4th Parliament · 1st Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
– Yesterday I took it upon myself to write to the Premier of Victoria expressing sympathy, on behalf of honorable members, with those who were injured in the railway disaster at Richmond, and with the relatives of those who were killed. To-day I received the following reply : -
Melbourne, 19th July, 1910.
Dear Mr. McDonald,
I am in receiptof your letter of this day’s date, expressing the deep sorrow felt by’ the members of the House of Representatives respecting the railway disaster at Richmond yesterday, and their sympathy with the relatives and friends of those who were killed, as well as with those injured by the accident.
In reply, I beg to request that you will be so good as to convey to the members of the House of Representatives the thanks of the people of this State for their kindness and thoughtfulness, which will be duly brought under the notice of those concerned, through the medium of the public press.
– I feel that you, Mr. Speaker, have interpreted the unanimous opinion of the House in conveying our sympathy to the sufferers and relatives of those who were lost in the Richmond railway disaster. Deep sorrow has thrilled us all, and our sympathy is with those who have been bereaved and with those who are suffering from injuries and shock. I hope that the intelligence and wit of man will be able to devise means to prevent the recurrence of similar catastrophes.
– I am sure that what you have done, Mr. Speaker, meets with the approval of every honorable member. We are all very much obliged to you for taking action so early. The event to which you allude was so sudden and so sad that it is difficult to realize. Our sympathy is with those who have been bereft of relatives, or whose relatives have been injured,and with those who are suffering. I concur heartily in what the Prime Minister has said.
– As Parliament has now been in session for nearly three weeks, and the House has not yet been officially informed of the personnel of the present Ministry, will the Prime Minister, at as early a date as may be convenient, announce the names of the gentlemen who compose his Administration, and the portfolio allotted to each? Such an announcement was made in the Senate on the1st of the month.
– When a change of Government has taken place after a dissolution, it is not usual to announce it at the beginning of the new Parliament. Honorable members have documentary and other evidence of the existence of my Administration. When a change of Government takes place during a session, it is customary to announce the names of the new Ministers.
– Has the Minister of External Affairs obtained a formal opinion from the Attorney-General as to whether, under the true construction of the Agreement, it would be possible to take a railway line from the Northern Territory into Queensland, or outside South Australia? If so, will he lay it on the table?
– I am furnished with the formal opinion of the Department, and shall lay it on the table.
– Last week, the Minister of Trade and Customs promised to consult the Cabinet regarding a proposal to impose an export duty on hides. Is he yet in a position to make a statement to the House on the subject?
– Will the Minister of Trade and Customs exercise the powers vested in him by the Customs Act to prohibit the importation of films showing the Johnson- Jeffries fight?
– I am not empowered by the Customs Act to do so.
– It was stated in yesterday’s Argus that the Minister of Home Affairs has in contemplation the planting of 1,000,000 trees in the Federal Capital
Territory. I wish to know if the honorable gentleman can pledge Parliament to the expenditure of money there, and whether he is going to undertake this work without the express authority of Parliament.
– I am not going to spend a shilling without the authority of Parliament; but if Parliament gives me the authority, I shall carry out a splendid scheme of afforestation in the Federal Territory.
– It would appear, from a paragraph in yesterday’s Argus, that members of the Political Labour Council are exerting coercive influence upon individuals.
– The honorable member must not, under cover of an allusion to a newspaper paragraph, use arguments in asking a question.
– Mr. Hannah, a member of the Victorian Parliament, has been compelled to resign from the Commonwealth Protectionist Association because he is a member of the Political Labour Council. I wish to know whether the members of this Ministry are being coerced by the Council into resigning their position on other political organizations.
– I decline to reply to that question.
MINISTERS laid upon the table the following papers -
Northern Territory Acceptance Bill - Opinion of the Attorney-General regarding the interpretation of the clause in the agreement relating to the Transcontinental Railway.
Fisheries - Report by the Director on the work of the Endeavour, Sydney to Brisbane, 20th June to1st July, 1910.
Beer Excise Act - Regulation Amended (Provisional) - No. 15A (1) - Statutory Rules 1910, No. 65.
Electoral Act and Referendum (Constitution Alteration) Act - Regulations Amended (Provisional) - Nos. 26A, 31A - Statutory Rules 1910, No. 23.
asked the Prime Minister, upon notice -
Whether, in view of the beneficial effect it would have in shortening the time occupied by questions, replies, and discussion in dealing with the Estimates of Expenditure submitted by the Government, he will consider the expediency of appointing a Standing Committee of Accounts to report annually upon past and proposed ex penditure, after investigating the same, and examining, if necessary, the permanent officials of the service with reference thereto?
– In reply to the honorable member’s question, I have to state that it is not considered desirable to appoint such a Committee at present. Consideration will be given to this matter later on.
asked the PrimeMinister, upon notice -
In further reference to the questions asked on 1 2th inst, as to the different rates of wages paid in the various States to persons engaged in the same industry, and producing the same kind of goods in competition with one another -
– The answers to the honorable member’s questions are as follow -
asked the PostmasterGeneral, upon notice -
Whether he can inform the House what steps have been taken up to the present to instal telegraphic communication with Port Davey, on the West Coast of Tasmania?
– In reply to the honorable member’s question, I have to state that no definite steps have been taken in this matter, but inquiries are being made as to the cost, &c, of providing such communication.
asked the Minister representing the Minister of Defence, upon notice -
Pay Branch of the Defence Department, Sydney, have been compelled to work, during the last six months and particularly during the last three weeks, from9 a.m. to hours varying from 9.30 p.m. to11 p.m.?
– The answers to the honorable member’s questions are -
asked the Prime Minister, upon notice -
In order to maintain the principle of a citizen before a soldier inconnexion with the Defence Forces of the Commonwealth, will he consider the suggestion that a citizen soldier shall always have the right of appeal to the Civil Courts of the Commonwealth from any court martial, and that such principle should be incorporated in our Defence Acts?
– It is not proposed to amend the law in this respect, as it is now open to the Civil Courts to relieve any illegal or excessive punishment. The following is a fuller statement of the law -
The Defence Act 1903 has now been in force for over six years, and during that period there have been only four district courts martial on members of the Citizen Forces. Three resulted in acquittal, and in one a fine was inflicted. It has been found that breaches of discipline in time of peace can ordinarily besufficiently punished by the powers of fine and discharge now given to commanding officers. It is, however, provided by section 265 of the Commonwealth Military Regulations, that, whenever a commanding Officer proposes to inflict any but a minor punishment upon a soldier the latter shall be so informed, and that he shall have a right to demand trial by court martial.
In time of war it is obvious that offences cannot be dealt with by civil courts, and therefore the Imperial Army Act comes into force under section 55 of the Defence Act 1903-4. In the area of active operations no civil courts would be in operation, and it would be impracticable to send the officers and soldiers, whose presence would be required at a trial, back to the base for the purpose. The application of the Army Act is, however, limited by sections 96,98, and 106 of the Defence Act 1903-4.
The following will show that the rights of the citizen are amply safeguarded, and that the civil courts can always prevent illegal punishment : - “ It is, therefore, highly important that the mistake should be corrected, which supposes that an Englishman, by taking upon him the additional character of a soldier, puts off any of the rights or duties of an Englishman.” - Chief Justice Sir James Mansfield in Burdett v. Abbott, 4 Taunton’s Reports, page 401. “ The members of courts martial and officers in the exercise of individual authority are, like the inferior civil courts and magistrates, amenable to the superior civil courts for injury caused to any person by acts done either without jurisdiction or in excess of jurisdiction.” - Manual of Military Law, 1907, page 119.
The writs of prohibition, certiorari, and habeas corpus, as also actions for damages, are all available to one who feels aggrieved, and there are many such reported in the English Law Reports.
Mr. W. ELLIOT JOHNSON (for Sir
John Quick) asked the PostmasterGeneral, upon notice -
Whether he will give some information respecting the telephone rates in force in New Zealand?
– The following extracts are from the New Zealand Postal Guide, January, 19 10 : -
Charges. “ In addition to the entrance-fee of £1, the charge per annum payable in respect of the hire for any telephone instrument connected with the Government Telephone Exchange is as follows : -
To every subscriber for a single wire as from the date of connexion - At exchanges which are open continuously -
The above rates are for connexions of warehouses, stores, shops, and business places not more than half-a-mile from, and of private residences not more than one mile from the telephone exchange. For every additional quarter of a mile or fraction thereof for each year commencing from the date of connexion, and for every following year, 10s. per annum.”
From the Postmaster-General’s report for the year 1909, it is seen that the four largest exchanges in New Zealand were - Wellington, 4,258 ; Auckland, 4,016 ; Christchurch, 3,472 ; Dunedin, 3,219; connexions on 31st March, 1910.
The following are extracts from a report by the Secretary of the Post and Telegraph Department, New Zealand : -
Onmy arrival at Vancouver I was astonished to find that the number of telephone exchange connexions was about twice as many as those in Wellington, although the cities are about the same size, and Wellington rates are considerably cheaper.
In the exploitation of the business the telephone companies are assisted by the almost universal system of the measured rate charge, i.e., a charge for each call made over a certain number. For branch exchange work this is the only method that can be well employed, as nohotelkeeper is likely to go to the expense of paying a flat rental for 100 or 200 telephones for the use of his guests.
While I am not convinced that the measured rate system should be adopted in its entirety, I think it is likely that the rigid flat rate as in use in New Zealand, is largely responsible for our failure to develop on the lines I have indicated, and it would be well to consider whether a measured rate could not be adopted for branch exchanges,&c., which would give satisfaction alike to the Department and telephone users; that is to say, the present flat rate to be maintained for single connexions, particularly with private residences, and a measured rate introduced for branch exchanges and party lines.
– On the 8th inst. the honorable member for Cook asked the following questions : -
An interim answer to the questions was furnished when they were asked, but the following are the complete answers to them : -
asked the Minister of Home Affairs, upon notice -
– The answer to the honorable member’s question is -
The premises are the property of the Commonwealth, but not now being required for Defence or other Federal purposes, the New South Wales Government have been asked if they will accept a re-transfer of the property. A reply is expected in a day or two.
asked the Minister of
Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Debate resumed from 15th July (vide page 486), on motion by Mr. Fisher -
That this Bill be now read a second time.
– It is generally admitted, I think, that this is one of the most important Bills with which this Parliament will have to deal. It is a great pity that the Financial Agreement entered into between the representatives of the States and the Commonwealth has not been given effect to ; and one of the chief weaknesses in the Bill is that it does not, and cannot, give any hope of stability for a period of ten years. The Prime Minister, in introducing the measure, pledged himself to endeavour to keep the contract as herein entered into; but personal guarantees are not of the slightest value in such a case. Even- during the present session, we have been shown the utter futility of placing any reliance on this ten years’ agreement. Three years ago we passed a Bill the operation of which was to cease at the end of 1912. That term was arrived at by a compromise, but we find on the notice-paper to-day a proposal to repeal that Bill before it has run half its length. I have no wish to transgress by dealing with that other measure, but merely desire to show how vain it is to expect that this or any other Parliament can pledge future Parliaments. Those who took the same view as myself think that the effect would be much more permanent if we left the future- consideration of the financial arrangements to the electors rather than to a future Parliament over which this Parliament has no control. What we urge is that the people of Australia ought to be trusted. There are two agencies elected by the people to do different works for the same people. Those people pay the same taxes, and when the two agencies differ as to the allocation of the money, a fair and proper tribunal is not one of the parties to the contract, but the people who have subscribed the money. The Prime Minister has said that the personnel of this House is an answer to the terms of that proposed Financial Agreement: but it is nothing of the kind. In practically every State the candidates who opposed the Financial Agreement did so on totally different issues. Senator -Pearce, the Leader of the Labour party in Western Australia, writing to the newspapers, pledged his party to a contract for twenty-five years, whereas in my own State the present Minister of Home Affairs, the leader of the party there, and those acting with him, based their opposition to the agreement on the ground that it was not fair to Tasmania in that it did not give her a sufficiency. At the great Labour Tally in the Theatre Royal, Hobart, at which, I think, nearly all the Labour candidates were present, the Minister of Home Affairs called on the people to reject the agreement, pledging himself and his party-
– He could pledge only himself.
– The Minister of Home Affairs pledged himself, and that pledge was indorsed by every one sitting with him on the platform, that if the agreement was rejected-
– Does the honorable member not hear that the Minister could pledge only himself?
– I say that the present Minister of Home Affairs pledged himself and his party that if the Financial Agreement were rejected the Braddon section would run, at any rate, until the end of the present )*ear.
– So it will.
– It will do nothing of the kind. Those members who have so pledged themselves will have an opportunity of voting on their pledges. What has happened since those diverse pledges were given? The .Financial Agreement has been defeated, and the Labour party has been returned to power; and it will be interesting to see how those men who have pledged themselves - I say nothing of those who did not pledge themselves - will vote on the question whether or not the Braddon section shall be continued in operation to the end of the current year. It has been said that those who supported that agreement have no reason to complain, because it has practically been given effect to. But the agreement, as I understand it, and as it was set down in black and white, showed that the then Treasurer anticipated a deficiency of £1,200,000. It will be remembered that ,£600,000 of this was deficiency in revenue, caused largely, if not wholly, by the obligations of old-age pensions, ,;and £600,000 for new works. The State Pre- miers agreed that, as the Commonwealth had to pay old-age pensions, they would make good the deficiency on the conditions laid down. As a matter of fact, however, the revenue increased, and the deficiency is only some £440,000; and the whole of this, and not half, as previously agreed, the Treasurers are asked to provide. In the interests of Tasmania, it is exceedingly regrettable that the Financial Agreement has not been given effect to, because greater security would then have been given to the States, and also a larger contribution than under the proposed Bill. Another feature of the financial relations has been brought under the notice of the House by the honorable member for Wilmot. I am not here to ask for any charity for my State, but I think it is recognised by everyone who has gone into the question that there is a certain amount due to Tasmania on account of what is commonly called “leakage”; that is, the loss caused by goods, which have been imported into other States, being transferred to Tasmania without the ordinary procedure of trade certificates being observed. When the honorable member for Swan was Treasurer, he went into the matter, and, I think, he accepted the view that there was a deficiency or leakage representing £20,000to £25,000. The matter was brought more prominently under the notice of the honorable member for Hume when he was Treasurer, and he came to a similar conclusion. The honorable member went so far as to bring the matter under the notice of the then Premiers of Victoria and New South Wales, and urged them to consider this claim, which he recognised as fair and just. They were not prepared to recognise any claim whatever.
– Mr. Bent was.
– I am glad to hear it, because it is the State of Victoria which really secures the benefit of the larger amount of the leakage, although there is also a portion coming from New South Wales. Now that the Commonwealth Parliament is dealing with the matter in equity and justice, taking over the whole of the Customs revenue and distributing to the States the proportion to which it thinks they are lawfully entitled, and which it can honestly and fairly spare, the matter ceases to be one of concession between State and State, and it devolves upon the Federal Parliament, which has the responsibility, to do what is right, just and honest. The Federal Government must take the full and complete responsibility in dealing with this question of leakage, seeing that the Commonwealth officials in the Customs Department have failed to deal with it. A considerable portion of Tasmania, especially the north-west’ coast and the west coast, does practically the whole of its trade, in the shape of importations, with Victoria. The north-west coast has become the happy hunting ground for commercial travellers from the adjoining States. There is an exceedingly large trade done between Tasmania and Victoria. A few figures will show how Victoria and New South Wales are becoming not only distributing, but also manufacturing, centres for the whole Commonwealth. Whilst the increase in population of Victoria for the ten years ending 1908 was 7½ per cent., the number of her factories increased in eight years by 60 per cent., the average number of factory hands employed increased by 71 per cent., the value of the buildings and lands on which the factories were erected by 16 per cent., and the value of the plant and machinery by 54 per cent. In those eight years the number of factories in Victoria increased by1,739 and the number of employes by 39,000, while the increased expenditure on lands and buildings for factory purposes amounted to , £3,600,000. One of the reasons why there has been such a falling-off in the Customs duties in Tasmania is that prior to Federation the same duties were levied, for instance, on boots coming from Victoria, as on those coming from England and America; but when Tasmania entered the Federation, and a uniform Tariff was imposed, whilst the duties remained, and were even increased against England and America, they vanished as against the factories of Victoria. These have consequently monopolized the whole of the trade, and the Customs duties have correspondingly fallen off. One of the interesting features of Federation is the extent to which InterState trade has grown, and the right honorable member for Swan has placed on the paper a notice of question asking whether uniform rates of wages are to be paid, in order that the people in the West, where wages are higher, may be protected from the undue competition of Victoria and New South Wales. Our experience in Tasmania is that, no matter what wages are paid in the smaller centres, the large centres, owing to the advantages of their increased output, can swamp the market. Prior to Federation, we had several flourishing little boot factories in Hobart and Launceston. There are no Wages Boards in Tasmania to regulate wages, which are much lower than in the Melbourne factories. Yet the Melbourne factories have practically wiped the Tasmanian factories out of existence.
– Is that in spite of the higher wages?
– It is due to the larger output and a little dumping. The manufacture of boots in Tasmania is now almost wholly confined to one line, which is not used and therefore not made in Victoria - a very heavy class of boot for bushmen. Melbourne and Sydney have not only become the manufacturing centres for the greater portion of Australia, but they are rapidly becoming the distributing centres. Sydney is the distributing centre to some extent for Queensland, while Melbourne and Sydney are to a large extent distributing centres not only for Tasmania, but also for Western Australia. We shall, therefore, have to face the question of the allocation of Customs duties in a truly Federal spirit, because the leakage will go on. I am not blaming the Customs authorities, because I know from experience the difficulties which are placed in the way of any one buying goods in Victoria who endeavours to get a Customs certificate in order that the duties may be transferred. In fact, some of the business houses object to give certificates, as they do not care for the trouble. We make our claim in this matter not as a pauper State, not as a necessitous State, and not as an act of charity. We are trying to put our case within the four corners of equity and justice. We claim that goods are imported into Victoria, pay duty here, and are transferred to our own State, but instead of the duties being credited to the State where the goods are consumed, they remain in the first port of entry. The right honorable member for Swan and the honorable member for Hume, who were both Treasurer for years, and went into the matter carefully, recognised that a large amount is due to Tasmania. The honorable member for Hume even took the trouble to appeal to the Premiers of the two States concerned to do an act of justice to Tasmania, and, therefore, now that the Federation has taken the matter over, and the responsibility rests upon this Parliament, it is the duty of the Federation to put the matter right without any appeal to the Premiers of other States, and not as a concession, but as a matter of right and justice. I think it will be generally con ceded that so far this discussion has been conducted with the desire to get down to the bedrock of things, and without any attempt to throw undue obstacles in the way of the passage of the Bill. We recognise that some measure of this kind is a necessity. It would have been much better for the States if the settlement had taken place years ago. The longer it is delayed the worse it will be for the States, and I wish I could hope that the Bill would run for ten years. I fear, however, that the projects which we are somewhat extravagantly and rashly launching will entail such an expenditure on the Federation that our resources will be strained, and strained so far that a desire may be evinced to get the money in the easiest way available, by restricting the life of this measure and deducting the amount required from the amount payable to the States. I warn honorable members of the utter futility of believing that a pledge given by a Minister, or, indeed, by any other mernber of the House, can bind future Parliaments. The Sugar Bounty Bill, which will be before us in the course of a few clays, is a case in point. It will serve to show that, although a time limit may be fixed to the operation of a Bill - although the Minister in charge of that measure may pledge himself that it shall run to its full limit - there is no guarantee that that limitation will be observed after an appeal has been made to the electors, and a new Parliament may decide that a change shall be made. The weakness of one State is the weakness of the whole Common wealth. That has been the experience over and over again of the United States of America. When honorable members say that the States of America have succeeded individually in carrying out their work without receiving any share of the Customs revenue, I am constrained to ask them to consider the straits to which they have been reduced because of the absence of that source of income. Many of the works now carried out by the States of the Commonwealth have long been impossible, so far as the States of America are concerned. They have had to hand over the greater proportion of works, such as we carry out through the States, to private syndicates and trusts which have gloated over and robbed the people of America to an extent which the people of Australia have never fully appreciated. While the Union Treasury has been overflowing with money - whilst the Union Government have been purchasing and storing in the vaults at Washington hundreds of thousands of pounds worth of silver, and have administered a pension list in relation to soldiers who took part in the American Civil War, in a way that has been disgraceful, every effort being made by the Union to spend money wisely or unwisely, the States themselves have been starved, and compelled, I repeat, to hand over to trusts and syndicates works which we in Australia hope the States will always be able to undertake. There is no room in this matter for antagonism between the States and the Commonwealth. If we could only keep always in front of us the fact that we all represent the same people, and that an injustice done by the Federation, or a State, injures alike all the people whom we represent, we should be able sometimes, I think, to come’to fairer judgments in these matters. It will not be in the best interests of the Commonwealth itself if, by starving the States, wre prevent them from carrying out. the great developmental works which must be undertaken if Australia is to make the progress that we desire. The States can be enabled to undertake the construction of roads, bridges, and other public works only by the allotment to them of a fair share of the Customs revenue. It would be well for this Parliament to remember that many of the most important functions of government are still in the hands of the States. They have to carry on extensive railway systems, the construction of public works of various kinds, a great national system of education - which, after all, is the most important duty that could devolve upon a Government - and State Judiciaries, and they have also to meet the interest on their national debt. For every pound in respect of which there is a claim upon the Commonwealth to-day, there is a claim of £7 or £8 on the State Treasurers, and they must be granted a reasonable proportion of the Customs revenue if they are to discharge their highly important functions. It matters little to the people who spends the money so long as it is expended to their advantage, but it will be a matter of serious concern to them if one of their governmental agencies, having a surplus revenue, expends it on works that are not wholly essential and thereby renders it impossible for their other governmental agency to carry out equally, or more, important functions. It would be a serious matter for the people if, as the result of this process, the States were compelled to apply a brake to the wheels of progress, and to say that developmental works within their borders must-cease. We can come to a fair and proper decision on this question only by viewing it broadly from the standpoint of the rights of the Federation and of the States. I hope the time will never come when there will be any desire, either on the part of this Legislature or the State Parliaments, to create antagonism between the two great agencies of government, or to create in the minds of the people a feeling that one of the agencies which they have elected to do special work is in direct antagonism to another agency which is also elected to do work for them. The. Federation should be more generous to the States than is proposed under this Bill. The per capita allowance of 25s. per annum represents practically only one-half of the Customs and Excise revenue, and I believe that the payment of so small an allowance will cause a reduction in the expenditure of the States and hit a class of people whom’ very few of us wish to see injured. In Tasmania, as the result of the pressure upon the Treasury by reason of the great reduction in the amounts that it has received from the Federation, officers in the lower ranks of the Public Service are receiving rates of wages of which few if any of us are proud. Their salaries have been cut down and they cannot be increased because of the shortage of revenue, and the loss Tasmania has sustained owing to the upsetting of her Customs and Excise income. We have an honest claim to make. When it can be shown by two men, who have gone into the matter carefully, and neither of whom is a representative of Tasmania, that that State, since the inception of Federation, has not received its rightful share of her Customs revenue, then I do think that the Federal Government ought to go thoroughly into the whole question before this Bill passes through Committee. It will be too late to take action after it has been passed. This Bill is to determine for ten years the allocation of the Customs and Excise revenue to the States, and, in view of the evidence of the two gentlemen to whom I have referred that Tasmania has been improperly deprived of her fair share of the revenue from Customs duties, it is the bounden duty of the Government to see, before the Bill leaves the Committee, whether the wrong cannot be righted. I trust that the claims of Tasmania will be determined, not on grounds of necessity or pauperism, but wholly and solely on the grounds of public right and justice, and that fair play will be meted out to the smallest State of the Union, and one which has made a greater sacrifice for Federation than has any other State in the Commonwealth.
