4th Parliament · 1st Session
Mr. Speaker took the chair at 2.30 p.m., and read prayers.
Mr. SPEAKER, pursuant to standing order 25, laid on the table his warrant nominating Mr. Chanter, Mr. Fowler, Mr. W. Elliot Johnson, Dr. Maloney, and Mr. Roberts to act as Temporary Chairmen of Committees when requested so to do by the Chairman of Committees.
Report (No. 1), presented by Sir John
Quick, read by the Clerk, and adopted.
– Is the Prime Minister yet in a position to state what is the intention of the Government respecting the ap pointment of a Royal Commission to make investigations regarding the sugar industry ?
– The Government has taken action to close the inquiry of the Commission appointed by its predecessors, but the question of appointing a new Commission’ to go into the whole subject will be considered later.
– In considering, the matter, will the Government have regard to the expediency of placing on the Commission a representative versed in the interests of the manufacturers who use sugar in their business and a representative of the general public, in addition to representatives of those interested in the business of growing, making, and sellingsugar ?
– If a Commission is appointed, its investigation will have a wider range than an inquiry into the technical production of sugar.
– When will thepublic accounts for the quarter ending 30th- June be laid on the table?
– As soon as they havebeen balanced - which the Treasury officials hope will be within a day or two - they will be available to the public, and to members of Parliament.
– With reference to the reply to my question yesterday concerning the expediency of the building of the Federal Capital, did the Prime Minister intend it to apply to the YassCanberra area, approved and accepted byParliament, or is it to be accepted in the equivocal sense suggested by a paragraph in this morning’s Age, which points out that he “ did not fix the location of the Federal Capital, which, in. the long run, might beeconomically and expeditiously erected at Dalgety “ ?
– I hope that honorable members will not bring newspaper paragraphs of that kind before the Chamber. My reply was definite enough, and had reference to the Capital and Territoryselected.
– Is the Prime Minister aware that certain banks of issue were given rights respecting their note issue by State Acts in the nature of charters which have yet many years to run ? Does he propose, in establishing a Commonwealth note issue, to terminate those rights without offering any equivalent? If so, is he able to reconcile an act in the nature of repudiation with the provision of the Constitution as to the full faith o and credit to be accorded to the Acts of the States?
– Nothing in the Government proposals will be in any way a repudiation of the State Acts, and no compensation will be necessary by reason of the exercise by this Parliament of its constitutional powers. When the people gave us the right to deal with currency, they intended us to take advantage of it so soon as it might be convenient to do so.
– Referring to the question put by the honorable member for Parkes, is it not a fact that the banks of Australia consider that they are not making a profit out of their note issue, because in most of the States they have to pay a tax of 2 per cent, on their notes ? If they make no profit out of their note issue they cannot be disadvantaged if we legislate to take from them the right to continue it.
– My own impression is that many statements have been made that the banks do not make a profit out of the notes. That, however, is their business, and does not affect my position at all. The tax is paid to the State Government whereever it prevails. It is 3 per cent, in Queensland, but I think the general rate is 2 per cent. The banks do not claim that ney will suffer any considerable loss if the Commonwealth takes charge of the currency.
– There seems to be some difference of opinion as to whether the Prime Minister or the bank managers who took part in the conference are most anxious to keep secret what took place there. Will the Prime Minister remove any embargo from publicity on the part of the bank managers who advised him on this question ?
– I cannot’ accept the question in the language used by the honorable member, to the effect that the bank managers came there to advise me. The bank managers asked to have an interview. I agreed to that, and preferred to have the meeting public. They preferred to see me privately. I willingly agreed to that, because they might have good reasons for it. I have no objection whatever to their giving their own version of what took place. No particular record was kept of the proceedings; in fact, I think the only record was a note taken here and there by the secretary to the Prime Minister. There isnothing to conceal, and the representatives of the banks can speak freely if they please. I am quite satisfied with the interview.
– Can the Treasurer give the House any idea as to when the new Works and Buildings Estimates wilT be tabled?
– As soon as the accounts, are balanced and the Estimates for the current year are approved the Works and1 Buildings Estimates will be submitted tothe House, and the earliest opportunity will be sought to secure their passage through Parliament.
– Will the Treasurer try to arrange for the unexpended balances; in connexion with Works and Buildings, particularly as regards the Post and Telegraph Department, to be treated in the same way as are the unexpended balances, in connexion with defence works?
– The same difficulties will not arise in future financial years as. have prevailed during the last nine years. A new set of circumstances will obtain, and’ the financial difficulties regarding the return of the balances will not be the same as. heretofore. Some new method of dealing with them may be inaugurated by legislation this session.
– Will the Minister of Home Affairs lay on the tablethe plans and specifications of the proposed Kalgoorlie to Port Augusta railway, prepared by the Governments of South. Australia and Western Australia, and submitted by Mr. Deane, the engineer who acted for the Government in the matter?I know that the papers are all in theDepartment, but I do not think they have been laid on the table of the House. If they have been, I have not seen them.
– If the papersare in the Home Affairs Department theywill be laid on the table to-morrow.
Scrutiny or List of Voters - Applications for Polling Places
asked the Minister of Home Affairs, upon notice -
With reference to his reply of Friday last, Sth inst., respecting the non-scrutiny of voting papers so as to discover if .any persons vote more than once -
As section 163 of the Electoral Act only provides for the sealing up of ballot-papers, does he think that the regulations, even if legal, should go further and provide for the sealing up of the lists of voters also?
Whether he thinks the sealing up of these lists without scrutiny or examination does not encourage unscrupulous persons to vote more than once? _ _ .
Is he aware that a scrutiny and examination of ail lists of voters voting at any election, with a view of discovering if any person votes more than once, has been for many years in force under the law in Western Australia, and that no trouble or delay has been experienced in carrying it out?
Will he have this matter investigated and considered when the amendment of the Electoral Act is being dealt with?
– The answers to the honorable member’s questions are as follow : -
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and a. All applications for the appointment of polling places, received in time to permit of action being taken, were fully investigated and dealt with on their merits. Thirty-three (33) additional polling places were appointed in the division of Hunter for the purposes of the recent elections.
Expedition of Works - Undergrounding of Wires between Bendigo and Eaglehawk.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
– With the qualification that only approximate figures can yet be given, as the balances are not complete, the answers to the honorable member’s questions are as follow : -
.- I move -
That in the opinion of this House the Commonwealth should forthwith take over the inspection and effective control of produce passing from State to State.
I make no apology for submitting this motion, because it deals with matters of great importance not only to a large number of producers, but also to a great many workers in the different States, and’ to a large body of consumers. It is important also because this Inter-State trade is of very considerable value and is likely to increase. According to the Commonwealth Year-Book, the apples, bananas, citrus fruits, pineapples, and other fresh fruits which passed between the States durirg 1908, were of the value of , £550,000. The Inter-State trade, in onions during the same period amounted to something like £114,000, and that in potatoes to £530,000. The article of produce most prominently before us in this regard at present is potatoes. During last session this matter was frequently discussed. Representatives of Tasmania, and of other States, addressed various questions cn this subject to Ministers, and speeches were frequently made by the honorable member for Darwin, myself and others, with the object of inducing the Commonwealth to intervene, and to prevent New South Wales and other States from excluding sound produce, fit for consumption, which had been shipped from Tasmania. We were told that it was a matter for the States themselves, and that there was no room for Federal intervention. Finally a difficulty arose between Victoria and New South Wales, and I pointed out to the Attorney-General of the day, that, on the facts disclosed, it would appear that New South Wales was acting unconstitutionally; that she was not only shutting out produce from other States on the ground that it was diseased, and that, therefore, its importation would be a violation of the Vegetation Diseases Act, but that her chief object seemed to be to preserve the local market to local growers, and that produce far inferior to that sought to be introduced from other States was being grown in New South Wales and consumed in Sydney.
– I do not believe that.
– That at all eventswas the point taken, and the then AttorneyGeneral said that if the facts were as stated, New South Wales was acting in an unconstitutional manner. He went on to point out, however, that, even if that were so, the Federation could not intervene; that the remedy was for the individual whose produce was rejected at the port of Sydney to institute an action for damages in the High Court against New South Wales. That was a check to further protests by the honorable member for Darwin and myself. We could do no more in the circumstances, but towards the close of the session, I brought up a proposal that the work of inspection should be taken out of the hands of the State authorities and handed over to the Federal authority. It seems to me that the restriction in regard to the Inter-State trade in produce of various kinds warrants Federal intervention. There is at present no certainty to the grower that even sound, wholesome produce grown in Tasmania will be admitted into Victoria, New South Wales or other parts of the Commonwealth. That state of affairs ought not to continue. Surely a man in any of the States should be able to place on the markets of Australia sound produce raised by him. Unless that can be done no encouragement will be given the small farmer. There is, moreover, no guarantee at the present time that produce, however good, produced in one State will be received in another. New South Wales and Queensland are now admitting produce- from Tasmania on terms that suit themselves. They can shut down on importations of potatoes and other produce from Tasmania whenever they please. Such a condition of uncertainty ought to be removed. At present, if a farmer in Tasmania wishes to introduce potatoes into Victoria, he has to prove not only that they are sound, but that they were grown at least half-a-mile from any infected area. In the case of Western Australia, he has to show that they were produced at least 50 miles from any infected area. It is estimated by those engaged in the trade that farmers on the north-west coast of Tasmania lost last year£20,000 In respect of the Western Australian market alone. That market used to take something like 2,500 sacks of potatoes per week, and, very often, when the eastern market was over-supplied it relieved the tension, and enabled prices to be kept at something like a fair rate.
– Does the honorable member allege that Western Australia has unfairly shut out Tasmanian produce?
– It seems to me that such a regulation as that to which I have just referred is unfair.
– We wish to keep Western Australia free from insect pests.
– The contention is that sound produce, and especially potatoes, grown within the Commonwealth should be admitted into any State. One of the .chief troubles in connexion with the potato growing industry is the disease known as Irish blight. That disease, however, exists, 1 believe, in every State, and therefore with a proper Federal system of inspection not much damage is likely to be done to any State by the adoption of my proposal. If produce sent from one State to another is properly inspected there will not be very much danger of the disease spreading. In August last the State Ministers of Agriculture and certain agricultural experts met in conference in Melbourne and framed regulations creating what are known as neutral zones. In other words, it was decided that potatoes should :not be sent from one State to another unless they were produced in districts a certain distance from any infected area. That was the arrangement made between the Ministers of Agriculture of the various “States, but it was broken within a week or two, and became inoperative; and at present the whole business is in a state of sixes and sevens.” Each State has different regulations, and, altogether, there :is a very unsatisfactory condition of uncertainty and bad feeling between the States which should not, of course, be in any way encouraged. If the Tasmanian inspector passes certain produce as fit for consumption that produce may be condemned at the port of entry. Only last year potatoes from the northern part of Tasmania were condemned at Sydney, but, after they had been re-shipped to the island State, and put into different bags, they were accepted at Sydney as of excellent quality. All this, as I say, only tends to breed the wrong sort of feeling between the producers of the various States.
– Does the honorable member propose to abolish inspection ?
– No j the remedy I suggest is that the work of inspection should be done, not by State officers, but by Federal officers, and that, on the cer tificate of the latter, the produce, whatever it may be, should be admitted.
– Would that not have the effect of largely taking over the Agricultural Departments of the States?
– The proposal I make would only affect produce passing between State and State; I am perfectly satisfied to leave all the power as to regulations within the boundary of a State to the State authorities. There must, however, be some control coupled with the inspection I suggest, in order to prevent produce passed by the Federal officer being quarantined by a State officer. If the Federal Inspector is satisfied, there should be sufficient control coupled with the inspection to insure that the produce shall be admitted into the market of the State.
– Does the honorable member desire to amend the Constitution?
– No amendment of the Constitution is necessary.
– Where does the honorable member suggest the inspection should be - at the port of entry or the port of shipment?
– At present there, is inspection at both ports, and I have no desire to lay down any hard and fast rule, preferring to leave the matter to the Federal authorities. At present the Government inspection is objected to as involving unnecessary expense, and I think that if the produce were inspected at the port of entry, the grower taking his chance, that might possibly be sufficient.
– Is the honorable member not a State Righter? Why does he propose this motion?
– This is not a question of State rights; all I am asking is that the Commonwealth should exercise a power which it already possesses under the Constitution.
– The honorable member wishes to make the States take “ spuds “ even if they do not desire to have them.
– No one is asking the States to accept anything but sound “ spuds.” At the present time there is no certainty that sound produce will be admitted to any of the. markets of the Commonwealth. I contend that the Federal Inspector would be just as careful to see that no State was imposed on as is any State officer to-day, and the people would be satisfied that there, was an impartial tribunal to judge as to the soundness of their produce. At present the same produce may be passed by the inspector of one State and rejected by the inspector of another; and if the State to which it is sent is known to have a good local supply, those forwarding the stuff feel that it is rejected, not because it is unsound, but because there is a desire to exclude it from the markets of the State to which it has been consigned. There is nothing Federal in such a feeling as that, and some remedy ought to be applied; and for that reason I am asking the statesmen on the front benches to do the right thing. Section 92 of the Constitution provides for InterState Free Trade, but, as things are, I submit that we have not that Free. Trade which we all expected when we entered the Union. Then section 109 of the Constitution says that where a State law conflicts with the Federal law, the Federal law shall prevail ; and, taking these two sections together, I am of opinion that under the Constitution the Commonwealth has power to undertake the work of inspection, and to exercise sufficient control to see that the produce that is passed is sound before it is permitted to go on the market for sale. Section 13 of the Quarantine Act of 1908, provides for proclamations on various matters by the Governor-General ; but that Act does not, I think, cover the ground - it does not go far enough. However, the late Attorney-General, the honorable member for Angas, gave an opinion which I am sure will receive the greatest respect from all members of the House; and to that opinion I invite attention. It was given on a question arising out of some proclamation or regulations concerning a vine trouble in South Australia ; and, though the main part of the opinion does not concern the question I am dealing with, it shows at the end, if I understand aright, that according to the learned gentleman, the Quarantine Act does not at present give us the power I desire in regard to inspection, but that, under the Constitution, we may take the power by simply amending the Act. That is the. procedure I suggest the Government should adopt. There are very large powers under the Quarantine Act, but they do not represent anything like all the powers we possess.
– The Government has too much power under the Quarantine Act.
– It has not as much power regarding the matter of which I am speaking as it should have, and, as I hope, soon will have. I do not wish action to be taken without a consultation with the State authorities. Possibly after such consultation some amicable arrangement may be arrived at; but the matter is of such importance to producers and consumers alike, that, if the States will not meet us, this Parliament should take action in the interests of Australia. If this is done, we shall insure the security and stability of producers who grow good, sound, marketable stuff, in every way fit for human consumption. There would be no risk of the greater dissemination of disease, because Federal inspection will be as rigid and efficient as that of the States, and possibly many of those who are now acting as inspectors for the .States will be engaged to do the same work for the Commonwealth. What I propose will secure a more constant supply of good food for the poor. Last year several members complained that their constituents were suffering because of the high price of potatoes and other nutritious foods of that kind. Owing to the severity of the regulations in force in Western Australia and in New South Wales, potatoes were then at a very high figure in both Perth and Sydney. The poor of New South Wales had to buy from local growers potatoes inferior to the stocks imported from Tasmania which were being rejected by the inspectors. It is the poor who are least able to help themselves, and we therefore should give consideration to means for supplying them with cheap and good food. We should also regard the interests of those who work on- the wharfs, and of the growers of produce and those whom they employ. The action I suggest would tend to remove the bad feeling engendered when the authorities of one State refuse to admit the produce of another. The State whose marketable commodities are rejected feels that it is being unfederally treated, and it should be our object to do all that is possible to “strengthen the Federal feelingWhat I propose will promote the harmonious relations of the States.
– I second the motion.
– 1 regard this as a very important motion, though the remarks of the mover make it appear that he thinks more of protecting the interests of the Tasmanian growers of potatoes than of effecting the good of the community. He complains that Tasmanian potatoes imported into New South Wales have been condemned by the inspectors of the latter State, but he also said that if the inspection . of produce passing from State to State were undertaken by the Commonwealth, some of the present inspectors would, in all probability, be appointed to do the Commonwealth work. Now, if the present State inspectors are not efficient, surely they ought not to be. appointed to do Commonwealth work. I believe that the inspection of imported potatoes has been very rigid in New South Wales, and that the potatoes refused admittance were rejected because found to be suffering from Irish blight. That justified their rejection. The honorable member for Wilmot contends that Irish blight is to be found in all the States.
– I said in most of them.
– If.it is to be found in them all, that furnishes a stronger reason why action should be taken by the local authorities to reject diseased importations.
– What I propose would not prevent that.
– Under the present system one State can prevent another from dumping inferior produce into its markets.
– Does the honorable member think it right that New South Wales should charge five or six times as much for the inspection as it actually c costs ?
– The question of charges was not mentioned by the honorable member for Wilmot, to whose speech I am replying.
– I overlooked it.
– The honorable member contended that the inspection of produce passing from State to State should be undertaken by the Commonwealth. I am surprised that a member of the party which is always charging the Labour party with being unificationists should ask us to take a step towards unification.
– I merely ask that the powers given to this Parliament by the Constitution shall be exercised.
– The honorable member is asking for the exercise of powers of which we have not yet availed ourselves. He wishes us to take from the States the right to exclude produce which their authorities declare to be unsound. That surely is an interference with the powers of the States, and a step towards unification. In my opinion, we have already enough to do. Let us put our house in order before wre take over powers which we have not yet exercised. At the time to which the honorable member referred, Irish blight was less prevalent in New South Wales than in any of the other States, but it was discovered that it had made its appearance in the Richmond district becau.se the seed potatoes used there had been imported. That in itself was justification for the rigid inspection of all importations. The honorable member said that the New South Wales inspections were made for the purpose of protecting the local market.
– I said that that was the impression in the mind of the public.
– Then it is a wrong impression. Does the honorable member think that a Government would prohibit the importation of such things as potatoes to make the price dearer to consumers? The action taken in New South Wales was taken with the desire of preventing the importation of diseased potatoes. If diseased potatoes were imported wholesale, and used for seed, Irish blight would spread throughout the States.
– The inspection which I propose would be as rigid as that which now exists.
– The honorable member has said that the Commonwealth would engage the services of the present inspectors.
– I said that it might do so.
– The honorable member told us that one consignment rejected in New South Wales was returned to Tasmania, rebagged there, and then sent back again to Sydney, where it was accepted. Are not those facts evidence that some inspector did not know his duty? When produce has been rejected, it should not be possible for it to be sent back again and passed. I cannot see what is to be gained by giving the control of this inspection to the Commonwealth, if the existing inspectors are to be used. Apparently the honorable member desires, not so much to benefit the public, as to extend the market for the producers in Tasmania.
– Are potatoes grown in the honorable member’s electorate?
– Yes. I do not object to the honorable member looking after the interests of his constituents, but other honorable members must have regard to the interests of the public at large, and uphold a system which tends to prevent the spreading of disease. The honorable member seems to think that anything grown in Tasmania should be accepted by every other State, but I hold that the inspection of produce passing from State to State cannot be too rigid, because all steps must be taken to prevent the spread of, and, if possible, to eradicate, disease. I know of cases in my own State in which farmers have lost an entire crop by the appearance of disease in it. In the interests of those men it is necessary that we should take every precaution to prevent diseased potatoes being supplied to them for seed purposes. Consequently I do not think the House would be doing right at this juncture in carrying a motion of this kind. The question is a big one, and has received consideration at the hands of the State Premiers or Ministers of Agriculture.
– And they all have different systems.
– They have made certain arrangements in regard to the matter and have tried to work amicably.. I hope they will be able to formulate some system which will be acceptable to all concerned. Whilst there is perhaps something in the honorable member’s contention that, with Commonwealth control, there would be no bickerings, I do not think the time is ripe for us to interfere. It is a matter for the States, which have their own systems of inspection. If the States consider it necessary to prevent the importation of any article of produce that may be detrimental to their own people, they have the right to do so, and, so far as the people in the particular State which takes action are concerned, they are the sufferers. The people of New South Wales suffered considerably and paid considerably more for their produce during the time that the importation of potatoes from Victoria and Tasmania was barred. There was sufficient pressure brought to bear on the Minister of Agriculture for New South Wales by the public at that time to induce the Government to let ‘the. potatoes in, and, if they could possibly have admitted them, they would readily have done so, because of the high’ price that the people had to pay. I can assure the honorable member for Wilmot that, so far as New South Wales is concerned, there is no foundation for his belief that the importations are shut out for the purpose of keeping the local market. New South Wales has a better Federal spirit than that, and the Government took action simply because they had to protect the growers and prevent disease from becoming rampant within their borders. I am against the motion at present, and, if necessary, shall vote against it.
