matter which the Prime Minister skimmed over so skilfully, though I have endeavoured in a logical sense to put him into the ice. Now, there is no more accomplished politician - and I use the word advisedly - than Sir Joseph Carruthers in Australia ; and what he says is worth hearing as from a State politician -

It is a very serious thing to ask the Commonwealth of Australia to commit itself irrevocably to a scheme of finance between the Commonwealth and the States, the result of which no man here can forecast. Just look at our revenue for last year. It is beyond the expectations of any man in Australia.

The President:

– It is not irrevocable at all.

The Hon. J. H. Carruthers. - Not irrevocable; but we know how every few alterations have been made in the equally irrevocable Constitution of the United States. We know how difficult it will be if anything is put in the Constitution to get it amended under the complicated process provided by the Constitution.

The President:

– It would be very easy to amend it if it were causing financial dislocation.

That has been said here, and also by many people, namely, that if we have financial dislocation, the public and the States will come forward, with flags flying, and say, “ We wish to alter the Constitution in order to convenience the Commonwealth Parliament.” Sir Joseph Carruthers, who is a practical man, and has had to do with the needs of the interior of a great State, said -

Take this contingency - that it is found that this arrangement works harshly and unjustly to two States, but works favorably to four States.

That is not an unfair proposition, because we have been told that the population of seme of the smaller States is going to increase in a phenomenal way. We do not know whether the population of all the States is going to run parallel ; but, at any rate, Sir Joseph Carruthers said -

You have then to ask for an amendment of the Constitution against the interests of the people of four Stales and against the interests of the Treasurers of four States, and you have to get that amendment carried bv a majority of the people in a majority of the States. You cannot do it. It will be far easiej in dealing with a question of this character to get an amendment made by the Federal Parliament than it will be to’ get an amendment made by the Federal people, because if you have got four States who are perfectly satisfied with the arrangement, and have only to appeal to their sense of honour to give up something for the benefit of others, it will be very difficult to carry the amendment, especially when some people may think that they would have to give up a certain amount of revenue over and above what they are justly entitled to surrender. It will be very difficult to get people to do that in a young country where expenditure means everything - where a settler looks upon expenditure as meaning a road to his land, where expenditure means to another man the keeping up of the rate of wages or of keeping him in employment. It will be very hard to get people to set personal honour against personal interest, and that is what will be involved in an amendment of the Constitution.

So that, Mr. Chairman, we see that this little party which favours the amendment has on its side Sir George Turner, the Prime Minister, the Treasurer, Sir Joseph Carruthers, and the Argus of only a short time ago. What does this amendment involve? I think that the honorable member for Mernda very wisely and discreetly claimed that he was entirely in favour of the principles of the agreement. So we are. Personally, I went so far as to say that I should not have minded seeing the amount of the per capita payment made 30s. for a limited time. The mover of the amendment says, in effect, “ We thoroughly approve of the agreement, as it has been assented to by the Premiers of the States and by the Prime Minister, but we object to it for all time. We say that if it be limited to an amount which will be equivalent to the aggregate interest on the debts existing at the time of Federation, say£7,500,000 - the exact amount is about£7, 300,000, but let us put it in round figures - the arrangement should last until the population of Australia has reached 6,000,000. So that the amendment is one approving of the agreement in every particular, but limiting it to a period when the population becomes 6,000,000.

Mr Mcwilliams:

– Would the honorable member put that provision into the Constitution ?

Mr BRUCE SMITH:

– We are perfectly agreeable to its going into the Constitution.

Mr Mcwilliams:

– The honorable member does not mind anything that he approves of going into the Constitution.

Mr BRUCE SMITH:

– The honorable member will be generous enough to admit that I have said, over and over again, that I should prefer the provision not to eo into the Constitution. Let us be fair to each other in this matter. I went so far as to say that I thought there was a medium course between merely passing an Act and putting the provision into the Constitution ; that we might have adopted the method of passing an Act embodying an agreement such as we agreed upon in regard to the Naval Agreement, or as we propose to do in the case of the Northern Territory. I think it would have been far better - it would have been more consonant with the views of the Prime Minister expressed at the Conference to which I have referred - that the arrangement should not be embodied in the Constitution. I quite agree with Sir Joseph Carruthers that we must assume that this Parliament in the future will consist of honest and honorable men, who will recognise the primary purpose of (he Braddon section to give to thu States a fair and proper proportion, having regard to their needs, of the taxation collected through Customs and Excise. That is what we are contending for. We indorse the agreement. We even go so far as to consent to an alteration of the Constitution, although I have shown a way of avoiding that difficulty. We give up our objections on that score. But we say, “ Do not let us bind ourselves for all time; do not let us, as the right honorable the Treasurer said, run contrary to the basic principles of the Constitution “ ; which is also what Sir George Turner said, and what the Prime Minister said at the last Conference. Therefore, we say, “ We give you everything, only limit the time.” The Prime Minister has admitted in one of his utterances, and the Argus admits, which is perhaps more significant, that in the three years which would elapse between the time at which we enact this agreement and the time of the election after the next one, we should have much more experience to guide us. That is an argument which I have put in the two previous speeches which I have made. We have gained so much experience between 1901 and 1910 that we cannot arrogate to ourselves that our minds are finally closed to the reception of further data, and that we shall not be wiser in 1920 than we are to-day. We have gained so much experience between 1901 and 1910 that I should like to know of any member of this Committee who is so hidebound as not to admit that his views have not been modified by the added knowledge. We all know the relationship between the States and’ the Commonwealth far better than we did, and we shall know them far better in 1920 than we do to-day. We shall know what the history of this young country has been in the meantime. Some people say that the younger States will remain stationary in population, and that their advance will not be in the same ratio as it has so far been. We have other honorable members on this side of. the Chamber who say that there is going to be an abnormal development in some of the Stales, and that this abnormal increase in population will make a great difference. We do not know what will be the actual state of Australia in ten years from now. We are embarking upon a most comprehensive system of immigration. We have not been doing that for years. We do not know exactly where the people who come to us will settle. They will not settle where they are told to settle; of that I have always been convinced. They will choose for themselves, and we do not know how they will choose. The future is, therefore, an algebraical X, and the problem has to be solved by time and experience. Therefore, I maintain the wisdom of the proposal of the honorable member for Mernda, that when the population of Australia has reached 6,000,000 we should have an opportunity of againlooking round and seeing how it has placed itself - where the people have gone, what they are doing, what our Customs revenue is, what our Commonwealth needs are, what the needs of the States are; and out of the wisdom derived from that addition to our knowledge we shall then have an opportunity of making a fresh arrangement. If I have demonstrated, as I have tried to do, that our Fusion agreement was in accordance with the amendment which the honorable member for Mernda has moved, then I want to say that the only men in this Committee who are steadfast to the Fusion agreement are those who voted for the amendment of the honorable member for Mernda last week, and those who propose to vote for the amendment now before the Committee. If we are going to refer to the old phraseology of St. Paul about “backsliders,” the backsliders are not the men who are supporting this amendment, which is in accordance with the contention of the Argus of three months ago, and which is in accordance with the Fusion agreement, and in accordance with the declaration of the Prime Minister in 1907.

Mr Atkinson:

– Is this amendment in accordance with the Fusion agreement?

Mr BRUCE SMITH:

– Yes. Surely the honorable member has been out of the Chamber, or has not been paying attention. Otherwise he would have heard me read what the Fusion agreement in relation to the financial problem was. It referred to an interim arrangement.

Mr Atkinson:

– Doesthe honorable member call this an interim arrangement?

Mr BRUCE SMITH:

– If the honorable member had listened to my argument, he would have heard me say that if the limit be£7,500,000, it will be reached when the population is 6,000,000; and that according to the ratio of increase in the past, that limit of 6,000,000 would probably be reached in fifteen years.

Mr Atkinson:

– That is problematical.

Mr BRUCE SMITH:

– The honorable member cannot have listened to what I said. I want to emphasize this point. I know that there is a good deal of soreness in the party because the supporters of the amendment do not come to heel at once.

Mr Bowden:

– Oh !

Mr BRUCE SMITH:

– I will, if the honorable member does not like that expression, say, because we do not fall into line. I want to say that that old phrase of St. Paul about “ backsliders “ cannot apply to those who are in favour of the amendment. They are true as steel to the Fusion agreement. That Fusion agreement is the basis of this party’s existence; and we, in moving and supporting this amendment, are acting in accordance with that basis. Therefore, if St. Paul’s term of “backslider” can be applied to any members on this side of the House, it must be applied to those who have abandoned the Fusion agreement, and not to those who have been loyal to it. If any serious result arose out of this crisis in breaking up the Fusion, as we were told it might do, then the blame would lie upon the heads of the Prime Minister and of those members of his party who have allowed him to break through his own compact.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I should not have risen to follow the honorable member for Parkes if any honorable member on the other side of the question had risen to speak. In the very admirable speech to which we have just listened, the honorable member for Parkes has put all or nearly all the points which I had it in my mind to put, and has added some very important points of his own. I shall not take up the time of the Committee in reiterating arguments which have been placed before it at an earlier stage, but there are one or two matters upon which I desire to add a few words. First of all, I. wish to emphasize, as strongly as I can, what the honorable member for Parkes has said about the Fusion agreement.

Mr Bowden:

– Doesthe honorable member propose to quote more of Wise’s speech ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I am not citing the speech of the honorable member for Gippsland, although I think he is entitled to every credit for the industry which he has brought to bear upon the matter, but: I am citing the official document put forward as the basis of the formation of thu Fusion party. I desire again to emphasize the fact that before our friends on this side of the House can level against us the very serious charge of a. breach of party allegiance, they are bound in honour and in justice to us to look into the facts.

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

– No such charge has been made.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I have heard it made over and over again, not merely in this House but outside. I have heard it made by interjection, and it has been made to. me personally inside the House. It has been, made the text of sermons in the press, not merely in this State, but in other States. Before anybody can make that charge it is his bounden duty to look at the terms of the compact, to see who it is that has broken it. I read in theF usion agreement the following -

Fending the preparation of a complete scheme adjusting the future financial relations of the Commonwealth and the States, an interim arrangement to be proposed under which the Customs and Excise revenue of the Commonwealth shall be dealt with.

It seems to me that two things stand out clearly in that sentence. The first is that which the honorable member for Parkes has laid stress upon - that the interim arrangement was tobe proposed pending the preparation of a complete scheme, and that the complete scheme necessarily included, as has been admitted by the language already cited from the Prime Minister’s former speeches, the settlement of the State debts question. The other point is that the words “ pending the preparation of a complete scheme,” appearing in a document of that kind, which embodies the terms of agreement between various sections of the House which were coming together to form one party, must mean the preparation of a formal scheme by the party, and not by the Government for the party.

Dr Wilson:

– The honorable member is reading something into it that is not there.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– It can have no other meaning, for this reason : The gentlemen who came together to form the basis of that Fusion agreement knew the conflicting views of several of us with regard to the financial question. They knew also that there were wide discrepancies with regard to other matters, such as new Protection, the Tariff, and naval and military defence, dealt with in the same agreement, but on the Tariff, on the question of new Protection, and on the defence question they did come to an agreement together which was to bind every member of those three sections who became a member of the new party. With regard to those questions we all became bound by the agreement, but on the finance question those who framed the agreement could not, and did not, come to any agreement to bind any of the members of the party, except that they should agree to an interim arrangement until the party, as a party, could adopt some general scheme. That is the only meaning which in reason and fairness can be attributed to that sentence in the document, when we consider the circumstances under which the agreement was entered into. There is another matter. It has been stated by the honorable member for Mernda, and admitted by the Prime Minister, that the amendment, upon which a vote which was taken the other day was submitted to the Committee in the form in which it was submitted as a test, the result of which the Government were prepared to accept and act upon as an indication of the opinion of the Committee. If that amendment had been carried by a majority of two, or even one, without the Chairman’s casting vote, I think the Prime Minister himself would have admitted that he was bound not to ignore it. But I claim that, as it stands, it is in exactly the same position as if it had been carried by a majority of one vote, with one exception, and one exception only. Where the Chairman records his vote in order that the matter may be further considered, the vote of the Committee remains exactly . in the same position as any other vote given by a Committee of this House, with the exception that the Government have a right, which I fully admit in this case, to again test the opinion, of the Committee if they choose to do so.

Dr Wilson:

– Other members of your party do not take the same view.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I suppose the honorable member is entitled to make the kind of insinuation which is implied in the term “ your party,” but I think the honorable member ought to deal with the matter, as other members ought if they desire to remain loyal members of the party supporting the Government, in the same spirit as the Prime Minister did. We have been invited to consider this question. We were entitled to raise it, as loyal members of the party supporting the Government, and I ask the honorable member to accept the same position. The Prime Minister has said that he intends practicallv to ignore the vote of last week, or, at all events, not to take any action upon it. Then the position comes to this : Another amendment has now been moved, and, even if that amendment be lost, still the previous vote stands, which, in effect, indicated that the majority of the Committee are not in, favour of the agreement in its present unrestricted form. At a very early stage of the discussion of this matter I gave my friends - wisely or unwisely - to understand that, provided that we, who dissented from this Bill, had an opoortunity of testing the opinion of the House in Committee upon it, I, for one, forthe purposes of the passage of the Bill through this Parliament, should accept that decision, and record my vote for the third reading. The matter has now been fairly submitted to the Committee in a way which was laid before the Prime Minister, and accepted by him as the proper wav of testing the opinion of honorable members. The Government chose their own battlefield, and their own time to press for the division. They obtained it, and they obtained a vote which, as it stands, is a vote hostile to the Bill in its present form.

Mr Deakin:

– Hostile ! By an official vote given in connexion with a perfectly even balance.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Yes, but there is no balance in favour of the Bill as it stands. There is, however, a balance against it int his way: If, instead of the omission of the word “ the,” the effect of the amendment had been to make a substantial alteration in the Bill, could it be contended that the vote taken the other night does not, in fact, determine and make that substantial alteration?

Mr Deakin:

– Yes, but the fact that there was an equal vote on either side left a further opportunity which, in this particular form, is nowbeing used.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Whatever were the circumstances under which, personally, I bound myself to take a certain course, I shall carry out that promise, but it was a promise with a condition, and at present that condition is not fulfilled.

Mr Deakin:

– Will not this vote decide it?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– No. We have been compelled, by the action of the Government in ignoring the vote taken the other night, to put forward now a particular scheme. Tt is quite possible that certain honorable members cannot accept the scheme put forward by the honorable member for Mernda, and yet are still of the opinion recorded by their votes the other night.

Mr Deakin:

– That will be determined by the event.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Not by the event of this division.

Mr Deakin:

– I think so, especially if it is found that every vote cast in a particular way then is again cast in that way presently.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not want to bring before the Committee matters which are really more or less of a personal character, but, in view of the attitude adopted by the Prime Minister of ignoring the vote cast by the Committee the other night, it seems to me to be right to mention that I have serious doubts as to whether that attitude is in compliance with the understanding arrived at. It is, however, I admit, always open to the Prime Minister, after a vote of that kind, to re-test the matter. If he does so, I for one, should have no right to complain that there was the slightest departure from the understanding. There is another matter, personal to myself, which I am rather reluctant to deal with. Charges of inconsistency have been made against me in connexion with my present attitude, by people out side this chamber, and also in the press. I have never made it a practice to reply to such charges when made in the press or by people outside, but when they are made by my honorable friends inside this House, and, if not met, may have some influence upon them, I may be permitted to say a word in reply to them,. It is perfectly true that when I was Premier and Treasurer ofVictoria I took part in a Treasurers’ Conference, which I attended for, I think, a week, although it lasted longer. I was then retiring from the Government, and my duties were continued by my successor. At that Conference, I put forward a proposal for the continuation in the Constitution permanently of the Braddon section. Nobody, I suppose, for a moment, dreamt, nor did I myself, that there would be the slightest chance of carrying such a proposal. My action at the Conference does, however, involve this, that I was at that time prepared to advocate, by a Constitutional amendment, a Constitutional security or guarantee to the States of something which they did not then possess, namely, an assurance of thepermanency of the Braddon section.

Mr Henry Willis:

– That was a much fairer proposal than is the present agreement.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– What I desire to say with regard to it is that, with all its defects - and, of course, it would have the extremely serious defect which has often been pointed out, that, under the Braddon section, if we want to raise £1, we must impose taxation sufficient to raise £4 - that proposal for the permanency of the Braddon section would have been free from some of the most serious defects of this agreement. I, for one, would not dream now of advocating the permanency of the Braddon section. A great deal of water has passed under the bridge since the time of which I speak. I do not think that one of the State Premiers would dream of advocating such a proposal now, but that is the widest admission which can be charged against mc. As against that, I must say that from the moment I thought of entering Federal politics, and in the first speech I made on the hustings, as well as in every speech I have since made in this House and the country, I have taken up a position which is entirely consistent with that which’ I now hold. The honorable member for Fremantle has several times cited passages from a speech I made in 1907, but I think the honorable member does not fully understand the position. The position I took up then, and which I took up the other day when I spoke on this question, was that what I should personally regard as the best settlement of the question that could be devised would be one which .would involve a particular change in the Constitution under which we should endow the State. Governments with a permanent amount of revenue equal to the interest on the debts at the time of Federation, reserving to the ; Federal Parliament complete and untrammelled power to deal with the accretions from Customs and Excise that might naturallly be expected in the future as a result of an increased population. That would involve, as honorable members will see at once, an amendment of the Constitution to a limited extent. It might not be one which would meet with the approval of honorable members, but it is what I endeavoured to put forward in 1907. The present proposed amendment practically gives effect to that proposal, though it leaves to the Fede- iA.l Parliament power, after a certain time, to further modify the arrangement made, should circumstances arise to justify a modification. I agree entirely with one statement made by the Prime Minister in the speech which he delivered yesterday. The honorable gentleman said that the real kernel of the whole question is whether, if we get the electors to assent to this agreement, we can ask the same electors to give us back the powers which we have at the present time, and which it is proposed, under this agreement, to surrender. I think that is the practical question which should dominate and decide this controversy. If I believed, as the Prime Minister does, that we could ask the electors to give us back our powers with the facility with which we can now ask them to sanction our relieving ourselves of those powers, I should withdraw my opposition to this agreement. It is because I do not believe we could do so that I continue my opposition to it. The Prime Minister, as the honorable member for Parkes has said, laid enormous stress, and has spoken with great eloquence and force, upon the difficulties that we have to face in asking the electors to accept this agreement. To carry it we must receive the support of a certain majority of the people of the Commonwealth, and of a .majority in a majority of the States. But when the honorable gentleman came to deal with the other side of the question, as has been pointed out, he made a slight alteration in the course of his aeroplane, and sailed smoothly away from what appeared to be a very dangerous obstacle. It is that obstacle which constitutes the crux pf this question. It is not difficult to suppose that the people will sanction what we ask them now to do, because, as a Federal Parliament, we should come before them and say - “Please will you allow us to hand over to the State authorities our powers, the State authorities being quite willing to receive those powers?” All that the Federal Parliament would have to do under this agreement would be to ask to be allowed to relieve itself of certain of its powers, the State authorities with becoming modesty indicating that they would be quite prepared to assume the responsibility of exercising them. That we should be binding ourselves must be obvious and palpable to the most inexperienced politician-

Mr Sampson:

– We have generally been false prophets so far as the operation of the Federal Constitution is concerned.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We may be false prophets in all respects, but I am not now prophesying. I am endeavouring merely to state plain facts from which I ask honorable members to draw certain inferences. Is it not perfectly plain that no difficulty will arise if the Federal Parliament ask to be allowed to give up its powers, and the State authorities say that they are prepared to accept them?

Mr Deakin:

– Surely the State Parliaments as such would not acquire any powers under our proposal, though the electors would.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I venture to think that if this agreement is carried the State Parliaments will acquire additional powers of a most substantial kind. Before I deal with that I should like to complete the other statement I wished to make. Once we attempt to get our powers back again we have to ask a majority of the States-

Mr Deakin:

– Of the electors in the States.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– A majority of the electors in a majority of the States. We should have to get the assent, not only of a majority of the whole of the people, but also of what might be an insignificant minority who happened to be voters in four of the smaller States. That seems to me to be a constitutional block, imposing an infinitely greater difficulty in the way of an effort to get back our powers again. To my mind that is the source of all the trouble.

Mr Deakin:

– But where do the State Parliaments come in? They are not the States ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The real trouble would arise from another cause. In all political institutions - and this applies especially where, as in a federation, political power is vested in more or less competing authorities - the power of government ultimately depends on public opinion. It rests on public attention. The particular body which can succeed in gaining public interest, and in concentrating public attention upon its operations, is the body which steadily and perpetually increases in influence and power. The body which is unable to do so becomes atrophied and paralyzed. If we place ourselves in a position in which we give up a large part, not of our money, but of our financial power, and place the State Parliaments in control of much greater financial powers than they have had before, and the right to continue the exercise of them - and this is in reply to the interjection of the Prime Minister - then, assuredly, the State Parliaments and the State Governments will steadily arrogate and attract to themselves continually a larger comparative share of public opinion, and will concentrate to a greater degree public attention upon their operations, while we shall correspondingly sink to a. lower plane.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– That is a splendid picture ; it pleases the people opposite.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The honorable member says that I have painted a splendid picture. Let me say that the Prime Minister accused us of taking too black a view of the progress of Australia. I do not take by any means a dark view of that progress. I say that, whether the Parliament of the Commonwealth or the Parliaments of the States are the dominant authorities of the future, Australia will continue its progress. Its progress cannot-be prevented. We are invested with a country the very nature of which is such that - unless it were in the hands of a people without energy and without resource, and I should not care to say that about the inhabitants of Australia at the present time - it must forge ahead. Its resources are enormous. It is gradually attracting the attention of people in other parts of the world, and it must continue to progress, and to progress rapidly. I take no dark view pf the future progress of Australia; but what

I do take a dark view of is the probability under this agreement of a decline in the future of the Commonwealthauthority and usefulness as compared with the State authority and usefulness. That is what I fear. Though it may be, to some extent, repeating one portion of my, argument, I should like to ask honorable members to consider what is. likely to be the comparative, position in regard to their financial resources and powers of the Commonwealth and the States ten, fifteen., or twenty years hence, or even before that time should this agreement be carried out. In the first place, the States would have a first charge of .ess. per head on the Customs and Excise revenue, which at the present very high rate of return per capita from Customs and Excise . would involve 50 per cent, of the total revenue from this source. In addition, they would have what they have secured already, a primary position and a first lien on all, or nearly all, the great sources pf direct taxation. We have land taxation in, some form in, almost all of the States. We have taxation on incomes in, I think, all of the States. There is very heavy taxation in the form of succession and probate duties in most of the States. I am putting the position fairly, when I say that the State Parliaments have already a first footing. They have fenced the ground, and are in possession practically of nearly all the ordinary sources of direct taxation. If the Commonwealth authority desires to occupy that position we shall have to appeal to the people who will be asked to submit to the extra, taxation on grounds sufficiently strong to justify us in asking that we should be allowed to duplicate this kind of taxation, to impose it in addition to that imposed by the State authorities. We should! have the State Parliaments possessed of these two powerful and growing sources of revenue. In addition, the States would have another power which is very seldom referred to, but which is one of the most important considerations affecting the progress in economics of other countries, and especially of the United States, and one of the most important sources of financial power in the world. Each of the State Parliaments would be in the position of the owner and controller of a monopoly of the transport services of the whole country. They already derive enoromous revenues from this source. They have been able to defray the greater portion of the cost of construction, and the moneys still payable out of capital always assume smaller proportions to the original indebtedness on this account. The revenue from this source is perpetually increasing. The State authorities would be in possession of all these sources of financial power, and what would be the position of the Commonwealth? The Commonwealth authority would be in possession of what remained of the Customs and Excise revenue after 25s. per head had been returned to the States, and I have previously endeavoured to show that in all probability that would be a diminishing amount.

Sitting suspended from 1 to 2.15 p.m.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– When we ask the people to return the power which it is now proposed to voluntarily relinquish, the Governments and Parliaments of the States will have been for years in possession of sources of revenue of great magnitude. They will have been receiving - a large and fixed percentage of the Customs and Excise revenue levied by the Commonwealth, they will have practically the first claim in respect to direct taxation, and they will have large and increasing returns from their railway systems and other reproductive public works. It has been said, more than once, by the honorable member for North Sydney, that the creditors of the States expect to be repaid the sums which they have advanced, and the interest on their loans, out of the Customs and Excise revenue. I dispute that. In Victoria - and the remark applies in a greater or less degree to the other States - the great bulk of the public borrowing has been expended on the construction of railways, and it is the revenue from railway administration which constitutes the source from which the interest and principal of the State, debts should mainly be repaid.

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

– A great deal of money has been borrowed for purposes other than railway construction.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I think that only a small proportion of the whole amount borrowed has been spent for purposes other than railway construction.

Mr Deakin:

– Out of ^250,000,000 borrowed, between ^90,000,000 and ^100,000,000 has not been spent on railway construction.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– No doubt the Prime Minister’s figures are correct ; I am surprised to learn that not more proportionately has been borrowed for railway construction. But whatever may be the case in regard to the smaller States, I think I am right in saying that the revenue from railways and other reproductive public works will pay the interest on the greater part of the money borrowed by them. When we come to ask the people to give back to us the powers which it is now proposed to relinquish, our prestige and authority will have been weakened. We shall be practically in the position of mendicants, and the people will have become accustomed to the expenditure of huge sums by the State Governments. In this way various interests will have been created which will milita’te against the granting of our request, while we shall have the united forces of all the State authorities in opposition to us. It is a negation of all that we know to be true regarding the evolution of politics to affirm that we shall be able to get back these powers, except at a time of extreme national emergency. Should a. war break out, making it necessary to spend an enormous sum on defence, the people would, no doubt, submit to- further taxation in any form, and under such circumstances - though only after a terrible internecine conflict between the authorities of the Commonwealth and the States - we might get back the powers which it is proposed we should surrender. Under ordinary circumstances, what we give away now we shall give away finally. The ‘ Prime Minister said - it was not the weakest part of his speech - that this matter must come before the electors at one time or another, either by way of referendum, or at the next election as the proposition* of the Government. I say, let it come before the people in the ordinary constitutional manner, so that every candidate for election may be free to advocate what he thinks best, untrammelled by party influence or prior commitment. What would it matter if the settlement of the question were postponed for another year? The Braddon provision will operate until Parliament otherwise provides. Why should we, because outside authorities insist upon a certain course, not seek the opinion of the electors on some definite proposal of the Government, regarding which we shall be absolutely unfettered? An interjection made by the honorable member for Indi during the speech of the honorable member for Mernda last night was extremely significant. He asked - anticipating, no doubt, the answer “No,” though he did not get it - “Suppose a referendum had again to be taken regarding Federation, would you vote for it?” The question shows what lies at the bottom of a great deal of the support given to the Government proposal. In the minds of many of those who favour the agreement, or who, although opposed to it, feel bound to support it, is a lurking distrust of this Parliament.

Mr Atkinson:

– Would we not have a natural bias ins our own favour?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not know. The interjection of the honorable member for Indi puts in a nutshell the feeling of those who are supporting the agreement.

Mr Mcwilliams:

– That is pretty rough on the Government.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not think sc. The Government have made an agreement which, to my mind, is not the best. No doubt Ministers think differently, otherwise they would not have proposed its acceptance. But when we find honorable members saying publicly that they would have preferred another agreement, that they do not like the permanency of this, and the honorable member for Indi impliedly stating that he has no trust in the Federation, it is plain that we should exercise our votes in the matter with perfect freedom. The Parliament has not achieved most of the purposes for which it was brought into existence. On this point I differ as widely as the Poles from honorable members opposite. In devoting most of its time to social and industrial questions, it has departed largely from the main purposes for which it was created. I do not expect honorable members to applaud that statement. With the exception of the Tariff, we have failed to properly deal with the great questions for which the Parliament was primarily created. I hoped that, with the formation of the party which is supporting the Government, and the division of the House into two distinct parties, we should have been able to put the machine into motion for the purposes for which it was really created.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– Is the honorable member still hopeful?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Yes. I hope that nothing will intervene to prevent that. But under the circumstances itis most discouraging to hear even the faintest indication of an opinion that the people have deservedly lost confidence in the Parliament. I do not think that thev have. I think that the spirit which called the Parliament into existence is not dead. It is sleeping, and nothing is more likely to arouse it than the insistence on an agreement whichcarries withit no other recommendation than that it is approved by persons to whom the members of this Parliament owe no responsibility.

Mr McWILLIAMS:
Franklin

. -I always think it a pity that the time of Parliament should be occupied with attempts to prove the consistency or inconsistency of honorable members. In this case the important issue is, Are we justified in submitting the agreement with the Premiers to the electors? We have heard lecturettes from some members of the Fusion party regarding the duty of their fellows. The honorable member for Parkes told us that those who are acting with him are the real Fusionists, and loyal supporters of the Government, and that we, who are actually supporting the Government, are disloyal to Ministers, and have broken the party compact. The honorable member reminded me of the juryman who always had the bad luck to be associated with eleven obstinate men. Three-fourths of his speech, and nearly one-half of that of the honorable member for Mernda, were occupied with the contention that the agreement should not be ratified, because it would be practically impossible to amend it subsequently, should it be embodied in the Constitution.

Mr Harper:

– We wish the agreement to be ratified.

Mr McWILLIAMS:

– The honorable member wishes his own scheme to be carried out. Practically every member of the Opposition who has spoken has taken for his text the difficulty of amending the Constitution. Those who think that it would be wrong to embody the amendment in the Constitution because it would be d’fficult to take it out again are consistent ; . but those who support the honorable member for Mernda are inconsistent, because they propose to embody in the Constitution a provision which could be amended only by the operation of the same machinery as would have to be set in motion to secure any other amendment. What the honorable member for Mernda proposes is the addition of a provision that the payments to the States shall continue until they amount to the annual sum of£7,500,000, and thereafter until the Parliament otherwise provides.

Mr Bruce Smith:

– That will necessitate the arrangement being reconsidered later by the Parliament.

Mr Wilks:

– Inthe same wayas its consideration is provided for now by the Braddon provision.

Mr McWILLIAMS:

– Either the honorable member for Mernda means this to be a temporary arrangement, or he does not. If it is to be temporary, the question will be raised by the people in electing the members of this Parliament. Any proposalto alter the Constitution would be undertaken by the same process. The arguments used by honorable members against the Government proposal apply to any proposed amendment of the Constitution. The honorable member for Mernda, if we judgehim by his own standard, is the only member of this House who has a knowledge of finance. He knows, however, that not ten honorable members would vote for his amendment if it were put as astraight-out issue. The Opposition certainly do not favour it.

Mr Thomas:

– We prefer it to the Government’s proposal.

Mr McWILLIAMS:

– Honorable members opposite are prepared to vote for this amendment, although they do not believe that it is the best proposal that could be made.

Mr Thomas:

– It is a question not as to what we believe in, but rather as to what we canget.

Mr McWILLIAMS:

-Honorable members opposite have not endeavoured to get what they really believe is a true solution of the financial difficulty. They are quite prepared to make use of honorable members on this side of the House to defeat the Government scheme. I was surprised to hear the Opposition applaud the statement made by the honorable member for Parkes, that we could not trust the people to deal with so complex a. question, and that this Parliament should therefore determine it.

Mr Chanter:

– He did not make that statement.

Mr McWILLIAMS:

– I made a note of the words used by the honorable member.

Mr Hutchison:

– The honorable member is mistaken.

Mr McWILLIAMS:

– The argument advanced by the honorable member for Parkes was that Parliament had the power, in its own hands, and that the question was not one that should go to the people for decision.

Mr Bruce Smith:

– I asked whether we should give back to the States-

Mr McWILLIAMS:

– Why use the word “States” when the honorable member reallymeans “the people “ ? It is the people whom the honorable member is afraid to trust. In passing, I may say that I think it rather mean to refer to this as “the Premiers’ agreement.” Certain honorable members on this side of theHouse, in order to make their way a little easier lateron, insist upon referring to this as “the Premiers’ agreement.” We have nothing to do in this House with a Premiers’ compact. What we have to do with is a proposal deliberately laid before us by the Government as embodying theirfinancial scheme. That is the simple position which honorable members have to face, and it is not fair for them to attempt to shelter themselves behind the contention that in opposing the agreement they are resisting dictation on the part of the Premiers That statement has been made by the honorable member for Mernda and the honorable member for Flinders.

Mr Poynton:

– It is true, and the price paid by the State Premiers for this agreement is the promise to support the Government party at the next election.

Mr McWILLIAMS:

– Are honorable members who support this amendment prepared to say that the Government are actting on the dictation of the Premiers?

Mr Bruce Smith:

– They are trying to incorporate the agreement in the Constitution.

Mr McWILLIAMS:

– The Opposition are prepared to take that stand, but are the lip loyalists of the Government ready to do so? Are the honorable member for Mernda, the honorable member for Parkes, and the honorable member for Flinders prepared to support this amendment on the ground that the Government have been forced into their present position by the action of the State Premiers? If they are not, then we are again face to face with the position that this agreement has been deliberately signed by the Prime Minister and the Premiers of the States, with the full knowledge that, if it is not carried through this House, the Government, as the Prime Minister announced, will carry it to the country. That is a fair statement of the position.

Mr Kelly:

– But surely that fact will not influence votes.

Mr Mcwilliams:

-I do not think that it will, but the supporters of the amendment on this side ofthe House declare that they are voting to destroy the compact, and to force the Government to make this a vital issue at the approaching general elections.

Mr Hutchison:

– And why not? We were never consulted.

Mr McWILLIAMS:

– That is just such an argument as one might expect from a fair-fighting Opposition, but it is an extraordinary position to be taken up by members who start out with the statement that this is a friendly amendment, and that those who support it are the real adherents to the Fusion agreement. The honorable member for Parkes quoted a paragraph from the Fusion agreement, as included in a speech delivered by the honorable member for Gippsland, but he studiously avoided referring to the immediately succeeding paragraph in the Ministerial announcement. In the Ministerial statement, as published at page 282 of Hansard, we have the statement -

A temporary arrangement for a term of years to replace the existing distribution, in which the obligations of the Commonwealth are recognised, is being prepared forsubmission.

But mark the followingparagraph -

The future financial relations between the States and the Commonwealth, taken together with their present and future loan obligations, are being carefully considered in principle and in detail, in order that a satisfactory and permanent settlement may be achieved.

Mr Harper:

-That permanent settlement includes the question of the transfer of the State debts.

Mr McWILLIAMS:

– No honorable memberon this side of the House took objection to the statement when if was made by the Prime Minister.

Mr Chanter:

– But this agreement does not deal with State debts.

Mr McWILLIAMS:

– There is before the House a Bill relating to the transfer of the State debts. The statement I have quoted was that the Government were preparing for a permanent and satisfactory settlement of the difficulty, and the objection offered to this agreement by a section of honorable members on this side is that the Bill now before us provides for a permanent settlement of the question - permanent, may I add, only so long as the people of Australia determine that it shall be. The honorable member for Parkes said that he objected to the agreement being embodied in the Constitution, but that he was making a concession to those who were in favour of the original compact. .

Mr Bruce Smith:

– I made no such statement. What i did say was that I ob. jected to the agreement being placed in the Constitution, but that i was willing to forego the objection so long as the compact was limited to the term of years indicated in the amendment moved by the honorable member for Mernda.

Mr McWILLIAMS:

– Then we can brush aside all the arguments used against the placing of this agreement in the Constitution.

Mr Bruce Smith:

– I have never used anv.

Mr McWILLIAMS:

– We are told that the amendment is the deliberate outcome of consultation between certain honorable members on this side of the House. They have given the whole question their earnest consideration, and, having submitted this amendment, they are fighting all the time to win. We must, therefore, come to the conclusion in the circumstances that there is no serious objection on their part to this agreement being placed in the Constitution.

Mr Wilks:

– It is a case of “ win, tie, or wrangle” with the honorable member.

Mr.Mcwilliams.- Not at all.I think that the Prime Minister should have adopted the course suggested by the honorable member for Flinders, and that it would have been preferable to take a direct vote to reverse that given early on Friday morning last. That would have been a shorter cutto a settlement of the question than the course which is now being followed. We come back to the real issue that honorable members who support this amendment say that the people of Australia should not decide this issue finally.

Mr Chanter:

– They do not.

Mr.Mcwilliams.-i support this agreement because I believe that the Commonwealth Parliament and the States Parliaments are acting jointly for the same body of electors, and that when a difference ofopinion arises betweenthem the only impartial tribune to decide the issue consists of the electors to whom, after all, we are directly responsible.

Mr King O’malley:

– But the State Parliaments are elected on a different franchise from that on which this Parliament is elected.

Mr McWILLIAMS:

– As a matter of fact, so far as this issue is concerned, we have nothing to do with the State Parliaments, and they have nothing to do with us. This is simply a proposal to remit this big question to those who created the Common wealth Parliament and the Legislatures of the States, that is, to remit it to the whole of the people of Australia on the most Democratic franchise the world has ever seen in the history of Parliaments.

Mr Bruce Smith:

– And give the power to 80,000 electors to negative the decision of 900,000 ?

Mr McWILLIAMS:

– That contingency has to be faced on all questions affecting an amendment of the Constitution.

Mr Bruce Smith:

– But in this case it is proposed to give our power away.

Mr McWILLIAMS:

– It is a splendid old Tory argument to say that Parliament is giving to the people some concession. But it is no concession ; and the honorable member is only repeating the Tory argument that has done duty for a century past. It is contended that we have the power, and are all important and almighty - that we possess the whole of the financial ability in Australia, and that the electors have not sufficient intelligence to decide the matter for themselves. That is a splendid text for a nice little lecturette on the new Liberalism by the honorable member for Parkes, and it is vociferously cheered by his new allies and converts, the members of the Labour party. But the electors are going to decide this issue, whether honorable members like it or not, where there are no friendly amendments moved, and no alliance between the Tories in this Parliament. The electors will decide whether or not the States shall receive, until the electors themselves alter the arrangement, a certain amount out of the Customs and Excise revenue, which the people themselves contribute. A great deal of the heat imported into this debate when the honorable member for Mernda was speaking, was not because that gentleman has not the respect of honorable members, or because there was any desire not to hear his opinions, but really because very serious objection was taken when he practically repeated on the floor of the House private conversations which he said had taken place between himself and other honorable members outside the chamber.

Mr Harper:

– I did nothing of the kind !

Mr McWILLIAMS:

– There has been in this House a code of honour equal to that in any other Parliament in Australia ; and there has been the freest personal intercourse amongst members on all sides. It has been my good fortune, or misfortune, to sit on the opposite side from my friends of the Labour party; but in talking privately to them I have never put the slightest restraint on my words, while they have talked equally as freely to me, in the certain knowledge that the code of honour, which ought to prevail amongst members of Parliament, and, indeed, all men, would be respected. If an honorable member has to look round to see who is within hearing before he can have intercourse with his fellow members, our position will be intolerable.

Mr Harper:

– I rise to a point of order. The honorable member is absolutely in error, and I must contradict his statement.

The CHAIRMAN:

– That is not a point of order; the honorable member must not interrupt another honorable member when he is speaking.

Mr McWILLIAMS:

– I can assure the honorable member for Mernda that I have not the slightest intention of either misstating or misinterpreting what he said, but he deliberately, over and over again, repeated that five or six honorable members had declared privately that, if it were not for party pressure, they would vote against the proposal of the Government.

Mr Harper:

– But that was said in the House.

Mr McWILLIAMS:

– The honorable member did not say so. I desire him to understand that the resentment against his statement was not because of the merits or demerits of his proposition, but because honorable members desire to retain the same open and gentlemanly intercourse there has ever been, however they may differ in politics or principles. There is, I take it, a very serious result attachable to the question as presented to-day. If you will allow me, Mr. McDonald, to say so, I think that the vote you gave early the other morning was quite in accord with ordinary Parliamentary practice, and one you were thoroughly justified in giving, so as to enable the matter to receive further consideration.

Mr Wilks:

– And the Chairman voted in accordance with his expressed opinion on the second reading.

Mr McWILLIAMS:

– I take no exception to the vote given by the Chairman-. But what objection is taken to it? The honorable members for Parkes, Mernda, and Flinders resent this Committee doing exactly that which your vote was intended to enable us to do.

Mr Bruce Smith:

– I never resented it at all.

Mr McWILLIAMS:

– It might have been preferable if the question had been considered in another way ; but that, of course, is only a matter of opinion. I cannot understand the line of argument adopted by the honorable member for Flinders when he says that, because the question is being reconsidered, he is relieved from some promise he has given. It would be better to clear the air of a great deal of misconception. Either honorable members are prepared to vote for this agreement or they are not. Personally, I am of opinion that the electors will have to decide the question one way or the other; but it would be infinitely better to have it decided by referendum apart altogether from party influences, and apart altogether from those considerations referred to by the honorable member for Flinders. If there be a referendum the electors will vote “ Yes “ or “ No “ quite irrespectively of the opinions or political views of the different candidates; but otherwise, the only way the electors can express their opinion would be by supporting candidates who are in favour of or against the agreement.

Mr Henry Willis:

– They will not do that.

Mr McWILLIAMS:

– Then we shall not get a true reflex of the opinions of the people, as we should, much more clearly and emphatically by means of a referendum on a straight issue. I can understand an elector, on this one question, holding views entirely opposed to those of the candidate whom he wishes to support. There are honorable members who resent interference by State members in a Federal election, though we know that Federal members have felt it quite within their province to interfere very materially in State elections. When a State election is held, Federal members will travel from far-distant States to take part in it; I do not defend the practice, but merely mention that it has been followed.

Mr Frazer:

– We do not cease to be citizens because we happen to be members of theFederal Parliament.

Mr Mcwilliams:

– it might just as well be said by a Premier who took the platform, and vigorously supported or condemned the agreement, that he was doing so, not as Premier, but as a citizen of his State, though the fact that he was Premier would cause more weight to be given to his words. If we wish to force the State Parliaments and Governments into the issue, the very best way to do so is to refuse a referendum.

Mr Hutchison:

– Let us put every question to the referendum !

Mr McWILLIAMS:

– The honorable member is prepared to put to the referendum only those questions on which he knows the electors are with him.

Mr Roberts:

– That is precisely the case with the party of the honorable member for Franklin - they will not have a referendum respecting industrial legislation.

Mr McWILLIAMS:

– The Federal Government and the State Governments have said, “ We do not desire to bring the State authorities and the Federal authorities into conflict at the next election, and, therefore, we propose to allow the people to decide the question by referendum.” As I say, to refuse the referendum is the very way to force the two authorities into conflict ; and I have no desire to see the State Premiers taking part in the Federal elections. It is infinitely better that Federal candidates should face the electors without either the support or opposition of State politicians. The great objection to the referendum, from this side of the House, at all events, apparently is that the people of Australia desire the agreement - that a majority of the whole of the electors are in favour of it. I am sufficiently democratic to say that if the majority of the people of Australia and a majority of the people in four States are in favour of the proposed amendment of the Constitution, this Parliament is usurping authority if it attempts to prevent that majority from giving effect to their views. I can understand the argument coming from the honorable member for Parkes and the honorable member for Mernda, but not from the Opposition proper.

Mr Poynton:

– Will the honorable member vote for submitting the question of industrial legislation to the people?

Mr McWILLIAMS:

– I am going to vote for this referendum. Will the honorable member say whether he will do so? The attitude of honorable members opposite furnishes a complete corroboration of my statement that they are prepared to accept a referendum only when they know the numbers are in their favour. The argument against a referendum might come very, well from other honorable members of the House, but I cannot understand honorable members of the Labour party objecting to submit to the people a. question- which can only be affirmed by a majority of the people.

Mr Harper:

– As, a matter of personal explanation, I desire to say that I resent very much the remark made by the honorable member for Franklin that I had in the course of my speech made use of private conversations among honorable members and made them part of my argument. Fortunately, I have with me a copy of the Hansard report of my speech, and shall read what I said. It was this -

I may say that in addition to those who recorded their votes for the amendment divided upon the other night, there are at least halfadozen honorable members on this side,some of whom have spoken to that effect.

By “ spoken,” I meant, of course, publicly - and some of whom have privately intimated their entire approval of a limitation of the operation of this agreement.

I did not mean in private conversations, but as honorable members know, men talk about their opinions openly, and I made an impersonal statement to that effect. I stick to that statement now. There were certainly in my mind three honorable members who had spoken in the House against the agreement being unlimited, and who had not voted for my amendment.

Mr Mcwilliams:

– I was alluding to the private statements.

Mr. Harper. - I said also that others had privately expressed the same opinion. The honorable member for Franklin tried to entrap me into making it a personal matter by interjecting -

It would be better for the honorable member to give the names of the honorable members to whom he refers.

I replied -

I mention no names, but if I were to mention the names, I do not think 1 should mention the honorable member for Franklin. I repeat, and I challenge contradiction of the statement, that at least half-a-dozen honorable members on this side, in addition to those who have already voted-

At that stage the honorable member for Grampians interrupted me, and as the result of his interruption I said distinctly that I did not refer to him, that I did not know his opinion, and that consequently my remarks were not directed to him at all. I was simply making a general statement such as is made every day in the House, and which I have heard the honorable member for Franklin make in connexion with honorable members on the other side. What I resent is the charge distinctly made by the. honorable member that I revealed private conversations. I did nothing of the kind. I alluded simply to a fact, based on the public utterances of a certain number of honorable gentlemen, and. on statements which were made by others at various times, although not in the Chamber, but which were well known. I mentioned no names, and simply stated a fact which I was quite entitled to state so long as I did not point to any individual.

Mr CHANTER:
Riverina

.- The honorable member for Franklin endeavoured to reply to the arguments adduced by the honorable member for Mernda in moving the amendment and supported by the honorable members for Flinders and Parkes, but he did not touch, one of those arguments.. He simply repeated what has several times been said by way of interjection with the object, if possible, of discrediting all those who do not agree with the Government in regard to the agreement, to the effect that they are afraid to trust the people. The honorable member, who, I am sorry to say, is leaving the Chamber, is no novice, and knows as well as any honorable member in the Chamber that not one of those who sit on this side is at any time afraid to trust the people. He knows also that the combination which has been formed between the Federal Government and the State Governments in order to carry this amendment of the Constitution at a referendum could never be got together again to take it out of the Constitution. The honorable member in the latter portion of his remarks did allude for the first time to the fact that a majority of the States, as well as a majority of the people, was necessary to secure an alteration of the Constitution. The trouble is not the getting of a majority vote of the people, but the question of getting a majority vote of the States. It has been shown that 900,000 people may be defeated by 80,000 people at a referendum of this kind. That is not trusting the people.. Those who support the Bill want to trust the 80,000 people and to defy the will of the 900,000.

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

– Those figures are not correct.

Mr CHANTER:

– They are not my figures, but it will be sufficient for my argument to say that if this alteration is put in the Constitution, and the people see afterwards that a grave mistake has been made and want to take it out again, the great majority of the people who reside in. the three larger States of Victoria, New

South Wales and Queensland can be defeated on that issue by the minority of the people who reside in the States of Tasmania, South Australia and Western Australia. Assuming that every one voted, and taking the relative strength of the people in each of those sets of States, the fact remains, and will always remain, that the majority of the people can be defeated by the minority.

Mr Atkinson:

– Does the honorable member think it likely that such a thing would happen?

Mr CHANTER:

– I do. If I did not, I should not have the same objection to the Government’s proposal. The Constitution provides that the National Parliament, after ten years’ experience of the requirements of the States and of its own requirements, shall have the sole right to determine the future distribution of Customs and Excise revenue between the States and the Commonwealth upon an equitable basis. It does not give the States that right, but this Bill will have the effect of depriving the National Parliament for all time of the power to review the position if a mistake has been made. It is easy to do evil at all times, but it is difficult to undo that evil. Prevention is better than cure, and we have the means of prevention in ‘our own hands. If we use those means we shall in no way derogate from the real rights of the States, but at the same time we shall maintain the rights of the people, because no one will attempt to deny that if the people are represented by one Parliament more fully than by another, it is by the National Parliament as compared with the State Parliaments. This Parliament is elected on the broadest franchise, and the will of the people is fully represented in it. Every man and every woman has and can exercise the right to say who shall control their destinies in this Parliament, but my honorable friends know as well as I do that that is not true of the State Parliaments. No more important matter than this was ever brought before the National Parliament. There should be no question of political parties in this case. There should be only one party, and that is the party which stands for the maintenance of the people’s rights in the only Parliament that has been properly constituted to safeguard those rights. We who are taking the National side in this matter see the danger ahead. We see the necessity of preserving the paramountcy of the National Parlia ment, but we are asked to degrade and disrate and decrease the powers of this Parliament by our own act. The views which I am expressing have been held by the leading members of this Parliament from the time when the question was first brought forward. No one will dare to say that the first Federal Government and those who supported them were not patriots. The first pronouncement on the subject was made by Sir George Turner when he occupied the position of Treasurer. He laid it down clearly that there ought to be a distribution of the finances as between the Federation and the States, but only on condition that the States handed over to this Parlia-ment full control of future borrowing. That was followed up by the right honorable member for Swan, when Treasurer previously. He made at that time no proposal for referring the question to the people. Ha claimed that this Parliament’ was specially deputed by the people to deal with the matter, and prepared to settle it on an equitable basis. On that occasion again the Federal Government and their supporters stood firm. Next the honorable member for Hume, as Treasurer in the Deakin Government, I presume with the full concurrence of the Cabinet, and I know with the concurrence of l hose who supported that Government, laid down the principle that there should be a redistribution of the finances, but no surrender of the powers of the National Parliament. Not very leng before the last Premiers’ Conference, where this agreement was arrived at, the present Treasurer, the right honorable member for Swan, voiced exactly the same views in an interview. Therefore, in the course of a few years we have had all the Federal Treasurers, all the Governments, and all their supporters saying, “We recognise our responsibilities and our duty to the people; we are going to discharge those responsibilities honestly and truly.” Notwithstanding what the honorable member for Franklin has said about trusting the people, no one has attempted to deny that what the honorable member for Mernda proposes is merely a limitation which will give an opportunity for the gaining of further experience.