– I do not intend to occupy the time of the House at very great length, but I wish to draw attention to one or two matters in connexion with this Bill which, I think, are worthy of consideration. The fact that the measure embodies a proposal that the Commonwealth shall annually return to the States 25s.per capita is a great tribute to the agreement which was entered into between the late Government and the State Premiers. Notwithstanding all the denunciation which the present Ministry and their supporters heaped upon that agreement in this House, on the public platform, and in the press, they have now presented for our consideration a Bill which, according to their own statements, embodies practically the same proposals as those submitted by the Deakin Government. They were unable to find any better scheme for submission to Parliament.
– We submitted it in the first instance.
– The Minister of External Affairs says that the agreement was formulated by the Labour party in the first instance. In reply, I merely wish to point out that when that statement was made from our side in the last Parliament it was flatly contradicted by Labour representatives.
– By whom?
Mr. W. ELLIOT JOHNSON.Amongst others, by the present AttorneyGeneral. But I will deal with that aspect of the matter later on.
– The Minister of External Affairs may ejaculate “ Nonsense,” but I will presently supply him with the proof of my statement. I do not suppose that he will impeach the accuracy of Hansard. In speaking in this Chamber last session, the Attorney- General first claimed that the Financial Agreement was practically the Brisbane Labour Conference scheme. He afterwards denied that there was any resemblance between them and opposed the agreement, declaring that a contribution by the Commonwealth to the States of 25s. per capita was altogether too much - that the Commonwealth could not afford it. He urged that the late Government proposed to return that amountannually to the States because they desired the States to reap such an advantage in promoting immigration schemes as would place the workers of this country under a disability. He argued that the proposal was a move in the direction of promoting immigration in order that persons from abroad might come here for the purpose of sharing in and lowering the wage fund. For that reason he denounced the agreement, and declared that the most which the Commonwealth could afford to return to the States was £1 per capita. Will the Minister of External Affairs deny that?
– I am not going to repeat my statement. While it is true that this Bill embodies the same proposal as that which was put forward by the late Government, it is the same proposal with a very vital difference, inasmuch as the agreement which was entered into by the Deakin-Cook Ministry would, if adopted, have given to the State finances that element of stability which is entirely lacking under this measure. It is all very well for the Prime Minister to rise in his place, and in that pompous lordly autocratic style which he has affected so much of late, to say “We “ - that is, he and his friends- “ guarantee to the States that the provision incorporated in this Bill shall continue for ten years.” But he cannot guarantee that it will continue for more than twelve months. He has not the power to do so. He can pledge nobody but himself. He cannot pledge even his own followers, because none of them is his own master, while they are all his masters, and in turn he and they are but the recording agents of another set of masters above them. Their masters are a body of men who meet and decide these things outside of Parliament. Notwithstanding anything that the Prime Minister may affirm in this House, he is merely the mouthpiece, and not the leader, of the Labour party. He is here, in the first place, to voice the decisions which are arrived at by an outside body, and, in the second, to register the decrees of another body which meets within the precincts of the building, obedient slaves to the irresponsible outside body. No matter what his own views may be, he has to voice those decisions, and in no sense can he be regarded as a leader.
– It is enough to make the honorable member weep.
– It is a most humiliating position for the Prime Minister of the Commonwealth to occupy, no matter to what party he may belong. It is utterly subversive of all ideas of responsible democratic government.
– He has to follow because he is the Leader of the Labour party.
– The agreement which was entered into between the late Libera] Government and the State Premiers, would, if ratified by the electors, have been embodied in the Constitution, and thus would have given to the finances of the States that element of stability which, under the present Bill, is entirely lacking. It is all very well for the Prime Minister to urge that the Bill secures the payment of 25s. per capita for ten years. It secures nothing of the sort. It may possibly continue in force during the life of this Parliament, and it may conceivably last for ten years. But this Parliament cannot bind any succeeding Parliament. It cannot legislate for more than three years ahead. Indeed, we cannot guarantee that the provision shall continue operative for three years, because nobody can foresee what political exigencies may arise which may result in the Government being suddenly deprived of office.
– Do not hold out the olive branch.
– I admit that there does not seem much probability of the Ministry being deposed during the life of the present Parliament. But, whilst we may regard the proposals of the Government as likely to continue operative during the term for which this Parliament has been elected, we cannot guarantee their continuance even for that term and certainly not for any longer period. As a matter of fact, the Government cannot guarantee that they will remain undisturbed even during the life of this Parliament, because the next InterState Labour Conference may not approve of them. The Ministry may find themselves obliged to bow to the decision of a majority in that Conference, and to make some amendment in the Bill, even if they are not driven to a pretext for its repeal.
– Cannot the honorable member tell us something about the caucus ?
Mr.W. ELLIOT JOHNSON. - I should like to have been present at some of the caucus meetings of the Labour party at which this matter was discussed, so as to ascertain whether the proposals which are embodied in the Bill really represent the opinions of every member of that party. , Their election platform speeches on the subject were so widely divergent. The view which I have expressed is that which was held by some of the most prominent men in the Labour movement, amongst others, by the Deputy Leader of the State Labour party.
– He is like the honorable member - a State Righter.
– He has since been compelled to sing a different tune, and has swallowed his expressed convictions as they are recorded in Hansard. As soon as the Conference met, all the valiant State Righters of the Labour party had to climb down and accept the decision of the Conference of the Labour political organization. What happened to them is likely to happen to the Ministry and its followers, because they are under the control of outside organizations and have no power except that which they derive from those organizations.
– The honorable member himself had to swallow the time limit which he favored in reference to the agreement, and to support the insertion of that agreement in the Constitution in perpetuity.
– I have repeatedly denied the accuracy of that statement.
– It is recorded in Hansard.
– I did nothing of the kind, and it is not upon record in Hansard.
– I was careful to see that the honorable member did not eliminate the statement from Hansard.
– I am perfectly prepared to stand by every word that I uttered upon the Financial Agreement as reported in Hansard. During my recent election campaign I took up the sameposition as I took then and am adopting now. I said then, that while the State Premiers would have been well advised if they had permitted a time limit to be imposed upon the operation of the agreement which was entered into between them and the late Government, still’, as they had not done so, that was their affair, and as they were prepared to accept that agreement for an indeterminate period, the stability which was guaranteed to their finances under that arrangement was not so good in my opinion as that which was guaranteed to the Commonwealth. The great point was to get the agreement into the Constitution, whatever the duration of it might be. And the Bill upon which I voted was not a Bill to indorse the agreement, but a Bill to refer the decision of the matter to a referendum of the electors. But there is no proposal to put this scheme into the Constitution. Consequently, there is no security for the States’ finances. I propose now to quote the opinion expressed by the Deputy Leader of the Labour party in the Parliament pf New South Wales. Mr. Holman is reported as having said, in the New South Wales Parliamentary Debates of 21st October, 1908 -
I ask, as the honorable member for Darling asked some time ago, how can we obtain permanency and security unless we have some amendment of the Constitution? What kind of security is- that which the State Treasurers will enjoy if every year they know that a chance verdict of a Parliamentary majority in the Federal House can rob them of the most important element in their revenue?
Mr. Holman saw the element of danger as I saw it then and as I see it now. Notwithstanding anything the Prime Minister may allege, the guarantee that the new arrangement will last for ten years is not worth the printer’s ink used on the Bill. We have heard a good deal about the Brisbane Conference scheme of the Labour party. Notwithstanding anything that has been said during the elections, and notwithstanding anything said in this House, anybody who has read the proceedings of the Brisbane Conference can come to no other conclusion than that the original intention of the Labour party in regard to the financial arrangement between the Commonwealth and the States was that it should be of a permanent character, and that it should be embodied in the Constitution. Mr. Bowman, the Leader of the Queensland Labour party, said so ;. the present AttorneyGeneral said so ; Mr. McGowan, the Leader of the Labour party in New South” Wales, said so j Mr. Holman, the Deputy Leader, said so ; every State Labour member in the party in New South Wales said so; and many members of the party in other States said so. I propose to prove what I have said by reading a few quotations -from statements which they made. Mr.
Bowman, the Leader of the Queensland Labour party, said -
The agreement (the Premiers’) the Conference came to is largely based on the scheme that was laid down by the Labour party last year. With very little alteration, the scheme brought up by the Labour Convention in 1907 is the scheme adopted by the Premiers’ Conference:
I have referred to the attitude taken up by the present Attorney-General, and the Minister of External Affairs has interjected that what I have stated is “nonsense”; so any sane person would naturally believe ; but no.w I produce the proofs. In Hansard for 1909, page 2430, the AttorneyGeneral is reported to have said on the 12 th August -
But whatever may be the shortcomings of the Brisbane scheme it had at least the merit of practicability. That was not merely a temporary expedient for the next year or two, but a settlement for all time.
Here is a positive declaration, made in the most unequivocal terms, by one of the members of the present Government, that the scheme of the Brisbane Conference was not merely a temporary expedient, but a settlement for all time. How. is the element of permanency to be secured unless the arrangement made be embodied in the Constitution? There is no other way in which permanency can be obtained, because there is no other way by which a future Parliament could be prevented from repealing an Act passed by this Parliament. Notwithstanding the provisions of this Bill, a future Parliament will have the same power to repeal it as we have to pass it. It was this undeniable fact that caused several members of the Labour party in the different States to recognise that’ in order to secure permanency there must be an alteration of the Constitution to prevent any tampering with the agreement, which, otherwise, would be at the mercy of every change of Government, of every party occupying the Treasury bench, and of every impecunious Treasurer. But notwithstanding that the AttorneyGeneral, on the 1 2th August last, made the declaration that I have quoted, in less than a month he made an absolutely contradictory statement, which will be found on page 56 of the volume of reprint of Parliamentary Debates on the Financial Agreement -
To make the agreement permanent would be an outrage to which I hope Parliament will not agree. I hope that even the most abject of the Ministerialists will make some sort of a protest against this.
In August the Attorney-General insisted that there should be an agreement for all time, and that the Brisbane Labour Conference had so decided; but in September he declared that to make the agreement permanent would be an outrage. I notice the Minister of External Affairs is now silent. There is no defence to such incredible inconsistency. What are we to think of a party that changes its opinions so frequently, and whose leaders make certain statements one day and exactly opposite statements on the morrow ? Yet this is the party that claims to be above all other parties in respect to consistency - the party which keeps steadily on one course with one objective in view.
– How does the honorable member like this quotation from one of his own speeches, Hansard, 1909, page 5352 ?-
The Premiers would have been well advised to have agreed to a limitation of the duration of the arrangement.
– I have already explained that very phrase. I do not object to a limitation of the period, so long as security is afforded for giving effect to the Bill. This can only be done by putting it into the Constitution. I put my views before Parliament clearly in saying that the Premiers would have been well advised to adopt a certain course, but since they did not see their way clear to adopt that course the only thing to do was to take the agreement as it was presented to us. I did not commit myself to the agreement as such, but simply to the proposal to refer it to the electors, so the honorable member’s attempt to misrepresent my attitude is at once defeated. The Bill before Parliament was not a Bill to ratify the agreement, but to allow the whole matter to be referred to the people for their decision, and I was not going to block that, whatever my opinion as to the merits of the agreement might have been. That is all I have to say in regard to that matter. This element of permanency was really the strong feature of the Brisbane Labour Conference scheme, the belated denials of the Labour party to the contrary notwithstanding. Again, I will put into the witness box one of the prime movers in the matter, and quote his own words from the New South Wales Hansard. Mr. Holman said -
I would ask the patience of the Committee for one moment, whilst I put before it what has been the action of my own party, the Labour Party, during the past twelve months, because, like my leader, the honorable member for Redfern, I took a share in that work myself; and I would like to explain to the Committee, and, if possible, to the country, what I believe to have been done.
This conference sat twelve months ago in Brisbane, when a financial scheme was drawn up. I was a member of the sub-committee which drafted the scheme, and I was the member of the committee appointed to present the scheme to the conference.
I take it that a gentleman occupying that position should be, above all others, an authority on what was intended by the agreement which was accepted by the Conference. He said unmistakably that it was intended to be a permanent arrangement, and to be embodied in the Constitution. He went on to say -
I attended every meeting; I was present in the conference right through the debate on which the scheme was adopted, and I have therefore as intimate a knowledge of the scheme and its intentions as any man at the conference could have had. And I should like to say this : there is not the remotest room for doubt that the gentlemen at that conference who voted for the scheme voted for a permanent allocation of the Customs revenue between the State and the Commonwealth on the lines laid down. . . .
I am bound to confess that after a careful reading of the report the words “ constitutional provision “ are nowhere to be found, either in the scheme or in the discussion, but I will ask the Committee, if I am not wearying them, to allow me to read two or three very brief passages, which will show the principle underlying the proposal.
Then followed another matter which it is not necessary to quote. Mr. Holman continued -
Mr. Watson addressed the conference, and he said - this is a very abbreviated report; but it is truthful : - “ This scheme met the objection raised by the Premiers’ Conference against Sir William Lyne’s proposals; the Premiers objected through there not being any provision after thirty-five years.”
This scheme met that objection- that was to say, it did contain a provision after thirty-five years.
It will be seen that the question of that period, viz., thirty-five years, was considered at the Conference, that it was not considered a permanent agreement, that thirty five years was regarded as too short a period, and that they wanted something more permanent than that. It will also be seen that they made a provision, which was not to be for thirtyfive years, but which was to be a permanent agreement for all time. Mr. Holman’s extract from Mr. Watson’s statement continued -
And Mr. O’Malley’s proposition was open to a similar criticism.
Then Mr. Holman remarked -
Mr. Watson said that. I myself said, when introducing it, that it was to be a permanent arrangement, and I gave this illustration of how it would work. “ For example, if Queensland’s population doubled in ten years the return would be double in the aggregate to the Queensland Treasurer.
Therein this scheme differed from that of Sir William Lyne, who made no allowance for increase of population ; no provision for the future.”
No man could have said that, knowing as I did, that Sir William Lyne’s scheme did propose an increase for the first thirty-five years unless I intended that the scheme went beyond thirty-five years.
That remark was made by the man who drafted the proposal, brought it before the Conference, and was familiar with all the details. He rejected Sir William Lyne’s proposal because it was limited only to thirty-five years ahead. The proposal of the present Minister of Home Affairs was rejected because the element of permanency was absent. Mr. Lamont, who is well known in Labour circles, also addressed the Conference. Referring to the question of the complete separation of the Commonwealth and State finances, he said -
He had to say that it was utterly impracticable to carry it out. Seeing that it was impossible to dissociate the finances of the Commonwealth and the States, he believed the scheme submitted was the only one which gave freedom to the Federal Parliament and security to the State Parliaments.
That is pretty definite. It shows that in the mind of other members of the Conference the idea of permanency was fixed and immovable. They had no idea of fixing the arrangement for any term of years.
– He has absolutely denied that since.
– Oh ! I do not doubt it. It is very inconvenient now, but here is his. statement in the Conference report.
– He has absolutely denied that.
– There was no denial made then, nor was it denied when Mr. Holman referred to it in the speech on the financial statement, which he delivered in the Legislative Assembly of New South Wales on the 21st October last, and which has been reprinted.
– He has denied it since.
– The honorable member just repeats that interjection. But he cannot suppress the facts and the proof. There was no denial of it then, nor was there a denial of it previously. If there has been a denial, it was made since, and months after the actual event took place, when members’ memories could not be expected to be anything like so fresh as they were at the time when they were reported.
– It was made before the 13th April, anyhow.
– Whose remarks has the honorable member been quoting ?
- Mr. Holman’s remarks on the Financial Agreement.
– Quite inaccurate.
– The Prime Minister did not hear what transpired. He has only just entered the Chamber. On page 9 of the reprint of his speech, Mr. Holman said -
It was a proposal which was to be permanent. It was a proposal which was to give security, and it was understood by everybody at that conference in that sense.
Later, he said -
My impression is that Mr. Fisher thought he would be driven to depart from the proposal of the Brisbane Conference, and to bring forward some alternative suggestion. I do not think Mr. Fisher has anywhere asserted that the Brisbane Conference proposal did not provide for a steadily increasing aggregate return in proportion to the population of every State. . . . I am in full accord with my leader in the stand he has taken here, and I say that the Labour Party in its conference determined that there should be an allocation of this particular fund - saying nothing, of course, of the revenue raised from other sources - between the Commonwealth and the States to provide for old-age pensions, the reasonable necessities of defence, certain other expenditure which is directly or indirectly connected with defence, and other matters such as the site for the Federal Capital.
Referring to the proposal of the late Government, Mr. Holman concluded his speech with these words -
I rejoice to think that I am urging the adoption of a proposal which in its present shape was first suggested by the Labour Party, which emanated from the Brisbane Conference, and which the party I belong to has brought as a valuable contribution to the national policy.
That is the proposal which has been so roundly condemned by the present Federal Labour party, and roundly condemned, even since that statement was made, and since a further conference of the Labour leagues has been held, by the very men who gave utterance to the statements which are recorded in cold print in the State Hansard. The members of the State Labour party drew up a manifesto, in which they complained of the attitude adopted by the members of the Federal Labour party towards the agreement between the Deakin Administration and the Premiers. They repudiated what was done by the Federal Labour party, and justified their position, explaining that the settlement of the finances suggested by the Labour Conference was intended to be permanent. Let me read a statement concerning this manifesto which has appeared in the public press - in their recent attitude, in connection with the financial debate in the New South Wales Parliament, had only repeated for the third time what they had said on two previous occasions with the full approval of the Labour movement. The statement gives an outline of the Brisbane Conference financial proposals, and the party’s reasons for regarding those proposals as permanent, and to be embodied in the Constitution.
The statement was signed by several members of the State party, including its leader,deputy leader, secretary, treasurer, and whip -
The scheme was particularly supported by the State Labour members, because, as they alleged, it had the backing of members of the Federal Labour party, as well as of their own. It was the only scheme which had a strong body of support in both the Federal and the State Houses.
The manifesto points out that -
No one objected to the assumption that the Brisbane scheme was to be a permanent one, and that it bound Federal as well as State members, and nobody objected to the assertion- that it would have the support of Federal as well as State members.
The crux of the position is expressed in these words -
The last step taken by the State Labour party was when they laid down for the third time the Brisbane Conference scheme as the one they supported, and this was the occasion that had given rise to all the criticism that had been indulged in in certain quarters.
The State Labour party’s view of the controversy is then summed up into three propositions - one, that the Brisbane Conference scheme was intended to be a compact between the States and Federal interests represented within the Labour movement; second, that such a compact was binding upon both parties to it, and that neither party was free to depart from or alter it without previously consulting and obtaining the assent of the other; third, that the compact was intended to be final and permanent.
Thus we have the three propositions laid down, that the scheme was to be a compact between the State and Federal sections of the Labour party, that it was binding upon both sections, and that it was to be permanent. These statements have been, denied by members of the Federal Labour party, and with most positive insistence affirmed by the State Labour party ; but since another conference has been- held, some of those w-ho originally objected most strongly to the position of the Federal Labour members have had to re-adjust their views and swallow everything they said. The Minister of External Affairs contradicted me when I said that the AttorneyGeneral had stated that 25s. per capita was too large a sum to return to the States, and that £1 would be enough. He denied, too, that the honorable gentleman had stated that the proposal to return 25s. per capita was intended to bring about an influx of immigrants to reduce wages. Again, let me give proof of my assertions. Speaking on the 9th September last - the remarks are to be found on page 49 of the reprint of the Financial Debates - the AttorneyGeneral said -
Now it is obvious, I venture to say, that under the 25s. per head arrangement, we can do none of these things - -
That is, provide for large railway developments, the taking over of the Northern Territory, the building of a Federal capital, and other matters which he had mentioned -
The very most that we can give to the States at the present time, and pay our way, is £1 per head. lt will take some little time, and no little ingenuity, to explain away those words. In the same speech - page 55 of the reprint - the Attorney-General said -
Under the agreement we shall not have enough money to take over the debts of the States, and to take over only h’alf of them would not do good but harm, because there would be a Commonwealth stock competing with State stock.