.- The honorable member for Wilmot has merely exercised his right as the representative of one of the districts of Tasmania in bringing this very important question under the attention of the House, because we are all aware that last year the subject of Inter-State trade, particularly in the matter of potatoes, was frequently brought before the House by the members for Tasmania, who complained that Tasmanian producers and traders were not receiving fair play in some of the Australian markets.
– Why did not the Government of which the honorable member was a member give them that fair play and justice which he says that they demanded?
– I am merely drawing attention to those complaints. i am not at present saying that the method proposed to be. adopted by the honorable member for Wilmot, as embodied in the motion, is the correct one, but any member has a right to bring under the attention of the House complaints of the kind, to see whether the Constitution provides a remedy, or whether there are other legal remedies which ought to be resorted to. Whilst, no doubt, Tasmanian growers have complained of the treatment they have received, the question is still open to argument as to whether tHey have not a proper legal remedy for the redress of their grievances in the Federal Courts. The honorable member suggests in the motion that the Commonwealth should forthwith take over the inspection and effective control of produce. I do not think, as a matter of constitutional law, that the Commonwealth at present can take over the right of inspection, because, by the Constitution, the right of inspection in Inter-State trade is reserved to the several States. At the same time, even under the Constitution, no State can defeat the principle of InterState Free Trade by fraudulently or improperly imposing inspection laws. i think if any State endeavours, under the pretended exercise of the inspection powers, to interfere with the principle of Inter-State Free Trade, a remedy exists at the present time without any amendment of the Constitution. During the controversy last year, I suggested to the honorable member for Darwin, when he brought the matter before the House, that the remedy of the State or the producers of Tasmania lay in challenging, in the Federal Courts, the inspection laws of Victoria or New South Wales, on the ground that they were excessive or unfair, and mere evasions of the principle of InterState Free Trade. That is quite clear under the Constitution of the United States, and equally clear under our own. In
Prentice and Egan’s Commerce Clause of the Federal Constitution, at page 157, the following passage occurs : -
The amount of the charge which a State can lawfully impose for inspection is by the Constitution limited, in the case of foreign commerce, to such sum as is absolutely necessary for execution of its inspection laws; and so long as the charge imposed is of an amount which can reasonably be considered an inspection fee, a Federal Court will not determine the question whether it is excessive. In all these matters State legislation is subject to the revision and control of Congress, by whom alone the question is determined whether an inspection charge is excessive. It is, however, the function of any Court, before which the question may arise, to determine whether or not a charge imposed by the State under the guise of an inspection law is, in its nature, an inspection fee or a tax.
So that, as I told my honorable friend last year, the producers of Tasmania, through the Government of that State, could have tested the question of the legality of the so-called inspection laws of which they complained. At’ the same time, in addition to that legal remedy, this Parliament can annul any inspection laws which are complained of, as invading the principle of Inter-State Free Trade. I do not think we can, constitutionally, take from the State authorities the right to themselves inspect in the first instance. There cannot be such officers as Federal inspecting officers, because that would be practically annulling the Constitution. The State authorities have, in the first instance, the right to consider and to challenge any proposed importations or introductions of goods, which they say do not come within the principle of freedom of trade. True, we have the principle of absolute freedom of trade between the States affirmed by the Constitution ; but that means freedom of trade in goods, wares, and merchandise which are capable of going into trade and commerce. There Can be no trade or commerce in diseased commodities. I presume that no State asks, or pretends to affirm, the right of forcing diseased productions into the markets of another State. I do not think that any State has the right, on the other hand, under the pretence of excluding diseased productions, to exclude productions which are honestly healthy commodities, fit to go into trade and commerce. I think that, as a matter of practice, as well as constitutional law, if any Tasmanian trader could prove to the High Court that he presents, say, to the State authorities in New South Wales or Victoria, trade and commerce, in the shape of potatoes or fruit, which are really and truly healthy, and cannot be suspected of being diseased, he could claim the right of entry for them, and they could not be kept out by the imposition of an inspection fee, or by any false charge of being diseased. It is all a question of fact; and the problem is, “ How are you to establish a tribunal to deal with all these importations?” You have a number of experts in the port of Sydney or Melbourne saying that, in their opinion, certain potatoes or fruit are diseased, or show signs of disease. On the other hand, you may have other experts affirming that those potatoes or fruit show no signs of disease. It is not a question of legislation, but of fact. How are you to reconcile the conflicting opinions of experts? A regulation passed, say, by Victoria or New South Wales, that no fruit or potatoes coming from any spot in Tasmania within a certain radius of a suspected area shall be admitted, may be well open to challenge as to whether it is legal, because that produce may be fairly honest fruit or potatoes, free from disease. The importing State might, however, well say that if an area is known and established to be diseased, nothing coming from that area shall come in, because there may be prima facie proof or presumption that it contains the bacteria of disease. That, again, involves a question of the opinion of experts, and no legislation can deal with it. It is all a question of the tribunal which has to decide. I rose merely to say that the motion, if carried, would be quite ineffective, because it would invade the principle that all the States have, by the Constitution, the right of inspection, and the right to exclude diseased matter of any kind. At the same time they have no right, under the pretended exercise of that power, to exclude honest trade. The problem is to reconcile the conflicting rights of the exporting State and the importing State. It may be a matter for negotiation between the Federal Government and the State Governments to establish a neutral tribunal to deal with all these questions. On the other hand, if any State representative can point to any law that, on the face of it, appears to be unfair, or to be a sham exercise of the inspecting power, let him bring it under the attention of the Minister of Trade and Customs, and if he can show that it is an unfair exercise of the inspecting power, that law can be annulled by this Parliament. There are, therefore, two remedies - first, the judicial remedy in the High Court, where you can prove that an inspection law is on the face of it unfair; and, secondly, the remedy that this Parliament can annul any State inspection law interfering with the principle of Inter-State Free Trade. It is unnecessary at this stage to go further than to say that the motion will have the effect of drawing attention to the matter. It will be far better that a friendly understanding should be arrived at between the various States upon the subject than that there should be any suggestion of coercive legislation by the Federal Parliament, or any attempt to stir up strife, or animosity, or jealousy between the States.
– The motion is that we take over the power of inspection.
– I do not think that can be legally or constitutionally done.
– The honorable member for Wilmot contends that if we carry the motion, it will mean that we do take that power over.
– It will be quite ineffective, because we cannot take it over.
– I submit that we can, by amending the Quarantine Act.
– I do not think that the Quarantine Act can interfere with the principle of Inter-State Free Trade, or the inspection powers of the States. Good, however, will result from the honorable member’s action in presenting the case by drawing the attention of the State authorities to it. It is most desirable that the State authorities should receive a friendly warning that they ought not to push their inspection rights so far as to interfere with the principle of Free Trade.
– Some of the States have in the past, not only by these regulations, but by harbor regulations, limited tge effect of the Inter- State Free Trade section of the Constitution.
– Those harbor regulations, if they amount to taxation interfering with the principle of Inter-State Free Trade, will be challengeable by any trader, and also, I think, by the Federal Government. No doubt the Federal Government have to exercise a watchful care over the mandates of the Constitution, and that can be done by correspondence with the various State authorities without resort to any unfriendly act on our part. There are numerous remedies open to us without making such a fundamental and organic alteration as is proposed in this motion.
– As a representative of a little State, much concerned in the export of her products, I wish briefly to address myself to this important question. It was my intention to move in the matter as soon as I became possessed of certain knowledge, which I could not obtain without consulting the legal fraternity, and I was heartily glad when I learned that the honorable member for Wilmot proposed to take action. Tasmania is suffering considerably owing to the restrictions placed upon her produce by the other States of the Union. I wish at this stage to put the House right as to my competency to speak to a question of this kind. When I was addressing the House a few days ago the honorable member for Franklin was good enough to interject, “ What does the honorable member know of the land question?” From that interjection it might be assumed that it was presumption on my part to deal with this matter. I wish, however, to tell the honorable member for Franklin and the Hobart Mercury that I was brought up on the land, and know the North Coast well. If the honorable member will accompany me- to the farm carried on by my uncle at Burnie, he will find in that gentleman a farmer who is also an expert in diseases affecting potatoes. Mr. Laird informed me, on the occasion of a visit that I recently paid to him, that he hoped in a very short time to be able to produce a blight-proof potato. He is now conducting experiments, and hopes to bring them to a successful issue. Honorable members will recognise, therefore, that I do know a little of the farming industry.
– The fact that the honorable member has an uncle on a farm does not make him an expert.
– But since I followed the plough, during my school holidays, and engaged in planting potatoes in order to find the money necessary for the purchase of books to complete my education, I think it will be admitted that the honorable member’s interjection is quite beside the mark. I make no apology for earning an honest living.
– The honorable member for Franklin ought to apologize.
– I think that he ought to do so. I should like to see how he would get on if he had to follow the plough. The people of Tasmania are of opinion that the products of that State are being excluded from other, States of the Union, not because they are diseased, but because they compete with the produce of local farmers. What we wish to do is to remove the inspection of produce from parochial influences. It would be impossible for local men to influence a Commonwealth officer, as they do influence a State officer. Only the other day a press representative was before a Tasmanian Court for having made, through the press, certain statements to the effect that the then Premier of Tasmania, Captain Evans, had visited the wharfs, and interfered with the inspection of fruit, against the will of the State inspector. Parochial influences are exercised in every State, and we wish to remove them. Tasmania entered into the Federation believing that there would be Free Trade between the States. Can it be said that InterState Free Trade exists when the farmers of one State are able, through the State Government, to bring influence to bear upon inspectors to secure the condemnation of certain products from another State? Such a condition of affairs is most unjust. The Commonwealth is better able to secure efficient inspection than the States are. The honorable member for Wilmot has made out a very good case, and I hope that his motion will receive the support that it deserves. I shall certainly vote for it.
– This question is not new to the House, It arose in the first instance owing to the action taken by New South Wales in regard to produce exported from Queensland to that State. When the Reid-McLean Administration was in power a regulation was passed in New South Wales precluding from the port of Sydney all agricultural produce from Queensland. That regulation was framed because one or two cases of bubonic plague had occurred in Brisbane, and produce from Queensland, although it never went near Brisbane, or within the infected area, was absolutely excluded. A protest was made against this action, and on behalf of several bodies concerned I addressed a letter on the subject to the Minister of Trade and Customs. It was pointed out in the correspondence that if a State, under the guise of exercising its inspection laws, was really prohibiting far beyond the area necessary for its purposes the importation of produce from another State, it was enforcing to an unreasonable degree the police powers reserved to it, and acting contrary to the principles of the Constitution. Shortly afterwards the State authorities of New South Wales relaxed that rule, and regula tions were made to try to meet the specific grievance that had to be faced. Recently we had the same trouble in regard to the export of fruit from Brisbane, bananas sent from Queensland to this State having excessive restrictions placed upon them. -I should like to say, in passing, that we ought not too hurriedly to condemn the action of the States in this regard, because the industries of a State represent the livelihood of the people, and some of these insect pests, if allowed to spread, would destroy its primary interests. It therefore becomes absolutely necessary for a State to exercise, in the first instance, perhaps, with excessive zeal, its powers in this regard, in order that its industries may be protected from destruction. There is, however, no justification for the continuous use of the power in such a way as practically to exclude the produce of another State from its legitimate market.
– Very often a State quarantines whole areas within its own boundaries.
– That has to be done. In Queensland, for instance, under the Tick Act, there is power to proclaim different parts of the State as prohibited areas. The honorable member for Brisbane will bear out my statement that one cannot move from place to place within those areas without taking what are certainly proper, but, at the same time, extraordinary, precautions. The question was again raised by the honorable member for Parramatta in connexion with the export of fruit from New South Wales to Western Australia. On that occasion the complaint was not as to the actual inspection, but as to the excessive inspection fees charged. The State authorities of Western Australia were not displaying that broad Federal spirit that we should have expected had they been led by the right honorable member for Swan, and they imposed inspection charges that were about the same as the import duties passed by the Commonwealth Parliament. The matter was brought prominently before the House, and the honorable member for Franklin was among those who urged that action ought to be taken1. The Commonwealth Government immediately drew the attention of the Government of Western Australia to these excessive charges, and, although the fact may not have been expressly mentioned, we recognised that we had power under the Constitution to claim all fees that were paid, over and above the amount actually necessary to cover the cost of inspection.
– We have that power under section 112, and we can also annul an inspection law if it is unreasonable.
– That is so. The position in regard to the export of potatoes from Tasmania to the mainland was brought before the House in a very forcible manner by the honorable member for Wilmot. The whole question was discussed when the Quarantine Bill was before us last session.
– Why did not the honorable gentleman do something ? He was in office at the time.
– I have shown what was done. I have already explained that the regulation in force in New South Wales was altered, and the regulation in Western Australia, of which complaint was made, was also modified.
– Why did not the honorable member, as a member of the late Government, take the action which the honorable member for Wilmot now proposes shall be taken ?
– I was only one in a House of seventy-five members. When the Quarantine Bill was before us there was a general consensus of opinion that the Commonwealth powers in regard to the quarantine, both of animals and goods, should be confined to oversea importations. We acted in accordance with that expression of opinion. It was felt that we had a reserve power to intervene at any time, and that that power should, if necessary, be exercised. It was a moot question, however, as the honorable member for Bendigo has pointed out, as to the extent to which our power to regulate Inter-State Trade would enable us to interfere with the reserve police powers vested in the States ; but the balance of opinion was that the Commonwealth had power to take the action I have mentioned, so far as Inter- State trade is concerned. That power is exercised freely, and with advantage, by the United States of America, and I believe that we enjoy it to an exactly similar extent. For the time being, however, if the States are willing, as they appear to be, judging by the result of the recent Conference in regard to diseases affecting potatoes, to bring their regulations into conformity, we should give them an opportunity to do so. If it should appear that they are not prepared to do so, and that they are going to exercise their powers to an unreasonable degree, the Commonwealth power should be brought into operation; but until such an intention on their part is shown, however, I do not think we should take action. The honorable member for Wilmot has done right in bringing this matter before the House, and in endeavouring to secure such reasonable inspection laws as will tend, whilst securing Inter-State Free Trade, to pre-: vent the spread of diseases likely to injure the primary industries of Australia.
– When the honorable member for Wilmot gave notice of his motion, I consulted the AttorneyGeneral’ as to whether we had the power to do what is proposed without an amendment of the Constitution, and I believe that not only my honorable colleague, but his predecessor, the honorable member for Angas, agreed that it was quite possible that we had that power and could exercise it, by legislation, without an alteration of the Constitution. I, for one, agree with the remarks of the honorable member for Darling Downs that the Federal Government should be very reluctant to interfere, in cases of this kind. We should do all in our power to induce the States to carry out the inspection laws and the quarantining of goods in a manner not so harsh as in some cases in the past. In the early days of Federation it was well known that the Western Australian Government imposed such heavy wharfage rates and enacted such inspection laws as to actually amount to a prohibition of goods from the eastern States.
– Only certain goods - fruits that were all rotten.
– I heard quite another tale when I was in Western Australia from some orchardists, who happen, by the way, to live in the right honorable member’s electorate. These rates and regulations had the effect of shutting out produce from Tasmania, South Australia, New South Wales, Victoria, and, I believe, Queensland, and gave the local orchardists a practical monopoly. Since that time, however, the regulations have been relaxed and the charges reduced.
– The Federal Government intervened.
– Yes ; I think it was at the Hobart Conference of Premiers that a resolution was carried dealing with the matter of the charges made by harbor authorities and others. The honorable member for Wilmot has served a good purpose in showing that the members of this
Parliament are alive to the question. On many previous occasions, on the adjournment of the House, the matter has been referred to.
– Not this particular point of inspection.
– No ; but the question of the shutting out of Tasmanian potatoes by Victoria and New South Wales was discussed in September, October, and November last, though it has never been debated as to-day on a specific motion. It will be remembered that certain States have not only shut out the produce of other States, but have, in many cases, quarantined areas within their own boundaries. I heard from the Minister of Agriculture of Victoria last week that in the electorate, I think, of the honorable member for Flinders, a whole area had been quarantined on account of disease having appeared on a little patch in one gully. It is probable that the farmer himself did not know the disease’ was there, but he and his neighbours have all to suffer on that account. If the farmers of the north-west of Tasmania have undergone any hardship, they are not alone, though that, of course, is not much consolation ; at any rate, they know that the laws of the various States are enacted for the purpose of endeavouring to free Australia from disease. If that can be accomplished, however harsh the inspection laws may be, good service will have been done to the country.
– But that refers to inspection inside each State.
– If the honorable member by his motion means to abolish State inspection altogether, not only of oversea goods but of Inter- State goods, we shall be taking a step which has not up to the present time even been contemplated by this or any previous Government.
– I refer only to inspections at the port of entry, and do not wish to interfere with goods from oversea.
– I am not sure that we shall not at some time have to take complete control of commerce, not only oversea but Inter- State, thoughI do not think that time has yet arrived.
– That is another question.
– Quite so ; but the honorable member is asking that the inspection shall be taken out of the hands of the State officers and vested in Federal officers, although he should know that there is not a single Federal officer employed even under our Commerce Act at the present time. All fruit exported from Tasmania is inspected by State officers who are paid by the Federal Government; and what applies to Tasmania applies to every other State.
– That only has reference to goods which go outside the Commonwealth.
– Yes ; but if it is true of goods which go outside the Commonwealth, we certainly do not exercise any inspection over those transferred within the Commonwealth. As a matter of fact, we should probably have the same officers doing theinspection as at present.
– We have the same men making both inspections now.
– But there would be this difference, that the Commonwealth would pay the inspectors instead of the States.
– We should be getting the inspection fees which go to pay the salaries of the officers.
– We get no fees at present, though I trust that will be remedied in the near future.
– There ought not to be any profit made out of the inspection.
– No; but the inspection should pay for itself. However, that is another question, with which I do not desire to deal now. The honorable member for Wilmot, when an honorable member was referring to fruit which, after being rejected at Sydney, was passed on a second’ presentation, interjected - “ The bags may not have been seen on the second occasion.” If the inspection is so lax as would appear from the interjection, I certainly think it forms the best argument in favour of thie motion; but I do not think the inspection is so lax.
– I only said that to illustrate the present state of affairs.
– But it is somewhat dangerous, when we suppose the inspection to be fairly effective, to make such a suggesr tion.
– I did not say there was no inspection, but that these particular bags had not, perhaps, been inspected; every bag is not inspected.
– Quite so; just in the same way as only certain boxes of export butter are examined. As a result of this debate, I shall refer the matter to the Attorney-General. This, of course, is not a party question in any sense; on all sides honorable members are anxious that the producers should be able to send their pro duce all over Australia, and that no State should seek to interfere with that freedom by means of regulations. If any honorable member will bring under my notice exorbitant charges or unfair regulations, either I myself or any other Minister concerned will be glad to assist in having the Constitution interpreted as was intended, so as to make Inter-State commerce absolutely free.
– The Minister will take some steps to inquire into the particular subject of the motion?
– I shall.
I am glad this matter has been brought before honorable members. On many occasions it has been discussed; and the Minister of Trade and Customs is quite correct in saying that at one time the Government of Western Australia imposed such charges on the introduction of fruit especially, as to amount to a prohibitive protective duty. I then considered it only right to bring the matter under the notice of the Federal Government of the day ; and thereupon the Government of Western Australia were distinctly told that they must not levy charges beyond the actual cost of inspection. In New South Wales the question has arisen again ; and here I must say that I always speak of that State with the very greatest gratitude. We cannot forget that in the pre- Federation days good old New South Wales opened her ports to Tasmania, and traded with us when other and closer States shut out everything that we produced. To-day Sydney is unquestionably the best market Tasmania possesses. It may surprise honorable members to learn that Tasmania will this year ship to Sydney, including, of course, the transhipped Queensland trade, as many apples as are shipped to London, namely, half-a-million bushels.It will be seen, therefore, that, as I say, New South Wales is our best neighbour and our best market ; but, at the same time, the Government of that State insist on a system which is distinctly unfair to the producers. For instance, it is demanded that there should be one inspection at the port of export and another at the port of entry. The majority of honorable members, if not all, will, I think, agree that there should be left in the hands of any State the most full and complete power to prevent the importation of rotten or diseased produce from one State to another, with the inevitable loss and spread of desolation. But we contend that an inspection at the port of entry is all that is necessary, and that New South Wales could best defend her produce and her industries by inspection at her own ports. The same applies to other States; but the position which the New South Wales Government have taken up is that, unless the produce sent from Tasmania is accompanied by an export certificate, it must be treated in a very much more severe way, thus making the cost exceedingly heavy. For months we have been endeavouring to get the Minister of Agriculture of New South Wales to regard this matter in the same light as it is regarded by the Governments of other States - to agree that the charges levied for the inspection shall be no more than the actual cost. As a matter of fact, New South Wales is charging fees which are enormously in excess of the cost of inspection, and is thereby making a profit; whereas the argument of the Minister of Agriculture is that the Department is being run at a loss, and cannot afford any reduction.