Mr Wilks:

– His proposal is a qualified Braddon provision.

Mr CHANTER:

– Yes. When the amounts paid to the States have reached a certain sum, the payments will continue only until Parliament otherwise determines.

Mr Harper:

– And the electors will have a voice in regard to any change which may be proposed.

Mr CHANTER:

– Quite so. Why should we deprive the electors of ten or twenty years’ hence of rights which the present electors enjoy under the Constitution? As trustees of the rights of the people, we have a sacred trust imposed on us. The honorable member for Mernda merely wishes us to provide that for a certain time certain things shall be done, and shall continue to be done until the Parliament otherwise provides.

Mr Wilks:

– It is the Braddon provision over again, tempered with experience.

Mr CHANTER:

– And extended for a further term. It has been said that this is not the Premiers’ agreement ; but I say unhesitatingly that it is. All past Treasurers and Governments, and, indeed, the present Government, up to the time of the last Conference, have opposed an arrangement of this kind. What has brought about the change ? The light of day was thrown on the proceedings of all former Conferences, the press publishing a daily account of what took place therein; but, from the last Conference, the reporters and the public were excluded. Something took place there which we do not, and may never, know. The members of the Conference are dumb as to its proceedings. They are afraid to say what arguments were used, or influence exercised to secure the adoption of an agreement which has required them to give up the pledges and principles of a lifetime. Ministerial supporters are right in dealing with the agreement as some of them have done. There has been no breach of confidence on the part of the honorable member for Mernda, in stating that those of his party who last week voted for the agreement voted against their declared convictions. The honorable member for Wimmera did so, for one. He declared positively in this Chamber that he was not in favour of embodying an arrangement in the Constitution for all time. The honorable member for Kooyong presented a scheme for the settlement of the financial question which showed that he was not in favour of embodying any arrangement in the Constitution, and recently he deliberately spoke against securing finality in that way. Whatever may have taken place in the caucus of the Government party, the fact remains that some of the Ministerialists have spoken in one way and voted in another. Some force has been brought to bear to make them change their attitude. To show how the people view this matter, let me read an extract from an article published in the Western Grazier, of the 24th October last. This newspaper supports, not the interests of the masses, which I have always stood by, but rather those of the classes ; yet the article in question states the opinion of a large section of the public of New South Wales. It says -

Mr. Deakin is always interesting in his speeches, if indeed he is not edifying, but for all that he may not be convincing, and this is what may be said of the oratorical deliverance which accompanied the introduction to the House of Representatives of the Constitution Alteration (finance) Bill, which is the outcome of the late Conference of Premiers - State and Federal.

The Crazier has all along expressed its entire disapproval of Conferences of Premiers as being mischievous in their incidence and unconstitutional.

The Milparinka Progress Committee called the attention of the Prime Minister to this subject in the following emphatic terms : - “ That this Committee indorses the publicly expressed opinion of Mr. Hugh Mahon, M.H.R., that Conferences of State Premiers are distinctly unconstitutional.’ “ “ That being so, it is the opinion of this Committee that any recognition or participation in Conferences of State Premiers by the Prime Minister, or any of his colleagues, is equally unconstitutional.” “That the attention of the Federal Parliament be drawn to the extraordinary position in which the settlers of this western country, comprising about one-half of the entire State of New South Wales, are placed by reason of the anti-Federal attitude of the State Government.” “ That the absolutely free intercourse among the States intended by the Commonwealth Constitution under sections 92, 99, and101, is denied to the said settlers.” “ That the refusal of the Stale Government of New South W.ales to construct such public works as would facilitate free intercourse with the adjoining States which forces settlers to run their produce (in order to reach the sea-board) hundreds of miles further than is necessary, seriously retards the progress and prosperity of the three States that rank among the foremost of the Commonwealth.” “ That copies of the foregoing resolutions be forwarded to the Hon. Alfred Deakin, M.H.R., and the Hon. Andrew Fisher, M.H.R., with a request that the matter therein contained may be made subjects for debate at an early date by the Federal Parliament.”

But Mr. Deakin, although admitting and even emphasizing the fact that the subject-matter of this Bill was the most important that could engage the attention of the House, and while pointing out that the whole purport of the proposed enactment was the result of such a Conference of Premiers as had never before been held, did not think it worth while to refer to the way the ground-work of his Bill had been challenged, or defend his action from a constitutional stand-point.

The CHAIRMAN:

– The honorable member may not read from an article commenting on something which has been done in this Chamber.

Mr CHANTER:

– The article comments

On the actions of the Prime Minister, and of the Premiers’ Conference. It has been the practice to quote similar articles from the Age, Argus, Herald, Telegraph, and other journals. I am quoting a leading organ, circulating in the western part of the State of New South Wales, which gives the opinion of the people there.

The CHAIRMAN:

– I ask the honorable member to confine his quotation to such portions of the article as deal directly with the matter before us.

Mr CHANTER:

– I have not very much more to read. The article continues -

Mr. Deakin, however, may not feel his position too safe, and may prefer to act on the defensive when the time comes rather than invite criticism. However, criticism will and must come if the electors are to decide- this great question of finance, and the relationship between the States and Federal Parliament on that head. Mr. Deakin would have us believe that the Commonwealth Constitution is vague on thispoint, but, in our view, nothing could be plainer. The obligation of the Federal Parliament to pay certain portions of the revenue derivable from Customs and Excise was defined, and wasto continue for ten years (see sections86 and 87 of the Commonwealth Act). Nothing is said about Conferences of premierstaking a hand in influencing the Federal Parliament in any future financial arrangement as is nowbeing done. As regards thetaking over of the State debts the Commonwealth Act is equally clear, and that is a course of action which naturally follows upon the whole of the revenue from Customs and Excise falling into the handsof the Federal Parliament, and before any arrangement be come to as to the amount to be returned to the States, an investigation should be made as to how the States have expended the enormous revenue that has passed through their bands during the last 10 years. To use Mr. Deakin’s own words : “ That 10 years was intended to be a term of probation inquiry and experience which shouldfit the representatives whom I have the honour to address for the task of reshaping the partnership according to the knowledge gained in the interval.”

Has not every honorable member who has supported the amendmentasked for more experience, so that ultimately the matter may be dealt with in a manner equitable to the States, without depriving the Commonwealth Parliament of its due powers?

Whether the Deakin-cum-Cook fusion is a tribunal honestly representative of the people, and to whom Mr. Deakin’s appeal can alone have been intended, is a moot question. But this we do know, that it is the duty of the Federal Parliament before swallowing Mr. Deakin’s financial proposal to cause a strict investigation to be made as to the determination of the Sydney Government to so entirely ignorethe Western half of this State as they have done during the last ten years.

The CHAIRMAN:

– Order ! The honorable member will recognise that a question of local politics has nothing to do with the matter now before the Chair.

Mr CHANTER:

– Very well, sir ; I proposed to quote only three or four lines more, but I shall not do so. During this debate a great deal has been said about the position of the people, and the article from which I have quoted represents the views of the people in the Western District of New South Wales. I speak now on behalf of thousands whom I represent, including those who did not record their votes in my favour. The people of ray electorate are almost unanimously in favour of a limitation being placed upon this agreement as proposed by the honorable member for Mernda.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Does the honorable member think they understand the question ?

Mr CHANTER:

– They understand it far better than the honorable member does, for they are true Federalists. The honorable member will not be annoyed if I say that he was never a Federalist, and that, according to his own statements, he is not a Federalist at the present time. The people of my electorate desire to uphold the Federation, andthey look to the Commonwealth Parliament to make such arrangements with the States as will secure to them the rights and privileges for which the Constitution provides.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– The honorable member must be dreaming.

Mr CHANTER:

– No. My constituents haveexpressed their opinion on this question at various political meetings as well as through thepress, and they object to the Commonwealth being bound and fettered for all time merely to permit of the powers of the State Parliaments being enlarged. They have a perfect right to so express themselves. They have been constantly galled by the action of the State Governments, who have displayed anything but a Federal spirit. Victoria is unable to give them that which they desire, and they look, therefore, to this Parliament - and they did more to bring it into existence than did those of any other part of the State - to secure for them the retention of their privileges under the Federal Constitution. At present we have no true Federation, and if this agreement be carried, then I, strong Federalist though I am, will despair of the National Parliament being able to do for the people what they hope and expect. It is proposed that we shall return to the States for all time 25s. per head of the population, leaving 25s. per head for our own use. Of that amount 22s. 6d. is already allocated: 10s. per head being required for the payment of old-age pensions, and 12s. 6d. per head to provide for the Government scheme of defence. That leaves a balance of 2s. 6d. per head to provide for the cost of administering the affairs of the Commonwealth. I” appeal to those with whom I have worked for years in the cause of Democracy and Protection not to support this agreement. They must know in their hearts that if the agreement is accepted we shall soon reach the stage at which it will be absolutely impossible for the Commonwealth to obtain from Customs and Excise sufficient revenue to enable the proposed payment to the States to be continued, unless we so recast the Tariff as to secure larger returns, and at the same time destroy the industries of Australia.

Mr FRANK FOSTER:
NEW ENGLAND, NEW SOUTH WALES · ALP

– That is the serious aspect of the position.

Mr CHANTER:

– It is one that I invite the supporters of Protection to consider. The statistical returns prove conclusively that wherever a truly protective policy has been established there has been a decline in the Customs revenue. Every one knows that as a protective Tariff becomes effective, and leads to the creation of new industries, the Customs revenue must decrease. That is the experience of Germany, the United States, and other nations. I quoted recently a long statement showing how the Customs revenue of various nations had fallen as the result of the imposition of protective duties. In only three cases was the per capita return from Customs and Excise over 25s. per head; in all others it was below that amount. The Commonwealth can afford at the present time to make the proposed return to the States, for the reason that, as yet, Protection here is only in its infancy. The industries that we hope to see created as the result of the existing Tariff have not yet been fully established. We have consequently a large Customs revenue, but, if Protection is maintained, that revenue must decrease vear by year. From what other sources are we to obtain more revenue to meet the demands made upon the Commonwealth Government ? We can raise revenue only bv the imposition of Customs and Excise duties, or by direct taxation. Do honorable members desire to save Protection at the cost of the imposition of direct taxation, or by going to the pawnbroker and loading posterity with a national debt, for which they will curse us?

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– We shall not be here to hear their curses.

Mr CHANTER:

– That is immaterial. As trustees of the people, we have a right to consider those who come after us, just as we consider the future of our children. We ought not to impose on posterity burdens that it will be found very difficult to remove.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Have people never built up a heritage only to have it squandered ?

Mr CHANTER:

– We have received from the people of Australia a goodly heritage. Can it be said that we have squandered it? Have we squandered the millions that we have received from Customs and Excise during the last few years ? Has it not gone back, for the most part, to the States, only, to be absolutely squandered by some of them? It is our duty to protect the people, not only in their National, but in their State capacity. In pre-Federal days, my own State could get along very well with an annual revenue of between £9,000,000 and £10,000,000. This Parliament has relieved it of an expenditure of about ,£3,000,000; yet, although having regard to the comparatively small increase in population, the ordinary expenditure of the State should not have been increased, we find to-day that it amounts to about £14,000,000 and that the State Government have gone into the market for about £2,000,000 a year. New South Wales is in a position different from that of the other States. Having a fiscal policy different from that of the other States prior to Federation, it did not derive from Customs and Excise anything like the revenue they secured from that source. Its Customs revenue before Federation amounted, roughly speaking, to about £1,000,000’ per annum. It now derives from that source over £3,000,000 per annum. Why should the Government hesitate to give the people an opportunity to consider this question before they are called upon finally to decide it? It is not absolutely necessary that this Parliament should deal with it. The Braddon section will not expire until the end of next year, and before then there must, ir- any case, be an appeal to the people. At the next general election it would be the bounden duty of every honorable member to deal with this question from a patriotic stand-point,, and to advise the people as to the course they ought to pursue with regard to it. Then the people will begin to consider and understand how the agreement affects them, in both their State and their National capacities; and they will be in a much better position to give a rational vote than they will be .;f the issue is forced on them in this unholy manner. I say, “ unholy manner,” because, notwithstanding all the denials, the organ that supports the Fusion party is assiduously stating, week after week, that there is a combination of Liberal and Reform sections, Farmers and Settlers’ Associations, the Women’s National Association, and other organizations, to have this agreement embodied in the Constitution.

Mr Poynton:

– And to vote against all candidates who oppose Ihe agreement.

Mr CHANTER:

– Already, candidates are out in various districts declaring themselves in favour of the Fusion Government, and of the agreement.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Can the honorable member name one?

Mr CHANTER:

– I can.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Against the honorable member himself?

Mr CHANTER:

– -Yes.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– That is about the only one, I should say.

Mr CHANTER:

– I could cite others; but there is no need to mention names.

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

– If the people are against the agreement, that ought to suit the honorable member.

Mr CHANTER:

– How childlike and bland the honorable member is ! If the people are allowed time and opportunity for consideration, I am perfectly satisfied that they will be against the agreement.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– The people will have nearly six months for consideration.

Mr CHANTER:

– They will not have anything of the kind. There have been several persons in the electorate of Indi, both male and female, advertising the honorable member; but I challenge him to say that any one of those ambassadors spoke on the question of the agreement.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– I have not had any such people in my electorate.

Mr CHANTER:

– Yes, the honorable member has ; including a certain Mr. Menzies, and a lady whose name need not be mentioned, but who is connected with the Women’s National Association. Some twelve or thirteen meetings have been addressed; but at not one was this question discussed. Then, in the suburbs of Sydney, how many honorable members. who have addressed meetings of the Women’s National Association, have mentioned the financial agreement ?

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

– There is no Women’s National Association in Sydney.

Mr CHANTER:

– The honorable member is behind the times. There is an association in Sydney, though %it may be called by a different name, and it is working in unison, as I have indicated, with other organizations. The honorable member knows that the association in Sydney sent delegates to the Conference of Women’s Associations in Brisbane, and at that Conference public questions were discussed from the point of view that the Opposition must be kept out of power, because they are Labour, and, therefore, unholy.

The CHAIRMAN:

-The honorable member must not reply to irrelevant inter jections

Mr CHANTER:

– Then, I think that the honorable member for North Sydneyshould be asked not to make irrelevant interjections. The position would be sound and unassailable, if Ihe Government were to say to the people of Australia, “ The operation of the Braddon section terminates at the end of next year, and we propose that an agreement shall be made for all time, while, on the other hand, it is held that there ought to be a limit fixed, in order that the Federal Parliament may have an opportunity for further review - which view do you agree with?” The people would then consider the matter, and be able to give an intelligent vote. But, as a matter of fact, the people are told that there must be this agreement or nothing, and that, if they do not vote for it, they are not supporters of the Government. We are going to have in the country what we have had within this Parliament. There are members here who disagree as much as I do myself with the proposed arrangement, and yet they dare not voice their views, solely in order to keep faith with their party ties. What, then, may we expect to see in the country, in the face of the combined associations? Can we expect an honest and deliberate vote? The Prime Minister’s absence from the Chamber is a matter for which he himself is responsible ; and I have to say that I resented an interjection he made last night. No member of this Parliament gave the present

Prime Minister a more loyal support than I did ; and when he twits me with turning round on my convictions, 1 can only throw the accusation back, and say that my convictions are now what they were then, while his are entirely different. I did not leave the Prime Minister, but he left me; and he, and those with him, must take the responsibility of their action. The Prime Minister, like myself, was returned as a Protectionist, and associated himself with Protectionists only; but. now he is allied with Free Traders of the most extreme type - a step which I never could take. The turning away from convictions and pledges was not on my part, but his.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– It was a dead heat 1

Mr CHANTER:

– There was no dead heat. The honorable member for Grampians never was a Protectionist, and cannot understand the question. I am speaking for the fourteen honorable members who stood by the Prime Minister and formed his party, and not for the honorable member for’ the Grampians, who then sat in Opposition, and many times, while claiming to be a Protectionist, voted the other way. 1 challenge the Prime Minister, or any member of his party, to show where I have changed my principles or convictions ; and I claim that I .now sit with those who are my natural affinities. I have always been in favour of the masses as against the classes ; and when I find a combination to favour the former, I refuse to join it. If we are to believe, as I do believe, the honorable members for Mernda, Flinders, and others, the Prime Minister made a distinct and clear arrangement with the members of his party, that there was to be a test division, and that, if the division were against him, he would drop the Bill and take the matter to the country. The division was taken, and the test applied, and, notwithstanding the fact that the vote was against him, the Prime Minister, because of the arrival of a colleague, who was then absent and unpaired, hopes to be able to fly in the face of the wishes of, not only the Opposition, but of his own supporters. Is that honest politics ?

Mr Fisher:

– There is a majority in Parliament against the agreement.

Mr CHANTER:

– There is. We know that there are members of the House absent and unpaired - one, at least, in consequence of severe illness - and that if they were here they would be sitting and speaking on this side of the House.

Mr Kelly:

– Does the honorable member for Eden-Monaro wish to be paired against the Government on the question?

Mr CHANTER:

– Yes, if the Government will provide a pair.

Mr Crouch:

– Is the honorable member authorized to say that?

Mr CHANTER:

– That is my responsibility. There are other honorable members absent unpaired, including the honorable member for South Sydney, who is now on the water, and who, unsolicited, has announced his opposition to the agreement. If all the talk about majorities is sincere, the Prime Minister, and those with him, must know that there is a majority against their proposal.

Mr Frazer:

– They wish to win on points !

Mr CHANTER:

– Yes, and it is absolutely discreditable that a great question - no greater has ever come before us - should be settled by what can only be termed tricky politics. I have not heard of, or observed, any desire on this side to make this a party question, but merely to limit the agreement in order to afford opportunity for review. If ever the party whip was cracked, in order to make members subservient, and to abandon their principles, it has been by the Government on this particular occasion.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Is the honorable member saying that of his own knowledge ?

Mr CHANTER:

– Yes, I am ; I do not speak on subjects on which I .have no knowledge.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– It is npt Parliamentary, but I must say that I do not think that any pressure has been attempted by the Government ; at any rate, not in my own case, nor do I believe in that of others.

Mr CHANTER:

– There was not the slightest necessity to crack the whip over the honorable member, who has been the most willing supporter of the Government I ever saw in the Parliament. We all know, however, that the honorable member is not in favour of Federation.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– That story is too thin !

Mr CHANTER:

– When the honorable member for Mernda was speaking last night, the honorable member for Indi showed his attitude by asking whether the honorable member would, if an opportunity presented itself, vote for Federation now, and he received a most emphatic answer. Personally, 1 have always been

  1. Federalist ; and it is because I seedangers ahead that I call upon Parliament to hesitate in this matter. I desire honorable members to be true to their principles and pledges, and not, for the sake of party, or in order to save their own political skins, do something which, I am sure, none will regret more than themselves in the future. It is easier to commit evil than to undo the effects of evil; and, to put it mildly, there is a suspicion that evil will be done if this agreement be adopted. Why not, in the name of common sense, afford the people a few months for consideration, so that they may arrive at a verdict, not by a majority of the States, but by a majority of the electors, and thus determine their own destiny.
Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– I have listened to the extraordinarily inconsistent speech of the honorable member for Riverina, and whilst I do not intend to attempt to follow all its devious courses, I may deal briefly with one or two of his statements. First of all he has complained that in the settlement of this question there have been some refusals of pairs, and he calls that sharp practice. Yet the honorable member is one of a party who adopted that very sharp practice as one of its principles, for the first time in the history of this Parliament. He actually attempts to twit honorable members on this side, even if they did refuse pairs, with adopting a system of sharp practice, which he, by his decision and by his action, has been indorsing in this Parliament.

Mr Chanter:

– The honorable member is absolutely wrong. I gave the PostmasterGeneral a pair on several occasions.

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

– The honorable member and those associated with him adopted the plan of refusing pairs. He now makes the insinuation that there has been a refusal to pair. Where is that refusal on this side? Let bini instance one case in this division..

Mr Frazer:

-I can name a case that happened last night.

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

– I am speaking of the coming division. There are honorable members on that side paired now. The honorable member for West Sydney got the pair of the right honorable member for East Svdney on this question before the latter left for Melbourne.

Mr Frazer:

– Last night a pair was refused to the honorable member for Hume, a sick man.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– That is not correct.

The TEMPORARY CHAIRMAN (Mr.

Johnson). - I must ask the Committee to observe the rules of debate and to refrain from making disorderly interjections across the chamber.

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

– The honorable member for Hume is absent from the House now, under a pair given by this side.

Mr Kelly:

– I gave him a pair last night also.

Mr Frazer:

– After the Whip had refused him one.

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

– That has nothing to do with it. No case is brought forward, and apparently none can be brought forward, to sustain the statement of the honorable member for Riverina. I ask him now to name any member who is being refused a pair in this division, by this side.

Mr Chanter:

– The honorable member for South Sydney is refused a pair.

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

– Is he the only one away?

Mr.Chanter. - No.

The TEMPORARY CHAIRMAN:

– I have several times called “ Order,” and must ask honorable members to cease these disorderly interjections.

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

– I am sorry that I am touching honorable members so keenly that they cannot restrain themselves.

Mr.Frazer. - It is because the honorable member is not quoting facts.

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

– I am quoting facts, and challenge denial of them. The honorable member for Riverina admits that another member of the House is absent in addition to the honorable member for South Sydney. That other member is a chosen candidate of the Fusion party. Does the honorable member for Riverina say that the one does not balance the other ?

Mr Chanter:

– Does the honorable member refer to the honorable member for Eden-Monaro?

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

– Yes.

Mr Chanter:

– Then he has publicly disavowed that.

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

– If the honorable member for Riverina wishes to claim the vote of the honorable member for Eden-Monaro, he must show a communication from that honorable memberauthorizing him to be paired on that side of the House. Does the honorable mem ber think that pairs are to be given without an indication of the desire of the honorable member concerned, especially when he is in the Commonwealth ?

Mr Chanter:

– The honorable member for Eden-Monaro sent word to us to instruct the Government Whip not to pair him with the Government.

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

– The position is that an honorable member is absent who may be looked upon as voting for the Government, and those who say that he should be paired on the other side cannot produce a single document to show that he desires it. The honorable member for Riverina also asked if those on this side, with whom he had been associated for many years, were going to vote for direct taxation if they afterwards found that this agreement made that necessary in order to preserve the policy of Protection, indicating thereby that direct taxation was against their policy. The honorable member himself has joined another organization one of the planks of whose platform is a progressive land tax. He accused the members of the party to which he previously belonged of being associated with Free Traders, while he claimed that he had never touched that unclean thing. Yet he has himself joined a party which has Free Traders within its ranks. What consistency is there in that sort of argument?

Mr Chanter:

– I was. always in favour of a progressive land tax.

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

– Then why did the honorable member taunt his old associates on this side with doing what would not te in accordance with, their policy if they had in the end to resort to direct taxation?

Mr Chanter:

– I said they would be forced to do it.

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

– The honorable member taunted those who had been associated with him for so many years, and asked if they were going to impose the taxation. Coming to the arguments used by previous speakers in favour of the amendment, I would deal with that one on which great stress has been laid, to the effect that the proposal of the Government is not in accordance with the Fusion agreement. While it differs in some ways from the Fusion agreement, it is not inconsistent with it. That agreement said that, failing the preparation of a complete scheme, a temporary system should be adopted. Further, as the honorable member for Wilmot pointed out, the Prime Minister elaborated that question when he brought the matter before Parliament, and indicated that steps were being taken for the preparation of a complete scheme. Some have said that the Prime Minister and the members of his Government who .went into the Conference with the State Premiers ought not, in view of the Fusion arrangement, to have consented to anything without consultation with the members of their party. Just expand that argument. If the Ministers representing the Commonwealth in the Conference, and every Minister representing the six States, although they went there to strive to arrive at an agreement, were to do nothing without consultation with and approval by, not their Parliaments, for that had to follow as a matter of course, but also their own parties, what would be the position? Nothing more absurd could be put forward. Members on this side of the House, as well as those on the other side, knew that when the Prime Minister and those associated with him entered the Conference, it was with the desire and intention, if possible, of arriving at an agreement. They arrived at an agreement, and I have shown the absurdity of proposing to submit that agreement to the members, of the parties supporting the Governments in the six States and in the Commonwealth. It is too ridiculous to be worth consideration.

Mr Harper:

– Could we not have consulted them about the permanency of it ? That is the one point in dispute.

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

– Consultation with the supporters of the Federal Government would involve also consultation, by the State Premiers with their own parties.

Mr Harper:

– Not at all.

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

– It must have involved that. Do honorable members think that there would have been any chance of coming to an agreement if it had been known that it was to be only tentative, and would have to go to seven bodies of Government supporters throughout the Commonwealth? The Conference would1 never have dreamt of coming together, and.’ could not have been brought together, under those conditions. The only conditions that could bring them together were those that existed - that those present were prepared, as the Prime Minister said, to put their political lives behind the agreement arrived at, and to stand or fall by it. Further than that, of course, they had to agree to. carry the thing its full course- that is to carry it to the people. In those circumstances, I do not think the objections which have been taken to the action of the Prime Minister are sustained. The honorable member for Parkes spoke about dragging the party behind the Government. There has been no attempt to do so. The honorable member, and others who support his views, are perfectly right in maintaining that, as there has been some departure from the arrangement outlined in the Fusion agreement, they are not entitled to be dragged at the chariot wheels of the Government. The Government recognised that fact fully and generously, and gave those honorable members, without cavil andwithout dispute, the liberty which they sought of recording their votes with their views. They surely cannot complain of that, nor, I am sure, can they complain of the official attitude of any member of this party towards them individually. All consultations have been conducted on the most amicable terms, with every admission of the claims for freedom put forward by those honorable gentlemen.

Mr Chanter:

– Was that in caucus?

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

– I am not speaking of a caucus meeting. Had we met in caucus, we should have been’ bound by a vote, and no such vote was taken. The honorable member will have to submit to that condition in the future.

Mr Chanter:

– The honorable member is entirely wrong there. I know what I am doing.

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

– The honorable gentleman will soon find out the restrictions of his present position. He was not present at the meetings to which I am alluding. I am addressing those who were present, and who are aware that not one note of discord was heard there. No reflection has been cast in this Chamber on the free action of honorable members who differ from the rest of the party, and I shall not assist the Opposition by using language which might be offensive to them. The silence of honorable members opposite is ominous. They recognise that a family difference often leads to a family quarrel, and that words spoken in heat may accomplish what they desire, the severance of the Ministerial party. They have endeavoured to further that by applause and interjections, which, I am sure, will be appreciated at their full value by those who have received them. The utmost freedom has willingly been conceded to those who have differed from the majority of the party.

Mr Poynton:

– The honorable member for Batman did not say so last night.

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

– I would accept the honorable member’s word as to whether party pressure was brought to bear on him at these meetings, or in any other way. I do not take into account conversations between members. Warm things are sometimes said between friends. Argument does not always lead to agreement, but frequently ends in a heated passageatarms which the parties would not afterwards justify. . I am not speaking of such matters. We have no right to recognise them here. I am speaking of official actions of the party, and no one can contradict my statements. Two or three honorable members have said that most of those who support the agreement are doing so against their convictions. That is a statement which should not have been made, because it is absolutely incorrect. Were in justifiable it would apply to both sides. Some of those who support the agreement would like it amended in detail, but they recognise that there will always be differences of opinion in regard to a matter of this sort. Their position is this : “An opportunity now presents itself to come to an agreement. We wish for a settlement. We would prefer an agreement for a period, or one differing in some other particular from that put forward by the Government ; but we recognise that we cannot get unanimity, that what one would consider a sufficient period, another would think too short ; and, therefore, to settle our differences, we will support the proposal of the Government, as the best possible under the circumstances.” If, to take that attitude, is to depart from one’s convictions, the same thing may be said of the attitude of those who are supporting the amendment. Some years ago, the honorable member for Mernda proposed a financial scheme, the adoption of which he has since frequently advocated. He deserves credit for the interest and trouble that he has taken in the matter. But his present proposal differs from that scheme.

Mr Bruce Smith:

– Because he has given up his scheme.

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

– Is that a departure from his convictions?

Mr Harper:

– No.

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

– I do not call it a departure from the honorable member’s convictions. But if the honorable member who has given up the scheme which he would prefer for that which he now puts forward is not to be charged with acting contrary to his convictions, others who have abandoned schemes which they preferred to the agreement, and are now supporting the agreement as the best possible under the circumstances, are not to be so charged.

Mr Harper:

– My amendment is not a scheme at all. It is simply an arrangement for continuing the Braddon provision.

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

– It is a very definite scheme.

Mr Harper:

– It does not deal with the debts of the States, and has nothing to do with my scheme.

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

– The amendment is an entirely different proposal from the honorable member’s scheme.

Mr Harper:

– It does not deal with the same subject.

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

– It deals with the transfer of the debts, the honorable member having fixed the amount of £7,500,000, because that, with the expenditure on old-age pensions, covers the interest on the debts. To secure unanimity amongst themselves, those who are opposing the ratification of the agreement are departing from proposals which they previously favoured. But it would not be fair to charge them with deserting their convictions because they are doing so, finding that they cannot get exactly what they desire. The honorable member for Parkes said that the Fusion agreement provided for the transfer of the State debts and the sharing of the revenue to be dealt with together. That is what the Government proposes. It has introduced a Bill to provide for the sharing of the revenue, and another to provide for the transfer of the debts, or any portion of them, to the Commonwealth. He also said that the attitude of the Prime Minister, the Treasurer, and others now is inconsistent with their attitude in 1907. But the Conferences of 1907, and former years, had for their object the division of the Customs and the Excise revenue between the Commonwealth and the States. This differs entirely from the proposal now before us, which provides for the payment to the States of 25s. per capita, all, or none, or only part, of which sum may come from Customs and Excise revenue. Surely different opinions may be held regarding proposals which are so different ! An honorable member might see good reason why a mere allocation of the Customs and

Excise revenue should not be permanently provided for in the Constitution, but might not object to the amendment of the Constitution so long as the Commonwealth was not bound to make payments to the States out of any particular revenue fund. The fiscal arguments used in this debate do not apply, because the whole field of taxation remains open to the Commonwealth. The honorable member for Mernda charged the Premier of Queensland with being inconsistent in agreeing with his scheme and opposing his amendment.

Mr Harper:

-i did not say that he was inconsistent.

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

– The honorable member apparently referred to the attitude of the Premier of Queensland towards his scheme by way of showing that he is inconsistent, but I accept the honorable member’s denial. It would be astonishing were the Premier of Queensland to be opposed to the honorable member’s scheme, because what the honorable member suggested was that the interest on the debts, up to nearly£9,000,000, should be put on the shoulders of the Commonwealth, and that the debts carrying that interest should cease to be charged against the States when the burden of interest had been so transferred. There was to be practically a wiping of the slate. Each State was to be freed from its existing debts. Queensland was to be freed of nearly £80 a head, Victoria of only. £42 a head, and Tasmania, of, I think, about £45 a head. A gigantic premium was offered to Queensland. Is it, then, astonishing that the Premier of the State favoured the proposal ?

Mr Harper:

-My scheme was not on a per capita basis, whereas the honorable member has spoken of per capita payments. Who’ knows what theper capita arrangement would be twenty years hence?

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

– We must take the position as we find it to-day. A great premium was offered to the State of Queensland.

Mr Harper:

– We are not now discussing that matter.

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

– Under the later scheme now proposed by the honorable member for Mernda in connexion with this agreement - a scheme which deals with the distribution on a per capita basis - that objection is got rid of, and Queensland would not have under it the premium that she was offered tinder the honorable member’s first proposal. Some honorable members object very seriously to the attitude and action of the State Premiers. We must remember, however, that the matter is of great importance to the States. The question at issue is whether any share of the Customs and Excise revenue or its equivalent is to go in future to the States. The financial standing of some of the States is seriously involved. Do honorable members suggest that if -they were State Premiers they would not consider it their duty to take action in this matter, and in dealing with it to obtain recognition at the hands of the Prime Minister of the Commonwealth? I think that any honorable member who occupied the position of Premier of a State and properly recognised his duty to the State which had placed him in that office would feel it his bounden duty to take up that attitude and to see that his State was not to a large extent, if not entirely, deprived of a very important proportion of its revenue. The honorable member for Flinders, in the course of .a recent speech on this question, gave an illustration which I think offers good reason for the fears of the State Premiers. He said that at a time of great financial stress, when there was .a serious shortage in the revenue of the Commonwealth, the States from the same causes would be .in .an exactly similar position. “ Should ,we be likely,” he asked, “ to get the agreement altered in such circumstances if it were embodied in the Constitution ? “ That is just the situation that the States have to fear. At a time of great financial stress, the Commonwealth, in the absence of any lasting agreement as to the distribution of Customs .and Excise revenue, would have more than enough to provide for its wants. It would have full control over its revenue, and would be able to fill its own pockets, taking eventually the whole .25s. if it wished, while the States would be short not only of the fer ca-bita allowance of 25s., ‘.but of an additional amount due to the stress at the time, and would find themselves in a very serious position. Justice must be done to both the Commonwealth and the States. Objection has been raised to the State Premiers taking an active personal part in a Federal election. I am opposed to their doing so, and hope that they will not. That objection has come, however, to a considerable extent from the Labour part-v, although members of State Labour Governments and State Labour members have taken a very active part in Federal elections.

Mr Tudor:

– No one on this side hasraised that objection.

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

– The honorable member has not been in the chamber throughout the proceedings, and he cannot contradict my statement, that objection has been taken from the Opposition side of the House by way of interjection and also in the course of one or two speeches, to *he State Premiers taking part in a Federal election. I hope that the State Premiers will not do so, but honorable members who have been supported by State Ministers belonging to their own party should rot raise this objection. I propose now to deal with one or two matters to which I rose principally to speak. I would not accuse any honorable member of indulging in misrepresentation, but some very serious misapprehension certainly exists in regard to this question. It is constantly stated that under this agreement power has been taken from the Commonwealth. It is -said that the Commonwealth is selling its birthright for various things - one of the most valuable that has been mentioned .being “a.,mess of pottage.” There is not a .scintilla of power taken from the Commonwealth by this agreement. If it be .accepted, all our powers will .remain with us. We shall still have the ^enormous power - one of the greatest that any legislative body could possess - of .absolutely unrestricted taxation. That is a power which the States do not .possess. They cannot touch that great source of revenue which Customs .and Excise taxation provides, and they say very properly to the Commonwealth Parliament, “ When we are excluded from that you ought certainly to consider our large expenditure and to give us some allowance, not necessarily from Customs revenue, to meet our expenditure. “

Mr Harper:

– And we are all ready to do that.

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

– I am dealing now only with the argument that under this agreement powers are being taken from the Commonwealth Parliament. I repeat that no power will be taken from it. If it so desires, it can enter fields of taxation now occupied by the States, or it cart exploit fields of taxation which the States have not yet entered. It has full anr! ample power. The States which have only a limited power should not be left absolutely unassisted by the Commonwealth, as they might ‘be if not secured, since the Commonwealth has taken from them that great source of revenue which Customs and Excise taxation provides. I do not intend to repeat some arguments that I used on a previous occasion, but 1 shall briefly summarize them. I tried to show that even if this per capita allowance were to be provided entirely from Customs and Excise taxation we should only be carrying out the intention of the Federal Convention that we should allocate to the States some permanent share of the Customs and Excise revenue. On the question as to whether a sufficient or an insufficient proportion was being granted, I pointed out that the proposed distribution to the States of 25s. per head of the revenue financed the States only in respect of their present expenditure, whereas it financed the Commonwealth in respect of not only its present expenditure, but the cost of old-age pensions and its anticipated increased cost of naval defence. I urged, beyond that, that if the States and the Commonwealth entered upon other enterprises, as both will probably do, it would surely be the responsibility of those who did so to find the means of providing the necessary revenue. The greater developmental expenditure rests certainly with the States. I gave the particulars before, and shall not repeat them. The States are also responsible for a larger proportion of the expenditure, which must increase with population, than the Commonwealth is. It has been urged that if this agreement were carried and placed in the Constitution there would ‘be no power to excise it, if circumstances rendered it necessary.

Mr Wilks:

– We said there would be enormous difficulty, not that there would be no power to excise it.

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

– Then I will accept the honorable member’s correction and say that it is urged that there would be enormous difficulty in removing this agreement from the Constitution if it were placed in it. Since the taxpayer in State and Commonwealth is one and the same, I fail to appreciate the difficulty. But beyond that, the stupendous powers of the Commonwealth would certainly operate to compel an alteration of the Constitution if such became necessary. The Commonwealth has unlimited power of taxation. It can enter every field of taxation that the States have entered or have neglected, and if for serious reasons it was thought necessary to reduce permanently by 10s. the proposed per capita allowance to the States, the Commonwealth would doubtless say to the States, “We must have a reduction of 10s. in the per capita return to you. We are going to secure that additional revenue either by your consenting to a reduction of our contribution, since it is a permanent necessity that we have to meet, or by entering a field of taxation that you are occupying or may occupy and imposing direct taxation in addition to your own.” It is impossible to believe that in such circumstances the State Premiers would not agree, as they do to-day, to an alteration of the Constitution.

Mr Frazer:

– That is a lovely position for the Commonwealth to take up.

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

– The honorable member cares nothing about any “lovely position” unless it is one for the- Commonwealth. The States may be in a very unlovely position so far as he is concerned.

Mr Frazer:

– Is that a fair statement?

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

– It is a fair inference to draw from the honorable member’s attitude.

Mr Frazer:

– We do not desire the Commonwealth to be a mendicant.

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

– The Commonwealth would not be a mendicant; there would be compelling, not asking.

Mr Wilks:

– Then, why the honorable member’s anxiety to have this agreement in the Constitution ?

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

– I am pointing out that, if it be placed in the Constitution, there will be nothing to prevent an amendment of the Constitution, if there is absolute need on the part of the Commonwealth.

Mr Wilks:

– Then the honorable member anticipates the Commonwealth exercising the power?

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

– The honorable member knows that there is no point in his question. To put the agreement in the Constitution is simply to give security to the States in regard to what they are to receive of the revenue. There will be no abandonment of power by the Commonwealth ; we simply fix a contribution which has hitherto been uncertain and varied ; and I am quite sure that when the representatives of the Government went to the Conference, they never anticipated they would get so low an initial figure as the 25s.’ agreed upon. A stupendous power remains to the Commonwealth, a power so great that it is quite impossible for the States to refuse anything reasonable in a financial way. If they did refuse, the Commonwealth could enter the taxation sphere now occupied by the States, and obtain the money just as it would by a reduction of the contribution.

Mr Frazer:

– The money might be raised by revenue duties on the necessaries of life.

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

– The Parliament of the Commonwealth would settle that question.

Mr Frazer:

– It would be settled in the face of urgent necessity.

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

– Why should we think that the Parliaments of the future will be less intelligent than the present Parliament?

Mr Tudor:

– Then, why embody the agreement in the Constitution?

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

– I used the words ‘ ‘ less intelligent “ ; I did not say less grasping, or less open to temptation to annex revenue. Any Parliament, if it finds that it has a fund to draw freely on, will gradually annex the whole of it for its own expenditure. No Parliament I know of, has ever long resisted the temptation.

Mr Frazer:

– Is that the fear the honorable member has?

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

– It is not a fear, but a certainty ; and the States recognise the danger of depriving them of such a large source of revenue, and feel that it must certainly lead to unification. There are certain honorable members who have unification in their minds, and every move they make in this House has that motive, though I am not accusing the supporters of the amendment of that. On all occasions, we should try to look at both sides of the question - the Commonwealth side certainly, but also at the State side.

Mr AGAR WYNNE:
Balaclava

– Some of the leading Ministers were those who took the greatest interest in, and had more to do with bringing about Federation than probably any other members of the House; and it seems to me that, by this proposal, they aim a severe blow at the very thing they brought into existence. I should like Ministers, before they press their supporters too strongly, to consider carefully whether it is advisable to make this agreement permanent. I could understand members of the Labour party opposing it, seeing that they have for a long time been bringing pressure to bear on the Federal Parliament to impose a land tax. If the agreement is carried, it seems to me that the Federal Parliament will have to impose both a land and an income tax, in addition to the land and income tax of each State. It is quite evident that we shall not, in time to come, have sufficient revenues from our present resources to meet the whole of the engagements of the Commonwealth. It has been clearly proved, I think, that as population increases, the per capita return from Customs and Excise will fall; and yet it is proposed for all time to give a permanent grant of 25s. to the States. I could understand a sliding scale, by which the proportion paid to the State rose or fell with the revenue. I have no objection personally to the present proposed grant, provided there be a limit of time; and I think that has been the view of every honorable member who has opposed the proposal of the Government. It has been stated that those who oppose the agreement are supporting the Labour party ; but it appears rather that the Opposition are supporting members on this side, probably because they regard the position they take up as fair, or, it may be, for some other reason. It is easy for us on this side to sit on a bed of roses, and agree to the proposals of the Government ; but many of us are, I think, making ourselves unpopular with our constituents, though our action shows the consistency of our views, and that we are not afraid, even just before an election. to do what we honestly believe is the correct thing. There is one argument I have not yet mentioned, namely, that if we make the agreement permanent, it can never afterwards be altered. It is a contract between the Commonwealth and the Governments of the States, that this sum shall be paid for all time; and it is quite certain that many of the. States will increase their borrowings, because they will have a fixed income. They will be able to say to their creditors, “ We are assured of s:> much per annum from the Customs and Excise in perpetuity.”

Mr Deakin:

– The honorable member heard what Mr. Kidston and other Premiers have said. .

Mr AGAR WYNNE:

– But when the States once start borrowing, we shall not be able to help ourselves. Further, there is nothing in the Bill to prevent a State mortgaging its share of the Customs and Excise revenue under the contract, because it will be as safe to them for all time hereafter, as was the payment of the three-fourths under the Braddon section. What would have been said if the Commonwealth, pressed for money, had asked the people to vary the Braddon section? Supposing, at the end of five years, we had said : “ We wish the section altered, and we ask you to amend the Constitution so as to give us one-half of the revenue instead of onefourth,” what would the people of Australia have said? What would the State Ministers have said? Would they not have urged that it was absolute repudiation? And so it would be if we were to ask them to vary the contract that is now proposed. It is just as much repudiation to alter a contract made in perpetuity as to ask the people to vary a contract made for ten years. I do not think that the Commonwealth Parliament could at any time, in honour, ask the people of Australia to vary the agreement into which we are now entering. The States might double their indebtedness by borrowing another £200,000,000 ; and we know that they have security sufficient to pay the interest on such a debt. The railways are an ever-increasing revenueproducing property, and just about pay the interest on the present debts. If we double the income of the States by granting 25s. per capita, we virtually authorize them to pledge the State assets to the extent of another£100,000,000, or £200,000,000. And this can never be undone; we cannot say to the State creditors : “ We are going to ask the people of Australia to vary the contract.” I am sure that the members of this Parliament would never dare to ask the people to vary the agreement, seeing that it had been solemnly entered into, and that the States had in consequence pledged themselves to pay interest on largely-increased loans. The Commonwealth has no assets on which to borrow. We have extensive powers of taxation, but, with the exception of duties of Customs and Excise, our powers are hardly worth the name. Each State has a land and an income tax, and the income tax in Victoria is probably one of the heaviest in the world. I do not think that the Commonwealth Parliament would dare to impose on the people of this State a super-income tax ; and, in any case, there is a certain limit to the paying power of the taxpayer. If an income tax and land tax are made too heavy, the income tax drives capital out of the country and the land tax drives people off the land, and the revenue instead of being increased is decreased. What would State politicians sayif we attempted to ask the people to vary the agreement now proposed? They would say to us : “ Did you not enter into the contract with us for all time, with your eyes open? The State Premiers pressed for this agreement, and the Prime Minister agreed to it; the Federal Parliament, by Act, assented to it, and the people were asked to confirm it.” Can we at any time go to the same people, and ask them to undo what they did with open eyes? It would be repudiation if we attempted it.

Mr Palmer:

– The people could force us to do it.

Mr AGAR WYNNE:

– How does the honorable member mean?

Mr Palmer:

– Public opinion could force us.

Mr AGAR WYNNE:

– Such a step would be necessary only when there was a serious drought, depression, or threatening of war. There are about 600 State politicians, as against in members of the Commonwealth Parliament. There are from three to five State electorates for every Federal electorate, and where one Federal member will be advocating the repeal or alteration of this arrangement, there will be five State members stumping his district against him. The people will say that they must consider the interests of the States which are at their own doors, and when the Federal Capital is established at Canberra, what interest will the people of States other than New South Wales have in the Commonwealth Parliament?

Mr Groom:

– The people of Queensland, Western Australia, and other States take an interest in Commonwealth affairs at the present time.

Mr AGAR WYNNE:

– Very little. You will see in each of the State daily newspapers about half a column regarding what is going on in the Commonwealth Parliament, as against columns and columns referring to what is taking place in the State Parliaments. Take Victoria as an example of what will happen. When the Federal Capital is established at Canberra, and Victoria is receiving £2,000,000 or more out of Customs and Excise revenue, will the Victorian people give that up in order to allow the greater part of it to be spent, perhaps, in New South Wales? The fleet will be there, the docks will be there, the shipbuilding yards will be there, and the people of Victoria will say, “ Why should we give up £2,000,000 to be spent in New South Wales or in any other State? “ The same thing will apply to Tasmania, South Australia, Western Australia, and Queensland. The people of the States will not give up the money, and will not vote for the revoking of this agreement. Therefore, I say that, once entered into, this will be a contract for all time, and the Commonwealth

Parliament will have to look to some other source for revenue. What undertakings have we entered into? We have taken over old-age pensions, which were said by the Treasurer at the time to be costing about £1, 000,000 a year. They cost £1,500,000 now, they will cost £2,000,000 a year before the matter is finally settled, and the total will be £3,000,000 a year when invalid pensions are included. We propose to build railways from east to west, and from north to south. We are going to take over the debts which South Australia has incurred in the Northern Territory. We propose to attempt to develop the Northern Territory, and we contemplate building a Federal Capital. We cannot do those things under from £20,000,000 to £30,000,000 or £40,000,000. We shall have to borrow that money, and pay interest on it. Defence will cost £3,000,000 at least, and old-age and invalid pensions £3,000,000, and we shall have to pay £1,000,000 in interest. We shall have to find, therefore, £7,000,000 out of the little Customs revenue which will be left to us. That is about all that we should have to fall back upon. We might put revenue duties on tea, kerosene, and cotton goods. Those are about the only large importations that are free at present, and how much could be squeezed out of them ? If we got £1,500,000 a year out of them we should be very lucky. Yet, after paying 25s. per head to the States, we shall have to pay our way out of the balance of the Customs and Excise revenue, and out of what little revenue we can produce from the balance of our importations. I feel, therefore, that within a very short time, probably within the time of many members now in the House, the Commonwealth Parliament will be in the greatest financial difficulty, and I do not think that our borrowing power in the eyes of moneylenders will be more than £50,000,000. We shall have to pay a larger rate of interest in the future than we are paying now. The States are by degrees getting into the hands of a ring in London. The other day, the Premier of South Australia tried to place a loan outside that ring, and what a howl there was ! Inspired paragraphs appeared in the papers, and attempts were made at Home to block the loan. We cannot borrow £3,000,000 or £4,000,000 for the repayment of any existing debt when it falls due unless we go to the same people. From 3½ per cent., our interest has now risen to about 3½ per cent., and before long it will be 4 per cent. That means a serious charge upon the people of Australia. Do honorable members think that the States will come to the Commonwealth Government and float their loans through us when their assets are better than our own? The security which the States offer to the money-lender is better than the Federal Parliament can give. We have no railways or other large revenue-earning, trading concerns, and, therefore, there is very little chance of our ever being asked to take over the debts of the States. In England, pensions were granted to the Duke of Marlborough and others for all time, and what has happened? The Imperial Government has had to pay enormous sums to commute those pensions ; but, if we enter into this agreement with the States, we shall never be in a position to commute the payments. We shall have to make them as long as ever the country and the Parliament are in existence. If we require money in time of war, how are we to get it? We shall have no importations if our ports are blocked, and yet we shall have to pay 25s. per head to the States, whether it comes from Customs revenue or from any other source. It will probably mean that we shall not be able to pay even that 25s. per head to the States in time of war, but will have actually to repudiate the contract that we have entered into. I think the least that can be put into this Bill is some saving clause to protect us in time of war. As the agreement stands, we have not the slightest protection. We are entering into this contract, and will have to carry it out, whether we want to or not, or else repudiate our liability. There is no provision whatever to suspend the contract except by the cumbersome system cf taking a vote of the people, and then three States can block us. Do honorable members think that we can afford to take a referendum of the people on the question when the enemy’s fleet is on its way to Australia? It takes something like sixty days now to take a vote.