He further said - page 51 -
Last year the Customs and Excise revenue amounted to £2 10s. 8d. per head of the population, but the average has been about £2 6s. per head. If we return to the States 25s. per head of their population, and it takes over 25s. per head to govern the Commonwealth, it is very clear that we must lose on every additional person that comes to the Commonwealth.
Lower down on the same page he is reported as having said that the proposal to return 25s. per capita to the States - is designed to afford every immigrant a chance of sharing the wage fund, which is already too low for those here.
Notwithstanding those statements he now proposes that a return of 25s. per capita shall be made to the States. When that proposal was made by the late Government, he said that it could not be entertained, because the sum was too large, and the proposal was designed to reduce wages.
– Of what does die honor-‘ able member complain?
– Of the inconsistency and changeableness of honorable members opposite. We do not know from day to day what their opinions are. To-day they say one thing, and to-morrow they will approve of what they condemn to-day, and condemn what they approve today. And they all the time boast of their consistency. The Ministry has. put before the House proposals which last session they condemned. We never know from one day to another what their mind is on any subject, because they never know themselves. They are creatures of expediency in matters of finance, as in everything else. No governing principle is discoverable in anything they do. They are all the time creatures of circumstance. The Prime Minister has included in this Bill a clause which is intended to provide that the payment of 25s. per head shall be made to the States from the first of this month. The honorable gentleman is aware that under the Constitution he cannot limit himself to that, and that the Bill in this respect is merely make-believe. Willy-nilly the Government must pay to the States threefourths of the net revenue from Customs and Excise during the first half of the current financial year. That is provided for under the Braddon section of the Constitution, the operation of which does not expire until 31st December next. And we have no power to alter that provision. Under that section the States must receive £4,400,000 for the first half of the current financial year. During the second half of the year the States will receive, under the Government proposal, not £4,400,000, but, after deducting amounts totalling £450,000 which appear in the schedule, a sum of only £45°>°°°- In the circumstances, the States will receive during the second half of the current financial year, not 12s. 66. -per head, but only 2s. 7 Jd.
– Who will?
– The States. That is the amount per head which they will receive under this Bill for the second half of the current financial year after deducting the amount referred to in the schedule.
– Will they receive more or less than they would have received under the Financial Agreement ?
– In the second six months certainly much less. If the Financial Agreement were made to date from 1st January next, and the States were to get 25s. per head of population from that date, they would receive a great deal more during the second half of the financial year than they will receive under this Bill. What is being proposed now is to ante-date the payment. It is proposed, then, to deduct the amount which the States will receive under the Braddon section for the first half of the year.
– Will the honorable member say whether they will get more or less than they would have received under the agreement upon which honorable members opposite went to the country?
– They will, get very much less under this Bill ^during the second half of the year, as I have already pointed out. I remind the Prime Minister that the States only accepted the Financial Agreement because of the permanent character underlying it, and they were prepared to make their arrangements accordingly. The present Government’s proposals will dislocate their finances. I do not say that they will not receive a certain amount during the whole of the financial year.
– Will they receive more or less than they asked for under the Financial Agreement?
– They will certainly receive less in the second half of the year. The Prime Minister is compelled by the Constitution to give more in the ensuing six months ; the States have nothing to thank him for in that regard. I am objecting that the conditions under which the payments to the States will be made are different. There was an element of permanency in the Financial Agreement which this Bill lacks. It is not proposed that the provisions of this Bill shall be embodied in the Constitution, and they may continue in force only for the next three years.
– Does the Bill give the States the same amount of money as they would have received under the Financial Agreement ?
– The Prime Minister may continue to harp on that string, but the fact remains that in the second half of the current financial year they will get considerably less, and this proposal will place the State Governments in a very difficult position financially.I think they should have been given due notice of what the Federal Ministry intended to do. The Prime Minister might, at any rate, have accepted the suggestion to hold another Conference, so that some mutually satisfactory arrangement might have been arrived at between the Federal and State Governments, and the financial relations adjusted in a way more acceptable to all parties concerned.
– I did accept it.
– I think not. I have a copy of the correspondence here, and it seems to me that the Prime Minister treated the State Premiers most scurvily, and behaved certainly in a very undignified way. The honorable gentleman treated them as though they were so many schoolboys. He seems to forget that the State Premiers represent sovereign States, whose rights, secured to them under their own Constitutions, are as important and sacred as are any rights which we enjoy under the Federal Constitution. The States are not dependencies of the Commonwealth. They are not merely municipal bodies. The Prime Minister dealt with the State Premiers as though the Commonwealth Parliament were the only Parliament in Australia, as though it possessed arbitrary and unlimited powers, and the State Parliaments had no status whatever in the community. That was not a proper or a dignified attitude for the honorable gentleman to take up. Mr. Wade, the Premier of New South Wales, in the third paragraph of his letter to the Prime Minister, says -
It is recognised that the adjustment of the financial relations is a matter that rests with the Commonwealth Parliament.
He courteously makes that acknowledgment, but he says further - and under these circumstances I shall be glad to know whether you are prepared to put before the States any proposal withregard to our mutual financial relations.
He did not desire to dictate to the Commonwealth Parliament what it should do in dealing with the financial relations. He did not question its right to control Commonwealth finances. But he made a request for information as to what the Prime Minister and his Government proposed to do. He asked the honorable gentleman if he would lay his proposals before them, so that they might know what the Government intended to do, and consider the proposals at a Conference.
– He did not.
– I have just read the paragraph from his letter.
– Then the honorable member cannot understand it.
– In the third paragraph of his reply to Mr. Wade, the Prime Minister says -
I am still willing to meet them if they desire to discuss the matter.
What, then, is the meaning of the honorable gentleman’s interjection to the effect that Mr. Wade did not ask for a Conference?
– Let the honorable member read the whole of Mr. Wade’s letter.
– It is unnecessary to do so, as the first part is merely introductory. I shall continue the quotation from Mr. Wade’s letter after the close of the third paragraph, which is the pith of the letter. He went on to say -
I am of opinion that if this course is adopted and a definite proposal is placed before the various States, a conference on a practical basis can be established, and, having obtained the views of the Commonwealth, the State Premiers will be glad to arrange for a conference with you and your Ministers with regard to your proposals.
Yet the Prime Minister says he did not ask for a Conference. What is that but a request for a Conference to permit certain definite proposals to be considered by the State Premiers?
– The honorable member misreads the letter.
– I have read it exactly as it is printed. Nothing could be more definite than the quotation I have made. This can be seen from the Prime Minister’s reply. The honorable gentleman wrote -
In reply to your letter dated 26th ultimo, relating to a proposed conference on the subject of financial relations between the Commonwealth and the States, I have to remind you that a conference has never been suggested by me.
Whom was it suggested by? If it was not suggested by the Prime Minister, it must have been suggested by the State Premiers. Yet the Prime Minister denies that there is any suggestion for a conference. In paragraph 2 he says : -
On being approached by the Premier of Victoria
– Hear, hear!
– What for ? The paragraph proceeds : -
I readily consented to meet the Premiers in conference if they so wished.
It would appear, therefore, that the Premier of Victoria did approach the Prime Minister with a view to a conference, and that the statement that there was no suggestion or request to that end is not in accordance with fact. And, furthermore, seeing that at first the Prime Minister expressed his willingness to meet the Premiers in conference, I cannot understand his denials in the face of the letters I have read. In paragraph 3 the Premier says : -
I am still willing to meet them if they desire to discuss the matter, but I have always been of the opinion that, as the determination of the financial relations between the Commonwealth and the States is left solely to the Federal Parliament, it is not advisable that the Prime Minister should formulate a scheme for the consideration of the Premiers.
That, of course, shut the door to any conference. It would have been of no use to meet together simply to look at one another,; when the Prime Minister was not proposing to submit any scheme, to meet in conference would have been merely to enact a farce.
– Mr. Wade knew the terms, through Mr. Murray, before he wrote the letter.
– He may have known.
– He actually did know.
– I accept the Prime Minister’s statement; but, at the same time, an opportunity was here presented to discuss ‘financial matters. After all, the Commonwealth Ministers represent the same people as do the State Premiers; the same people are interested in the question of the financial relation, because it is the same people who have to foot the bill, and therefore they ought to have been enabled to make their views known through their recognised representatives. This, I submit, was not a proper way to treat the Premiers of sovereign States. As the heads of the State Governments, they have the right to speak for the States; and it would have been only ordinary courtesy on the part of the Prime Minister to recognise their status and lay his proposals before them, even though those proposals might not be accepted. I desire to record my protest against the action of the Prime Minister as belittling the Commonwealth in an attempt to belittle the State Parliaments, and not doing justice to his position. It is an attitude that no other Prime Minister, representing any other party in the Commonwealth, would have dreamt of assuming. I am sorry the Prime Minister took that course, because at all times we should do our best to preserve harmonious relations between the States and the Commonwealth, and avoid by every possible means anything that may lead to friction and misunderstanding.
– I recognise the importance of the Bill before the House, and, therefore, desire to say a few words in reference to the history of this financial measure. It will be within the memory of most honorable members that the suggestion for a per capita return to the States first saw the light at the Brisbane Labour Conference. In its embryo state, the proposal was taken up by the Tasmanian Statistician, Mr. R. M. Johnston, and by him handed over “to a conference of Premiers. Year after year, it was under consideration by the Premiers, and eventually found expression in the Commonwealth Parliament by means of the Bill of last year. Members of the Opposition did not hesitate then to support a per capita return of 25s., but they desired a provision to that end to be placed in the Constitution for all time. So far as I can see, the only difference between members of the Opposition and members on this side is that the latter protested against thus shackling the Commonwealth for ever. I fail to see why members of the Opposition should now oppose what their own daily newspaper tells them is really their measure, and on the accepttance of which by the present Government they are complimented by that journal. I regret that the right honorable member for Swan is not in his place, because I desire to refer to the cruel manner in which he spoke of honorable members on this side of the House. I speak of the honorable gentleman most respectfully, in view of his long political career as a member of various Governments in Australia ; but it is a pity he was not more guarded in his utterances. I have signed the platform as laid down by the Brisbane Labour Conference, but I emphatically declare that, outside that platform, I am’ a free man, notwithstanding what the right honorable member said about the declaration of Senator Pearce, who, at that time, was not a Minister of the Crown. Why should the Western Australian utterances of. a member of the Labour party, who was not a Minister, bind a member of the Labour party in Tasmania? Why should a statement made by the present Minister of Home Affairs be binding on me? I happened to be at the Hobart meeting referred to by the honorable member for Franklin ; and I spoke before the present Minister of Home Affairs, and simply told the people that I was in favour of a per capita return of 25s., but not in favour of the provision being placed in the Constitution for all time. I cared not one iota what the honorable member for Darwin might say. Why should his statements bind me any more than the statements of the Leader of the Opposition bind honorable members opposite? I tell the right honorable member for Swan that, in my opinion, Western Australia has been exceedingly well treated. In addition to the per capita return, Western Australia is given a special grant in the face of a declining revenue. Who can say what the revenue of Western Australia, large as it may be at present, will be in ten years’ time? We can say what the revenue of the other States will be at the end of that period, because they have reached normal conditions. According to Mr. Knibbs, Western Australia, in 1901, had a revenue of £20 13s. 4d. per head; whereas, at the present time, it is only £12 2s. 5d., showing a decline since Federation. Seeing that Western Australia has been so well treated, I should advise the representatives of that State to take what is .offered as quietly and quickly as possible, in case other honorable members may go more deeply into the question and change their minds. In Tasmania, in 1901, the imports per head amounted to £4 14s. 2d., whereas at present the figure is £4 2s. id. But, the imports of Tasmania are low because its Inter-State trade is so high. Its Inter-State trade is £13 8s. 11d. per head, whereas that of Western Australia is only £11 3s. 10d. per head, so that we are not the poor hungry little people that the right honorable member for Swan and other honorable members would lead the House to believe. We are importing largely from Victoria and New South Wales, and, therefore, we should be granted some consideration by the Commonwealth Government. The oversea and Inter- State trade of Western Australia is £23 6s. 3d. per head, while that of Tasmania is £18 us., or a difference of only £4 15s. 3d., so that there is not such a vast difference after all between the amount of products consumed per head in Western Australia and Tasmania. New South Wales and Victoria have stepped in and taken practically the whole of our trade, and so a considerable leakage has come about, because people come from Tasmania and purchase dutiable goods in Victoria. Only the other day, as the honorable member for Bass can bear out, I met a gentleman from Tasmania, who had purchased in Melbourne, and was wearing, apparel to the value of He had no Inter-State certificate, and was going back to Tasmania, and so no duty would be credited to Tasmania on those goods. That sort of thing has been going on all these years, and our excellent statistician, Mr. R. M. Johnston, stakes his reputation on the statement that Tasmania has been done out of no less than ,£40,000 per year since Federation began. If we have been done out of that big sum of money, surely we are entitled to some consideration from the Federal Government. I do not ask for consideration for the relief of the wealthy taxpayer of Tasmania. We have very few wealthy men there, but even those are paying considerably more than is paid in any other State. The Tasmanian income tax would be considered a war tax in any other country. If I interpret it correctly, I shall pay this year about is. in the pound, or a total of ^30 in income tax. It is a question of” the interpretation of the Act. A gentleman I approached here looked up both Acts, and said, “ I should not care to interpret them; that is a matter for the Commissioner of Taxes.” I may pay 6d., or I may pay is., but I shall say no more about the matter lest the Minister of Home Affairs, hearing the enormous sum he will have to pay to the State of Tasmania in income tax, should take fright or fall ill. It is not on behalf of the wealthy taxpayer that I am speaking now, but on behalf of the poor taxpayer who is in receipt of £2 2s. a week. If a man in that position loses a day’s pay it takes him six weeks to overtake his consequent indebtedness. Yet in Tasmania he has had to pay an ability tax in the past, and now has to pay an income tax. I also appeal to the House on behalf of the widows who, in Tasmania, are making incomes of slightly over £100 a year by keeping small business establishments. They have to pay income tax. Surely if we are federated, as I hope we are, the wealthy States will come to the rescue of our little State.
– It is not a case of coming to our rescue; but of paying us what we have lost through a faulty system.
– I admit that the system is bad, but the honorable member’s interjection reminds me that I have a question to put to him, and to the honorable member for Franklin.’ Why did they not move in the matter last year when it was before the House ? Why did they sit quietly ir their seats when if they had made out the case which they have made out this year, they might have led the present Prime Minister to consider our claim favorably? They simply sacrificed their little State to save the Fusion party which they had joined. They cared not one iota for their State, but now they ask the House for a special grant, in order to inconvenience the present Government, and to enable them to mount the hustings next time, and say, “Look what I did for Tasmania.” If they were in earnest, why did they not do this last year when they had the opportunity? My task of obtaining a special grant for Tasmania has been made exceedingly hard by the action of honorable members representing Tasmania, not only here, but in another place. When they had the opportunity to vote for a special grant in the Senate last year, they did not do so. Senator Keating brought the matter up.
– The honorable member must not discuss what occurred in another place.
– All I wish to do is to bring under the notice of the House the fact that when honorable members from Tasmania had the opportunity of moving in the matter, they did not do so.
– What action did the Minister of Home Affairs take?
– The Minister of Home Affairs did not have the opportunity to move in the matter. He was then sitting in Opposition, and it was not his place to do so. The system of bookkeeping has been far from perfect, and through it Tasmania has lost considerably. It is also losing population owing to the progress the larger States are making. I am proud to say that Tasmania shows the highest birthrate of any of the States, and yet our population is on the decline owing to the rapid progress which Victoria, New South Wales, Queensland, and Western Australia are making under Federation. Our young people, -who are the true wealth of the country, are being attracted into those States, and a per capita return will not benefit us as it will the richer States, whose population is so rapidly increasing to the detriment of our own. I hope that it is not too late for our little State to be helped, but I fear it is. From the little I know of parliamentary procedure, I fear that the suggestion made by the honorable member for Wilmot, will be ruled out of order when it comes before the House, and that when the Bill passes this House it will be finally dealt with, and we shall not have an opportunity to reopen the question. I have, therefore, very little hope that Tasmania will get any help from the Commonwealth, but I am sure that, had members gone deeply into the question, they would certainly, as a matter of justice, have given us more than a per capita return of 25s. Trade with the west coast of Tasmania, as I pointed out the other day, is practically in the hands of Victoria; we bring profits to Victoria and New South Wales, and I appeal to the representatives of those two States to give some consideration to the claims of Tasmania in dealing with this measure. I do not intend to take up the time of the House further than to say that at the Brisbane Conference no reference was made to the proposed per capita return being embodied in the Constitution, or to paying a fixed sum to the States for all time. I have the report of that Conference, and shall be pleased to hand it to any honorable member who desires lo read it. A perusal of it will show that the Conference had no intention of urging that the arrangement which it proposed should be placed in the Constitution.
– Some members of that Conference say that that was the intention.
– Some of the members? Some one has said, “ Give me the liberty to utter, to argue, and to answer freely according to conscience above all liberties, ‘ ‘ and I say that the Labour party enjoys that liberty. Although I have attended every caucus, I never saw this Bill until it was placed on the table of the House. The same may be said of our party generally. We have perfect confidence in the Government we have elected, and we hold them personally responsible for the measures they bring down. We are not responsible for them. If the Ministry went out of office to-morrow, I fail to see that we should be called upon to retire from the seats we now occupy. Why should we be held responsible for anything that the Government do? Honorable members on this side of the House are as free as, if not freer than, the Opposition. I had the pleasure on one occasion of travelling to New South Wales with a gentleman with whom I engaged in conversation, and eventually we became friendly enough to allow of my asking whether he was a member of any Government. “ No,” he replied; “ if I were, I should be only one man in the House, but at present, when 1 pull the strings, nine men jump.” Who is the freer man - the man who is here with no- thing to lose, or the man who is running a big business, and has, perhaps, a big overdraft with one of the financial institutions of the Commonwealth ? We know how hard it is to be free when one is running a business, and certain men can bring certain pressure to bear.
– Will the honorable member connect his remarks with the Bill before the Chair?
– I shall do so, sir. Thisis a big financial question, and I was diverted from my line of argument by the statement of an honorable member opposite that the Labour party had no freedom - in other words, that we are mere automata, working as we are instructed. I hope that honorable members will rise to the occasion, and give the little State of Tasmania something more than the mere per capita allowance of 25s. per annum.
.- As this Bill has been discussed fairly and well by honorable members on both sides of the House, I do not propose to speak at any great length ; but there are one or two matters connected with it which the Prime Minister has not made as clear as he might have done.I should like, at the outset, to congratulate the Government upon having brought forward this measure soearly in the session. That, I think, is their due. I gladly and heartily congratulate them, believing that the measure is one of the utmost importance to all the States, and that no time should be lost in passing it, so as to settle, for at least ten years, the financial relationship of the Commonwealth with the States. The time limit is certainly too short, but, I suppose, that we cannot hope for more at the present time. Old members will recollect very well the difficulties which State Treasurers have experienced from year to year in preparing their Estimates, because of their inability to determine with any degree of certainty what revenue would be forthcoming from the Commonwealth. With the passing of this Bill that difficulty will disappear to some extent, and that fact alone should induce honorable members to assist in passing it into law as soon as possible. One of my objections to it is that its operation ought not to be limited to a period of only ten years. The Prime Minister the other day spoke freely of his generosity to the States, and while he was in that generous mood I think that he might well have proposed to provide for this per capita payment extending over a period ofat least fifteen, if not twenty, years. I am given to under stand, however, by some honorable members who have spoken, that there is a possibility that this allowance may not be paid to the States for even ten years. The Prime Minister has assured us that, so far as he is concerned, he will protest against any change being made before the end of that period.
– Hear, hear.
– I feel confident that we may accept the honorable gentleman’s assurance.
– His individual assurance.
– Quite so. But what influence would he have over his followers if they were inclined to favour the introduction of a measure to repeal the present Bill?
– I have still a little influence with them.
– I recognise that, but I should not be surprised to see a great change in the party before the end of this Parliament.
– I have had a little influence with my party for the last twenty years.
– I am not in a hurry to see any change. My sole desire is that the business of the country shall be carried on as satisfactorily as possible. It matters little to me who are members of the Government, or who are their supporters; I am here, not for personal advantage or gain, but to assist in passing legislation that may be for the interests of Queensland and the States of the Commonwealth generally.
– The honorable member’s remarks may be misunderstood. I do not think that any honorable member is here for personal gain.
– I did not mean to convey such an inference; but I do feel that if the majority of the members of this Parliament had business to attend to that was worth looking after they would not be here. Whilst I object to the proposed per capita allowance being limited to a period of ten years, I presume that the Opposition will have to take whatever the Government chooses to give, and to be thankful for it. This Bill, to my mind, has not been well drafted, and appears to me to be contradictory in terms. We have the statement in plain language in clause 4, that the Braddon section, under which the States are to receive at least three-fourths of the net Customs and Excise revenue until 31st December, 1910, shall cease to operate six months before the time limit attaching to it. That clause reads -
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.
Under that clause, the Bill would come into operation as from the1st July of this year, and the provision in question contemplates the payment to the States of 25s. per capita. In this connexion, I desire to ask the Prime Minister one or two questions in the hope that he will be able to make the position clearer than he did the other day. Under clause 4, I repeat, the Bill will become operative as from the1st July. But section 87 of the Constitution, which is known as the Braddon section, provides for the return to the States of three- fourthsof the net Customs and Excise revenue until the 31st December next. I wish, therefore, to ask the Prime Minister whether the States will receive their full three-fourths of that revenue during the first half of the present financial year ?
– I do not think that the Prime. Minister made that point quite clear in moving the second reading of this Bill. I am glad that he intends to respect the Constitution by returning to the States their full three-fourths of the net Customs and Excise revenue until the end of December next.
– But they will receive only 2s. 7½d. per head during the second half of the current financial year.