– There will be a change of Government there soon !
– I do not desire to go into that question. It will be of distinct advantage to the Governments who are dealing with this matter to know that the subject has received the attention of the Federal Government and the Federal Parliament. As to the constitutional aspect, I have here the paper which, at my request, was laid on the table of the House, containing the opinion of the late AttorneyGeneral, the honorable member for Angas, who has dealt with the subject at considerable length, and with the pains he bestows on all he undertakes. It may be interesting to read this paper, giving that honorable gentleman’s deliberate opinion, in which he shows quite conclusively that the Federal Government has full power to deal with the matter, so long as the whole question is taken into consideration. That opinion is published in a Parliamentary paper available to honorable members, and I suggest that they give it consideration. I hope that the Governments of the States will take notice of this discussion, and recognise that if they continue to place restrictions on InterState trade which harass and embarrass the producers of anytate, a higher authority may intervene to prevent this injustice. It is well known that it is practically impossible to obtain in Victoria to-day a Queensland banana which can be termed eatable, because the State regulations for the prevention of the introduction of the fruit fly prohibit the importation of fruit that has not been cut when so immature that it can never properly ripen. These regulations have killed the banana trade, so far as the Southern States are concerned, and affect prejudicially, not only those who grow bananas in Queensland, but also the consumers here, many of whom regard this fruit as one of the most wholesome foods obtainable. If one desires a good banana nowadays, he has to buy a Fijian banana. The object of Federation was to secure the freest exchange of products between all parts of Australia, and if, by exorbitant charges and unfair regulations, Governments or officials place an embargo on Inter-State Free Trade, the constitutional powers of the Commonwealth will be invoked to give full play to the Federal spirit, which should never have been thwarted.
Debate (on motion by Mr. Livingston) adjourned.
– I move -
That this Bill be now read a second time.
The introduction of a measure such as this was contemplated by the framers of the Constitution. The main provisions of the Bill have been discussed perhaps more than any other matter which has come within the scope of Federal politics, and, during the recent electoral campaign, was probably debated from every platform. The provisions of the Bill are so simple that honorable members will have no difficulty in expressing their opinions concerning them with brevity, and I hope that the second reading may be agreed to during the sitting. The Constitution requires that for the first ten years of Federation, the Commonwealth shall return to the States not less than threefourths of the net Customs and Excise revenue. In 1908 ‘we passed the Surplus Revenue Act, to enable us to put to the credit of a trust fund or funds unspent balances of the one-fourth which the Commonwealth is entitled to retain for its own purposes. The Bill amends that Act, so far as is necessary to enable our present proposals to be carried into effect. It provides that, for ten years, from 1st July last, there shall be paid to the States an amount equal to 25s. per capita, and that for this purpose the number deemed to be the population of each State shall be that estimated by the Commonwealth Statistician as its population on the 31st December in the financial year in respect of which any payment or debit is to he made. The State of Western Australia is to receive also for the first year an additional £250,000, but in each subsequent year this special allocation is to be progressively diminished by £10.000. One-half of the amount of these special payments is to be debited to all the States, including Western Australia’, in proportion to the number of their people, the Commonwealth paying the remaining half. There is a proviso to give effect to the agreement between the Governments of the States and our predecessors that those States which paid old-age pensions should contribute jointly with the other States to the deficit of the last financial year in the ratio of three to two. It is, therefore, provided that for the financial year ending 30th June, 191 1, the following amounts shall be deducted from the payments to the States concerned: - New South Wales, £l%>973i* Victoria, £143,092 ; Queensland, £63,788 ; South Australia, £30,529; Western Australia, £20,113; a”d Tasmania, £13,505. These sums total £450,000, which is approximately what the amount of the deficit on the Commonwealth accounts for the financial year ending 30th June last will be.
– Under what authority will these deductions be made?
– The deductions will be made in the exercise of the powers vested in this Parliament. What greatly influenced Ministers, and especially myself, in the adoption of this provision was the agreement between the representatives of the Governments of the States and the representatives of the last Commonwealth Government to do what we provide for. In conference, those representatives expressed their willingness to ‘ do this, and made their intention plain in a document which they all signed.
– Can we provide for these deductions without an amendment of the Constitution?
– The Constitution empowers us to legislate regarding the manner in which the Customs and Excise revenue shall be distributed after the 1st January next.
– But the Bill is providing for a distribution which is to take place on 1st July of this year !I cannot see how that can be done, unless the States agree to it.
– I speak with the greatest diffidence as a layman in replying to honorable members who belong to the learned profession of the law; but I am of opinion that the statement in the Bill is clear, definite, and direct. Clause 4 lenves nothing in doubt.
– Except whether it is . constitutional.
– If it is unconstitutional, the remedy is easy. It provides -
The Commonwealth shall, during the period of ten years beginning on the first day of July, One thousand nine hundred and ten, and thereafter until the Parliament otherwise provides, 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 Twenty-five shillings per head of the number of the people of the State.
In my opinion, that covers the legal difficulty which the honorable member for Flinders has raised.
– It was a constitutional question that was raised.
– The constitutional question does not arise. We propose that from the 1st July of this year, for a period of ten years, the Commonwealth shall pay to the States 25s. per capita, and pay it annually.
– Of course, that can be done after the 1st January next year.
– It anticipates the constitutional provision by six months.
– I should be more stupid than I look if I thought that we could pay less than three-quarters of the net Customs and Excise revenue to the States during the first six months of the current financial year. I am under no such hallucination. But, at the same time, it is, I presume, a right thing for this Parliament to pay that amount during the first half of the financial year, and then during the second half arrange the payments in such a way as to enable the net 25s. per capita to have been paid to the States during the whole of the financial year.
– Well, that is what the Bill says, and what the Government mean to do.
– The provision was for monthly settlements, on the threefourths basis, for the rest of the current calendar year.
– The honorable member is not on sound ground even in that matter. The High Court has held that it need not necessarily be an exact balance. It has never hinted that it would be wrong or unjust for the Federal Parliament to pay more than the monthly balance. That is all that we propose to do. We say that if the States insist upon their legal rights - upon having the full three- fourths of the net Customs and Excise revenue during the first six months of the current financial year - it shall be paid to them. But I venture to say that it is not asking too much of them, and it would not be an exceptionally generous act on their part, if the State Governments came forward boldly in their Parliaments and said, “ The Commonwealth has taken over large obligations, including old-age pensions and defence, which are absolutely necessary, and has relieved us of that great load, and we are therefore prepared to allow the Federal Parliament to take all the amount above 25s. per capita during the whole of the financial year beginning on the 1st July, 1910.” If they did that, they would be doing nothing more than they pledged themselves to do, and endeavoured, on the platform, to induce the people to consent to.
-That would have to be done by Act of Parliament.
– I admit that. They would have to go to their Parliaments; but there would be nothing wonderfully generous in their doing it.
– The proposal of the Government means that the States will get considerably less than 25s. per capita in the second half of the financial year.
– What a discovery ! I have been explaining that for the last ten minutes. Everybody knows that that is the proposal.
– It should be known, too.
– If it is an injustice, I should like to know how it arises. If the Commonwealth is prepared to pay, during the first half of the year, probably two-thirds of the amount for the whole year, the difficulty is the Commonwealth’s and not the States’ ; and, therefore, the States should be very glad to receive it, in view of the action of the Federal voters at the last election.
– So they ought ! Codlin is their friend, not Short, after all.
– If the Government err at all as regards this proposal, they err on the side of generosity, and not on the side of parsimony to the States. I put my name to a manifesto to guarantee to the States, by an Act of the Federal Parliament, so far as my power would carry it, 25s. per capita for ten years, with a great deal of hesitancy and reluctance; but, having done that, and having placed that proposal before the electors, with any weight that I might have individually, and as the leader of a great party, I mean, so far as I am able, as a public man, to stand by it. It is in that respect that I say that our proposal is exceedingly generous from the States’ point of view.
-It is a composite of generosity and meanness.
– My reply to that is the following document, a copy of which I hold in my hand : -
Agreement on Commonwealth and State Finance and Summary of Resolutions Agreed to by the Conference.
Commonwealth and State Finance. - Agreement between the Prime Minister of the Commonwealth and the Premiers of the several States.
In the public interests of the people of Australia, to secure economy and efficiency in the raising and the spending of their revenues, and to permit their Governments to exercise unfettered control of their receipts and expenditure, it is imperative that the financial relations of the Federal and State Government - which under the Constitution were determined only in part, and for a term of years - should be placed upon a sound and permanent basis.
It is therefore agreed by the Ministers of State of the Commonwealth and the Ministers of the Component States in conference assembled to advise : -
I think that language is similar to that contained in our Bill -
That is, the financial year which closed on the 30th June last - withhold from the moneys returnable to the States such sum (not exceeding Six hundred thousand pounds) as will provide for the actual shortage in the revenue at the end of the said year. If such shortage amounts to Six hundred thousand pounds the basis of contribution by the States shall be Three shillings per head of population in the Pension States (viz., New South Wales, Victoria, and Queensland)
The States that were paying old-age pensions prior to the Commonwealth taking over that burden - and Two shillings per head of population in the Non-pension States (viz., South Australia, Western Australia, and Tasmania). If such shortage be less than Six hundred thousand pounds the contributions shall be reduced proportionately per head of population as between the Pension and the Non-pension States.
Alfred Deakin, Prime Minister of the Commonwealth of Australia.
State Parliament House,
Melbourne, 20th August,1909
– Am I to understand, from honorable members opposite, that this is not a proposal to meet the exigencies and necessities of Commonwealth finance?
– Itw as an ordinary bargain - a quidpro quo. You cannot have the quid unless you give the quo.
– An ordinary bargain - a quidpro quo - between the elected representatives of the Commonwealth and the States? They made the error of thinking that the people desired to put that agreement into the Constitution. The people said, “ No; we shall not put it into the Constitution, although we take no exception to the terms of the agreement itself.”
– Oh, no ! They wiped it all out.
– The answer to that interjection is to be found in the members on this side, and an even more effective answer is to be seen on the other side of the Chamber.
– That is the proof of the rejection of the whole agreement.
– No ; those who sit here, with one or two exceptions, accepted the ten years’ proposal.
– Not one in Western Australia proposed the ten years’ term.
– One candidate in Western Australia who wished the agreement to be permanently embodied in the Constitution utterly failed in his candidature, but we stood against itbeing placed in the Constitution under any conditions whatever. There is not one honorable member on this side of the House who was returned except on that understanding.
– Several honorable members on this side of the House were returned on the same terms.
– I am glad to know that that is so, and I thank those who, quite apart from any consideration of party, held with the Labour party that it would be disastrous to the Commonwealth and the States alike to place the Financial Agreement in the Constitution. Surely the honorable member for Flinders would be the very last to say that this was a political bargain and not a genuine agreement to meet the financial necessities of both parties.
– It is an insult to all who made it to say that it was not genuine.
– The honorable member for Parramatta says that it was a genuine agreement.
– A genuine bargain genuinely made.
– I have never in my bitterest moments alleged that it was otherwise.
– The honorable member said just now that it was a political and not a genuine bargain.
– The honorable member is under a misapprehension. I asked the honorable member for Flinders whether he would say that it was a political arrangement and not one honorably entered into for national purposes.
– It was an honorable bargain honorably entered into, like any other agreement might be.
– But the honorable member says that there was a quid pro quo. As between whom?
– The States and the Commonwealth.
– As between representative men and not in their own interests. What power had they, apart from the interests of the people, to make this bargain? We appealed to the people, and they said by a very substantial majority in each State that the men who had made the agreement utterly misunderstood their sentiments and views. As to the terms of the agreement itself, however, excepting the proposal to embody it in the Constitution, they were prepared to accept them because they were fair.
– The honorable gentleman cannot very well rely on the terms on one side of the agreement when he does not give effect to the terms on the other side. That is all I contend.
– Very well. That statement is received with a chorus of approval on the part of honorable members opposite. What does it mean ? The honorable member assumes that the ten years’ period for which we say this agreement should continue is unreasonably short. Is it absent from his mind that one of the strongest arguments used by two or three of the State Premiers was that it would be much safer to put the Financial Agreement into the Constitution because the people could remove it at any moment? The ex-Prime Minister said that to guarantee this payment for a period of ten years might be embarrassing to this Parliament. The honorable member for Flinders shakes his head.
– I do not agree with that.
– I am sure that the honorable rnember does not, but that was the plausible story told to the people in order to induce them to agree to the proposal of the late Government that the Financial Agreement should be embodied in the Constitution. Surely if that was the view they held we are entitled to ask that effect shall be given to the terms of this agreement. If any blame attaches to me in undertaking to pass an agreement of this kind to operate for a period of ten years, it is thatI err entirely on the side of generosity.
– There is not much generosity, so far as Western Australia is concerned, in the Government proposal. That State will lose very considerably under it.
– That was also said in our State. Thousands of votes were cast against the Financial Agreement in New South Wales on the score that it was not generous enough.
– Order. I must ask honorable members to cease these constant interjections. The Prime Minister has a task to perform, and I ask honorable members to allow him to perform it in his own way.
– Subject to Mr. Speaker’s ruling, I am glad to listen to relevant interjections, because I recognise that associated with this question are many avenues that might well be investigated. Let me take, first of all, the statement of the honorable member for Perth that under our proposal an injustice will be done to Western Australia. I am surprised at such a statement. Western Australia will not contribute per capita anything like what some of the States will have to do, andI do not understand his interjection. Generally speaking, the honorable member is able to express a reasonable opinion on matters of this kind, but his interjection is entirely erroneous, as the most casual investigation of the figures will show.
– Indeed, it will not.
– I am speaking from memory, but I venture to say that under this scheme the largest contributor per capita to the cost of the Commonwealth Government will be Queensland, and that
New South Wales will be second on the list.
– New South Wales will he first.I have the figures up to date. New South Wales will contribute £350,000.
– The honorable member is off the track. I am speaking of the per capita contribution. Each and every person in a State subject to two limitations will bring from the Commonwealth to that State an income of 25s. per annum.
– There is a table in the Budget papers dealing with the per capita contribution, and showing the difference which the Financial Agreement would make in the returns to the various States.
– Let us take the position of Western Australia, and assume that its income last year was£3 5s. per capita. Under this arrangement that State will receive 25s. per head of its population, leaving 40s. to be accounted for. It will also obtain what will be equal to about 17s. per head of the population out of the special grant of£250,000 which it will receive during the next year, leaving a balance of 23s. Now take Queensland. That State, I think, will contribute nearly 28s. per capita, and the position of New South Wales will be practically the same, so that there will be a difference of 5s. per capita between the contribution of Western Australia and the other two States to the expenses of the Commonwealth. In these circumstances, how can it be said that Western Australia is to be unfairly treated? I am sorry that I have not before me a table setting forth the exact figures, and that I have to speak entirely from memory so far as this phase of the question is concerned.
– There is a table in the Budget papers showing how the surplus will be distributed.
– I am talking, not of the surplus in the aggregate, but of the surplus per capita under this Bill. After this digression, I propose to complete the reading of the agreement made between the late Government and the State Premiers -
Vesting in Commonwealth by States of Certain Powers in respect of Industrial Matters.
When the Court of a State determines on complaint of an industrial tribunal that -
Advertising Australia Abroad.
That, in the opinion of this Conference, it is desirable that the ocean lights be taken over by the Commonwealth as early as practicable.
That it is desirable that the Commonwealth should take over quarantine stations other than those exclusively used for animals and plants, together with all officers engaged solely in such quarantine work.
That completes the official record of the agreement entered into between the Premiers of the States and the representatives of the Commonwealth as presented to this Parliament, and it shows clearly the position that was taken up. One advantage of the early introduction and passing of such a measure as this is that it will enable the State Premiers to know practically what amount of revenue they will annually receive. Each State Treasurer will have only to learn from the statistics what is likely to be the population within the borders of his State on 31st December of each year in order to be able to determine what his returns from the Commonwealth will be.
A simpler method could not well be devised. There is yet another advantage to be stated. The Constitution provided that five years after the imposition of uniform duties of Customs and Excise the Parliament of the Commonwealth should have power to determine the distribution of the surplus revenue. As I have pointed out before, this Parliament did pass a Surplus Revenue Bill, and, on the passing of this measure, that, shall I say disturbing, feature of the procedure under the Constitution, the bookkeeping system, which has caused a great deal of annoyance and trouble as between the States, will be entirely set aside.
– The bookkeeping system involves Inter-State certificates in relation to the transfer of goods between State and State. It was a wise and very necessary provision in the Constitution that the duties on goods were to be credited to the State in which the goods were consumed, and not to the State in which they were landed ; but, as the contribution is to be arranged in a definite sum, which does not in any way affect the consuming power of the people, the bookkeeping provisions can be entirely abolished ; and this, I think, is an additional advantage in the measure before us. Honorable members will see that there is a provision which compels the Commonwealth to pay to the States any surplus there may be over the sum necessary for the promised payment of 25s. per head.
– That is the most extraordinary thing in the whole Bill. It makes the States dependent on the Commonwealth for ever and aye - re-enacts what we have been trying to get rid of.
– As Treasurer, I do not feel a bit alarmed about that provision, but, on the contrary, regard it as very necessary.
– It is so provided in the Constitution.
– I do not apprehend that any Treasurer will, as a result, be unduly embarrassed.
– There must be such a provision.
– I think it very advisable to avoid the raising of technicalities elsewhere.
– I could understand such a proposition by the Opposition, but not by the Government.
– The only difference between myself and the honorable member is that I desire this Bill, when passed, to remain a Statute of the. Commonwealth. The particular point may be raised and attacked ; and, as a layman, I do not desire to leave any loophole for an appeal to the High Court. The provision may be right, or it may be wrong; if it does a little harm, it will do a good deal of good.
– The Government are right in inserting this provision, I think.
– I am glad to have that view, which is also the view of my advisers, and onethat I should be very foolish not to take on a momentous measure of such far-reaching effect. Whether enough safeguards have been provided is another question.
– The Constitution provides that any surplus must be paid over. The Bill that was rejected repealed the section of the Constitution which provides for the payment.
– I do not think there is any other serious principle involved in the Bill. As to the question raised by the honorable member for Perth, I point out that approximately the financial effect of the measure will be as follows : -
It will be seen that, while Western Australia contributes £1 3s.10d., Queensland contributes £1 8s.7d., and New South Wales£1 7s. 3d. It is true that Tasmania and also South Australia contribute less, but that hardly bears out the statement that Western Australia is being treated unfairly.
– There is a leakage in Tasmania.
– That is an old question ; but whatever may have been the case in the past, Tasmania will not be able to make any complaint in the future.
– Are the figures quoted based on calculations including the oversea trade?
– I give the whole of the estimated Customs and Excise receipts for the financial year just closed, and go on to show the amounts the Common wealth will be able to retain for the services of the Commonwealth.
– The question of leakage could not affect these figures.
– The question of leakage can affect Tasmania only in regard to dutiable goods landed elsewhere, and then transferred to Tasmania. I have gone into the question ; and I venture the opinion’ that the statements about Tasmania’s loss are greatly exaggerated, if they have any foundation at all. I do not at this moment desire to reveal the want of knowledge of some Tasmanian members as to how the Customs and Excise duties are applied - this is not the occasion.
– Are these figures the Prime Minister’s estimate ?
– The figures areso nearly accurate that they cannot be more than 3 per cent. out at the very most.
– Are they not the actual figures ?
– No; they were made out before the close of the year ; but they will not vary more than the estimate of the Treasurer has varied, and may be regarded as an absolute guide. It wilt be seen that Tasmania pays the lowest contribution by nearly 5s.
– Assuming goods to be imported into Victoria, and consumed in Tasmania, do the figures give credit in respect of such goods?
– Yes; the figures include the whole of the estimated revenue and adjustments. I commend this Bill to Parliament with the feeling that the proposal made is generous. I venture to say that some of us, instead of standing on the platform asking for more for the States, will, because of the pledge we have given to faithfully carry out our promise to the electors, have to stand on the platform and maintain this payment to the States for ten years. Any influence I may have will be exerted in the direction of maintaining the honour of the Federal Parliament in this regard.
– We cannot bind future Parliaments.