Mr Frazer:

– We shall have totake a referendum to see whether we can protect ourselves or not.

Mr AGAR WYNNE:

– Exactly. That is a nice position in which to place the Commonwealth Parliament and the people of Australia ! If we make this agreement the law, we shall have in a time of emergency either to override the Constitution and refuse to pay, or to suffer a serious delay in attempting to secure an alteration which we may not even be successful in securing. I do not think anything but a threat of war would cause the people to vary this agreement once it was entered into. If we do adopt it without some saving clause, the Government and the House will be making a big mistake. A number of members look at the question simply from the State point of view. They regard themselves as delegates to this Parliament from the States. They consider that they ought to obey the dictation of the States, and not to act as Nationalists in the interests of the whole of Australia. ‘They do not look to the future in the slightest. They have a parrot cry of “ What is going to happen to the States?” Surely we have ,to look beyond that.

Mr Palmer:

– I do not .think that is true of a single member.

Mr AGAR WYNNE:

– It has been repeated time after time. I think every member from Tasmania has uttered the cry. They have said, “ What is poor Tasmania going to do unless you. give her this money ?”.

Mr Fowler:

– What about the parrot cry of “ What is going to happen to the Commonwealth?” We have been hearing that for the last hour.

Mr AGAR WYNNE:

– The honorable, member may call it a parrot cry, but some day it will be a shriek. I think that .some States like Tasmania and Western Australia do need money very badly, and I am quite in favour of the scheme proposed by the honorable member for Mernda. I voted for it for the very reason that it gives us ample time to look round. . I should not object to a sliding scale by which the States would get the benefit of any increase of revenue, but on the other hand would suffer equally with the Commonwealth in times of depression. We are sure to have droughts and bad times, and then our revenue, especially the revenue from the Customs, will seriously fall. An income tax will be of very little value then, because the people will have very slight incomes to tax. The number of sheep in New South Wales and Queensland fell in one year from a hundred millions to forty millions. What revenue was obtained in the country -when that loss occurred? It takes two or three years to build such an industry, up again. A trust has been given into the hands of this Parliament by the people in the Constitution as framed, and we ought to discharge that trust. Provision was made for a temporary arrangement, that is, for ten years, but at the end of that period this Parliament was to decide “what should be done, it is now proposed to make another arrangement for fifteen years, leaving the Federal Parliament then to decide the matter again. But no ; there is such a terrible dread of the Labour party some day coming into power and playing ducks and drakes with the finances of the Commonwealth that we are asked to take everything away from the Commonwealth Parliament, and hand it over to the State Ministries, so that the Commonwealth may not have any money to spend. Are not the people just as much in danger from the action of the Labour party in the State Parliaments as in this Parliament? I am not afraid of the Labour party at the next or any other election. I think the common sense of the people of Australia is sufficient to prevent that or any other party from giving effect to wild-cat schemes or playing ducks and drakes with the finances. It is therefore a great mistake to raise that cry or entertain that fear. The people of Australia have plenty of sense, and the members of this Parliament are elected on the same franchise as are the members of the State Parliaments.

Mr Crouch:

– Who is raising that cry?

Mr AGAR WYNNE:

– I have heard ‘ft raised both outside and inside this chamber.

Mr Crouch:

– There will not be any Labour party in 19.11.

Mr AGAR WYNNE:

– There may not be. I am quite satisfied, at any rate, that after the next election the Fusion party will be in a majority as against the present Opposition. I therefore cannot see why that terrible bogey should be raised now or at any other time. The honorable member for North Sydney said that we must look after the .States. Nobody objects to the States being .fairly treated, or to the State Premiers trying to drive as hard a bargain as they can, but there is nothing in the agreement that shows that the scheme was meant to be for all time. The Prime Minister and the State Premiers simply .entered into an agreement to recommend to Parliament, .and this Parliament has the power to say what it will take.

Sir George Reid:

– There is nothing -in it to make it for all time unless the people will it so.

Mr AGAR WYNNE:

– I pointed out before the right’ honorable member came in that it will be a contract for all -time, because the States will borrow money on the strength of the per capita grant from the Commonwealth, and their creditors will look

Upon it as a security for the money which they lend. There is nothing to prevent any State pledging its share of the grant as security for debts.

Sir George Reid:

– Does the honorable member think that any of the Australian States will be driven to that as a security for its solvency?

Mr AGAR WYNNE:

– It may happen.

Sir George Reid:

– That is the most dreadful view that any one could possibly take of the future of Australia.

Mr AGAR WYNNE:

– Many of the States have had to pledge their Customs revenue as security. They are getting very close to the limit of their borrowing power. They have great difficulty in raising money. The chances are that if they are pressed they must pledge this source of revenue.

Sir George Reid:

– They could borrow without doing that.

Mr AGAR WYNNE:

– I believe that they could. But we are proposing to enter into a contract in perpetuity.

Sir George Reid:

– There never was such a contract. The agreement will be subject toalteration.

Mr AGAR WYNNE:

– The Braddon provision was a contract for ten years or until otherwise subsequently altered. What would have been said had the Parliament tried to bring about its repeal at the end of five years? Our action would have been denounced as repudiation. Just as the Braddon provision is a contract for ten years or more, the proposed agreement is a contract lor all time, and it would be considered repudiation for the Commonwealth Parliament to ask the people to amend it.

Mr WISE:
Gippsland

.- The honorable member for North Sydney said that he would not have risenhad he not felt it necessary to reply to the statement that the proposal of the Government was to take power from the Commonwealth. He said that it would not take away power. I was surprised to hear him say that. At the present time, under the Constitution, the Parliament will be free to deal with the financial question at the end of next year. Its action is at present unfettered. That was the arrangement come to by the Premiers prior to the enactment of the Constitution, and it was accepted by the people. If the proposed agreement be carried out, our hands will undoubtedly be tied. Therefore, the proposal of the Government is to take from our powers ; to put into the Constitution something which will prevent us from altering the financial arrangement without the consent of a majority of the States. Let me read what the Treasurer said on the subject. He stated his opinion most emphatically in the following words: -

It was decided by the votes of the people of Australia that this shall be the Constitution, and it would be a strange idea for the Parliament of Australia to say to the people, “ We are not competent to handle this great power you have given to us, and we want you to take it back and hold it again. Hold it for us so that we shall not do any mischief with it.” We, who represent the same people and the same electors; we, the Commonwealth Parliament, say - “ Take back this power; we are not worthy to hold it, and we are not worthy to do justice in the way you desire.”

It must be obvious that we are asked to take from our powers. It puzzles me that the Prime Minister should be so desirous to have the agreement embodied in the Constitution. He and his Treasurer are adopting an attitude contrary to that which they have hitherto adopted. The honorable member for North Sydney said that at former Conferences the subject discussed was the allocation of the Customs and Excise revenue, and that now the proposal is merely the payment to the States pf 25s. per capita without the specification of any particular revenue fund. That is mere quibbling. Does it matter what fund the money comes from? If it be paid out of Customs and Excise revenue, and the Commonwealth be left short, we shall have to make up the deficiency by taking it out of other revenue; if it be. taken out of other revenue, leaving a deficiency, we shall have to increase the Customs and Excise revenue. The position taken up by every Prime Minister and Treasurer from the beginning to the present time has been that the settlement of the transfer of the State debts question is inseparable from the allocation of the Customs and Excise revenue. The two things were considered inseparable at the first Convention in 1891, and have been considered inseparable ever since by the representatives of the Commonwealth who have met the Premiers in Conference. We have not been told why the Prime Minister and Treasurer now have taken up an attitude which is quite the reverse of that which they formerly took up. The last Conference was held in secret. It is the only one. which has been so con- ducted. We do not know what arguments were used there to compel the Commonwealth representatives to change the opinions which they have been holding for nine years, nor have we been informed why they did so.

Mr Deakin:

– The reasons used in the Conference were those which have been used in this chamber, and have been stated by me - some of them three times.

Mr WISE:

– I have not heard any reason given for dealing with the two matters separately, though it is very significant that the Treasurer, when asked why two referenda were now suggested, said that the people might wish to accept one and reject the other proposal. That is an abandonment of the contention that the two matters should be dealt with together. We were told by the Prime Minister, when . he introduced the measure, that the arguments of the Premiers forced him to the conclusion that the agreement should be adopted ; but I do not remember that he has favoured us with those arguments. We have been told by those opposed to the proposal to embody the financial arrangement in the Constitution that’ they object to it being made permanent. They wish to fix a time limit, so that Parliament may, if necessary, deal again with the matter later. But the Prime Minister says that he wishes to have the agreement embodied in the Constitution to give us greater freedom ; to enable us to deal with the matter again within three, four, or five years, should that become necessary. On the other hand, the Premiers desire to have it embodied in the Constitution to make it permanent. And what do those who support the Prime Minister say? The honorable member for Wilmot savs that -

But for the fact that 25s. per head is to be paid for all time,I should not be prepared to accept this part of the agreement.

The honorable member for Nepean hais stated that there should be “ something amounting to permanency “ in the arrangement, and the honorable member for Moreton that ‘ ‘ there should be an element of permanency “ associated with it. Undoubtedly the Premiers are aware, as these honorable members are, that the agreement, it embodied in the Constitution, will be permanent. They do not support the view of the Prime Minister that to embody it in the Constitution will give us greater freedom. I do not wish to repeat what has been effectively and forcibly said by the honorable members for Flinders and Parkes as to it being the opinion of the representatives of the States that it will be practically impossible to have the agreement altered once it has been embodied in the Constitution. The honorable member for Echuca interjected, when the honorable member for Balaclava was speaking, that if it became necessary, the States would agree to an amendment of the Constitution. As has been pointed out, that would happen only when money was urgently needed, when the States, as well as the Commonwealth, would be in want of funds. Is it to be thought that the State politicians would surrender revenue to the Commonwealth and have attached to themselves the odium of imposing taxation to make up the deficiency ? Such a supposition is ridiculous. The States will incur large indebtedness, and undertake big public works, relying upon the payment from the Commonwealth. Their liabilities in this respect will increase every year, and they will throw upon the Commonwealth Parliament the odium of imposing the taxation necessary to obtain the revenue which they will spend. If we ask the people for money for some national work connected, say, with the development of the Northern Territory, or the linking together of the eastern and western parts of the Commonwealth, it will be difficult for us to get their approval. The honorable member for North Sydney says that we have the whole field of taxation before us. Are weto further tax the masses by imposing duties on tea, kerosene, and cotton goods, or are we going to levy land and income taxation? The honorable member for Echuca and others will say, “ Perish the undertaking for which you want money if it has to be got by means of a land tax.” It is wrong that one Government should have to be the collecting agency, and the other the spending agency. At the present time we collect the whole of the Customs and Excise revenue, but three-fourths of it goes to the States. Under the proposed arrangement we should have to collect 25s. per capita for the States. That, in a few years’ time, may, by reason of the increase of population, impose a heavier liability upon us than the Customs and Excise revenue will bear, and we shall have to levy fresh taxation to meet our necessities. A good deal has been said with reference to the freedom of honorable members to vote as they please regarding this agreement. I am not concerned with the differences of opinion that may exist amongst honorable members on the Government side of the House, but it does seem strange to me, having regard to the declaration of the Prime Minister that he wished to obtain the frankest expression of the judgment of every honorable member upon this, “ the gravest question that this Parliament has yet met,” that we should hear so much about coercion and influence being brought to bear upon certain honorable members. The honorable- member for Batman spoke volumes last night when he related certain facts to the Committee. His statement has been ridiculed to-day as having reference only to- the private conversations of individual members-. I take it, however, that a Government Whip, when he professes, to carry a message from the Prime Minister to a Government supporter, does not occupy the position of a private member, and it is strange that that kind of influence should be used. I fail to understand why it should be. I fully appreciated the statement by the. Prime Minister that he desired the frankest expression of the judgment of every honorable member on this momentous question. That is a proper position to take up, for this question is far above all party considerations. It should not be dealt with from Government, Opposition, Labour, or anti-Labour points of view, for it goes to the very root and existence of this Parliament. We have been told to-day that we- are constantly hearing in this House the parrot-like cries of “ Commonwealth interests “ and “ the National Parliament.” I should like to know where such cries should be raised, if not in the Parliament of the Commonwealth. Then we have the statement that has been made that certain honorable members opposite would vote against this agreement if they were free. It is difficult to understand how the supporters of the Government can be said to be otherwise than free in view of the statement by the Prime Minister, but it is a fact that several honorable members have openly declared themselves in favour of a limitation of the agreement, and yet have voted against an amendment designed to indicate to the Government the desire of the Committee that a limitation should be imposed. Take for instance, the honorable member for Wimmera, who, on the motion for leave to introduce this Bill, said -

Perhaps in the course of ten or fifteen or twenty years further experience may suggest the necessity of making another alteration of the Constitution.

At another part of his speech, he said -

If the State debts were taken over automatically by the Commonwealth Parliament - and I very much regret that that is not made an integral part of this scheme - this Parliament would become the supreme financial power, so far as Australia is concerned.

Then he went on to say -

Our circumstances change rapidly. Public services come into existence one year which were hardly thought of the year before, so that the States should recognise that it is unreasonable to make an agreement of this kind perpetual. … I hope that in Committee it will be found, possible to meet the wishes of many honorable members, who, like myself, think that the payments to the States should be limited to a term of years.

We were told on the floor of the House that a friendly arrangement had been made with the Prime Minister that a test vote should be taken to determine whether there should be a limitation to the agreement, on the motion for the omission of the word “ The “ from clause 3, and that honorable members would be perfectly free to vote as they pleased. Yet we found the honorable member for Wimmera voting for the retention of that word, and I venture to say that he will vote against the amendment now before us. I fail to understand why he should have gone back on the opinion that he expressed in this House only a week or two ago. I come now to the honorable member for Kooyong, who went into the financial question rather elaborately, and submitted a scheme dealing with the whole of the financial relations between the States and the Commonwealth. Speakingon the motion for leave to introduce this Bill, he said -

I never contemplated any change in the Constitution, but regarded it as a matter of trust between the representatives of the States and the representatives of the Commonwealth, holding the opinion that it is quite competent for us to enter into an obligation for a period of years that will be as binding as any Constitutional enactment. I have not yet seen or discovered any reason for a referendum on the question. The proposal for the taking over of the State debts is quite a different matter ; but, in regard to the Braddon section, I regard a referendum as unnecessary at present. In insisting that it is necessary to have the arrangement in black and white, we are practically taking up the position that we cannot trust ourselves . and also a want of confidence in the State Parliaments.

He went on to say -

The Ministry, with their wider knowledge, may feel that a referendum is absolutely necessary, seeing that they are in possession of the views of the various State Premiers; but I think there is a middle course which would relieve much of the existing difficulty, and enable the whole of this House - because it is not .a party question, but rather a family matter, concerning our own brothers and sisters - to come to an agreement universally acceptable.

And yet the honorable member voted against the amendment to omit “ The.” Was any influence brought to bear upon him, either in the House or outside ? He also said -

I think that if the agreement were limited to, say, the next ten years, we shall in that period have a development which will surprise us all. .

If honorable members sitting behind the Government were’ free to vote as they pleased, why did the honorable member for Kooyong vote against the amendment? The honorable member for Lang, who was the last to speak to the amendment for the omission of the word “ The,” said -

I do not regard the agreement as perfect, especially bearing in mind the commitments of the Commonwealth.

Evidently the honorable member recognises that we have a lot of commitments, and does not know how they are going to be met -

I should like to see an arrangement come to which, whilst insuring the solvency of the States, would be sufficiently elastic to enable us to regulate our expenditure and income in accordance with our needs, without any further amendment of the Constitution in future, or recourse to additional taxation.

It is surprising to find member after member making such statements, and yet voting against the test amendment to determine whether the agreement should be for only a limited period. I have now quoted statements made by four Ministerial supporters, some of whom, like the honorable member for Kooyong, are of considerable standing. Had they voted according to their expressed opinions in this House, there would have been no doubt as to the result of the amendment in question.

Mr Palmer:

– The honorable member himself is an example of inconsistency.

Mr WISE:

– I am not. I certainly gave the honorable member credit for having a little more brains than the honorable member for Fremantle has, although that is not saying very much. The honorable member for Flinders has replied already to the charge of inconsistency levelled at him by the honorable member for Fremantle, and the same charge is made against me because I said, in 1907, that I was prepared to support the arrangement which the honorable member then suggested. I have not varied in my view of the subject ; but, even if I had, two years have elapsed since the speech in question was made, whereas not two weeks have elapsed since some of the speeches from which .1 have just quoted were delivered. Indeed, that by the honorable member for Lang was delivered almost immediately before the Committee proceeded to a division last Friday morning.

Mr Palmer:

– Am I my brother’s keeper?

Mr WISE:

– I should be sorry to take upon myself the responsibility of looking after the honorable member for Echuca. The most unsatisfactory feature of the Premiers’ Conference is that it was held in secret. ‘We know that it is alleged that at the back of the whole proposal is the promise of the influence and assistance of the State Premiers at the next general election. The facts cannot be quoted too often, because they are pregnant with meaning. The Argus has been quoted today as having desired an agreement for a period of three years. When it did not secure that, it made this comment -

The Prime Minister thinks the political factor is even more important than the financial one.

It published that statement on the 19th August. On another occasion, it urged -

Issues not merely financial, but of serious political import, hang upon the result of the Conference. A failure on the part of the Commonwealth representatives to accept reasonable offers may be held to prove the failure of the Fusion, and may result in dividing the House of Representatives once more into its three warring and practically helpless parties.

On the 20th August, it wrote -

The agreement was drafted and drawn out ready for signature. It provides Mr. Deakin with a definite something to fight for at the March elections, and it assures him and the Fusion party the support of the State Premiers.

That is the only explanation of the action of the Prime Minister and his colleagues in reversing their former position, and undoubtedly it explains why the Conference took place in secret. Some honorable members have resented, and very properly resented, the threats of the State Premiers as to what they intend to do at the next Federal election, and it may be just as well to quote the exact words used .by them. Mr. Kidston, Premier of Queensland, referring to the possibility of some honorable members, whom he described as “ malcontents,” joining with others to defeat this agreement, said -

If that were the case, they would have a. very important .fight on their hands within the next six months. All he asked was that that agree, ment should be submitted to the people of Australia.

He went on to say -

There was no other honorable course for the Federal Government than to ratify that agreement or refuse that agreement. For the benefit of those who were trying to interfere with the carrying out of this agreement, he would just like to point out that it was quite possible that, if they succeeded in their present aims, and prevented that agreement from being submitted to the people for ratification, this very undesirable result might come about - that the State might elect senators who would prevent any alteration of the Braddon clause’ whatsoever until a reasonable settlement was come to.

If that is not the most outrageous threat for a State Premier to make in regard to members of this House, I do not know what is. It is a distinct threat that, at the next general election, the State Premiers will run candidates for the Senate, who will be pledged, not to attend to the interests of Australia or of the States,” but to allow no alteration of the Braddon section, which every one admits cannot continue, until a reasonable settlement of the financial situation is arrived at-. It is like holding a revolver at a man’s head. Then, again, Mr. Wade, Premier of New South Wales, said -

It would be suicidal to accept this reduced amount, and then to subject the States to the uncertainty and unrest arising from the knowledge that in future years the whole question would be re-opened, with a strong probability that the amount repayable to the States would be further reduced.

I ask the Prime Minister, who talks about the ease with which the- Constitution can be amended, when this agreement becomes irksome, what he has to say to that statement? It will be seen that Mr. Wade contemplates absolute permanence -

It was generally understood that the question was one to be determined by the Commonwealth electors, and that if the Federal Parliament refused to allow the question to be submitted for decision the States should continue to work to secure a permanent agreement. It would, therefore, be necessary in the forthcoming general election to endeavour to secure a pledge from all candidates that they would support a proposal to make the agreement permanent, and that they would vote for its being remitted to the electors by next Parliament. He did not see what was to be gained by any further conference of Premiers.

I cannot see, how, in view of the words of the Constitution, he could say it was “ generally understood,” because the people generally understood that their representatives in this Parliament should have sole control. We should be unworthy of our position in this House, if, under’ a threat like that, we were to vote against our convictions, as the honorable member for Koo- yong, the honorable member for Wimmera, and the honorable member for Lang, according to their utterances, appear to have done. It is a source of considerable regret to me that we have heard so few honorable members on the Government side. There are some, like the honorable member for Maribyrnong, who are supposed to have been Liberals all their lives, whom I should have been very glad to hear explain their reasons for supporting the proposal. That honorable member’s former colleagues in the party - the honorable member for Corio, and, particularly, the honorable member for Batman, who are younger by some years than himself - have had no hesitation whatever in expressing themselves, even in the face of what we know was tremendous influence brought to bear to induce them to take a different view. There are other honorable members whom I should have liked to hear ; but some, who have spoken, have attempted to create discord by making it appear that members of the Opposition are all eager to defeat the proposal for the purpose of injuring the Government. But a Government cannot be injured or defeated unless the combination formed is for the purpose of displacing them; and the combination the other- evening was one that had no possibility of office, and was formed for no such possibility ? It is, therefore, nonsense to say that honorable members on this side are eager to injure the Government. I am quite satisfied that, if we allowed this measure to go through, we would do the Government infinitely more damage than by opposing it. ‘ In the case of the direct Opposition, it would very much hasten the day when they would be able to bring into force or, what would be better, see their opponents bring into force, their muchdesired land tax. But the Opposition recognises that this measure ought not to be the sport of parties, seeing that it is allimportant to the future of Australia. If this agreement be embodied in the Constitution, nothing but discord and disunion can follow. We have had pointed out, over and over again, the influences that would be brought to bear to prevent any amendment of the Constitution in the future. We should find a minority, or certain States, standing in the way of an amendment; and what would happen? The Prime Minister, 1 think, said that friction would die away in future years - that the division between State Rights and the National interest would disappear. That, however, is not the teaching of history. We know that in the United States the State Rights question did not die out, but increased in intensity until it could only be settled on the disastrous fields of the Civil War. It is probable that our being part of the British Empire may stop us from civil war ; but many things may happen to bring disaster nearly as great, in attempts to amend the Constitution. Honorable members should reflect what an awful responsibility is placed upon them.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– We do recognise it.

Mr WISE:

– If there is one honorable member who recognises the responsibility less than others, it is the honorable member for Indi. I appeal to those who do recognise the responsibility not to sow seeds of disunion and leave a crop of trouble to be reaped by their children. If this agreement be embodied in the Constitution, I shall feel sufficiently sore to wish that those responsible may live long enough to reap the whirlwind. I hope, however, that they will yet rise to the occasion. Are honorable members who will vote for the proposal going to ‘be honest enough at the elections to advocate its adoption on the platform? I fear that a great number will altogether drop the subject. There never was a more momentous question before this Parliament ; and the Prime Minister himself has said it is the gravest that ever arose. It is the parting of the ways; at this very early stage, we are asked to give the Federation a death blow - if not to wipe it out altogether, to place it, as the honorable member for Flinders very effectively said, on the low road of subserviency for all time. Are honorable members prepared to take that responsibility, sitting here as the representatives of the people of all Australia, and with the National interests to guard ? Are they going to ask for the support of the Premiers at the next elections, and, surrendering their great powers and responsibilities, prove themselves absolutely unworthy of the trust reposed in them? I hope that such will not be the case ; but that the measure will not be carried, and that whatever is to be done at the end of next year, this matter will be fought out on the platform, when members will be free to advocate their views without any question of party.

Mr FISHER:
Wide Bay

.- It would not be wise to allow the question to be put without saying a few words. I desire to refer very briefly to one or two remarks made by the Prime Minister and other speakers, notably the honorable member for North Sydney, as to the action of the Opposition in supporting the amendment. The inference that the speakers attempted to draw is that the Opposition are supporting a proposal with which they do not agree; but, as a matter of fact, our present action is the only one we could take, holding the views we do on the question before us. We are not able to obtain what we desire ; and, therefore, our duty is to get that which is as near to our policy as possible, with the assistance of other honorable members, who, have practically the same ideas, but who also are unable to have their particular views adopted. It will not be inappropriate if I say that we are indebted to the honorable member for Mernda for the way in which he has treated this subject. If any man in this Parliament has taken great pains to present the National cause, as apart from the parochial cause, it is the honorable member. If in the earlier Parliaments, more serious thought had been given to his speeches and recommendations, we should not have been in our present trouble. The honorable member’s schemes for taking over the State debts were, in my opinion, statesmanlike; but they were ignored, and wilfully and maliciously misrepresented, both inside and outside Parliament, particularly by the newspapers. Whatever division there may be of the Customs and Excise revenue - whether it be’ collected by the Commonwealth and distributed amongst the States, or the Commonwealth retains the whole of it - the citizen of Australia does not benefit one penny piece ; but when, in conjunction, we have- to consider the taking over of the State debts, then there immediately arises a position in which money can be saved. There is not an authority that has been consulted - and all have been consulted by the various Treasurers - but declares that the Commonwealth credit will be better than that of the States. I should like to say here that a great deal of criticism has been offered regarding the position of the Labour party on the question of the per capita payment, and the embodying of the agreement in the Constitution. I refer now to the proposal of the Labour Conference, from the official report of which a number of honorable members have quoted. It has been declared that the honorable member for South Sydney, who is at present absent from Australia, was in favour of embodying in the Constitution any agreement arrived at.

Mr Bowden:

– That he was in favour of a permanent arrangement.

Mr FISHER:

– I think I speak for the whole of the members on this side when I say that we are in favour of a permanent arrangement - .in favour of granting to the States a maximum of £7,500,000.

Mr Tudor:

– That is when we take over the debts.

Mr FISHER:

– Honorable members should recognise that the question of the allocation of the revenue ought to be associated entirely with the taking-over of at least that amount of the State debts the interest on which would be covered by the £7,500,000. That is a practical, sensible, and sane proposition. The honorable member for South Sydney knows the position exactly, although I am not speaking for him in regard to the State debts question. We have different ideas as to how the taking over of the debts can best be accomplished. He believes in taking them over, .but not in the form that I prefer. I have referred to him because he was quoted yesterday as being in favour of the proposal of the Government, but I had the pleasure of receiving from him yes.terday a letter, in which he gives unsolicited his opinion on this question, and deals with it in a way that leaves no doubt as to what his views are. The language of his letter is clear and definite, and the press was good enough to publish a portion of it to-day, ‘ The Prime Minister, in his anxiety to get out of a difficulty, in contending that there was an even vote in the Committee, claimed that the Chairman’s vote, although given against his proposition, still left the numbers even. But how can he claim to have a majority in this House for his proposal when it is known that the majority of those who are not present are against it? I do not see how he can make that claim ; but it would be impertinent on my part to interfere in any differences between members of his own party.

Mr Bowden:

– Has the honorable member any warrant for making that statement with reference to the honorable member for Eden-Monaro?

Mr FISHER:

– -What I said is true in any case. Even with the honorable member for Eden-Monaro, the Prime Minister is no better off. The honorable member for Nepean has not applied his mind to the question at all. In view of the expression of opinion by the honorable member for South Sydney, the Prime Minister is in exactly the same position as before.

Mr Bruce Smith:

– That is, that the agreement is not approved.

Mr FISHER:

– That the proposal of the Government cannot be carried, because they have not the necessary majority. The vote of the honorable member for Brisbane, whom we are glad to see back from his labours, is set off by the vote of the honorable member for South Sydney.

Mr Fairbairn:

– We set the honorable member for South Sydney off against the honorable member for Eden-Monaro.

Mr FISHER:

– I leave the discussion of that matter to others, but I say positively that I know it is not so. Even if others are so persistent as to make a demonstration against a sick man, I think it would be improper for me to canvass him. I have been invited many a time to attempt to interview him on certain political questions, but I have always declined. I do not want to’ embarrass a man who is not in the best of health, and never in any instance, by delegation or otherwise, have I approached him on any question whatever.

Mr Chanter:

– He sent a message to the Government Whip that he was not to be paired with the Government.

Mr FISHER:

– At any rate, I have stated my position with regard to him. In the letter which I received yesterday from the honorable member for South Sydney, written from Thabina, in the Transvaal, on 14th October of this year, the following passage occurs -

Although, as you know, I am practically the suggester of the -per capita basis for overcoming the Braddon clause, I quite agree with you that it should not be embodied in the Constitution. Surely they can trust the people of Australia to do the right thing by majority without tying them up. . . . However, the bargain could be accepted for the time being without being included in the Constitution.

Mr Fairbairn:

– He is altogether out of touch now with Australian politics.

Mr FISHER:

– That is the very reason why I think this letter is important. He left before this controversy began, and has been away from the seat of the trouble. Uninfluenced by local circumstances or surroundings, he is able to bring a fresh, clear mind to the question.. With his experience in this House, his knowledge of Parliamentary life in Australia, and his acquaintance with the financial position of the Commonwealth and the States, he expresses a clear and distinct view practically in favour of the policy that we have adopted in his absence, and relatively more favorable to the proposal of the honorable member for Mernda than to the Government proposal.

Mr Bruce Smith:

– Exactly, because he says that we should not tie the matter up.

Mr FISHER:

– Clearly he says that nothing that we do regarding the allocation of the revenue from Customs and Excise to supersede the present Braddon section should be embodied in the Constitution.

Mr Mcwilliams:

– He says we can trust the people, does he not ?

Mr FISHER:

-Yes, but the proposition put forward by the Government in association with the State Premiers does not trust the people. No political manoeuvring could be more calculated to mislead than the argument that the Government proposal is a proposal to trust the people of Australia. It is not. The Prime Minister used that argument also. I do not call it clap-trap, but it has all the elements of a clap-trap; argument. If to trust the people is the object of the Government and the State Premiers, why do not they trust the people from time to time? The honorable member for Parkes, when speaking, reminded me of a statement made by the late Sir Henry Parkes in this city twelve or thirteen years ago. That distinguished statesman said : “ Probably ten years after this, none of us will be here to say a word for the great object we have in view.” The honorable member for Parkes said to-day that probably fifteen years hence very few of us would be here, but that the act that we proposed to do now would be absolutely binding on every one of the members of the Federal Parliament, who in those days would come here straight from their constituents, but would be powerless to alter it. Therefore, the Prime Minister and those associated with him, if they place any reliance on the argument for trusting the people, will say : “ We will give the people an opportunity every ten years at least to express their views on the matter.” What objection can there be to that? The proposition pf the honorable member for Mernda, if given effect to, would simply mean that if the Parliament and the people so desired, at the end of approximately fifteen years the question could be put to the people again, and that if amajority of the people were in favour of continuing the conditions then existing they would be continued.

Mr Fuller:

– How many are going to be here in fifteen years?

Mr FISHER:

– That is my very point. Here are honorable members led by the Prime Minister saying that they must trust the people in this matter, but that we on this side are afraid to trust the people. Far from it. But we are not prepared to say that the people of Australia to-day are wiser than the people of Australia will be fifteen years hence. It would be presumptuous for honorable members to think that. The people fifteen years hence will have had more experience of Federation and of State activities, and will certainly be quite as capable as we are to regulate their financial affairs. Is it not a fact that those who support the Prime Minister’s proposal are really apprehensive of the decision of the majority of the people of Australia ?

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

– Would the honorable member mind saying why no amendment has come from the other side ?

Mr FISHER:

– I stated previously that the Opposition could not get the scheme that they desired, and that, therefore, our public duty was to try to get the next best possible arrangement in. the public interest. Amendments in this matter cannot come from this side unless the Ministry will listen to them. Take the proposal of the honorable member for Barrier, which has been published in the newspapers, that this arrangement should be put in the Constitution, if Parliament so desires, for nine years, but that every third Parliament the people should be asked to express their approval or disapproval of its continuance.

Mr Mcwilliams:

– That is a much better proposal than the one now before the Committee.

Mr FISHER:

– Surely we are here to get the best proposal possible? If the Prime Minister will say that the suggestion of the honorable member for Barrier is better than the one now before us, I think I can pledge myself and the whole of the Opposition to accept it at once. If the honorable member for Franklin says it is a way out of the present difficulty, I am sure the honorable member for Barrier will be quite ready to accommodate him.

Mr Mcwilliams:

– I say I prefer that proposal to the amendment of the honorable member for Mernda.

Mr FISHER:

– I do not doubt the honorable member’s statement, but I am afraid that if the proposal of the honorable member for Barrier had been made first some other scheme would have commended itself more strongly to the honorable member’s mind.

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

– I understood the honorable member for Wide Bay to say last night that he preferred not to put the arrangement in the Constitution at all.

Mr FISHER:

– I have never hesitated on that point. I stated again and again that I did not think it advisable to embody any arrangement arrived at in the Constitution, but when in an official position I said, speaking on behalf of the Government, that we would guarantee to the States at least £5,250,000 per annum for all time, and that if there was any surplus revenue above that the States could share it on a per capita basis. Surely that is clear and distinct enough. I do not think the Commonwealth has any desire to rob the States of a share of the Customs and Excise revenue, but I have held from the first, and hold to-day that whatever money is credited to the States should be paid in interest on the debts already incurred by them. My great objection to the agreement, as was effectively pointed out this afternoon by the honorable member for Parkes, is that whereas the allocation of the revenue between the States and the Commonwealth is mandatory, the great question of the State debts is simply left to an investigatory Committee. Reading that agreement as a layman, I find not a word in it to bind the States to do anything so far as the debts are concerned. They simply say they will take that great question into consideration, and that there shall also be an investigation of the little differences between the calculations of Commonwealth and State officers regarding the transfer of the State properties. That paltry little matter is to come in with the other great question, which indicates to my mind that there was at the Conference a process of bargaining on small matters, and that great and important issues were lost sight of.

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

– Is £8,000,000 -or £9,000,000 a mere nothing?

Mr FISHER:

– That is about the value of the whole of the transferred properties ; but the difference at most is about 10 per cent. The only point raised in the document is whether certain properties shall be considered transferred properties; but it is not suggested that the difference will amount to more than £1,000,000, or £2,000,000 at most.

Mr Deakin:

– The question is how much of the cost of the transferred properties was paid out of loan money ? Is the Com monwealth to pay twice for any part of these properties?

Mr FISHER:

– If the Commonwealth took over the transferred properties at the valuation of, say, £9,000,000, it would credit the States accordingly in connexion with the transfer of the debts.

Mr Deakin:

– But we should be paying twice over, if we took over the whole of the debts.

Mr FISHER:

– The sum of £7,500,000 will be allocated for the payment of interest on the debts, and surely the States will be credited with the value of such transferred properties as have been constructed with loan money. The Prime Minister, and other speakers on his side, have tried to make the public believe that it will have the same opportunity to amend the Constitution later as it has now. They omit to say that at the present time the Premiers of the States and the Commonwealth Government are in complete agreement - an arrangement which, on their own admission, is of great political significance. The Premiers have stated openly, and it has been published in the press that, unless the Commonwealth Government stands by them, they will oppose it at the election. This is a political as well as a financial combination, and it is dragging Commonwealth politics into the gutter. It is the beginning of arrangements which may be made by Governments to carry out political ideas or to maintain office. Could the naked truth be put before the people, they would be indignant, and would declare that Federation was brought into existence for other purposes. It was created to deal with, not local matters, but great national questions, and to inculcate the National spirit. I doubt if any country would be great without the association of the national idea with the National Parliament. If within the first ten years of the Federation, we give away our powers, the growth of the national sentiment, and the . political and industrial progress of the Commonwealth, will be retarded. In saying that, I do not speak as one who is personally in favour of unification, because I am not ; and by way of making a positive statement, rather than of correcting the mis-statements of others, I say that it is not true that the Labour party favours unification.

Mr Thomas:

– Some of us do.

Mr FISHER:

– It is not true that the Labour party is in favour of unification.

Mr Bamford:

– Not as a party.

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

– It would be more correct to say that a few of its members are not.

Mr Hutchison:

– The South Australian Labour party favours unification.

Mr FISHER:

– The statement has been made in this chamber, and assiduously published in the press, that this party is in favour of unification. That is not so. In this, as in other matters, its members can take whatever action they please.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– The honorable member refers to the Federal Labour party ?

Mr FISHER:

– I refer to the Australian Labour party, which this party is. On this, as on other matters, its members are free to think as they like. The Prime Minister has said, again and again, that when he sees this party united on matters which are not matters of policy, he distrusts our statement that we are not bound. I have heard him say that three times, and I respect him less now for saying it than I did before, because I have told him privately and publicly that it is not so. The last occasion whenI spoke at length on the matter was before he took office, when I put the whole position to him and the honorable member for Maribyrnong, who point-blank declined to believe what I said, which, of course, ended the matter so far as he was concerned.

Mr Mauger:

-I did nothing of the kind.

Mr Thomas:

– What about the Postal Commission ?

Mr FISHER:

– Except on question which are covered by the Labour platform, which honorable members have advocated before the electors, none of us is bound.

Mr Poynton:

– That is absolutelytrue.

Mr FISHER:

– My reason for referring to the matter again is that there are men and women electors who do not desire to be deceived, and who honestly believe the contrary. It would be wrong for me to allow them to be deceived. If it were not for that, I should not have troubled to refer to the matter. Honorable members are, at times, under wrong impressions, and make untrue statements, believing them to be true; but, after what I have just said, they will be in a position to determine whether the members of the party are, in this connexion, acting as individuals or at the dictation of the party. Honorable members opposite have tried to show that the Brisbane scheme provided for a per capita distribution to be embodied in the Constitution. The Prime Minister stated that, and a number of others quoted the reports of the Conference to support that position. The delegates to the Conference have been individually interrogated by letter, and, with the exception of a lady delegate - I exclude Messrs. McGowen and Holman - have replied that it was never intended that the agreement should be put into the Constitution.

Mr Poynton:

– How many delegates were there ?

Mr FISHER:

– Thirty-six. The arrangement was in general terms, and every member of the committee which drew it up took a view which was the opposite of that affirmed by Messrs. McGowen and Holman.

Mr Deakin:

Mr. Holman said that it was never mentioned, but that the object could not be accomplished in any other way.

Mr FISHER:

– It is rather late to make that discovery.

Mr Deakin:

Mr. Holman has written a long letter on the subject.

Mr FISHER:

– I am not now entering upon a controversy with Mr. Holman. The party will do its best to interpret the pro gramme which it has to carry out. Honorable members opposite say that if a thing is not stated it is affirmed. The Government take the attitude that unless you deny a statement, it must be true. That is the way in which the Prime Minister deals with us.

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

– No. He takes the language of the programme, which says that the agreement is to be a fixed one.

Mr FISHER:

– The matter is past discussing now. Every one of the delegates - who must be either capable and honest, or incapable or dishonest - has expressed his view. It is true that members of the Conference were allowed to say a good deal on the opposite side, but they were in a sad minority, though perhaps their speeches have left the impression on the minds of some that certain things were affirmed which were not affirmed.

Sitting suspended from 6.29 to 7.45 p.m.

Mr FISHER:

– When we adjourned for dinner I was dealing with the question of trusting the people, which has been the subject of much discussion and of a good deal of eloquence on the part of the Prime Minister and others in connexion with the consideration of this agreement. No one desires to trust the people more than I do, and I think that if the agreement were incorporated in the Constitution it would be advisable to have periodical referenda to enable the people to declare from time to time whether or not it should remain there. I am a little apprehensive as to the anxiety of the parties to this agreement that it shall be enacted in perpetuity. The Prime Minister has declared, and, by way of interjection, the Minister of Defence has affirmed, from time to time, that if we placed this agreement in the Constitution it would not necessarily remain there for all time. The Prime Minister went so far as to say that it might not remain there for more than ten or fifteen years, and that, if necessary, the people could remove it three years hence. The Ministry know very well, however, the almost insuperable difficulties that would be associated with the removal of the agreement from the Constitution. The Prime Minister said that in time of great financial stress, or when war threatened, the people would probably agree most readily to its removal. But in such circumstances the States would be embarrassed just as much as the Commonwealth would be.

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

– Does the honorable member think it would be wise to attempt to alter the Constitution in that way at a time of great financial stress?

Mr FISHER:

– No. I am simplv endeavouring to controvert the statement made by the Prime Minister that the Constitution would most likely be altered in such circumstances. I do not agree with him. That would notbe the time, in my opinion, to look for such an alteration, because the States would be faced with difficulties as great as those confronting the Commonwealth.

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

– If both the States and the Commonwealth were in difficulty, surely that would be the best of all reasons why an alteration of the Constitution should not be sought.

Mr FISHER:

– I repeat that I am referring to an argument advanced bv the Prime Minister with which, apparently, the Minister of Defence, who is his junior partner, does not agree. We might reasonably expect the Ministry to agree amongst themselves as to the policy of the Government before it is announced.

Mr Johnson:

– Let the Minister down lightly.

Mr FISHER:

– It is a question not of letting any one down lightly, but of dealing with what will continue to be a political consideration of the utmost importance long after the honorable member has been let down lightly by his constituents. To use an old couplet -

Some lie beneath the churchyard stone,

And some before the Speaker.

And probably most of us will have ceased to worry over public affairs when the younger generation are greatly troubled as the result of an unfortunate act on the part of the present Government. If the Government are not prepared to accept the alternative proposed by the honorable member for Mernda, is there no other amendment that they will accept? I would suggest the adoption of the proposal made by. the honorable member for Barrier, who proposed the other day that if the Government desired to trust the people they should consent to the agreement being placed in the Constitution for a period equal to the life of three Parliaments, and that at the end of that time the people should be asked to reaffirm it.

Mr Henry Willis:

– The Government rejected a proposal for a ten years’ limitation. I made that proposition.

Mr FISHER:

– Quite so; but the honorable member complicated his proposal by seeking to impose conditions that I am sure he does not wish me to explain.

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

– If a ten years’ limitation had been proposed from this side the honorable member would have opposed it just as he opposes the present proposition.

Mr FISHER:

– That is a statement, not an argument.

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

– Based on the honorable member’s statement that he does not desire this agreement to be placed in the Constitution.

Mr FISHER:

– I do not desire that it shall be placed in the Constitution.

Sir John Forrest:

– The honorable member said that the proposed per capita payment of 25s. per annum was too much.

Mr FISHER:

– The right honorable member is in error; I have already corrected that statement. I repeat now what I said on a former occasion, namely, that if this agreement provided also for the transfer of the State debts I should be prepared to supportan even larger per capita payment. The honorable member for Parkes has also said that he would be prepared to agree to a temporary payment of 30s. per head of the population, if this proposition were accompanied with one for the transfer of the State debts. If that were the position we should have an absolute severance of the financial affairs of the Commonwealth from those of the States. My contention is that if the proposed per capita allowance of 25s. per annum is to be a continuous payment while the population increases it is too much. The Treasurer does not understand the position.

Sir John Forrest:

– Of course, I am an ignorant fool.

Mr FISHER:

– I do not say that. All that I say is that evidently the right honorable gentleman has not given close attention to this matter, or he would not attribute to me what he has done.

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

– Of course, he has not the honorable member’s gigantic intellect.

Mr FISHER:

– The point involved is not the possession of a gigantic intellect, but the capacity to think. If this agreement were affirmed by the Parliament and the people, surely the Government would not deny to the people of the Commonwealth ten years hence the privilege which the people of the present decade have? Surely it is not too much to say that, at intervals of ten years, the people should have an opportunity of affirming or negativing such an agreement as this ? Such an arrangement would get over the Prime Minister’s difficulty as to not trusting the people, for it would enable them every ten years to determine what should be done in the light of the latest and most complete information. If this agreement were inserted in the Constitution at the present time, and the people at a later period desired to take it out, a majority would not be able to do so. Even if five-sixths of the people of the Commonwealth desired to remove it from the Constitution, they could not do so. But if we embodied it in the Constitution, subject: to the proviso that it should be re-affirmed every ten years, we should be sure that a majority of the people, with a majority of the States, would be able either to affirm it, or, if they did not, to say that the Commonwealth Parliament should thenceforward deal with the matter as it thought fit. A few days ago, the Prime Minister, as reported in the Melbourne Herald, made the following comment on the proposition made by the honorable member for Barrier -

It was interesting as a proposal which might unite some of those who were divided in their opinions, but from a constitutional point of view he did not favour it.

Mr. Thomas’s idea, briefly put, is that the 255. arrangement might be inserted in the Constitution for a fixed term, at the end of which the question of the re-enactment of the clause should automatically go to the people. This would meet the views of those members who do not object to the amount of the proposed payment to the States, but who oppose the agreement because it would be possible hereafter foi a minority to keep the arrangement in the Constitution.

Mr. Deakin said that some such idea was discussed by the Ministerialists some days ago, but the objection he saw to it was that it would alter the basis of the Constitution. Such a big question would open up a discussion lasting probably over several weeks, and much time could not be given up to the subject at this stage of a closing session.

What is the Prime Minister’s objection? His chief objection to the proposal is that too much time would be occupied in discussing it.

Mr Deakin:

– The report is merely the reporter’s recollection of a general conversation. I think that it gives part of it.

Mr FISHER:

– I was careful to say that the Prime Minister was reported to have made this statement with regard to the proposition of the honorable member for Barrier. It seems to me that the honorable gentleman grasped the situation at once. He recognised, as soon as it was put before him, that it was really a means of asking the people from time to time to re-affirm the agreement. The main object is to get over the difficulty of a minority being able to retain something in the Constitution long after the vast majority of the people have made up their minds that it should be taken out of it. It was said last week by the Premier of Queensland that the States would be injured if the Commonwealth were to take over their debts, and in any way to restrict them from borrowing. I desire in no way to restrict the borrowing of the States, beyond the point that I think the good sense of the people would soon lead to an arrangement whereby State loans could be placed on the market at the most convenient time, and in the most convenient way.

Mr Wilks:

Mr.. Kidston could not prevent us from taking over the State debts as existing at the time of Federation.

Mr FISHER:

– Quite so. As honorable members are aware, the Commonwealth Government have power at the present time to take over debts of the States amounting to nearly £200,000,000; and there will be that power so long as the Constitution remains in its present form. As a politician, T am not averse to the Commonwealth taking over the debts at the time of Federation ; but that would be a grave blunder compared with taking over the whole of the debts at the same time that we arrange for the distribution of the revenue. It would be a great advantage if this Parliament could have the direction of all the negotiations for renewals, conversions, and the flotation of new loans. I have no doubt that great saving would result from the taking over of the debts, though the Treasurer seems to have some doubt on the point.

Sir John Forrest:

– I do not think I said anything about that.

Mr FISHER:

– From the remarks the honorable gentleman has made recently, I gather that he is not at all anxious to undertake the burden of the State debts.

Sir John Forrest:

– I was always in favour of taking over the State debts.

Mr FISHER:

– If that be so, does the honorable member not think that it would be a great deal more statesmanlike, if the necessary legislation had been passed to enable the debts to be taken over, before we dealt with the distribution of the revenue ?

Sir John Forrest:

– I have always said that the two matters could be conveniently taken together, but that they could be dealt with separately.

Mr FISHER:

– I admit that they are not inseparable, but the honorable gentleman will admit that in his memorandum he stated that by the taking over of the State debts there would be a saving in interest of £26,000,000 in about half a century.

Sir John Forrest:

– That is so, if “the Commonwealth stock were quoted J per cent, better than that of the State.

Mr FISHER:

– Does the honorable gentleman not think that the credit of the Commonwealth would be at least _ £ per cent, better than that of the State? ‘

Sir John Forrest:

– I think it would be after a while.

Mr FISHER:

– I think .it would be better at once; but, in any case, i per cent., or 2s. 6d. per cent., better to begin with would mean an enormous saving, and some scheme to bring it about ought to be put into operation as early as possible. If the interest be assured, the Commonwealth ought to be responsible for not only the interest, but the whole of the principal.

Sir John Forrest:

– The States would have to indemnify the Commonwealth under the Constitution.

Mr FISHER:

-The Commonwealth should undertake the responsibility, without any further obligation on the States. A number of State members of Parliament take the view that the desire is to aggrandize the Commonwealth Parliament, and to take possession of the railways and other assets ; but I hope that nothing of the kind will be done. It is quite true that Sir George Turner, one of the ablest of our Treasurers, said that he desired no further guarantee for the payment of the interest than the revenue which the Commonwealth could hold; but as the indebtedness would be greater than represented by that amount, he demanded that the States should hypothecate their railway revenue to secure the Commonwealth against loss.