– In my opinion, the Bill, instead of becoming operative as from1st July of this year, ought not to come into force until 1st January, 191 1. That is the view which was expressed the other day by the honorable member for Darling Downs. In reply, the Prime Minister stated -
I will consider that seriously. Nobody in my position can do more than that.
The honorable member for Darling Downs then said -
The general opinion was that the ten years would date from the expiration of the Braddon clause.
To that remark, the Prime Minister replied -
That is impossible financially.
What does the honorable gentleman mean by declaring that for the Bill to come into force on the1st January next is financially impossible? However, I am glad to have his assurance that until the end of the present year the States will receive their full three-fourths of the net Customs and Excise revenue.
– No thanks to him. Under the Constitution he is bound to return them that proportion of Customs and Excise revenue .
– The proposals contained in the Bill are, with one exception, . the same as those which were embodied in the agreement submitted by the late Government, which the honorable member supported.
– They are not quite the same.
– This measure is a little more favorable to the States.
– Those who supported the agreement which was entered into between the late Government and the State Premiers desired to have that agreement embodied in the Constitution. But the electors refused to ratify it, although it could have been eliminated from the Constitution at any time by the self same electors. However, I am not so dissatisfied with the Bill now that I have the assurance of the Prime Minister that for a period of ten years it is certain the States will annually receive from the Commonwealth 25s. per capita.
– There is no certainty about it.
Mr.R. EDWARDS.- I think that more reliance may be placed in the honor of the Commonwealth Parliament than the honorable member’s interjection would appear to suggest. I wish now to ask the Prime Minister whether the States will receive 25s. per capita from the Commonwealth during the second half of the current financial year? 1 am somewhat anxious about this point, because it has been rumoured that they will not.
– It is more than rumour. There is an explicit statement in the Bill.
– The Bill is not as explicit as it ought to me. It is badly drafted. I regret that, because I think that measures submitted for our consideration ought to be drafted in as explicit a form as possible. In the absence of the Prime Minister, perhaps the AttorneyGeneral can tell me whether it is proposed to return to the States 25s. per capita from 1st January to 30th June, 191 1? Will there be no deductions made? As the AttorneyGeneral does not reply, I put the question to the Minister of Trade and Customs?
– I advise the honorable member to ask the Prime Minister.
– I wished to ask the Prime Minister, but he has run away instead of attending to his business.
– Effect will be given to the bargain which was made by the late Government with the State Premiers - the arrangement for which the honorable member voted last session.
– The Bill provides for the return to the States of 25s. per capita from the1st inst., but I am given to understand by the Prime Minister that until the 31st December next they will receive three-fourths of the net Customs and Excise revenue. I take it for ganted, therefore, that upon the termination of the Braddon section of the Constitution the 25s. per capita will be paid to them. In other words, that payment will begin on the1st January, 1911. As the Prime Minister has now returned to the chamber, I ask him whether, during the second half of the current financial year, the States will receive in full 25s. per capita, as provided by clause 4 of the Bill ?
– If the Bill passes, the States will receive 25s. per capita during the current financial year, less their proportion of the deficit this year.
– I am sorry to hear that.
– Seeing that honorable members opposite advocated that very proposal before the electors, I do not understand why they should be sorry.
– I repeat that I am sorry to hear it. I am no authority on constitutional law, but I am inclined to think that if the States were to appeal to the High Court judgment would be given in their favour.
– They would waste their money.
– The Prime Minister ought to know better than I do, but I still think the States would succeed on such an issue. I regret that the £450,000 is to be deducted from the States’ share of Customs and Excise revenue, and do not think that the Prime Minister has shown much generosity towards them. He tried to impress upon us how very generously he was dealing with the States, but his generosity certainly does not go to very great lengths. Rather does his treatment of them tend in the opposite direction. However, the principles of the Bill have been thoroughly threshed out, and the sooner we pass the second reading the better. I do, however, once more appeal to the Prime Minister to deal with the States, after a full consideration of their claims with as much generosity as he can afford to do.
.- As this Bill is likely to pass and to remain on the statute-book in substantially its present form for a number of years, I desire to make a few remarks explanatory of my views and attitude concerning it. During the recent election I was one of the strongest supporters of the Financial Agreement, and did my best to secure its adoption. I am glad to say that in my constituency I was able to secure, not only a majority for myself, but also a majority for that mode of settlement. The Financial Agreement is now, however, athing of the past, and, as practical politicians and statesmen, we must make the best of the means and opportunities at our disposal. Subject to certain comments which I shall make upon the form of the Bill. I welcome it as the nearest obtainable equivalent to the ill-fated Financial Agreement. There are three elements in the Bill to which I desire to draw attention as being somewhat approximate to the fundamental provisions and principles of that scheme. First, there is the principle of the per capita allowance; secondly, there is the 25s. per capita amount; and, thirdly, there is the element not of constitutional stability, but of parliamentary continuity within the period of ten years. Those were, no doubt, the broad outlines and the organic principles of the Financial Agreement. The claim has been put forward this afternoon that the principle of the per capita allowance originated with the Labour party at the Brisbane Conference. That is not historically accurate. As a matter of fact, the principle of the per capita distribution of the surplus revenue was considered by the Federal Convention at its first session held in Adelaide. A proposal was put forward there that the surplus revenue should be distributed per capita among the peoples of the various States ; but objection was strongly taken to that principle by the representatives of some of the States, especially New South Wales. It was held by them that owing to the vast revenue that would be received under the Federal
Tariff, a per capita distribution would be hardly fair to New South Wales. Sir Frederick Holder, on behalf of South Australia, gave his approval to the per capita principle, and said that he believed it would prove to be fair. Sir George Reid, then Premier of New South Wales, said that he would agree to a sliding scale ending in a per capita system after ten years. So that those leading members of the Convention were advocates of the principle of a per capita distribution after a certain time - that is, after the expiration of what is known as the book-keeping period, which was limited to five years. This Parliament could have brought into operation the per capita principle at the end of the five-years’ period. But, unfortunately, parties were so distributed, and opinion was so divided, that we could not arrive at any settlement of the question. Then came the Financial Agreement arrived at by the representatives of the late Federal Government and the State Premiers. That agreement recognised the per capita principle for the first time in this Parliament. Consequently, it is hardly fair to say that the Labour party at the Brisbane Conference was the originator of this system. At any rate, I believe that we are now unanimously agreed as to the 25s. and as to the mode of distribution according to population. I welcome this Bill also, because I think it is a manifestation of a desire on the part of the Ministry and the Labour party to do some measure of justice to the States in the distribution of the surplus revenue. It is also, I consider, a refutation of some of the misrepresentations made, and objections urged, against the Financial Agreement during the last election. I believe that the agreement suffered defeat to a very large extent owing to misrepresentations, and to some extent also through misapprehensions and misunderstandings as to its possible results and its probable effect upon the finances of the Commonwealth. In some quarters, the very strongest objections were urged to the amount of 25s. per capita. It was said that that was too large. The honorable member for Lang has quoted to-day the strong argument that was pressed by the present Attorney- General in Sydney, to the effect that 25s. per capita would lead to the Commonwealth revenue being unduly strained and straitened. No doubt that argument went a long way. There were columns of articles in some of the newspapers urging that the payment of 25s. per capita would mean that the Commonwealth would be crippled, would be leg-roped, would be manacled, would be starved, and would be unable to carry out such national works as the transcontinental railway, the taking over of the Northern Territory, and the establishment of the Federal Capital. It was urged that we would be short of money for defence purposes. All these arguments no doubt told in the minds of a considerable number of Federal electors, who thought that the Commonwealth had better have the benefit of the doubt. Accordingly, they refused to ratify the agreement. I should like to know what has become of the great outcry that was raised against the agreement based upon (the necessities of the Commonwealth? We do not hear it urged now in the House that 25s. per head is too much. It is not said now that we shall be short of money for the Northern Territory or the transcontinental railway or the Federal capital or for Defence purposes. There is a remarkable silence on that side of the House, as to the possible shortage of Federal funds. Apparently we are all going now merrily and strongly for the 25s. per head. We hear a murmur here and there that it is not sufficient; but very little is said now under the heading that 25s. per head is toomuch.
– You would not give us a land tax?
– At the very time that some members of the present Ministerial party were fighting the Financial Agreement tooth and nail in every part of the country, and saying that it must rob the Commonwealth, they also contemplated a land tax as a part of their policy. They further contemplated the revenue from the issue of bank notes as a part of their policy. It cannot be said that the Commonwealth can pay 25s. better now under the Labour policy than it could under the late Ministerial policy. Therefore, to some extent the Ministry are to be complimented on the promptness with which they have dealt with the question, and their desire to remove all doubts in the minds of the State Governments and State Parliaments. It is only fair that they should know at the earliest opportunity what are to be their financial rights under the new regime. It is said by the Prime Minister that this is practically a crystallization or re-enactment of the Financial. Agreement. His intention may be such, but I hardly agree as to the possible realization of that. Under the Financial
Agreement we proposed to shorten the period of the operation of the Braddon section by at least six months. That was an important feature of the agreement which cannot possibly be realized by this Bill. An attempt is made in the form of the Bill. I admit, to make it appear to the general public that the new arrangement will begin on and after 1st July of this year. I do not know how the Government propose to do that, except in the cutting down process of the last six months, as was suggested just now. I fail to see how the arrangement can possibly begin on1st July. It cannot possibly begin until1st January, 191 1, because the Braddon section is still in operation, and will automatically require the Treasurer to pay to the State Governments monthly their three-fourths share of the net Customs and Excise revenue. Therefore, I agree with those honorable members who have said that it would have been far more straightforward, consistent, and in harmony with the Constitution, had the Treasurer stated straight out, “ This is a ten years’ agreement, to come in force on1st January next.” That would not have prevented him from deducting the amount which he claims to deduct as representing the shortage or the deficiency for the past year. I agree with him that it is only fitting and proper that that deduction should be made at some time or other. That could have been made within a ten years’ period, beginning on1st January, without the Bill assuming its present form. As it is, the Treasurer will be in a difficulty. Under the Bill there will be two appropriations operating.’ First there will be the month’s appropriation of three-fourths of the net revenue from Customs and Excise from month to month under the Constitution, which goes on automatically and cannot be stopped. Secondly, it may be contended by some smart lawyers that in the Bill there is a second appropriation of 25s. per head, because it says -
The Commonwealth shall, during the period of ten years beginning on1st day of July, 1910, 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 25s. per head of the number of the people of the States.
Apparently that is an appropriation of 25s. per head during the twelve months from1st July last, and in addition to that annual appropriation there is the constitutional appropriation of three-fourths of the net revenue from Customs and Excise.
The Treasurer will have trouble. I have no doubt that he is well-advised, but at the same time his attention has been drawn to this matter by a supporter, the honorable member for Capricornia. I am not surprised that that honorable gentleman and other laymen should be puzzled as to the real meaning and significance of the provision. Even the Leader of the Opposition felt called upon to draw attention to the peculiar form of the drafting which may lead to trouble, difficulties and possibly litigation.
– The honorable member for Capricornia lost sight of the Surplus Revenue Act of 1908.
– He did not lose sight of the Constitution or of clause 4 of this Bill, apparently. Those were his troubles, and they can give the Minister trouble before it is over. During the balance of the operation of the Braddon section - that is up to the 31st December, 1910 - I fail to see how he can carry out his honest desire and intention of abolishing Inter-State certificates. Certainly it will come very hard upon the smaller States if they are abolished. As a representative of Victoria, as a Federalist, and as a public man, I would very much like to see the principle of absolute freedom of trade introduced right off if it can possibly be done by the abolition of those certificates.
– I think that the honorable member has misunderstood the Treasurer.
– I understood the Treasurer to say that he is going to establish right of freedom of trade - trade free and unfettered without any difficulty from interruption - by the complete abolition of Inter-State certificates.
– I am of that opinion.
– On the lines of this Bill the honorable gentleman will begin the abolition of Inter-State certificates. There is to be no record of InterState trade since 1st July last. That may be a very good, desirable, and nice thing ; but what about the consuming States such as Tasmania, Queensland, and South Australia, which are to a large extent dependent upon the great States of New South Wales and Victoria for their supplies ?
– They will get their 25s.
– But what about the period of six months during which the Braddon section has still to operate? Under that provision the States will still be entitled to a monthly share of the net revenue from Customs and Excise, and the consuming States will he entitled to be credited with the duties collected in the importing States on goods afterwards sent to” the former.
– They will get that all right.
– How can that be done unless some record is maintained as to the movement of trade into the States? That is the difficulty. If it could be done of course I would welcome it.
– Can we not set it aside at once?
– Yes, it can be set aside at once. It is useless to pretend to keep alive the Braddon provision when, in reality, it is not being kept alive.
– The honorable member is in favour of doing away with Inter- State certificates. What we propose is a proper and perfectly legal and constitutional method of doing that.
– It seems to me that it would be fitting and proper to keep the old system in force until the new system can be brought into operation. With a half-and-half system it will be difficult to say what the rights of the States are. I approve of a per capita distribution, and would have welcomed its adoption long ago. had it not been for the Braddon provision ; but, as that provision must operate until the end of this year, it would be better to wait until it has expired before making a change. We have the assurance of the Prime Minister, on behalf of his party, that the legislation now proposed is to remain the law of the land for ten years at least - that is, during the life of at least three Parliaments. It is not to be changed at” the will of chance majorities from session to session, or from Parliament to Parliament. That gives the States a certain amount of security. The last Government held the view that the States would not have sufficient security, and would be unable to launch into enterprizes to be carried out over a number of years, if their revenues were liable to be affected by the policies of changing majorities in the Federal Parliament, and, therefore, it thought that the Financial Agreement should be embodied in the Constitution. During the electoral campaign we had the greatest difficulty in convincing the public that it was not intended that the arrangement come to should last for ever. It was argued that, if put into the Constitution, it would be unalterable, but the intention was simply that it should remain in the Constitution until a majority of the people, voting in a majority of the States, decided “that there should be an alteration. Had the people determined to put the agreement Into the Constitution, they could at a later date have taken it out again. If the people put a provision into the Constitution, that provision can be taken out again at the will of those who put it there. When addressing my constituents, I said that I thought it probable that the proposed agreement, if embodied in the Constitution, would remain there for ten or fifteen years. I did not suggest that it would last longer. By the end of that period, the requirements of the Commonwealth may have so largely increased that the financial relations of the Commonwealth and the States will have to be reviewed. I did not dream of the continuance of the arrangement for twenty-five or thirty years. As to the argument that an agreement put into the Constitution has to remain there in perpetuity, it must be remembered that the Constitution makes this Parliament supreme in matters of finance. Were the Financial Agreement -embodied in the ‘Constitution, and were it to be discovered later that the Commonwealth was not receiving enough revenue to meet its requirements, this Parliament could, should the States raise any objection to the reconsideration of the financial position, impose a land tax, an income tax, a stamp tax, or other direct imposts. That position was put by Mr. Dugald Thomson. He pointed out that, were an objection to be raised to a proposal to amend the Constitution with a view to allowing the requirements of the Commonwealth to be met. this Parliament would be the master of the situation, because it could say to the Governments of the States and to the State Parliaments, “ If you will not allow a re- arrangement, we must exercise powers of direct taxation, which we do not wish to exercise unless you make it necessary for us to do so.” It would be most disastrous were any political party to endeavour to foment disputes or jealousies between the various governing todies existing under our Constitution. The State Parliaments and Governments have their proper share of activity, just as this Parliament and Government have their proper share. I do not think that the Prime Minister and his party will ever make it part of their policy to foment such disturbances as 1 speak of.
– The honorable gentleman knows that the Premier of New South Wales has been doing that for years.
– I think that the leaders of parties in the Federal Parliament should set a good example, and should not sanction anything like a war against the States, because the State Parliaments, as well as the Federal Parliament, are representative of the Commonwealth. I wish to say that, backed as this Bill will be by the assurance of the Federal Labour party that it is to remain on the statute-book for ten years at least - and to that statement I hear no dissent - the States will have the benefit, to a large extent, of the constitutional security which we proposed to give them under the Financial Agreement. With that guarantee and security, this proposal for the payment of 25s. per capita is open to the objection of rigidity and inelasticity which was raised against the Financial Agreement by the Labour party and the opponents generally of that agreement. It is, in the circumstances, a matter for congratulation that we have been able out of the wreck of the Financial Agreement to secure in this Bill an alternative which, if it does not satisfy some of the advocates of the agreement, may be regarded as a not inconsiderable instalment of what they expected and desired. I hope, in conclusion, that the Prime Minister will remember the objections raised to the form of the Bill, and will not insist upon passing it in its present form, pretending, so to speak, that the agreement will come into operation as from the1st July last when it will really be made to operate from the 1st of January next. If an agreement for nine and ahalf years, or for only nine years, is meant, why not say so? A great and important instrument such as this, intended to operate for ten years at least, should on the face of it be clear and unmistakable. It should not be open to any quibbles, doubts, or ambiguities. The States should know clearly what their position under it will be. It is obvious from the criticism offered in various parts of this House, and by various State authorities, that the provisions of this Bill, even after this debate is concluded, will not be clearly understood, and it is suspected in certain quarters that there are some ambiguities in it, and that it is not as clear as a great and important instrument like this ought to be.
– It is in accordance with the pledges I made to the people.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Clause 2 -
The Surplus Revenue Act1908 is amended -
by omitting from paragraph (b) of section five the words “ (subject to section eighty-seven of the Constitution) “.
– I should like the Treasurer to give the Committee some little information about this clause. The honorable gentleman Will recognise that he is proposing the repeal of section 4 of the Surplus Revenue Act of 1908. That section provides machinery for crediting revenue and debiting expenditure and for the payment of balances to the several States. The Treasurer has said that he intends to observe section 87 of the Constitution - I am assuming that no arrangements are made with the States - and I should like to know upon what basis the honorable gentleman proposes during the next six months to pay monthly to the States their proportion of three-fourths of the net revenue from Customs and Excise?
– The honorable gentleman’s question, of course, involves the whole of the bookkeeping . system. The Government propose, on advice of course, to abandon the whole of the Inter-State certificates of the bookkeeping system immediately this Bill becomes law. They think that the provision made in this measure is ample and secure. It will enable them to keep account of the whole of the revenue collected, and to make dead sure that three-fourths of the net Customs and Excise revenue will, during the first six months of the current financial year, be paid over to the State Governments if they demand it. But, as I mentioned in my speech on the second reading of the Bill, in view of the fact that not very long ago the whole of the State Governments agreed together with the Government of the Commonwealth to the repeal of the constitutional provisions requiring the payment to the States of three-fourths of the net Customs and Excise revenue, and so enable the Federal Government to begin the payment of 25s. per capita as from the1st July of this year, they might very well, if they desire a good result to follow their labours, come to some agreement with the present Commonwealth Government. I do not wish to enter into any controversial matter, but, as it affects the question raised, I should like to mention that I was approached by the Premier of Victoria, in view of my public promises, and he informed me that he was ready and willing to consult with the Commonwealth Government, and to come to an arrangement. He thought, after that interview with me, that it was worth his while to go. to Sydney and interview Mr. Wade. He subsequently returned to Melbourne, and came to see me again. He asked if the 17th June would be a suitable time for Commonwealth Ministers to meet State Ministers. I said that it would be a most inconvenient time for the Government of the Commonwealth, but that I was quite ready and willing to meet State Ministers to discuss the matter on the conditions laid down. The conditions were the fulfilment of the pledges of myself and the Government to the people of the Commonwealth. That was communicated, I understand, to all the Premiers, and subsequently there ensued the correspondence which Has been laid on the table. I am advised by the authorities who are competent to advise me that what is here proposed is the proper way of dealing with the matter ; and it is the desire and wish of this Government, and all the Governments, together with the traders and the people generally, to have the Inter-State certificates abolished as useless, unnecessary, and as retarding trade and industry. That can be done in the way proposed as soon as this Bill is passed, or by. another measure if it is desired.
– A lot of money goes to some of the States by means of the Inter-State adjustments.
– Let us get away from all ideas of what we would like, and face the facts. The States will get neither more nor less than 25s. -per capita during the current financial year.
– That is the intention of this Bill ?
– That is practically the whole and sole purpose of the Bill - to do away with the Inter-State certificates.
– That was not made sufficiently clear in the secondreading speech of the Prime Minister.
– I must plead guilty to any defects I may have in expressing the objects of the Bill; but I put the view as briefly and concisely as I could that the purpose of the Bill is to pay the States 25s. per capita, less their proportion of the deficit for the last financial year.
– But the payment will be for the current financial vear.
– For the current financial year, from the rst July to and including the 30th June next - that is the financial, not the calendar year. I am glad that (he honorable member for Darling Downs has raised the question, because it has been carefully gone into, and I understand that the measure covers the legal requirements completely.
.- I am glad that the Prime Minister realizes what I am trying to show - that we ought to know, in case of difficulty, where the States stand and where the Treasurer stands. We are all agreed, I think, as to the advisability of abolishing any machinery which interferes with Inter- State trade. But supposing that during the next six months, owing to some misfortune, the Government are not able to make any arrangements with the States, and the Braddon section continues to operate, the States being entitled to three-fourths of the revenue, what is the basis on which the States are going to be paid during that period of six months? If we keep section 4 of the Act, revenue will have to be credited, and the expenditure debited, according to certain lines. If we delete the bookkeeping sections, must not there be some machinery provided for the next six months, in case the States should not fall into line with the Commonwealth, to determine what the States are to get? If the Prime Minister will look through the Bill, he will find that he is not providing for that contingency. He provides for the payment of monthly instalments, by which the States shall not get more than -25s. per capita in the twelve months. These, he says, he will adjust to comply with section 87. The adjustments should be made monthly; but section 93 and section 89 of the Constitution have been superseded by the Surplus Revenue Aci 1908. During the next sixmonths, when the monthly adjustments are being made, some principle for payment must be adopted. Will it be the per capita principle’?
– Not necessarily.
– What will it be?
– The collection.