– That interjection is, I think, entirely unnecessary. Speaking as an individual, I say that, if I live and have any weight in the public life of Australia, that weight will be so thrown into the scale as to keep this agreement for the period named ; and I think that all who undertake to support the measure will direct their efforts, to maintaining the honour of the Commonwealth. If there is any necessity for further revenue we can seek other means. One of the complaints of the States has been that the Commonwealth is overlapping their field of taxation. That may be so; but if we assure to the States this return for ten years, they cannot, in justice, complain of the Commonwealth seeking necessary revenue in other fields, whether in competition with them or not. At any rate, in dealing with the proposal before us, let us examine it from every point of view. To look ten years ahead, with all the fluctuations that may take place in the Tariff revenue, is very venturesome; but it is done with a’ desire to give some stability and security of revenue to the States, and if this Bill be passed, I am sure it will be for the safety and to the credit and honour of all concerned.
.- The Government deserve to be congratulated on having chosen this as their first measure for submission to Parliament. The sooner it is dealt with and disposed of, the sooner the ‘feeling of security, which the Prime Minister desires, will spread throughout the Commonwealth. All of its citizens, as we have occasion to remind ourselves, control two Governments, two separate agencies, through which they carry out their desire’s. They have complete control. Their fingers are on the stops of both organs, and it is for them to say through which they prefer to express their will. Hence, above all, it is desirable that their representatives in each Parliament should, as far as possible, come into harmony. They should maintain 21. clear and definite understanding in order that those, who are the masters of both bodies, may judge each by its own actions, and the two together by their success in co-operating to meet the needs of the Commonwealth. I think, therefore, that the Prime Minister and his colleagues have acted wisely in making this their first measure, since it brings us into line on finance. I do not apprehend that its discussion need detain us at any great- length, though it is a measure of such extreme moment that no consideration which we can devote to it, can be deemed undue. At the same time, we have to realize that the public have been informed - so far as it is possible for members of Parliament, the press and other agencies to inform them - of the nature of this particular financial issue which forms the base of the whole of the government of Australia - government in the “ Commonwealth and government in the States alike. The Prime Minister has reminded us several times that this question, after having been exhaustively discussed, has been de:cided by the people of Australia. But he must not forget that the majority who registered their decision upon it - a decision which is likely to affect our history for a longer time than any of us can foresee - was, after all, a majority of only 25,000 out of a vote of 1,300,000. These figures show how comparatively -close- was the division between the electors who took different views of the Financial Agreement submitted to them. However, our path to-day is smoothed, not only by that decision, but by the fact that the proposition which the Government are submitting is for the term indicated, namely, ten years, precisely the proposition for which we have just been contending in the country. To that proposal there can be no possible objection urged by any honorable member on this side of _ the Chamber, since, I believe, every member of the Opposition, without exception, was pledged to the payment by the Commonwealth to the States of 25s. per head. We regarded that amount as a fair return to the States from the Customs and Excise revenue of Australia - as an equitable proportion enabling them to fulfil their share of what may be reasonably termed national duties. I propose to pass by the whole range of argument as to what those duties are, or as to the way iri which that sum was arrived at after exhaustive discussion, simply because it is not possible for any of us to take exception to the amount in question. It would be idle to question the period of ten year.s further than to say that, as that limitation postpones the further settlement of this . important issue for a decade, we must necessarily - and we can safely - trust the electors of that time, and their representatives’, to arrive at the decision which will seem’ to them in the light of their fuller knowledge most just to all the interests of the’. Commonwealth. We are also relieved pf the necessity for discussing whether a .period of . fifteen years would not be better than one of ten years, or whether a term of twenty years would not be better than one of fifteen years. A proposition has been submitted by the Government with the authority, not only of a majority of both Chambers, but apparently with that of a small majority of the electors outside, to whom a ten years’ term was offered as an alternative. On what ground then ought exception to be taken to the motion for the second reading of this Bill ? I doubt if there be anything to which we must demur, save, perhaps, the form of the measure, and even that is capable of being discussed quite as effectively, probably more so, in Committee. Still this question having been broached by the Prime Minister, and followed up by him in replying to interjections, it may be as well to put to him the view which is entertained by honorable members upon this side of the Chamber - a view which, so far as I have been able to gather, he has not quite appreciated. We quite recognise the strength of the case submitted by the honorable gentleman for some concessions in his favour. If we were concerned “with the framing of some new contract or agreement, the illustration which he drew from the agreement proposed by the late Government might be apt, and his argument could be made reasonable. But we are not dealing with any such state of affairs. The Prime Minister was good enough to read the full text of that agreement.
– I thought that it was advisable to do so.”
– That represented - as we have endeavoured to point out to him by interjection - an honorable arrangement, which was the result of a great deal of bargaining, arrived at after ‘ protracted and severe argument upon both sides. It represented an agreement to which the then representatives of the Commonwealth and the State Premiers were able to subscribe. It provided for the return to the States by the Commonwealth of 25s. per head for so long a period as the people should retain it in the Constitution, provided that they first placed it there. In consideration of that payment, the States agreed to find certain money with which to finance the Commonwealth over the difficulties into which we had knowingly plunged ourselves by introducing a system of old-age pensions in anticipation of the time when our revenue would enable us to pay them, and before the period, even though we retained our surplus revenue from year to year, when we should have command of the whole of the Customs and Excise revenue. Of our own volition we undertook obligations which left us sorely in need of money during this financial year. The States consented to assist us to meet the deficit which would inevitably occur in consideration of an agreement for the payment to them of 25s. per head being submitted to the people, and if approved by them, embodied in the Constitution. The people did not approve of that agreement, which has consequently been set aside. Now the Prime Minister wishes, in a rather unusual fashion, to adhere to the concessions promised conditionally by the States - at which they arrived for a certain consideration which to them seemed adequate. He offers them something which at the time of our Conference they refused to consider an adequate recognition of the financial sacrifices they were prepared to make. In other words, something which they then rejected is being thrust upon them by the Prime Minister, as if they were under an obligation to accept it now. The whole point at issue is, where is their obligation? The Prime Minister is entitled to ask anything he may think fair. He. believes his proposal is fair, and has advanced reasons why he thinks so. But unless he can convince the representatives of the States that it is fair, that is of no use. He has .no right to treat it from the stand-point of any relation to a past bargain, but only from that of its relation to a present bargain. His one argument was that more than one State Premier has said that some advantage would accrue to the States from limiting the arrangement to a ten years’ period, which would not follow from the agreement they made with the late Government. If the agreement which we indorsed had been accepted by the people, it would have been possible at the next election for the country - if it had changed its mind in the interim - to reverse its verdict. It could alter the amount to be returned per capita by the Commonwealth, namely, 25s., or, indeed, alter any other portion of that agreement. But under the Bill which is now before us, the State Premiers will sit safe at all events until ten years have expired. Consequently, they gain something from a limitation of the agreement to a ten years’ period which they would not have gained under the agreement made with the late Government. On the other hand, they would say that the agreement with us, in their opinion, possessed other and greater advantages which that he now proposes does not possess. The Premiers strongly contended for an arrangement regarding the distribution! of the Customs and Excise revenue which should be embodied in the Constitution. It was then a matter of bargaining ; but it is now a matter of fresh bargaining. Were it not for the curious implication of the Prime Minister that the States are under some obligation to approve this proposal, I should not have detained the House by even a casual reference to the matter. He seems to think that, by giving effect to the policy which his party submitted to the people, and to which he is therefore committed, he is placing the States under an obligation. That being his case, he is sure to be met with the retort, “ You are merely carrying out what you have pledged yourself to do, while asking us to agree to something we refused to sanction because it was inimical to our interests. You wish to throw this provision into the form of a fresh contract, as if displaying great generosity on your part, but really placing us in a worse position. You can dictate your own terms, as if ignoring your pledge to your constituents.” That is a view which appears not to have suggested itself to the honorable gentleman, and which, were I the Premier of a State, I should feel bound to submit. It also puzzles me, as a Federal representative, that the Government should have drafted the Bill in so curious a fashion as to suggest that it is attempting to alter that provision of the Constitution which requires the Commonwealth to return to the States, until the 31st December next, three- fourths of the net Customs and Excise revenue. Of course, the Bill does not amend the Constitution; but its form, and the line of argument adopted by the Prime Minister, bring this comparatively side issue into such strong prominence that it is scarcely possible to pass it by without reference.
– Everybody knows that the Constitution cannot be amended by an Act of this Parliament.
– That is so; but the clause could have been expressed in a form which would not have given rise to doubt or debate. It is mandatory on us to return to the States, until the close of this calendar year, three-fourths of the net Customs and Excise revenue ; by antedating later deductions the issue has been unnecessarily confused and a form of expression adopted by which nothing is gained. The Government, of course, are bound to comply with their constitutional obligations. They have no choice. But they propose to deduct, during the first six months of 191 1, from the per capita con tribution which is to be paid to the States, the amounts set forth in the schedule, without any warrant from them, and so as to take back, in effect, part of what they have been obliged to pay.
– May not some of the State Parliaments pass Acts allowing us to make the deductions during the .present calendar year?
– All things are possible.
– The provision, as worded, gives the State authorities an opportunity to show their reasonableness.
– We need not object to an appeal to the generosity of the authorities of the States ; but the honorable mem-, ber is virtually soliciting a subscription, while holding a pistol at the head of those from whom he asks it.
– Not a pistol, only a collection box.
– This Wild West method of collection, to which we are not accustomed, may become necessary when the Government’s paper money is in circulation, if we wish to get gold for our notes. The State receipts from January to July, 1910, will be left very small. This Bill secures stability for the finances of the Commonwealth and the States for the next ten years; and I welcome warmly the assurance of the Prime Minister that, although it will be within the power of Parliament to amend the measure at any time, and in any particular, there is no intention to alter it for that period. He. has given a deliberate pledge, not only for this, but for future Parliaments, during the period for which the measure will operate. Although that assurance was unnecessary, so far as honorable members are concerned, it is valuable and effective so far as the public is concerned, because without it they might be misled. The Prime Minister laid a proper emphasis on this understanding.
– I do not think that his words went so far as the honorable member suggests. This, like any other measure, may be altered if the necessities of the Commonwealth require it.
– Nothing short, of a cataclysm, such as cannot be foreseen or provided against, would justify any party in proposing an alteration of the measure.
– No personal pledge can bind the Parliament.
– The necessities which would justify an alteration would be so extreme as to be almost unthinkable.
– They might arise in time of war.
– In time of war, all legislation is liable to be treated, on emergency, as mere printed paper.
– This measure is equivalent to a treaty between two States.
– A treaty between two States may be broken by one of them ; but it is incredible that representatives of the same nation would be guilty of such a breach of national faith. Therefore, I not only welcome the Prime Minister’s statement, but am adding on my own behalf, and on behalf of most honorable members - if not all - on this side of the House, that we, too, recognise in this Bill a fixed and final settlement of this financial issue forthe next ten years. We take it to be the will of the people, which we are here putting into effect, and we put it into effect without any concealment of its purpose. Indeed, we repudiate as quite beyond the horizon of practical politics, any departure from the agreement now solemnly made.
. -The only reason why I interjected when the Leader of the Opposition was speaking was to. convey what seems to my mind the true position with regard to a Bill of this kind. I have always maintained that we ought not to take away from ourselves any powers which the Constitution has vested in us. But I fully admit this : that there is a considerable difference between a Bill of this kind and an ordinary Act of Parliament, which, on the face of it, contemplates the possibility of change whenever the convenience or the advantage of the public may from time to lime require it. I agree with the Leader of the Opposition when he says that we ought to give the assurance - and we do by passing this Bill give the assurance - to the States that we contemplate nothing within the horizon of practical politics, to use the language of the Leader of the Opposition, which will be likely to induce us to alter the terms of this measure. That is the strongest declaration of intention that we can make. But I decline to go further than that, and to consider that there can be anything in the nature of a pledge binding the conscience of any member of this House with regard to what may be the case should the ultimate necessities of the Commonwealth require a change. I do not think the matter can be put higher than that. With regard to the Bill itself, I entirely coincide with what the Leader of the Opposition said as to the extraordinary nature of the form in which it is brought before the House. If we are asked to legislate - as we are asked to legislate -as from the1st of January next - that, I take it, will be admitted is the effect of our legislation - why should we not, in express terms, legislate as from the1st January? Why should we,on the face of this Bill, hold out a direct challenge to the States to contest the constitutionality of it?
– Is not the Bill an olive branch ?
– I do not regard it as such, as I shall show. We have had considerable discussion as to the effect of the Financial Agreement. One thing, however, I think, may be said, and that is that that agreement had all the elements of an agreement; but it is not really fair for the Prime Minister to attempt to rely upon any stipulation having been put forward on one side of that agreement, in view of the fact that the essence of it has been repudiated by his own party. I do not think that the Prime Minister can rely upon that, and say that, because the State Governments were prepared to give up a portion of what they considered to be their financial rights, or were prepared to abate to some extent what they considered to be their financial necessities, in order to obtain what they considered constitutional security for the payment to them - that, when they did not get that security, we are in a position to turn round and say, “ You admitted that this sum was enough for you.” I think that when a bargain is off, it is definitely off, and ought not to be referred to again.
– There is no necessity to make a bargain.
– There is not, and I have always contended that it is the function of this Parliament to decide what is a fair adjustment of the finances. If the Prime Minister had couched the Bill in the form it would naturally have taken, seeing that we are going to legislate as from the1st January next, see the remarkable result which would have followed. When we look at this measure I think it becomes apparent why this extraordinary method of drafting has been adopted. I am going to paraphrase the Bill and to put it in the form in which it would have been drafted had the true constitutional form been adopted. We are not legislating for the next six months - for which we have no power to legislate - but for the six months of the new financial year commencing on the 1st January next, for which we have power. What form would that legislation take if we stated the true purpose? I take it that it would read somewhat as follows : - “ Whereas we are, during the ensuing six months, obliged to return to the States three-fourths of the Customs and Excise revenue, but whereas we have determined that we are going to adopt a system of paying 25s. per head as the basis of future payments ; therefore we are going to make the payment from the 1st January next so much less than 25s. per head as to make an average of 25s. for the whole financial year.” Not only are we going to do that which will reduce the payment for the time during which we have power to legislate to an amount very much less than 25s. per head, but we are saying that, having diminished the payment to very much less than 25s. a year, we are now going to take from that reduced minimum a sum of £450,000 to make up for the deficiency which was created in last year’s finances under the control of the Federal Parliament. What are the figures? I speak subject to correction from the Treasurer and his officers, because I am only going to give the figures which I have had an opportunity of taking out within the last few moments. I take it, from the returns which have been placed in my hands, that the total returns of revenue from Customs and Excise would give an average returnable to the States as their three- fourths - if the Braddon section continued in operationof £8,803,000. We are obliged to pay at that rate for the rest of this halfyear. Assuming the same return from Customs and Excise, we shall be obliged to pa’v to the States £4,400,000 up to the end of this current year ; that is, up to the 31st December. Now, what is the proposal of the Government? The proposal is that we shall start now to pay to the States 25s. per head, and that we shall deduct from the last half of the financial year the amount necessary to bring the payments to the States down to an average of 25s. per head. Assuming our population to be, in rough numbers, 4,300,000, the total amount we propose to pay to the States during the next financial year is £5,375,000. But being obliged to pay them under the Constitution during the first half of the financial year £4,400,000, we only leave to them £935,000 as a payment during the second six months. That is, we propose to pay to them during the second half of the financial year consider ably less than £1,000,000. And, mark, having reduced their minimum in the second half of the year to the sum of £935,000, we proceed to take away £450,000 out of that to make up for the deficiency in the Commonwealth finances last year, leaving the total sum payable to them during the six months at £485,000.
– And they say how generous !
– So it is.
– They will say anything.
– I do not know exactly what form of generosity it is. It seems to me to savour a little too much of that kind of financial buccaneering which was initiated by the Treasurer a few days ago by taking £50,000 out of the Trust Funds.
– Perhaps the honorable member would not have the courage to do that.
– It is usually called by another name in the Law Courts. I think it becomes sufficiently apparent why this extraordinary form was adopted in drafting the Bill. It was to cover up what obviously would have become apparent - not the generosity, but the extraordinary parsimony of this proposal, and the extraordinary position in which it will place the States in the second half of the financial year. I do not propose to criticise the actual merits of the proposal, but I think it would have come a good deal better if the Treasurer had boldly .said, “ We are going to legislate for a scheme to commence on 1st January, 191 1, and from that time forward we propose to have a system for the payment of 25s. per head, but for the first half-year we intend to take away the whole.” That is what it practically comes to. It may be generous or it may not be. I am not prepared at the present moment to criticise that until I learn more about the Treasury figures, which no doubt will be presented by-and-by. But it is a most extraordinary way in which to present to Parliament a Bill of this extreme magnitude and importance.
– Will not the States be in a better position under this proposal than they would have been under their own agreement?
– I am not going to say anything about that agreement, but it is quite unfair to use the argument against the States, “ Well, you agreed to give up so much “ when we deprive them of the consideration for giving that up. It was considered a matter of immense importance to the States that they should acquire a constitutional guarantee. They have not got the guarantee. Honorable members ought to wipe the slate as far as the agreement is concerned, and approach the subject from the stand-point of what is fair. As regards the general position, I cordially agree with the Leader of the Opposition that it will be of immense advantage to the Commonwealth and to the States, too, that some reasonable permanent arrangement for a considerable period should be arrived at. By the remarks I have made, I do not want to raise any criticism which is not founded on justice.
– I shall be very glad to hear it.
– If we plainly put the position before the States now, if we say that at the end of the half-year we intend to practically reduce their amounts to a trifle for the rest of the year, they may be in a position at once to curtail their expenses so as to meet the necessity which is placed upon them. But I should have thought that it would have been better, not only to put the thing in plain, distinct language before the States, but if honorable members are going to further reduce the payment by such a considerable sum as £450,000, to adopt a scheme which would have spread the deduction over a greater time than the first six months in which it will be in operation.
.- I desire to refer to the probable attitude which the State Premiers will adopt when they see what is promised to them. The Prime Minister appears to think that they will be very naughty boys indeed if they do not think that they are getting something really good under this method of settlement. But I would remind him that when the arrangement was arrived at in the celebrated Conference there was nothing in the air about a note issue which would trespass on (he State funds to the extent of £80,000 a year. There was also nothing in the air about that which I suppose will become a concrete fact before very long. There was nothing said about the Federal Parliament intending to trench their sphere of direct taxation.
– The States knew that very well.
– I do not think that it was pretty well known when the Conference met.
– Yes, it was.
– In my opinion, it was not considered. I think that the position of things has totally changed; and we shall find that the Premiers ‘are not at all satisfied with this method of settlement. I believe that when the public consider that the States are to lose a revenue of £80,000 a year by the issue of Commonwealth notes, and that a great portion of their power of direct taxation is also to be taken away, they will wonder where they are. Any ordinary man of business, placed in die position of the Premiers, would have the greatest difficulty in financing the States under the proposed conditions. No doubt we shall hear a great deal from those gentlemen. I shall be very much surprised if we do not. Without a Conference between the Prime Minister and the Premiers, I do not think it is possible that we can satisfactorily adjust matters. The State and the Federal spheres of influence concern the same people. I hope to see the Premiers and the Prime Minister cordially working together. Otherwise, I feel sure that we shall witness continual fluctuations on this question. I have already pointed out two matters which have come about since the Premiers’ Conference was held. I feel satisfied that it will not be possible for the Premiers to carry on the financial undertakings of their States, which are most important to their people, unless there is harmonious co-operation between them and the Federal authority.
.- The criticisms which have been directed against the principle of the Bill have been very mild, and I hope that they will continue so. It has been suggested by the honorable member for Flinders, who has been supported by the last speaker, that the Bill will do some injustice to die States, and conflict with the principles laid down by their Premiers. And a great deal of attention, it is hoped, will be directed to the fact that its operation is not to commence in its entirety until the 1st January, 191 1, and that the State Premiers will be told that the Commonwealth proposes to give them 25s. a head, their own choice, less £450,000.
– I assure the honorable member that it was not their choice, but their necessity.
– We have not yet hail an opportunity of knowing what was done.
– Yes; the honorable member has been told this over and over again.