Sir John Forrest:

– The amount of 25s. would not be enough.

Mr FISHER:

– It is obvious that 25s. a head, in nearly all the States, would not cover their present indebtedness, but the Commonwealth has power to take over only £200,000,000 of debts. What I desire is to remove the misapprehension in the minds of a large number of representatives of the States. I am not speaking from mere hearsay, because, when I was in office, I had a conversation with one State representative, at any rate, who declared, “ We are not going to allow the Commonwealth to take over our debts, as it will also mean the taking over of our railways.” I did my best to persuade him to the contrary, but without avail; and a feeling of the kind is very prevalent, though I do not say it is found amongst those holding responsible positions. That view, however, has been used by a prejudiced press in order to prevent the debts being taken over. The Commonwealth credit should be better than that of the States, or the Commonwealth should cease to exist. If we assume that the Commonwealth credit is better by J per cent., or 5s. per cent., then, by -putting the difference aside as a sinking fund, we could, at 3 per cent, compound interest, pay the whole of the principal and interest in eighty-seven years, without collecting a single penny more from the taxpayers. Surely that is worth considering; because it would give the Commonwealth a better standing, and afford absolute security to the States.

Mr Crouch:

– Even if the proposed arrangement is amended, -it applies only to the interest, and not to a sinking fund.

Mr FISHER:

– I am afraid the honorable member does not quite follow me. There would be an absolute severance of Commonwealth and State finance, and, at the same time, there would be set aside a certain proportionate amount for each of the States. I desire to- make it perfectly clear that, however we may distribute the revenue, the people of the Commonwealth can in no way be advantaged ; but that immediately we take over the debts, there is a saving. I presume we are here to save money where- possible ; and if, by the superior administration or credit of the Commonwealth, the whole of the indebtedness can be paid off in less than a century, the suggestion is worth considering. I have here some extracts which may be of some interest. At the Adelaide Convention in 1897, Sir George Turner said -

I simply say that if we are to give the Commonwealth power to take over the debts, let it be the power to take over all the debts at the time the transaction is carried out. Otherwise I think that if the debts of one State are taken over there will be a reduction of interest, or else they will be worth more because they belong to the Commonwealth.

Mr. J. Henry, Sir Edmund Barton, and the honorable member for Denison, also spoke of the advantage to be gained by a consolidation of the debts, the last-named saying -

We ought not to be six separate peoples, with six separate interests, but one people with one interest.

I commend that remark to the honorable member now. Sir George Turner interjected, “ And one debt,” to which the honorable member replied -

Yes, and one financial agency. . . . Still we have advanced so far that we recognise that instead of going into the world’s money markets, competing against each other as we do, from time to time, it would be to our advantage to consolidate our debts….. We could get it (money) more cheaply.

Mr. Dobson and Sir Edmund Barton spoke to the same effect. Let me make a rather more lengthy quotation from a Conference report -

The only benefit which we can hope to gain from the Federal Government taking, over our debts, or any portion of our debts, will arise from this. There would be only one borrower on the money’ market instead of seven borrowers, each competing with the others, and the one borrower would be in a more advantageous position for negotiating loans, and might obtain better terms for that reason. So far as I can see, Sir George Turner, from your proposal and from the proposal made by Sir Frederick Holder, no federalization of the States debts is possible at the present time ; and we might consider whether any other action that we could take would give us the benefits which we hope would accrue from the federalization of the States debts. It was hoped that the one borrower, instead of seven, would get more advantageous terms, and that the amount of the interest bill would be reduced. The price that the Commonwealth would get for their loans would probably be slightly better.

That was said by Mr. Kidston. Mr. Butler, South Australia, said -

Everyone must admit that what you call the “ cut-throat “ policy adopted by the different States in the past has resulted in heavy loss to all, and that any advantage which is to be gained by substituting Commonwealth for State credit must be neutralized if the same policy be continued.

Then we get this statement -

Had it not been that the Treasurers - seeing that they are, to a certain extent, faced with almost immediate conversion saw some possibility of making better terms through the Commonwealth than their States could make independently, I do not think we should have had a Conference at all.

That was said by the Honorable J. Gardner, Treasurer of Western Australia, on the 8th February, 1904.’ The last Conference, however, declined to have anything to do with the transference of the State debts, desiring to continue the old system - under which six borrowers competed in the money market - possibly with the Commonwealth as a seventh competitor. I cannot conceive of a more humiliating position for the Federation. The National Parliament was created to deal with the transference of the State debts and other national- questions, but, after nine years, the best arrangement the Prime Minister can propose is for the setting aside of the transfer of the State debts and the distribution of the Commonwealth revenue in such a way that the State debts may never be transferred to the Commonwealth. The other night, the honorable member . for Moreton said that he is in favour of the proposal for the distribution of the revenue, and that the Government would get no help from him so far as the taking over of the State debts was concerned, because he thought that the Commonwealth had already too much power, and had misused some of it. He is therefore content to allow the States to continue in the old way. Let me make one more quotation. Mr. Kidston, speaking at the Sydney Conference, in 1906, said -

If the amount of the debt were fixed, then in fifty years or in twenty years the whole balance might be altered. In any case, it would do two things, both of which are eminently desirable. It would create an Australian stock, and make the Federal debt an investment which would, at any rate, bring better prices to the seller.

A little later, he said -

I venture to say that, taking a broad view of financial affairs, and looking more than tea years ahead, this proposal shows, not only a broad Australian spirit, but would establish the financial stability of the States, and end the whole of the trouble that now exists.

I have another statement by the present Treasurer, but I need not read it to honorable members. To my mind, the Government has not faced this question as it should have done. The action of Ministers in putting on one side the transfer of the State debts at the dictation of the Premiers is not statesmanlike nor advantageous to the people. Whatever the result of the division may be, I shall take every opportunity to inform the people that it would be to their disadvantage to em-‘ body the agreement in the Constitution. I shall not hesitate to do that, even though the view I take may be unpopular. I shall do so because I think that the arrangement, i if inserted in the Constitution, will be mischievous. The Government may gain a temporary advantage, but it will be establishing a precedent which, I hope, no future Government will follow. Just one other matter before I conclude. Ministers have denied that pressure has been put on. their followers regarding this matter. I take no exception to honorable members voting as they choose, but my candid opinion is that, but for the influence of the Government, and the promise to the Premiers, not twenty members would vote for the proposal.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– And how many honorable members opposite would vote against it?

Mr FISHER:

– Honorable members on this side are at liberty to vote as they please on this Question.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– There has not been a meeting, then?

Mr FISHER:

– Not on this question. The Prime Minister said, by way of excuse, that there had been a meeting of his party, but that he had not taken a vote on this question. It is nothing to me how Ministerial party meetings are held. It is admitted that there are such meetings. If votes are not taken at them, I do not know how the wishes of the party are detei mined. In any case, I do not see what advantage he gained bv the statement. Judging by what the honorable member for Balaclava said when he was discussing the election of a Speaker, a party vote was taken by which he felt himself bound. Whether members opposite are bound on the question before us is not now in issue. What has happened is that the Government, which claims to have the national interests at heart, has surrendered them to the

States at a time when the people are looking for guidance. I quoted the late Sir Henry Parkes on a previous occasion as saying that, although he represented the State which had more to lose than any other, he was prepared to give up everything, trusting the people to decide according to their intelligence and lights. It would be well for Australia had we now a Prime Minister who would take up such a statesmanlike attitude. If we cannot trust the people to do the right thing at every election, it is a serious reflection on them. To put the agreement into the Constitution is to declare that this generation is wiser than those which will follow it. I again express regret that the consolidation of the State debts is not made mandatory, and the distribution of the revenue left for further investigation. The Prime Minister said that if the Conference had had more time, it could have settled everything. He can have more time. He can appeal to the electors on the subject. We are quite ready to do so. The position would remain as it is now. It would not be affected by anything done in this Parliament. Surely the Prime Minister does not desire us to believe that the States would mistrust him? The States would be perfectly secure if he and his party went to the election under those conditions, and if the Government are so confident of their position, why do they not take the chance to settle the matter in that way? Why is the Prime Minister so anxious to put the arrangement in the Constitution without any mandate from the people? He is doing this without a mandate, and at a time when there is no opportunity to advise and enlighten the people as to what the proposal really means. He is doing it at the close of a Parliament, when what is practically the biggest question that has yet been discussed here has received very scant attention. All of us are very poorly informed about it, and it would have been well for this Parliament if, in its earlier days, it had devoted more time to the financial question, so that honorable members and the public would have been better informed regarding all its phases, and better able to give an intelligent vote on it.

Mr HENRY WILLIS:
Robertson

– The address delivered by the Leader of the Opposition was full of information, and took a broad view of the financial question. I refer more particularly to the large question of taking over the State debts, and the honorable member’s statement that he would not restrict the borrowing of the States. I wish to make a point of that, because that matter will have to be considered at some future time, and the fact that the Labour party are not in favour of restricting the borrowing of the States must, I think, make them strong when the question has to be decided as between the States and the Commonwealth. This debate has been full of interest, and the amount of special pleading resorted to must have aroused a great deal of admiration on the part of honorable members.I thought the Prime Minister acquitted himself excellently, as he always does. The honorable member forHerbert stated that in this debate the point had been overlooked that, when the Constitution was before the Convention, equal representation in the Senate for every State was insisted upon. As it would be most difficult to take out of the Constitution anything which the States did not want taken out, the States knew that they were secure once they got that provision in, because before it could be taken out they themselves would have to vote in favour of that course. During the dinner hour I looked up the figures to ascertain what the proportion would be, and I found that 20.14 per cent. of the population could prevent 79.86 per cent. of the population from taking out of the Constitution anything that had once been put into it. Thus, less than twenty-one persons out of every 100 could prevent the other seventy-nine persons from giving effect to their wishes. Of course, it was that provision that caused the small States to come into the Federation. They are very strong in the Senate, and will always be so, because we cannot take that representation from them without their consent. Therefore, I say we should not put into the Constitution anything that we may afterwards wish to take out. If we do put anything into the Constitution, and desire at some future time to take it out, although we have 79 per cent. of the people on our side, the other 21 per cent. can prevent us. The Prime Minister says that we would only wish to take the proposed provision out at a time of financial stress. Of course, nothing would be more easy at such a time, because, as soon as there is financial stress, as soon as we are attacked by the enemy, we are one people, solid and inseparable. Then, of course, we could do anything in that regard.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Is not that the point ?

Mr HENRY WILLIS:

– No, it is not the point at all. The point is that when the enemy attacks us, and there is a time of financial stress”, our prosperity leaves us, and poverty and privation overtake us. Then, of course, we speak with one voice and act as one man. Under this agreement, the State of New South Wales is called upon to pay 4s. 7d. per head of population more than she ought to. The State of Western Australia is losing 10s. per head of population. Still, Western Australia was amply represented at the Conference, and, as a result, obtained a special concession in the shape of a cash payment of . £3,250,000. The State of New South Wales, on the other hand, lost about £500,000 a year through not being adequately and faithfully represented. Mr. Wade said that “ he got the worst of the bargain at the hands of the Commonwealth,” but accepted the. situation. I doubt that statement - Mr. Wade was outmanoeuvred by the other State Premiers - for I decline to believe that the Prime Minister of the Commonwealth would penalize any one State. He dare not suggest it, for has he not at his elbow the Minister of Defence, who is the exLeader of the Opposition and the second part of the Fusion, to represent the interests of New South Wales ? I take it that this agreement was not the agreement of the Commonwealth, but the agreement of the States. Indeed, sufficient evidence is forthcoming to show that the Prime Minister said, “ We require a certain sum of money, and that sum we must have.” I thoroughly agree with that. He also said, “ You shall divide the balance amongst yourselves.” Then the representatives of the States began to wrestle, and when five men got at the throat of Mr. Wade, he cried for mercy, panic had arrested him. They said to him, “ You shall be allowed to go back to your State with an agreement, which you alone over-estimate the value of, properly signed, provided that you give to Western Australia £3,250,000 in hard cash.” Queensland got what she wasentitled to, all but 9d. per head of population, so that no clamour can be expected from that quarter at present. Mr. Wade, however, when he returned to Sydney, said that he was badly treated. If that is so, there should be a re-opening of the door of the room where that meeting was held, and the public should n-now what was said, so that they could judge whether Mr. Wade was fairly or unfairly treated. If he was fairly treated, let us have it upon record. I have read the report of the Conference, and, while there is a “summary of other questions that were discussed, there is not a single word as to the means by which the Conference arrived at the 25s. per head of population arrangement. Throughout the discussion, we can understand from a remark dropped, Hansard was told not to report certain matters. It appears, therefore, that, the Conference conspired against giving the public any information as to the means by which they arrived at their decision. I say, again, that we ought to put into the Constitution nothing that we may wish to take out of it. We can” arrive at a temporary understanding until the great question of consolidating the public debt is dealt with. When that time arrives, the whole question can be re-opened, and no harm will have been done in the meantime. That would be in accordance with the fourth plank of our charter - the Fusion agreement. In June last, the honorable member for Ballarat was interviewed, and gave the press official information, which was published under the headings of “ The Basis of Fusion,” “ Official Agreement.” The report read in this way -

The leader of the Opposition (Mr. Deakin) to-day made public the policy which was agreed to by all parties sitting behind him. The basis of Fusion is as follows -

Pending the preparation of a complete scheme adjusting the future financial relations of the Commonwealth and the States, an interim arrangement to be proposed under which the Customs and Excise revenue of the Commonwealth shall be dealt with.

An interim arrangement was to be entered into, so that we might at some future time have a discussion upon the broad question of taking over the State debts. I therefore fall back upon that fourth plank, and I expect the Prime Minister to fulfil the compact that he entered into with us. I also expect the honorable member for Parramatta, as representing the other side of the Fusion, to see that the arrangement is faithfully kept.

Mr Wilks:

– But he is the hostage for the Fusion.

Mr HENRY WILLIS:

– The word fusion is coming- into general use as applied to this party, but I prefer the word coalition. You can have a coalition if there are differences between you. In a fusion, both sides have to give away something, but, as the Prime Minister gave nothing away, there could have been no fusion, but there could have been a coalition. There has been a good deal of discussion on the amendment now put forward by the honorable member for Mernda. The same honorable member moved an amendment last week which was regarded as a test motion. A test vote has been taken in the same way hundreds of times in Parliament as an indication of what the House wants. In this case,- what the House wanted was a review of the agreement. The exact proposal of any one honorable member might not be the exact proposal of others. I disagree with the honorable member for Mernda’s proposal; but the effect of carrying it will be to stipulate that the agreement shall be terminable. The question of whether it shall cease to operate when the amount returnable to the States under it reaches £7,500,000 per annum, or twentyfive years hence, is of no consequence at’ this stage. The main question is whether or not it shall be terminable, and it is that fact that enables the honorable member to obtain considerable support for his amendment. The honorable member has referred to those who are acting with him, and I cannot help saying that if he had to rely only upon their arguments, the acceptance of his amendment would be unlikely. The honorable member for Parkes has declared that he would favour a per capita allowance of 30s. per annum to the States. If such an allowance were made, it would be impossible to carry on the affairs of the Commonwealth.

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

– The honorable member would have to find more revenue.

Mr HENRY WILLIS:

– Exactly. The honorable member for Parkes evidently has not carefully studied the question. His proposal would mean a return to the States of £6,500,000 per annum ; and the Commonwealth, instead of receiving £2,300,000, would get only £1,400,000. In round figures, the Commonwealth’ would have a shortage of £1,000,000. He has also shown his failure to study the question carefully by his statement that as the population increased, the revenue from the Customs Tariff would decrease.

Mi. Bruce Smith. - I did not say anything of the kind. What I said was that the revenue from the present Tariff would increase in volume; but that it would de- crease per capita, as shown by the statistics of three Protectionist countries.

Mr HENRY WILLIS:

– That is to say, it would decrease in percentage and per capita.

Mr Bruce Smith:

Per capita.

Mr HENRY WILLIS:

– The honorable member does not seem to realize that that would work out as a reduction in percentage.

Mr Bruce Smith:

– Not at all.

Mr HENRY WILLIS:

– 1 knew that the honorable member did not understand the question, and that was why I said that we could not act upon the arguments of some of those who are working in concert with the honorable member foi Mernda.

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

– In the midst of all this confusion, stand by the agreement.

Mr HENRY WILLIS:

– Under the proposal of the honorable member for Parkes, there would be a loss to the Commonwealth of £1,000,000 per annum.

Mr Bruce Smith:

– There will be now.

Mr HENRY WILLIS:

– The Commonwealth would have £1,000,0000 per annum less than it must have to carry on with. The honorable member, therefore was indulging in mere fudge in quoting certain figures. Does he recognise that his proposal would bring about direct taxation? Does he desire direct taxation just as he wants unification? Any honorable member who supports the Government proposal will also declare that he is in favour of unification. Under this agreement, the finances are to be pooled. All the revenue is to be placed in one receptacle, and there is to be an equal distribution. That is what would happen if we had unification. There would be a common fund to which every State would contribute, irrespective of its progress, development, or wealth per head of the population. There would be one common fund from which each State would draw to provide for its services. This agreement, if adopted, would mean really the beginning of unification, and that is one reason for our opposition to it. I can understand the Labour party favouring a per capita return of 25s. per annum, because a large section of that party believe in unification. They know also that such an allowance would lead to a shortage in the finances of the Commonwealth, and so would clear the road to the imposition of the direct taxation they favour. The affairs of Australia cannot always be managed from Melbourne. Local Departments must be managed locally. I do not wish to enlarge upon that aspect of the question, but I desired to show that the honorable- member for Parkes should not be taken too seriously when he speaks for two hours in the morning. The honorable member gave us a rehash of a great deal of valuable information. He quoted largely from an excellent speech made by the honorable member for Gippsland, which was brimful of information, and was the result of a great deal of industry. The honorable member for Parkes was guilty of plagiarism in extracting from that speech, so to speak, large junks of information, although I admit that he said that he had not brought a barrowful of books into the chamber, and was content to quote from a speech made by the honorable member for Gippsland, which he declared in passing to evidence great industry. The speech delivered by the honorable member for Gippsland was convincing, but the honorable member for Parkes sandwiched it with ideas of his own with the result that the whole was unsound, and led one to begin to think that the honorable member for Parkes belonged to the other side of the House.

Mr Bruce Smith:

– The honorable mem-: ber is very jealous.

Mr HENRY WILLIS:

– I am jealous for the honour that is due to the honorable member for Gippsland. The honorable member for Flinders stated that at a Premiers’ Conference, held some time ago, he proposed that there should be a continuation of the Braddon section, but that no Treasurer would think of making such a proposition at the present time. I agree that no Commonwealth -Treasurer would now think of doing so for the reason that the Commonwealth Government require more than £2,000,000 per annum, in addition to what they could retain under the Braddon section. But if that proposal were sound in principle then, it must be sound in principle to-day. We began as a Federation by returning to the States three-fourths of the Customs and Excise revenue, but so soon as we put all the revenue into a common receptacle and say, “ We shall distribute it evenly all round,’- we declare for unification. If the proposition made by the honorable member for Flinders at the Conference to which he refers was sound, then he should have supported my amendment, for it would have done justice to New South Wales and no injustice to the other States of the Commonwealth.

Mr Bruce Smith:

– The honorable member is disappointed because his amendment was not carried.

Mr HENRY WILLIS:

– The honorable member is mistaken if he imagines that I thought I should succeed in carrying that amendment. I simply desired to ventilate the fact that, under this agreement, New South Wales would suffer a loss for all time of something like £500,000 per annum. I knew that I should have an opportunity later on to utilize the disagreements amongst honorable members who cannot make their logic tally, and to give a vote to prevent the passing of this agreement, and so to cause it to be reviewed. As a matter of fact, I think I scored last week ; instead of being disappointed I vas elated. The vote that I gave led to the Chairman being called upon to give his casting vote, which I may say in passing is as powerful as is that of any honorable member. In the Senate, when the voting is equal, the question passes in the negative, but the vote of the Chairman of Committees in this House is equal to that of any other honorable member. Had you; Mr. Chairman, in your wisdom, given your vote last Friday against instead of in favour of the amendment, no one could have questioned your decision. I desire this agreement to be reviewed. I do not think any State will suffer if it is. If the Premiers again assemble in Conference I am satisfied that they will meet with open doors, and that the public will know their reasons for arriving at a decision. If it is decided that New South Wales must make a sacrifice, she will then do so with her eyes open. If it is said that there are impecunious States that must be assisted, then I am sure honorable members will hurry to their assistance. But I do not think that any State is seeking relief at the door of another.

Mr Sinclair:

– But each State wants its own.

Mr HENRY WILLIS:

– The State, of which the honorable member is a representative, is losing ad. per head more than she ought to lose under this agreement. New South Wales is the greatest State in the world, but Queensland will be as great. Future Premiers of those States, with a better idea of the responsibilities devolving upon them as the representatives of millions of people, may say that this is an inequitable adjust ment. But, although the people of those two States, representing two-thirds of the population of the Commonwealth, may ask for a modification of the agreement, their voices will be as voices in the wilderness, if it is embodied in the Constitution, without any limitation, since it will be open to 21 per cent, of the people, if the ratio of population in the several States remains as at present, to outvote 79 per cent. It is a situation of that kind that will bring about a civil war. To avert the distant possibility of such a catastrophe we federated, and if the Federation is now used to impose upon the people unification a civil war will be brought about in the distant future. We should put nothing in the Constitution that we may wish to take out ; and a revision of this agreement would be a good thing for the Commonwealth. I absolve this Government from any participation in the injustice done to New South Wales. Though I have said a good deal about the financial agreement, I have never imputed any blame to the Commonwealth Government in this connexion. I worked with some of them for nine years, and found them straightforward,broadminded men ; and I decline to think that they were a party to the unjust agree-, ment which took away £400,000 per annum for all time from the people of New South Wales, and as time runs on this sum will increase. If my vote would secure it, I should have a review of the situation, without binding myself to any particular scheme. I desire the Premiers to be heard, and the Prime Minister to be heard, and to see the latter as firm as when- he said, “ We require £2,373,100, and not a penny less will be taken.” That is the voice of a strong man, such as we require to lead us. If we have a strong man,- we shall see him through, but for one who vacillates, we can have nothing but disgust. I ask the Prime Minister to do his best to bring about another meeting of Premiers, and see if they cannot come to an arrangement which will be satisfactory to New South Wales and do justice to every State.

Mr KELLY:
Wentworth

.- Unlike the honorable member and distinguished gentleman who has just resumed his seat, I approach this subject without any special knowledge whatsoever. I. have found considerable difficulty in arriving at any sort of sound judgment as to what the Australian requirements really are on the subject of the finances of the Common- wealth and the States. I, at first, sat at the feet of the honorable member for Mernda in a worshipful frame of mind; but, after considerable labour, I came to the conclusion I was not capable of thoroughly understanding his proposal. Then 1 sat at the feet of the honorable member for Parkes, and, though I found my resting place slightly more comfortable, I confess that, even there, I could not get the solace and comfort I was looking for. I have also sat at the feet of sundry other financial authorities in the House, including the many different feet of the honorable member for Robertson. I can remember that honorable member taking quite a different stand from-that he has adopted this evening. I can remember his. posing as the champion of nationalism in this Parliament, whereas to-night I have heard from him nothing but a sort of furtive bleat on behalf of moribund parochialism, from the State, the representation of which he adorns.

Mr King O’Malley:

– It made me mad.

Mr KELLY:

– What made me madder was the fact that, after listening with considerable interest, and even greater pleasure, I am now in some doubt as to what the honorable member is going to do in regard to the particular amendment before the Chair. So far as I can understand, the honorable member professes himself anxious to have his own scheme carried into effect, and he is in favour of a reopening of the question. He is in favour of a Constitutional amendment, though not the Constitutional amendment now proposed. The present alternative appears to be one form of Constitutional amendment as against another form of Constitutional amendment. On that point, the honorable member, in the exuberance of his eloquence, forgot to enlighten poor ignorant honorable members, such as the humble gentleman addressing the Committee. The first thing that interests me “in the present situation is the altogether hopeful re-arrangement of parties; and I use the word “ parties “ in its broad sense, because I should be the last to crack any party whip on a subject of this kind. When this session opened, I can remember my honorable friends opposite accusing the archangel of liberalism, the present Prime Minister, of appalling backsliding in venturing to ally himself with such ‘Tory fossils as the honorable member for Parkes, the honorable member for Flinders, and a number of others. I now find that the Opposition realize the inherent merits of the honorable member fct Flinders and the honorable member for Parkes ; and I am glad, because I have long since recognised those merits myself. Now I hold that the fact that certain honorable members on the Government benches are, on this Bill, working in the same direction as members of the Opposition gives no one any justification or cause to complain of their party loyalty. We had an honorable member this afternoon talking of “ lip loyalists “ amongst the Government supporters ! The term is an offensive one at any time, and not only offensive, but unjust, when applied to a number of honorable members who have the misfortune to be opposed to the Government on a non-party question which they regard as of great . importance. For instance, we have had the honorable member for Flinders attacked in the press, and in the House, in a way which reflects little credit on the attackers. What is this question ? It is essentially a non-party question. If honorable members can see their way to support the Government, as I am supporting them, well and good; but, if they cannot, surely this is not an occasion to have the party whip cracked at them in the press and in this House? I am glad to say that neither the Leader of the Government nor the Ministry have endeavoured to take any such action ; but I find that their example has not been followed by certain members who belong to what I might call “ the pack “ - for it is noticeable that certain kinds of politicians, like certain types of animals, find it safer to hunt in packs. . Those, gentlemen may feel bitterly resentful at an honorable member having sufficient individuality to have an opinion of his own and sufficient courage to back it. For my part, greatly as I have always admired the keen perception and breadth of view of the honorable member for Flinders, I never had greater admiration than for his courage all through this business. I say that, even whilst I disagree with him ; and the man who does not recognise grit and courage, in a great national crisis of this kind, is not fit for a place in this House. It is rather a pity that the full sense of this Chamber cannot be taken on this question. The Prime Minister, I think, will agree with me that a matter involving a change of the Constitution is one which should not depend on a catch division.

Mr Wilks:

– Be courageous, and give a pair to the honorable member for South Sydney !

Mr KELLY:

– I have already given pairs in this debate. I should like to see another absent honorable member who is in Australia declare himself one way or another on this important question ; that is, I should like to see the honorable member for Eden-Monaro declare himself, because it is only fair that he should.

Mr King O’malley:

– He is against the Government.

Mr KELLY:

– Then let him say so, and we can talk about what we can do for him.

Sir John Forrest:

– He is ill.

Mr KELLY:

– We know he is ; and I have been ill myself, and have always felt grateful to honorable members for conveniencing me with a pair. It is quite possible that Constitutional amendments may be proposed in the future and passed in a haphazard way. We may have an amendment, as serious as the one now proposed, carried in the Committee stage by a catch division, only the third reading requiring the statutory majority. I suggest that if we could ascertain what is the real opinion of honorable members in the Chamber, it would make our position much stronger before the country. What honorable members are asked to do, is not only to give a vote here, but to back their opinion on the public platform at the next general election; and if we are in a position to say that the decision arrived at was, in the whole course of the Bill, by an absolute majority of this and another place, our position would be, as I say, infinitely stronger on the public platform. I suggest that the Ministry might consult with honorable members opposite, and see whether some soundway of carrying out this idea can be arrived at.

Mr Batchelor:

– The two absent members are against the agreement - certainly the honorable member for South Sydney is.

Mr KELLY:

– That may be. But I do not desire to advise anybody to give a pair to an absentee unless we have a written assurance from the latter.

Mr Batchelor:

– We have the written assurance of the honorable member for South Sydney.

Mr KELLY:

– The honorable member for Flinders has said that we must, on this question, range ourselves into Federalists and anti- Federalists ; but I venture to disagree with him. I think the honorable member underestimates enormously the strength of the Federal feeling throughout Australia. In portions of my own electorate, which, nine years ago, were strongly anti-Billite, the younger community are beginning to be Australians, as distinguished from New South Welshmen. That process is going on all over Australia ; and, therefore, it behoves every one who wishes for a union of the Australian people to do nothing to interfere with the even flow of that Federal sentiment. If a party or a section of this Committee show themselves anxious to starve other public agencies in which they are not directly interested, it will materially interfere with that even flow ; and I say that as a man who looks, forward to a unified Australian people in the future, when such a thing can be safely brought about, though certainly not now. The last thing we ought to do is to show ourselves at this juncture grasping in dealing with Australian finances. We ought not to be grasping, in view of all that has been said here - in view of all the vituperation that has been hurled on State members and State Premiers - or say that they, who are our partners in the responsibility for the administration of the affairs of Australia, shall have no financial guarantee from year to year, on which to properly base their Estimates.

Mr Harper:

– We are all agreed on that point.

Mr KELLY:

– If we are all agreed that there should be a constitutional amendment, I have only to say that one of the hard and fast character suggested by the honorable member would be more difficult to revoke than that proposed by the Government.

Mr Wilks:

– The Prime Minister said otherwise two nights ago.

Mr KELLY:

– What have I to do with that ? I am expressing my own opinion.

Mr Roberts:

– The proposal of the honorable member for Mernda provides automatically for the reconsideration of the matter.

Mr KELLY:

– Let us say fifteen years hence.

Mr Roberts:

– The time may be hastened.

Mr KELLY:

– We have been told that the Premiers will throw every obstacle in the way of a second amendment of the Constitution.

Mr Roberts:

– We are justified in saying that by what has happened in thepast.

Mr KELLY:

– Then we are justified in believing that the Premiers will throw every obstacle in the way of an increase of population by immigration to delay reaching the period provided by the honorable member for Mernda for the termination of the arrangement.

Mr Batchelor:

– But they would be getting 25s. per capita from the Commonwealth.

Mr KELLY:

– Only during the period prescribed by the honorable member for Mernda. In my opinion, one of the strong points about the agreement as it stands is that it makes the States equally interested with us in fostering immigration. But the amendment, if it had any effect at all in this connexion, would offer them an inducement to keep their population within certain limits. In my opinion, the proposed agreement will last a much shorter time than the arrangement suggested by the honorable member for Mernda. Does any honorable member believe that, if a great national emergency were to arise, and Australia were to be threatened by foreign aggression, the agreement would last? The moment that we are faced by foreign aggression we shall become one people in fact as in name. But were the amendment agreed to, and were a crisis to arise a few years before the arrangement became terminable, the States might say, “ Why should we not in the meantime advance the Commonwealth money by way of loan? Why should we not see it through until the agreement becomes terminable?” How humiliating it would be for the Commonwealth to be financed by the States ! The one thing to be objected to in the present agreement is that the Commonwealth puts itself into the position of accepting temporary assistance from the States. After listening to the debate, I feel that a constitutional amendment is necessary. At first, after listening to the speech of the honorable member for Parkes, I was inclined to think that all that was required was the passing of an Act granting the States 25s. per capita for a term of years. Since then I have listened carefully to the discussion, and have come to the conclusion that we are tarred with the same brush as are the members of the State Parliaments. They, no doubt, think of nothing but their particular public agencies, and I am deeply disappointed to believe that a large section of members here regard themselves, not as trustees of the common weal, but as jealous advocates of what they are pleased to describe as the rights of the

Federation. If the finances of Australia are to be controlled entirely for the advantage of any particular set of public agencies, it will be bad for the common weal. Public agencies which touch the daily lives of the people as nearly as do ours would be starved under such a system and the people would suffer. For that reason I think that an amendment of the Constitution is necessary, and I reiterate my belief that those who desire that the arrangement shall continue no longer than it may be absolutely required should do all that is possible to prevent the adoption of the proposal of the honorable member for Mernda.

Mr WILKS:
Dalley

.- During the past three weeks, on the second reading of the Bill, and in Committee, we have been discussing the financial question in its various phases, and the remarks of the last speaker show the advantage of cautious action. Being cool and calculating, he has not declared himself until now.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– He made a good speech.

Mr WILKS:

– From his stand-point. He said that he was desirous that in a crisis like the present - he admitted that there is a crisis - his constituents should know what he thought. He strongly desires the recording of a full vote in order that he may put into active operation’ a little of the ideal political feeling about which he spoke. He is aware that the honorable member for South Sydney cannot vote, being away in a distant land, and that the honorable member for Eden-Monaro is absent on account of ill-health. We shall be able to admire him- as he admires the honorable member for Flinders, if he will follow his remarks by granting a pair to the honorable member for Eden-Monaro.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– He is on the same side.

Mr WILKS:

– He is not on the same side as either the honorable member for Eden-Monaro or the honorable member for South Sydney. Those who speak of high political ideals may well be expected to set an example to the more humble members of the Committee. Not one vote will be altered by the debate. But the speeches here will educate the people for the coming elections. I agree with the honorable member for Wentworth that our earnestness in this matter should not be confined to the making of speeches within this Chamber. In seeking the suffrages of the people, those who want the agreement will have to take off their coats and fight for it, while those who are against it must oppose it. I can understand the Ministry fighting for their kingdom of Cabinet control. The party on this side of the Chamber is now composed of Ministerialists and fusionists. When speaking on the Government programme, I took the liberty of classifying honorable members on this side as those who were Ministerialists rather than Fusionists, and those who were Fusionists rather than Ministerialists. This is the first fray of any magnitude; but it accentuates the position. Those who were Fusionists and Liberals have no desire to rend the party asunder. Certainly, the Ministerialists have the right to do as they think fit; but it should be made clear to the public that they are Ministerialists first and Fusionists afterwards, while we who differ from them are Fusionists first and Ministerialists afterwards.

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

– The honorable nmember believes in having two political parties at some times, and three at others.

Mr WILKS:

– The Fusionists remain loyal to the terms of the Fusion agreement, which provide for an interim arrangement.

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

– No.

Mr WILKS:

– That is distinctly provided for by clause 4.

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

– That is not all that it says.

Mr WILKS:

– Is the Liberal party to obey without question the behest of the Ministry in this matter? I do not blame the Prime Minister for fighting for his own hand; but that he is doing so is not a reason why we should surrender our personal freedom. Did I not consider the proposal of the Government a dangerous one, I would not oppose it. The honorable member for Wentworth says that he is a unificationist, but he objects to unification taking place now. I say that we have no right, by any legislative act, to obstruct unification. I am opposed to unification ; but those who are Liberals have no right to prevent others from doing what they think proper. I have no desire to traverse ground which has already been covered. Those who oppose the agreement do so deliberately, and have given many arguments in support of their position. They realize that a strain is being put on the party allegiance. But, having won two nights ago on the casting vote of the Chairman, they are bound to again do what thev think necessarv to prevent the ratification of an agreement which thev regard as dangerous to the community. If we are defeated to- night, we must nevertheless oppose the third reading of the measure. If we are not ready to do that, we must be fooling the Committee, or the country, or ourselves. What is taking place now is the commencement of a large and powerful agitation. Did I desire to take the convenient course, I should not oppose the agreement. There is to be a struggle on the platforms, and those who are against the agreement must avail themselves of every opportunity to state their reasons.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– But why do so now ?

Mr WILKS:

– I am doing it now because the Prime Minister said two days ago: “ If this Bill is not carried, I shall take it to the country.”’

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Surely we have had enough talk on it.

Mr WILKS:

– The honorable member can sit behind and vote silently. He has the Prime Minister standing as his political godfather, and a certain section of the press as his political godmother. It is those who are fighting the Bill that have a right to speak on the matter. Only a few months ago, the honorable member for Indi, when sitting in the Opposition corner, could see nothing right in the Prime Minister. Although he is a staunch supporter of the Prime Minister now, he then held that gentleman up on every occasion in this Chamber to scorn and ridicule. When he failed while on his feet in casting opprobrium on the honorable gentleman, he used to cast slurs upon him by a series of interjections. One of the leading organs of this’ city - the Argus - was opposed to the present Prime Minister only four months ago, but to-day it is supporting him. That applies to a large section of the press throughout Australia. As a matter of fact, they distinctly say now that they do not approve of the agreement in full, or believe in putting it into the Constitution, but. they disapprove of the Labour party getting the ascendancy. The whole secret behind this movement is that the State Premiers are afraid of the political Labour forces, and of what is called unification. I do not ask for immunity from the Labour side. I will fight them, and they will fight me as strongly as ever, but are we to act a part here, and pretend that in supporting this agreement, we are acting purely in the interests of the country ? Surely the amendment of the honorable member for Mernda meets all reasonable requirements. It goes even further than I would be prepared to go. Personally, I am against putting the arrangement in the Constitution, and, in any case, I believe in a time limit. But my tribute to the honorable member for Mernda is that, for the sake of the solidarity of the party to which I belong, I am prepared to put the arrangement in the Constitution with a time limit. I am prepared to agree to put it in the Constitution for fifteen years, and no longer, that being the period when it is estimated that the population will have increased sufficiently to bring the amount paid to the States to £7,500,000. I am prepared to make another concession to show my loyalty to the party. If the Prime Minister will put to the people, by a referendum, two distinct questions - first, the proposal to pay 25s. per capita, and to place the arrangement in the Constitution ; and, secondly, the same proposal limited to a period of years - I shall support him. Surely that is not the attitude of a man who is opposing the Government simply for the sake of hostility. It is known that the return of the honorable member for Brisbane has given the Government their majority on this question. That honorable member is unacquainted with the facts of the case, and has not favoured the Committee with his opinion. It rests with him to decide the matter, and I ask the honorable member for Wentworth, who is so fervent an admirer of courage and political righteousness, why he did not appeal to the honorable member for Brisbane to explain to the Committee and to the country his reasons for voting for the agreement. We have not heard a word from him - perhaps another evidence of Ministerial discipline. I belong to the Liberal party, and to me the only charm in public life is the preservation of one’s own individuality. If a man has no personality and does not desire to assert his individuality, let him get nearest to the side whose general politics agree with his. On general politics, the Opposition side is nearer to me, and the only point on which I fight them is the question of the surrender of one’s individuality and personality.

Mr Roberts:

– The ‘honorable member is quite wrong.

Mr WILKS:

– I am prepared to gauge the Labour party by their works. I am not new to public life, or to the disciplinary methods practised by the political Labour forces of Australia. I may be wrong in my judgment or dull of perception, but I hold the opinion that that side has become so disciplined that this side is trying to imitate it. The present case is a very clever imitation of the discipline exercised by the Labour party. I am old-fashioned enough to believe that Liberalism cannot be associated with Cabinet direction, and Cabinet discipline. I do not blame the Prime Minister, or his Cabinet, for fighting for the agreement, but if they are successful in this battle, either in this Chamber, or outside, it means good-bye to the independence of any member who belongs to this party. I shall tell the 30,000 electors of my constituency that if they are going to do the behests of Gregory Wade, no matter how able he may be, they had better not exercise their franchise at all, but place it in his hands. This is the battle of Nationalism, and the fight is not for the supremacy of a Parliament, but for the supremacy of the people. The people employ two agencies - the Commonwealth and the State Governments - and it would be to descend to ‘the lowest depths of humbug to say that the average elector is prepared to cast a clear and intelligent vote on the question, or is fully acquainted with all the details of this intricate scheme. The very men who claim that he is, know that it is impossible for him to be so, seeing that they themselves have only arrived at the agreement after many years of struggle. The Prime Minister himself less than twelve months ago gave to the public in this Chamber a very different idea from that which he expresses to-day as the Leader of a Fusion Ministry. If the Government and the State Premiers are so’ satisfied with their position, and want te* appeal to the public, what is to prevent their submitting the question at the next: election, and obtaining a mandate from the people, as the honorable member for Robertson suggested? In that case everyone of their supporters who binds himself to the scheme on the platform, and is returned, will be in duty bound to see them through. Both as a citizen and a candidate, I - shall do my best to. resist the embodying of the agreement’ in the Constitution, and ami prepared to take the consequences. I ask for no favour from the Ministry or the Labour party. If I did not think the question was worth fighting for, what would be the use of bothering over it?’ When the fight does take place, every art of cajolery, and every piece of instructivepress work, will be brought into play on> behalf of the agreement, and almost the whole of the powerful press of Australia will paint the picture to the public as attractively as they can. That being so, it is just as well to prepare for the struggle. The people of New South Wales must be told, as the honorable member for Robertson said, that those who vote for the 25s. per capita arrangement will be making a very serious attack upon that State. The people of New South Wales, if they assent to the agreement, will be mulcted to the extent of about £600,000 per annum. That is the price which they will pay for a continuance of national life. I believe they are prepared to pay it, but it is asking them too much to expect them to place the agreement in the Constitution in such a way that it cannot be reviewed when found necessary. The amendment of the honorable member for Mernda is simply the re-enactment of the Braddon section as it now stands in the Constitution, tempered by experience. The honorable member asks that “that section, the term of which is about to expire, shall be superseded by his scheme, which will practically last for fifteen years. That is the point upon which all this terrible struggle is taking place. The honorable member and those who support him are called traitors to the Fusion Ministry, and recreant to their principles, although they simply ask that the Braddon section, with all its safety, shall be extended for fifteen years, and that, then, those who compose the Federal Parliament shall review the matter. With a further experience of fifteen years, surely the Parliament and the electors of that day will be in a better position to decide. Personally, I think the honorable member for Mernda is going too far, but he is making a concession to the Premiers, because they say they want security. They have had experience of us for ten years, and have no reason to doubt us. We have treated them more than liberally ; we have even given them more than their three-fourths of the Customs and Excise revenue, and yet they turn round and say that the National Parliament should not be trusted. They want everything in the bond. I am told that if the arrangement is put into the Constitution, it can be removed, but if that is so, why do Mr. Kidston, Mr. Wade, and others fight so strenuously to get it into the Constitution? I am sorry for the Prime Minister, who has fought his battle both hard and well. If Messrs. Kidston and Company had any spark of manly feeling in them, they would, knowing that hon- orable members in this House are equally divided on the question, release the Prime Minister from his position. If they had no intention of placing a heavy manacle on the Federation, they would voluntarily accept a time limit of fifteen years ; but the fact that they are holding back in the traces shows that they are fighting for their pound of flesh. They know that once they get this provision in the Constitution, they will have gained all that they desire. The Customs taxation today amounts to 50s. per capita, of which, under the agreement, 25s. is to go to the Commonwealth, and 25s. to . the States. Those who believe in lessening Customs taxation see no ray of hope there. Whether Protectionists or Free Traders, those who wish to take that form of indirect taxation as far as possible off the backs of the masses, know that to place this arrangement in the Constitution will defeat their hopes.

Mr Mathews:

– It means good-bye to the free list.

Mr WILKS:

– The honorable member for Melbourne Ports, as a Protectionist, realizes the position, and I, as one who does not believe in high Customs taxation, can realize it also. I believe that the less taxation you have the better, so long as you have efficiency of government. I intend to vote for the amendment, npt that I am any’ more enamoured of it than the Prime Minister is, but it brings me nearer the goal of a time limit, and it is possible that, if immigration is encouraged, the 6,000,000 standard of population will be reached in ten years. The honorable member for Wentworth must have thought we were children when he told us that if the amendment is adopted the State authorities will try to restrict the growth of population, and that they will be opposed to immigration. I never heard a more absurd statement. Every immigrant is worth thousands of pounds to the _ State that secures him, and the honorable member for Wentworth must think we are very foolish if he imagines that we will accept his statement that the State Premiers, in order that this agreement shall not be disturbed forfifteen years, will discourage immigration.

Sir Philip Fysh:

– Is such an argument worth answering?

Mr WILKS:

– The honorable member realizes the absurdity of the statement, although the honorable member for Wentworth assured us that he was serious, ami declared that he was robust, healthy, and most courageous. Having regard to that assurance, surely I should be the last to doubt the honorable member’s seriousness. Indeed, I should not insult him by doubting his word. If his argument is not worth answering, so much the worse for those who support the agreement. There is no more ardent supporter of this agreement than is the honorable member for Denison,’ yet he suggests that we should take no notice of an argument advanced in favour of the Government proposal. The incident serves to illustrate how quickly the Prime Minister is able to obtain support. Those who deliberately oppose this agreement, must continue their opposition to the end. You, Mr. Crouch, according to my way of thinking, have displayed a great deal of courage in voting for Nationalism.

The TEMPORARY CHAIRMAN (Mr Crouch:
CORIO, VICTORIA

– The honorable member has no right to refer to a vote or the views of the Chairman.

Sir John Quick:

– Hear, hear !

Mr WILKS:

– It is all very well for the Postmaster-General to applaud you, Mr. Crouch, but if my observation had been in favour of the Government attitude, he would not have attempted to rebuke me. I can overcome your objection, sir, by referring, by way of illustration, to the honorable member for Corio.

The TEMPORARY CHAIRMAN:

– I think that the honorable member is displaying bad taste in commenting on the act of an honorable member who, from his official position, cannot reply to his criticism.

Mr WILKS:

– I would remind you, sir, that you are not the permanent Chairman of Committees. My action has been challenged; but no honorable member is more obedient than I am to the ruling of the Chair.I shall refer, not to you, sir, but to the honorable member for Corio. That honorable member acted most courageously in voting in the most deliberate manner for the previous amendment. Of all those who voted for it on this side of the House, none is more courageous than he is ; and I am sure that he will be the last to take exception to my statement. The honorable member for Corio, together with some others on this side of the House, has from the first voted against this agreement. They have gone away from their party in doing so, and will probably vote for this amendment to-night. Is our opposition to end there? If the placing of this agreement in the Constitution for all time will be a danger to the people, should our opposition to it cease at this stage? If we think that it would be a danger to place it in the Constitution for all time, then I respectfully submit that we should oppose the third reading of the Bill, and so render it impossible for the Government to secure the statutory majority necessary to enable it to pass. If that be done, the Prime Minister will then carry the agreement to the country, and those who have been fighting against the Government proposal here, will be able to continue that fight on the public platform. They may be sorry for doing so; but they need offer no excuse for their action to those with whom they have been so long associated. When the fight starts, they will appeal to the public, fighting as Liberals, and not as emissaries of the Political Labour organizations. They may fight as political Cossacks, at the headof their army, but never against their own army.

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

– “ At the head of their army ! “ I like that. “ Behind it,” the honorable member should say.

Mr WILKS:

– The honorable member would like to get them behind.

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

– Behind the army, a long way behind !

Mr WILKS:

– The honorable member for Wentworth has already spoken of certain people who, like animals, prefer to work in packs. He applied that opprobrious term to many honorable members behind the Government ; but it cannot be said that the eight who voted for the amendment last week are in the pack. At the worst, they are political Cossacks; but when they are on the public platform, they can say distinctly that they stand, not as Ministerialists but as loyal Fusionists, prepared to stand by the Fusion agreement. Some three months ago, when speaking from this side of the House, I said that I voted for the present Government to come into power on the invitation extended to me to assist in bringing about a state of affairs in which we should have in this House only two parties. I declared, however, that I reserved to myself the right to vote as I pleased on the individual measures submitted by the Government. I am still a Fusionist, and still, I trust, a Radical. The Prime Minister, twelve months ago, was also a Radical. I may be wrong in my judgment and perception ; but I think that the Prime Minister, in proposing to place this agreement in the Constitution - and I am not opposed to the details of the agreement, or to the amount which it provides shall be returned to the States, although its effect will be serious on my own State - is simply doing the work of the Conservatives of this Parliament.

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

– Cheers from the Labour party !

Mr WILKS:

– The Minister of Defence and I have been associated for many years, and it is unnecessary to deal with this matter in a lachrymose manner. There is no room for apologies or for the use of language of the perfumery description - language which suggests that it has just left the glove-box -of some dainty lady. We are men, and as such have to take our stand. I regret that I have to differ so strongly from the Minister of Defence, but that difference will not ‘be confined to this Chamber. It must be continued at the next general election. We cannot escape from that position. Honorable members who from the inception of our consideration of this agreement have broken for the time being from their party allegiance and party ties have thus committed themselves after due reflection. If my reflection and deductions have been wrong, I alone will’ suffer ; but I think that the class to whom I belong and the people whom I represent would not, in fact, be represented if I did not oppose the placing of this agreement in the Constitution.

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

– Then the honorable member is opposed to anything going into the Constitution?

Mr WILKS:

– No. There is no one more acute than is the Minister of Defence.

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

– I am anxious to know where some honorable members are.

Mr WILKS:

– The honorable member has known for weeks where I have been. He is a ‘busy man, but I respectfully ask him to read the report of the remarks I made only a day or two ago, when I endeavoured to answer the arguments advanced by the Prime Minister.

Mr Roberts:

– The question just asked by the Minister of Defence is a nice one to be put by an honorable member who has espoused every cause in politics.

Mr WILKS:

– I do not desire to be drawn away from the question. The political Labour forces themselves are out of joint.

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

– Is it not nonsense to say that this is not a party question? Can the honorable member doubt that it is?

Mr Roberts:

– The Minister of Defence declares that it is a party question.

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

– I deliberately say that it is, so far as the Opposition are concerned.

Mr Roberts:

– A shameful and discreditable utterance.

Mr WILKS:

– The Prime Minister throughout has said that it is not a party question; the Minister of Defence, on the other hand, says that it is.