– But the whole basis of the collection has been repealed by section 4 of the Surplus Revenue Act 1908 as amended.
– Our books will show the collection.
– But no definite basis at law is being laid down. For instance, during the next six months Tasmania will not be able to get any benefit if section 4, subsection b, goes. The Treasurer of that State may say that, during that time, he is determined to stand by the Constitution ; and the Prime Minister will not be able to give any credit for goods passing from one State to another, because fie has wiped out the machinery for doing so.
– That will hardly be wanted under the agreement.
– But who is to determine? Is it to be the fiat of the Treasurer ?
– The amount collected.
– Do I understand that if, during the next six months, the States will not come into line with the Commonwealth, the Prime Minister will bring about the desired result by an administrative act? When the Bill is passed the Prime Minister will say, “ The whole basis of the bookkeeping machinery is gone, and during the next six months I, as Treasurer, will give direction to the Secretary of the Treasury to keep accounts on certain lines; I shall tell him not to take any notice of- Inter-State certificates, because I am going to credit the revenue and debit the expenditure in each State, and shall pay over the balances to the States in proportion.” That is one way which might be directed. ‘
– What would be the matter with such a way?
– The matter might be that one State might get less than under another system.
– All the States will get 25s. per capita.
– Ultimately ; but during the next six months what are the States to expect, and on what basis? I suggest that the consideration of the clause should be postponed. I raise the point simply because there is a difficulty presented. For instance, if the Premier of Queensland desired to know on what basis the payments would be made during the. next six months - whether per capita or on crediting revenue, debiting expenditure and payment of balances to each State - what answer would the Prime Minister give?
– Will the honorable member address himself to the question assuming the bookkeeping sections are abrogated altogether.
– I am assuming that, the Treasurer’s difficulty may arise in the distribution of the three-fourths.
– I do not see any difficulty.
– I think the honorable member will find that it exists. Is he going to make the return on a pgr capita or a bookkeeping basis? As Treasurer, will he not be compelled to decide one way or the other, as the bookkeeping basis is completely wiped out, and it would appear that he makes no provision as to the method by which the revenue is to be distributed for this period of six months?
– He proposes to refund it on a collection basis, but he will balance up next year on the 25s. per capita basis.
– That may be proposed, but is it being not laid down as a matter of law? What we are most concerned about, and what the States may want to know, is how the Treasurer proposes to distribute the balances, and will it depend on the basis on which he is going to keep his books? If the Treasurer is satisfied that the course he is taking is correct, I am satisfied that I have done my duty in raising the point, but it would be just as well for him to consult’ the Crown Law authorities on the point.. It may be that, either way you take it, it does not make much difference in the end.
– It does not make a penny of difference.
– Does the honorable member say that that is so during the next six months, and that he has been so advised ?
– Then if the Treasurer is so advised by the Crown Law authorities. I shall say no more on the point.
– If we turn to the Constitution for a Little light on the point, which was new to me until submitted by the honorable member for Darling Downs, we find by section 94 that, after a period of five years from the imposition of uniform duties of Customs, “ The Parliament may provide, on such’ basis as it deems fair, for the monthly payment to the several States of all surplus revenue of the Commonwealth.” Parliament made such a provision by the Surplus Revenue Act 1908, of which we are now repealing section 4. It contains the whole of the provisions made by the Parliament for the distribution of the surplus revenue in accordance with the Constitution. If we sweep away that section, no provision by Parliament, “ on the basis that it deems fair,” remains, so far as I know. Section 4 provides for the Commonwealth crediting each State with revenue, debiting each State with expenditure, and paying over each month to the States the balance of revenue over expenditure, on a certain basis. It provides also a definition of new revenue, directs what is to be done with duties of Customs in certaincases, and defines payment to trust accounts as expenditure. All this goes. Nothing is proposed by the Government to be substituted for that section. Consequently there will be no provision of this kind by Parliament for the distribution of our revenue during the current six months. The Treasurer, of course, can during the following six months adjust his payments to fall in with his own design of paying only 25s. per head for the whole financial year, if he still thinks fit to do so. That is another matter, we are not now concerned whether it is right or wrong. But for the current six months the Treasurer appears to be sawing off the branch on which he and other Treasurers for the last nine years have been sitting. He should appeal to Parliament to authorize some provision for the distribution during the six months of the three-fourths of the Customs and Excise revenue which, under the Constitution, he must return to the States.
– It ought to be in the Bill.
– That is so. I think the honorable member for Darling Downs is right in his suggestion that the wholesale repeal of section 4 of the Surplus Revenue Actwill necessitate the introduction of other provisions. I do not think it is fair to press the Treasurer to look into a new point of this sort at once.
– The whole thing has been duly considered.
– This very point? Is the honorable member quite sure of that?
– A good deal of section 4 can be dispensed with, but some of it cannot be, unless the Treasurer can point to some provision on the statute-book which Parliament has made, or is asked to make, in accordance with the Constitution, for distributing the surplus revenue of the Commonwealth to the States.
– It is considered sufficient to acknowledge the revenue collected and distribute it.
– There is never any difficulty in receiving revenue; the difficulty here is in paying it to the States in an approved scheme. The Constitution requires that Parliament shall decide the distribu tion, and I know of no provision made by Parliament except section 4 for that purpose.
– Does not section87 of the Constitution provide for it?
Mr.DEAKIN. - No. It simply says that during a period of ten years not more than one-fourth of the net Customs and Excise revenue shall be applied by the Commonwealth towards its expenditure, and that the balance shall, “ in accordance with this Constitution,” be paid to the several States or applied towards the payment of interest on State debts taken over.
– Is not that clear?
– Perfectly, but how are future payments to be “ in accordance with this Constitution?” It must mean in accordance with section 94, under which Parliament may provide, “ on such basis as it deems fair “ for the monthly payment to the several States of all surplus revenue of the Commonwealth.
– Parliament may, or it may not.
– But unless Parliament does provide some basis, the Treasurer has no authority for any distribution.
– Section 87 provides machinery enough.
– Not for the distribution. It provides for the amount of onefourth which the Commonwealth may retain for its own purposes, and for the other three-fourths which the Commonwealth must distribute to the States, but it does not lay down what principle must be followed in allotting that three-fourths between the States for the next six months. The principle of distribution must be laid down by Parliament. The Treasurer will shortly have an opportunity of putting this point to his legal advisers, and, if he so desires, the clause can be postponed.
.- I am not quite sure that the clause is not all right, but I have marked on my Bill a doubt as to what is meant by this clause and by some other clauses.If there is a doubt, I would suggest to the Treasurer that he should make paragraph a come into force on a date to-be fixed by proclamation.
– That would meet it.
– My impression is that what thedraftsman had in his mind was that we are only collectors of the Customs and Excise revenue, and that our power to spend is limited to one-fourth. We collect under section 86 of the Constitution. and under section 87 can spend one-fourth. Three-fourths must be given back to the States, and, as the bookkeeping clauses have been abolished, it does not matter much to the States one way or the other whether these provisions in the Surplus Revenue Act 1908 are repealed or not, because we can only distribute the balances in the way in which we have been paying them hitherto, i.e., per capita. We have now stopped crediting to each State the amount of revenue collected in each, and debiting them with the expenditure pf the Departments taken over, but, independent of that provision, which is contained in section 89, and of the provision in section 93 which has been repealed, there is the provision in section 87 by which we hold as. trustees for the States three-fourths of Customs and Excise revenue, and it is on that point that the question has arisen.
– Section 93 of the Constitution is reproduced.
– We repealed section 93 in the Surplus Revenue Act and substituted a new method of dealing with the finances. It evidently occurred to the draftsman that since we were abolishing the bookkeeping period all that we had to do was to pay three-fourths of the Customs and Excise revenue to the States.
– I am speaking supposititiously when I say that it evidently occurred to the draftsman that as we were merely collecting in trust for the States three- fourths of the Customs and Excise revenue we must give back to the States what we collected in trust on the basis of the amount collected in each State. I merely make the suggestion that it might be well if there is a doubt to make this measure to come into force on a date to be fixed by proclamation.
– That would cover the difficulty.
– I think so. If there is any doubt as to the drafting of the measure it can be cleared in five minutes.
– I speak the more freely now because notwithstanding the opinions of some legal authorities opposite I am advised that there is nothing wrong with this provision. The Braddon section provides for the payment to the States in the aggregate, and this Bill provides for the distribution of that money.
– In clause 4 and clause 6. The honorable member will observe how careful the Government have been, not only in providing for the payment of 25s. per capita to the States but in making provision for the distribution of all future surplus revenues per capita. That covers the whole ground. The distribution will be made per capita.
– I think that the provision is all right.
– Without speaking in disparagement of any other member of the Opposition, I can assure the honorable member for Angas that I would as soon have his opinion on a question of this kind as that of any other man of whom I know. I am pleased that the honorable member for Angas shares my view, although he puts his opinion very delicately,saying that he “ thinks “ the provision is’ all right. As a layman, I believe that it. is. and in that view I am fortified by the statement that the Crown Law officers are satisfied that there is no better way of securing what we desire, and of doing away with the bookkeeping system, than that which we propose.
; - Owing to the way in which this . Bill is drafted, it is difficult to understand how” the Government propose to distribute, theCustoms and Excise revenue in accordance’ with the principle which has been in operation since the establishment of Federation.’’ Under the bookkeeping system we have’ credited to each State all revenue received, and debited against each State all expenditure incurred within it, and I fail to see how that system is to be carried out under these provisions. The difficulty has arisen owing to the desire of the Government to make this Bill come into operation before the expiration of the Braddon section. Had the Government proposed that it should take effect as from ist January, 191 1, the provisions of the Surplus Revenue Act could have been repealed as from that date; but the Government desire to bring this Bill into force six months before there is any legal power to make it effective. It cannot be made effective so far as the annual payment of 25s. per capita is concerned until ist January next, and the whole trouble arises from the determination of the Government to try to drive a coach and four through the Constitution. I agree with those who have spoken that it is inadvisable to repeal section 4 of the Surplus Revenue Act until we can get something in its place. It is all very well for the Prime Minister to talk airily about the States agreeing to the Government’s proposal, but I doubt whether they have power to come to such an agreement. The State Governments could not invade the Constitutionby merely saying, “We will take 25s. per capita during the remaining six months of the present year, instead of our proportion of the three-fourths of Customs and Excise revenue due to us.” Each State Parliament would have to pass an Appropriation Act providing that any amount over 25s. per capita per annum may be retained by the Commonwealth during this six months’ period.
– That is the only way.
– I think so; but, after all, it would be a very clumsy method of dealing with the matter. There would be great difficulty in inducing the six State Parliaments to pass such a measure. The whole proposal on the part of the Government is clumsy, and cannot be readily understood.I fail to see what their object can be. The present system will expire on 31st December, and a new system can then be instituted. As it is, the Government are creating a difficulty, and I am convinced that the matter will not end here. The Prime Minister may say, “ It is all right; “ but if section 4 of the Surplus Revenue Act be repealed, we shall have no basis on which to proceed. Three-fourths of the net Customs and Excise revenue will be available to the States under section 87 of the Constitution, but how is it to be distributed ?
– Per capita.
-Is the per capita system to operate during the existence of the Braddon section?
– I would refer the right honorable member to clause 4 of the Bill.
– The per capita return of 25s. per annum must be made after 31st December. We must continue to return to the States until that date threefourths of the Customs and Excise revenue.
– The Bill provides for a per capita payment of 25s. per annum as well as for the distribution of any surplus on a per capita basis.
– What surplus will be available? The Government will probably propose presently a largely increased appropriation in respect of old-age pensions or something else. What became of the surplus for 1908-9? It went into trust funds. I am sorry that the honorable member for Angas supports such a complicated provision as this when it would be an easy matter to make clear the intention of the Government. I should like to hear the views of the honorable member for Flinders on this question.
.- I wish to ask the Prime Minister whether during the next six months these moneys will be paid on the basis on which they have hitherto been paid under the Surplus Revenue Act, by monthly instalments, or whether they will be paid on a per capita basis ?
– The per capita basis.
– So that during the six months we make a change in law.
Sitting suspended from 6.30 to 7.45 p.m.
– I must congratulate the Treasurer or his officers upon having presented to Parliament one of the most extraordinary financial conundrums that has even been put before any legislative body. I have read the Bill over and over again. I have had a good deal of experience in reading Acts of Parliament, but I must confess that the position has already presented itself to me in at least two or three different lights, and I do not yet know which is the correct one. I would like the attention of the Prime Minister for a moment, because, after all, we are merely dealing with a matter of form, and, so far as our work in Committee is concerned, we all desire to assist the Government to put the Bill in a form in which it will give effect to the Intention which the House has affirmed by agreeing to its second reading. Let me put one or two of the difficulties that I feel in connexion with this matter. As I intimated duringmy remarks upon the motion for the second reading of the measure, the object of clause 4 seemed to me to be to provide that during the whole of the current financial year the Commonwealth should return to the States 25s. per capita. but should it be obliged to returnthem more than that amount during the first half of theyear, it should be enabled to strike a balance by returning them less during the second half of the year. Is that the view of the Prime Minister?
– Then 1 am afraid that clause 4 does not give effect to it. The clause reads -
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.
Suppose, for example, that we wish to arrive at how much ought to be paid in Queensland. Under that provision we inquire, “ What is the population of Queensland?” The reply is, “ Half a million.” We then have to ask ourselves, “ What has the Commonwealth to return to Queensland ?” The answer is, “ 25s. per head, or £625,000 per annum.” How is that to be paid? By monthly instalments. Therefore the Commonwealth, during each month of the financial year, must pay to Queensland one-twelfth of £625,000. That is what the clause provides. For- the current six months of the financial year the provision is really in the nature of a parliamentary appropriation. One-twelfth of 25s. per head must be paid monthly to Queensland. Let the matter stand there for a moment. Queensland may say, “Oh, that is all very well, but section 87 of the Constitution is in existence until 31st December next, and under that the return to Queensland of a great deal more than 25s. per head is guaranteed.” Therefore, during the first six months of the present financial year, the proposed monthly appropriation will go for nothing. The declaration is tantamount to saying that we will pay a portion of our debts. Of course we will. The Constitution provides that during that term we must pay to Queensland a great deal more than 25s. per head. Now, the Treasurer must obey. an Act of Parliament as well as the Constitution, and under this Bill he will be required to pay monthly to Queensland during the first half of the current year one-twelfth of 25s. per head, whilst under the Constitution he will be bound to return the difference between that amount and the three-fourths share of the net revenue from Customs and Excise. That is the extraordinary way in which the matter is put. I have always maintained that in the settlement of this financial question we ought to exercise the powers which have been directly vested in us by the Constitution, without any agreement with the State Premiers or with anybody else, and that we ought to exercise them as autho rized by the Constitution, that is, from the ist January next. But for some reason or other, the Government have chosen to say, “ We are going to initiate this scheme as from ist July of the present year.”
– We must keep our pledges to the country.
– Honorable members upon this side of the chamber are not concerned with the pledges which were given to the country by the Prime Minister. But we are concerned with what the effect of this Bill will be if it becomes law. Under it the Treasurer will be obliged to pay to Queensland 25s. per head for the ensuing six months. But the Constitution also imposes upon him the obligation to return to that State the difference between 25s. per capita and her three-fourths share of the net revenue from Customs and Excise. The Bill does not provide any parliamentary authority regarding the method in which that difference is to be distributed.
– That authority is contained in the Bill.
– Under clause 6?
– Under clause 4, too.
– That is not so. Clause 4 contains no provision regarding the method of- distribution to be adopted as between the States, or regarding the mode of payment to be observed in respect to any particular State.
– It provides for the return to each State of an annual sum amounting to 25s. per head of its people.
– That is admitted. Assuming that the Bill becomes law, the Treasurer will have his authority to draw a cheque monthly for one-twelfth of the amount represented by 25s. per head in the case of all the States. But the States are entitled, during the present half-year, to three-fourths of the net revenue from Customs and Excise, and, therefore, Queensland ought to receive more than 25s. per head during that period. Where does the Treasurer derive any authority to return to Queensland any portion of that sum, how much is it to be, and in what manner is it to be returned?
– ‘Section 87 of the Constitution gives the necessary power.
– That section merely says-
During the period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, of the net revenue of the Commonwealth from duties of Customs and of Excise not more than one-fourth shall be applied annually by the Commonwealth towards its expenditure.
– One-fourth - yes.
– I am assuming that the Commonwealth retains the whole of that one-fourth.
– It must pay over the remainder.
– The section continues
The balance shall, in accordance with this Constitution, be paid to the several States or applied towards the payment of interest on debts of the several States taken over by the Commonwealth.
The Constitution does not say that the Commonwealth must pay to Queensland so much of that balance in proportion to its population. It does not declare that it must pay to Tasmania so much of that balance in proportion to its population. Neither does it affirm that the Commonwealth shall pay the amount monthly to Queensland or Tasmania. Consequently, the Treasurer must come to Parliament to obtain the necessary authority to pay its proportion of the balance to Queensland, and to prescribe the mode in which the payment shall be made. The difficulty which was suggested prior to the suspension of the sitting was supposed to be overcome by clause 6 of the Bill. But that provision has nothing whatever to do with this point. It reads -
In addition to the payments referred to in section four of this Act, the Treasurer shall pay to the several States, in proportion to the number of their people, all surplus revenue (if any) in his hands at the close of each financial year.
Now. “ surplus revenue “ is a term which is used in section 94 of the Constitution, and which the High Court has finally determined possesses a very definite meaning. That tribunal has held that “ surplus revenue “ means the portion of the Commonwealth’s share of the Customs and Excise revenue which has not been applied towards Commonwealth expenditure. But in this Bill we are not dealing with the Commonwealth revenue at all. We are” dealing with the three-fourths of the net Customs and Excise revenue which must be returned to the States. It will be seen, therefore, that clause 6 of this measure has nothing whatever to do with it. I entertain the highest respect for the gentlemen whom the Treasurer has been consulting - the Law officers of the Crown. But they are not members of this House, and, therefore, cannotbe heard in explanation of these difficulties or of how they arrived at their conclusions. Consequently we have to use our own judgment in the best way that we can. We are entitled to ask the
Treasurer - who is charged with the responsibility of piloting the Bill through this Chamber - what authority he is now seeking from Parliament to enable him, during the first half of the financial year, to deal with that portion of the threefourths of the net Customs and Excise revenue which is not dealt with in this Bill, and which will be due, not merely to Queensland and Tasmania, but to the States, as a whole, under section 87 of the Constitution. I do not want to raise difficulties.
– I want the difficulties to be raised if they are there. They are not there according to the advice which I have.
– We ought to have that advice explained to us, I think. That is the least that is due.
– The honorable member for Angas expressed a different view.
– I have had an opportunity of speaking to the honorable member for Angas during the dinner adjournment. I have the greatest respect for his opinion, but I am not sure that he holds a strong view on the matter one way or the other.
– I think the drafting of the clause is very ingenious from the point of view of concealing what is intended to be done.
– The drafting effectually conceals what is intended to be done.. Talleyrand said that language was given to us to enable us to conceal our thoughts, but that is not the sort of language which we usually advise to be employed in our Acts of Parliament.
– Even the honorable member for Angas suggests that the operation of the clause should be suspended for six months.
– And the honorable member for Angas also said, of sub-clause a of clause 2, that it might come into force by proclamation.
– May I suggest this to the Treasurer : There are two respects in which what is manifestly and admittedly his intention - be it right or wrong - will not be carried into effect. One of them is that he intends that the 25s. per head, the payment of which is to commence from the 1st Julyin the present financial year, is to cover all the payments to be made to the States during the whole year.
– And that, if we have to pay more than that in the first six months, we are to make it good by paying less during the second half of the financial year. That is one intention. I have dealt with it before on its merits. But assuming the intention to be right, I say that clause 4 does not give effect to it, because it says that you are to pay by monthly instalments 25s. per head in the first six months, and then the Constitution comes in and says that, in addition, you have to pay the surplus amount to the States. In the second half of the year you would not be able to cut down the 25s. instalments. You must still go on. According to that view, the intention of the Government will not be carried out, if I can read the clause at all. The second point is that this Bill gives no parliamentary authority, no direction, no authority to the head of the Government, as Treasurer, to distribute amongst the States, in proportion to population, or in any other way, that very large sum - amounting to some millions - forming the difference arising during the first half of the financial year between the aggregate amount of 25s. per head and what will be ascertained to be three-fourths of the Customs and Excise revenue. Unless I can be shown to be wrong, surely the Treasurer ought to take time to have this matter in: vestigated. The Attorney-General is not here. We have been offered no explanation of this particular crux. I can promise the Treasurer that, if he will give us an opportunity, I will render him every assistance in my power to frame a Bill to carry out the intention which the House has authorized in passing the second reading; but I have thought it right to point out the difficulties which present themselves to my mind.
– The honorable member has shifted his ground.
– I admit that. I stated at the commencement of my speech that this Bill has presented several different meanings to me at different times. When I read it at first, I thought that the effect of clause 4 was to enable the Treasurer to subtract from payments made in the second half of the financial year the amounts more than 25s. per head which he was obliged to pay in the first half . That was undoubtedly the way in which the clause presented itself to my mind, and that was the basis of my former criticism.
– That is what the Government intend.
– That is admittedly the intention.
– Leave the political side out of the matter.
– The Treasurer says that I have shifted my ground. I have in this sense - that a “more careful examination of the language of the clause convinces me that the intention of the Government will not be carried out.
– I think that, if the Treasurer had made his meaning clearer in moving the second reading of this Bill, the debate would have presented a different complexion. At one time, like the honorable member who has just spoken, I thought that I had grasped the Treasurer’s meaning, and the view just presented is that which I took. But something said by the Treasurer in his speech made me think that I was wrong. The position as it appears to me is plainly this: The Treasurerintends - and some of the legal members on this side of the Chamber say that that is what the Bill will effect - to carry out the terms of the Constitution during the current six months of the financial year by paying back three-fourths of the Customs and Excise revenue to the States ; that is, if he does not - as he seems to assume that he will be able to do - effect some arrangement with the States by which they will fall in with his ultimate design. That ultimate design is simply this : Having paid to the States - in some manner which I can assure him that no legal member on this side can understand - three-fourths of the Customs and Excise revenue during the current half of the financial year, he is then going to pay, under the succeeding clause, a sum sufficient to make up the total of 25s. per head for the whole financial year.