– We have not yet had an opportunity of knowing what did take place in the secret Conference. My complaint in the last Parliament was that the Conference was held in secret, and that the members of the House were not taken into the confidence of the parties to the agreement, and really knew nothing of what had transpired. On that occasion, the minority did not forget - and all honour to Australia that they did not - that underlying the proposal was an attempt on the part of the Premiers to dominate the nation by taking, ultimately, sole control of the purse. What they wanted was not so much the 25s. per capita for to-day or to-morrow or next year, as to fix the provision in the Constitution in such a way that it would be an almost absolute impossibility ever to remove it, because its inclusion would defy the people’s will to remove it, seeing that a majority of the States, as well as a majority of. the people as a whole would be required. That: was the whole trouble. We know what the financial position of certain of the States is, and that it must remain so for a certain time. It would be only human nature for those States to refuse to go against their own financial interests for a considerable time to come, and to refuse therefore to allow the Constitution to be altered in order to hand back again to the Federal Parliament, as representing the whole people, the powers which the States desired to take away from it. At the Premiers’ Conference, as the Commonwealth was faced with a probable deficit for the financial year of £1,200,000, through relieving the States of expenditure on old-age pensions, it was suggested by the States, in their generosity, that the Commonwealth Government should agree to give them 25s. per head, and embody that agreement in the Constitution, and that then they should allow the Commonwealth to deduct £600,000, or one-half the estimated deficit, from the payments to them for the financial year just closed. The deficit, fortunately, is not so large as was estimated by the right honorable member for Swan, but still there is a deficit, which has been caused through the Commonwealth relieving the States of an expenditure of £900,000 per annum on old-age pensions. All that the States are now asked to do for the remainder of the current financial year is to put the Commonwealth in a solvent position by allowing a deduction of £450,000 to be made. I was glad to hear the true national note sounded this afternoon in the statement that, in sanctioning the Federal Constitution, the people never intended this Parliament to bargain with the States. They simply said, “ We have no experience, and nothing to guide us for the first ten years as to what our national and State necessities will be. Let the Federal Parliament return a certain proportion of the revenue to the States for ten years, and then, after that experience, the Federal Parliament, which we have created to deal with us in our national capacity, can make what fresh arrangements it pleases, not by an agreement with the State Premiers, but as it thinks will be most beneficial to us in both our national and State capacities.” Our proposition now practically is to relieve the States of the obligation to pay £150,000 of the £600,000 which they last year agreed to pay, and to limit the period of the per capita payments to ten years. I am in favour of the principles of the Bill, and will support it, but I told my constituents, and they shared my feeling very strongly, that there should be no fixed period as to any arrangement for the return of money to the States. The matter should go from Parliament to Parliament by a simple Act, which can be altered if the people of the future demand it and the necessities of the case require it. Looking ahead to the national necessities and the immense amount of expenditure that must take place, I have very grave fears that; long before the ten years’ period has elapsed, the people will see the necessity for their National Parliament controlling a much larger proportion of the Customs and Excise revenue than it can at present. As a Protectionist, I hope to see effective Protection established permanently in Australia, but in that case the Customs revenue must decline. If then our revenues are to decline and our necessities to increase year by year, I cannot look with favour upon the ten years’ period. I recognise, however, as the honorable member for Flinders put it, that, no matter what period we insert in the Act, if the necessities of the case demand it in the future, the Act can be amended, because the needs of the people must be the first consideration with their representatives in the National Parliament. The honorable member for Fawkner and others spoke of the opinions of the Premiers. There are Premiers and Premiers. When Federation was initiated, I fondly hoped that the
Premiers would work in accord and harmony with the National Parliament, but my hopes were disappointed. Unfortunately, with one or two notable exceptions, particularly in South Australia, the State Premiers have been bitterly hostile to the National Parliament. Instead of trying to work in accord with it, they have done everything they possibly could to create discord and friction, and in every way to try to gain back for the States the powers which the people deliberately took away from them years ago. We read with pain day after day the statements made by some of the Premiers, and the honorable member for Flinders should know that, even if the Prime Minister went out of his way to try to bring it about, he would find it impossible to get into harmonious working relations with some of them. In to-day’s Herald, published in this city, there appears a statement by Mr. Murray, the Premier of Victoria. It would be unfair to class him as bitterly hostile to the National power, but I have noted on several occasions that he too is trying to cling to those powers which he thinks the States have been deprived of. However, this is what he is reported to have said to-day -
The Premier (Mr. Murray) referring to-day to the Financial Relations Bill just introduced into the House of Representatives, said that it embodied really the same proposals as the Financial Agreement, except that “ten years” was substituted for “ perpetuity.” The States would be no worse off for ten years than they would have been under the Financial Agreement, and as the Federal Government, with its majority in Parliament, was the master of the situation, what could the States do? The deduction of the£450,000, representing the Commonwealth deficit last year, from what was coming to the States this financial year was in accordance with his expectations. Had the Financial Agreement been adopted, the States would have had to pay the same amount out of last year’s revenue.
That is exactly corroborative of my statement. I admit thatthe crux of the position was the proposal to embody the Financial Agreement in the Constitution when it would have been immensely difficult, if not impossible, to take it out again. But, apart from that, if the State Premiers are honest, they will admit that they are in a better position financially to-day, and will be in a better position at the close ofthe present financial year, than they would have been under the terms of the Financial Agreement to which they were parties. I intend to set a good example, because I think there should not be any lengthy debate on a Bill of this kind. We had the compliment from the Leader of the Opposition that it was proper that this measure should have been introduced as the first measure proposed by the present Government. I hope that it will be passed, and I hope that the State Premiers will recognise that this Parliament, representing the national feeling in Australia, has no desire to interfere unduly with the financial position of the States. At the same time, we believe that our first duty is to the people of Australia as a whole, and that it is necessary that we should retain sufficient of the revenue derived from the taxation of the people to meet national requirements.
.- The Prime Minister, when speaking on this measure, was good enough to try to relieve my mind as to the disabilities which Western Australia might suffer under it, but I wish to say that the honorable gentleman did not touch the objection I have to the measure. My objection to it was revealed in the speech of the honorable member for Flinders. Western Australia has always contributed the largest per capita amount of Customs revenue, and under the measure before us, that State will stand to lose the largest per capita amount.
– That is quite inaccurate; but the honorable member does not mean that I know.
– In this connexion I cannot help wondering what is the position of those representatives of Labour who have come from Western Australia to this Parliament. During the last election campaign every one of them assured the people of that State that Western Australia would get as good terms from a Labour Ministry as those offered by the previous Liberal Government. One honorable member went so far as to say that his principal objection to the proposals of the Liberal
Government was that they were not nearly so good as a Labour Government would be prepared to give the State. The Prime Minister did not make any reference to the position of Western Australia under clause 5 of this Bill. He did not give us any idea of what it would mean in L.s.d. to that State if this measure were adopted.
– Western Australia will lose £980,000.
– We all know that that Statew illlose a very considerable sum. I consider that the loss which will accrue to that State from the method of finance proposed by the present Prime Minister is a matter which every Western Australian representative should emphasize. They should remind the people of the State from which they come that there are members in the Labour Government at the present time who have been practically pledged to give that State something altogether different from what is now being put before us in this Bill.
.- I do not think there is any doubt that the real difference of opinion last year between opposing parties in this Parliament was as to whether the proposed payment of 25s. should be fixed in the Constitution, subject to the power of the people to alter it by referendum on our initiative, or extend over some fixed period variously stated at twentyfive years, twenty years, and ten years. I think that the policy of the party which the Prime Minister leads so well was that expressed at the Brisbane Labour Conference. So far as I could understand the terms of the somewhat ambiguous resolutions come to by that Conference, the policy was, not that the terms of the proposal should be embodied in the Constitution, because I do not think that was meant, but that there should be a fixed payment apportioned fer capita amongst the States, which it was estimated would come to about 25s. per head of the population.
– A little over 24s.
– In round figures, with the Western Australian allowance, 25s. The point of the resolutions, to my mind, was that the amount of the payment was to <be based upon the actual experience of a period which would terminate at the close of 19 10. I think it was said that we might very well take a period of average years ending at the close of the financial year 1910) and that would involve the commencement of the proposed payment at the expiration of the operation of the Braddon section ; that is to say, at the beginning of next year. Not a word is to be found in what I may describe as the then official programme of the Labour party as to any reduction from the amount to be thus ascertained. It was to be a payment estimated at about 25s. per head, to commence from the 1st January of next year. On what ground does the Prime Minister now depart from what the people, whose voice we all reverence, assumed would be the alternative adopted by the Labour party in -case the. Financial Agreement was rejected ? The Financial Agreement has been rejected, and we have now before us the policy of the Labour party. As to the precise nature of the terms of the Brisbane Conference proposals there was some difference of opinion amongst the members of the Conference. The State members interpreted its terms in one way and Federal members interpreted them in another. In any references I have made to the matter from the platform, I have always adopted the interpretation of the Federal members of that Conference, and I say now that it is rather unfair to the electors who sent the Labour party into power that there should be at the. very initiation of the financial policy of the party, a departure from what the people legitimately thought would be the alternative to the rejection of the Financial Agreement. I leave it to honorable members opposite to justify the departure to their constituents. There is another matter to which I should like to refer. There is no reason, because the £600,000 was to be deducted, why we should make a deduction to the amount of the deficit.’ It was part of the understanding, whether rightly come to or not. There might be a difference of opinion as to whether we should or should not have included any provision about the £600,000 to cover the period of six months, but it was part of the consideration that the six States, three of which had not established any system of old-age pensions at all, would contribute towards the £600,000. The six States agreed to contribute, but only three were relieved of the obligation to pay old-age pensions. The three smaller States did not have a local system of oldage pensions in force, but they fell in with the proposition in consideration of the fixity of the agreement.
– Old-age pensions were being paid in those States.
– They were being paid in only three of the States.
– When the Financial Agreement was made, people in every State were receiving old-age pensions under the Commonwealth Act. That, so to speak, “knocked the bottom” out of the whole thing.
– If it did, the agreement to contribute the £600,000 ought never to have been entered into. Why, therefore, does the Prime Minister ask that thatarrangement shall practically be carried out now ?
– I shall explain when I reply.
– My contention is that the three smaller States undertook to join with the other States in making a contribution of £600,000 towards making good the estimated deficit, not because they were released, under the agreement, from an obligation to pay old-age pensions, but in order to secure the benefit of permanency so far as it could be secured by the insertion of the agreement in the Constitution.
– This shows that we ought to have had a report of the proceedings at the Conference. Some of the State Premiers make a statement quite contrary to that put forward by the honorable member.
– Who cares what is said by this Premier, or that, in regard to the Conference? We can be guided only by the resolutions. One of the first principles of interpretation of an Act of Parliament is that a Court is to look not at what is said by members of Parliament but at what they resolve.
– The honorable member is giving us the reasons why the State Premiers came to a conclusion in regard to the contribution of £600,000.
– I am dealing with the resolution.
– The honorable member is telling us what actuated the Premiers in coming to that conclusion.
– I have not said a word about motives. I am simply dealing with the terms. of the resolution, which has been published, and which forms part of the data upon which we. arrived at a decision last year. The State Premiers in Conference decided that, in consideration of three of the States being released from obligations incurred with respect to the payment of old-age pensions, a reduction, amounting in the aggregate to £600,000, might be made from the amount returnable to them towards making good the estimated deficit for the year. That meant, of course, that if there were no deficit, that reduction should not be made ; but we made an alteration by Act of Parliament, and made the provision absolute. The Prime Minister is not justified by any promise made under different conditions by three of the States, which were under no obligation, and had not been relieved of any, in relation to the payment of old-age pensions, in proposing now to make this deduction. It happens that the three smaller States were the vicarious sufferers under the Commonwealth Tariff of 1002. I do not wish to repeat the arguments - although I had them expressed in different figures - that have been given by the honorable member for Flinders as regards the effect of this arrangement, but little Tasmania, which has received no relief so far as the payment of old-age pensions is concerned, by the Commonwealth’s assumption of the responsibility with regard to the payment of those pensions, was the biggest vicarious sufferer under the Commonwealth Tariff of 1902.
– Did it not obtain some advantage by the establishment of a Commonwealth system of old-age pensions?
– All the States are now enjoying the Commonwealth system, but three of them have been relieved of their annual expenditure in relation to their State systems of old-age pensions.
– Simply because they recognised their obligations in that respect.
– But what is that to do with the question of the bargain?
– The honorable member wishes to give the States to which he refers special treatment, because they did not carry out their obligations to the people in respect of old-age pensions.
– It is unnecessary to reply to that interjection. The smaller States, which are not relieved of any obligation in respect of the payment of oldage pensions, have been the biggest sufferers under the Customs Tariff Act of 1902. In the very first year of its operation, Tasmania lost £162,000 as compared with its revenue in 1900, from its own Tariff. I believe that if the record since then is followed up, it will be found that the figures relating to Tasmania show a continual, though diminishing, loss as against ‘the position it might have assumed under its somewhat wide Tariff, which covered about 91 per cent, of its total imports. That is the position. As to Western Australia, we had to make certain provision for the extraordinary -per capita results there, and that special provision expired about three years ago.
– The honorable member is quite in error in suggesting that Tasmania’s returns have been gradually going down.
– I know that her losses have been less since 1902-3. But at a time when there was an actual increase of £778,000 in the revenue of the six States, as compared with their receipts from Customs and Excise prior to the introduction of a uniform Tariff, Tasmania itself suffered considerably.
– Queensland’s returns fell in a greater ratio.
– I shall deal presently with Queensland’s compensations. South Australia is losing about £20,000 a year by reason of the abolition of its special Tariff for the Northern Territory. Before the uniform Tariff came into operation South Australia had in force certain special rates of duties in respect of commodities, and particularly rice, in general consumption in the Northern Territory. Under that Tariff it would have been receiving about £30,000 per annum more than it has received under the uniform Tariff. At all events, when the Commonwealth Tariff was brought into force there was at once a drop of . £20,000 a year in respect of the duties on those commodities. South Australia is also losing owing to the competition of the Pacific Cable Board with the Eastern Extension Telegraph Company, which used our transcontinental line far more than any other. The State from which I come is thus losing something like £15,000 or £16,000 a year in connexion with the telegraph rates.
– Is not the loss to which the honorable member has just referred debited to the Northern Territory?
– No; it is an absolute loss. By entering into small details I could show much larger figures, but in dealing with a Bill of this kind, I do not wish to go into details. I am referring to a few broad financial considerations. Queensland has been relieved of the burden of old-age pensions, and there can be no doubt that it did suffer a certain drop in its return per capita on the introduction of the uniform Tariff. If I am not mistaken, however, that has practically been cancelled. It was about £3 4s.
– And it fell, roughly, to £3 3s.
– There was a big drop, which has not altogether been recouped, but Queensland has been fairly well supported financially by the Commonwealth Parliament. One of its chief policies was in relation to sugar. I find that in1907-8 the Customs and Excise receipts from sugar amounted to £770,000, while the bounty paid to Queensland and New South Wales growers totalled £577,000, leaving a net revenue, chiefly brought about by compensation to the so-called vested interest in kanakas of £193,000. That will be the measure of the loss suffered under this policy in normal years. I say in normal years because, when the crop fails, as it has done on one or two occasions, the amount received in revenue from the import duties must go up. On the whole, there is a sacrifice in connexion with the kanaka policy. I voted for the exclusion of the kanakas, but not for compensation to vested interests. The policy does mean a loss of at least £500,000 a year, and it is a policy that ought never to have been initiated by Queensland. It will be found that I am justified in saying that the States which, on a ground which has disappeared, are now asked to contribute to the deficit are the States that have received the least consideration in connexion with the finances. The Commonwealth is in a better position now than when the Treasurer made his Estimate last year, seeing that there has been an increase of over £1,000,000 in the revenue of the Department of Trade and Customs and of the Post and Telegraph Department. Surely it ought not to be beyond the financial ability of the Treasurer to find some means of meeting the deficit, because, if the Prime Minister’s policy had been carried out last year, he must have had to face a bigger liability than that now before him.
– The honorable member is in error ; last year was started with a credit of £700,000.
– But there was the obligation to pay old-age pensions, which ate up the credit balance.
– Last year there was a deficit of about £1,800,000, but we got £600,000 promised from the States.
– The Government last year, when they started, had credit for £700,000 in the Trust Funds.
– The amount in the Trust Funds was £650,000, and, even after taking into account the £600,000 to be given by the States, there was still a deficit of £600,000 to be faced this year. The Treasurer, however, on the Supplementary Estimates, explained that the revenue was coming in by leaps and bounds; and since then the increase has been the same, to the extent, as I have said, of over £1,000,000 in the Department of Trade and Customs and the Post and Telegraph Department.
– If the Government last year started with a credit of over £600,000, and left with a deficit of nearly £600,000, that makes us actually £1,200,000 worse off.
– Last year we anticipated a big deficit, which was not- realized by experience, and this year there is the small deficit of £447,000.
– That is last year’s deficit.
– It may be that this year, as last year, the revenue will be better than anticipated.
– There will be an end to that.
– I do not believe it. Though I did not speak on the question, 1 went exhaustively into the figures, and the only possible justification for such an idea would be if a wider period were taken than has been mentioned. At all events, there was no anticipation that for five or six years the revenue would drop seriously below the figures of last year. The estimate given was £2 8s. 6d. per head for 1910-11, or a little less than the actual result for 1909-10; and I do not think the Treasurer is likely to be in “ Queer Street “ if he does not get this money from the States. In view of the fact that the three States 1 have mentioned are receiving no consideration, there is no justification for not making the payment of 25s. per head date, as the Labour party proclaimed, from 1st January, 1911.
.- Perhaps the most instructive speech in the course of this debate was not the speech with the most matter in it, but the speech which gave most cause for reflection. I refer to the speech of the honorable member for Riverina, which simply bristled with give-a-ways of the party to which he belongs. The honorable member referred 1 to the irrevocability of the Financial Agreement, now defunct, and proceeded t > tell an astonished Chamber that that agreement had been defeated by the very people who he claims would not have allowed it to be taken out of the Constitution once it had been put in at their behest ! He told us, also, that he was not going to b? bound by the word of honour of the Prime Minister to the people that this agreement was to be at least for ten years ; because he had informed his electors that he would regard the agreement as being binding for merely one year - that it should be repeated by legislation from year to year, or Parliament to Parliament. As a result of listening to the honorable member, I have come to differentiate between the pledges made by honorable members opposite to the coun try, and the pledges made to their colleagues’ machinery in this Chamber. It is not safe to violate a Labour plank ;. though it appears to be absolutely safe to break a promise to the electors. I wish to know, in the first place, how far honorablemembers opposite are free to follow the Prime Minister in regard to the agreement now under consideration?
– I cannot see that thehonorable member’s remark has anything todo with the matter before the Chair.
– There is a clause in the Bill which lays it down that the measure shall have a lasting period of ten years;, and I think I am at liberty to inquire what chance the Government and the House haveof passing that proposal. Consequently, I ask how far honorable members, who havepledged themselves to the electors against the period of ten years, will be compelled: to give up that pledge in order to “ save the face” of the Prime Minister?
Sitting suspended from 6.30 to 7.4.5 p.m..
– When the sitting was suspended, I was addressing myself to dieperiodicity of the proposed arrangement,, and was endeavouring to show the difficulty which’ some honorable members will, experience in reconciling their duty to theelectors with their duty to the Government, which they are supporting. It has alwaysstruck me that it is merely beating the air to attempt to define irrevocably any particular, period during which the proposed agreement shall be operative. The first great war into which this country is unhappily plunged, will, by its mereexistence, destroy any such financial arrangement as is now proposed for a period of ten years. Some of the supporters of the Ministry are, apparently, in a difficulty as to the term over which the proposed agreement should extend. One section of them is singularly unhappily placed in this regard. The representatives nf Western Australia, to a man, pledged themselves to support the agreement for a period of twenty-five years. They did not idly hit upon that particular term because they thought that twenty-five years was preferable to twenty-four, but in order that they might show the electors of that State that, where its interests were concerned, they were prepared to deal with it as liberally as it would have been dealt with under the old Financial’ Agreement to which they were opposed. That agreement offered Western Australia a special grant of £250,000 annually, which sum was to decrease automatically by £10,000 a year. In other words, the special grant to enable Western Australia to meet her financial exigencies was to terminate in twenty-five years. The Labour party, in order to appear as keenly alive to the financial interests of that State as was the party to which I have the honour to belong, declared that they favoured an agreement which would be binding on the Commonwealth for a term of twenty-five years. What are these honorable members going to do now ? We are told that the Government which they are supporting favours a limitation of the agreement to ten years.
– The honorable member need not worry about us at all.
– I am not worrying about the honorable member, who comes from a placewhich is very much nearer to me than is Western Australia. The representatives ofthat State must either keep their public pledges or stand falsified before their constituents. If they vote in accordance with their pledges to the electors, and do not obey the caucus whip-
– Order !
– Are not the words “ caucus whip “ in order?
– It was not merely the use of the words “ caucus whip “ which induced me to call the honorable member to order, but the fact that he is following a line of argument which has no relevance whatever to the proposed Financial Agreement. I must ask him to deal with the general principles of the Bill.
– I submit that I am dealing with the biggest general principle of the measure, namely, its periodicity. If we are not to be allowed to discuss whether the proposed arrangement should continue for ten, fifteen, or twenty-five years, I contend that free discussion has ceased in this Chamber.