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

– I do not say that it is a party question so far as this side of the House is concerned, but it is with the Opposition.

Mr WILKS:

– The Minister of Defence has made several statements at variance with others made by the Prime Minister. I recognise that he has a perfect right to his own opinions.

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

– I should hope so.

Mr WILKS:

– If the honorable gentleman, although he is the Prime Minister’s first lieutenant, takes the liberty of differ- ‘ ing from him in important essentials, surely he cannot object to a supporter of the Government differing from him.

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

– I know of no difference.

Mr WILKS:

– The Prime Minister said only a day or two ago that those who opposed the placing of this agreement in the Constitution would discover sooner than they anticipated that the Commonwealth would be so flush of funds that it would be in a position to return -to the States more than 25s. per head of population. Five minutes later, the Minister of Defence said, by way of interjection, that five years hence the Commonwealth would be stumped for funds.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Has the honorable member any proof of his statement?

Mr WILKS:

– Yes, I refer the honorable member to Hansard.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– The honorable member cannot prove in that way what he said about me. I doubt if the statement which he attributes to the Minister of Defence appears in Hansard. I did not hear him make it.

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

– Two different points altogether, and the honorable member ought to know that.

Mr WILKS:

– The honorable member for Indi has challenged my veracity, and I appeal to the Minister of Defence to say whether my statement is not correct.

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

– The Prime Minister and I are not in dissonance.

Mr WILKS:

– The honorable member for Indi has challenged my veracity, and I ask the Minister of Defence straight out to say whether he did not make the statement that five years hence the Commonwealth would be stumped for funds?

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

– My reply is that the honorable member makes an incorrect statement when he says that the Prime Minister and I are at variance.

Mr WILKS:

– That is a political answer, but the honorable member for Indi can no longer doubt the correctness of my statement.

Mr Mathews:

– If the honorable member mentions the honorable member for Indi’s name again, he will make another speech.

Mr WILKS:

– I hope that he will. It is about time that he spoke to this question.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– I am not to be drawn so easily ; I am keeping my oratorical virginity for the elections.

Mr WILKS:

– I ask you, Mr. Chairman, whether a man who can coin a phase like that, whatever it may mean, is to be trusted on important financial questions? In all my experience of public life, I have never known a man more quickly become a supporter of a Government than has the honorable member for Indi in this instance; and, no doubt, he is a hard fighter and a loyal friend. If the first lieutenant of the Fusion Ministry can disagree with his own Prime Minister, and the Prime Minister can disagree with himself in twelve months, the only proper course is to have the question threshed out at the ballot-box. This is a new question for the public; and it is fair that they should be given reasonable time to form their opinion. A strong agitation and a strong battle will eventuate; and the public ought to know why we so strongly object to this agreement being made part of the Constitution. If the Prime Minister, or any of the Ministry, think that this opposition is merely for the sake of embarrassing the Government, let them say so; and we can choose our own course of action. My conclusion may be erroneous; but my idea of a Liberal party is one which allows each man to exercise his own judgment on his own responsibility. Of course, I cannot ask the Prime Minister to so protect me at the coming elections ; and I shall have to take mv own risk. I prefer that the matter should be decided at a general election rather than bv means of a referendum. If the Prime Minister will put the ques tion so as to boldly provide for a limitation of time, I shall be satisfied, but failing that I shall vote for the amendment, not because I am impressed with the amount proposed, but because I regard it as a means whereby a limitation may be imposed.

Dr MALONEY:
Melbourne

– I think that the wisdom of the House is with those who are opposed to the proposal of the Government. As one who has taken some interest in the referendum I object strongly to the Prime Minister or any one else saying that the referendum proposed is a fair one, because it is impossible to have a fair referendum under our Constitution. In no Democratic Constitution can they find such a provision as that now submitted by the Government. The only similar case is that associated with what is known as the “Spoils Campaign” in Switzerland - that is the only example as degraded and infamous as that now before us. It had to do with the disposal of the surplus Customs revenue in Switzerland : and the Switzers rose in their might and exercised the power they possessed under their Constitution. The account in the Referendum in Switzerland, by M. Simon Deploige, is as follows -

The third voting, which took place in 1894, created an enormous amount of excitement in Switzerland, and was known as “ the Spoils Campaign.” In 1850 the Customs duties yielded between four and five million francs. In 1894 they had increased to thirty-five millions. As a result there was a considerable surplus, which has been employed in subsidizing railways, in vast works of fortifications, in grants to native manufacturers, and in erecting public buildings. Some cantons were thus subsidized at the rate of 1 franc 35 cents per head of the population, while others obtained 154 francs. The mutual jealousy of the cantons was aroused, and an initiative amendment was set on foot signed by 67,828, by which the surplus was to be distributed among the cantons at the rate of 2 francs per head.

That means rs. rod. and not 25s. per he? d -

The Swiss are always very chary of expenditure. Thus the amendment .was speedily calculated to appeal to them. Pamphlets were circulated giving an account of the salaries of the public officials, and brilliant schemes were propounded as to what the cantons could do with the money. The Opposition were quite as active, for the initiative was an attack upon the whole system of Federal finance and administration.

Just as this is an attack on the Federal finances and administration -

If an amendment could be thus incorporated into the Constitution, bv which the people should be paid 2 francs a head the canton to spend the money as they liked, with no supervision from the central ‘ Government, if was practically turning the Federation into a! company for the distribution of dividends to the shareholders.

I take it that there is an attempt to compel the Commonwealth to distribute money in the same way -

After a period of great political agitation in which 496,601 voters out of 700,000 registered electors went to the polls, the motion was lost by 205,177 votes. An act of religious intolerance, an extremely advanced socialistic measure, and the attempted pillage of the Federal Treasury to the tune of six million francs, has been the result of the latest experiment in direct legislation. The fact that the last two were rejected is not a guarantee that such things will always be rejected, and the new Federal initiative has been the cause of great anxiety in Switzerland.

Once this provision is inserted in the Constitution, as we are told in the splendid articles in the Age, 90,000 electors may frustrate the will of 900,000 electors. We have a record of forty-two referendums ; and it is shown that smaller States always object to any advance or change, especially when there is a money interest attached. When the peopleare without power there is degradation, but, with power, there is good government. If we had the initiative, there would be no fear of the State Premiers, some of whom exist on a majority of one, and can only be regarded as the puppets of the day. We are the dominant Legislature, elected on the widest franchise in the world, and it is monstrous to suggest that we should go cap in hand to the Premiers,and humbly bow to their decision. As the honorable member for Darwin has said, if this agreement is once placed in the Constitution, it may take as bloody a war as that which occurred in America, to secure its removal. The honorable member for Dalley, in his outspoken way, has touched the acorn of the oak which it is desired to grow. He suggested that it was, perhaps, because the partv behind the Prime Minister feared the rising Democracy, that they desired to shelter behind the parochial powers of the Premiers. It is all very well for the Prime Minister to thunder that the State Parliaments are elected by the same people who elect the Commonwealth Parliament ; but the statement is not correct, because in the States there are second Chambers which are not elected on the same franchise that is enjoyed under the Commonwealth. All the voters in New South Wales cannot elect a single member to the second chamber in that State; and yet the Prime Minister has the audacity to make the state ment to which I have referred. Sir Charles Dilke, one of the greatest of international authorities, has stated that the Legislative Council of Victoria has twice brought the people of the State to the verge of civil war. It does not matter how brilliant an orator a man may be, there is danger when he can be induced to change his mind when surrounded by half-a-dozen of his colleagues. The Prime Minister is the key of the Government arch. If he were removed, the Cabinet would fall to pieces. The honorable member for Mernda, unmoved by efforts to shift him from his position, has submitted an amendment for which I intend to vote. I should have preferred a proposition to the effect that the Commonwealth should take over the debts of the States and control them. Why should we not provide that, after meeting the expenditure of the Commonwealth for each financial year, the balance of Customs and Excise revenue should be divided pro ratâ amongst the States?

Mr King O’Malley:

– That is what is provided for in my scheme.

Dr MALONEY:

– I know that, and my honorable friend’s scheme has my loyal support. If the people of Australia had the power which the Switzers have of expressing their will by means of a referendum, I have no doubt as to what their decision would be. Indeed, if we had elective Ministers in this country, such a proposal as that now submitted by the Government would never have been laid before the Parliament. There were fewer heartburnings after the selection of the last Labour Government than there have been after the appointment of any Government of which I have had knowledge; because the members of the Fisher Administration were elected fairly and squarely. The present Government was chosen purely in accordance with the will of the Prime Minister, who, consequently, became a dictator. We have got rid of the dictatorship of the Throne, and yet we permit a dictator, in the person of the Prime Minister, to control our affairs. Do honorable members realize that if such a proposal as that made by the Government for the payment of 25s. per head to the States were made in England, it would bring the Treasury to bankruptcy ? Imagine the Chancellor of the Exchequer having to pay 25s. per head in respect of each inhabitant of England, Ireland, Scotland, and Wales. It would mean an expenditure of£50,000,000 per annum.I shall be told, no doubt, that there is unification in Great Britain, which is controlled by one Parliament. I wish we had only one Parliament in Australia, so that the second Chambers of the States might be swept into the limbo of oblivion. The Prime Minister is bartering away his reputation as a Liberal by bringing forward such an infamous proposal as that before us; for I can apply to it no milder term. I would go to any length to prevent the Bill becoming law in its present shape. I do not take up this attitude of opposition to it because 1 am afraid of the people. But this Government would only trust the people when they were bound and manacled. I will resist to the utmost of my power this attempt to enable the dead hand of the past to grasp the throat of the National Legislature of the future. No Parliament, and no Government, has the right to inflict upon unborn generations laws that are practically irrevocable. The time for the enactment of laws similar to those of the Medes and Persians has for ever fled. This agreement, if embodied in the Constitution, will form the subject of continual bickering in the future. It will be a disgrace to our civilization. If the Government have any doubt upon the matter, why do they not seek to embody in our Constitution a provision similar to that which is contained in section 118 of the Swiss Constitution, which provides -

The Federal Constitution may at any time be amended wholly or partially.

It then goes on to say that 50,000 electors, or approximately1¼ per cent. of them, have a right to demand the taking of a referendum upon a proposed amendment. Yet we are told that the agreement before us will be the subject of a referendum. I only wish that our citizens, by their votes, could compel the Government to submit a simple question to the people. The Ministry simply seek to puzzle the electors, just as they were puzzled by the referendum which was taken in Victoria some time ago upon the question of religious instruction in State schools. I have pleasure in supporting the amendment, which, I hope, will, be carried. But even if it be defeated as the result of one honorable member putting in an appearance at the psychological moment, those who vote for it will have the satisfaction of knowing that they fought for the right, and refused to bow their heads to the dust at the behest of the State Premiers. If the agreement becomes law, I venture to prophesy that no provision in our charter of government will ever cause such continual worry and fighting as will this infamy which the Prime Minister is seeking to engraft upon one of the freest Constitutions in the world.

Mr POYNTON:
Grey

.- For a considerable time past the States have endeavoured to saddle this Parliament with the cost of assisted immigration. I understand that the honorable member for Wentworth objects to the proposal of the honorable member for Mernda, on the ground that it would have the effect of restricting immigration. But if we accept the agreement in the form in which it is proposed by the Government, we shall have consented, not merely to incur the expenditure that is involved in the payment of old-age pensions, but also to defray the whole cost of immigration. The average cost of bringing an immigrant to the States is about £7, and, under this agreement, in a little more than five years the States will be recouped more than that amount for every immigrant that they receive. It is idle for the Prime Minister to say that the people who have power to embody this agreement in the Constitution also have power to take it out again. Will not any such proposal always require to run the gantlet of the two branches of the Legislature ? The very moment that the proposed agreement is incorporated in the Constitution, all the efforts of the State Premiers will be directed to capture the Senate, with a view to rendering it impossible to remove it from that charter of government. But even if a proposal to that effect were adopted by both Houses, it would still be within the power of a minority of the electors to defeat the wishes of a majority. Some time ago, when the proposal that Parliament, should adjourn over the Premiers’ Conference was submitted for our consideration, I appealed to the Prime Minister not to sacrifice the interests of this Parliament at that gathering. In the faceof that warning, it has been deliberately sold; for if the agreement be adopted, this Parliament will unquestionably become subservient to the State Parliaments. A large majority of the members of those Parliaments will advocate the retention of the agreement in the Constitution.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– That will be a splendid thing.

Mr POYNTON:

– The State Premiers have declared that every honorable member who opposes the agreement will have to fight for his seat at the next general election. Had this proposal been submitted for our approval twelve months ago, it would not have secured five advocates. I venture to say that if a secret ballot were taken, it would not have twenty supporters in this House. When the honorable member for Mernda stated last night that many honorable members opposite would vote as he intended to vote, if they were free to do so, he stated only what is an open secret. There are very few members who favour the continuance of the proposed agreement for more than ten years. Yet the honorable member has been twitted with having disclosed private information. Such information is not private, but public. Why was not the Braddon section of the Constitution subject to alteration only by an amendment of the Constitution? Was not the object to enable this Parliament to deal with the matter? Have we not the right next year to deal with it, without consulting the electors? When once the agreement has been embodied in our Constitution, any proposal to remove it may be rejected by 80,000 electors voting against it, although 800,000 vote in its favour.

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

– That proportion is not accurate. At the last general election, 430,000 electors voted in four States, and 1,600,000 in two States.

Mr POYNTON:

– I will give the precise figures presently. Is that a fair proposition? Has this- Parliament done anything to warrant the censure upon it that is implied in the proposal to embody the agreement in the Constitution? Have we not starved our public services in order that we might hand back money to the States? Have we not loyally given effect to the provisions of the Sugar Bounties Act? Will the next Commonwealth Parliament be less honest than we have been? I venture to say that if we limited the proposed agreement to ten years, no honorable member would dare to attempt .to remove it from the Constitution during that period. Were such a course suggested by the party with which I am associated, I should immediately hand in my resignation, and that, I am confident, would be the attitude of every other honorable member of this House. Yet we are told that the States require the agreement to be embodied in the Constitution because this Parliament cannot be trusted. We have already handed back to them £6,500,000, every penny of which we could have expended had we chosen to do so. In addition, we have constructed out of revenue public works to the tune of £3,250,000. In short, we have done everything that we could to maintain the reputation of this Parliament. A few moments ago, the honorable member for North Sydney challenged the accuracy of the figures which I quoted.

Mr Hutchison:

– They were within a hundred or two of being absolutely correct.

Mr POYNTON:

– At the last election, 38l>336 persons in New South Wales voted for a proposed amendment of the Constitution, 381,185 in Victoria, 124,539 in Queensland, 35,258 in South Australia, 26,356 in Western Australia, and 24,439 in Tasmania, making a total of 973,113 in favour of the amendment. «Let us now see how many electors would have voted against the proposed amendment of the Constitution in the three small States. In South Australia 35,259 votes would have been recorded against the proposal, in Western Australia 26,356, and in Tasmania 24,440, making a total of 86,055, as compared with 973,113 votes cast in favour of it. That calculation is based upon the actual voting at the last election.

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

– According to the present rolls, one-fifth of the electors of the Commonwealth are contained in the three small States.

Mr POYNTON:

– The honorable member will not dispute that slightly over onehalf of that number could prevent the proposed new section from being taken out of the Constitution. Is it not idle, therefore, for any one to say that it could be taken out easily? I venture to say that once it was inserted its removal would be very difficult. It would give the States- a vested interest, irrespective of how the Commonwealth might fare. State Ministers will fight to place the provision in the Constitution, because they realize that it would be much more difficult to take it out than to put it in. On the other h.md, it is contended that the persons who put the provision in the Constitution would be able to take it out. Is it not fallacious to say that there would be the same reasons for omitting the provision as there was for inserting it ? Is it likely that the State Premiers would look at the matter in the same light? In one case it meant an addition to their revenue, but in the other case it would mean the withdrawal of that revenue. It would only be in accordance with human nature that they should fight to retain the provision. I do not want to see the Con- stitution altered in this respect. In view of their experience, the State Premiers might very well have been content to trust this Parliament to hand over a proportion of the Commonwealth revenue for a number of years. They ought to be satisfied with a provision of that kind. They can point to no act which justifies their present attitude. I agree with those “who have said here to-day that the attitude of the State Premiers is an arrogant one. What . right have they to state on public platforms that, unless certain members of this House swerve from their honest convictions and vote for a provision which suits their purpose, they will oppose their re-election to the House? To-day we were told by the honorable member for Parkes that a member of the committee which selected him as a candidate has already tried to induce him to vote for the proposal of the Government. Last night the honorable member for Batman said that he had been pressed to do the same thing, though, of course,, it does not necessarily follow that the pressure was used by the Prime Minister. Have we not seen the Government Whip whipping up honorable members on the other side? The Minister of Defence has alleged that it is a party question with the Opposition, but :I ask him whether it is a party question with those on his side who have been putting up a vigorous fight against the adoption of the proposal. I refer to such men as the honorable members for Mernda, Parkes, and Flinders. Have they not put up a great fight because they fear that an attempt is being made to shackle this Parliament? It is idle for the Minister of Defence to talk about it being a party question. If any one has tried to raise that issue, I venture to say that it has been the Government. If any pressure has been used to induce those who defeated the Government on the last amendment to vote differently on this occasion, it has been used by the Ministry. When the honorable member for Mernda moved his first amendment, I understood, from the statement of the Prime Minister, that the vote thereon would be taken as a test, and that, if the first word of the clause were omitted, his proposal would be inserted. Surely, sir, it is very paltry for the Prime Minister to say that, because you, in your official capacity, were called upon to give a casting vote, that was not the decision of the Committee. I ask honorable members what would have been the position of the agreement if you had given a vote, as you had a right to do?

Mr Hutchison:

– He spoke vigorously against the proposal of the Government.

Mr POYNTON:

– Yes, but, as a matter of fact, the Government are about to carry their proposal because the Chairman cannot vote. If he could vote according to his conviction, the amendment would be carried.

Mr Fairbairn:

– What about the Speaker ?

Mr POYNTON:

-If the honorable member wishes to drag the Speaker into the hurly-burly, let him do so. But God help the Speaker if that is done.

Mr Fairbairn:

– The honorable member dragged in the Chairman.

Mr POYNTON:

– The late Speaker would not have been dragged into the matter.

The CHAIRMAN:

– Order ! I ask the honorable member not to discuss that question.

Mr POYNTON:

– It was not I who introduced the Speaker into the discussion, and I would very much regret to do so. I was only pointing out that by reason of the fact that you occupy the chair, those who are opposed to the continuation of the agreement will lose a vote. It was a paltry act on the part of the Prime Minister to-day to claim that the last amendment was not carried simply because you gave a casting vote in order to insure an opportunity for further consideration

The CHAIRMAN:

– I ask the honorable member not to discuss that point.

Mr POYNTON:

– This Parliament has reached a most critical stage in its history. It is called upon to deal with the most serious question which has ever been submitted for its consideration. It is approaching the parting of the ways. It is called upon to give away its very birthright, to betray the interests of the people of the Commonwealth. We were sent here to do that which was best at the expiration of the Braddon section. It is now proposed, however, to sacrifice the position of this Parliament simply because one or two State Premiers have exercised certain influence at a secret meeting. The discussions which took place on that occasion have not been disclosed to the people. No reason has yet been given for the conclusions which were arrived at. Even the PrimeMinister has admitted that he went to the Conference quite opposed to the adoption of a per capita scheme for all time. Not one of the reasons which persuaded him to concur in the view of the Premiers has yet been revealed. Not one of the reasons which were advanced in favour of the agreement has been published. In the case of every other Premiers’ Conference a record of the work done therein was kept and published, but in the case of the last Conference the meetings were secret, and all evidence as to what was done was destroyed. We are asked deliberately to sacrifice the rights of this Parliament in order that the States can maintain their grandeur. When the people were asked to accept the Constitution Bill, were thev not told that the establishment of the Commonwealth would lead to great savings in the State Legislatures? Were they not bull-dosed from every platform by the advocates of the Constitution? But when there is a possibility of our doing something in the public interest, we are told that we are not to be trusted. We are actually asked to censure ourselves in the very face of the fact that we have starved our services and done without many things which, if obtained, might have brought much kudos to us. All this was done for the benefit of the States, and here are the thanks which we get. I represent a small State, but I intend to use all the influence I have in my district to persuade the people to reject the agreement if presented for their ratification. I would sooner lose my seat in this House fighting against the adoption of the agreement than win it with the assistance of the State Premier.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Divide.

Mr Roberts:

– Adjourn.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Not after three weeks’ discussion.

Mr KING O’MALLEY:
Darwin

– If the new Prime Minister wants to gag me let him do so.

Mr Roberts:

– I think it is a fair thing to adjourn now.

Mr KING O’MALLEY:

– As we have been sitting since eleven o’clock this morning it is really sweating to prolong the sitting. In this House, sir, the old national constitution guard, dies but never surrenders. No matter what may be said from the Treasury bench we shall not be scared. If all the State Premiers opposed me in my electorate, I could defeat them. I do not want to be here except by the will of a majority of the people of my electorate, and as a straight-out believer in what is right and just. The honorable member for Grey has put the case fairly. We on this side are the Nationalists and our op ponents are the anti-Nationalists. We are the Federalists who fought for and believe in Federation. The honorable member for Wakefield knows that in South Australia, as a fellow member ofits Parliament, I fought for Federation. When the final battle was being fought I sent from Kalgoorlie £50 to Sir Edmund Barton to help to carry the Constitution Bill. I put up as much as any one of its advocates did in order to secure Federation. We destroyed the segregated political nonentities, and created a great National Government. I do not wish to see political buck-tailed hunkers, the bob-tailed Boxers of modern civilization, destroy this great sacred Constitution. If there is to be war or trouble about it, I wish to be in it. I love a fight. We should never postpone trouble for some one else. We have heard some great Federal speeches to-day. It is not necessary to name the speakers, because all the speeches have been good. But honorable members have not been able to speak from real experience. Those on the Government side who have declared that they are Nationalists first, and party men second, would not think of putting up the strenuous fight which they have made, were they not convinced that they were doing what was right in the interests of the people of Australia. As I said some time ago, the history of the world shows that Constitutions are saved when at their last gasp, not by Radicals, but by out-and-out Conservatives. The American Constitution was saved, not by the American Radicals, Jefferson, Madison, and Adams, but by Hamilton and Washington. I admit that it would be pleasant to follow the line of least resistance, and that the popular thing to do would be to vote for the agreement, because the States believe that by it they are getting something for nothing. In my opinion, the proposed payment to the States is not large enough. My scheme would have given them 28s. 6d. per capita, and I should even like to see them get 30s. for a period of ten years. I recognise the obligations which they have undertaken, and wish to pay them a large sum, because their loans were raised largely on the security of the Customs and Excise revenue, which they willingly surrendered to the Commonwealth.

Mr J H Catts:

– The States borrowed on the security of their railways.

Mr KING O’MALLEY:

– The Customs and Excise revenue formed part of the security offered to the money lenders who took our bonds and debentures. Nearly all the money we get in Australia comes from great Trusts. A man, known by the banks of America as the credit man, is specially picked out to investigate the securities which are offered for great loans. It is in this way that money is obtained to carry on the activities of a great nation or a great State. Such an investigator would report that the States had their railways and lands, the power of levying taxation, and an income from Customs and Excise duties. Prior to Federation the whole of the ‘Customs and Excise revenue formed part of the State assets, and since then three-fourths of it has been pledged to those who have lent Australia £48,000,000. None of us object to paying the States 25s. per capita. So far as the amount of the payment is concerned, , a splendid bargain was made with them, but it must be remembered that there is interest to be paid, and a good sinking fund should be established to wipe out the debtsBoth Federal and State representatives are under an obligation to provide for the extinction of the debts. It goes without saying that the States have great interests in the revenues of the Commonwealth. But while I think that they should receive a larger payment, I do not wish to embody the arrangement in the Constitution, because to do so would be derogatory to the responsibility and to the supremacy of the Commonwealth Parliament. It would be derogatory to the Parliamentary standards of this nation. The designers of the Constitution specified thirty-nine powers to be exercised by the Commonwealth, reserving all others to the States. Now it is proposed to take from those thirty-nine powers that which makes us paramount. I do not rejoice when I’ see the flag of Victoria, New South Wales, or even Tasmania. I doubt if I know them ; but I rejoice when I see the Commonwealth Flag. Every citizen possesses a dual capacity and responsibility. His paramount allegiance is to the Commonwealth, and his subordinate allegiance to his State. Yet this Fusion Government, this creation of all things and nothings, this combination of the rich, the powerful, the noble and exalted of the earth, to keep its place, has bargained away the birthright of the National Parliament. Its desire is to keep itself in and to keep us out. I propose to add to the clause the words -

Until such time as the Commonwealth shall have taken over and relieved the various States of their existing national debts to the following extent - New South Wales, ^60,683,624; Victoria, £48,880,925; Queensland, £23,492,050; South Australia, £”14,414,100; Western Australia, £”19,709,400; Tasmania, £”7,378,875. Total, £^74,558,974-

That is part of the amendment which I desire to move later on. It means that we shall gradually take over that amount of the national debt as it matures, and issue Commonwealth consols to liquidate it.

Mr Groom:

– How does the honorable member fix the amount?

Mr KING O’MALLEY:

– On a per capita basis. I provide further -

Thus relieving the States annually of the following amounts of interest : - New South Wales, £2,123,927; Victoria, £”1,710,832; Queensland, £”822,222 ; South Australia, £504,493 ; Western Australia, £”689,829; Tasmania, £258,26^ Total interest bill £6,109,564, and annual sinking fund ,£870,000, or a total of £”6,979,564.

My proposal is that we shall start our Federal stock at once, and that the States shall be relieved at once of the £6,109,564, but that we shall only take over the debt gradually, according to actuarial calculations, and as it falls due. But in addition to the £6,109,564 I also propose to insert a provision for a division in perpetuity of surplus Commonwealth revenue, because I think that those two things should go together. I want to start our Commonwealth consols at once, so that they mav take a position in the markets of the world as the standard Australian stock. Honorable members know that my whole scheme rests on a national postal banking system. Although the United States has held back from that system all these years, a Banking Commission has been appointed by the United States Senate, with Senator Aldridge as chairman, and left lately for England to take evidence. It will travel all over the world to get the latest and best information with a view to establishing in the United States a bank of banks - a bank that can re-discount the securities of other banks, and make financial crises, which are the result of overtrading, impossible. My proposal would enable the States to have for all time an interest in any surplus revenue which the Commonwealth may have after meeting its own liabilities and paying the necessary amount to a sinking fund. Many a time in America some of the States have been virtually starving while millions have been lying idle in the national Treasury. I do not propose that the Commonwealth shall give up any of the powers that it received from the people at the beginning. I would provide in these terms for the division in perpetuity of the surplus Commonwealth revenue : -

In recognition of the fact that the increase in the population of the Commonwealth, and the further development of its resources, will entail upon the Governments of the several States increased expenditure in connexion with the functions of Government retained by them, while such increase and development will produce a concurrent increase in the revenues derivable by the Commonwealth in respect of Customs and Excise duties, it is proposed that the surplus Commonwealth revenue resulting in any financial year from the excess of the revenues received in that year over the expenditure which took place therein, shall in the first instance be applied to the liquidation of any Commonwealth revenue deficit which may have accumulated, and that the balance shall be distributed amongst the States on a fer capita basis.

I propose to put that in with my amendment, because I want the two provisions to run concurrently. If there were a great drought in certain of the States, and they had to import fodder for their stock or food for their people, they would naturally swell the revenue of the Commonwealth, but under every other proposal than mine they would have no interest in the surplus revenues piled up in the Commonwealth Exchequer. Under my scheme they would become at once entitled to a share of the revenues which through their misfortunes they had created. We who are Nationalists do not desire to prosper on the misfortunes of our country. Our mouths do not open from ear to ear when we see or hear of an early frost. We do not rejoice when the codlin’moth gets into a man’s orchard. We want to prosper only when our country prospers. The misfortune is that this agreement is the product of petty, local, parish-pump politicians, men ,who are not tall enough intellectually or politically to see their own wives and kiddies across the kitchen stove. Those are the men over whose backs the whip is cracked by an outside army of plotters. They came from far and near to Victoria, and held a secret conclave in the dark caverns of the State Parliament, with the doors closed, window shutters down, and lights out. I am told that if we put this agreement in the Constitution there is no danger of it ever-

Mr Wilks:

– Coming out.

Mr KING O’MALLEY:

– They do not say that, but there is no doubt that it is what they mean. It is said there would be no danger of any conflict; but we know what happened in New York in 1863, and it has a great bearing on the question now before us. The moment we insert this provision in the Constitution, we begin to create vested interests, in the same way as vested interests were created in the southern States, representing £80,000,000, owing to the system of slavery. We have as much chance of walking from here to America as we have of removing this agreement from the Constitution once it is inserted; and, personally, I do not think that the people of Australia will vote in favour .of the change. There was an honorable understanding that the last vote was to be. a test vote, and that if it proved to be against the Government, the question would be taken to the country.

Mr Wise:

– Some people have no idea of what an honorable understanding is I

Mr KING O’MALLEY:

– It is too bad that an understanding of the kind should not be observed in the National Parliament. If the people of Tasmania, Western Australia, and South Australia regarded the provision, when once inserted in the Constitution, as beneficial to them, vested interests having been created, and the people of Victoria, New South Wales, and Queensland resolved that it was injurious, how could it be removed ?

Mr Webster:

– I think that we ought to have a quorum. - [Quorum formed].

Mr KING O’MALLEY:

– There has never been a revolution in the history of the world which did not rest on the transfer of property or money rights. The French revolution was over property.

The CHAIRMAN:

– How does the honorable member connect his remarks with the amendment now before the Committee?

Mr KING O’MALLEY:

– I desire to show that the moment the agreement is placed io the Constitution, it will breed secession, and finally lead to the dissolution of the Commonwealth. England lost America over property rights, the question being whether people ought to be taxed without representation. This proposal before us ought to be examined without the prejudice, sectional bigotry, and partisanship which cause some to love their party better than their country, and themselves better than their party. There will be a danger to our national future if the provision gets into the Constitution. Some years ago, I used to hear the right honorable member for Swan talking about nationality. In those days, he used to remind me of old Hickory Jackson. I used to listen to the eloquent words of the

Prime Minister speaking in praise of nationality, union, federation, the people one and inseparable. But now I see him selling the Constitution and his country for a mess of pottage.

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

– Who is doing that?

Mr KING O’MALLEY:

– The Prime Minister of this country is doing it.

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

– To whom is he selling the country?

Mr KING O’MALLEY:

-To the “ boodleiers.” Honorable members opposite do not like to hear these truths. It is a triple-headed political monster that the Government want to put into the Constitution which was framed at the expense of so much trouble and time. The Braddon section provides for the payment of threefourths of the Customs and Excise to the States for ten years and then “ until the Parliament otherwise provides.” That is to say, we have control of revenue to the extent of £2 9s. 6d.per capita. But we are going to transfer. 25s. of that amount to the States. The people of the States selected the members of this Parliament to be their trustees. After 19 10, we have power to do what we like with the revenue; but if we give away 25s. per capita, we shall have control over only 24s. 6d. Why should we make that surrender ? Yesterday, we heard a good deal about backsliders and renegades. I hate to hear such terms used in a Parliament. They are unkind. Why should an honorable member be called a backslider because he votes according to his convictions? Fifteen or sixteen followers of the Prime Minister came into this House after the last elections pledged to certain principles. They were as fully pledged as were the members of the Labour party. Indeed, we fought the elections on very much the same lines as did the followers of the Prime Minister to whom I refer. We were all Liberals.

Mr Crouch:

– But we were free men, whilst the honorable member and his friends were not.

Mr KING O’MALLEY:

– The honorable member is free now if he chooses to exercise his freedom. Recently, a new political league was formed called a Fusion. The constituencies were not consulted in regard to it. No one objected, however, and no one can reasonably object to what has been done. The new party consists of honorable members who have allied themselves with their direct opponents, with people who have said such things about them that Lake Michigan is not big enough to wash away the stain. Honorable members opposite formerly said most un-Christian, unrighteous, and untheological things about each other. But now, here they are, banded together to act as messenger boys for the “ boodleiers.” Why should they condemn eight or nine of the members of their own party who do not see eye-to-eye with them on this great and mighty issue - the biggest issue that has even been discussed in this Parliament? When the Prime Minister argues that the proposal of the Government does not take anything away from this Parliament, and seeks to make it appear that the same taxpayers are concerned all the time, I think he must be impregnated with sophistical verbosity ! When I hear that 24s. 6d. per capita is all the money with which we shall have the right to deal, and that it will be a diminishing amount, I am reminded that it is already mortgaged. Through the arrival of Blucher, this great National Parliament is to lose that right for all time by one vote to-night. If the State Premiers, the State Legislatures, and the State politicians believe that they ought to exercise this power of control, all they have to do is to unite and concentrate their money and energy upon securing a majority in the Senate, when they can distribute the revenue as they like. I was amused to hear some honorable members comparing the State . Parliaments, because some States have not a real adult franchise. In Victoria, it does not exist. How is it that in this State I can go into different districts and vote? Simply because there is a boodle franchise.

Mr Crouch:

– If the honorable member has property in eighteen districts, he can vote only once.

Mr Groom:

– What has this to do with the question before the Committee?

Mr KING O’MALLEY:

– The proposal before the Committee is dictated by the State’ Parliaments and the State Premiers, who represent billy-goats, long-horned rams, woodchucks, and bandicoots - not human beings. Suppose that the honorable member for Corio was running for a seat in the State Parliament, and that 50 or 500 persons, including myself, decided that, as another candidate was safer, we must defeat him. We can take our motor cars, and go into the electorate, and perhaps defeat him by a few votes, thereby returning a man to represent motor cars, dogs, cats, horses, rams, bulls, and pups. The successful candidate would represent, not those who toiled and moiled in the electorate, but those who went there and by various schemes acquired possession of the property. Would a Parliament composed of such persons as the successful candidate hold the same position as the Commonwealth Parliament, whose members are elected by adult suffrage? Yet such persons are the secret plotters, who have prepared this scheme to compass the death of this Parliament. Every power which is handed over to the State Parliaments will aggrandize them at the expense of the National Parliament.

Mr Wise:

– What do they care about the National Parliament?

Mr KING O’MALLEY:

– Exactly. When the honorable member for Indi asked the honorable member for’ Mernda whether he would vote for Federation if it were again before the people, and the latter replied, “ I would,” and the former said that he would not, I recognised that the former had no constitutional right to be here. He ought to be in the Dead House in Victoria, not in a House which represents human beings.

Mr Wise:

– He is part of the Government majority.

Mr KING O’MALLEY:

– Exactly.

Mr Hutchison:

– He is going to vote for this proposal, because he knows that, if carried, it will destroy the Federation.

Mr KING O’MALLEY:

– The essence of finance is that those who direct the expenditure of revenue should bear the odium of levying the taxes required to raise the funds. Although that principle is recognised by every civilized Government on the face of the earth, yet the Government and the Fusionists propose that we shall bear the odium of raising it, and that the State Parliaments shall spend it. There is’ a vast difference between my proposal to take over £174,500,000 of the State debts in proportion to population, to pay £6,105,000 a year by way of interest, and to create a national sinking fund to pay off that debt, and the proposal to allow the States to continue to pile up .debts year after year until about thirty years hence, posterity will be told by the money-lenders of Europe that their security is not sufficient to enable them to raise any more loans. The National Government will then have to do something.

Mr Chanter:

– There will be no National Government then.

Mr KING O’MALLEY:

– I quite recognise that. In matters of national finance, I always turn to the “United States because that country has had to fight several great wars, and has had to face the identical issues which we have to face. When the American Revolution was concluded, Hamilton established a sinking fund for the liquidation of the national debt. At the close of the American rebellion, the debt amounted to many millions. That was only forty years ago, but the debt has now been reduced to £200,000,000. and there is sufficient gold in the country to liquidate it in its entirety, and to leave a surplus of £’127,000,000. But that course cannot be adopted, because the National currency is founded upon Government bonds. These do not produce interest at more than 1½ per cent., and they are quoted at £115, whereas British Consols which pay £2 9s. per cent, are quoted at £84. From a Dictionary of American Politics, by Everett Brown and Albert .Strauss, I extract the following -

Sinking fund is a fund provided for the payment of a debt or obligation, and is formed by successively setting apart smaller amounts for this purpose. Even under the confederation an attempt was made by Alexander Hamilton to establish a sinking fund for the national debt; it was unsuccessful. The first sinking fund under the Government of the United States was created by Act of August 2, 1790. The present sinking fund to retire the national debt was established by Act of February 25, 1862.

The Americans recognise that a nation cannot continue to pile up debts without becoming bankrupt.

As subsequently modified, it sets apart all duties on imported goods as a special fund first, for the payment of interest on the public debt, and second, for the purchase every year of one per cent, of the national debt; bonds so redeemed are to be cancelled and deducted from the outstanding indebtedness of the Government ; but in addition to the one per cent, thus redeemed there is to be purchased annually an amount of Government bonds equal to the annual interest on bonds previously bought for the sinking fund. The sinking fund is thus, as far as interest is concerned, in the position of any other holder of the Government’s obligations, receiving interest on all the bonds that have been purchased for its account, only the bonds belonging to it have been cancelled, and the debt is considered reduced by that amount. The Act of April I 7th. r8/6, provides that fractional currency redeemed by the Treasury shall constitute a part of the sinking fund. The estimated sinking fund requirement for the year ending July 1st, 1888, is $46,817,785.

Mr Crouch:

– That Act was repealed either in 1902 or 1903.

Mr KING O’MALLEY:

– I do not think so.

The operations of this fund will provide for the payment of the entire national debt by the date of maturity of the Government bonds having longest still to run, viz., the four per cent, bonds due in 1907.

Mr Hutchison:

– I think it is ridiculous for us to proceed in the absence of a quorum. What is the use of a Government which cannot maintain a Committee? [Quorum formed. ~

Mr KING O’MALLEY:

– There is no doubt that the desire of the Fusion Government to outrage the Constitution is becoming contagious, and that is why I am speaking now at such length. I hope that, if they think it necessary for their purposes, they will gag me. If they do, the fact will go down in history. I should like to be a martyr, so long as I do not suffer too much. It is hard to persuade honorable members, when so much is at stake, that they are doing wrong. No sinner has been brought to see the error of his ways until it has been shown to him that he has been losing in pocket by them. It is hard to persuade honorable members that they are wrong. I doubt if any of them seriously desires to cripple the Constitution or to destroy the national power. But they propose to transfer power from the Commonwealth to the subordinate States. If the Commonwealth pays the States 25s., and has only 24s. 6d. left for itself, it will not be as well off as if it controlled the expenditure of £2 9s. 6d. If a man puts £1,000 into a bank and pays £500 out. he has only £500 left. When the Parliament agrees to pay to the States 25s. ‘ per capita, it will become, in effect, their revenue collector. The money will have to be handed over directly it is collected, and the Commonwealth’s position will be that of the agent who collects rents for a property owner. The Commonwealth will become the bailiff for the States. There will he no liquidation of the debts, nor will a scheme be created to give us national financial power, enabling us to reduce the national debt by borrowing at a lower rate of interest, and by making various savings. Wade, Kidston, and Company came to Melbourne and dictated to the Prime Minister the policy of the Commonwealth. We ought to shut up shop and take our orders from them altogether. The present position is more degrading than that of the slaves prior to the American War. This might be called the Pork Government. It has sold its birthright for a mess of pottage. We looked to Ministers as the Nationalists, the Federalists, the Hamiltons and the Washingtons of Australia. The Prime Minister aspired to be the ruler of a great Empire, but now he is satisfied to be the pound-keeper of petty Provinces. What sort of bargain is this? I understood him to say that the Premiers will stump the country in support of his candidates. That is an unrighteous bargain.

Sir John Forrest:

– I do not think he said that.

Mr KING O’MALLEY:

– I understood that they are unitedly to support the whitehaired boys opposite, who are virtually only their typewriters. As I said the other night regarding the statement of the Prime Minister that we cannot know what will happen twenty years hence, the statesman is the man who understands the present, and moulds the future. He thinks to-day what the crowd will think fifty years hence. When Sir Robert Peel carried his banking Bill in 1844, he was thinking what the people think to-day, seventy years later. He was a statesman, but Ministers are not. They are bob-tailed political hunkers, and in America would be called peanut politicians. They are willing to sacrifice their country to obtain place and pay. The AttorneyGeneral, at any rate, has been misled, because if ever there was a patriot in the South Australian Parliament, he was one. Had the Premiers gone to Washington to play a similar game, they would have been lynched ; they would not have got away with their lives. They should have applied to the representatives of the States in this Parliament, instead of getting us to adjourn for a week, so that they might do their dirty work in secret. The Prime Minister, unfortunately, on the question of Nationalism and the rights of the people of this country, has acted like a great general who, on the eve of victory, deserts his army for the camp of the enemy. He has gone from the people to the camp of the boodleiers, and the marvellous part of it to me is that at the same time the honorable member for Flinders has left the boodleiers to fight for the people. The country has now come to such a pass that it is being run by a combination of disgruntled politicians. In the language of the American classics, they are “mugwhumps.” They have been in every party, and been driven out of every party, and now belong to none. I have no doubt that before the Prime

Minister is through he will die of swallowing this agreement. After all the battle that we have put up in Australia for the last ten years to get the Constitution working and the people to understand and be satisfied with it, it is a shocking thing to hear the Government say, “ Submit this question to the people.” It is laughable to hear such sentiments coming from men who are supposed to be intelligent. Why, half the people call me a senator. Others do not even know what Parliament I belong to. Day after day I am asked, “ Why do you not let the shops open on Saturday afternoons?” I reply that we have nothing to do with the shops, as that is a matter for the State Parliament. They reply, “We do not know the difference,” and those are intelligent, business men. When’ this question is submitted to the people, one man will tell them to vote for it and another to vote against it. The people will not know what to do, and the result of the vote as a general rule will be against the agreement where the successful candidate is against it, and for the agreement where the successful candidate is for it. We have seen referenda taken on the Bible in State schools and other questions, and we know what has happened. The people send us to Parliament to study these matters, and not to ask them to do it. They send us here as responsible trustees, and regard it as our duty to settle a question of this sort in Parliament. That is what they pay us £600 a year for. If any member is not sent here for the purpose of studying and settling public questions, then he is not a responsible trustee, but an irresponsible agent, and has no right to be in Parliament. We Nationalists are the defenders of the Constitution, and the anti-National army led by the Prime Minister are its destroyers. When the war arrives for which the Fusion party are now preparing it will not he those gentlemen that will fight for the defence of this country ; it will be the descendants of those honorable members who are now in opposition to this agreement who will have to shoulder the guns and go forth to defend Australia. But they would not have to do so if honorable members opposite stuck to their pledges. More power to the honorable member for Batman, who has been steadfast to principle. He must have courage, because I know how the whip must have been cracked. He has now become one of the defenders of the Constitution. Remember that nations are generally saved by the few that have courage. It always requires courage to differ from the multitude, who advance only gradually. Some man must lead. No great principle has ever yet ‘been secured or great reform effected except by a laborious process of hard work and agitation. Those who lead the way have always had to suffer. They have been called fools, and have been held up to public reprobation. There are multitudes who work like horses, and allow themselves to be led by asses, producing wealth of which they get a very little share. Unfortunately, the great mass ‘ of the people are led more by impulse than conviction ; if they could think they would not be toiling and struggling to keep others in clover. I draw an absolute line of demarcation down this House between Federalists and Nationalists on the one side, and anti-Nationalists and anti-Federalists on the other. 1 put on one side the lions who are defending the Constitution, and, on the other, the asses, who are seeking its destruction. We Nationalists stand for a new declaration of independence - we stand for the people; and I tell the Government that this is only the beginning of the struggle. We have starved the Post and Telegraph Department, while we have returned to the States £7,000,000 over and above the amount to which they were entitled. Six years ago I proposed to utilize the surplus revenue for old-age pensions, and to make up the difference by reimposing the duties on kerosene and tea ; but during those years we have allowed thousands of old men and women to go hungry to bed. The country has not had the courage to tackle ‘the problem, because it was run by men without any tra:ning in finance, by political and financial bobtailed hucksters. .When a man who knows the subject stands up here, they do not desire to hear him, because they are mere financial accidents, owned body and soul by some banker. The Prime Minister, with his wonderfuleloquence, has tried to electrify the Committee and the country by pointing out that the Commonwealth Parliament will lose no power bv agreeing to the Government’s proposal. He says that by placing an amending provision in the Constitution we shall not be taking any power out of the hands of the people. But I maintain that the people of Australia, with their eyes open, inserted in the Constitution the provision giving this Parliament power to amend the existing financial arrangement. Many members of this Parliament stumped the counT try in advocacy of the Constitution. I did myself. I made the first speech in Western Australia - at Kanowna - in favour of the adoption of the Constitution. I stumped the country at my own expense in this cause.

Sir John Quick:

– The honorable member supported the Constitution as first submitted to the people, I believe?

Mr KING O’MALLEY:

– I did. At that time the Braddon section was a permanent enactment.

Sir John Quick:

– The honorable mem- ber supported that, and so did 1 .

Mr KING O’MALLEY:

– I did, because the Constitution in that form was the best one we could get. Either we had to take it or have no Federation. But to the everlasting credit of the right honorable member for East Sydney, then Premier of New South Wales, a modification of the Braddon section was secured limiting its operation to ten years.

Sir John Quick:

– That alteration was nor made by the Convention.

Mr KING O’MALLEY:

– I quite agree that we had either to reject the Constitution or accept it. I was prepared to accept it in the hope that it might be altered for the better later on. I spoke on the question at Penola, South Australia, when the present Premier of that State took the chair for me. The strange thing is that the people of the district were opposed to the Constitution at that time. They thought that the Commonwealth Parliament should have complete control over finance.

Sir John Quick:

– Did the honorable member oppose the Constitution on those grounds ?

Mr KING O’MALLEY:

– No, I stumped the country in favour of it. I sent Sir Edmund Barton £50 from Kalgoorlie towards the funds of the Federal movement’. I took a great interest in the movement for the adoption of the Constitution, and wherever I spoke I told the people that they would not regret adopting it. I urged that they should accept it, with all its faults, because it offered the only means of achieving Federation. The Braddon section was really suggested to Sir Edward Braddon by the late Speaker of this House, Sir Frederick Holder. It was only suggested as a compromise because the States were then afraid of the way in which it might operate, just as they are now. But why should they be afraid, seeing that the Commonwealth has already returned to them £7,000,000 in excess of the amount which it was required to hand back to them under the Constitution? The Postmaster-General would like to spend thousands of pounds in providing rural districts with telephonic and postal services, and yet the Commonwealth has returned to the States about £7,000,000 which it had a right to retain. Had the first Commonwealth Parliament been composed Of business men, that money would have been debited against the transferred properties. Deducting the interest to which the States were entitled, they have received about £3,500,000, which should be debited against those properties. Unfortunately, men do things in Parliament which they would never dream of doing in their private business.

The TEMPORARY CHAIRMAN (Mr.

Poynton). - Will the honorable member connect his remarks with the question which is now before the Chair ?

Mr KING O’MALLEY:

– Unless we adopt a sound scheme for the adjustment of the financial relations between the Commonwealth and the States, millions sterling will be wasted. Apart from the amendment which I have indicated, I intend to provide for the establishment of a postal banking system which would enable the various States to be financed. Under my scheme, the Postmaster-General would have the right to spend £1,000,000 or £500,000, or whatever amount appeared upon his ledger. The Department would pay interest only upon the amount which was thus utilized. When any portion of the money was re-paid, interest would be charged only upon the outstanding balance. The Department would thus be absolutely financed upon credit. Under my scheme, neither the Commonwealth nor the States would ever be tied up financially. No other scheme contemplates any arrangement under which the States and the Commonwealth would be enabled to liquidate their debts, or to create a sinking fund, or a reserve fund, or a redemption fund. In other words, the States are to compete with each other oh the London money market. In my opinion, that is not right. I suppose 1 that it is almost impossible to induce honorable members to view this question apart from considerations of party government, which is the curse of this House. Let us have elective Ministries, and we shall no longer have all-night sittings.

Sir John Quick:

– The honorable member has had one experience of an elective Ministry.

Mr KING O’MALLEY:

– That does not matter. Upon the next occasion that the Labour party come into power, I shall be on the Treasury bench. In the event of the debts of the States being taken over by the Commonwealth,I propose that the Federal Treasurer may, at his discretion, authorize the issue of Commonwealth consols.

Mr Glynn:

– What has that scheme to do with the amendment which is now under consideration ?

Mr KING O’MALLEY:

– It is part of a clause, the insertion of which I intend to move.

Mr Glynn:

– But no amendment of that sort has yet been accepted by the Chair.

The TEMPORARY CHAIRMAN:

– The only amendment now before the Chair is that of the honorable member for Mernda.

Mr Glynn:

– The honorable member for Darwin cannot debate his proposal until the question of . its relevancy has been determined.