– Unless the Trea-surer gets parliamentary authority, he may pay the whole of the difference between the 25s. per head of the population and the three-fourths of the net Customs and Excise revenue to one State.
– He will have no means of apportioning the sum. The clause takes away some of the machinery created by Parliament in place of the constitutional machinery with regard to the division of the “three-fourths. If that be done, there will be no machinery left, either under the Constitution or in this Bill, to enable the Treasurer to apportion the three-fourths of the revenue between the different States. Consequently the Treasurer will be in this position’: He will either have to apportion the sum by some means of his own, month by month - because it must be month by month - or he will get himself into trouble with the States that will lead to litigation in the High Court. It seems to me that, if the Treasurer will only take the view of this matter which we on this side of the Chamber have advocated, and make the clause dealing with the 25s. grant date from the expiration of the Braddon section of the Constitution, the whole of the difficulties will vanish.
– That is purely a political issue.
– It may be political.
– It is purely a party political point mixed up with a legal point.
– Whether it is political or not, the suggestion offered will solve all the difficulties connected with a very vexed question indeed, and will enable the new financial arrangement between the Commonwealth and the States to be started on a fair and square basis, and one that will give ample satisfaction to the States, whilst leaving the Commonwealth, if in a somewhat hampered position for a few months, yet ultimately in a very fair position indeed. At the same time it will make this Bill what it ought to be, a model of clearness, for which we have precedents in some of our other measures. The honorable member for Darling Downs on Friday referred to the clearness and accuracy of the draftsmanship exhibited in Commonwealth Acts of Parliament. I am inclined to believe that the honorable member was quite correct in what he said. But if the draftsmanship of this Bill be clear, it certainly is draftsmanship that cannot be easily understood, except perhaps by some of the legal members of this Parliament. During the whole course of the present debate there has been a close critical discussion as to the exact meaning intended to be conveyed by the language of the Bill. It cannot be said to be a model of drafting which requires of the States -
– I am afraid that the honorable member is setting away from the question before the Committee.
– If we negative the provisions of the Surplus Revenue Act, as proposed by the clause, the Government will not have any directions from either the Parliament or the Constitution as to how they are to pay over three-fourths of the net Customs and Excise revenue to the States from month to month during the first half of the financial year in compliance with the Braddon section. All that, however, can be obviated if the Government will see fit to extend further the generosity which I, for one, recognise they have exhibited in drafting the measure. They have shown admirable generosity so far as it goes, in complying with all their election pledges, and promises, in endeavouring to solve a very vexed question, and placing the financial relationsbetween the Commonwealth and the States on a fair and definite basis agreeable to both parties. If they will only date the new arrangement from the expiration of the Braddon section instead of dating it back six months, all these difficulties will vanish, and we shall start everything with a fair understanding, and in such circumstances as will do away with a vast amount of the friction which has hitherto existed.
– I think, on consideration, that the Bill is right as it is. When I first read the clause I made a note that there was a doubt as to what was meant. What the honorable member for Flinders relies on mainly, I think, is that “surplus revenue “ referred to in the Constitution is the difference between out one-fourth share of the net Customs and Excise revenue and our expenditure. I went to the Library to get the report of the surplus revenue case, but it is not there at the present moment. I think that in that case the High Court did not say that that was the definition of “surplus revenue.” I think it said that it did not decide that point, and could see no distinction between the surplus revenue dealt with in section 94, which is all the balances and the surplus revenue referred to in section 89. In other words, section 94 obliges the Commonwealth to hand back to the States the whole of the unexpended or unappropriated balances, and that applies after the expiration of the Braddon section, as well as before it. Before the expiration, the payment must amount to at least threefourths of the Customs and Excise.
– That is unexpended balances not appropriated?
– Yes. According to the decision of the High Court, as long as Parliament by an Act has declared some object for the expenditure, we can as against that surplus make an appropriation.
– Not expended within what particular time did the High Court decide ?
– I do not think that the High Court laid down any limitation in regard to time. All it said was that so long as it was an expenditure which the Parliament was justified in authorizing an appropriation might be made for a period df, say, three or four or five years, so as to diminish the surplus, but subject to the payment of the three-fourths Customs and Excise to the States. But I do not think that it ever decided that surplus revenue is defined in the Constitution by necessary inference as being the difference between onefourth of the net Customs and Excise revenue and the Commonwealth expenditure.
– 1 did not suggest that. It is the difference between the Commonwealth’s cwn revenue and its own expenditure. It may get revenue from other sources.
– It practically amounts to the same thing. I see what the honorable member now holds, and 1 quite agree with it, but 1 took it that he did not say that. Section 94 deals with surplus revenue which is all Commonwealth revenue unexpended under the Constitution.
– That is exclusive of the three-fourths of the Customs and Excise revenue, so long as the Braddon section continues.
– The payment of that portion of the Customs and Excise revenue would be an expenditure for the ten years.
– Do I understand that that would apply to a land tax?
-Yes. The surplus would include balances from all sources.
– I never read section 94 in that way.
– I cannot help that. I do not think that there is an Act or decision to say that we are entitled to keep the whole of the revenue which does not come from Customs and Excise. What the Constitution says we are entitled to spend is, in relation to our powers of administration and legislation, all revenue received from any . source, subject for ten years to the payment of three-fourths of the Customs and Excise to the States. Any revenue in hand beyond that is surplus revenue which must be handed to the States. Had the Financial Agreement of las’- year been carried at the referendum, that would have been put an end to, and then we would have had the power of re taining from time to time, subject to section 87, without appropriation, the unexpended moneys in our hands, and the States would have been entitled to nothing. But section 94 is not repealed by this measure, and the result is that we will continue to make payment to the States of surplus revenue from whatever source it may have come. The intent of the Bill is that we do not want to let the States see that we are not giving them 25s. per head from the 1st January, 191 1. By an ingenious method of drafting which reflects great credit upon the draftsman we say that we will pay 25s. per head from the 1st July of this year, less £450,000 and subject to section 87. And after deducting our expenditure from whatever balance is in hand - and part of that expenditure will be £125,000 to Western Australia as provided for in clause 5 - we shall make the ordinary deductions for the management of the Department which will no longer be affected by the bookkeeping provisions. Therefore all expenditure will become Commonwealth expenditure, and all that is deducted from whatever revenue we have in hand. The balance remaining is surplus revenue, and is dealt with under clause 6 of the Bill. If that balance, plus a payment of 25s. per head to the States, amounts to whatever sum ought to be paid under the Braddon “ blot “ for six months and under the 25s. per head provision for the balance of the year, then all constitutional requirements will be complied with.
– That is assuming that the three-fourths Customs and Excise is expenditure.
– I think it is a fair inference to say that it does include that. So long as we have paid our three-fourths of the net Customs and Excise revenue to the States-
– Surely that is no part of the Commonwealth expenditure?
– So long as we have paid our expenditure out of all sources and handed the three-fourths share of the Customs and Excise revenue to the States, we wi 1 1 have complied with the Constitution . The Bill says that we must pay 25s. per head in a certain way, and the surplus from the rest of the revenue after meeting our expenditure in the same way. If during the next six months the sum total of all the payments to the States amounts to threefourths of the Customs and Excise revenue, and for the first six months of next year to 25s. per capita of the population, they cannot complain.
– Suppose the payments do not amount to as much?
– Then the provisions of the Constitution will not be complied with. The Commonwealth must, during the next six months, pay to the States in the aggregate three-fourths of the net Customs and Excise revenue. The method of payment is left to our discretion. The expiration of section 89 and the repeal of section 93, which provided special methods of payment to the States, leave it to our unfettered discretion to determine how the revenue shall be apportioned among them.
– Must not the payments to the States be uniform?
– They need not be, but, of course, they in general ought to be. Section 94 provides that after five years from the imposition of uniform duties of Customs, the surplus revenue may be returned to the States in any way we like, so long as for the first ten years of Federation they receive in the aggregate threefourths of the net Customs and Excise revenue. Clause 4 of the Bill deals with the per capita distribution to the States of the 25s.
– What about the payment of three-fourths of the net Customs and Excise revenue?
– Clause 6 provides for the return of surplus revenue to the States in the same way.
– There being a difference of opinion, would it not be best to make the measure clear?
– The Committee is indebted to the honorable member for the light which he has thrown on this matter. We are all trying to improve the Bill. It is the policy of honorable members on this side to do so, not by captious criticism, but by putting for consideration as plainly as possible the position as it strikes them.
– If we place conundrums on the statute-book, there will be trouble later.
– Ministers have been driven to adopt rather an ingenious way of doing something which they wish to conceal. Ministers do not wish to shock the States by saying, “ We shall pay you under the Braddon section this year, and 25s. per capita per annum from the beginning of next year, because we-intend then to make certain deductions from the 25s.” Their method of drafting does not make it clear that that is the intention.
– The honorable member for Angas says that the Committee is indebted to the honorable member for Flinders for raising a second point. In my opinion, it is indebted to the. honorable member himself for his clear and lucid explanation of the position. He has put, not only the legal, but also the political, position, and I have no complaint about the language which he has used. The honorable member for North Sydney dealt with the question only from the political stand-point. He says that the Act should take effect from ist January next, and that the Braddon section should have effect during the last six months of 1910. That would be intolerable.
– Why ?
– Because it would not be in accordance with the pledges made to their constituents by a majority of honorable members, nor in accordance with the agreement between the Governments of the States and the Government of the Commonwealth.
– The present Administration was not a party to that agreement.
– I am merely stating a fact ; I do not wish to enter upon a political controversy. I said, when moving the second reading, that, as the leader of the party returned with a majority, I signed a manifesto stating that it would be against the best interests of the Commonwealth to incorporate the Financial Agreement in the Constitution, but that the States would be guaranteed the return of 25s. per capita for a period of ten years, less a proportion of the Commonwealth deficit, and a special allowance of £250,000 to Western Australia. We substituted that arrangement for the agreement referred to the people and rejected by them.
– But the Government proposes to give more.
– I admitted, when moving the second reading, that generosity is the only fault that can be charged against us.
– -Ministers are not carrying out their intentions.
– I speak on the legal point with great diffidence. But I must stand by those responsible for the constitutionality of the measure - the Crown Law advisers.
– The man who must take the sole responsibility for the legal position is the Attorney-General.
– Surely the honorable member does not seek to dissociate the AttorneyGeneral from the opinion which I have given.
– No; but in this difficulty we are entitled to an explanation from him.
– Perhaps he is waiting for something to answer.
– If there is nothing to answer, why is the Prime Minister speaking?
– In my opinion, the Commonwealth must, until the 31st December of this year, return to the States at least three-fourths of the net Customs and Excise revenue. That provision of the Constitution will be complied with, unless some of the State Governments accept the suggestion that they should pass legislation to give effect to their promises to the people.
– “ Hopesprings eternal in the human breast.”
– What the honorable member is now offering to the States is not what they asked for as the consideration for their promise.
– The honorable member says that we are not giving them a quid pro quo regarding the conditions which they attach to their agreement.
– They say that that is so.
– Many honorable members opposite - the honorable member for Bendigo was one - havesaid that, even had the Financial Agreement been embodied in the Constitution, it could not be expected to remain unchanged for more than ten, or at the most fifteen, years.
– That may be the view of the honorable member for Bendigo, but not that of the Premiers.
– It is admitted that the term of ten years is not only fair, but even generous, and that the distribution per capita is as great “as that promised under the Financial Agreement referred to the people. The honorable member for Angas stated that the Bill had been ingeniously drawn. There is no doubt as to the constitutional orlegal position under the provision of this Bill. Some of the legal authorities on the other side are taking a political view of the matter.
– Arguing upon this clause, they have not done so.
– With the exception of the Leader of the Opposition, almost every one of the legal authorities who has spoken from the political point of view have stated that the 25s. per head ought not to begin until the 1st January next.
– That need not make any difference in the result for the year.
– Need it not? The proposal is not to begin the payment of the 25s. from the1st January next.
– The Bill does not carry out the Government proposal - that is the difficulty.
– If so, the responsibility rests upon some one, and the consensus of legal and other opinion is that the effect of the Bill will be exactly what it says. It will permit theCommonwealth to pay to the States three-fourths of the net Customs and Excise revenue collected during the first six months of the current financial year, and to adjust the finances for the second half of the year - from 1st January to the 30th June next - so that each State will have returned to it not less than 25s. per capita for the whole of the financial year. In my opinion, the Bill permits of ample justice being done the States, and I remind honorable members that immediately it is passed there will be absolute Free Trade between the States, unfettered by any bookkeeping embarrassments whatever.
.- The speech just delivered by the Prime Minister is actually more difficult to follow than the Bill. If we examine the Bill carefully for a considerable time, we may discover from it the intentions of the Government, but though we have listened to the Prime Minister for some minutes I defy any one to understand the reply he has given to what has been said on this side. Arguments by authorities who merit attention were addressed to the Committee on the legal aspect of the case, and the Prime Minister, jumping in where the AttorneyGeneral fears to tread, does not reply to the arguments at all, but says that the Crown Law authorities, whose presence we are not privileged to have here, have told him that the Bill is all right. The honorable gentleman himself, in his legal wisdom, also thinks that it is all right, but as a lay member of the Committee I should like very much, in answer to the arguments to which I have referred, to have the opinion of the only representative of the law in the Cabinet. I do think the AttorneyGeneral might answer what has been said upon a question fraught with enormous consequence to the Commonwealth ; because if we have to pay 25s. per head for the last six months of the coming financial year, in addition to three-fourths of the net Customs and Excise revenue for the first half of the year, the Commonwealth will either be bankrupt or will have to raise the money by loan. I am sure it is not the intention of the Government to bring about such a state of affairs. I think the Attorney-General might take the Committee into his full confidence, and let us know, what the Prime Minister in the course of his speech was unable to do, what are the arguments behind the Government proposal to give us assurance that the position of .the Commonwealth in the matter will be absolutely, safe.
.- I understand that the position taken up by Ministers is that they desire to reach the result which would have, been arrived at by the Financial Agreement of the Premiers’ Conference.
– Is the honorable member speaking for the AttorneyGeneral ?
– If the honorable member will do- me the justice of listening to what I have to say, so far from suggesting that I am speaking for the Attorney-General, he will probably come to the conclusion that the Attorney-General does not agree with my contention. I understand that what we purpose doing is to try under this measure to reach the result which would have been reached under the Financial Agreement. We want to pay 25s. per head to the States from the ist July of this year, and we desire also to deduct a sum which it was estimated would amount to £600,000, but which it turns out now will amount to £450,000. I am concerned to know whether under this Bill we shall reach the result at which we are aiming, and I am bound to say that I think there is more in the criticism of the honorable member for Flinders than has been answered up to the present. Clause 4 of the Bill says that-
The Commonwealth shall, during the period of ten years beginning on the ist day of July, 1910, and thereafter until the Parliament otherwise provides - pay to each State, by monthly instalments, the sum of 25s. per head per annum. I understand from that that we desire to make two deductions. We desire, first of all, to deduct an amount of £450,000, as set out in the schedule. We desire, in addition, to deduct for the first half of the financial year the difference between 25s. per head and three-fourths of the net Customs and Excise revenue.
– That is the intention.
– That is to be deducted during the second six months of the year.
– Yes. I look at the part of clause 4, which governs the deductions, and I do not see where any provision to make that second deduction is to be found. The clause says -
Provided that in the year ending the thirtieth day of June, One thousand nine hundred and eleven, the Commonwealth may deduct from the amount payable in pursuance of this section the amount set out in the schedule.
We may deduct £450,000, and as nothing is said about any other deduction, I see no power under this Bill to enable the Government to deduct the difference between 25s. and the three-fourths of the net Customs and Excise revenue to which the States will be entitled up to the 31st December next. As I understand the position the States will stand by their rights under the Constitution. They will say that they want three-fourths of the net Customs and Excise revenue for the first half of the current financial year. We cannot deny it to them. All we can say is that on the 1st January next we shall have complete control of the Customs and Excise revenue, and that if we choose to exercise it we can then get even by retaining in the second half of the year the amount in excess of 25s. which we paid them in the first half of the year.
– If the honorable member will look at clause 3 of the Bill he will see that it abolishes the Braddon section.
– That is so; but we have no power by any Bill we pass here to abolish the Braddon section until the end of this year. The section will continue to operate until then. .
– Surely that is superfluous when clause 3 of the Bill provides that from and after the 31st December next the Braddon section shall cease to have effect? That is the first principle of the Bill.
– I realize that clause 3 .is a necessary provision to abolish the Braddon section, when we have the power to do so. That is all we can legislate for. There remains the period between the 1st July and the 31st December of this year, during which the Braddon section will continue to operate and the States will claim from the Commonwealth a sum in excess of the 25s. per head it is proposed to pay them under this Bill.
– And we will pay their claim.
– Shall we get it back in the second half of the year?
– If we are not aiming at getting it back, then I admit that the Bill effects its purpose; but I thought we were. Do we propose making a deduction’ during the second half of the year of the amount we pay them in excess during the first half?
– We do not propose to, and we cannot, deduct what we pay them in excess, in the first half.
– I am sure I am not bidding for the applause of gentlemen opposite, and I would rather not have it; I am only anxious that we should effect the purpose we have in view. I understand that what we propose is to say to the States, “ You must agree to give up your rights on the 30th June this year “ ?
– Then do I understand that the Government are prepared to allow the Braddon section to operate until the end of this year?
– And without asking during the next half-year the right to deduct anything other than the £450,000?
– That is exactly the opposite of what we were told ten minutes ago.
– There has certainly been a change in the last twenty minutes.
– No, no.
– If that is all we are aiming at - to pay 25s. perhead from the 1st January, less£450,000 - then we reach the end we have in view. That is beyond doubt.
– What is the use of the 25s. per head proposal as from the 1st July?
– There may be some subtle purpose in that.
– What does clause 4 mean ?
– I do not give advice. If the position be as now stated we reach what we have in view, as, I think, the legal members of the House will admit.
– A difficulty presents itself which has not been answered by the Prime Minister, or any honorable member opposite. In clause 2 it is proposed to sweep away all parliamentary authority as to the distribution of the three-fourths of the revenue from Customs and Excise under section 87 of the Constitution, and in clause 4 it is proposed to pay 25s. per head, and only 25s.
– Plus any surplus.
– Yes, but the great difficulty which presents itself to my mind is that the difference between 25s. per head and three-fourths of the revenue from Customs and Excise is not surplus, for the simple reason that it does not belong to the Commonwealth, but belongs to the States, under section 87 of the Costitution. In this Bill there is no provision whatever for paying over the difference between 25s. per head and the three-fourths of the Customs and Excise revenue.
– Section 87 of the Constitution does that.
– How? The moment we have swept away the provisions under the existing Surplus Revenue Act, how can the matter be adjusted, since no machinery for the purpose is provided by this Bill?
– It is mandatory.
– But how can it be done? What parliamentary authority is there for doing it?
– How long does this Bill purport to operate?
– For ten years, as from the 1st July this year. What I cannot understand is why there is this straining at what I might call two negatives in order to state a positive. Why does not clause 4 state distinctly the two deductions straight away as from1stJanuary, 191 1, and in that way adjust the whole thing? That would make the matter plain and simple.
.- I understand that the position suggested is that the revenue is to be federalized, so to speak, on a per capita basis from the 1st July this year; but I should like to know whether the expenditure is also to be federalized? Is the expenditure to be apportioned on a per capita basis, or is it to be apportioned according to the expenses of each State? The Bill is silent on that proposition, and leaves it an open question whether the whole of the expenditure of the Commonwealth is to be federalized and paid out of the Federal Treasury, irrespective of the expenditure in each State, or whether the expenditure in each State is to be debited to and deducted from the per capita distribution in each State.
– What was the proposal under the Financial Agreement?
– The proposal was that there was to be a complete federalization of the revenue and complete federalization of the expenditure on a certain per capita basis; but the scheme before us seems to be silent on that point. If the expenditure is to be maintained on a State basis, then there arises the point which I made in my remarks, that it will be impossible to abolish Inter- State certificates until there is complete federalization. If the States are still to be debited with their respective expenditure in collecting this revenue, they ought to be secured the right and privilege of getting the whole of the revenue which is earned by consumption in each State ; but in regard to that the present scheme seems to make no provision. I am in favour, if possible, of bringing about the complete federalization of both expenditure and revenue ; and the Minister in charge of the Bill ought to say whether that is intended.
– I say, yes.
– Then let the honorable gentleman point out words in the Bill which provide for that. Our argument is that there are no words in the Bill providing for the federalization of the whole of the expenditure. It is proposed to wipe out section 4 of the Surplus Revenue Act, and nothing is said about the expenditure. It may be that the Commonwealth Treasurer, in the exercise of his administrative authority, may proceed to debit each State with its respective expenditure, and deduct that from its share in the per capita distribution.
– The question raised by the honorable member for Bendigo is an important one. namely, the federalization of both the payments to the States and the expenditure in the States. In spite of the talk about Federal expenditure being adjusted on a State basis, it has never been actually so adjusted during the whole of these years. Fortunately in some respects, the Federal Parliament has been Federal from the first, and some States have got a large excess of expenditure compared with others. I hope that question will not be raised so late in the history of the Federation, and I did not expect it to be raised by the honorable member for Bendigo.
– But the Act says that we must credit revenue and debit expenditure.
– The honorable member for Bendigo simply asked what the honorable member was puttingin place of that.
– That adjustment will be made by Parliament before this session closes, no doubt by the proper appropriations, and those States which do not voluntarily give up their rights during the last six months of the Braddon section will be paid in full.