– The honorable member should either move to disagree with the ruling of the Chair, or else he should obey it.
– Without any reflection on the Chair,I think it is usual to permit an honorable member who has been called to order to advance reasons why he considers his remarks are in order. Consequently, I take no notice of the interjection of the Prime Minister, who, fortunately, has not me under his whip.
– Order ! Will the honorable member deal with the question that is before the Chair?
– I propose to do so.
– It is a case of youth and anger going together.
– No. But there are such things as old age and mental intemperance. I commend the Prime Minister for exercising control over his feelings in a very trying situation. I wish to point out that it is necessary to condition the proposed agreement with a twenty-five years’ period, if the representatives of Western Australia are to fulfil their pledges to the electors. Such a condition is only unessential if their pledges in another respect and their necessities of another nature, compel them to play false to the people who have sent them here. If they stand firmly for a limitation of the agreement to twenty-five years, which I submit is in the best interests of Western Australia, and if the provision relating to that period goes by the board, the Prime Minister will be afforded a choice between exhibiting the ‘ ‘ courage ‘ ‘ to break his word and having the decency to keep it. I am now referring to his promise to the people of Australia, that if returned: to power he would endeavour to secure legislative sanction to an arrangement which would give some sort of financial stability to the six States of the Commonwealth. How does this questionaffect Western Australia? If honorable members opposite will make a mental calculation they will find that the arrangement proposed in this Bill will give to Western Australia a sum of £2,050,000 in addition to the 25s. per head. But under the scheme propounded by the late Government after consultation with the Premiers, that State would have received £3,030,000 in addition to the 25s. per capita. In other words, if the representatives of Western Australia go back upon their pledges that State will lose no less a sum than £980,000. I address these remarks to the Western Australian representatives in order that they may see where their duty lies in considering a matter of such vast importance. I have no desire to canvass the arguments which have already been advanced in regard to the particular form in which the Government have thought it their duty to introduce this Bill. The honorable member for Bass stated, by interjection this afternoon, that the three States which had not paid old-age pensions ought to receive very scant consideration from us in connexion with this financial arrangement because they had failed to discharge their duty to the electors in that regard. The honorable member, I think, may have some weight behind his argument. My only regret is that two of the States out of the three which have failed to pay old-age pensions, are two out of the three States which have ever had Labour Administrations.
– What about the Legislative Councils in those States ?
– My honorable friends have an excuse for everything ! But I do not wish to be led away from my line of argument, and thus transgress the Standing Orders. As you know, sir, I am one of the most faithful observers of our Standing Orders, and I do not wish to give you cause to intervene for any breach of them. In my judgment the attitude which each honorable member ought to adopt towards this question is that neither of a Commonwealth, nor of a State Rights man. Both phrases are objectionable. We should all regard ourselves as trustees for the Australian people, a higher title than that of members of the Federal Parliament.
– We cannot serve two masters.
– The people who vote at the Federal are the same as those who vote at the State elections, constituting one selfgoverning entity. The Constitution gives us vast financial powers, as it were in a trust deed. After this year we may make what financial arrangements we please. These powers are not to be abused. We must seek, not only the well-being of the particular authority of which we form a part, but that of the people as a whole. While we may disagree as to whether the Commonwealth or State agencies should control this or that public utility, we must not endeavour to enhance the importance of our .position by ;any action which will be detrimental to the well-being of the people whom we have been elected to represent.
– The introduction of the Bill at this early stage of the session reflects credit on the Government. Ministers are entitled to credit also for carrying out their electioneering promises, though, as I interjected when the Prime Minister was speaking, the provisions of the measure are a queer mixture of generosity and parsimony. The promises made by the Prime Minister and his friends are being kept in some respects and broken in others. The political party now in power here promised that if it gained a majority at the elections, it would put the States in regard to finance in the position in which they would be put should their opponents be retained in office,- with the exception that the annual payment of 25s. per capita would be provided for, not in the Constitution, but in an Act of Parliament. The Bill, however, does not do what would have been clone had the party with which I have the honour to co-operate obtained a majority. Had it retained power, the States would have received more than it is now proposed to give to them, and the Financial Agreement would have been embodied in the Constitution. Ministers are apparently desirous of lessening the friction between the Commonwealth and the States, but they might have acted generously on one or two points. As things have turned out, I am glad that the Financial Agreement is not to be embodied in the Constitution. Such kaleidoscopic changes in our fiscal system are proposed that it is impossible to form a fixed and definite opinion as to the financial relations that should exist between the Commonwealth and the States. When I advocated the embodiment of the Financial. Agreement in the Constitution, I knew that the party of which I am a member did not intend to invade such fields of taxation as income tax and land tax, hitherto left to the States. A land tax, whether proposed for the sake of revenue, or to effect social and agrarian reform, must be a heavy impost on the people, and a source of considerable profit to the Government. When the financial relations between the Commonwealth and the States was being discussed in the last Parliament - of which I had not the honour to be a member - I thought, as I afterwards told the electors, that 25s. per capita was more than the States had a right to expect from the Commonwealth. On that point, I differed from many of my party. I firmly believe that if the Commonwealth were to be restricted for revenue to the imposition of Customs and Excise duties, and the other means of which it has hitherto availed itself, and the States allowed to avail themselves of all other sources of taxation, 25s. per capita would be too much to give to them. Of course, the Constitution does not prohibit the Commonwealth from taxing the people in any .way thought necessary ; yet those on this side of the chamber would not invade the fields of taxation which hitherto have been left to the States, and which can be properly exploited by them in connexion with measures of social and land reform. But it having been determined to invade what has hitherto been considered a province of the States, a return of 25s. -per capita to them is too little. I am glad that the financial arrangement is not to be embodied in the Constitution, because, while it remains a provision in an Act, it may be re-adjusted from time to time, according to the fiscal needs of the” Commonwealth and the States. Since the beginning of Federation, I have held, and frequently expressed, the view that the sooner the Mates cease to be dependent on the Commonwealth for revenue, the better it will be for the economical administration of the affairs of the country. So long as the State Treasurers are dependent on the Commonwealth Treasurer, there must be uncertainty as to what revenue they will have to spend, and less inclination to exercise the strict economy which the taxpayers have a right to expect. Therefore, any measure finally determining the relation of the Commonwealth with the States must be hailed by me with a certain amount of satisfaction. The matter was thrashed outlast year at a Conference attended by representatives of the Commonwealth and the States, and a compromise was arrived at which was not to be taken section by section, though the Prime Minister, notwithstanding his endeavour to put- the matter before the House so that there could be no misunderstanding, implied to the contrary. That compromise was one to be accepted or rejected in its entirety. If not complied with in every respect, it ceased to exist. The representatives of the States conceded a great deal, in order to obtain a permanent provision of 25s. per capita. They desired that this arrangement should be embodied in the Constitution, so that it could not be interfered with except by an alteration of the Constitution. In consideration of this, they agreed to make good part of the deficiency incurred by the Commonwealth, largely, if not entirely, in relieving some of the States _ of their expenditure on old-age pensions. This also was part of the whole proposal. But the people took the entire compromise as one. They understood most thoroughly in voting for it that they were voting to carry out all the provisions of the compromise - not only that the- Financial Agreement should be embodied in the Constitution, but that they, as taxpayers under the State Governments, should give us a certain amount of money to make good the deficiency of the Commonwealth Government incurred in meeting old-age pensions, and that this new arrangement should be carried out before the conclusion of the operation of the Braddon section of the Constitution. The electors, in their wisdom, threw this compromise aside. There was not a clean party division on the question. It must not be forgotten by honorable members opposite that very many eminent politicians and leaders on the Labour side in the States held views in antagonism to those of the Labour members in this House who now constitute the Government party. There were men on both sides who did not vote with their party. The Attorney-General differed from his party on some points in regard to the two referenda that were placed before the public. I also differed from my party in some respects. I voted for the taking over of the State debts by the Commonwealth. But the whole compromise proposed at the State Premiers’ Conference was not accepted; and it is not competent for the Prime Minister, or for any honorable member opposite, to say now that they are carrying out that arrangement when they are leaving out one of the principal provisions implied in the compromise. The whole contract must stand as one and indivisible, or the whole contract goes by die board. I know that it is of no use to oppose this measure, and I do not know that I should oppose it if I thought I could succeed in defeating it. It is so necessary to get a settlement that even this decision will be better than none at all.- On the other hand, I should like to show honorable members what a difference it makes to the States, and how the Prime Minister, as Treasurer of the Commonwealth, in seeking to make the financial position of this . Commonwealth easy and satisfactory, has been thrusting a financial position upon the States which, at any rate during the coming year, will be felt to be anything but easy and satisfactory. Under the provisions of this Bill, the States will receive something less than half a million of money in the first six months of next year, after they are subjected to the reductions proposed and have returned to the Commonwealth Government the £450,000 provided for in the schedule. I do not think that it requires any great and intimate acquaintance with the details of State finance to know that if the amounts received from the Commonwealth are reduced by £450,000 in the first half of next year, the finances of several, if not of all, the States, will be seriously upset. Therefore, we should approach this question with very great caution indeed. I know that it is of no use to think of getting the Bill amended. But if the Prime Minister, before this session of Parliament closes, can see some way of modifying the terms and conditions of this Bill, so as to make it not only more acceptable to the States, but a measure which the States will be- better able to put up with so as to make two ends meet, he will be doing a great thing. I do not wish to have any misunderstanding about my feelings on the question of Australian Nationalism. I am a Nationalist to the core of my heart. I wish to see this Commonwealth Parliament strong within the terms of the Constitution, and exercising every function that the Constitution intrusts to us - exercising them to the fullest. But I do hold with that eminent Treasurer whom we had in charge of our finances in the early days of Federation, Sir George Turner, that we cannot proceed too carefully or too cautiously in regard to the necessities of the States. During the first years, when we are laying down, as it were, the foundations of our future .National Government, we must show a consistent regard for those necessities. Having once fixed the position, and come to that point where we can cut off for ever the financial dependence of States on Commonwealth, and of Commonwealth upon the States, we shall no longer have to consider that point of view. But, during this period of transition, we cannot be too careful, cannot be too cautious, in considering the necessities of the States, upon which the prosperity of the Commonwealth must depend. I only wish to make one further reference to this Bill; for I am aware that it is of no use to oppose it with any idea of stopping its passage, and probably with very little idea of getting its provisions amended. I should like to refer to clause 6. I am surprised to see it included in a Bill proposed by our friends on the other side, who have taken up such a strong national attitude upon this subject.
– lt is in accordance with the Constitution.
– 1 have had to differ from lawyers before, and I am going to differ from some of them now. I do not believe that the idea underlying this clause is in the Constitution. I have looked at the Constitution carefully, and it seems quite plain to me that the origin of clause 6 is in section 94 of the Constitution, which provides that after the expiration of five years from the imposition of uniform duties, the Parliament - that is, the Commonwealth Parliament - may make provision for the return to the States of any surplus revenue. The “ Braddon blot “ section which, strangely enough, precedes this, is section 87, which provides that the Commonwealth can only keep for its own use one-fourth of the revenue derived from Customs and Excise, and must return three-fourths to the States.. If those two sections were transposed, and section 94 was made to come before section 87, one would see the continuity of reasoning which provided first for five years and afterwards for ten. A strong point in favour of the view that I take is that in section 94, upon which clause 6 of this Bill is based, it is said that the Commonwealth “may” make provision for the distribution of surplus revenue; but in section 87 - the Braddon section - it is said that the Commonwealth “ shall” do so. I hesitate to discuss the bearing of these constitutional provisions as a layman when I know that lawyers take opposite views of it, but it seems to me quite plain that sooner or later we must have litigation in the High Court over the clause. It is preventing what I, and many others with me, ultimately hope to accomplish, and that is finality to the dependence of the States on the Commonwealth and vice versa. So long as this provision exists on our statute-book, the States will be perpetually interested in any surpluses which the Commonwealth can create, and the latter will be perpetually interested- in not creating any surpluses.
– Hear, hear; that is” good.
– No doubt, with a certain class of Treasurer it is desirable to have no surpluses. It is a bad thing from the taxpayers’ point of view to have any surpluses. But in view of verymany National undertakings which cannot be undertaken except in years when we start with a surplus, I think it is a pity that tins clause is to find a place on the statute-book. I believe that if we could do without its enactment we should be very much better off, and, although I express the opinion with that hesitation which a layman should always exhibit when he is dealing with a question on which lawyers differ, it is clear to mv ordinary commonsense reasoning that there must be some opportunity for differences of opinion as to the operation of section 94 of the Constitution. I wish that the Government had more fully considered the matter than they probably have done before they introduced the provision into the Bill, and so’ saddled the Commonwealth for all time with a mixed kind of financial arrangement between the States and the Commonwealth, which we had hoped to get rid of.
– If the matter were in doubt, how would the honorable member deal with it?
– I would leave out the clause. If the States have any legal right under the Constitution they would soon apply to the High Court to get it established. While this clause remains the Commonwealth Government admit their right, and so prevent any reasonable chance of the matter being solved by the High Court. But, to my mind, “it is clearly expressed in the Constitution that once we get to the end of the ten years’ period, and settle the financial relations between the States and the Commonwealth, we need not go back to section 94, which simply provides for the distribution of the surplus between the period of five years after the institution of uniform duties and the period of ten years when it will be necessary for the Commonwealth to determine its future financial relations with the States. I applaud the Government, I repeat, for bringing in the measure early. I applaud their generosity in dealing with the matter in a way which, in the distant future, will be perfectly just to the States. But I do regret and deplore that they did not see their way clear to be equally generous with the other provisions, and leave the States no ground for serious complaint, which, I fear, they will have against this proposed solution of a great difficulty.
.- I think that the terms of this measure and its introduction by the Government as the first business for the House to deal with will be gratifying to a majority of the electors, who accepted the assurance of the opponents of the Financial Agreement that the people of Australia could safely leave the financial relations of the States and the Commonwealth in the hands of this Parliament, believing that it would deal justly and fairly with the claims of the States. The first comment which I made when I read the Bill was that which has been made by the honorable member for Flinders, and it is in regard to the rather peculiar way in which it was prepared. I could see at once what the Treasurer’s object was from the money point of view, but it occurred to me. as it did to the honorable member for Flinders, that it might have been just as well to state in plain language that the deduction should be made from the amount which is to be paid to the States during the first six months of next year. I think that I can see the reason why the Treasurer brought in the Bill in its present form. It was not for the purpose of hoodwinking the Treasurers and Premiers of the States, because any one who understands the subject knows at once what the BiU, as drafted, means, namely, what the honorable member for Flinders has pointed out. By submitting the measure in this particular form, the Treasurer is carrying out, as nearly as possible, so far as money is concerned, the exact terms of the Financial Agreement, which the Premiers of the States and the representatives of the Commonwealth made at the secret Conference in Melbourne, lt is practically, as the Treasurer said, carrying out their agreement, with only one difference, and that is its non-embodiment in the Constitution, and a limitation to a particular period. Objection has been taken to the Treasurer’s claim that he is practically carrying out the agreement. It has been pointed out that it was ?.n agreement as a whole, and that, if every clause is not carried out, it ceases to be art. agreement. It has been pointed out that the clause for the embodiment of the agreement in the Constitution is absent from thepresent arrangement. Looking at the’ matter from a reasonable point of view, if we are to remember the arguments winch were put forward here in favour of the agreement, I cannot take that clause as a condition on which the Premiers placed muchstress. This, after all, is a matter dealing with the financial relations of the States and the Commonwealth. The States proposed to concede not merely £600,000 to the Commonwealth, but also the termination of the Braddon section, on the 1st » July of this year. By that means they were going to lose about £1, 200,000. This proposal will practically carry out that arrangement. The States were not to give that money to the Commonwealth in consideration of getting the agreement put in the Constitution. The agreement stated distinctly that the surrender of a sum not exceeding £600,000 was to be a recognition of the Commonwealth’s obligations in. regard to the payment of old-age pensions. That was the consideration, and it still exists. Inasmuch as those obligations have been incurred, the Treasurer has a perfect right to say that this Parliament should deduct from the amount which we propose to pay over to the States a portion of the deficiency up to that sum. The measure carries out, to all intents and purposes, the agreement. Why was the provision for its embodiment in the Constitution placed before us? Why were we asked to support that proposal? We are told now that it was because of its being an agreement in perpetuity, and Mr. Murray, Premier of Victoria, used that term in the interview which was read here this evening from the Herald, and which the honorable member for North Sydney has referred to. But that was not the reason. When the honorable member for Mernda, who led the opposition to the Financial Agreement here, proposed to limit its operation to ten years, it was objected that that would mean tying the hands of the Parliament. It was said that if the agreement were put in the Constitution without a definite period being specified, it could be altered by the electors in three years, if they thought fit so to do; so that there was not a question of perpetuity. We were not then asked by the Government to vote for the agreement in order that it might be perpetual. They objected to our even voting for the agreement for ten years. Thewhole opposition to its acceptance was based upon what we called its perpetuity, which, we said, would be the effect of its embodiment in the Constitution.
– Certainly not all of it.
– Yes, the whole of it. The Leader of the Opposition referred to the fact that there was not such a big majority of votes cast against the Financial Agreement. To me it is a surprise that we got a majority at all, when we know how very few of the electors could understand this complicated question.
– That is why your majority was got.
– I think it was the Premier of New South Wales who said the electors did not really understand the question, and yet he was one of those who insisted upon the amendment of the Constitution which necessitated the people being consulted in the matter. If it was the complicated question that we said it was, why were they so eager to send it to the people? Our fear was that the people would not understand what was involved in the alteration of the Constitution, and the most sordid reasons were offered to the electors by the great journals that were backing up the agreement throughout Australia to induce them to vote for it. As regards my own district, the Conservative journal in this city pointed out that Gippsland was desperately in want of money for roads and railways, and that by voting for me the people of Gippsland would be voting for a man who would deprive them of the money that they would get under the agreement. That was put forward as a reason why they should vote to put the agreement in the Constitution. With that sort of argument being used everywhere, it is a wonder that so many people in outlying parts of the Commonwealth, to whom roads and access to their holdings mean everything, were able to rise above their immediate self-interests, and look at the question from a national point of view.
– The honorable member is a great Nationalist !
– I should be sorry if I were not a much greater Nationalistthan is the honorable member for Parramatta. I would rather not see a period of ten years fixed, because I agree with the Prime Minister that by that means we are practically pledging ourselves to keep this arrangement perfect for that time. I also fully appreciate the view of the honorable member for Flinders, that exigencies may arise that may make it necessary for the Commonwealth, in the national interest, to amend the Act. But, short of some great and pressing difficulties arising, I take it that we will adhere, as far as possible, to the term of ten years when it is embodied in the Act.- T am, however, prepared to vote for the Bill with the ten years’ period in it for this reason : When the matter was being debated in the House last year those of us who opposed the agreement were prepared to assent practically to anything rather than refer this complicated question to the decision of the electors, because we feared that the electors would not understand the issues involved in it, and that it might get into the Constitution. We knew perfectly well what a disastrous effect that would have on the welfare of Australia as a whole. Therefore, when we were told that the State Premiers wanted some sort of security, the honorable member for Mernda said, “ We will concede that it should be fixed in the Constitution for ten years,” and on one occasion, in order to make a bigger bid, and get the matter settled then and there, an offer was made to fix it for fifteen years, although many of us thought that dangerous.
– The amendment to which the honorable member refers involved fifteen or sixteen years, because if went on a population basis.
– Yes, but that definite figure was mentioned one night, and I was prepared to .vote for it in order to get a settlement, although I thought it was too long a period in which to tie up the finances of a growing country. Having made that statement, and having been prepared to vote for len years, and also for 25s.- per capita,^ I am ready now to carry out what we offered the other side then. When before my constituents, I pointed out that there was no attempt on the part of those opposed to the agreement to deprive the States of their fair share of revenue, or subject them to uncertainty. I said we were all prepared to give them 25s. per head for at least ten years, and pointed out that the only question at issue between the two parties was that we would not have the arrangement embodied in the Constitution without a time limit, and also that we would not have the final determination of the matter taken from us, to whom the people had intrusted it when they accepted the Constitution, and handed back to the people, who were not asking that it should be handed back. I quoted the right honorable member for Swan, who at one of the Premiers’ Conferences scouted the idea of the Federal Parliament asking the people to take back the power which they gave us. He looked upon it as a humiliating thing to do.
– That was a ten years’ agreement, too.