Mr J H Catts:

– I think that we ought to have a quorum present.[Quorum formed.]

Mr KING O’MALLEY:

– Let me now take another point.

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

– I think it is time that this farce came to an end.

Mr KING O’MALLEY:

– The honorable gentleman can apply the gag if he likes. I am talking to posteritv, and nor to the House. We are committed by the Defence Bill to an enormous expenditure on an Army and a Navy, but we have not provided any ways and means. Although we have just passed a Bill which will shortly entail an enormous expenditure, yet it is proposed to hobble the Commonwealth by putting upon its revenue a lien for all time. We are actually asked by the Government to destroy our own credit, to make it impossible for us to borrow at the same rate as the States can do. We shall shortly have to enter the money market of the world, and shall not be able to borrow on as good terms as the smallest State in the union - Tasmania - if this provision is placed in the Constitution, because we shall have to say to the moneylenders, “ We can give you as security only 24s. 6d. per capita of our revenue, the other 25s. belonging to the States.” I should be prepared to make a larger payment to the States, but I would make provision for the transfer of their debts to the Commonwealth, so that we might have one control and a national stock. Should the amendment of the honorable member for Mernda be defeated, I shall move that to which I have referred. My proposals furnish the only solution of the great financial problem and recognise the rights of the States without impairing the financial integrity of the Commonwealth.

Mr J H CATTS:
Cook

– I have a few remarks to offer, but as the hour is now very late, and we have been sitting more than fourteen hours, and must meet again at 11 o’clock this morning, the Government might well consent to an adjournment. A number of speeches have been delivered from the other side of the Chamber.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– But on the side of the question on which the honorable member ranges himself.

Mr J H CATTS:

– The speakers have been chiefly Ministerialists. Had they and not members of the. Opposition been speaking late in the day, the Government would have consented to an adjournment. We are asked to speak when we should be resting. Apparently the Minister in charge of the Bill wishes to make this a trial of physical endurance, and to prevent the free and calm discussion of one of the greatest measures that has ever been before Parliament.

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

– We have been discussing it now for three weeks.

Mr J H CATTS:

– The Bill has been on the business-paper for three weeks, but the Government has deferred its consideration pending the return of the honorable member for Brisbane from England. The tactics adopted to bludgeon the measure through, would be a disgrace to any Parliament, let alone a national one. Ministers have brought to bear on their supporters such pressure that they have been able to cause those who deliberately spoke against the agreement to go back on their political convictions, and vote for it. This, I shall prove by quoting passages from speeches delivered by the honorable members for Wimmera, Kooyong, Lang, and Bass. They deliberately expressed themselves in opposition to the proposal ; but when the party whip cracked, they put their consciences into their pockets, and crossed the floor to vote for it.

Mr Storrer:

– There has been no cracking of the party whip, so far as I am concerned.

Mr J H CATTS:

– When the news was flashed across the wires that a Labour candidate would oppose the honorable member, he voted with the Government, in contradiction to his speech, so that he might obtain their support at the poll.

Mr Storrer:

– It was known weeks ago how I would vote on this question.

Mr J H CATTS:

– In view of that statement, let me quote what the honorable member said on the 28th September last - his remarks are to be found on page 3849 of the Hansard report of the discussion on the present Bill -

It would be a mistake, however, to bind the Commonwealth for all time to a per capita payment of 25s. per annum to the States. I should certainly be in favour of suchpayment being made for the next ten years, and rather than that the agreement should be lost to us altogether, I should vote for its continuance for twenty or thirty years. As the honorable member for Parkes pointed out, we know more now concerning the finances of Australia than we did eight years ago, and our experience will be still broader ten years hence. If we agreed to make aper capita payment to the States of 25s. per annum for ten years, we should be able, at the end of that term, to decide whether that payment should be continued, or whether it should be increased or reduced. We should then be able, if we found that the arrangement was endangering the Protectionist policy of Australia, to vary its terms. I should certainly be prepared to trust the people and their representatives to do what is right at the end of the ten years’ period.

The honorable member expressed himself as strongly opposed to the agreement.

Mr Storrer:

– I did not.

Mr J H CATTS:

– Will the honorable member deny that he objected, to its permanency ?

Mr Storrer:

– I expressed a doubt as to the wisdom of making it permanent.

Mr J H CATTS:

– Does the honorable member impugn the accuracy of the Hansard record ?

Mr Storrer:

– It is quite correct.

M.r. J. H. CATTS. - Notwithstanding that the honorable member uttered the words which I have read, he voted against the amendment moved by the honorable member for Mernda to test the opinion of the Committee as to whether the agreement should be made permanent. Why? Being left to our own conclusions, we can only assume that it was because it was telegraphed that a Labour candidate was to oppose him ; that he rushed into the arms of the Deakin Government for shelter and support. Then we have the honorable member for Kooyong reported in Hansard, page 4167, to have said, on 6th October of this year -

I never contemplated any change in the Constitution, but regarded it as a matter of trust between the representatives of the States and the representatives of the Commonwealth, holding the opinion that it is quite competent for us to enter into an obligation for a period of years that will be as binding as any Constitutional enactment. I have not yet seen or discovered any reason for a referendum on the question.

Yet the honorable member walked across the chamber to vote with the Government.

Sir John Quick:

– He said he would vote with the Government.

Mr J H CATTS:

– That is so, but he expressed his conviction that there was no necessity for a permanent arrangement by means of an alteration of the Constitution. He said, also, that the Commonwealth Parliament could be trusted.

Mr Storrer:

– We should not have heard a word about my attitude if they had not heard from the honorable member for South Sydney.

Mr.J. H. CATTS.- As the honorable member for South Sydney has been referred to, let me say that I consider it an absolute disgrace that the honorable member for Kooyong should have given his personal bond of honour to him when he went away to pair with him, and then should have broken that pair.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– After the Labour party broke all pairs.

Mr J H CATTS:

– Honorable members opposite would like to get me off the quotations which I propose to make. The Labour partv did not break pairs, but refused to give pairs, which in no way affected the personal arrangement of the honorable member for South Sydney with the honorable member for Koovong. The honorable member for Wimmera said, on 22nd September, as reported in Hansard, page 3696-

I shall give the second reading of the Bill my hearty support, but I hope that in Committee it will be found possible to meet the wishes of many honorable members, who, like myself, think that the payments to the Slates should be limited to a term of years.

But what does the honorable member do now when he gets the opportunity to vote to limit the agreement to a term of years? When the honorable member for Mernda proposed an amendment to test the feeling of the Committee as to the permanency of the agreement-

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

– He merely declines to play the game of the Opposition.

Mr J H CATTS:

– He merely plays the game of the Prime Minister when the party whip is cracked, and he is practically told that if he does not march across to the other side with the Government and swallow his convictions he will not get support at the polls. Therefore, because he thinkshe might otherwise sacrifice a few votes at the polls, he crosses the floor and sacrifices his political conscience. What is the attitude of the honorable member for Lang, who sits on the back Government benches and prates to members on this side about who should come in to hear the prayers read? He jeers and gibes at us because some of us do not always come in to make a quorum for the Government, while some of the Government’s friends go off to earn large fees in the Courts. He impudently makes out that we on this side object to the prayers being read, but what does this great Puritan himself do? He talks all over the Commonwealth about the sacredness of a member’s independence, and the necessity for the assertion of his conscience, but on 4th November, as reported on page 5351 of Hansard, he said -

I do not regard the agreement as perfect, especially bearing in mind the commitments of the Commonwealth. I should like to see an arrangement cometo which, whilst insuring the solvency of the States, would be sufficiently elastic to enable us to regulate our expenditure and income in accordance with our needs, without any further amendment of the Constitution in future, or recourse to additional taxation. In my opinion, the Premiers would have been well advised had they accepted an arrangement limiting the duration of the agreement.

On page 5354 he is reported to have said -

I should like to see the agreement amended in the direction of greater elasticity to provide for the increasing needs of the future which we cannot afford to ignore.

Again on page 535 2-

The Premiers would have been well advised had they agreed to a limitation of the duration of the arrangement to fifteen, twenty, or twentyfive years.

And further on -

I am sorry the Premiers did notsee their way to fall in with the suggestion for a fixed period, because it would have meant absolute unanimity on this side. But while I hold that view, and would have preferred a more elastic basis of agreement, I shall not help the Labour Socialists to dishonour the compact made with the States at the recent Premiers’ Conference.

That is the whole trouble. It is a party question, and therefore the honorable member for Lang leaves his conscience somewhere on the shelf and forgets that he ever had it. Here is a great question that is dividing parties. It is dividing the party on the Ministerial side of the House, and although it has not divided members on this side, it is dividing our party, because there is a very serious difference of opinion in the party on the question, especially in New South Wales.

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

– But not here.

Mr J H CATTS:

– The honorable member, who was returned to Parliament by the miners of Lithgow as a Labour member, and deserted them, knows that any disruption in the Labour movement is serious, because it is one solid, united movement. Any disintegration amongst our forces is a very grave matter indeed.

Mr Webster:

– It is only temporary.

Mr J H CATTS:

– But it is there. The disagreement on the other side is also only temporary. For those honorable members to claim that it is a party issue on one side and not on the other is so much humbug. I am now going to show that there is a large majority of honorable members against the proposed agreement. The division list on the test vote taken on the 4th November is as follows: -

Ayes … … … 33

Noes … …33

With the pairs we have thirty-five- on each side; but I now propose to reconstruct the division list, placing those honorable members, who have expressed themselves as against the Government, on their proper side. If honorable members had all voted as conscience dictated, the list would have been as follows: -

The absentees were the Speaker and the honorable member for Brisbane on the Government side, and the Chairman of Committees and the honorable member for South Sydney 00 the Opposition side. Another absentee was the honorable member for Eden-Monaro, but he has not expressed an opinion either way. The full count of heads shows forty-one members who have expressed themselves as against the agreement, and only thirty-three in favour of it.

Mr Crouch:

– I think it is most improper to refer to the Speaker as being on the Government side.

The CHAIRMAN:

– The Speaker’s, name had better, I think, be left out of the discussion.

Mr J H CATTS:

– I mean no reflection on the Speaker, who, I understand, has the right to vote on certain occasions.;, but leaving him out of consideration, we have thirty-two for the Government and. forty-one against. Such, however, is the manipulation of members by the Government that there was a tie on a national issue of this description; and now that the honorable member for Brisbane has returned, the Government hope to have a majority of one. I think the Age of to-day sums up the situation very correctly and1 effectively in the following words: -

In the Conservative organs, certain members of the House are openly and constantly rebuked because they do not violate their political consciences in order to vote with the rest of their party on this issue. They are told that party men have no right to political conviction. The matter of supreme consequence is party integrity. Principles are of no consequence. Party is first, last, everything. And it is to this most immoral doctrine that certain members who were returned as Liberals have succumbed. Federal politics have reached the lowest ebb of demoralization. We may hope at least that there is no lower depth than that in which Liberalism is absolutely swallowed up in a Fusion which is undiluted Conservatism.

Mr Crouch:

– Hear, hear.

Mr J H CATTS:

– The honorable member for Corio says “ Hear, hear,” but I have no doubt that when the whip is cracked he will be found voting with the Government. We all remember the magnificent flights of oratory to which the Prime Minister ascended when advocating the glories of the Constitution ; but it remains for this gentleman, who thus exhausted his vocabulary, to be the first public man in Australia to seek to degrade the Constitution, and limit the sphere of action of this Parliament. We a’-e told that the proposal before the House will not take anything away from the Constitution, and that is correct, seeing that something is added to the limitations in favour of the State Parliaments. It seems ridiculous to ask the people of Australia to take away certain powers with which they have invested us. Could there be a greater admission of incompetence than this desire to invite the people to take from the Commonwealth Parliament the constitutional powers with which it has been invested by the people? The people gaveto this Parliament great powers of taxation and of control over the revenues derived from certain sources. The Prime Minister talks of the -submission of the question to a referendum of the people. But he is not- prepared to allow a proper referendum to be taken on the issue. If he were, the situation would be different. He simply wishes to submit a single issue to the people, in such a way as to invite them to impose further constitutional limitations upon the Commonwealth.

Mr Crouch:

– Really, the Prime Minister should be here to listen to this speech.

Mr J H CATTS:

– The honorable member need not expect that the Prime Minister will sacrifice himself very much in this matter. No doubt he is away having a sleep. It is well known that the per capita scheme of distributing the surplus revenue of the Commonwealth was evolved at the Inter-State Labour Conference at Brisbane. The principles of the scheme there formulated have been stolen by the present Government. In the first instance they had no idea of submitting such a scheme to Parliament. But, as acknowledged by the Prime Minister in his opening speech on the subject, it was necessary for the Government to come to an agreement of this kind in consequence of the political situation. ‘ They knew that if they went to the polls without some support from the State Governments they would receive very short shrift. They are, therefore, prepared to sacrifice the constitutional power of the Commonwealth in order to secure political support from the State Premiers. But the Government have gone beyond the Brisbane scheme, inasmuch as they now desire to have the arrangement made embodied in the Constitution as a permanent provision. Such an idea was not in the minds of those who prepared the Brisbane scheme. I was present at the Conference, and heard the whole of the debates. I took part in them. There was not a single reference to a fixed period for which the agreement was to operate. I think that as so much misrepresentation has been indulged in, I ought to place on record a statement as to the opinions of the delegates to the Conference. The Sydney Worker sent out a bal lot-paper to the delegates asking them the following question : -

Did you understand that the financial scheme of the Brisbane Conference was to be incorporated in the Constitution?

To that question the following members of the Conference answered “No”; namely -

Mr. Ager, Mr. Anstey, Mr. Bowman, Mr. Catts, Senator Findley, Mr. Fisher, Mr. Foster, Senator Givens, Mr. Grant, Mr. Heagney, Mr. Hinchcliffe, Senator Henderson, Mr. Hurst, . Mr. Hutchison, Mr. Jensen, Mr. Lamond, Senator de Largie, Senator Lynch, Mr. Mahon, Senator McGregor, Mrs. Miller, Senator Needham, Mr. O’Malley, Mr. Reid, Mr. Spence, Senator Story, Mr. Tudor, Mr. Tunnecliffe, Mr. Ben Watkins, Mr. Ward.

One lady member of the Conference answered “ Yes.” The honorable member for South Sydney was absent in Tasmania and his vote could not be taken. Mr. Holman and Mr. McGowen, members of the New South Wales Parliament, had already expressed the opinion that the intention was that the scheme should be embodied in the Constitution and consequently a ballotpaper was not submitted to them. The Leader of the Labour party in this House has since received a letter from South Africa, from the honorable member for South Sydney, who states” most emphatically that there was no intention on the part of the Brisbane Conference to incorporate the scheme in the Constitution. He further expresses the opinion that 25s. percapita is too high, though he considers that the agreement might be allowed to operate for a number of years. On the 28th October last year I placed before honorable members a calculation showing how the Brisbane Conference scheme .worked out. I found that it worked out at £I os. od. per head to be returned to the States. It is interesting to note that the honorable member for South Sydney now expresses the view that 25s. per head is too large a figure. The president of the Brisbane Political Labour League, Mr. Mat Reid, who represented Queensland at the Conference and who has been a member of the State Parliament, expresses himself in the Worker in the following terms : -

Enclosed are answers to questions asked. As you know, I was a member of Finance Committee that submitted the scheme. The idea of embodying it in the Constitution was never even suggested, or perpetuity either. It was thought the best for the time being, as it has proved itself to be. I cannot recollect even a suggestion of time limit or fixture. As far as I remember it was given to the people of Australia as the machinery whereby the financial relations between the Commonwealth and the States would be equitably settled for some time, experience guiding the future as necessity demanded, as it was then helping us to draw up the scheme. .

That statement expresses my view entirely. There was no idea of placing a limit on the operation of the scheme, which was adopted simply as that which seemed the best and most practical obtainable. It was to be given effect to in such a way as to be open for review whenever occasion demanded. The amendment of the honorable member for Mernda is not one which I can heartily indorse. If I have to choose between the proposal of the Government and the amendment, I shall vote for the amendment, inasmuch as it secures some finality. But, at the same time, I express my absolute dissent from a proposal to tie up this Parliament to raise heavy Customs duties from the people one moment longer than is necessary. I came into this Parliament as a reformer. I came here with the idea of reforming the basis of taxation. At one time the Minister of Defence was a strong believer in direct taxation. No member of the Government has expressed such abhorrence of Customs taxation as he has done. Yet he can now contemplate with perfect equanimity the exploitation of the working classes by means of Customs revenue duties. Those by whom he is surrounded do not seek to disguise the fact that they prefer to collect revenue from Customs duties rather than from direct taxation. To my mind it is criminal to place a constitutional embargo upon the electors should they desire to raise revenue from direct taxation rather than from Customs duties. When the Tariff was under consideration I was quite prepared to vote for protective duties on the understanding that effect was also to be given to the policy of new Protection. But on every occasion I have opposed the imposition of revenue duties. Whenever such duties were under consideration the Conservatives of this House rallied to the support of the Government, with the result that the Labour party were left alone in opposition to them. Thus we cannot be charged with having supported that portion of the Tariff which presses heavily upon the working classes. Under the Constitution, it is necessary that the Commonwealth shall raise four times as much revenue from any article as it may require. It is well known, too, that if a revenue duty of £1 be levied upon any article, the importer not only passes the duty on by charging it on to the price of goods, but also adds a profit upon the duty. In addition, wherever a duty, say, of id. is charged upon any article the merchant adds a penny to its price. In the debate upon preferential trade which took place at the Confer ence of the Chambers of Commerce of the Empire, which was recently held in Sydney, Sir Albert Spicer, its President, said -

If we could import with some preference, say, from Canada, Australia, and India, without its affecting the price of the whole of the rest of the wheat it would be a different thing. The Duke of Devonshire made a statement some two or three years ago in the course of a great fiscal debate.

Mr.Joseph Cook. - Is this reference by the honorable member relevant to the proposed agreement? I submit that he is discussing the question of preferential trade.

The TEMPORARY CHAIRMAN (Mr Johnson:
LANG, NEW SOUTH WALES

– I would point out that a very wide latitude has been allowed to other honorable members, and consequently I cannot prevent the honorable member from proceeding.

Mr J H CATTS:

– I am not discussing the question of preference. I am arguing that the adoption of the proposed agreement will involve the imposition of heavy revenue duties, and that for every pound raised in that way for Governmental purposes, the people have to pay an added amount such as shown by Sir Albert Spicer. The Minister of Defence very cunningly interrupted my quotation at its most effective point. Sir Albert Spicer said -

If we could import with some preference, say, from Canada, Australia, and India, without its affecting the price of the whole of the rest of the wheat it would be a different thing. The Duke of Devonshire made a statement some two or three years ago in the course of a great fiscal debate, that preference such as was suggested would mean an advantage to the self-governing Dominions of one and a half millions, but would cost the British consumer£10.000,000.

That is to say, the self-governing Colonies would derive an advantage of £1,500,000, but the British consumer would have to pay £10,000,000. This shows how revenue duties would operate. Sir Albert Spicer added -

That was the statement of one of the most brainy men in England - one who put the interests of the country above all party.

We had an illustration of what a duty on wheat would mean in March this year.

The TEMPORARY CHAIRMAN:

– I would ask the honorable member not to proceed further on those lines.

Mr J H CATTS:

– I merely wish to point out that the imposition of Customs duties for revenue purposes involves the payment by the consumer of several times the amount of those duties. Consequently it is a system of taxation which should not be resorted to. The quotation proceeds -

The price of wheat in England was 35s. rod. and in Berlin 48s. rod., though the import duty there is only 7s. 2d.

The TEMPORARY CHAIRMAN.Ihe honorable member will not be in order in pursuing that line of argument.

Mr J H CATTS:

– My point is, and I desire to show, that while a duty of 7s. 2d. per quarter was operative upon wheat, the consumers were required to pay 13s. per quarter more for it.

The TEMPORARY CHAIRMAN.That circumstance might be used as an argument upon the Tariff, but it has scarcely any bearing upon the question which is before the Chair.

Mr J H CATTS:

– I am proving the burden of revenue duties. I have only a few more words to quote. Mill says -

A tax on any commodity, whether laid on its production, its importation, its carriage from place to place, or its sale, and whether the tax be a fixed sum of money for a given quantity of the commodity or an ad valorem duty, will, as a general rule, raise the value and price of the commodity by at least the amount of the tax. There are few cases in which it does not raise them to more than that amount.

Dealing with the importation of wheat into France and the United Kingdom during the period from 1883 to 1898, Lord Avebury, in his notable book, shows that the consumers were called upon, to pay fully 25 per cent, in addition to the duty thereon. I do not desire to weary honorable members by quoting the tables which are given for that period ; but they show that if the average price of wheat was 9s. 1 id., the consumers had to pay 2s. 6d. in addition to the duty.

The TEMPORARY CHAIRMAN.Order ! I cannot allow the honorable member to discuss the effect of a Tariff upon trade, because that has nothing to do with the question Before the Committee.

Mr J H CATTS:

– I am discussing a question which is involved in the agreement, and that is whether we should be compelled to raise an excessive revenue from Customs duties on the necessaries of life of the working people.

The TEMPORARY CHAIRMAN.The honorable member was going beyond that. He was dealing with the effect of Customs duties on the cost of foodstuffs, and there is no proposal for a duty on wheat involved in the question before the Chair.

Mr J H CATTS:

– I submit, sir, that I was not. I do not desire to discuss the

Tariff, but to point out to the people that this agreement, if carried, would involve the imposition of heavy Customs duties on the necessaries of life. I think, sir, that I am quite entitled to point out that a proposal to raise a tremendous amount from the working classes by indirect taxation should not receive the support of a Democrat. It may be said that the necessary sum could be obtained by levying duties upon certain articles not in general consumption ; but we know that if duties were put upon such articles, the revenue therefrom would be very small indeed. So that, in order to derive a huge revenue from the Customs, it would be necessary, if this agreement were adopted, to levy duties on trie necessaries of life to the working classes. When the honorable member for Denison was asked during this discussion where the revenue was to come from, he said, “ Oh, we can raise £3,000,000 by means of duties on cotton-piece goods.” What would that mean? It would mean taxing the wearing apparel of the wives of working men merely to save States with Conservative Upper . Houses from resorting to direct taxation. The honorable member for North Sydney has stated that a large sum could be raised by levying duties on tea and kerosene, which he pointed out were great untapped sources of revenue. I am opposed to the adoption of the agreement, because it would involve the imposition of heavy revenue duties on such articles used by the working classes. I regret that there is a prospect of it being referred to the people with the nominal indorsement of this Parliament, when, as a matter of fact, it can have nothing of the kind. A majority of honorable members have, by their expressed attitudes, declared against the agreement, thirty-two being in favour of it and fortyone against it. I do not think that there are really thirty-two honorable members in favour of the agreement if they would only speak truthfully ; party pressure by the Government has much to account for in this debate. I shall take every opportunity to prevent the incorporation of the proposed agreement in the Constitution. Whilst I shall vote for the amendment of the honorable member for Mernda as infinitely better than the Government proposal, I shall hold myself free to speak against it in the constituencies, and, if it be defeated, to vote for something commending itself more to my judgment. I hope that those who have made such brilliant speeches against the Government proposal will not, if defeated to-night, tamely vote for the third reading. If they sincerely desire to prevent the wrecking of the Constitution, they should vote against the adoption of the proposed agreement at every stage. I have no desire to gain any party advantage in connexion with this matter. My firm belief is that the best thing that could happen for our party political ends would be the carrying of the Government proposal. I closely followed the campaign of the right honorable member for East Sydney against the draft Constitution Bill, attending every meeting I could get to, and I am convinced that the feeling which was then exhibited against the proposal to make the Braddon provision perpetual will be revived, and that the people will protest against being taxed through the Customs House for revenue purposes. The one thing which will secure most likely the turn of the balance in favour of the election of Labour senators for New South Wales is the carrying of the agreement. I know what the feeling of the people of the State will be. All the printed matter that can be turned out from the Sydney Morning Herald and Daily Telegraph offices will not affect it. The eloquence of the Minister of Defence will be swept aside, or he will be reminded of old speeches, which will make him appear ridiculous. Personally, I want no better political issue for campaigning purposes.

Mr Mcwilliams:

– Then, what is the matter with the honorable member?

Mr J H CATTS:

– I have no desire to see a sacred constitutional issue made the sport of party politics. The honorable member for Franklin spoke about the referendum being Democratic.

Mr Mcwilliams:

– The proposed amendment can be made only with the consent of the majority of the people.

Mr J H CATTS:

– Yes, but a minority could block a subsequent alteration.

Mr Tudor:

– A minority of one in ten.

Mr J H CATTS:

– Yes, no matter how burdensome the proposal may prove to the majority. The referendum provided for in the Constitution is not a Democratic one. If it were, the honorable member for Franklin would not be in favour of the proposal of the Government. I have personal friends in Tasmania, and regularly spend my holidays there. Perhaps I shall have an opportunity to explain this matter to some of his electors. The Labour party is prepared to trust the people, and to refer to it any question upon which it can freely express its opinion. We desire the initiative referendum. We would allow 1 per cent. of the people to initiate a referendum on any question by petition to the Prime Minister. Under the Constitution, a minority can successfully prevent themajority from taking an objectionable provision out of the Constitution. The honorable member for Wentworth has drawn my attention to the wording of section 128 of the Constitution, which enacts that-

The proposed law for the alteration thereof must be passed by an absolute majority of each House of the Parliament, and not less than two or more than six months after its passage through both Houses the proposed law shall be submitted in each State to the electors qualified to vote for the election of members of the House of Representatives.

But if either House passes any such proposed law by an absolute majority, and the other House rejects or fails to pass it or passes it with any amendment to which the firstmentioned House will not agree, and if after an interval of three months the first-mentioned House in the same or the next session again passes the proposed law by an absolute majority with or without any amendment which has been made or agreed to by the other House, and such other House rejects or fails to pass it or passes it with any amendment to which the first-mentioned House will not agree, the Governor-General may submit the proposed law as last proposed by the first-mentioned House and either with or without any amendments subsequently agreed to by both Houses, to the electors in each State qualified to vote for the election of the House of Representatives.

When a proposed law is submitted to the electors the vote shall be taken in such manner as the Parliament prescribes. But until the qualification of electors of members of the House of Representatives becomes uniform throughout the Commonwealth, only one-half the electors voting for and against the proposed law shall be counted in any State in which adult suffrage prevails.

And if in a majority of the States a majority of the electors voting approve the proposed law, and if a majority of all the electors voting also approve the proposed law, it shall be presented to the Governor-General for the Queen’s assent.

Those members, therefore, who talk about submitting this amendment of the Constitution to a Democratic referendum, and about its being alterable at any time by the same means, are simply talking with their tongue in their cheek. Many of them have paraded up and down Australia objecting to this provision in the Constitution ; but, of course, when it suits their purpose, they can forget all the Democratic ideas which they espoused in days gone by. The Government ought to submit alongside their present proposal, another question which would enable the people to vote for a limited period, say, of ten years. Personally, I would much prefer that the matter should be arranged without an amendment of the Constitution at all, as I do not desire to see the powers of the Commonwealth Parliament in any way trammelled. The States had a right to put their financial house in order during the ten years’ notice which they have had. Instead of that, they have gone on squandering their money. New South Wales has had since Federation £10,000,000 more revenue than it would have had if its old Customs Tariff had been in operation during the whole time.

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

– And the honorable member’ says that New South Wales has squandered it?

Mr J H CATTS:

– Yes. The New South Wales Governments have been indulging in a policy of spend and burst. They have had £24,000,000 of Customs revenue from the Commonwealth, and, in addition, have spent over £20,000,000 of borrowed money in that time.

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

– Can the honorable member give an instance of where they have squandered it?

Mr J H CATTS:

– Yes. Although a large number of non-revenue-producing Departments have been handed over to the Commonwealth, the cost of government in New South Wales is larger now than it was before federation. That is for governmental purposes alone, and indicates that no economy has been practised in the administration of State affairs. For a period of four years before Federation, the average Customs and Excise revenue of New South Wales was £1 4s. 6d. per. head. We now propose to give them £1 5s. per head. We have given them, in the meantime, a tremendous amount ; but the result has been as I have stated. As the States, my own included, have not put their financial house in order during that ten years’ period, this Parliament cannot see their finances thrown into a condition of confusion by immediately depriving them of all the revenue which they have been obtaining from the Commonwealth; but must see that they have another opportunity, although they have been prodigal in their expenditure. As we are going to make them an allowance, it should not be in perpetuity. I wish to express my strongest disapproval of the proposed leerroping of the Commonwealth, which will prevent it from adopting what it may believe to be the best method of taxation, and also prevent members of this House from insuring that the expenses of government shall be met from direct taxation. Whilst I strongly object to it, I shall vote for the amendment of the honorable member for Mernda ; but if I can get it, I shall take the opportunity of voting for some other proposal more in accordance with my views.

Mr Storrer:

– I wish to make’ a personal explanation. The honorable member for Cook charged me with changing my mind because a certain telegram came from Tasmania. Three weeks or more ago, I told the honorable member foi Franklin, and other honorable members, as the Prime Minister knows, how I was going to vote on this occasion. The honorable member for Cook did not quote all that I said ; but even if I did change my mind, 1 should have done no more than my Labour friends in Tasmania have done. They have changed their minds so far as I am concerned ; but it is a free country, and I can change my mind as well as other people can change theirs. My mind, however, was made up on this matter three weeks or a month ago.

Mr HUTCHISON:
Hindmarsh

– I would point out to the Government that we have had only one day’s debate upon the greatest question that has come before the Chamber. We met two hours earlier than usual to-day, and yet the Government now refuse an adjournment. When I had the honour of being elected, I felt delighted at the prospect of joining an assembly of gentlemen, who, no matter what differences of opinion there might be, would be at one in defending the powers intrusted to us by the people. But instead of defending those powers, a large number of honorable members opposite are ready to destroy the Constitution.. What more is this pliable Government going to accept in the way of suggestions from the Premiers? So long as I am here I shall do all I possibly can to prevent any of the powers we possess now being handed over to the States. The honorable member for Franklin, like many others, says that we are afraid to trust the people, and I have to say that I shall never consent to a referendum with the object of depriving us of any of the powers we now possess. I am prepared at any time to have a referendum on the question whether we shall be given fresh powers, which the people may think we are better fitted to exercise than are the States. But I should not, for instance, consent to a referendum on the question of the Northern Territory. There is another agreement, entered into by the Prime Minister with the late Premier of South Australia. But this Parliament has the power to decide the question just as it has in the matter immediately before us ; and I do not see why there should be a referendum. I listened to hear what the Prime Minister might have to say as to the demerits of the proposal of the honorable member for Mernda; but not one word of disparagement was uttered by the honorable gentleman, for the obvious reason that there is nothing to be said against it. We are told by the Prime Minister that if this agreement be embodied in the Constitution there will be no difficulty with the people in the future in regard to securing any necessary amendment ; and he has instanced the referendum on the Constitution Bill, when the whole of the Parliaments, the majority of the people and the States had to consent. But how was Federation carried in some of the States? Federation had the support of the whole of the press, all the leading men, and also the members of the Labour party, the South Australian members of which had included it in their platform years before. But we were satisfied that the Bill submitted was not on a proper Democratic basis, and we opposed the measure, while not opposing Federation, which, I may say, was carried precisely as this agreement will be carried, as the result of the most outrageous promises to the people. The late President of the Senate, Sir Richard Baker, told the electors of South Australia that, instead of Federation costing them anything, it would save them £12,000 per annum. We are going to have newspapers like the Argus, the Sydney Morning Herald, and the Advertiser and the Register in Adelaide, placing anything but the truth before the people; and I have no doubt there will be no difficulty in having this agreement put into the Constitution. The decision at which we arrived the other day ought to be respected; and the honorable member for Parkes has shown us, that putting the vote of the Chairman of Committee aside for the moment, there is a majority against the Government. But I remember, Mr. Chairman, the vigorous speech which you made.

The CHAIRMAN:

– The honorable member must not discuss that matter.

Mr HUTCHISON:

– At any rate, we know the opinion of the Chairman.

The CHAIRMAN:

– Order.

Mr HUTCHISON:

– I shall not discuss the matter further than to say that the Chairman was just as entitled to give his vote, without any qualification, as was any other honorable member. The leading points in the agreement have been admirably dealt with by the honorable members for Mernda, Parkes, and Flinders, and we, on this side, will not be accused of supporting those honorable members, because we are anxious to do something which will win their favour while they are not anxious to do anything for the sake of pleasing honorable members on this side. But I am glad to think that honorable members, who differ from us on almost every other political question, are at one with us in safeguarding the Constitution. A great deal was made of the fact that one or two State members in New South Wales - though I am glad to say that such members are not conspicuous in other parts of the Commonwealth - have stated that the proposed agreement is practically that carried at the Brisbane Labour Conference. However, we have now received replies from every member of that Conference, to two questions put to them through the Sydney Worker. The questions are as follow : -

  1. Did you understand that the financial scheme of the Brisbane Conference was to be incorporated in the Constitution ?
  2. Was any hint of such intention given by any member of the Conference in your hearing? 1 am pleased to say that so far as those who drew up the proposals embodied in the platform are concerned, every member replied in the negative to the first question, while the whole thirty-five delegates, with the exception; of Mr. Holman, Mr. McGowen, and Mrs. Dwyer, gave ah emphatic “ No” to the second. There was also one who said he did not recollect anything of the kind being said. But we shall not find the Government retracting a single word that has been said.I am delighted to think that the Labour party in South Australia are unanimous in their desire to trust this Parliament with the work that was handed over to it by the people, in the belief that it would always act fairly and generously. There is one thing that cannot be denied by any section of honorable members ; and. that is that it was the intention of all parties in this Parliament that any settlement of this question should be made in connexion with the taking over of the debts of the States. But was the Prime Minister in earnest when he said that one of the best arguments for the agreement was that it would hasten the imposition of direct taxation? Does the honorable gentleman mean to tell us that the people will be satisfied with that reason ?I venture to say that the Prime Minister himself would be one of the strongest opponents of a proposal to impose direct taxation. Land taxation, and the adoption of this agreement, are entirely separate questions. Land taxation will only come up for consideration when we find that extra revenue is needed ; and when that occurs, he will be a bold member who will be prepared to say to his electors, “ We in the Commonwealth Parliament have given away our revenue, and, therefore, we now desire to superimpose a Federal land tax on the land taxes imposed by the States.” Any member of Parliament who advocated such a policy would run the risk of having some one else put into his seat. I could imagine the Minister of Defence, if he were still a member of a State Parliament, going wholesouled for this agreement; because, if it were adopted, he would have no trouble about taxation for the rest of his life. He would have the satisfaction of knowing that if the members of the Federal Parliament did not do what he wanted them to do, it would be the simplest thing in the world to persuade the electors to replace the Federal members by others. But is that taking a national view of things? I venture to say that it would not be very long, under such conditions, before this Parliament became one of the most degraded Parliaments in the British Dominions. We cannot be a National Parliament if we are to do the bidding of the State Premiers whenever they meet in Conference. It is remarkable that we cannot obtain any statement from any Minister regarding the reasons which induced every one . of them to change his views on this question. There was absolute unanimity, up to the time of the late Conference, that we were to give to the States what we could afford.
Mr Mcwilliams:

– But Ministers afterwards saw the light.

Mr HUTCHISON:

– They went into a dark recess to find the light. Indeed, we do not know whether there was a light there at all, and no one will tell us. The Minister of Defence has developed into one of the worst parochialists we have in this Parliament. He does not appreciate the powers which the Constitution has intrusted to us, and is ready to assist in giving them away.

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

– Everything that is done by honorable members on this side is done for political purposes; but everything done by the Opposition is done from pure patriotism and love of country.

Mr HUTCHISON:

– Everything that is done by the Government party is done to help the Legislative Councils of the States, which have ever been the drag upon progress in this country. This Parliament is being rapidly put in the same position as the State Parliaments occupy to-day. The Premiers of the States are limited to what the Legislative Councils will permit them to do. They have to do the bidding of the Legislative Councils. The present Government is prepared to do the bidding of the Premiers which are subservient to the Councils.

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

– Therefore, according to the honorable member’s logic, this Parliament is doing the bidding of the Legislative Councils ?

Mr HUTCHISON:

– Precisely ; the Minister of Defence is helping in that process, and seems to glory in his shame. I take the same stand regarding the proposal of the honorable member for Mernda, as I did at the Brisbane Conference. That Conference adopted an infinitely better scheme than any. other that has been laid before this Parliament. It was better than the scheme of the honorable member for Mernda, and if there were a chance of carrying out the Brisbane scheme, it would be moved from this side of the chamber. I object to anything relating to our financial relations with the States being placed in the Constitution. The people were satisfied, in the first instance, to limit the Braddon section to ten years. They were content that this Parliament should then review the situation, recognising that we should undoubtedly be the better judges.

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

– Does the honorable member think that we are?

Mr HUTCHISON:

– I do. I venture to say that ifI were to walk down a street in the Minister’s constituency, and were to speak to fifty electors, not two of them would know much about this question. Similarly, if the Minister would come to my own constituency, and question the first fifty electors he met, he would meet with the same result.

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

– What a slur on the honorable member’s constituents !

Mr HUTCHISON:

– It is not a slur upon them. There are members of this Parliament who would be the better for a good deal of tuition regarding the financial question. I do not know nearly as much about it as I should like to know, although 1 have given it careful study for months past.

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

– The honorable member has accused his constituents of gross ignorance.

Mr HUTCHISON:

– Here we have another exhibition of the tactics of the Minister of Defence. He studies how he can effectually throw in interjections so as to misinterpret anything said by an opponent.

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

– The honorable member did say that scarcely any of his constituents could understand this question.

Mr HUTCHISON:

– I invite the Minister to come over to my electorate and tell my constituents that I reflected upon them. It is no reflection to say that an ordinary workman or a busy merchant knows very little about these great political questions. Some of the most intelligent men in South Australia have told me how little they ‘know of political questions.

Mr Kelly:

– I believe that the honorable member is right in his contention’. If the honorable member for Robertson were permitted to walk down the street and to expound this question, I do not think that anybody would understand it.

Mr HUTCHISON:

– It is absurd to suggest that the people have any grasp of it. I venture to say that the honorable member for Mernda was occupied many months in evolving the scheme which he has put before us. That being so, how can the man in the street be expected to understand the matter ? If we had a Labour daily newspaper I should not object to the question being submitted to the people. I hope that the time will come when they will read the Labour newspaper, the Liberal organ, and the Conservative journal, and then judge between them.

Mr Kelly:

– By eliminating the lies.

Mr HUTCHISON:

– They may judge for themselves what statements are lies. I am sorry to say that there is nothing national about the press of Australia. The one exception to that statement is the Age, which has taken a noble stand upon this question. I admire my greatest political opponent just as I admire the Age for its outspokenness in the interests of Nationalism as opposed to the interests of parochialism.

Mr J H Catts:

– It publishes a great article in its issue to-day.

Mr HUTCHISON:

– It has published a series of magnificent articles. Some honorable members opposite, whose consciences are pricking them for the stand which they are taking upon this question will eventually be very sorry that they did not fight for Nationalism instead of parochialism.

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– Let us take a vote.

Mr HUTCHISON:

– The honorable member is not interested in whether or not the people understand this question. Does he not imagine that we ought to have a little more discussion upon it?

Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910

– We have already had three weeks’ discussion of it.

Mr HUTCHISON:

– We have only had a single day’s debate upon this amendment. . When the Minister of Defence was Leader of the Opposition, a question which was not a tithe so momentous as is this one, would be discussed for a fortnight.

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

– That is all a nightmare.

Mr HUTCHISON:

– The present Government have never had to encounter obstruction in the way that previous Administrations encountered it.

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

-The honorable member is quite wrong.

Mr HUTCHISON:

– The Minister of Defence used to glory in his obstructive tactics, and I was wont to admire the loyal way in which, night after night, his supporters backed each other up, not till 3 a.m., but very often till 8 a.m.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– They were fighting for a great principle, and the High Court has since decided that they were right.

The CHAIRMAN:

-Order!

Mr HUTCHISON:

– The honorable member for Indi badly needs to be taught a lesson. Earlier in the evening I had occasion, to call attention to the fact that he has not the manners to remove his hat while he is interjecting. I object to any honorable member interjecting while I am speaking without uncovering. If the amendment be defeated, nobody will be more disappointed than I will be. Such a result will not prove the death-knell of Federation, because I am quite sure that it will not be long before some of the parochialists of this House will be removed and their places taken by a body of Nationalists. The unfortunate feature of the whole business is that we shall not be able to undo the mischief which will have been done. If the agreement be carried, I shall endeavour, on every possible occasion, to show the infamous way in which it has been thrust upon the people. It was drawn up in a manner that is foreign to the spirit of the British Dominions. I have never known of a State and Federal authority meeting in secret, and then whipping their supporters by saying to them, “You must vote for this agreement, or take the consequences of your action.” I hope that this will be the last agreement which will be formulated in a secret caucus, whilst I have the honour to be a member of this Parliament.

Mr FRAZER:
Kalgoorlie
Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Vote.

The CHAIRMAN:

– I would point out to the honorable member for Indi that he must not interject with his hat on ; also that interjections are disorderly at any time.

Mr FRAZER:

– Although this agreement has been before Parliament for a considerable time, I have not uttered a word of criticism upon it.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– We shall be good for about four hours.

Mr FRAZER:

– When the honorable member for Indi, who has already been rebuked for his lack of manners, will permit me to do so, I shall proceed with my remarks. It appears to me that this question is an important one-

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– What, at this late hour ! Well, I am surprised.

Mr FRAZER:

– I was surprised at the refusal of the Prime Minister to consent to an adjournment of the debate last night. A question of this great importance is not likely to engage the consideration of this Parliament for many years, and when we asked for time to consider the merits of the amendment, we made a reasonable request. In my opinion, the Prime Minister has not dealt fairly with those sitting on his side who disagree with his proposal. It is well known that the honorable member for Mernda submitted his first amendment with a statement that the test vote to be taken thereon was to be accepted by the Prime Minister as indicating the wish of the Committee for a reduction of the term of the agreement.

Mr Mcwilliams:

– The Prime Minister never agreed to that.

Mr FRAZER:

– For the edification of my honorable friend, I shall read exactly what the Prime Minister said. In his speech, the honorable member for Mernda said -

The amendment that I propose represents the least offensive or objectionable way of impugning any of the Government’s actions. I understand from the Government that should the omission of this word be agreed to they will accept it as an indication of the opinion of the Committee that there should be a limitation of the term of the agreement.

In reply to that statement, the Prime Minister said -

We do not undertake to accept the amendment, but we undertake to accept the vote on it as indicating that intention.

That is, that he was going to accept the vote on the amendment.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– What else did he say ?

Mr FRAZER:

– He said nothing material to that point.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– Oh yes, he did.

Mr FRAZER:

– That is the complete statement which the Prime Minister made in regard to the remark of the honorable member for Mernda.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– Not by a long way.

Mr FRAZER:

– If the honorable member will refer to page 5251 of Hansard, he will find that what I have quoted is the only statement which the Prime Minister made on that page.

Mr Coon:

– The honorable member is quite correct.

Mr FRAZER:

– I know that I am.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– The Prime Minister said that he would take the agreement to the country.

Mr FRAZER:

– In regard to the interjection I have quoted, the honorable gentleman, has broken faith with those who sit on his own side of the chamber, and they, it appears to me, have some cause of complaint against him. So far, it cannot be said that any honorable member on this side has endeavoured to make the slightest political capital out of the attitude which has been adopted by some honorable members who sit on the Government side. We desire to see the question of the future position of this Parliament in relation to the States decided on its merits, without any attempt to derive a party advantage from any division which may be taken. An opportunity was presented at an early hour to-day to hear the opinions of those who differ from the pro posal of the Prime Minister. It appears to me that they have established an unanswerable case. The great point which I think has been made by the opponents of the agreement is that in the near future, under the Constitution as it stands, this Parliament will be absolute master of the finances of Australia, so far as the collection of duties from Customs and Excise is concerned. It was placed in that position by the deliberate vote of the people when they accepted the Constitution, including the Braddon section, with an operation limited to ten years, after which the Parliament was left free to decide as to what would be best in the interests of the people. At the end of, about ten months we shall have complete control of the whole of the Customs and Excise revenue. What are we proposing to do? It is suggested, now that we are reaching the time when we shall be able to say. what sum shall be retained by the Commonwealth for defence and other purposes, that we should ask the people to take away this power, and that we should put ourselves into the position of mendicants asking assistance from the States. I am not prepared to accept that suggestion, or to say to the people, “ You intrusted the Commonwealth with a power which we are not competent to use. I ask you to take it from us, and at the same time to impose upon us the responsibility of paying 25s. per capita to the State Governments for all time.” Is that proposal in keeping with the national aspirations and necessities? If it be accepted, it will be because of the cracking of the whip, and the threatening of party discipline. It is useless to try now to alter the votes of honorable members; they have made up their minds.

Mr Mcwilliams:

– On both sides.

Mr FRAZER:

– Those on this side have a genuine desire to give the people the opportunity to again deal with this question later, when they will have had more experience of the requirements of the Commonwealth. Honorable members opposite are supporting the agreement because the Premiers have promised to give their assistance at the elections.

Mr McWilliams:

– The honorable member does not think that that has influenced all honorable members on this side?

Mr FRAZER:

– It has influenced those who will make the majority. Were it not for the fact that there will be an election within three months, there would be an overwhelming majority against the proposal. Although I cannot hope to influence any one, I make these remarks at twenty minutes past 3 o’clock in the morning to justify my action to my constituents, and to such other electors as may need them. The public debts of the States now amount to about £250,000,000 or nearly £50,000,000 more than they amounted to when the States federated, and the yearly interestbill comes to nearly £9,000,000. It has been demonstrated by figures supplied by the Treasurer that, were these loans under Commonwealth control, they could be renewed for ¼ per cent. less than is now paid, which would save £26,000,000 during the currency of the present obligations. We are asked now to abandon the opportunity to obtain control of £202,000,000 of the debts of the States without consulting their wishes, that being the amount which was owing at the time they federated. But what I have suggested will be impossible if we have to pay to the States 25s. per capita per annum for all time. The Prime Minister, with his tongue in his cheek, talked about a referendum on this question. He knew that he was acting the part of a hypocrite, and that nothing can be done until there have been fresh negotiations. The proposals of the Government are so mean, and likely to be so disastrous to the Commonwealth, that I cannot think that any one has been convinced by the insincere eloquence of the Prime Minister. Under other circum- stances, I might well elaborate the arguments against this proposal, which affect our industrial legislation, and must injure our Protective policy. But no one is sufficiently interested in the matter now to make it worth while. The measure has been kept dangling before Parliament for nearly three months.

Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC

– Why?

Mr FRAZER:

– Because the Government have not had a majority. Their majority arrived from London on Tuesday afternoon, and now they are bludgeoning the Bill through. If they wait a week or two longer their majority will again disappear. They have broken a pair in order to secure a majority. It is a most unhappy omen for the Commonwealth that a question of this description should be decided under such conditions, and that a decision should be arrived at in which the real opinion of the majority of this House will not prevail. There is an actual majority against the agreement, but by a clever manipulation of pairs, and by exercising control over a small weak-kneed section of the Government party - men who are never safe unless they are with the “ packers,” as was explained by one of their own members the other day - the Government are evidently going to carry to victory this iniquitous proposal, which will tie up the Australian people. We cannot help it. Another opportunity for review will probably arise, but I cannot imagine a majority of this -Committee allowing such an iniquitous proposition to be given effect to in the interests of the State Righters - a proposition which is undoubtedly destined to aggrandize the State Premiers, and to sacrifice our national possibilities. At the same time, I am compelled to admit that they are likely to accept it to-night, but to those who believe in the industrial development of Australia, and who desire to see its Protective policy continued, no other course should be open than to vote against it.