– Appropriations by Parliament will not affect that at all.
– I venture to say that some States, notwithstanding the view of the honorable member for Flinders, will not insist upon their full pound of flesh. They recognise in honour and in fact that our proposal is generous. I am not in a position to reveal confidences, but more than one State is not only entirely satisfied with our proposition, but thinks it is generous.
– There is no provision in the Constitution affecting the financial relations of the Commonwealth and the States that at the expiration of ten years cannot be reviewed and altered and settled by this Parliament in any way it thinks fit. I hail with satisfaction any settlement of this vexed question, and if we have to take the Government’s proposal I am willing to do so. But I am with the legal gentlemen on this side who say, “ Let us understand what we are doing. Do not let even the Government make a blunder that will lead them into trouble.” Under this proposal the Government may find themselves faced with this position, that the Law Courts may decide that under the Constitution and under this Bill they will not only have to pay back three-fourths of the revenue to the States, but will have to pay month by month 25s. per head.
– The Bill says 25s. per head annually.
– We cannot get rid of the monthly settlements, do what we will.
– The honorable member has not read the Bill.
– I have read the Bill and I have also read the face of the Attorney-General during the discussion of the Bill. Seeing that this Parliament has the power to review and settle every provision in the Constitution affecting the relations between the States and the Commonwealth, we ought to make one settlement of the whole of them at one time, and that time is at the expiration of the Braddon section. Make what arrangements you like, no matter how easy or how hard they are on the States; but tide over the time between now and then, and when you get to that point solve the whole block of them - including section 94, which I have held all along ought not to be left there, and without which you would not want clause 6 of this Bill - by a commutation of the whole arrangement for the payment of 25s. per head for ten years. We shall then have something that he who runs may read; but at present we have before us a Bill on which there are almost as many opinions in this Committee as there are men.
– I had “not the advantage of hearing the honorable member for Flinders, and am therefore in a little difficulty as to the precise point that was taken, but so far as I understand it it amounts to this, that the Bill abolishes the bookkeeping sections of the Constitution, but does not say how or in what proportion the three-fourths of the net Customs and Excise revenue under the provision of section 87 is to be returned. If that be the point, then it is necessary to emphasize the distinction between section 87 of the Constitution which deals with the aggregate minimum to be returned, and sections 89. 93, and 94, which deal with its distribution. This Bill substitutes for those sections a per capita distribution. From the date of its passage there is a per capita distribution, which, until 31st December, 1910, is to be of not less than three-fourths of the net Customs and Excise revenue, and thereafter during the currency of this measure not less than 25s. per capita per annum. As to whether it is advisable to legislate in advance of the expiration of the ten years’ period, or whether section 87 by the word “thereafter” purports to limit the right of this Parliament to legislate in advance, that, with all respect to other honorable members., is a matter-
– Nobody has questioned that right.
– Very good. My opinion, which I give with great diffidence, and with all respect to those who are much better able to speak with authority on these matters than
I am. is that we have the powers which we have claimed under this Bill, and further we have a right in any case to expect, from the only parties who are entitled to challenge us, the same amount of consideration as they were willing to give under the Financial Agreement. They will be not one penny piece the poorer for any legislation such as this. We cannot take from them one penny that is their due, and the whole question, as the Treasurer has frequently pointed out, is simply whether we should take it from there when we have a right to take it, after the first day of the coming year, or whether they should not, seeing that we and they are partners, do what is proper by making allowances for the position. The whole thing is simple, and I do not see why, in the circumstances, there should be any hesitation on their part or doubt on ours. As to our right to deal with the matter, and the manner in which the three-fourths is to be paid, it was laid down clearly by the Chief Justice in the judgment of the High Court on the Surplus Revenue Act, as reported on page 190 of volume VII. of the Commonwealth Law Reports, that for certain reasons given it is impossible to hold that the balances are to be finally struck as of the last day of every month. He went on to say that the plaintiffs rested their whole case on this contention, which, in his opinion, was untenable, and added -
But the real foundation of the claims of the States is, I think (although disavowed by the plaintiffs’ counsel), a notion that the “ financial year” is part of the order of nature as regards government finance, so that the surplus must be finally ascertained and distributed at intervals not longer than a year.
But that view was so clearly untenable that counsel for the States did not openly advance it. What we are proposing to do is to* substitute for the method of distribution laid down in section 93. a per capita distribution. That must, under section 87, operate in such a way as to give the States not less than three-fourths of die net Customs and Excise revenue for the remainder of the current calendar year, and thereafter not less than 25s. per capita. The remark of the honorable member for Richmond that the Bill does not provide for the allocation of surplus revenue, because the three- fourths is not surplus revenue, is not correct. It is perfectly true that the threefourths is not surplus revenue, and it is what the States are entitled to under section 87. When, therefore, “surplus revenue “ is spoken of in the Bill, the words do not and cannot refer to the three-fourths, which has to be paid to the States until 31st December of this year. They refer to the difference between the Commonwealth’s share and the Commonwealth’s expenditure, which, unless appropriated, will be surplus revenue, and must, under the ruling of the Court, be paid over to the States before the 31st December, 1910. After that date all revenue beyond 25s. per capita, plus that which is expended or appropriated by the Commonwealth, will be surplus revenue, and, therefore, will be dealt with in the way provided by this Bill.
– I recognise, and have always recognised, that on constitutional questions arising in the House we are ultimately bound to be guided by the determination of the AttorneyGeneral. No matter what our opinions or the ultimate consequences may be, the House cannot be expected to transform itself into a Court to decide questions of law as between lawyers who take up different views. The Attorney-General is the authority of this House. Believing that, I should have been quite prepared to submit to the decision which he has given without making any further observations, but for the fact that, owing probably to his absence during a considerable portion of the time devoted to the consideration of this point, he seems not yet to have grasped or to have fully considered the difficulties which have arisen. I shall put again the two points that I raised, my only excuse for doing so being the vast moment and importance of the matter with which we are dealing. Hundreds of thousands, perhaps millions, of pounds are involved in the difference between our views. I stated, first of all, that I understood the intention of the Government was that the -per capita payment of 25s. per annum should commence as from ist inst. - that is to say,that it should cover the whole of the present financial year - and that, although we were obliged under the Braddon section, which must be observed until the end of the year, to pay more during the current six months, we should be enabled to strike an average by making a deduction from the payments during the last six months. The Treasurer assented completely to that view. I was therefore amazed when, later on, in answer to a statement by the honorable member for Werriwa - a statement which I feel sure the Treasurer did not fully grasp - he took up a diametrically opposite position.
– Will the honorable member ask the honorable member for Werriwa whether he attached to my statement the meaning that he has given to it?
– I do not know whether he did, but I think that it is material that the. Committee should properly understand what is the intention of the Government to be embodied in this Bill. Was I right or wrong? Did I misunderstand the Prime Minister when I took him to assent to “the position I have outlined? It has been repeated over and over again by the Treasurer during the discussion that it is intended to make from the payments for the second half-year the deduction necessary to bring down the average payment for the year to 25s. per capita. Is that so?
– The honorable member said the opposite just now.
– I said nothing of the kind.
– I felt sure that the Treasurer did not grasp the import of the question put by the honorable member for Werriwa, otherwise he would not have given the answer which he did. That being so, and taking the intention of the Government to be that which I have stated, I wish to point out to the AttorneyGeneral that clause 4 does not give effect to it. It provides, not merely that there shall be an annual payment of 25s. per head, but that that annual payment shall be made by monthly instalments.
– The instalments need not be equal.
– They must be equal. No other meaning could be attached to the words “ monthly instalments.”
– Has not .the High Court held that instalments need not be equal?
– That is in. re- ‘spect of a provision in the Constitution, but here we have a clause providing that a certain annual sum shall be payable by monthly instalments - a sum which is to be calculated upon the basis of population. If Parliament directed the Treasurer to pay that amount by “ monthly instalments,” what could it mean except equal instalments? Would it mean that the Treasurer could pay one penny in respect of one month and £500.000 in respect of the next? Clearly not. If the Treasurer knows his own mind, there ought to be no difficulty in making his intention perfectly clear. Do not let us put on the statute-book a provision bristling with legal difficulties. Let us make it clear now. Surely the Treasurer is not going to stand upon pique, or to consider this a political attack which must be defeated. Surely his officers and the AttorneyGeneral are capable. of removing any doubts which exist. It seems to me to be clear that the intention expressed by the Treasurer will not be carried out by clause 4. What will be done will be this : The Treasurer will have to pay, monthly, proportional parts of the sum determined, upon the basis of population, to be payable during the first half-year, and he will have, in addition, to pay the difference between that and what becomes due under the Braddon section. He will not be entitled, however, during the second half of the year, to make the deduction requisite to bring down the payments to the average of 25s. per head per annum. The Attorney-General has not dealt with that point.
– Perhaps, as the honorable member has, in my opinion, contradicted a statement made by me, he will allow me to explain before he proceeds to deal with the legal aspect of the question.
– The honorable member for Flinders has deliberately stated that T ought to know what is in my own mind, and that the honorable member for Werriwa understood me to tell the Committee that the Government would have power, during the first half of the present_ financial year, to make certain deductions from the three-fourths of the net Customs and Excise revenue payable to the States under the Braddon section. I never uttered words that would convey that impression. I had never such an idea in my mind, and the honorable member for Werriwa did not understand me to make such a statement. I have said over and over again that there shall be paid to the States for the . first half of the financial year - during which the Braddon section will remain in operation - a sum equal to the full three-fourths of the net Customs and Excise revenue due to the States. That payment, however, will be made subject to the one possible qualification that I have mentioned again and again, namely, that some .of the States, of their own volition, will probably take steps to allow the Commonwealth to retain more. That will be their own act, and will have nothing whatever to do with us. The misunderstanding, I venture to say, never arose in the minds of any large number of honorable members of the Opposition.
– It was in my mind.
– If it did arise, then I certainly conveyed to honorable members what was never in my mind. It is true that if the States insist upon their constitutional rights there will be paid to them during the second half of the financial year less than they will receive during the first six months.
– Less than 25s. per head ?
– Yes. It may happen that, during the second half of the financial year, they will be paid less than 12s. 6d. per head, representing one-half of the -per capita payment of 25s., for the year.
– It must be so.
– It need not be so. If the States stand honorably to the propositions which they have put before the country it ought not to be so. They ought to pass Bills through their Parliaments authorizing the Commonwealth Parliament to make use of the whole amount of the Federal revenue, subject to the return to the States of 25s. per capita. But if they do not adopt that course, the result will be the same, because I believe that this Parliament will authorize the Government to give legal effect to the will of the people. That is all that I wish to say upon the matter. _ Its legal aspect I leave others to deal with. I have never made any statement different from that which I have just made, as reference to Hansard will show. The monthly balances will be adjusted as nearly as it is possible to adjust them in relation to the different States.
– The explanation which the Treasurer has just made is a little more difficult tq understand than is the Bill itself. With whatever may have passed between the Treasurer and the honorable member for Werriwa, I am not concerned, but certainly the remarks of the Treasurer have made clear the position which he took up in moving the second reading of the Bill. In reply to an Interjection by the honorable member for South Sydney, the honorable gentleman - as will be seen by reference to. Hansard, page 415 - said -
I should be more stupid than I look if I thought that we could pay less than threequarters 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.
– That isvery clear.
Mr.W. H. IRVINE.- I should like to proceed with my exposition of the difficulty which confronts the Government, at the point at which the Treasurer Began his personal explanation. In the quotation which I have just made, he clearly stated the intention of the Government. With the. merits of that intention I have nothing to do. But under this Bill he will be required to return to the States, during the first half of the current financial year, 25s. per capita plus the difference between that amount and three-fourths of the net Customs and Excise revenue. During the second half of the financial year his intention is to deduct from the monthly contributions to the States the amount necessary to bring down the total average payments during the year to 25s. per head.
– That is what he previously said he would not do, but what he now says he will do.
– No. To do justice to the Treasurer I have always understood him to put the position as I have just stated it. But it is a position to which this Bill will not give effect, and for the reasons which I have stated. I ask the Attorney- General for an answer to my contention. The Bill can very easily be made to give effect to the desire of the Committee. I am not going to cavil at language if it clearly expresses the intention of the Government. The only other point which I raised when I previously addressed the Committee was that under this Bill we shall entirely wipe out the provision relating to the distribution as between the States, of the three-fourths of the net Customs and Excise revenue. We shall wipe out the whole machinery of the Constitution and also that which has been substituted for it.
– We propose to substitute a per capita distribution for that machinery.
– That is precisely what the Bill does not do. The per capita distribution applies only to the surplus revenue of the Commonwealth, and if there is one thing which the AttorneyGeneral has made clear, it is that the surplus revenue of the Commonwealth does not include the three-fourths of the net Customs and Excise revenue which is payable to the States. Therefore, the provisions relating to the distribution of the surplus revenue do not touch the particular subject with which I am dealing, namely, the difference between the 25s. per capita and the three-fourths of the net Customs and Excise revenue. The Bill deals with a contribution of 25s. per capita, which is only a portion of that revenue. The remainder is left unprovided for. Neither the Constitution nor the Surplus Revenue Act, which this Bill will to some extent repeal, nor the Bill itself, makes any provision as to how the Commonwealth shall pay that difference, or in what proportions it shall be paid to the several States. The Government require parliamentary directions in this matter - why not take them? Why not frame the Bill in such a way as to make it give specific directions? The Committee have a right to have these legal difficulties removed, apart altogether from questions of policy. It is true that questions of policy have been introduced into this debate by some honorable members, but by none more than by the Prime Minister himself. I put to the AttorneyGeneral the two points which I have raised, and which seem to me to require explanation. Another point has been put by the honorable member for Bendigo which did not occur to me, but which seems to carry equal weight with the points which I have raised. The Constitution provides the mode in which the apportionment to the States of their share of the Customs and Excise revenue shall be determined. It sets revenue against expenditure, and under the Surplus Revenue Act that disposition has been continued with slight modifications. But under this Bill it is proposed to wipe out that Act. . If the Government are attempting to federalize our revenue, they are making no provision for the other side of the account, by which to arrive at the amounts which will be payable to the States. Without unduly pressing Ministers upon the matter, I think that we are entitled to have these points made clear.
– I wish that I were able to see the many exceedingly subtle points which the honorable member for Flinders has raised, as clearly as he himself sees them, and as clearly as I feel sure a number of honorable members opposite are endeavouring to see them, although I venture to say they are not meeting with that degree of success which might be expected of them. In my opinion, there is no difficulty and no inconsistency in this, Bill. There is nothing contradictory in clause 4. Two points require emphasis. The Bill cannot affect the provisions of section 87 of the Constitution before 31st December next. The three-fourths of the net Customs and Excise revenue must be returned by the Commonwealth to the States until 31st December of the present year. Twenty-five shillingsper capita per annum must be paid to the States as from the1st of July, 1 910. Now clause 4 provides for both of these things being done. It says -
The Commonwealth shall, during the period of ten years beginning on the1st 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.
Very well ; since this Bill is to take effect as from the1st day of July, 1 9 10, the Commonwealth cannot pay at the rate of the 253., if that is less than the three-fourths of net Customs and Excise revenue, until after the 31st day of December, 1910. Section 87 of the Constitution prohibits that, and clause 4 of the Bill is not inconsistent with the Constitution. But, after 31st December, it can pay at the rate of 25s. per annum. Now, since the arrangement starts on the1st of July, 1910, all the Commonwealth has to do to comply with section 87 of the Constitution and clause 4 of this Bill is to pay 25s. per capita in the year that starts on the1st July, 1910, and ends on the 30th June, 191 1. And there is nothing in clause 4 that regulates the amounts to be paid each month or during each six-monthly period. The Bill thus complies with section 87 of the Constitution, and also with the condition to pay the 25s. per head. The 25s. has to be paid during the year, and as from the 1st July, 1910. It is perfectly clear that if you pay 18s. out of 25s. before the expiration of this year, you will only owe 7s. during the six months of the year which starts on the1st day of January, 191 1. Clearly, then, this Bill does not violate the Constitution, nor attempt to take from the States anything to which they are entitled. If I agree to pay a man 25s. in a fortnight, and I am also bound by a prior agreement to pay him £1 in the first week of the fortnight, the second agreement does not necessarily conflict with the first at all. I pay him the pound when it is due.
– Why not put that plainly, instead of pretending to pay him the 25s. ?
– I am asked why not state the intention plainly. I contend that it does so. When I contrast the ideal clarity of the terms of this clause with some sections of Acts of Parliament, I stand amazed and reproved at having invaded that special preserve which affords the members of our profession such opportunities of profitably doing that which some honorable members have been doing gratuitously this afternoon. There is absolutely nothing in this clause inconsistent either with the Constitution or with the intention of the Bill. That is to say, we can pay the 25s., and we can pay the threefourths. And we need not pay to any State which, as the Prime Minister puts it, demands its pound of flesh, a penny more than it ought to get. Each State will get just what it is entitled to, neither more nor less. The States cannot complain. They have no right to complain. Those rights which were given to them under section 87 of the Constitution remain unimpaired. When they contended that they had a right to monthly balances, the High Court held that they had no such right. Mr. Justice Barton, in delivering judgment, said -
The construction contended for is plainly unreasonable. It would mean that in some months, when receipts fell below Federal disbursements, the Federal Treasury would have a debit balance, and therefore could not give the States anything with which to meet their needs. On the other hand, when the Treasurer found that he had received in a month a vast sum more than he had actually paid out for the purposes of the Commonwealth, he would have to pay the whole excess over to the States at once, knowing, perhaps that there were millions to be met the next month and, ex hypothesi, a depleted treasury to meet them.
What was proper and constitutional under section 87 surely does not cease to be sounder the substituted legislation now proposed.
– His Honour Mr. Justice Barton’s judgment was delivered on the language of section 94 of the Constitution, under which, of course, you could not have equal monthly instalments.
– As to section 94, the Chief Justice, in the course of his judgment, said -
The plaintiffs further contend that, whatever section 93 would mean, standing alone, the effect of section 94 is that the Parliament may, but need not, alter the basis of apportionment of the surplus revenue among the States, but that in any case “ the monthly payment,” i.e., the application prescribed by section 89, of all surplus revenue, must continue. The defendants, without conceding this position, do not contest it for the purpose of the present case. I see no reason to doubt the correctness of the plaintiff’s contention, but the point has not been fully argued, and it is not necessary to decide it.
It appears to me that in any case that is a section dealing with the distribution of the surplus among the States themselves, and I do not see that it in any way affects the rights of the Commonwealth to make, at the expiration of the ten years’ period, such an arrangement as is set forth in this Bill, which is the substitution of a new method of distribution. Under these circumstances, I cannot see, in view of what I have said - namely, that the provisions of the Constitution and of this Bill can be carried out - any reason to doubt that the Bill is a valid exercise of our powers, and provides for an equitable distribution of revenue.
.- With great regret I have to say that we are not getting any “forrader.” I do not propose to occupy any time in repeating or elaborating the argument against the legal effect or form of this Bill, since all the points suggested by the debate have just been admirably summarized by. the honorable member for Flinders. But let me ask honorable members to measure the divagations of the Bill by what is actually authorized to be done thereunder. In the first place it does not authorize, and it cannot alter, as the Attorney-General has just admitted, the primary obligation of the Commonwealth to pay three- fourths of the Customs and Excise revenue up to the end of this calendar year. That has to be done; it cannot be escaped. In the next six months of the year what is proposed is to pay to the States not 12s. 6d. per head for that period but some sum less, owing to deductions made from the three-fourths legally paid to the States, so as to bring their income clown to 25s. per head for the whole financial year under a method of calculation, less £450.000. In the first six months the provision of the Constitution runs and three-fourths of the Customs and Excise revenue must be paid to the States. In the second six months something has to be paid less £450,000, and therefore only after the ist July, 191 1, is 25s. per head to be really paid, to the States without deduction. All the difficulty before the Committee, all this long argument, and all our misunderstandings are due to the fact that for some mysterious reason the Government wishes to draft this measure so that it may appear to authorize the payment of 25s. per head to the States from the ist July of the present year. As a matter of fact, it cannot constitutionally do that and does not, in fact, do it. This is the whole point. Yet all that the Ministry desire to do might have been clone without question or delay. They had only to accept the provision of the Constitution, as they must do, until the end of the year. They had then to deduct £450,000 in the first six months of next year and after that authorize the payment of 25s. per head for ten years. The whole of our difficulties to-night are due to the fact that instead of putting these three propositions plainly on the face of the measure, the Government, whose attention was drawn to this point during the debate on the Address-in-Reply, has thought fit to adopt a method of draftsmanship which has brought us face to face with three intricate questions as to the legality of the measure, to which the honorable members for Darling Downs, Flinders, Angas, Bendigo, and others have called attention. Is this worth while? It is for the Government to decide. We have nothing more to add. Why not frankly legalize their proposed action at once, getting rid of all this transparent pretence, which deceives no one, of commencing to pay the 25s. per head earlier than the Government intends to pay it?
– I take no exception to the language of the honorable member for Ballarat or the advice which he has tendered. It is the business of the Opposition to criticise wherever they find loop-holes in Government measures. Its leader said that the honorable and learned member for Flinders had pointed out two or three defects, and he rested his legal case largely on that point. I would remind the Committee that another honorable and learned member, with a great deal more diffidence and humbleness - the AttorneyGeneral in the previous Government - has expressed in legal language a very positive opinion that the present drafting of the clause covers all necessities from a legal point of view. Expressing himself in quiet language, he said that it only bears that meaning. He did not speak dogmatically and say, “ That is the law and no other.” He simply expressed his humble opinion on the point. That negatives the contention of the Opposition.
– He said that the Bill might cover it. He would not say that it would not; but he would not have drafted it in this way.