– Yes, but at the end of the time the power to deal with the finances was to remain with the Federal Parliament, where the people had vested it. The proposal of the Fusion Government last year was to surrender that great power, and hand it back to the people who had given it to us, and who had found no fault with us for the way in which we had dealt with it. I. am quite prepared to adopt the proposal in the Bill, because it carries out what we, who opposed the measure submitted last year, were prepared to do. We are practically carrying out the agreement with the Premiers, except so far as perpetuity is concerned. The honorable member for North Sydney spoke just now about the Premiers conceding something. People cannot concede what they have not got, and the Premiers had no power to concede anything, because at the end of this vear the whole power to deal with the Federal finances was, in the terms of the Constitution, to rest in our hands.
– Did not the Premiers agree to shorten the period of the Braddon section ?
– Yes, by six months.
– And to pay £600,000 ?
– Yes; but the honorable member must not forget that, although this was to get us out of the difficulty of paying old-age pensions, what was at the back of it all was to get over the deficiency which the right honorable member for Swan, when Treasurer, anticipated would amount to £1,200,000 on 30th June last. He proposed to get over that trouble by issuing Treasury bonds, but many honorable members on his own side of the House gave him a strong hint that they would not support that method. Consequently, some other means had to be found to meet the deficiency. The late Prime Minister said, I think at Ballarat, that, by means of the £600,000, and by ending the Braddon section on the 30th June instead of the 31st December, 1910, we should get the better of the States by something like £1,300,000 or £1,400,000, and so the deficiency would be wiped out.
– That was the concession.
– Yes; but the whole power at the end of the present year rests with this Parliament. I interjected to-night that the proposal of the present Government was generous to the States, and was taken to task by the honorable member for Parramatta in one of his well-known sneers.
– The honorable member ought to hold his tongue about sneering. He is one perpetual sneer himself.
– The honorable member never gives anybody time to get in a sneer.
– The honorable member is not sneering now ; he is crowing like a little rooster.
– As between the honorable member and myself at present, may I say that the sneers are his and the crow is mine? I was glad to hear the honorable member for North Sydney say that there was generosity in this measure. It is generous, because it carries out the terms of the Premiers’ agreement, except on the question of embodying it in the Constitution without a time limit. It is also generous because the fight was a hot and bitter one, and the Treasurer has come back with a big and solid majority. In those circumstances, many men might be tempted to say to the Premiers, “ You have fought your fight and done your worst; we have won the day, and now you will have to take the consequences of defeat.” But the Treasurer does not do that. He simply carried out what we contended should be done. That is gratifying to us, and it is gratifying to know that the contentions we put forward in this House, and on the platforms of the country, were accepted by the people who are now, as I stated in opening, realizing that our statement to them that they could trust the Federal Parliament to deal with the States in a generous way was one that could be relied upon.
– I agree that the. Prime Minister has done right in introducing this measure at this early stage. It is well to know that it will very shortly become an accomplished fact that Federal and State finance will be made entirely independent of each other. That is something for which we should all be ready to strive. I understood the Prime Minister, in introducing the Bill, to say that it was with reluctance that he agreed to the term of ten years, and that he considered that he was proposing very generous treatment for the States. In view of the fact that the honorable gentleman’s party swept the polls in the way they did, and that the Financial Agreement passed by this Parliament was rejected by the people - though only by a small majority, 1 should like to remind the Prime Minister - in one sense the honorable gentleman may be regarded as acting generously. I think, however, that he might very well be asked to treat the States a little more generously than he proposes to do. Instead of making the term of ten years begin from the ist of this month, he might make it begin from the ist January next, and from that time on, for ten years, pay to the States 25s. per head per annum by monthly payments, deducting the deficit of £450,000. The honorable gentleman could very well afford to do that. It is a degree of generosity which might have been expected of him. because I read that on the 31st March of this year, in the Melbourne Town Hall, the honorable gentleman, referring . to his party, said -
They were in favour of a fair return on a per capita basis, and would guarantee a fair return for ten years. But they would not bind the future of Australia by putting a practically permanent bond in the Constitution. . . Let three years be given to discuss this matter in the press, on the platform, and’ in Parliament.
At that time, it is apparent that the Prime Minister was prepared to continue the operation of the Braddon section, under which, for another three years, the States would receive a very much larger sum per annum than they will under this measure.
– Did the Prime Minister say that?
– That is what the honorable gentleman is reported to have said in the Melbourne Town Hall. Does he dispute the statement?
– From what newspaper is the honorable member quoting?
– I am quoting from the report of a speech made by . the honorable gentleman on the 31st March last, appearing in that well-known journal, the Illustrated Sporting and Dramatic News.
– Nearly all the shareholders in that newspaper are on the other side.
– The real question is whether the Prime Minister denies the report I have quoted. However, 1 am able to read the report of his address which appeared in the Age. Perhaps honorable members opposite will be satisfied with that -
They were in favour of a fair return on a per capita basis, and would guarantee a fair return for ten years, but they would not bind the future of Australia by putting a practically permanent bond into the Constitution.
Later in the report, I read that the honorable gentleman said -
Let three more years be given .to discuss this matter in the press, on the platform, and in Parliament. ls the Prime Minister satisfied now ?
– Yes.. That is a fair. report.
– Something to the same effect was written by the present Minister of Defence, in reply to a Mr. Wilbur. The honorable senator wrote -
His (Mr. Wilbur’s) queries will suggest the wisdom of the suggestion made by Mr. Fisher recently that the people might well take three years to think over the question, and then, as’ Mr. Fisher says, if they desired any substitution for the Braddon clause it should be embodied permanently in the Constitution. I, for one, would not oppose it.
Here is another member qf the Ministry who is prepared not only to continue die operation of the Braddon section for another three years, but says that if after that time the people are in favour of putting the proposal to be substituted for it :into the Constitution he will not oppose it.
- Senator Pearce advocated a term of twenty-five years.
– That is so. Another representative of Western Australia, Senator Buzacott, said -
He desired it to be clearly understood that the Labour party was in favour of the Financial Agreement.
The honorable senator may have thought so, but I do not think that the rest of us understood that. Senator Pearce wrote to the West Australian in these terms -
I will stand by my original contentions. . . . That the Labour party is in favour of paying 25s. (per head to the States and the special grant to “Western Australia, and, if the agreement is kept out of the Constitution, is pledged to embody it in an Act of Parliament for a fixed term of, say, twenty-five years.
All the other Western Australian senators took up the same attitude. In the circumstances I think the Prime Minister, if he reconsiders the matter will recognise that he might very well be asked to treat the States a little more- generously than he proposes to do, and date the agreement from the ist January next. Under his proposal, the States will receive the proportion of the Customs and Excise revenue to which they are entitled under the Braddon section for the six months ending 31st December df this year. That will amount to a good deal more than 25s. per head of the population. But during the following six months, in order that they may not receive more than 25s. per head, less the deficit, between the ist of the present month and the 30th June next, the Prime Minister proposes to ante-date the agreement to the ist July of this year. The figures work out something in this way : As their share of the Customs and Excise revenue under the provisions of the Braddon section, the “States will receive between, this and the end of December, roughly, £2,500,000. After the Prime Minister has dealt with them in the way he proposes they will receive, for the following six months, about £600,000. I should like also to point out that the undertaking of the State Premiers, to give up £600,000 to the Commonwealth if the Financial Agreement was carried out in its entirety, was based on the assumption that there would be a shortage of revenue. At the same time, it was agreed that the States which were being relieved of the payment of old-age pensions, should contribute to that amount, at the rate of 3s. per head, and that the other States should make a contribution at the rate of only 2s. per head of their population. The Prime Minister ignores that understanding, and is going to place all the States upon an equal per capita basis, charging them a fraction over 2s. per head. One of the remarkable results of this procedure is that, although the Commonwealth is to retain only £450.000, instead of £600,000, Tasmania will have to contribute to that sum £5,991 more than she would have done under the original agreement by which £600,000 was to be retained by the Commonwealth. These are small matters that might readily be adjusted. They mean a good deal to Tasmania, and will mean a good deal to other States, which I believe will soon find themselves in the critical situation unfortunately occupied by that earthly .paradise across the strait. Here is a table, a perusal of which will satisfy the Prime Minister of the correctness of the figures I have just given -
– By whom was that table prepared?
– It was published byrne Hobart* Mercury, which obtained” it from the Premier of Tasmania, Sir Elliott Lewis. The point that I wish to make is that, although the Premiers agreed that the States which were being relieved of the payment of old-age pensions should contribute to the £600,000 to be retained by the Commonwealth, at the rate of 3s. per capita, and that the other three States who were not being relieved should contribute at the rate of 2s. per capita, Tasmania will have to pay more under the present proposal for the retention of only £450,000 than she would have had to pay under .the original agreement, whereby £600,000 was to be retained by the Commonwealth. The Prime Minister appears to me to be taking advantage of certain clauses in the original agreement, and ignoring the considerations that were to be given under it to the States. He is saying, in effect, to the States, “ We will pay you such-and-such a sum ; but later on we shall take back a proportion of it.” That is not a fair attitude to adopt. The Government might well propose to make the new. arrangement operative as from ist January next; and I hope that they will do so. From my point of view, there is a serious omission from this Bill. Special treatment is to be accorded Western Australia ; but Tasmania, which, unfortunately, needs quite as much assistance, is not to be given any special consideration.
– Western Australia’s contribution per capita is twice as large as that of Tasmania.
– I know that is so. I am not cavilling at the treatment proposed to be extended to the western State, which is not getting more than “she is entitled to. My point is that the Prime Minister has objected to do what he might reasonably have done in the same direction for another State. The honorable gentleman quoted some figures this afternoon to support his contention that Tasmania is not entitled to any consideration ; and I propose to use a few of them. He says that Tasmania is not entitled to special consideration, because her per capita contribution is not nearly as large as that of the other States. That would be all very well if, under the present method of collection, known ‘as the consumption basis, reliable figures were obtainable. As a matter of fact, they are not. The Customs’ authorities obtain figures in relation only to goods in respect of which Inter- State certificates are issued. Unfortunately for Tasmania, many commodities are consumed in that State upon which duty has been paid in Victoria, although it ought rightly to have gone to the island State.
– Does the honorable member challenge the administration?
– No; I am not in any way reflecting upon it. I do not say that it is the duty of the Customs officials to obtain these figures.
– It is.
– I hardly think so. A regulation was passed whereby passengers’ luggage passing from one State to another should be allowed to come in free. Hundreds of Tasmanians visit Victoria, and, while here, purchase numerous articles of dress, jewellery, and other things, in respect of which no Inter-State certificate is ever taken out. Owing to the regulation I have mentioned, their luggage is not inspected, the purchases they have made in Victoria are carried by them to Tasmania, and the Customs authorities have no record of them.
– How could we form an estimate in respect of such transfers?
– An accurate estimate could not well be formed ; but it may readily be assumed that the amount involved is fairly large.
– Does that happen in Tasmania any more than in Western Australia ?
– I do not say that it does; but if this Parliament knows that Tasmania has lost, say, £500,000, it ought to grant sufficient to that State to compensate it for the failure of the bookkeeping system.
– Let Tasmania come in as a necessitous State, and we will deal with her.
– I shall ask for a definite sum immediately, namely, £225,000; indeed, it is possible I may ask for £400,000. The honorable member for Maranoa may think he has said a very smart thing, but I regard it as more insulting than anything else.
– How is it insulting? There is provision in the Constitution for necessitous States.
– I am not asking for this money because Tasmania is in need of it. I base my claim on common justice, and on the Federal feeling that ought to exist.
– What is justice?
– It is easy to avoid a claim by asking that question. There is no doubt that Tasmania has lost very heavily. It is estimated by the Tasmanian Statistician, who is known as one of the ablest officials of the kind in the Commonwealth, that the annual loss through Customs leakage has been no less than £40,000. He takes the year 1908-9, and shows that out of £295,668 credited to Tasmania on account of Customs duties, no less than £139,193 was credited on account of goods originally imported into other States and subsequently transferred to Tasmania, while the balance of £156,475 ‘represents duties upon’ goods originally imported into Tasmania. That means that 47 per cent, of the duties credited to Tasmania were derived from InterState imports, while in Victoria only 5 per cent, of the duties credited to that State were so derived, and in New South Wales 8 per cent. The Statistician goes on to say -
This indicates the relative trend of trade. The larger the volume of Inter-State transfers the greater the chance of leakage in adjusting the debits and credits between States, and the greater the certainty of credit shortage to the importing State.
If I can show that a certain amount has been lost to Tasmania, this Parliament, knowing that that State is fairly entitled to the money under the Constitution, will surely be prepared to give what is deemed reasonable and fair. I suppose I am not talking to a lot of quibbling lawyers.
– Lawyers are all liberal-minded men.
– I do not see much liberality in the honorable member’s attitude on this question. I regard this House as a Court of equity and good conscience, superior to mere technicalities.
– Why did the honorable member not press this matter last session, when the Fusion Government were in power ?
– Because there was a certain agreement embodied in a Bill before the House to which the Premiers and Treasurers of the States had assented, and had I moved in this direction then and been successful, that agreement, which, to my mind, embraced even more serious matters, would have been upset. This is the time to deal with the matter, because the House has now an opportunity to say “ Yes “ or “ No “ to a request of the sort. I could not move when the Financial Agreement was before the House without interfering with the settlement of the main question; and I have taken the first opportunity to submit this motion. It is not the first time by many that I have alluded to the matter; I have always endeavoured to keep the financial position of Tasmania not only, before this House, but before the people of that State.
– Would the honorable member be surprised to learn that Tasmania will contribute 3s. 9d. less than the next lowest contributing State?
– I should be surprised. The Prime Minister sets it down that Tasmania will contribute 13s. nd. per Head; but, according to the Statistician of Tasmania, he ought to add 4s. or 5s. as re presenting the amount the State has lost through the defective system of bookkeeping. Similar loss has occurred in Queensland in connexion with New South Wales, though it is a little more pronounced in the case of Tasmania and Victoria.
– We do not mind that !
– The honorable member represents a State with boundless resources, where, I remind honorable members, there is not yet even a land tax. In Tasmania, on the other hand, every available source of taxation has been tapped, and there is not much room for the Treasurer to raise another £100,000 or so should it be required.
– He can alter the incidence of taxation.
– I do not think that the incidence can be altered very much. i shall quote some figures to show that Tasmania is not wasting her revenue, and to explain how we have got into our present position. The Prime Minister ought really to take into consideration the leakage, because he bases his position on the Customs figures, which take no account of the importations I have mentioned. The Government Statistician of Tasmania estimates the loss at £40,000 a year, which sum ought to have been credited to that State.
– The allocation proposed in the Bill will involve New South Wales in a loss of £1,270,000 annually, and yet its representatives are not squealing.
– It is one of the merits of the scheme which we are now considering that it abolishes the bookkeeping system. In the past, New South Wales, at the expense of Queensland, has received substantial sums to which she was not entitled, just as my own Sta’te has lost considerable sums by reason of the leakage to which I have referred, whilst Victoria has reaped the advantage. My contention is that this revenue should have been returned to the States on a per capita basis, which is the only truly Federal basis. Now that New South Wales is to be treated in a Federal spirit, she will not receive within £1,000,000 a year of what she formerly received.
– Yet we are not complaining.
– And I am not complaining. 1 am merely pointing out that, owing to a defective system, Tasmania has suffered a substantial loss, and as a small
State which has made relatively bigger sacrifices than any other State, I say that, from the stand-point of equity and good conscience, this Parliament ought to do the fair thing by it.
– Why does not Tasmania become a province of Victoria?
– I should like the honorable member to visit Tasmania and preachthat doctrine. If he did so he might find himself in the Derwent.
– His station is bigger than Tasmania.
– That statement is like a lot of the lies which emanate from the Employers’ Federation.
– In order to show that Tasmania has not wasted money, 1 propose to quote a few figures. During 1908-9 the expenditure of that State was £5 3s. 4d. per head, whilst the average expenditure for the six States was £7 19s. per head. During the same period, Tasmania was credited with 25s.1d. per head as her share of the Customs and Excise receipts, whilst the average amount credited to the six States from this source was 37s.1d. per head. I am satisfied that there is not the great disparity between the consuming capacity of Tasmania and that of the other States which these figures disclose. They clearly indicate that there has been a leakage somewhere. I may also explain that in Tasmania the land tax is levied not merely upon the value of the land itself, but upon the capital value of the holding. If a man effects improvements upon his property, he is taxed upon its capital value.
– Does the honorable member think that it is the right thing to do?
– I do not, and I am glad to know that in Tasmania this year it is proposed to adopt a land values tax. My only regret is that the Commonwealth Government contemplate superimposing a similar tax upon the unimproved land values. In the State which I have the honour to represent, the amount collected by nay of land tax is 6s. 5d. per capita. What does New South Wales pay? Only is. per capita. Queensland contributes nothing in this connexion, South Australia 4s. 6d., and Western Australia 2s. 6d. ; whilst the average for the six States is1s. 8d. It will be seen, therefore, that Tasmanians are not shirking their fair share of direct taxation. During 1908-9 Tasmania collected from income, dividend, and ability taxes,10s. 2d. per head, as against 2s. 6d. per head in New South Wales, 4s.9d.in Victoria, 9s.10d. in Queensland, 7s.1d. in South Australia, and10s. in Western Australia, the average for the six States being 5s. 3d.
– How much was derived from the ability tax in Tasmania?
– I cannot give the honorable member the exact figures.
– The tax imposed by the Fusionist Government in Tasmania falls even upon the poor washerwoman, and that is why it yields so much.
– The honorable member looks so prosperous that I doubt whether he pays his fair share of taxation. The revenue derived by Tasmania from all sources - Commonwealth and State - during 1908-9, was £50s.7d. per head, as against £811s. 6d. per head in New South Wales, £69s.9d. in Victoria, £8 12s. 6d. in Queensland, £8 16s. 3d. in South Australia, and £12 4s. 7d. in Western Australia, being an average for the six States of , £81s. 9d. I might quote a number of other figures which indicate that although Tasmania has taxed herself freely she has lost by way of leakage a considerable sum of money which she couldill afford to lose. But from what I have already said that fact must be apparent. The figures supplied by the Prime Minister entirely ignore that leakage. Of course, it is impossible to estimate with accuracy the total amount of this loss, but it is clear that during the past ten years it must have aggregated between £300,000 and £400,000. At a later stage I will move that some concession should be granted to Tasmania to reimburse her for that loss. I might also remind the Prime Minister that the honorable member for Hume has admitted that Tasmania has sacrificed a considerable sum by reason of the leakage to which I have referred. 1 was glad to hear him ask that a special concession should be made to that State to compensate her for that loss, and 1 am sorry that he is not now present to lend me his valuable support. The honorable member was Treasurer in the Deakin Administration for a long period, and, after paying a visit to Tasmania, he was satisfied that that State had lost at least £20,000 annually in this connexion. Surely he knew what he was talking about ! He ought to, and his word would carry weight now. I do not blame the Commonwealth Administration, but the system of record is defective. There are many importations into
Tasmania of which the Customs Department has no knowledge, and about which it cannot give a correct statement. No doubt the Melbourne officials are of opinion that the Tasmanian loss of revenue is very small, but they have no means of gauging the leakage to which I have referred. I hope that attention will not be given to their statements in preference to those of the Tasmanian Statistician, who is as able as any in the Commonwealth. The per capita distribution of revenue w-as his idea, and his opinion regarding the importations of Tasmania is entitled to as much respect as is that of any other man in Australia. I hope the Prime Minister will come down from his high horse, and, instead of asserting that Tasmania is not entitled to consideration, because the Treasury figures show that her consumption is only so much per head of population, will look the facts in the face. It is clear that the Customs records do not take account of many importations for which the State should be credited.
. -I listened with great attention to the. speech of the honorable member for Wilmot, and tried to picture to myself what the effect on the debate would be were every honorable member to deem it necessary to attempt to show how unfairly his State is dealt with by the necessarily roughandready per capita method of distribution of revenue which it is now proposed to adopt. We have all recognised for years that the substitution of a per capita distribution for that provided for under the bookkeeping system would necessarily involve many inequalities and inequities ; and we have become reconciled to that necessity.
– It is easy for New South Wales to be reconciled to it, because she is getting .more than her share.
– In the early days of Federation I was very much struck by the fact that South Australia was making a profit of something like £140,000 a year out of her Postal administration, while the other States were losing money in the exercise of that function.
– Tasmania made money out of her Post Office.