Mr MATHEWS:
Melbourne Ports

– I should perhaps have abstained from speaking, but for the rather insulting tone adopted at times by the honorable numbers for Franklin and Lang, and a few others towards the Labour party. Whenever we objected to the so-called referendum now proposed, we were asked if we would not “trust the people.” We were told that we were the party who first advocated the principle of the referendum,, and were charged with refusing to accept it now that we had the opportunity. If there were any truth in that allegation, of course, we, as a party, should be ashamed to take up such an attitude, but those who make it know that in no sense of the word is the referendum provided for under the Constitution a true referendum, because, not only the vote of a majority of the people as a whole, but also the vote of a majority of the States is required to carry it. Our objection all along to this kind of referendum has been that no Constitution should be hide-bound, and that there should always be a possibility of altering it if the people think fit. Those who placed this form of referendum in the Constitution, however, did so because they knew well that under it it would be hard to get the true opinion of the” people, and that, the vested interests of the States would always be considered. Although there is a possibility that the people may accent this financial agreement at the ensuing referendum, I have a strong hope, and I believe there is a good fighting chance, that they will not. 1 f the State Righters had to fight the question against the full force of those who are supposed to be animated by the Federal spirit - if behind the cause of Nationalism we had the strong power of the Prime Minister and his Government, whom the people have looked upon as Nationalists, and if, in “addition, the newspapers which -support them were advocating a national instead of a State Righters policy dictated by the State Premiers - there is no doubt that the people would refuse to sanction the agreement. But the Prime Minister is accepted by the people as an authority, and although he has fallen away from grace upon this occasion the people have not had an opportunity of finding it out. The public have no time to consider the true political situation. Even in Victoria, where the attitude of the Age has given the people an opportunity of seeing the fallacy of the proposal to alter the Constitution to suit the Federal Government and the State Premiers, I have found during the last three or four weeks that not only do they not understand the question, but they have never attempted to consider it. The matter will, therefore, be left at the election’ to those who take the platform on one side or the other. We who are the remnants of the National party would have no fear of the result if we had behind us the power that we might expect to have on such a question, but, as matters stand, the people can be led astray by those who have gone over to the Little Australian party. The combined forces of the State Premiers and State Righters, aided by the Federal Government and their supporters, and by the press, may be able to achieve their purpose by misleading not only a majority of the people, but a majority of the States. Some of the small States seem anxious for this agreement in the belief that they will reap some benefit; but I think I can show the representatives of Tasmania that their State will find the proposal, if carried, really a detriment. The Prime Minister told us that if, after say three Parliaments, the arrangement was found not to work so beneficially as had been anticipated, the Constitution could be again altered; but we know that by that time the same influences will not be at work that are at work now - that only the three larger States might then be favorable to an amendment, and, therefore, no amendment could take place. It is not that we are afraid to trust the people, but that we object to the method by. which the Constitution has to be altered. Those who charge us with being afraid to trust the people, must know that they are making a representation that is not correct. We who have been used to party fighting for years, know that politicians do not al- * ways put the correct view before the people, but, with the same desire that the Government now have for greater strength at the next election, are willing to accept help from any quarter, even from Satan himself. The Prime Minister admits the possibility of our awakening to the fact that we have made a mistake in altering the Constitution in the way now proposed ; but, as I have pointed out, there will be great difficulty in having an amendment made in the future, if certain States are receiving what they conceive to be a benefit. In the course of his remarks, the honorable member for Wentworth said that if the States did not receive the fer capita payment proposed, it was possible they would retard instead of encourage immigration. I remind Tasmanian representatives that the States of small area will, in point of population, be outstripped by those of larger area, owing to the greater inducements they are able to offer to immigrants ; and those larger States might devote the whole of their portion of the Customs and Excise revenue to the encouragement of immigration. 1 may be charged with regarding the matter from a provincial stand-point ; but I admit that for the purposes of defence, and providing extended markets, any addition of population is good for the country as a whole. It must be admitted, however, that, from the point of view of population, the larger States will always have an advantage over the smaller States. At present Victoria is the distributing centre for Tasmania, and it is contended that, unless the revenue is returned per capita, the latter State will not get its fair share. Under the” bookkeeping system much of the trade that really belongs to Tasmania comes to Victoria, and Tasmania thereby loses, and should receive some consideration. However, the representatives of Tasmania should bear in mind the words of the honorable member for Wentworth, and realize that, while they may derive some benefit now under the agreement, it may, in the future, press hard upon them. In Tasmania, South Australia, and even Victoria the proposed payment of 25s. per head, has upset the calculations of the State Treasurers. In Victoria, the Treasurer found that he had to obtain revenue in some direction; and he immediately set about making arrangements to collect it by means of a land tax, knowing that, after next year, he will not receive so much from the Commonwealth as formerly. I regret this, because I had hoped that there would be a Federal land tax, though I know that a large number of honorable members prefer to leave such taxation to the State Parliaments, because they believe the. State Premiers and members would like to throw on the National Parliament the onus of collecting any further- taxation. We know that people object to taxation even if they will benefit from it. But we also know. that, while State politicians are throwing the onus of extra taxation on theCommonwealth Parliament, they are themselves utilizing the only means of. extra taxation that are available. Nearly all the States have income taxes and land taxes. Land taxation is likely to develop. Moreover the State Parliaments, instead of reducing their expenditure, are now spending £4,000,000 per annum more than they spent in pre-Federal days. They show no desire to reduce their establishments. They wish to continue all the glamour surrounding their Parliaments and Governors. Notwithstanding that we are about to appoint a High Commissioner, the States show no tendency to withdraw their Agents-General, but rather to magnify their position.

Mr Atkinson:

– We cannot stop that.

Mr MATHEWS:

– We cannot, unless we develop the national feeling, and recall to the minds of the electors what they desired before Federation was established. The people of Tasmania, for instance, never dreamt that the Government of that State would spend more money per capita after the Commonwealth took over several State functions. We are told that the people to whom the State Parliaments owe allegiance are the same as those whom we represent in the Commonwealth Parliament. But “such is not the case. While the Legislative Assemblies have shown an inclination to become more Democratic, the* Upper Houses are as Conservative as ever they were. It cannot be said that we represent the same people, because the Upper Houses represent only a section, whilst we represent all the adults of the countrys

Take the case of Victoria. The Legislative Assembly has recently passed three important Hills. The Legislative Council has cut them up in such a way that they are hardly recognisable by their authors. Can it be said that the Legislative Council of Victoria represents the same people as do those returned from that State to the Federal Parliament? The Legislative Council of New South Wales is a nominee Chamber. It may become more Democratic as the old retarders of progress die off, and their places, are taken by more liberal minded men. But in Victoria, with the limited franchise for the Legislative Council there is no chance of bringing about legislation that reflects the minds of the people. So that, once we permit the Constitution to be altered, as proposed by the Government, we shall have the greatest difficulty in securing an amendment in the direction desired in the future. When, therefore, the Prime Minister tells us that if after three Parliaments it is found that what is now proposed does not work as he expects it to do, it can be altered, he makes a statement which he must know is not correct. Perhaps I should not go that far. But I will say that if he had given the question that consideration which it deserves, he would recognise that it will be much more difficult to restore the Constitution to its present form when once this agreement has been embodied in it, than it will be to amend it now. I maintain that as honorable members have been elected upon the principle of one adult one vote, they can truthfully urge that they represent the people of Australia in the fullest sense of the word, whereas the State Parliaments do not. Then I should like to ask the Government where they intend to raise the necessary revenue for the purpose of discharging Federal functions, seeing that every form of direct taxation has already been exploited by the States. Although the Government will give us no hint in that connexion, I know that this Chamber contains a great number of RevenueTariffists, and that the imposition of revenue duties will probably be resorted to. I notice that the honorable member for Maribyrnong is laughing. As a matter of fact, he should weep, seeing that he is now assisting the Government to break down our Protective policy, of which he has always been a declared champion. He is one of the Government supporters, who ought to hide his head in shame.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– If the proposed agreement be embodied in the Constitution, it will destroy our Protective policy.

Mr MATHEWS:

– Exactly. In other countries high Protective duties have resulted in the collection of a smaller revenue.

Mr Mauger:

– Oh!

Mr MATHEWS:

– The honorable member may laugh. When the Tariff was under consideration, this Parliament recognised that it was idle to impose duties upon commodities that were not locally manufactured, and one afternoon it wiped off duties upon articles which would have yielded £395,000 annually. If the necessity should arise for the Commonwealth to obtain further revenue, and if all other avenues of taxation are closed to it, the free-list will have to be entirely suspended, and resort must be had to revenue duties. In other words, such commodities as cotton goods, tea, and kerosene, will have to be made dutiable. We can always afford to levy high duties, because, as a Protectionist, I maintain that 15 per cent. and 20 per cent. are not Protective duties in any sense of the word. They are merely revenue duties. We all recognise that a good deal of revenue might be obtained by levying duties of 15 per cent. and 20 per cent. upon goods which are now upon the free-list. That is a possibility of the near future.

Mr King O’malley:

– It is the natural sequence.

Mr MATHEWS:

– Undoubtedly. Honorable members opposite who are supporting the amendment of the honorable member for Mernda, usually entertain a different view of matters from that taken by the members of the party with which I am associated. But in the future, they will be regarded as the true Nationalists - as the men who endeavoured to save the Federation at a critical stage in its history. To those who tell us that we are afraid to trust the people, I reply that I am afraid to trust the form of referendum which is provided by our Constitution. While I recognise how much our Tariff means to the industrial life of Australia,I cannot fail to recognise what the proposed agreement means to our national life. I ask the representatives of the smaller States to again consider how it may operate.

Mr King O’Malley:

– They will be the sufferers.

Mr MATHEWS:

– Undoubtedly, because the larger States can offer greater inducements to attract population to their shores. I ask honorable members who are supporting the Ministry on this question to consider seriously, in their own interests if not in the interests of Australia, the position in which they are about to place themselves and the National Parliament.

Mr WEBSTER:
Gwydir

.I cannot forego this opportunity of entering a protest against this inhuman method of proceeding with important legislation. I have had a little acquaintance with Parliamentary procedure, and in my opinion a Government which tries to force its business through by pushing honorable members to the breaking point, undermining their physical strength and laying them out, as it were, all over the chamber, is not worthy of the respect which is due to the governing body of a civilized community. It is really necessary that the constitution ‘ and procedure of the House should be amended. We” are considering a proposal by the honorable member for Mernda to amend a provision of the Constitution. No one has ever put a case more deliberately and concisely than he has done. No one need be told that there was earnestness behind every word he uttered. It was apparent to every one that he was not playing a game but saying what he believed to be in the best interests of Australia, not only for to-day, but for the time to come. After the able speeches which he and other Government supporters delivered one would have thought that their appeal would have induced the Prime Minister to waver, even though he has behind him the State Premiers, urging him on in his destructive attitude towards the Constitution. I do not wish to go over any ground which has already been covered by honorable members. Unless the constitution of this Parliament is altered, party government will be the ruination of the Commonwealth. It is not now a question of whether principles are valuable or essential to the Commonwealth. But it. is a question of whether party government is to control not only the welfare of the people of to-day but the destinies of those who are not yet born. The Prime Minister is seeking to place a tremendous burden upon ourselves and posterity. In their desire to secure a reduction of the term of the agreement with the State Premiers, the honorable members for Mernda. Parkes, and Flinders have foregone their conviction regarding the unwisdom of inserting this provision in the Constitution. They have met the Prime Minister further than I expected that they would do, because they have agreed to do that which they do not believe to be right or proper. In order to get a safe decision on this all-important question they are prepared to agree to place the provision in the Constitution for the time which is embodied in the amendment. It did strike me as an uncharitable and unpatriotic act on the part of the Prime Minister to refuse to give an ear to a very reasonable suggestion of that character. If the party had decided to alter the basis of the Fusion agreement on this question, then those who are pleading for consideration would not have had a cause for complaint. The Government have asked those honorable members not only to forfeit their individuality and independence, but also to accept an agreement which is not the outcome of reasoning amongst their own members. It does not even express the opinion of the Prime Minister or the Government. It is mere dictation by the State Premiers whom the honorable gentleman and his supporters are over anxious to placate. Why? Because they desire to go to the country in unison with the State Governments. In other words, the reason why the honorable gentleman will not accept the amendment is because he fears for the political scalps of his supporters. He anticipates that if they appealed to the electors after having opposed the will of the State Premiers, the party of which he is the nominal but not the actual leader would not again hold a position in this House as a party. But notwithstanding all this sinking of individuality and sacrificing of the people’s rights, I venture to predict that those who support the agreement will be disappointed with the result. It is pitiable to see men like the honorable member for Maribyrnong compelled to abandon every principle which they have espoused and every policy which they have advocated. The other day the honorable member had to vote against his convictions regarding gambling, and though he has been a life-long Protectionist, and a champion of -the down-trodden and oppressed, he is now compelled to vote for a proposal which will put shackles on the toilers, and rob them of the opportunity to live. Had he half -the courage of those who have taken an independent stand, he would not have tolerated the dictation to which he has been subjected. His lot is that of many others on the Ministerial side. The honorable member for Cook has convicted them out of their own mouths. He has read speeches in which honorable members have declared that the financial arrangement should be for a limited time, and has pointed out that those who made them had the audacity to vote against the proposals which they advocated. Let me quote another short passage from the remarks of the honorable member for Bass. It is to be found in Hansard, page 5850. He said-

I am not disposed to vote for the agreement being fixed for all time, but I am certainly in favour of it being embodied in the Constitution in the terms of the Braddon section, its operation to be for ten years, and until Parliament otherwise provides.

That proposition is not so liberal as the amendment of the honorable member for

Mernda-

Surely the members of this Legislature ten years hence could be trusted just as we are to deal with the affairs of Australia !

Those are the sentiments of a statesman, but what is the action of the man?

If the Federal Parliament ten years hence seeks to deal unfairly by the States it will be for the people to change its Parliament, and to return men who will do what is best for Australia as a whole.

Yet a week or two afterwards the honorable member gave a vote which showed that his words were so much deception. It is his vote which will make it possible for the agreement to be adopted. I would rather leave public life than do what he has done, and would never face an audience if I could be accused of such inconsistency.

Mr Storrer:

– Does the honorable member never change his mind?

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

– He has not got one to change.

Mr WEBSTER:

– I should be sorry to have a mind like that of the Minister of Defence. I listened to the. speech of the honorable member for Parkes with great admiration, because I enjoy a good speech and good arguments, and admire a man who has the courage of his opinions, and will not be driven. I respect men who fight bravely and fairly. It is being said that the issue now is, Are we prepared to trust the people? We on this side can trust the people, and always do so. We are here because we trust them and they trust us. Men on this side of the House have never obtained their positions by the influences that have sometimes secured the return of men on the other side. If the Government will submit the question to a referendum to be decided by a majority of the people alone I will agree to withdraw: hh opposition to this clause, but I shall never consent to a mockery in the name of a referendum. The true referendum is a valuable instrument of government, and one of the strongest supports of modern Democracy. lt was because of the provision that an amendment of the Constitution should require not only a majority of the people, but also a majority of the States.that I opposed the Constitution Bill when it was first put before the people. I was one of the first to write to the Sydney press, as soon as I read that infamous section, pointing out that the Constitution was an ironbound one, which, if adoped, would fetter the people, restrict their liberties, and deny the right of the majority to rule. I fought the Bill on the platform throughout the campaign in the first fight, and although I was away in the back-blocks crippled with an injured arm when the second fight came on, so determined was I to protest against the proposal that I addressed meeting after meeting against the Bill; while in intense pain. That was in a place where the people carried the Bill at the first referendum, but reversed that vote at the second. I am therefore not fighting something which I have not fought all along. I realized from the beginning that section 128 of the Constitution was not only not Democratic, but absolutely retrogressive. I fought it not because I had a stake in the country other than the interest which any man with a family has, but because I felt it my duty to defend the rights and liberties of the people. To show what a real referendum means, let me quote what has been written on the subject by Nathan Cree, who was cited by Mr. Isaacs during the discussion when the Constitution was first formulated. He says -

Direct popular legislation, under proper modes and forms, is at once democratic and conservative. It accords with the tendencies and spirit of the time; it will, we think, prove to be a calming and a conservative institution. It will remedy some serious imperfections of our present system of law making, and some evils of our political life.

Those evils are very prevalent in this discussion to-day -

It will abate the rigour of our party system, break the crushing and stifling power of our great party machines, and give freer play to the political ideas, aspirations, opinions, and feelings of the people. It will tend to relieve us from the dominance of partisan passions, and have an elevating and educative influence upon the voters, by inducing them to consider measures upon their merits, as schemes of public policy, instead of as mere party proposals. Public spirit will thus be cultivated and intellectual exertion stimulated amongst the masses.

That is the referendum that I advocate - one that will tend to do away with party strife and party government as illustrated in this Parliament. But for party needs and party domination, the amendment of the Constitution now proposed would not have it chance of going through this Parliament. It is only because men are absolutely whipped into violating their own convictions in the interests of the Government that we must unfortunately look forward to a clause of this kind being carried within the next few hours. I have here a still higher authority in Lecky, who says on page 240 of his book, Democracy and Liberty -

If the electorate is to judge policies, it is surely less likely to err if it judges them on a clear and distinct issue. In such a case it is most likely to act independently, and not at the dictation of party wire-pullers. It is to be remembered, too, that the referendum is not intended as a substitute for representative Government. All the advantages of parliamentary debate would still remain. Policies would not be thrown before the electorate in a crude, undigested, undeveloped state. All measures would still pass through Parliament, and the great majority would be finally decided by Parliament. It would only be’ in a few cases, after a measure had been thoroughly discussed in all its bearings, after the two Houses had given their judgment, that the nation would be called to adjudicate. The referendum would be an appeal from a party majority, probably made up of discordant groups, to the genuine opinion of the country, it would be an appeal on a question which had been thoroughly examined, and on which the nation had every means of arriving at a conclusion. It would be a clear and decisive verdict on a matter on which the two branches of the Legislature had differed.

That, of course, refers to a true referendum, and not to a mockery and a fraud like that in our Constitution. What. Lecky says is exemplified by the position here today. The Government are not anxious to have this question put to a referendum in the true sense of the word, by means of which the same power could undo the decision at a later day. They know that under our form of referendum, though a majority will decide whether or not the agreement shall be placed in the Constitution, a minority will be able to prevent its being taken out. That is contrary to the principle of a true referendum. It is not necessary to dilate further on the sound judgment qf the able writers I have quoted. This measure has been laid before honorable members in a most’ unfair and inconsiderate fashion. We are compelled to stay here all night when we might very well have been permitted to adjourn. Such a procedure will not tend to facilitate the business of the Government ; it never has done so in any Parliament I have known, and cannot have any other effect than to cause honorable members to take a more antagonistic view than they otherwise would of future measures. When I regard the Government’s attitude, I feel like one prepared to almost do murder; because the Bill is one of the worst that could be inflicted upon a free people. It is of no use appealing to the Government, however, because the Prime Minister is only doing what he is ordered to do. He is no more a free man than are some of those who follow him; and it is pitiable that an allimportant question of this kind cannot be decided on the independent votes of honorable members, without an obligation being cast on them by those who dominate their political future. In all Parliaments, such an undertaking as that given by the Prime Minister the other night to regard the division as a test one would be respected ; and I think it was accepted in good faith by the honorable member for Mernda and others. However, the honorable member for Brisbane has returned, unfortunately for this country ; and I say that without any disrespect to the man. It would have been a very small sacrifice if he had been detained, and the people saved from this legislation - greater sacrifices have been made with less justification. The honorable member for Brisbane was taken into the Cabinet only at the last moment, and is obviously under an obligation to the Ministry. Such are the men who have to decide the destinies of this country, who are to jeopardize the welfare of our children, as well as of their own, by fettering them financially, not for a yea*- or two, but for all time ! A big responsibility rests on the Government ; but what do they care for responsibility ? Have they ever had any respect for principle. Did not the Prime Minister, not twelve months ago, enunciate opinions exactly opposite to those he holds now? The Prime Minister has supporters who have always. been his echo, and who follow him, as the faithful dog does its master, without any thought at all ; they feel their own weakness, and seek all the shelter ‘ that he can afford them from the political winds that blow. The Prime Minister is the only member of the Government who has spoken. Even the Postmaster-General, who is rightly regarded as a high Constitutional authority, and whose view we should like to hear, is not permitted to speak. Well I remember reading in the newspapers in pre-Federal days, about the efforts made by the honorable gentleman to conduce to a decision of the momentous question which was then before the public. He, more probably than any other man, influenced the adoption of the method by which the question of Federation was settled. He insisted that Federation should be based upon the people’s will, and that every man should have a vote. He was a. consistent Democrat at that time. But now he is a member of the party which says that the manhood of Australia shall not be permitted to decide this question. He would render it possible for a minority to overrule a majority of the electors of this country.

Sir John Quick:

– In the Federal Convention, I voted for the Braddon section being made permanent.

Mr WEBSTER:

– I am astonished that the honorable gentleman should confess to that blemish on his own keenness of perception.

Sir John Quick:

– The Braddon section was approved by the people in that form.

Mr WEBSTER:

– Not by the people of all the States. What is more, I point out to the honorable gentleman that if the Braddon section in its original form had been adopted, we could not have paid old-age pensions. Before the expiration of ten years, the Commonwealth one-fourth nf Customs and Excise revenue would have been insufficient for our needs, and the Braddon section would have broken down.

Sir John Quick:

– A referendum in regard to a proposed alteration of the Constitution could have been .taken.

Mr WEBSTER:

– The honorable gentleman’s idea of Democratic government has become very dim. I am astonished that a man of his intelligence; who has written a treatise on the Constitution which is creditable to him and a guide to us-that a man who has held such a prominent position as a Federalist - should believe that the provision made in our Constitution for the holding of a referendum is of a .Democratic character when it means that 80,000 people can override 900,000. A man who calls that a Democratic provision is not to be trusted by the people. If he fell into so serious an error while he was young and his mind was still versatile, it is not wonderful that as a member of the present Government he should hold that the > people can secure an alteration of the Constitution by means of the provision contained within the four corners of that document. I. venture to say that had the Postmaster-General been a private member sitting in one of the corner seats we should have had from him a display of keen argument and oratorical effort in opposition to the proposal of the Government. But he dare not speak on this important question. We are now making history, but, unfortunately, we are making history that will not be creditable to us. We can only enter our protest against what is being done. But I may make this appeal to the Government. They might agree to adjourn this matter for three weeks. They have plenty of business to bring forward in the meantime. If they are anxious to secure an expression of opinion from all the members of this Chamber, why not grant an adjournment until a member of this Parliament who is at present absent from the country can be in attendance? The honorable member to whom I refer is one whom all. of us profess to respect. He is rightly regarded as a high authority. He is about to return to Australia, and will be in his place here in three weeks time.

Sir John Quick:

– We want to close the session before three weeks are over.

Mr WEBSTER:

– Then it. is to be understood that we are not to be asked to do much more than bullock this measure through. A Government which would deprive a member of this Parliament of an opportunity of exercising his vote on so important a question make it plain that they are not anxious to secure a full expression of the opinion of honorable members. They brought forward other Bills pending the return of Colonel Foxton, and under the circumstances I think it is only fair that they should consent to a short adjournment of this discussion to permit of the return of the honorable member for South Sydney, who is expected here within The next three weeks. Who would ever have imagined that the Commonwealth Government would be under the wing of Gregory Wade? A few years ago the idea would have been regarded as a preposterous one. To-day the position is a scandal. The Government are so indifferent to the rights of the Commonwealth as to permit themselves to be dictated to by Gregory Wade. Apparently they are not prepared to agree to an adjournment of the discussion to afford the honorable member for South Sydney an opportunity to express his views upon this question. They are not willing to allow him to record his vote upon it. In the meantime we could proceed with other business. Why will the Government not consent to an alternative proposal being put before the electors ? Why do they refuse to ask the electors, “ Are you in favour of a permanent agreement or of an agreement which shall be limited to ten years?” Surely the Ministry can trust the people to decide as between an agreement in perpetuity and an agreement for ten years.

Mr Frazer:

– I call attention to the absence of a quorum. [Quorum formed.]

Mr WEBSTER:

– The Prime Minister was very eloquent and emphatic upon the last occasion on which he addressed himself to this question, but the only point which he made was that we could trust the people to settle it. By refusing to allow an alternative proposal to be put to the electors the Government give evidence that they are not prepared to trust the people. I have no hesitation in saying that if an alternative proposal were put before them they would declare themselves in favour of a limitation of the agreement to ten years.

Sir Philip Fysh:

– They would be like the poor old drunkard who says “ Give me a glass now.”

Mr WEBSTER:

– No salvation can be hoped for from the proposed agreement. Under it the States must annually be returned 25s. per capita for all time. I should not care two pins if the question were to be decided by a majority. Section 128 of the Constitution may have been a compromise between a body of Conservatives who had met for the purpose of framing a charter for the government of a free people. Certainly, the Convention included no Labour representatives, and, therefore, no one can say that the Constitution was to any extent the result of the deliberations of any Labour men. Those of the delegates who remain are known throughout. Australia as either Conservative or Tories. I do not wonder at such a body framing such a provision as section 128. At thetime, I said that it was done deliberately to strangle the future of Democracy.

Sir Philip Fysh:

– The Constitution gave one man one vote.

Mr WEBSTER:

– No. That privilege was granted in New South Wales before the Federal Constitution was framed.

Sir John Quick:

– Not in Victoria.

Mr WEBSTER:

– I am speaking of an intelligent State, not of Victoria. The agreement before the Committee was largely manufactured by men of Victorian education.

Sir John Quick:

– Where does the strongest opposition to this agreement come from ?

Mr WEBSTER:

– It comes from the Democratic party here.

Sir John Quick:

– It comes from Victoria.

Mr WEBSTER:

– Not altogether; because the honorable member for Parkes has put forward a case which is to be highly commended.

Sir John Quick:

– The agreement has two opponents on this side from New South Wales.

Mr WEBSTER:

– More credit to them. But how many opponents has it on this side? On this question, we are independent. The only thing which binds us together is the fact that it is an inequitable proposal. If any member of our party had spoken in favour of limiting the agreement to ten years, and revoked his speech by his vote, he would not have long held, our respect or that of his constituents.

Sir John Quick:

– How does the honorable member account for so many Labour men in the New South Wales Parliament being in favour of the agreement as it is?

Mr WEBSTER:

– Because they, like the honorable member, do not understand its purport, or, to put it in another way, because they are looking through their own spectacles, not through those of the public.

Sir John Quick:

– They are just as Democratic as is the honorable member.

Mr WEBSTER:

– I am not sure about that. A party which has been long hoping for a change to take place begins to fear that, unless it has means at its disposal to govern the country, it will not be able to govern with the same advantage as did the previous Government. It is quite possible for men to be blinded to a national duty by parochial necessities, which is the case with the Commonwealth Government and the gentlemen to whom the Minister has referred. Their action is not the outcome of national requirements, but the outcome of parochial necessities, which have impelled them to take a position which they will regret in days to come.

Sir John Quick:

– Was not the scheme of the Brisbane Labour Conference intended to be for all time ?

Mr WEBSTER:

– It was not intended to be embodied in the Constitution.

Sir John Quick:

– How could you obtain fixity ?

Mr WEBSTER:

– By an ordinary agreement with honorable men. Has this Parliament ever neglected to respect any bond or promise made or implied by an Act of Parliament? Has it ever broken faith with the sugar-growers, although the provision for a bounty was not placed in the Constitution? Has it broken faith with other people who have benefited by legislation which was not embodied in the Constitution? The Minister is only trying to throw dust in the eyes of the populace by implying that this agreement cannot be made secure unless it is implanted in the Constitution. It is not necessary to take that step. This Parliament can be trusted to deal honorably by the States. The Brisbane Labour Conference practically decided to accept aper capita basis, but no reference was made to placing the scheme in the Constitution, as has been proved over and over again. A day will come when the men who are now about to perpetrate an inequitable act will not dare to face the electors. I cannot understand the AttorneyGeneral’s attitude on this question. Had he been occupying his old seat on this side of the chamber we should have had pungent criticism from him on the injustice of placing the agreement in the Constitution.

Mr Glynn:

– It will not be so difficult to get it out of the Constitution as the honorable member thinks. The Swiss Constitution contains a similar provision, and yet in eighteen years eleven substantial double referenda have been carried.

Mr WEBSTER:

– That may be true of Switzerland, but it is not true of America. No one can say that it is easy to alter the Constitution of that country. Only unimportant alterations have been made. It has never been altered in respect of any large question. It has been admitted by students and authorities that the reason why important amendments have not been made is because that is impossible. Under our Constitution it is equally impossible to secure an alteration in respect of any great question. I would sit down at once if the Attorney-General would consent to give the Committee the benefit of his constitutional learning. I would applaud him if he could prove that the Constitution is easy to amend.

Mr Glynn:

– In eighteen years there were eleven amendments of the Swiss Constitution, several of them involving large sacrifices of revenue.

Mr WEBSTER:

– It is the duty of the Minister to prove these statements. But Ministers apparently dare not express their own opinions, and allow the Prime Minister to speak for them, or have no independent convictions. The proposal of the Government amounts to a degradation of the people and the humiliation of the Parliament,

Question - That the words proposed to be added be so added (Mr. Harper’s amendment) - put. The Committee divided.

AYES: 32

NOES: 33

Majority … … 1

AYES

NOES

Question so resolved in the negative.

Amendmentnegatived.

Mr FISHER:
Wide Bay

– As the Prime Minister is now present, may I point out to him that this is a matter of so much importance that the usual time and opportunity ought to be granted for discussing it in a rational way f I do not think that reasonable facilities have been afforded to Parliament to consider it. According to the Prime Minister’s own statement, it is a matter of the greatest consequence to the Commonwealth. It is all important, not only to members of this Parliament, but perhaps also to generations yet unborn ; but we are asked to rush it through without legitimate and reasonable criticism. It is all very well for honorable members opposite to smile, but they have got into a state of mind in which they do not desire discussion, or regard it as unnecessary. They do not wish light to be thrown on so important a matter, and think it a waste of time to do so, because they have some other object in view. The principle of Parliamentary representation, however, is deliberation upon all important matters, and I cannot do more than appeal to the Prime Minister to report progress until a later hour in the day, when the question may be more fully discussed, and honorable members will be more capable of doing justice to it. I had not an opportunity to address myself to the Prime Minister earlier in the evening on this matter. I remind him of his statement during the previous sitting, that he hoped that the matter would be brought to a conclusion at this sitting. Without a further word of explanation or intimation to this side, he determined to go on with it to the end, when he knew that the debate had not nearly been concluded. In the circumstances, does he intend to proceed ?

Mr DEAKIN:
Prime Minister · Ballarat · Protectionist

– The question whether this stage of the measure has been sufficiently debated is itself open to considerable debate ; but I think, with very little difference Of opinion. For the whole of the night and yesterday we have debated, as it deserved, practically one issue, the same as that upon which we spent a good deal of time last week. After all, this debate mav be partly, in fact almost wholly, judged by the result of the second debate, which has not altered the position of a single member.

Mr Bruce Smith:

– Surely that is not the test of the utility of a debate?

Mr DEAKIN:

– I was about to add that in the circumstances, this issue called for a second discussion. We have had that debate ; and I venture to submit, looking at results, that so far as this Chamber is concerned, its mind is made up on the particular issue before us.

Mr Frazer:

– What a miserable victory it is !

Mr DEAKIN:

– That, also, is open to debate, if it were thought worth while. I think that it will appear to honorable members, on reflection, that we have now disposed of this part of the measure.

Mr Hutchison:

– There may be a difference three weeks hence.

Mr DEAKIN:

– Three weeks hence we ought to be closing the session.

Mr Webster:

– Is this the end of this question ?

Mr DEAKIN:

– I hope so. The pro- position of the Leader of the Opposition is not one to be brushed aside lightly. His position and the seriousness of the question justify him in making it; but on the other hand, he should consider the state of public business, the time of the session, and the fact that our differences have been, almost: from the first, narrowed down to one; particular point, which we have now decided. If mv honorable friends weigh those circumstances against the considerations which they, have just urged, surely they will admit that the one counterbalances the other. In no spirit of unreasonable resistance, but as a deliberate judgment of my own, I submit that we have reached a stage both in the Bill and in the session, at which the least we can now do is to complete the work of this sitting by passing the rest of the Bill through Committee.

Mr KING O’MALLEY:
Darwin

– I move -

That the .following words be added to proposed new section 94B : - “ until such time as the Commonwealth shall have taken over and relieved the various States of their existing national debts to the following extent, namely : - New South Wales, £”60,683,624; Victoria, £”48,880,925; Queensland, £”23,492,050; South Australia, £”14,414,100; Western Australia, £19,709,400; Tasmania, £”7.378,875; total, £174,558,974, and thus relieving the States annually of the following amount of interest, namely : - New South Wales, £”2,123,927 ; Victoria, £”1,710,832; Queensland, £822,222; South Australia, £504,493 ; Western Australia, £689,829; Tasmania, £”258,261; total interest bill, £”6,109,564, and annual sinking fund of £870,000, or a total of ^6,979.564.” Earlier in the evening I explained that my desire was that the Commonwealth should take over £174,500,000 of the national debt to begin with, and make it Commonwealth stock, and that, on a basis of population of 6,104,564, it should put aside £870,000 a year out of the Consolidated Revenue as a. sinking fund to liquidate the debt in sixty years. The amendment involves a national banking system, because one would be useless without the other.

Amendment negatived.

Dr MALONEY:
Melbourne

.-I move -

That the following new section be inserted after proposed new section 94b : - “ Whenever one per cent. of the electors of Australia, by initiative, petition that the financial question shall be placed before the electors of Australia, on such petition being presented to the Prime Minister of the clay, it shall be mandatory on the Government to place such question before the electors, and if such question be affirmed by a majority of the electors and a majority of the States, it shall be mandatory on the Government of the day to bring in a Bill to carry out such affirmation.”

This amendment means the initiative, which is necessary to make the referendum complete. The percentage of electors is different in Switzerland ; but I thought it wise to fix it here at 1 per cent., representing about 40,000 electors. There must be an officer to accept such a petition, and I propose to make him the Prime Minister of the day; and when the petition has been lodged, the Government must take steps to enable a clear referendum to be taken. With the splendid facilities presented by our Postal Department, we could, without any extra expense whatever, have the referendum votes collected, because there is not the absolute need for secrecy that there is in voting for a Parliamentary representative. Names of al! the electors appear, of course, on the rolls, and each could be easily supplied with a voting paper, and thus enabled to express his or her opinion. The amendment, so far as the financial question is concerned, would give the electors here the right that is enjoyed in Switzerland, namely, the right of the initiative. I should have preferred to make the amendment apply to the financial or any other question, but that, of course, would not be in order in this Bill. If this Chamber is Democratic, and honorable members possess the national instinct to promote the welfare of the country, it would be well, in the dying days of the last session of the third Parliament, to give this right to the Australian people. Having regard to the divisions that have been taken on this Bill, I am sure the Prime Minister, in his long political career, has never gone through a similar experience. He has never had to withstand such leading articles as have appeared in that splendidly equipped journal, the Age,which, while admitting his own innate ability, may be said to have enabled him to reach the position he occupies to-day. The leading article, even so late as to-day, must have caused the honorable gentleman to cast a glance back to past years, and to reflect how this newspaper-, in sea-son and out of season, used to support him. There is no doubt that, if the Age had decided in favour of the referendum, when the Commonwealth was established, the Constitution would have been different to-day. As I gather that this is almost the last important measure that we shall deal with during the present session, I ask the Prime Minister whether he is not prepared to trust the people in the matter ? If not, it is all balderdash and nonsense to say that the Government are prepared to trust the people at all. My amendment affords a means of allowing the people to register their will more effectively than they can do in any other way. If the Prime Minister would give to the people of this country an opportunity of expressing their views by means of the referendum, he would add a glory to his name, which I should like to see him achieve, and it would be said of him in days to come that he really trusted his fellow Australians.

Amendment negatived.

Mr FISHER:
Wide Bay

– There are one or two amendments which I should like to submit, dealing with points which have really not been considered in connexion with the amendments upon which we have already voted. But it is quite evident that the Prime Minister desires to stifle discussion as far as possible. No question of such momentous importance has arisen before. The issue does not merely affect the present Parliament, but all succeeding Parliaments. 1 have never known such an important question to be treated in such a way by a Government majority which is gloriously uncertain, but which, because of its uncertainty, is. anxious to close debate. Quite a number of amendments might have been submitted, with the object of improving the proposals of the Government. If the matter under discussion were an ordinary one, we might look forward to having our fight over again after the next election. But it is not an ordinary question. This is the first really important .proposal to amend the Constitution that has come before the Federal Parliament. In my opinion, it has been treated in a manner quite out of keeping with the importance of it. I say, deliberately, that, in my opinion, discussion has been stifled by the manner in which business has been conducted. Other important matters are discussed for days at ordinary sittings, and no complaint is made.

Mr Sampson:

– We have been discussing this matter for weeks.

Mr FISHER:

– Nothing of the kind. The honorable member, apparently,, thinks that because the Bill has stood upon the notice-paper for weeks, we have had weeks of discussion.

Dr Wilson:

– Look at the discussion we had on the motion for the second reading.

Mr FISHER:

– There was practically no discussion on the motion for the second reading.

Dr Wilson:

– There were virtually second-reading speeches on the motion for leave to introduce the Bill.

Mr FISHER:

– The honorable member’s interjections show that those who have made up their minds on this question have no clear recollection of what occurred. He has corrected himself, and now. says that we’ had a debate on the motion for leave to introduce the Bill. But in the House of Commons many important measures are discussed at length on the motion for leave to introduce. They are also discussed at the subsequent stages ; and that in a Parliament which has a great deal more to do than we have. The point which I wish to make clear is that quite a number of amendments have been prepared ; but I do not think that they can be submitted under present circumstances. ‘ To propose them might seem to be an effective way of preventing the Bill from becoming law. I do not wish to have any misapprehension. I think, and hope, that it may be possible to prevent the Bill from passing in this Parliament, so that the question may be submitted to the country as a political issue, enabling the supporters of the Government to go before the electors and secure a mandate from them. At present the Government and their supporters have no mandate. There is not a single honorable member on the Government side who can claim that he has a mandate from the people to take proceedings for an alteration of the Constitution in the way proposed. Consequently, the Government have not the authority of the electors behind them. All that we ask is that they shall go before the electors, and then, if they can secure a majority, they will be entitled to rush through Parliament a Bill of this kind in their own way. At present, they have not such a mandate. If through any unfortunate circumstance at the next election the Government should secure a majority, it will be able - if its members do not alter their opinion again - to claim in the next Parliament that effect should be given to the principle of this measure. What injury can be done to the States by. allowing the question to go to the people free from the embarrassments attaching to a constitutional referendum? It is not a light question. I feel that it is useless to appeal to honorable members who have made up their minds. They have acted as they have done, not because they had a mandate from the people, but because they have come to the conclusion that they can secure some advantage for themselves and their party. This procedure, however,- 1 regard as a travesty on representative government. If a Government can come into office, and, by means of combinations formed outside, secure the passage of a Bill of this kind, then good-bye to the. representative system of government. The weaker the men who occupy the chief positions in the Commonwealth, the more likely they are to be influenced by outside bodies, which, however important their positions may be, ought not to be allowed to influence the decisions of the Federal Parliament.

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

– Stop that miserable whine !

Mr FISHER:

– Whine? What is the idea in the mind of the Minister of Defence? Does he think that this is a personal matter? How can it affect me or the party to which I belong? The issue is not a social one, nor is it a political issue in the ordinary sense of the term. Why should I whine about it? Why should any honorable member be interested in a proposal of this kind if he did not think that it would inflict an absolute injustice upon the Commonwealth? It is quite true that if the people understood the question as we do, it would be determined very speedily. But it is not to be placed before them in a proper way, and when once the agreement has been embodied in the Constitution it may not be possible for a succeeding Parliament to undo the mischief. This is a matter which might be debated for months without the bounds of legitimate discussion being exceeded. In my opinion it ought not to be remitted to the people until after the next general election. In my view the wrong course has been taken in a vindictive and a mercenary way.

Mr Crouch:

– No.

Mr FISHER:

– I think so, and I am sorry indeed that the Prime Minister should have been a party to it.

Mr DEAKIN:
Prime Minister · Ballarat · Protectionist

– When the concluding remarks of the Leader of the Opposition are reported, I am sure that the Committee and the community as a whole, will differ essentially from their gist. The honorable member has suggested that even after it has ceased to be possible to affect opinion in this House, the discussion here ought to proceed with a view to the education of the public. Of course the effect of Parliamentary debate upon public discussion is sometimes enormous and must not be under-estimated. But it has its limits, and, of course, Parliament has responsible and executive duties to discharge day by day. No Parliament known to a civilized country - and especially a Parliament of this character even if it sat all the year round - could hope to make itself the single medium of discussion for the great problems which come before it.Our part in discussion is to supply a lead - I should like to say to establish the tone and to put the public mind on the right track. But we cannot ignore the fact that the discussion which proceeds every day inthe public press and between men interested in politics is that which finally decides the national will, though Parliament, it is to be hoped, will always give guidance and colour. The statement of the honorable member for Wide Bay that we might discuss this question for months is absolutely true, but I would urge that an’ such discussion would be practically useless. We are here to register decisions to the best of our ability. If the criticism offered in this Parliament were always strictly relevant to the matters in hand, we should have a great deal more time for effective legislation. Our burden is that honorable members frequently persist - often from good motives - in discussing something else. Consequently, we do not make the best use of the time allotted to us. But of all measures which can be submitted with confidence to the people, surely this is of a class of whose fate we need have least concern.

Mr Fisher:

– Without a mandate from the electors?

Mr DEAKIN:

– Yes. I was just about to say so. We have fully and fairly discussed the matter. Debate upon it has been set going throughout Australia, and will continue, at all events, until the next general election. During the interval I trust that the public of Australia will have it threshed out from day to day. The discussion of this question is still in its early stages. It will continue for months when the popular verdict upon it will be registered apart from any other question. Surely that circumstance affords a guarantee not only that there will be the fullest discussion, but that our decision to-day will be either specifically set aside or specifically confirmed ! If there be any measure upon which the electors will then be in a position to pronounce a deliberate and mature judgment it will be this one.

Clause agreed to.

Clause 4 -

Section one hundred and five of the Constitution is altered -

by omitting 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 ; “ and

by adding at the end thereof the following paragraph : - “ The interest and 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.”

Mr FISHER:
Wide Bay

.I wish to emphasize the fact that according to the admission of the Prime Minister and of the Premier of New South Wales the proposed per capita contribution by the Commonwealth to the States of 25s. annually will continue even after the whole of the State debts have been extinguished by thu Commonwealth.

Dr Wilson:

– That is a matter which will come up for consideration seventyseven years hence.

Mr FISHER:

– Is that all that the honorable member has in his mind ? Is he prepared to snatch a temporary advantage for the States, irrespective of future disadvantages to the Commonwealth? The arrange- ment which has been arrived at evidences the extreme to which the Prime Minister is prepared to go without a blush.

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

– Does not the honorable member think that an agreement for seventy or eighty years is a fair thing?

Mr FISHER:

– This Parliament ought not to bind in any way its successors, who I hope will not be less capable of managing the affairs of the Commonwealth than are the present Ministers. Why should they be tied? Why should the dead hand of an incompetent present prevent them from carrying out whatever the people may desire? The action of Ministers and their supporters seems to indicate that this is a little temporary arrangement to suit present conveniences and necessities, but that is not what it means. Owing to the difficulty of removing a provision from the Constitution, it means a long embarrassing struggle between two parties.

Mr DEAKIN:
Prime Minister · Ballarat · Protectionist

– I understand what the honorable member means.

Mr Fisher:

Mr. Wade said that the honorable gentleman had agreed to it.

Mr DEAKIN:

– No. In the proposal to take over State debts there is nothing determined, except that their management, which at present rests with the several States, would under the Constitution be transferred to the Commonwealth, which would administer them all from one centre and with one control. That is the length to which the Constitution goes. Beyond that there are two acts of choice. The first act of choice may be a determination on the part of the Commonwealth to assume the responsibility for the payment of the interest and principal, both of which under the Constitution will continue to rest on the individual States, unless the Commonwealth deliberately and voluntarily assumes it. The other act of choice is the continuance of the payment of 25s. per head to the States, not for the period of seventy or eighty years during which loans fall due, but probably for the period covered by three or four general elections - that is from nine to twelve years. After that, perhaps, for ten or fifteen years later - or it may be earlier in special circumstances - the Commonwealth will decide anew whether it shall continue to make the payment of 25s. per head.

That again will involve reconsideration of that side of the question.

Mr Fisher:

– That does not touch the point.

Mr.HENRY WILLIS (Robertson) [6.8 a.m.]. - I think that the Prime Minister has not disposed of this very important question by his remarks. Some time ago, he gave the impression to the Committee - I know that he did to myself - that the provision for the payment of 25s. per head would be terminable on the liquidation of the State debts. But Mr. Wade had no doubt in his mind that it would be interminable, notwithstandingthe fact that the debts had been paid off. If we have acted on the assumption that the per capita payment is to be terminable, we have acted under a false impression. It was because we believed that it was not terminable, but permanent, that we had the long and interesting discussion which has just been brought to an end. I think that a more definite statement on the subject should be made.

Mr Fisher:

– I think that the consideration of the Bill should be adjourned until we can look into the question.

Mr HENRY WILLIS:

– When the honorable member began his speech this evening, I thought that we should proceed’ with the consideration of the Bill, but, in view of the discussion which has taken place, and especially of the remarks of the Prime Minister, I think that progress should now be reported. This suggestion is not made in an antagonistic spirit. The Prime Minister evidently had the impression in his mind that when the Commonwealth had taken over the States’ debts, and paid them off, the contribution to the States would terminate.

Mr Batchelor:

– The Treasurer said “No” to me.

Mr HENRY WILLIS:

– The Premier of New South Wales also said “No.”

Mr FRAZER:
Kalgoorlie

– To my mind the problem before the Committee is more important than any which’ was presented by the preceding clauses. Whether the Commonwealth is to continue to be saddled with the obligation of paying 25s.per capita to the States, even though it assumes the responsibility of their public debts, is undoubtedly a most important question. I put it to the Minister that it is a question which after all should be carefully considered.

Mr Deakin:

– This is a question which, if it has relevancy, is relevant to the Bill, which deals specifically with the State debts.

Mr FRAZER:

– How can the honorable gentleman make that statement in view of the following provision in clause 3 - “ 94b. From and after the first day of July,

One thousand nine hundred and ten, the Commonwealth shall pay to each State, by monthly instalments, or apply to the payment of interest on debts of the State taken over by the Commonwealth, an annual sum amounting to Twentyfive shillings per head of the number of the people of the State as ascertained according to the laws of the Commonwealth.”

Mr Deakin:

– That is simply restating the existing law. The other Bill is actually an operative Bill in regard to State debts.

Mr FRAZER:

– Suppose that this Bill becomes law and that the Commonwealth assumes the responsibility of the preFederatiqn debts of the ‘States, and consequently the responsibility of paying the interest thereon. Shall we still have to pay 25s. a head to the States?

Mr Deakin:

– The Commonwealth will not assume the responsibility for the payment of the interest on the debts by taking them over under this provision, because under the Constitution we shall simply take over the administration. If we do take over the responsibility of paying the interest and the debts that will be an independent voluntary act of this Parliament.

Sir John Forrest:

– It would be necessary to pass a special Act for the purpose.

Mr FRAZER:

– According to the Treasurer we are going first to concede to the States a per capita payment of 25s., and then negotiate as to how much of it they will allow us to retain in order to meet the interest on the public debts?

Mr Deakin:

– Not at all. We shall retain that without negotiating.

Mr FRAZER:

– According to the language of this provision it can mean nothing else. No other opinion can be supported by the language of this provision.

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

– What the honorable member is saving is irrelevant.

Mr FRAZER:

– It is absolutely relevant. The clause destroys the last possibility of this Parliament getting control of the public debts during our lifetime.

Mr Deakin:

– The honorable member is quite in error.

Mr FRAZER:

– It is easy to make the assertion; but the honorable gentleman has not proved it to be correct, and at this time of the morning, after we have beensitting for seventeen hours continuously, even he will have difficulty in convincing the Committee. The matter is one which should engage our attention when our brains are clear.

Mr Deakin:

– The clause does not alter the existing law in any matter relating to the point which the honorable member is raising.

Mr FRAZER:

– I do not agree with the honorable member. If we pass the clause, we shall destroy the last chance of obtaining control of, and financing the public debts. However, Ministers seem determined to take the Bill to a certain stage before adjourning, no matter what the result may be to the Commonwealth. Under these circumstances, argument is useless.

Sir John Forrest:

– The provision is quite right.

Mr FRAZER:

– The Treasurer has given me that assurance before; but I have always been deceived when I have accepted it. Although it is useless appealing to the Government, I wish to place it on record that I oppose the proposal which it is now sought to enact.

Sir GEORGE REID:
East Sydney

– I find it very difficult to understand the serious view of this clause taken by my honorable friends opposite. The clause does not provide for the. giving of a single penny to the States by the Commonwealth. On the contrary, it enacts that the interest on the debts taken over by the Commonwealth shall be paid out of the money due to the States by “the Commonwealth. The full interest on State debts taken over by the Commonwealth is to be deducted from the 25s. per capita payable to the States. The clause fixes that liability on the States. May I point out to the Leader of the Opposition that, in providing for the taking over of the debts before their maturity, we should be presenting to the money-lenders of London a Commonwealth indorsement of State bonds for which we should receive nothing?

Mr Fisher:

– I never agreed with the honorable member’s reasoning on that point.