– I reflected then that, had all the States considered exactly what they would gain or lose in different directions by the proposed national partnership, there would have been no Federation. The honorable member for Wilmot contends that, because Tasmanians find it profitable to shop in Melbourne occasionally, and the value of their purchases is not recorded when taken back to Tasmania, the Prime Minister should make a special allowance to the State. Were I to deem it my duty to look with like microscopic exactitude into the dealings of the public of New South Wales, I could spend some time in showing that the proposed allocation of Customs and Excise revenue will involve that State in a sacrifice ot £1,200,000 per annum. But I recognise that a decision would be impossible were each of us to endeavour to show with the nicest accuracy how his particular State will be affected. Tasmania, if compared with the other States, is a poor community, but the test of its financial position is not the aggregate smallness of its revenue or expenditure. That the people there spend less . money than do those of the. other States is not evidence of their poverty. I have heard it said that Tasmanians have to leave the country in order to die, so that it may be evidence that they are leading the simple life, and indulging in very few of the luxuries in which the people of the other States indulge. If that is so, instead of being objects of pity, they are entitled to philosophic admiration. This is one of the most important debates which we are likely to have in this Parliament, because it revolves on what I call the pivot of Federation. When Federation seemed on the eve of accomplishment, there appeared what the late Hon. James Service called the “ lion in the path. “ All die details of the Constitution having been settled to the satisfaction of the leading men of Australia, an apparently insuperable obstacle to union was found in the fact that, while in one State Free Trade was rampant, in others Protection was rabid, and in others, again, only moderate. There was quoted in this Chamber recently the solution offered by that great statesman Sir Henry Parkes, in a passage which I recollect with interest. He said that New South Wales was prepared to trust the Federal Parliament to deal with the fiscal question. Had not that been so, we should not have had Federation. After the meetings of the Convention at Adelaide, Sydney, and Melbourne, the question arose : What will the States do for revenue when they have parted with their right to levy Customs and Excise duties? It was only at the last moment, when failure seemed imminent, that Sir Edward Braddon proposed what has since been called the “ Braddon blot” - an arrangement which required the Commonwealth to return to the States three-fourths of the revenue from Customs and Excise. Then, honorable members will recollect, it was recognised as unwise to fix upon a definite proposition of that sort for all time, and it was ultimately limited to ten years, trusting to the Federal Parliament to substitute some other method in the light of the experience which the Australian people would gain in the intervening ten years, from the beginning of Federation.
– The limit was put in the Constitution at the instance of the Premiers’ Conference at Hobart.
– It was a very wise provision. Our view of the relations of the States to the Commonwealth in 1900 was very different from what it is to-day; and that is the reason which I gave for hesitating to confirm the proposal brought forward by the Fusion Government to make this a provision in perpetuity. I realized that during the next ten years we should have data before us which would probably alter our views of the relationship of the States to the Commonwealth, just as much as similar data has altered our views in the period 1901 to 1910. The debate seems to me to be all-important, because this question, being the pivot upon which the success of the Federation depended, we are now called upon, as representing the people of Australia, to substitute something for the Braddon section. It has been said by some people - I think without sufficient study of the Constitution - that, as the Constitution provided that three-fourths of the revenue from Customs and Excise should go to the States, we should, to some extent, adhere for all time to that provision. But anybody who knows the elements of the Constitution is aware that it was specially intended that this Parliament should reach the position in which we find ourselves to-day, of being called upon to decide whatis now a fair distribution of the Customs revenue in the light of the experience that we have gained in the meantime. A good deal, too, has been said by honorable members as to whether or notwhat is proposed is a fair substitute for the agreement entered into between the Premiers and the late Federal Government. I have expressed my regret before, that we have had no report, and no precis of what took place at their Conference. I should like to say that, with every desire to look at this question from the aspect of fairness towards the States, I do not recognise any obligation on the part of the Federal Government to abide by any agreement that was made with the Premiers of the States. That Conference was not the outcome of an appointment by this Parliament. It was a Ministerial Conference. Had it been entered into by the Labour Government, we should have had just as much right to take exception to the conclusion at which it arrived as honorable members opposite have to take exception to it now as having been arrived at between the Fusion Government and the Premiers of the States. We must observe in this matter the well-known maxim of the Equity Courts, to be just before we are generous. A great many appeals have been made for the Commonwealth to be generous. But we are trustees. A trustee cannot be generous. He must be just. Although the axiom may seem a bit hard, he is under an obligation to do his duty. We, as representatives of the people of the Commonwealth, are under an obligation to do justice to them by substituting for the Braddon section of the Constitution what we consider to be a just provision for the States out of the revenues collected by the Commonwealth. It is quite true that the Premiers of the States were prepared to accept a certain settlement. If we had the proceedings of the Conference before us, we should know whether the object aimed at was a constitutional, or whether it was a political one. But we do not at present know what the object was. I am unable to forget that some of the men who took part in that Conference had expressed opinions quite contrary to the idea of putting such an agreement into the Constitution, and they had deprecated the suggestion to make an arrangement for all time. When the amendment moved by the honorable member for Mernda was before the House last session, I was one of the seven or eight supporters of the Fusion Government who joined with him in moving for a limit to be imposed to the suggested permanent arrangement.
– We know that very well.
– And I know that the right honorable member knows it. Therefore, he need not remind me that he knows it.
– We know that the honorable member left us over the matter.
– I know that the Fusion Government left me as one of its supporters. What occurred pretty nearly cost me my election, because my constituents concluded that, as I differed from the Fusion Government on this question, I had left them, and had tried to break up a Ministry which had, as a fact, left its supporters without any consultation.
– Oh, no.
– They admitted it.
– I would ask the honorable member not to pursue that line of argument.
– I do not wish to create any unpleasantness with gentlemen with whom I have been, and hope to be again, associated in some way or other. I can only say that I considered, and I consider now, that it would have been extremely undesirable to put that’ agreement into the Constitution, for the reason I then gave. I regard the Constitution as our Magna Charta. I think that it is a document to which we should take off our hats. I consider that we should so respect it that we should do as the people of Norway and Sweden do with their Constitution. We should frame it, and haveit constantly before us. We should regard it as embodying a great national partnership which has been made between the States and the Commonwealth. There is, I note, a tendency from time to time to look lightly upon proposed alterations of the Constitution, so that if we framed it we should have to have a movable back so as to enable us to record the alterations made. It would be a great mistake now to put any agreement in the Constitution. It would be a great mistake to make any agreement in substitution for the Braddon section for all time. When honorable members criticise the present proposal - I admit that I see demerits as well as merits in it - upon the ground that it is contrary to the agreement made with the Premiers of the States, I submit, in the first place, that we are not bound by the conclusion at which the Premiers and the then Federal Government arrived. We are bound for ten years under the Constitution. The question has been left to this Parliament, not to any Government. The Constitution says, “ Until the Parliament otherwise provides.” Those who were members of this House in the last Parliament will recollect that Parliament did not approve of the proposed substituted agreement.
– Parliament did approve of it.
– Well, it did and it’ did not. I will show how it did. We know very well that in the first di vi - sion this House negatived the agreement. In the second important division it was approved of by a majority of one.
– Parliament approved of it.
– The Government secured a majority of one in the second division, because it waited for one member to come back, but would not wait for another member to come back a week later. I hope that honorable members on the other side, when they know me a little better, will understand that I am not so contending to placate them. I am doing it because ‘ I want to say what I think is right, and I want to tell my honorable friends on this side wherein I think their action was wrong. I am not going to turn from what I think the right thing to say in the House. The agreement was approved, and it was not approved. If we had waited a week longer for Mr. Watson to arrive, we have reason to believe that it would have been negatived.
– A week ?
– Well, eight or ten days if the honorable member prefers it. At all events, the agreement went to the people and it was negatived. The people, I know, felt that it was undesirable to . bind the Australian taxpayers for all time to give the same amount to the States ; that it was wrong to put the agreement in the Constitution because of the difficulty of getting it out. I then characterized it as a paw in a windlass. I said that we could not get it back, that we would have to go to the people and get them practically to give up a right to moneys which had been given to them for all time by this Parliament. Now the question arises - What arrangement should be made? The Premiers of the States recognised that 25s. per head which, roughly speaking, represents about one-half of the present Customs revenue, was a fair amount. But they stipulated, I admit, that it should be paid for all time. And in consideration of getting that money for all time they agreed to give up a sum of money equivalent to the extra cost which had fallen upon the Commonwealth Government in connexion with old-age pensions. They also agreed that the operation of the agreement should begin six months before the expiry of the Braddon section. They further agreed to have deducted one-half of the deficit which the honorable member for Swan as Treasurer had announced to the House. Now we are told - and I want to deal quite fairly with the case - that unless we take the whole of the agreement we should not take anything. In answer to that, I submit that we are not bound down by the agreement at all. It is the Parliament, as now constituted, which has to determine what is a fair and just substitute for the Braddon provision. But supposing that we were bound by the agreement, I ask the House- Would it not be just to cut out the perpetual aspect of it and the constitutional aspect? What I want to point out is that the perpetuity aspect of it does not touch the principle, but only provides how long the agreement is to last. The other provision about the agreement going into the Constitution does not touch it. The principle is contained in the amount of money which is to be given by the Commonwealth and the amounts which are to be deducted from the States in consideration of that general amount being allocated. Well, the Bill does that, and in that respect I think that it is perfectly fair. It is quite true that when this question was before the House, I did say in debate that if the States were prepared to accept an amendment so as to have the provision made for ten or fifteen years I should be prepared to make the amount 30s., because I saw then that whilst the Constitution contemplated that Customs and Excise duties would be the principal source of revenue for the Commonwealth, it was not then contemplated that it would ultimately take .put of the hands of the States the power of land taxation, and so reduce their income in another direction. It was not then contemplated that the Commonwealth would take a sum of £80,000 which the States now derive from their local bank note issues. But apart from those things, I then considered, and now consider, that 50 per cent, of the Customs and Excise revenue is a fair allocation. Some honorable members have talked of a payment for ten years as if that were to be the final provision of the Commonwealth. It is nothing of the kind. The Bill provides that that allocation shall be for ten /ears, or for so long after as the Parliament may provide. Therefore, it is only taking a wise course. It is taking one step at a time. It says, “ Ten years ahead is all that we can safely provide for at present, and we leave it open for the Parliament ten years hence to “re-consider the whole question as it is doing now in connexion with the Braddon section ; to reconsider whether that shall be continued, or increased or decreased, according to the circumstances of the time.” Therefore, this Bill is not, as the honorable member for Wentworth has said, giving the States an instalment of ten years instead of twentyfive years. If is giving them an instalment of ten years, leaving in this Parliament the right to give them a further instalment if the men who happen to represent the people at that time think that we have under-estimated or over-estimated the total amount to which the States are entitled.
– Still, that is a pretty clear indication that it is to be reviewed. The same provision is in the Constitution.
– I admit that, and I think that the matter ought to be reviewed then, because I believe that from time to time we shall find that the circumstances will require the Commonwealth to take a different view.’ We do not know what may happen to the Tariff in the next ten years. Supposing, for instance, as I pointed out last session, that the people of Australia took it into their heads to reduce the cost to the people of all the articles of daily necessity by reducing the Tariff. Under a Revenue Tariff we might have a much larger income from Customs than we have to-day. In that case it would be perfectly fair, as a proposal, to say that, inasmuch as the people of the different States are contributing through the Customs a much larger proportion of the Commonwealth revenue, they ought to have a larger allocation of the total receipts. But if, on the other hand, as appears to be the tendency nowadays, the Tariff is going to be increased towards the prohibitive stage; if the wall is going to be raised so high that imports cease to come into the country, it will then find the revenue from Customs dropping materially. In that case, in ten years we might have a revenue of only £6,000,000 instead of £12,000,000, and we might then say that the fixed amount of 25s. per head, whatever the revenue may be, is too great a proportion of it. I submit that there are so many political vicissitudes which may affect the revenue from Customs in the next ten years, that it would be unwise and unbusinesslike to attempt to forecast the relationship of the States to the Commonwealth financially for more than ten years. This provision provides for ten years, with the right in the Parliament to review it ; and it fixes upon a payment of 25s. per head, which is a fair estimate, and one agreed to by the Premiers and the Commonwealth Government. I do not say that the fact that they did agree upon it is conclusive ; but the fact is important, because I think that whatever we may consider is due to the Commonwealth, we should endeavour to soften, as much as possible, the somewhat bitter spirit which seems to be growing up between the States and the Commonwealth. I consider that it will be a very unfortunate day for the Australian people if we, by our legislative attitude, create a feeling of hostility between the political entities known as the State Governments, and the political entity known as the Commonwealth Government. We want to always keep before our minds the fact that the people who make up the States’ population are identical with the people who make up the Commonwealth population. Therefore, what we have to do is not to wrangle with the States as to what we can give and what they ought to receive; but to remember that this is a partnership, that we have found, it desirable to assign certain political functions to the local management of the States, and to take to ourselves certain larger functions which have a common effect on the whole people of Australia ; and that from time to time, when we are dealing with the Federal finances so far as they affect the States, we should try, by a system of just accountancy, to allocate to the local Governments what we think they should fairly have, and to reserve for ourselves what we think we may fairly need to carry on our legitimate exertions and enterprises. Something has been said about the special allocation to Western Australia. The honorable member for Wentworth complained that the Bill did not provide for that purpose for more than ten years, but ten years does not exhaust the sliding scale beginning at £250,000 a year, which is reduced year by year by £10,000. It would require twenty-five years to bring that sum down to nothing by a series of gradations, and the obvious suggestion which that carries with it is that it is intended that, when Parliament comes to deal with the question ten years hence, it may con tinue that sliding scale so that it will take twenty-five years to get rid of the allowance of £250,000 a year to that State. The Premiers have from time to time expressed in the newspapers what they deem to be the great demands which will be made upon their finances, and I have been rather interested and amused when they have put forward this category of obligations to notice that they include a number of works which they say are necessary to open up the country, but which will never touch their Consolidated Revenues. They include railways, wharfs, tramways, and a variety of other expenditures, which are all bringing them in a greater percentage to-day than they are paying on the loans out of which such works are built. Therefore the States have no right to endeavour to affect the public mind by an appeal for sympathy, putting forward a catalogue of channels of expenditure which have no possible application to any allocation that may be made by the Commonwealth to the States. The New South’ Wales Parliament has not been of late years carrying on its own business with that eye to economy that past Governments have adopted. The expenditure of New South Wales has gone up to something like £15,000.000 a year.
– That is rather hard on the Wade Government.
– I am not referring to the Wade Government only. I am talking about the Carruthers Government also, for die increase has gone on step by step until the New South Wales expenditure to-day is a fair subject for comment. I dare say the same may be said of some of the other States. If the States make an ad misericordiam appeal to us, saying, “ We want a bigger allowance from you, because we have to carry on so much work in order to open up our country to make room for the immigrants which you are going to attract,” we have a perfect right to point out that the opening up of that country is not done by money which the States get from the Commonwealth, but by loan money.
– Not altogether.
– A great deal of it.
– Main roads are not built out of loans.
– Many main roads have been paid for out of loan money. I speak as an ex-Minister of Public Works in New South Wales for three years.
– They are not now paid for. out of loans.
– I do not know what is done now.
– The Central Government has nothing to do with them.
– I know that they have now been handed over to the municipalities, but it is not at all ascertained how that change will ultimately turn out with regard to the condition of the roads. At any rate, we have a perfect right, when appealed to by the States to consider their necessities, to ask ourselves’ what are the real calls on their Consolidated Revenues. It is quite possible that Tasmania may be entitled to something additional. I quite agree with the honorable member for Maranoa that it is no reflection upon Tasmania to speak of her as a “ necessitous State “ if she asks for more money.
– She has not done so yet.
– I did not say she had, but I suppose I have a perfect right to put a hypothesis. If she should appeal to the Commonwealth on the ground that she cannot afford this or that, we have a perfect right to say, “.If you -do that, you come under the term used in the Constitution, of which your people approved.” I do not know why the right honorable member for Swan should feel called upon to champion the interests of Tasmania as well as those of Western Australia.
– I was just wondering why the honorable member was championing the honorable member for Maranoa.
– I am not championing him. I merely remark that when he made the statement just now that the word “ necessitous,” used in that connexion, was no term of opprobrium, inasmuch as it was used in the Constitution, he was answered in a manner which suggested that he had said something derogatory to Tasmania.
– So he did. It was the way he put it.
– Now the question is brought down to the way in which the honorable member said it. I cannot go into that, because I did not notice the lone of voice he used. At all events, when it appears in cold type, the phrase will not look very bad, because it will merely indicate that perhaps Tasmania wishes to come within that category. Unless some very specific reason is given to the House, I do not see why we should do in the case of that State what was done in the case of Western Australia. In the Constitution itself the different condition of Western Australia was recognised. Her population was of such a one-sided character at that time that it was admitted that equal treatment with the other States would not be fair and equitable. The same condition obtains to a certain extent to-day. and I have always understood that it is upon that ground that this differential treatment is meted out to her. But nothing of the sort is shown in regard to Tasmania, and, therefore, I do not see why Tasmania should be included in that special treatment. I do not want to speak in any way derogatory to Tasmania. It is a beautiful island, and 1 enjoy going there. It affords me excellent fishing, and the people are very genial and good-looking. I am willing to say everything that can be said in favour of Tasmania, but we are on business to-day and not on a pleasure trip. We have to do what is fair and just, and not what is generous.
– We are asking for justice, not generosity.
– I wish the honorable member had put it on that ground. If he had, I should” have listened to him and analyzed his reasons even more closely than I did. At all events, he submitted no definite figures, and the mere fact that people come across here and buy goods in what they consider to be a cheaper and more varied market to take back to Tasmania is surely a ground on which every State could appeal. Could not the South Australian people say, “ Our women folk go to Melbourne because the Melbourne people make better frocks and hats, and bring back hundreds of thousands of pounds’ worth of goods to Adelaide. All that merchandise comes in here without any entry being passed, and, therefore, we ought to have an allowance for it?” Or they could appeal on the ground that agricultural or other machinery is bought in Melbourne and taken over to Adelaide. If that sort of thing were admitted we should never be done with it.
No business man would indorse the proposal that we should apply the microscope to these things, and constitute ourselves a body of actuaries to go into all those trade details. I do not say that with any desire to deprecate, the attempt of the honorable member for Wilmot tq get some allowance for Tasmania, but we ought not to deal with matters of that sort unless they come before us in a more business-like way. On the other side of the argument I wish to say what I have said before, that when this allocation was talked of originally, and the threefourths was fixed, for which we now propose to substitute one-half, it was not contemplated that the State Parliaments were going to be denuded further of their powers of taxation by practically having the power to tax land taken out of their hands. I said the other night that I have ceased to object to a land tax, because I know it is inevitable; but upon business and political grounds I think it is highly undesirable that we should duplicate land taxation. We are now proposing to .take out of the hands of the State Parliaments a very important source of revenue, land taxation, because it is impossible to suppose that the people of the States will tolerate a duplicated land tax. We ought to recognise that, after all, revenue from Customs taxation is not the only form of revenue we are proposing to take from the States. It is intended to take from the States, as the Prime Minister must recognise, a lump sum of ,£80,000 by means of the proposed Treasury note issue. Other proposals have been suggested by which we should denude the States of further sources of revenue.
– None of them’ are very profitable, I think.
– I do not think that any of them are very profitable, with the exception of the two I have mentioned. The Prime Minister will admit that the State bank note tax is profitable to the extent of the amount I have stated, and that the land tax is a very important tax in all of the States, not mentioning my own State particularly. I should like to say that during the next ten years there will be many changes in the incidence of taxation in the Commonwealth and the States, and I am, therefore, not only willing to approve, but I think the Government have done the right thing in fixing upon ten years. When this question was before the House last session 1 was one of those who moved, not that the payment should be limited to a term of years, but to a time when the population of Australia had reached 6,000,000, because, by a calculation that was made at the time, the allocation would then amount to £7,500,000. In the amendment submitted by the honorable member for Memda it was provided that the payment of 25s. per head should terminate as soon as the population reached 6,000,000, or the amount allocated came to £7,500,000, which was estimated to extend to about fifteen years. I should like to conclude by saying that I hope the House will recognise that in the first place we are not bound by what the Premiers want. We are bound by what we think is just. What -the Premiers want may be some guide to us as to what will satisfy them, and I arn sure that in dealing with this matter we have no desire to ignore the feelings of the States or their representatives. I ask honorable members to join me now, and on all occasions, in trying to soften the asperities which seem from time to time to be growing up between State and Commonwealth representatives. They lead to the impression that we forget that we all represent the same people, that in the end our interests are identical.
Debate (on motion by Sir John Forrest) adjourned.
Mr. SPEAKER reported the receipt of a message from His Excellency the GovernorGeneral recommending an appropriation for the purposes of this Bill.
– I move -
That the Order of the Day tor the second reading of this Bill be read and. discharged, and that the Bill be withdrawn.
– Although the Crown Law officers do not consider it necessary, I think it is better, that this Bill should be initiated in Committee.
Question resolved .in the affirmative.
Order of the Day discharged ; Bill withdrawn.
House adjourned at 10 p.m.
Cite as: Australia, House of Representatives, Debates, 14 July 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100714_reps_4_55/>.