Sir GEORGE REID:

– When the Convention was sitting, the word “ shall “ was used. I arrived in Melbourne after that was agreed upon, and made an earnest appeal to the Convention to alter it, which I am glad to say was responded to. Had the word ‘ ‘ shall ‘ ‘ been retained, the Commonwealth stamp would have been put on £200,000,000 of State debts, to the advantage of the London money lenders who hold our bonds without any advantage in return, either to the States or the Commonwealth. ‘ In addition to the State guarantee, they would have got the Commonwealth guarantee. No one will surrender a bond to allow of its conversion and lose by the transaction, unless he fears that the credit of the State which has given the bond is bad. If the credit of a State is good, no one who holds its debentures will accept less than par for them. No bond-holder would convert a good State bond into a good Commonwealth bond except on terms which would give the Commonwealth no advantage. The State bondholders in consenting to convert would require ‘the payment of the interest now given by the States, and, on maturity, the return of the full value of the bonds. What could induce a bond-holder to consent to a reduction in interest on a security that was good? The Commonwealth can benefit the States only by converting their loans as the)’ fall clue. The lenders will have to be paid the value of their bonds, and a Commonwealth loan will be issued, in the benefits of which the States will share. But no advantage can come from conversionunti loans fall in.

Mr THOMAS BROWN:
CALARE, NEW SOUTH WALES · ALP

– Loans are falling in nearly every vear now.

Sir GEORGE REID:

– That is so, and it is a very important matter. The Commonwealth and the States can benefit only by waiting for loans to mature. We cannot anticipate their maturing.

Mr Harper:

– Does the right honorable member think that Commonwealth stock will be appreciated?

Sir GEORGE REID:

– It is not by any means clear that the Commonwealth bonds will be worth more than the State bonds while the credit of the States remains good, but there is a chance of it. and we ought to try to realize benefits which it may be possible to gain. The honorable member hopes that we shall be able to effect an arrangement which will enable us to pay i per cent, to a sinking fund without having anything more to pay in interest.

Mr Fisher:

– I think the Commonwealth credit will be, at least, . per cent, better in the average than that of the States.

Sir GEORGE REID:

– Let us take that position. Within the next ten years about £90,000,000 worth of State bonds will mature. One-quarter per cent, on that is about £230,000. The honorable member therefore should not think that an enormous amount would be made out of the transaction at once, although it would be a good thing.

Mr Fisher:

– A couple of million a year.

Sir GEORGE REID:

– But per cent, on a couple of millions is not very much. The main point, however, is that this clause does not relieve the States of one penny of responsibility for any debts taken over. We give the States nothing by it. We merely tell them that when we take over the debts we will pay their interest for them, but will charge it to them. We simply say, “ We will become your agent, butevery penny that we pay for you we shall charge against your 25s. fer caf iia.”

Mr FISHER:
Wide Bay

– I do not want to be misunderstood. The right honorable member for East Sydney has missed the point -altogether. I have never agreed with his great discovery that by the Commonwealth making the whole of the debts Commonwealth stock the bondholders would get a great advantage on the existing stock. What is the difference between the Commonwealth underwriting the debts now and saying that it will stand behind any State and protect its credit, and the Commonwealth coming to the conclusion that it will manage the stock and take possession of it as soon as it falls due? When is the right honorable member for East Sydney going to begin this operation?

Sir George Reid:

– As the debts fall due.

Mr FISHER:

– Exactly. But would it make any difference whether the Commonwealth declared for one stock now and took the debts over when they fell due, or claimed the power to negotiate for the conversion of those loans at any time? It is quite true that, whether the States or the Commonwealth pay, it will make very little difference to the bondholders, because they know the credit of Australia is good enough and that they will be paid in full by either authority. The honorable meml>er for Mernda has taken a much broader and safer view. He says we must begin to do something, but the right honorable member for East Sydney says that we should cease to do anything.

Sir George Reid:

– No, I say begin with the first loan that falls due.

Mr FISHER:

– We are doing nothing from year to year, and now the right honorable member supports a proposition which puts aside the State debts question for an investigation while it allocates the revenue permanently, and makes the allocation mandatory. It is true that 25s. fer capita can be credited by the Commonwealth at any time to the payment of interest towards the indebtedness of the States, but whenever the Commonwealth has taken over sufficient debts for the interest on them to absorb the sum which the Commonwealth allots to the States as a right, if then the Commonwealth by its improved credit can pay off that indebtedness, the States, and not the Commonwealth, will under this proposal of the Government get the benefit, and the Commonwealth become nothing more nor less than a glorified agency of the States. If it makes a profit, the States take it. If it makes a loss, the States have to bear it. That is not satisfactory. Yet that is not only proposed by the Government, but supported by the godfather of. this proposition.

Sir John Forrest:

– Does not the honorable member think we can discuss that question on the Bill dealing with the State debts? ‘

Mr FISHER:

– As soon as we raise an important issue affecting the standing of the Commonwealth and the position of the States, we are told that we ought to deal with the question on some other measure.

Sir John Forrest:

– All the powers that we have are in the Constitution.

Mr FISHER:

– The Treasurer must not think it is a pleasure to me to be continually inviting the attention, of honorable members to matters of this kind. The proposal of the Government and the Premiers of the States is to take away from the Federal Parliament that initiative and independence which is its undoubted right, and which the framers of the Constitution intended it to have. That power is to be delegated to the States, and all that the Commonwealth is asked to do is to act as a glorified agency of the States. It is obvious that it can mean nothing else, although the Prime Minister shakes his head. If the Commonwealth makes a profit by means of its credit, it ought to be entitled to put that profit into a fund of its own, manage the debts, and wipe them off if it can.

Mr Deakin:

– So it is.

Mr FISHER:

– No. The Premier of New South Wales said distinctly that it did not mean that, and my reading of the proposal as a layman confirms his view. I certainly think that he has the law on his side. It is, however, no use in the present temper of the Committee to discuss -the matter at any length or put it to a test.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The amendment of the Constitution proposed in this section is undoubtedly, as the Prime Minister pointed out, merely consequential on what we have passed. But the consequences it involves are a good deal more important than the Prime Minister or the right honorable member for East Sydney have recognised. It is quite true that the effect of the clause is to take out one portion of section 105, and substitute for it another portion that has exactly the same meaning, only that it uses different language applicable to the new conditions. But I do not think the arguments of the Leader of the Opposition can be lightly dealt with, so far as this “is a clause in a Bill containing the provision for the allocation of 25s. per head to the States, which we have just passed. It is undoubtedly true, as the Leader of the Opposition has pointed out, that the clause, taken in conjunction with the one giving a permanent and increasing endowment of 25s. per head to the States, has this effect : When we take over the debts of the States, and when, we [propose to convert those debts and create a Commonwealth stock, I quite agree, as the honorable member for East Sydney has said, that we shall not immediately derive any great benefit from’ the lessening of the . interest. But when we establish a Commonwealth stock of any considerable extent, and it comes to be recognised as an important stock on the London money market - when it ultimately attains, as it ought to attain, the same position as the Canadian stock - we ought to gain considerable advantage in the course of year&. But the Leader of the Opposition has pointed out that the benefits, when they come, will not accrue to the Commonwealth, but will accrue directly to the States. That is a fact which, must not be forgotten, because it is of the utmost importance in connexion with the vote we have ‘just taken.

Sir John Forrest:

– That is the law now.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– But it is the law now in relation to a totally different arrangement. The clause, as it stands, makes it the law for all time under the new agreement ; and that is one of the most momentous and unexpected consequences involved in the votewe have just cast.

Sir John Forrest:

– It is exactly the same position.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I say that it is a totally different position; it is the same provision applicable to totally different conditions.

Sir John Forrest:

– As there will be no surplus, we use the word “ charges.”

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I cannot stop to repeat my arguments to the Treasurer, but I think the Committee understands them. So far as the language of the clause is concerned, it has exactly the same meaning as the words we are leaving out of section 105, but it has the same meaning as applied to a totally different set of facts, and, therefore, has a totally different consequential result - a result, I venture to say, which, if it were placed before half-a-dozen intelligent men in the street, would be regarded by them with absolute amazement. If we asked the ordinary man in the street, whether he thought that, when the Commonwealth created a great Commonwealth stock, and, by its own exertions and its improved credit, decreased the interest payable on that stock, the whole benefit ought to accrue to the States, he would certainly be surprised at the question. This is not a matter to be lightly passed over ; and I think we ought to discuss it now. It is important merely as a consequence of the vote already taken, and the Committee ought to realize fully all the consequences of that vote. One of those consequences is that not a penny benefit of the decreased interest will accrue to the Commonwealth in any shape or form.

Mr Deakin:

– That is so under the Braddon section.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The Braddon section provides that we shall always have a certain percentage of the revenue, and it was never contemplated that we should take overa very large proportion of the debts during the currency of that section. It is an interim provision to give us time to take over the debts, and, while taking over the debts, to make any arrangement we choose in regard to the disposition of the revenue. We are now tying ourselves down to a disposition of the revenue, by a payment of 25s. per head for all time, coupled with a provision, which, when it applied to the temporary arrangement, was practically in nocuous, because we could alter it as we liked. .

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

– So we can now.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We cannot if we alter the Constitution in the way desired.

Mr Deakin:

– We need not take over a single penny of the debts, except on terms with which we are satisfied.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not think that that is the meaning.

Mr Deakin:

– It is the fact.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– It is quite true that we need not take over a single penny of the debts, but, if we do take over a portion, we must do so on the conditions we are asked to sanction.

Mr Deakin:

– Or any other conditions we choose to add.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We cannot add any conditions inconsistent with those in the Constitution.

Mr Deakin:

– We can say that we will not take over the debts except on conditions we approve.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– It is rather difficult, after a sitting of seventeen or eighteen hours, toenter on a discussion of a new and difficult constitutional point; and that difficulty is not at all decreased by the interjections of Ministers. Still, I think we are called upon to deal with the matter and discuss it now. Let me point out clearly that we are asked to definitely determine the conditions under which, if we assume the responsibility for the debts, those debts are to be taken over and to place those conditions in the Constitution. We are asked to leave in the Constitution the provision that the States are to indemnify the Commonwealth in respect of the interest, and we are asked to make a verbal alteration, and only a verbal alteration, in the other provision, which gives the Commonwealth the right to retain, out of the 25s. per head, the interest payable on the debts. As the debts are converted and the benefits, to which the honorable member for East Sydney referred, are derived by our efforts and our improved credit, so the interest is decreased, and the amount, which we are entitled to deduct from the 25s., is also decreased. If the amount we are entitled to deduct is decreased as the interest is decreased, it necessarily follows, as the Leader of the Opposition has pointed out, that the States derive the whole of the benefit from the conversion of the loans. Could anything be simpler ? This is a consequential amendment, in the sense that, while it does not alter the nature of the consequences which flow from the Braddon section, we, by a new disposition of the Braddon section, entirely alter the consequences. That cannot be disputed.

Sir George Reid:

– I dispute every word the honorable member is saying !

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I shall be very glad if the honorable member can do so.

Sir George Reid:

– I mean that I shall attempt to do so - that that is my view at present.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– What the honorable member has justsaid is the clearest evidence that this question ought to be discussed.

Sir George Reid:

– The honorable member has put his view most clearly.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I will read the whole section, because the right honorable member says that he does not agree with my interpretation of it. I do not for a moment pretend to infallibility on constitutional points or on any other points, but as the matter presents itself to my mind, I should have thought there was no doubt about the meaning -

The Parliament may take over from the States their public debts as existing at the establishment of the Commonwealth, or a pro-: portion thereof, according to the respective numbers of their people.

So far, the section leaves theCommonwealth absolutely at liberty at any time to take over the debts or any portion of them ; or not to take them over. Then the section goes on-

And may convert, renew, or consolidate such debts.

As I understand, the “ conversion “ of debts means handing to the creditors other bonds instead of the bonds which they at present hold; “renewal” is the same thing; “conversion” and “consolidation “ would involve paying off, and the issue of new bonds.

Sir George Reid:

– That implies the willingness of the bond-holders to be paid off. Until then there is no conversion; then there is.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The process of conversion may be pursued in various ways, and I express my concurrence with what the right honorable member has said on that point. You may say to the bondholder, “ Are you prepared to give up your old State bond, and take a Commonwealth bond instead?” That is one way. It is a question of agreement between the Commonwealth and the creditor. Or you may wait until the maturity of the bond-holder’s debt, and then pay him off. In order to pay him off, you may issue to the new set of creditors bonds for the whole amount, and may do that at a profit. Therefore, there can be no doubt as to the meaning of the section so far. It goes on -

And the States shall indemnify the Commonwealth in respect of the debts taken over.

That is a condition which, as I understand it, makes the interest payable by the States even after renewal. Then the section goes on -

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.

That is to say, the interest is to be deducted from the moneys payable by the Commonwealth -

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.

That means that if the amount of interest payable in respect of a certain proportion of debts belonging to, say, the State of Victoria, and for which Victoria is responsible, is diminished by the Commonwealth operations of conversion, consolidation, or renewal, the benefit of that diminution of interest goes, and the benefit of the reduction of the amount we are entitled to take from the States remains. If that be so, that provision, coupled with the provision we have already passed, that we are to pay 25s.per capita to the States, and that we are to pay that continuously, means that any benefit which the Commonwealth may derive from its operations on the market - from the renewal or consolidation of the debts - is a benefit derived on behalf of the States, and not on behalf of the Commonwealth.

Sir George Reid:

– As before.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– As before; I quite agree. But the right honorable member a few minutes ago said that he disagreed with everything I said. I want to find out where we disagree.

Sir George Reid:

– I consider that the States will always be entitled to that benefit.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The right honorable menrber does not disagree with me in my. conclusion as to that part of the section.

Sir George Reid:

– We are at one as to the construction of it.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I venture to say that that result is not what is expected by the great majority of the people of Australia in connexion with our operations in the renewal of loans.

Sir John Forrest:

– The matter was well understood at the Convention.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I can only speak of my own impression. Perhaps that impression is due to insufficient thought.

Mr Fisher:

– Or over-confidence?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– It may have been. I have been under the impression that the Commonwealth would retain to itself the benefit to be derived from the conversion of these loans. I am not at all Sure that I was not right. But I want to show what that impression was, and that, after all, it was not without foundation. Because, although the Braddon section might be’ allowed to remain in existence after the ten years, this Parliament was given the most complete and absolute authority to change the disposition of the Customs and Excise revenue when it so desired.

Sir George Reid:

– We all know that.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– If my right honorable friend knows that, then my argument receives an additional corroboration from him which is very valuable. We know that the right honorable gentleman is the real author of the Braddon section as it stands.

Sir George Reid:

– There are several other authors about, all proud of their firstborn.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The question is a difficult one, and it is one which we should at all events endeavour to understand. I am very glad indeed that I have the assent of the right honorable gentleman as to the constitutional position. Now, what I would ask the Committee to consider is this - Is there not. a very material difference indeed between the position of a House of Parliament which has power to alteT the whole basis of the distribution of revenue because of such a section, and the position of a House which parts with that power to alter the distribution of revenue, when grappling with the same question?

Sir George Reid:

– That has been the objection to the 25s. all the time. This is the old argument again. The honorable member has lost on the main issue, and now he wants to win on something else.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We are now dealing with another aspect of the matter. and I think it is clearly permissible, in dealing with this new aspect, to show the full consequences of what we have done. I am only endeavouring to do that.I am showing that the consequences that were pointed to by the Leader of the Opposition have, as I think, been lost sight of by many members in both Houses.

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

– Does the honorable member contend that if Victoria had £5,000,000 worth of 4 per cent. loans, and we converted them at 3½ per cent., the difference would belong to the Commonwealth ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– So long as the debts are not converted or renewed - so long as we have not established a consolidated stock - the States undoubtedly ought to pay.

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

– Ought they to continue to pay 4 per cent. by way of interest, when they can borrow themselves at 3½ per cent. ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not think that the honorable member has quite followed my argument.

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

– Does the honorable member suggest that the Commonwealth should retain any benefit that may accrue ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Undoubtedly ; until this Committee tied its hands in the matterof the distribution of the Customs and Excise revenue, by agreeing to the clause to which it has just assented, the Commonwealth possessed the right to readjust the whole basis of that distribution. When we couple that provision with this clause, which takes away from the Commonwealth any advantage which it may derive from the consolidation or renewal of loans, the whole position is placed in a much more serious light.

Sir John Forrest:

– We might have annually returned to the States 25s. per capita without embodying the arrangement in the Constitution.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We might have provided for a return to the States in several ways. I will suggest one way in which that might have been done. The Commonwealth might have said to the States. “ We will pay the interest - whatever it may amount to - upon your debts as at the time of the establishment of the Federation.”

Sir John Forrest:

– They would not have thanked us for that.

Mr.W. H. IRVINE. - We might have arranged to distribute the Customs and Excise revenue amongst the States by paying the interest upon their debts as they existed at the time of the inauguration of the Commonwealth. That was clearly within our power until we tied our hands by agreeing to the clause to which I have already referred. To my mind, such an arrangement would have been more in accordance with the general anticipations of the future financial relations of the Commonwealth and the States than is the arrangement which has now been assented to.

Sir George Reid:

– The referendum will determine all that.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

–I have nothing further to add. This is a matter which emphasizes in the strongest way–

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

– I suppose that the honorable member recognises that his own proposal would have achieved precisely the same result to the extent of half the State debts ?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– To which proposal does the Minister of Defence refer?

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

– To that which we have just negatived.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Which provided for the return to the States of 25s. -per capita until they were receiving £7,500,000 annually.

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

– When that time arrives, more than one-half of the State debts will have been converted.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not anticipate that during the next ten or fifteen years we are likely to derive any material advantage from the conversion of State loans. I must admit that I assented to the scheme presented by ‘ the honorable member for Mernda, because it was the only one which could command the support of all those honorable members who were opposed to the Government proposal. But in my own scheme I stated that the Commonwealth ought to take over, and become responsible for, the debts of the States as they existed at the time of the establishment of the Federation. We should then have derived whatever advantage might have accrued from our own operations on the money market.

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

– We could not have taken over the State debts as they existed at that time.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We could have taken over the whole of the State debts, or a proportion of them. Had we taken over the whole of them, a mutual adjustment would have been required as between the States.

Mr Roberts:

– Does the honorable member contemplate a per capita return, to the States ot 25s. annually alter the State debts have been extinguished?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– We are not obliged to establish a sinking fund in connexion with State loans. If we did so, we could certainly make an arrangement with the States which would neutralize our expenditure in that connexion.

Mr Roberts:

– But failing any arrangement with the States in accordance with the terms of the clause which has been assented to to-day, the Commonwealth would continue to return to the States 25s. per ca0:ta even after the State debts had been liquidated?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– If the Commonwealth were foolish enough to establish a sinking fund for the extinction of the State debts out of its own revenue, that would bo its own affair. The matter would be one of arrangement as between the States and ourselves.

Sir John Forrest:

– The honorable member has, I think, proved the case) against himself.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I do not think that that criticism is deserved.

Sir George Reid:

– Nor do I. The position of the honorable member is perfectly clear, and I thoroughly understand it.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The Constitution makes no provision for the establishment of a sinking fund. Neither the Commonwealth nor the States are obliged to make any provision of that sort. If the State debts are taken over by the Commonwealth, they can only be taken over after an arrangement has been entered into as between the two parties. We may impose any condition we like in that connexion. But whether or not we provide a sinking fund, any benefit which may accrue from any reduction in the interest bill must be derived by the States. Mr. GLYNN (Angas- Attorney-General) [7.4 a.m.]. - I wish to remove a misapprehension under which the honorable member for Flinders appears to be labouring. Of course he was not a member of the Federal Convention, and therefore I can quite understand the mistake which he made rer_garding the policy which prompted the inclusion of the provision relating to the transfer of the State debts in our Constitution.

Mr King O’malley:

– He is a constitutional lawyer.

Mr GLYNN:
Free Trade

– But other qualifications are required in addition to a knowledge of the points which have been raised. For instance, there is a knowledge of the history of the question. One proposal submitted at the Convention was that the State debts should be taken over by the Commonwealth, but at the instance of the honorable member for East Sydney that proposition was altered and made optional. But there was a guiding principle laid down, namely that the Commonwealth should take over the State debts wthout any indemnity from the States.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– But that proposal was not carried.

Mr GLYNN:

– I am aware of that. But it was part of an attempt which was made in advance to settle the financial question. There was a desire on the part of the delegates to the Federal Convention, that the States should receive a certain proportion of the Customs and Excise revenue. One means of insuring that was that the Commonwealth should take over the whole liability for the State debts. But it wasnot adopted by the Convention. All that was done was to adopt a provision enabling the Commonwealth to take over the debts. There was no connexion between the Braddon clause and the optional provision for taking over the debts, subject to an indemnity. If I wanted to strengthen that position more, I could show that it was pressed upon the Convention that it ought to provide for the Commonwealth assuming the liability without any indemnity, as a means of thus assuring a proportional charge on revenue to the States, and two analogies were pointed out, namely, the cases of America and Canada where that course was taken. It is a curious fact that in Canada, not only did they take over the whole of the debts without any recourse to the Provinces, but actually fixed the payments to the Provinces, showing that they did not regard their right to get a fair proportion of the revenue as having any connexion with the debts whether there was any indemnity or not. When the first referendum was taken in New South Wales the people by a majority accepted the Constitution with the so-called Braddon “ blot” and the provision with reference to the debts. But it was not accepted by the required majority. There we had a popular acceptance of a fixed payment of three-fourths of the Customs and Ex cise revenue for ever coupled with the very provis:on which is now objected to by the honorable member for Flinders.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– That Bill was not carried.

Mr GLYNN:

– It was carried by all the States except New South Wales. Here is a point to show how little the honorable member knows of what was in the mind of the Convention. When the Braddon clause was being altered to limit its operation to a period of ten years, was a single word said about n. connexion between the two provisions?

Sir George Reid:

– No.

Mr GLYNN:

– Did the honorable member for Flinderssay a single word then about the alleged connexion? No; he has found a mare’s nest. So far from there being any connexion in policy between this clause and other parts of the Bill, I do not believe that a single member of the Cabinet except myself saw the provision until it was printed. I was responsible for the drafting, and I put in this provision simply as a necessary drafting clause. The only alteration which has been made has been to put in the word “charges,”because it is doubtful whether otherwise we could debit the States with the charges for conversion. Under the Bill the surplus revenue will be abolished, and therefore we had to change the terminology. Another section of the Constitution is proposed to be repealed, but this allusion is very pertinent to the observations of the honorable member for Flinders. It does not seem as if he quite realizes the force of the Bill. It seeks to repeal section 94, under which, although the Braddon provision may be abolished at the. end of the year, we are under an obligation to pay the surplus revenue to the States. In future there will be no surplus payable to the States, so that we shall be absolutely independent in every sense of the term. For the last six or seven years we have been paying to the States a surplus that we could not spend, and it may be that for some time to come, owing to our increasing Customs revenue, there will be a very large surplus which, were this section not repealed, would have to be handed to the States. Let me point out here, that for the last three or four years the stock of New South Wales of the same term, and carrying the same rate of interest, has stood better in the market than has been that of Canada. The honorable member for

Flinders made a comparison between the value of Canadian stock and what we might hope to get for our stock. In the Convention I pointed out that it was folly to expect, perhaps for generations to come, a large saving on the issue of Commonwealth stock, because it will be found that even then - in 1898 - New South Wales stock was quite as good as the socalled better-priced Canadian stock. My honorable friends on the other side, as well as some honorable members on my side, have talked much about the difficulty of altering the Constitution under a double referendum. In the first place, we have been very properly ‘ told that it is the one taxpayer who in any event will be asked to re-apportion the revenue. It is rather impugning the intelligence of the electors of the small States to say that they would be utterly incapable of suffering anxiety for an amendment, when under this adjustment it may or may not be found that the States are getting much money which they do not require, and the Commonwealth too little. From the Swiss Constitution was taken the very provision which gives us a double referendum. Between 1874 and 1903 eleven amendments were carried under the double referendum, several of them involving large surrenders of revenue. They were not directly financial provisions, but they involved large sacrifices of revenue in connexion with transfers from the Cantons. Since 1903 fundamental amendments have been carried under the Swiss double referendum involving an enormous sacrifice of power. That does not bear out the assertion that the States will never give up anything. We have heard a great deal about the States, but what are they? Are they not the people? In connexion with amendments of the Constitution, we shall be dealing only with this Legislature and with the people.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The Attorney-General has said that I have changed my legal opinion upon this point in connexion with my policy, which is rather a serious allegation.

Mr Glynn:

– I said “ as well as.”

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The facts are these : I wrote a paper which was put before the Hobart Conference, in which I submitted the view, which I subsequently expressed, that there are two Wal interpretations which can be put upon the words “take over”; that they may refer to a taking over by the Commonwealth as agent for the States, which would leave the Sta’.es the legal debtors, or that a novation may be contemplated, the Commonwealth becoming the debtor in place of the States. I expressed myself, though with some doubt, as rather in favour of the latter interpretation. That has nothing to do with the position’ which I am taking now. Whether the legal relation of debtor and creditor is left unchanged so far as the States and those from whom they have borrowed are concerned, or whether the Commonwealth becomes the debtor, the financial results of any conversion will be the same. I merely wish, to remove an impression which, being created by what has been said by the Attorney-General, might be injurious to me.

Mr BATCHELOR:
Boothby

– The interesting discussion which is taking place shows the desirability of an adjournment. Honorable members are not now in a fit state for work.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– This amendment is only consequential.

Mr BATCHELOR:

– Yes, but I raised the matter on the second reading. Honorable members have quite different views as to whether the Commonwealth or the States would benefit by the conversion ot State stock into Commonwealth stock. The Treasurer stated that, even if the Commonwealth out of its own revenues established a sinking fund and paid off the debts, it would make no difference.

Sir John Forrest:

– No. 1 said that the States would indemnify the Commonwealth for any liability taken over. That is the whole point.

Mr BATCHELOR:

– It does not touch the point. It is generally understood by honorable members and State politicians with whom I have spoken that any saving made by the Commonwealth as the result of careful management after the conversion of State stock to Commonwealth stock would belong to the Commonwealth. That i« important in connexion with the payment of 25s. -per capita to the States.

Sir George Reid:

– That might be an argument in favour of the Commonwealth paying the interest on the debts instead of so much per capita, but we have decided the matter.

Mr BATCHELOR:

– We have not taken a division on the question to which I am drawing attention. My view has been that if the Commonwealth takes over debts to a certain amount, and discharges all Iia- bilities, leaving the State assets free, it will get the advantage of any savings that it may make.

Sir George Reid:

– The States will be responsible for every penny of the debts, although the Commonwealth may take them over. We do not relieve them of responsibility.

Mr BATCHELOR:

– When we have issued Commonwealth stork, we shall be responsible for the payment of the debts.

Mr King O’Malley:

– And the States will also be responsible.

Sir George Reid:

– It is the States which pay the money.

Mr Henry Willis:

– It is the Commonwealth which will pay the money, and will he responsible.

Mr BATCHELOR:

– Of course, the whole people pays and gets whatever advantage may accrue, but as between the Commonwealth and the States it seems to me that the Commonwealth, having the management of the debts, ought to be given a direct incentive to do its best, and should reap any benefits that may come from good management.

Sir George Reid:

– Does the honorable member suggest that the Commonwealth might do its work badly if it were- not making something out of the arrangement?

Mr BATCHELOR:

– That is not the point.

Sir John Forrest:

– The honorable member seems to think of the States as foreign powers. He should study the question.

Mr BATCHELOR:

– The Treasurer keeps repeating a parrot-cry as though it were an argument. The Government has done its best to prevent discussion.

Mr Henry Willis:

– It wishes to run this measure through when men are exhausted.

Mr BATCHELOR:

– What we want to understand is the effect of this proposal, and who will reap the benefit of any savings made through conversions. It is a great pity that we should have to hurry over the matter at the end of an extremely long sitting. The proposal ought to be discussed, and the people to understand it, because they have not understood it so far. When I raised the question in the House on a previous occasion, every one present, except the Treasurer, took the same view as I did, so that, if there was any misconception, it was not confined to me. Since then. I have seen several discussions on the matter in the public press, and the idea that, after the Commonwealth had .paid off the national debt, possibly with its better credit, it should still go en for all time paying to the States what it had previously paid to the creditor, h:is been scouted everywhere.

Sir George Reid:

– The honorable member would be absolutely right if the debt was paid off with Commonwealth money, but the fallacy of his argument is that it is the States which will pay it off with their own money.

Mr BATCHELOR:

– I do not agree with the right honorable member. I do not feel disposed to continue the discussion now, but would urge the Government to report progress, so that we can debate the matter when we are better able to deal with it. This clause offers the only opportunity tn discuss it in connexion with the continuous payment of a fixed sum to the States.

Sir GEORGE REID:
East Sydney

– I should like to remove what seems to be a misconception in the matter. lt the Commonwealth paid out of its Treasury any portion of the sinking fund, or the principal, or the interest, there would be a great deal in the contention of the honorable member for Boothby, but it would not do so. The debt can be paid off only in two ways - by a sinking fund which gradually liquidates it, or by paying the principal when it becomes due. If it is done by a sinking fund, the annual contribution to that fund comes, not from the Commonwealth funds, but from the funds of the States, and there can be no sinking fund unless a special agreement is arrived at between the Commonwealth and the States. The Constitution provides that if the Commonwealth does become responsible for the interest, the States are to be charged the amount, which it pays, so that, as the Leader of the Opposition said, the Commonwealth becomes a. kind of agent for the States in the matter. T corroborate the Attorney-General’s remarks. All through the Convention the idea was that the States were to Ret th benefit of any transaction about the debts. There was no idea of the Commonwealth reaping the benefit.

Mr Batchelor:

– Only so far as the States’ money was used.

Sir GEORGE REID:

– Let me put the matter in a practical way. In the Constitution there is an agreement between the Commonwealth and the States that the Commonwealth shalT take the debts over. A loan, let us say, is to be floated at 3$ per cent, with a sinking fund of £ per cent.

All that money would have to come from the States. What position would the Commonwealth occupy in the estimation of the people it it demanded an advantage of a¼ per cent. for itself from the States, on the ground that it had reduced the interest to per cent. ? That would be establishing a sort of money-lender relation between the Commonwealth and the States, which would shock the feelings of the people.

Mr Batchelor:

– That was not suggested.

Sir GEORGE REID:

– That is the effect of it. If the Commonwealth received from the State only the 4 per cent. to cover the interest and sinking fund, it would get no advantage, because it would simply hand over the3½ per cent. interest to the bond-holder and invest the½ per cent. towards meeting the principal. The only way by which the Commonwealth could get an advantage would beby demanding from the State an extra½ per cent., in addition to the 4 per cent. for sinking fund and interest. A sinking fund after all only compels a State to pay off its debt quicker than under the old arrangement. It is not an advantage to a State to pay an extra½ per cent..

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– In other words, whoever provides the sinking fund must have the advantage of it.

Sir GEORGE REID:

– Yes, but there is rather a confusion of ideas, as though the sinking fund were provided by the Commonwealth. It would be wrong to expect the Commonwealth to provide it. It would be burdening the Commonwealth with a liability which should not be placed upon it. This idea of an advantage through the Commonwealth taking charge of the State debts would always be more or less doubtful. There would always be a dispute between the Commonwealth and State Treasurers as to whether the States could not have raised certain loans as cheaply as the Commonwealth did. The State Treasurer would ask, “ Why charge me for a benefit which you allege has accrued, but which I say never accrued?” That sort of thing might cause the most irritating conflict between the States and the Commonwealth, and the Commonwealth would be put in the unlovely light of trying to make something out of the transaction. That would be fatal to good feeling between the two authorities.

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

– Supposing a loan were renewed at 4 per cent., and the State found that it could have borrowed at 3½ per cent. ?

Sir GEORGE REID:

– That would heighten the dissatisfaction. I really feel: that this transaction is one in which the States pay the whole of the money. They pay. the interest, and, if there is a sinking fund, they will have to pay more than they did previously, in order to wipe the debt out. This they do with their own money. What have we to get out of that ? We cannot charge anything on the transaction. The States have to find the money all the time, and, as they pay the interest, they have to pay the principal.

Mr K ing O’Malley:

– That is where my scheme comes in.

Sir GEORGE REID:

– It may. The man who pays the interest is always responsible for the principal, but if he is solvent, the principal is not required so long, as the interest is paid. If it is desired, and the debtor is solvent, the principal can be renewed in the open market from time to time. Thereis very little substance in the idea ; and the Commonwealth would be put in the position of huckstering over a State transaction in order to make a little money. That, of course, is beneath the dignity of the Commonwealth. Although we do not construe, the Constitution according to the discussions -in the Convention, I give the Committee my assurance that, all through, there was no idea of the Commonwealth reaping any pecuniary advantage. It was always held out to the people of the States, as an inducement to Federation, that the Commonwealth would manage the loan business, and save the States much money, in consequence of the improved credit of the Commonwealth.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Was it intended that afterwards there should be a Commonwealth stock, or that the Commonwealth should merely act as broker for the States?

Sir GEORGE REID:

– The idea was that a Commonwealth stock would be of advantage to the States, but we took care, in the Constitution, that the States should remain responsible. The man who has to pay the interest on a loan is responsible, and not the banker who pays it for him. Although the stock was to be in the name of the Commonwealth, the idea was that we would be doing for the States something they could not do for themselves.

Sir John Quick:

– As a trustee for the State.

Sir GEORGE REID:

– Practically so. The States could attain that benefit only through the Commonwealth, and the idea was that one of the advantages of the Commonwealth would be the consolidation of the States debts, always making the States responsible for all liabilities in the shape of interest and sinking fund. As I say, the Commonwealth could not derive any pecuniary advantage, unless it added another per cent, as a sort of charge; and such a project would be preposterous, placing the Commonwealth in a most ridiculous light. There would be endless disputations as to whether the State was really paying a lower rate of interest than it could have obtained for itself ; and one of my reasons for supporting the payment of 25s. per head is that the Commonwealth and the State finances can be managed each on a. different basis.

Mr KING O’MALLEY:
Darwin

– I remember when Sir Frederick Holder, at the Melbourne Convention, fought a battle all day in an endeavour to persuade the members of that Convention not to provide in the Constitution that the Commonwealth “ shall “ take over the debts, and how the honorable member for East Sydney, after the word had been inserted at the instigation of Sir George Turner, managed, by his wonderful eloquence, persuasive power, and domination over the assembly, to have the word removed. In the course of the speech which the right honorable member then made - and I may say that it had a wonderful effect on me - he said that, as the debts fell due, the Commonwealth would issue Commonwealth bonds or debentures, and, going to the creditors of the States, say, “ Here is a better security ; what are you prepared to do?” What is the benefit of the provision in the Constitution that the Commonwealth may take over the debts, if we do not go into the markets of the world and bargain to buy those debts as cheaply as possible for the benefit of the Australian’ taxpayer? The Leader of the Opposition says that we shall make a great saving of at least £ per cent., but I think that there will be no such saving for many years to come, unless the Commonwealth and the States unitedly operate a banking institution. The six States will have to go into the market in competition with each other, and do the best they can in the redemption, renewal, and conversion of their loans; and I venture to say that New South Wales and Victoria, with this provision for the payment of 25s. per head, would .be able to borrow money more cheaply in the London market than the Commonwealth could. I make that prediction, which I desire honorable members to note well, because later on I shall be saying, “ I told you so.” However, if the Government had the ability, and undertook the responsibility of tackling this question, as I propose - if they combined the taking over a certain amount of the debts and the institution of a National Bank - they could carry on the States while the latter could watch the market in London, New York, or Paris, until they were able to borrow money at a low rate when there was a glut. There could, in this way, be a great saving, but, otherwise, there can be none. A saving of J per cent, on the total debt at present, would mean about £600,000 a year. But there will be no per cent. Last year the Pennsylvania Railway Company, of the United States, went into the Parismarket, and borrowed at 2f per cent, at par ; whilst the big State of New South Wales sold her bonds on the London market at £6 per £100 below par. The honorable member for Flinders is one of the recognised constitutional lawyers of the Commonwealth. He appears in nearly every great constitutional case. He stands up and points out what this provision means. Yet laymen, who know less about the Constitution than a one-eyed bat knows about past centuries, absolutely contradict him and question his constitutional advice.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I think it only right to say that I defer entirely to the opinion expressed by the members pf the Convention as to the intentions of the framers.

Mr KING O’MALLEY:

– Had I been able to persuade honorable members to listen to me, I could have shown them what I believe to be the only way out of this tremendous sea of financial trouble into which we are getting. I have pointed out the only method of salvation. By putting this 25s. -per capita provision in the Constitution, the Commonwealth will only be half a revenue controller. It will control only £1 4s. 6d per head of the revenue from Customs and Excise. . In other words, this Parliament will be only a manager or collector or agent or messenger boy for the States to collect for and distribute to them£15s. per headper capita for all eternitv.

Mr HENRY WILLIS:
Robertson

– The right honorable member for East Sydney has made it clear that there is a great deal in the contention of the Leader of the Opposition, who has shown that the Commonwealth takes its own responsibility in paying off debts which are a charge against a State. If a State provides a sinking fund in connexion with its debts, it will be entitled to the 25s., because it will find the money to liquidate its own debts. But if we establish a sinking fund without consulting the States, we do it at our risk, and have to take the responsibility. We must still continue to pay the 25s. per head till the Constitution is altered.

Sir George Reid:

– Yes. but we shall not be such fools as to provide a sinking fund without making an arrangement with the States.

Mr HENRY WILLIS:

– We should indeed be foolish to do so. The only State, so far as I know, that has a satisfactory sinking fund is Western Australia. Other States have their sinking funds, but occasionally absorb them. Suppose that in the interest of Australia the Commonwealth Parliament said that the debts ought to be liquidated by establishing a sinking fund. Even so, we could not establish such a fund without consulting the States; or if we did we must continue paying them 25s. per head. This is not a satisfactory position. It means that we have to go to the States and get their consent to the establishment of a sinking fund. The Leader of the Opposition has, therefore, made it clear that there is a very great deal in his contention that we cannot move without the consent of the States.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– After listening to the speech of the right honorable member for East Sydney, I desire to say that he has converted me on one point, at all events. He has conveyed to my mind a different impression from that which I formerly entertained. Of course, he speaks as a member of the Convention, and one of its leading members. He tells us what the members of the Convention contemplated, namely, that the benefit of the conversion and renewal of loans should go to the States, and not to the Commonwealth. I must fully accept that assurance, and I do accept it.

Mr J H CATTS:
Cook

– On a question like this, which I am sure no honorable member understands too well, it is much to be regretted that the Government should persist in pushing forward the measure after we have been sitting in this chamber over twenty hours.

Mr Wise:

– They did not wish to attend a Governor-General’s ball, otherwise they would have consented to an adjournment of the debate at 10 o’clock last night.

Mr J H CATTS:

-We find the honorable member for East Sydney, the honorable member forFlinders, and the AttorneyGeneral, three constitutional authorities, differing amongst themselves as to the effect of this clause.

Sir George Reid:

– Not of this clause.

Mr J H CATTS:

– It appeared a little while ago that there was some room for a difference of opinion amongst them. Yet the . Government expect honorable members who have nothad a legal training to deal with this question after a sitting which has already extended almost twenty-four hours. This is another instance of the way in which the Ministry are prepared to sacrifice the powers and privileges of the Commonwealth. They are quite willing to make this Parliament subservient to the Parliaments of the States. “ He that is servant amongst you is greatest of all “ appears to be their doctrine. Evidently they think that the way to become great is to allow the Commonwealth to fetch and carry for the States. The position of this Parliament is being absolutely degraded by them. Under our Constitution, the Commonwealth next year would have been able to exercise supreme control over the Customs and Excise revenue.. Before the powers and privileges of the Commonwealth in respect of surplus revenue were bartered away, this Parliament possessed certain powers in regard to the transfer of the State debts. But now that we have sacrificed our constitutional powers, the Government tell us that’ they are merely proposing a continuation of the policy which was decided upon by the Federal Convention, and that, in reality, this proposal represents only a consequential amendment. Section 87 of our Constitution provides that certain revenues may be allocated towards the payment of interest’ upon the State debts for a period of ten years, after which the section is inapplicable. But under this Bill, we are asked to return to the States a contribution of 2 5s. per capita in perpetuity. If the Commonwealth takes over some of the State debts, and this 25s. per capita is allocated towards: the payment of interest upon those debts, we shall absolutely tie the hands of the Commonwealth for all time, and we shall be prevented from reconsidering that payment. Thus, any alteration of the Constitution will be rendered impossible. I have not read the debates of the Federal Convention very closely, but I do not know what was in the minds of the delegates in regard to the policy which should be adopted bv the Commonwealth in respect of the consolidation of the State debts. I certainly understood that the Commonwealth would be able to take over those debts, to manage them in the way that it thought best, to allocate any saving of interest which might be effected to a sinking fund, and thus, in a certain number of years to liquidate them. But I now find that no such proposal is placed before us. We are merely asked to continue a large public debt, and to sanction the heavy drain which must be made upon the labour of Australia to pay interest upon it. I view the situation with the utmost dismay. It comes to me as a tremendous shock.

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

– That is awful.

Mr J H CATTS:

– Of course, it is not awful to the Minister of Defence, who entered political life with the idea of doing some good for his fellows. I did hope that it would be possible for the Commonwealth to establish a National Bank jointly owned by the Commonwealth and the States, which might handle the State debts, effect enormous savings, and provide a sinking fund for their liquidation in a comparatively short period. But the temporary arrangement which was made in the Constitution for dealing with the surplus revenue is sought to be perpetuated, the Commonwealth is simply to handle the State debts as a kind of head clerk for the States, and the hope of many persons that under Commonwealth management the State debts might be extinguished in the course of a few years is to be disappointed. I have collected some data with the intention of dealing with this question at the first available opportunity, but after having been in attendance here for nearly twenty-two hours, I am not in a condition to do so. We were charged by our constituents with grave responsibilities, and we have been endeavouring to discharge our duty to the best of our ability. But the Government have decided to make this dual inequitable arrangement with the States, no matter what views honorable members on this side may hold with regard to dealing with the public debts. All that they are concerned about is to get this wretched agreement put through.

Mr THOMAS BROWN:
CALARE, NEW SOUTH WALES · ALP

– The Argus says that there is a price behind the agreement - the support of the State Premiers and the State politicians.

Mr J H CATTS:

– It appears that there is some price behind the agreement. One can hardly imagine public men in their senses adopting the attitude which has been taken up by the Government. Unhappily, we are on the eve of a general election, and their brainy supporters dare not press their views on this subject for fearof encountering Ministerial opposition at the polls. This great question has been dealt with in a disgraceful manner. It is deplorable to think that the business of the House is conducted in such a way by the Government that honorable members who have placed before their constituents their ideas on questions of reform; have not an opportunity of intelligently dealing with them. I can only enter a protest against the Government proceeding with the Bill under existing conditions, but I trust that when the people get an opportunity at the ballot-box they will take drastic action to return to this House Nationalists, instead of the petty, parochial-minded Constitution wreckers who now occupy the Treasury benches.

Mr FISHER:
Wide Bay

.The honorable member for East Sydney has explained that the intention of the draftsmen of the Constitution with regard to the taking over of the State debts was that any monetary benefit which might accrue through the action of the Commonwealth in dealing with stock should be credited to the States concerned, not to the Commonwealth.

Sir George Reid:

– I do not see how you could derive a benefit.

Mr FISHER:

– The right honorable gentleman said that that was the opinion of the representatives of the people in the Convention.

Sir George Reid:

– I put it in that way.

Mr FISHER:

– I was impressed by the fact that that statement seriously influenced the judgment of the honorable member for Flinders on this very point. I ask him to apply his mind to the question of a Commonwealth stock in that connexion.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– That is the part which troubles me most of all.

Mr FISHER:

– What was the idea in mentioning a Commonwealth stock and a Commonwealth credit if it was intended that the Commonwealth Government should simply act as an agency of the various States? Let me examine the question on its merits apart from the statement to which I have referred. Here is a Commonwealth credit which, in my opinion, would be better than the credit of an individual State. It may or it may not be, but that does not affect the question.

Sir George Reid:

– But the money to pay interest and establish a sinking fund will be provided by an authority other than the Commonwealth. In that sense it will not be Commonwealth stock.

Mr FISHER:

– Could the Commonwealth borrow without an application from a State? If the Commonwealth were to borrow largely, in anticipation of the demands of the States, and at a rate of interest lower than that at which they could borrow individually, would it be. bound to let them have the money at. the rate of interest at which it borrowed?

Sir George Reid:

– The Commonwealth borrowing would be for a definite Commonwealth purpose, and the money borrowed could not be applied to any other purpose. Money borrowed for the construction of a railway to Western Australia could not be handed over to the States.

Mr FISHER:

– The right honorable member does. not follow me. If the members of the Convention, thought as the right honorable member does, they should not have spoken of a “Commonwealth’-‘ stock. Assuming that £20,000,000 worth of State loans fell due in five years time, and that the Commonwealth, desiring to benefit the people, authorized the borrowing of an equivalent amount, obtaining it at a lower rate than the States could individually borrow at, would it have to hand the money over to the States at that rate? Where the Commonwealth credit is obviously better than the State credit, which will benefit, the Commonwealth or the States? Is the Commonwealth to take ali the risks of these transactions and the States to get the benefits? The whole arrangement seems to be ill-digested. Apparently it will be necessary that the money borrowed by the Commonwealth on behalf of a State shall be borrowed in the name of that State. According to the right honorable member for East Sydney, the Commonwealth will have to give reasons for the loans which it raises, specifying that it is borrowing on behalf of New South Wales, Victoria, or some other State, and the States will have to be credited and debited accordingly. Under this system money may be borrowed at different rates of interest at practically the same time. If separate loans were floated on behalf of two or more States, they might be raised, at different rates of interest, and the States concerned would be credited and debited accordingly. If that is the view which wastaken at the Convention, ‘it is a very narrow and unsatisfactory one, and evidences much short-sightedness. I never heard it stated before. The view which I have always heard advocated is that there would be a Commonwealth stock - that the Commonwealth would take over the debts of the States and be responsible for principal and interest, improving the credit of Australia by substituting one stock for many. I think that is the generally held view. Now we are told by the honorable member for East Sydney that the Commonwealth is merely to be an agent between lenders and the borrowing States. If that is so, the arrangement will not accomplish what thepeople had in their minds when voting for the Constitution.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The view came as a surprise to me, but I am afraid that it expresses what is embodied in the Constitution.

Mr FISHER:

– Honorable members will see that the questions which I am asking strike at the very root of progress ir» this matter. Apparently the Commonwealthcould do nothing without the leave of the States. On that point I should like to say a great deal, but this is not the time to doso. The right honorable member for East Sydney said that the establishment of a sinking fund might deprive the borrower of money which he might need to meet his necessities.

Mr Crouch:

– Why not provide in this clause for a sinking fund?

Mr FISHER:

– That would be possible. It seems to me that those who aregetting the immediate benefit of a loan should provide for its ultimate repayment. Economy is a virtue which should be morepractised in Australia. We are now in a time of -unexampled prosperity, and nodoubt people are ready to borrow without making provision for repayment, but thetime will come, as it has come before, whennature will be less bountiful, and credit will be scarce. Then it will be regretted that a sinking fund was not provided when times were good. However, the temper of the Committee is such that it is not worth while to discuss these matters now. The Government is determined to push the measure through. We may have another opportunity for the discussion. There aru many points which do not strike one’s attention until debate . has commenced, and the discussion of serious problems like this gives information and experience that can have but one result - the advancement of the best interests of the people of. the Commonwealth. I shall advise my friends not to take any divisions, but to allow the Bill to go through Committee as the Government have brought it in, as we cannot get a reasonable opportunity to discuss it or submit amendments. There will be a further opportunity to consider the main question at a later stage.

Clause agreed to.

Bill reported with an amendment.

page 5667

SUPPLY BILL (No. 4)

Bill returned from Senate without request.

page 5667

SPECIAL ADJOURNMENT

Mr DEAKIN:
Prime Minister · Ballarat · Protectionist

– We have had a protracted and trying sitting, and in thecircumstances I propose, with the consent of honorable members, to ask the House to take a rather longer adjournment than is usual. In ordinary circumstances under the new sessional order we should meet at 11 o’clock. I move -

That the House, at its rising, adjourn until 3 o’clock p.m. this day.

Question resolved in the affirmative.

page 5667

ADJOURNMENT

Hansard Staff

Motion (by Mr. Deakin) proposed -

That the House do now adjourn.

Mr KELLY:
Wentworth

.It struck me in listening to the debate during the whole of last night that special consideration ought to be paid on this occasion to the Hansard staff. The debate has not been an ordinary one. In fact, it has been a very heavy one, and I could not help feeling the sincerest sympathy with those officers in having to keep in constant touch with an exceedingly difficult debate all through the long hours of yesterday morning, afternoon, and evening and early this morning. I hope that particular attention will be given to the matter.

Dr MALONEY:
Melbourne

– I should like tobring under your notice also, sir, the fact that certain officers connected with the Hansard staff are not permanently employed. We surely ought to see if we cannot do something for them.

Question resolved in the affirmative.

House adjourned at 8.30 a.m. (Thursday).

Cite as: Australia, House of Representatives, Debates, 10 November 1909, viewed 22 October 2017, <http://historichansard.net/hofreps/1909/19091110_reps_3_53/>.