– I shall not press the point home. Speaking with the greatest respect to legal members on both sides of the chamber, in a matter of this kind’ I would lean more on the honorable member for Angas than perhaps on any other legal member, but that is a mere expression of opinion on my part. My present legal advisersits here at my side. Were it not for thatfact, I, as a layman, would have ventured to suggest that perhaps the term ‘ surplus revenue “ covers the revenue referred to in the Braddon section as well as the rest. But that is subject to other matters. Ultimately, of course, somebody must take the responsibility, and it rests with the Government to do so.
– On this point that person is the Attorney-General, and we must accept his opinion.
– The responsibility must rest somewhere. The Government have not jumped to a conclusion in this matter. On the contrary, the very best advice has been taken, and we think that the measure will not only be legally right, but will do credit to the Parliament, as other measures have done, even should it go before the High Court.
– I am very sorry to prolong the debate, but I only want to speak for a moment or two. I was very pleased to hear the Prime Minister’s statement. I assure him that I have no desire to obstruct or to unduly criticise, but I was under the impression that after the first six months of the present year - that is, after the Braddon section has expired on the 31st December next - any difference between the 25s. per head and the amount paid to the States under that section would be deducted during the second half of the year.
– That is supposing that we paid more than 25s. per head?
– Supposing that the Commonwealth paid three-fourths of the Customs and Excise revenue, as it is bound to do-
– And that that amounted to more than 25s. per head?
– Yes. The payment would be made at the rate of nearly £2 per head per annum.
– Oh, no.
– I was under the impression that any sum which had been paid in excess of 25s. per head per annum would be deducted in the succeeding six months of the year.
– If we pay more than 25s. per head we shall lose that.
– The Commonwealth will have to pay three- fourths of the Customs and Excise revenue.
– That will not come to 25s. per head.
– It will amount to about £1 per head for the half-year, or something like that. Then the Commonwealth will have to pay to the States 12s. 6d. per head for the next half of this year.
– Oh, no.
– What, then?
– The balance between the sum paid and the 25s. per head.
– The ex-Prime Minister said the very opposite, and complimented the honorable gentleman. Where are we getting? My leader said, as plainly as possible, and the honorable gentleman, as far as I understood him, acquiesced, that during the first six months of this year three- fourths of the Customs and Excise revenue would naturally and legally be paid to the States, and that during the second six months of the year 12s. 6d. per head would be paid to them.
– No, some sum would be paid to the States, not exceeding 12s. 6d. per head, but less the £445,000.
– I understand that £445,000 is to be deducted, but the Treasurer says that the payment for the six months before1st January next and the payment for the succeeding six months will amount to only 25s. per head.
– The whole amount is not to be more than 25s. per head.
– I understand that the States will receive, during the current half-year, three-fourths of the net Customs and Excise revenue, which, on the basis of last year’s figures, will amount to about £4, 200,000, and that, during the first six months of 191 1, they will receive, under the distribution of 25s. per capita, about £2.750.000 - that is, that the payments to them during the first half of the financial year 1910-11 will exceed those of the second half by about £1,450.000. But are we to understand that there is to, be deducted from the £2,750,000 which will be payable to the States during the first six months of 1911 the sum of £450,000, as provided for by the schedule, and £1.450.000 as well?
– Yes, and also £125,000, the amount of the special allowance to Western Australia.
– I am not at present concerned with the Western Australian deduction. I understand that during the first six months of 191 1 the States will receive, under the 25s. per capita distribution, about £2,750,000, less £450,000 and £r. 450, 000.
– That is approximately what they will receive.
– Then the States are to be paid during the first six months of 191 1 about £800,000.
– About that sum. The actual payments may be a little more or a little less.
– That was my original impression; but the Leader of the Opposition seemed to imply that the deduction from the £2,750,000, payable during the second half of the current financial year, would be only £450,000.
– No; that was not my position.
– 1 understand that the States will receive at the rate of about £2 per capita for the last six months of 19 10, and at the rate of about 4s, per capita for the first six months of 191 1.
– About that.
– The intention seems to be to pay the States, during the financial year commencing 1st July last, at. the rate of 25s. per capita. The Constitution, however, requires that, until the end of 1910, they must be paid three-fourths of the net Customs and Excise revenue. I am afraid that 1he High Court, the final arbitrator, may decide that this measure is an attempt to over-ride the Constitution, and may compel us to pay to the States three-fourths of the net Customs and Excise revenue for the first six months of the financial year, and for the second six months an amount equal to 25s. per capita, according to their populations. Would it not be better to say clearly that, until the end of 1010, the States will be paid the three- fourths of the net Customs and Excise revenue due to them under the Constitution, and that, from ist January until 30th June, 191 1, they shall receive a sum - less the deductions provided for in the schedule - which, taken with the payments for the first six months of the current financial year, will make the total payments for the financialyear equivalent to a per capita distribution of 25s. for the whole of the year? It seems to me that it would be safer to legislate in that way than to run the risk of being mulcted in costs for attempting to evade the Constitution. Personally, I think that we are treating the States very liberally. If I had my way. I would not do more than bind this Parliament. I think it would be. enough to provide for three years ahead. What is being proposed is to bind this and two subsequent Parliaments. Of course, the Government, having decided that the arrangement which is to be made is to stand for ten years, will be able to carry that decision into effect. It would be safest, however, to make our legislation date from the beginning of next January.
.- The time taken in discussing the measure tonight has not been wasted. By threshing out matters here, we may save their discussion in another place at greater expense to the country. The only doubt remaining in my mind is as to the meaning of the term “monthly instalments.” The honorable member for Flinders contends that it means “equal monthly instalments.”
– In this connexion.
– Obviously it cannot mean that. Section 87 of the Constitution prevents it having such a meaning.
– If the contention of the honorable member for Flinders is incorrect, the Bill does what we wish to do. If we have the right to pay to the States £1 per capita during the first six months ot the current financial year, in order to comply with the provisions of the Braddon section, and 5s. pet capita during the second six months, the Bill effectuates our purpose. It is with considerable diffidence that I put my opinion against that of the honorable member, but I cannot think that his contention, that the term “ monthly instalments “ means ,: equal monthly instalments,” would be upheld.
– It depends entirely on the context. In section 93 of the Constitution, “ monthly instalments “ could not mean equal instalments. That was de- cided by the High Court in the surplus revenue case. But, as used in this clause, the term” monthly instalments” could not mean anything but equal instalments, because, after fixing a definite sum to be paid during the year, we then say that it shall be payable in monthly instalments.
– I understand the honorable gentleman’s contention, but I still see no reason why we should read into this clause the words ‘ ‘ equal monthly instalments.” It seems to me, for instance, that if I undertake to pay the honorable member for Flinders £1 in twenty monthly instalments, and I pay him1s. 6d. a month for the first ten months and 6d. a month for the succeeding ten months, I will have carried out my undertaking.
– If the honorable member paid his rent in that way, he would land himself in trouble.
– I think not; if I were to pay more than the rent at first, as this Bill proposes to do. If under this Bill we proposed to pay 5s. per head for the first half of the year, and 20s. per head for the second, we should not effect our purpose.
– Would not the extra ex cess be attributed to our liability to pay under section 87 ?
– I should think not. We have to meet two obligations, and when we have done that we shall have carried out the provisions of the Constitution.
– There are two directions, that of the Constitution and that provided for in this clause.
– This clause governs us as to the amount we shall pay between the beginning and the end of the current financial year. That must be 25s. per head of the population. By doing that in the way proposed, we may achieve the end we have in view. At the same time, in deference to the doubts that have been raised by legal members of the Committee, I feel that it would not be a bad thing to insert a further clause to make our meaning a little more clear. Having a doubt about the matter, it is better that we should make sure now rather than run the risk of having our doubts resolved against us. It seems to me that it should not be difficult to draft a clause directing the Treasurer in paying these instalments to pay during the first half of the year so much in excess of 25s. per head as will make up the three- fourths of the net Customs and Excise revenue which will be due to the States under the Braddon section, and to deduct an equal amount in paying the instalments for the second half of the year. Personally, I think it would be well to give the matter a little further consideration.
– I hope not.
– With every desire to support the Ministry, I cannot lightly set aside the opinions of the honorable member for Flinders and other leading members of the Committee deliberately stated on a question of this kind. I submit that the Attorney-General might further consider the question with a view to seeing whether a provision could not be inserted which will more clearly effect the purpose we have in view.
– I think it is quite wrong to read into the reference to monthly instalments in this Bill anything more than is read into the equivalent words of sections 89 and 94 of the Constitution. In section 89, the reference is - shall pay to each State, month by month, the balance -
In section 94, the reference is - may provide for the monthly payment.
It is very clear in the light of the judgment of. the High Court in the surplus revenue case that that does not mean equal payments. The dictionary meaning of “ instalment “ is just as clear as is the dictionary meaning of “ payment.” That is to say, that unless it is qualified by a term that comes before it “ instalment “ does not connote equality in any way. In fact, it is a common thing in connexion with agreements for the purchase of land on a time- payment principle to say that there shall be a payment for so many months of equal instalments. There is nothing in the Bill to lead one to attach to the word “ instalment “ as used here anything more than attaches to it generally: I think I might explain the difference between “ payment “ and” instalment “ in this way: The word “ payment” is properly used in sections 89 and 94 of the Constitution, because it relates to an unknown amount of money. The word “instalment” relates to a definite amount - namely, 25s. per head of the population. There might be no payment at all under section 94 of the Constitution, but if there is it must be paid, not by equal monthly payments, but monthly. I submit that “instalment” is the proper word to use in relation to this specific amount of 25s. per head. There is absolutely nothing in the terms of the Bill which should force one to attach to it the meaning suggested by the honorable member for Flinders. ‘That meaning really cannot be attached to it, because, as I pointed out by way of interjection, to do so would make clause 4 ultra vires. It clearly could not have effect, because it would mean that we could not fulfil the terms of section 87 of the Constitution. If we paid the 25s. per head in equal instalments clearly we should pay during the current six months less than three-fourths of the net Customs and Excise revenue. I submit that the difficulties in this matter are only those which have- been created by the remarks of honorable members on the other side, and whether one views the matter from the stand-point of constitutionality or from the very much more important point of equity to the States, this Bill gives effect in the only way possible to the terms of the agreement arrived at between the State. Premiers and the last Commonwealth Government. There is no other way by which effect could be given to the terms of that agreement without throwing the affairs of the Commonwealth Treasury into headlong confusion during the next six months. That I am sure would not be desired for a moment. There is nothing in the wording of these clauses to alarm honorable members. In my opinion, they are perfectly in order, are constitutional, and are adapted to the purpose we have in view.
– - The Attorney-General says that the Government are seeking in this Bill to do exactly what we, the Opposition, when in power, agreed with the Premiers to do. But the difference is that, whatever we proposed, and whatever the Premiers were prepared to do, was to be made part of the Constitution, and was not to rest on a mere Act of Parliament.
– T do not deny that.
– That is one essential difference between what the Government are seeking to achieve and what we sought to achieve. One was a straightforward method, as to which there could be no possibility of cavil, either in a Court or in this House, while the method now suggested is, to say the least, one of doubtful legality. All that we are asking is that it should be put beyond possibility of reasonable doubt what is proposed by the Government.
– Any doubt must go against us, and in favour of the States ; if the Bill is declared unconstitutional we shall be the sufferers, and not the States.
– Why should we put’ ourselves in that position? I have never yet heard this point argued, except by the laymen of the Chamber, in which category I am ; and it seems to me the more we look at. it, the more we ought not to have the power to put through a Bill like this. I take the view that we have no right, either by legislative act, administrative act, or in any other way, to do anything which will have the effect of undoing one day’s operation of section 87 of the Constitution. However, the legal gentlemen of the Chamber say that we can antedate this Bill, and make it begin six months before the date of the expiration of the Braddon section; but I fancy that if I were the Judge of a Court, I should have a question or two to put to the Attorney-General if he appeared before me. When the case was put that, in the second six months, only 2s. 6d. or 2s. 7d. per capita had been paid to the States, I should, if the Judge, ask why that was so; and there could be but one answer, namely, that because £2 per head. let us say, was paid during the previous six months, the present course was taken in order to get round the difficulty. That is the only truthful answer that could be given to the Judge; only the truth would be spoken if the reply was, “ Your Honour, we are trying to evade this provision, which is broad based in the Constitution ; it is our way of getting round the legal difficulties in which we find ourselves.”
– The Opposition did not get round the electors !
– We did not try to get round the electors. My honorable friends are trying to get round the electors now, I venture to say, in what is being proposed. ‘There was a straightforward statement made to the electors that the States would be guaranteed for ten years a payment of 25s. per capita, and this Bill, on the face of it, attempts to do that to a certain extent. The Bill says distinctly, in clause 4, that there will be an annual payment made to the States by monthly instalments at the rate of 25s. per capita. That, I take it, is the clear meaning of clause 4, but it seems that the Government are going to do nothing of the kind. After declaring, in the clearest language, that they are going to pay the States an annual sum of 25s. per capita by monthly instalments, the Government show that the real purpose is to pay the States for half a year at the rate not of 25s. per capita, but of only 5s. 2d. or 5s. 3d. per capita.
– The honorable member does not say that, during the first half, we pay the States very much more.
– That is precisely what I do say, and the Government will have to go to the Judge and say, “ Your Honour, the reason why we are paying only 2s. 6d. in the last half-year is that we complied with the Constitution in the first half, or, in other words, we are taking this from the States, although we had to give it to them at the time.” That is the position in a nutshell ; and how this can be accounted a straightforward transaction, I am at a loss to understand. Here is the place where the Government can make their Act of Parliament a truthful statement of their intentions as expressed on the platforms of the country. The only thing the Prime Minister can say, it seems to me, either here or in a law court, is that he cannot do what the Government promised the people of Australia - that they are not going to give them the 2 5s. per capita for ten years, though ostensibly doing so, but propose to give them only 25s. per capita for nine and ahalf years, and at the rate of 5s. 3d. per capita for the first six months of the period. This is not a period of ten years, but a period of only nine and ahalf years; and for a portion of the period the States are to be paid at the rate I have mentioned.
– Why make such a row over six months?
– If the honorable member were a State Minister I fancy he would make a row if he found his Supplies suddenly cut off. This Parliament is supreme and all-powerful in this matter ; and why cannot we deal straightforwardly with those who are dependent on what we do for their Supply during the next ten years ?
– The honorable member can trust us to be straightforward !
– Is this a specimen of the straightforwardness? Honorable members opposite propose to get round the Constitution in any way they can, and the very last thing they think of in the Bill is to be straightforward, so far as the first part of the term is concerned.
.- One part of the reply of the Attorney- General struck me as particularly valuable to the Committee at the present juncture. The honorable member referred to the fact that the instalments could, under this Bill, be paid in unequal amounts during the course of the year, to any States, provided the States received the full amount of 25s. per capita in the year. How is that going to affect the finances of Australia and the general Government agencies that are absolutely essential to the wellbeing of the people, whether those agencies be operated by this Parliament or the Parliaments of the States? Almost as important as getting the money to any governing body that wishes to remain solvent, is getting it in even proportions and amounts, so that they may know what they have to expect. What is going to happen in the future with regard to the Bill should be pointed out now, because it seems to show the necessity for more definite and clear machinery than the Bill embodies. If in the latter half of this financial year we may give the States something less than 2s. 6d. per head in order to make up for the excess they have received in the first six months, equally properly - if that is proper - we could, in the next nine years, give any State the same amount in the first month, practically nothing the next, more the third, and so forth, right through the year. If the amounts are going to be paid unequally for the next nine or ten years, a very serious state of affairs will be brought about by the Bill. If the instalments are not to be regular equal instalments, it will be within the power of any party which may happen to be in control of the Federation to bring to its knees any particular State Government with which they happen to be in disagreement.
– The honorable member has an unequally balanced mind to make a statement like that !
– I appeal to the Committee to save me from this evidence of an equal mind ! I am putting the question in, I hope, a temperate spirit. It is not a matter of party politics. The party to which I belong may possibly be in power before the expiration of the Act, and I do not wish to import any party complexion into the consideration of the question. But any person outside the Chamber, if asked to interpret the meaning of the measure and of the term “ monthly instalments,” would say, “ They are reasonable beings in Parliament ; they mean to consider the well-being of the people who sent them to Parliament, and, therefore, they want the Government agencies in the shape of State
Departments to be carried on evenly throughout the year. Consequently, they propose to give the State Parliaments the money which the Commonwealth does not require in equal instalments throughout the year.” That is the inevitable conclusion which any man outside would draw from the Bill.
– As far as possible. This has always been done, but there was no obligation then, and there will be none now, to pay absolutely equal instalments.
– Then we have got the Attorney-General this far : that, approximately, the payments must be equal.
– I do not say they must be. The Treasurer will endeavour to so adjust the monthly balances as to do that, but there cannot be a rigid rule.
– I am not suggesting undue rigidity. I am talking of the reasonable interpretation which will be put upon the Bill. I shall not labour the question, because we are bound to accept the opinion of the Attorney-General in all matters of this kind. He has accepted the responsibility, from which neither himself nor his party can escape. If I viewed the matter from a party point of view, I should be delighted at his action in assuming responsibility for an Act of this kind, and throwing upon his party the onus–
– We do not mind the responsibility.
– The honorable member has had so little responsibility until lately that he is almost as greedy for it as I used to be. The Attorney-General is putting’ his party into a false position by refusing to make the meaning of this legislation abundantly clear. If it fails, and if after the new year Parliament has to be suddenly called together to put the matter right, in the eyes of the people the AttorneyGeneral will stand in the dock of public opinion as a person unfit to take charge of legal technicalities, because he refused to alter a single line of a BiU to make its. meaning clear. If his opinion is wrong, and the opinion of others more versed in the law is right, and if, in defence of Commonwealth rights, not State rights, and to safeguard Commonwealth solvency, Parliament has to be called together after the new year to repeal this legislation, not only the Attorney-General, but the whole of his party will be held convicted of a very stupid piece of business - a piece of stubbornness which has landed them in a mess and put the country to the expense of calling Parliament together unnecessarily. 1 am not going to beat the air. We have placed our views forward, and it is not our fault if the Attorney-General accepts, on his own behalf, and on behalf of his party, the complete responsibility for such a contingency as that which I have hinted at,c,and which, I think, will arise.
.- As I .have been engaged for about twelve hours to-day in parliamentary work I do not intend to deal with this question at length. In listening to the arguments, I have been reminded of the statement of the honorable member for Parkes that the law in t> the essence of common sense, and also of a statement by the beadle Bumble in Oliver Twist that “ the law is a ass.” Those who have listened to the debate to-night will have great difficulty in deciding which authority is right. 1 heard the honorable member for Angas’ with a great deal of interest, but I did not like his statement that the Bill was an ingenious attempt at pretending to do something that was not intended. When, before the electors, I pledged myself to support a Bill guaranteeing the States 25s. per head per annum for a period of ten years in substitution of the Braddon section, I am still of opinion, after what has taken place tonight, that the best thing for the Government to do would be to state clearly in the Bill that they propose to abide by th”. terms of the Constitution and pay the States three-fourths of the net Customs and Excise revenue up to the end of this year, and then commence afresh. Let them deduct the £450,000 if they insist on deducting it, but let us make a commencement from rst January, 1911.
– The Opposition are cheering the honorable member, but they did not intend to do that themselves.
– As I told the honorable member for Lang, I attach due weight to any encouragement that I receive from the Opposition. They did their level best to keep me out of the House, and would do it again if they could, and I am not at all influenced by their cheers, although they might be encouraging to people who have not been in politics as long as I have. But I heard the Attorney-General to-night express a doubt. He said that although the Government had power to do what they proposed to do in the Bill, if there was any doubt they were entitled to receive from the State Premiers the same consideration as would have been given to the member* of the Opposition if they had remained in power. May I remind the AttorneyGeneral that he must expect no mercy from the State Premiers?
– From some of them.
– From the majority of them. The Government have received very handsome treatment from the Victorian Government, and I believe that Mr. Watt and Mr. Murray will be only too glad to fall in with any reasonable arrangement, but honorable members must altogether dismiss from their minds the agreement which was proposed last year by the Premiers and the late Government. It was smashed at the last election, and it can only be taken into consideration by the House in deciding what is fair to put in the Bill. But Ministers and the House will have to consider that there must be no loop-hole whatever in any legislation we pass, or else some opponent of the Federation will take us to the High Court. I should prefer to pay the three-fourths right to the end of the year, and even go so far as to give the States back the £450,000. No doubt, with overflowing coffers, we shall be able to pay that sum. and it would be far better for the National Parliament to rise above any petty matters of half-a-million or so, and give the State Premiers and Treasurers, who may be opposed to us, nothing to cavil at.
.- On the point referred to by the honorable member for Capricornia. I did say that it was a very ingenious method of doing something that the Government wanted to conceal. I did not mean any disparagement, but was paying a tribute to the ingenuity of expression of the draftsman. The Government are now professing by this ingenious method of drafting to pay the States 25s. per head on the expiration of the Braddon section, and to comply with the terms of the Constitution, to pay the other amount until the end of this year. They are concealing the fact, although not deliberately, by an ingenious method of drafting that for the whole year the 25s. per capita may be made up of payments under section 8 7 to the end of the year.
– But that cannot affect the validity of the Bill?
– Not the validity. Although I have listened attentively to the debate, I have not altered the opinion I first expressed that the Bill will accomplish the intention of the Government. It will carry out the requirement of the Braddon section that the States shall receive threefourths of the net Customs and Excise revenue for the first six months of the present financial year, and it will give the States for the whole year, taking into account the payments under the Braddon section, 25s. per head. The one will be a compliance with the Bill ; the other a compliance with the Constitution. At the same time, this will not be a compliance with what the electors were led to believe was the Labour party’s proposal to continue the Braddon section until the end of the present year, and for ten years thereafter to pay the States 25s. per capita per annum.
– Who said that the electors were led so to believe?
– Did not the electors understand that the proposal of the Labour party was that 25s. per capita per annum was to be paid under the terms of an Act of Parliament to the States for a period of ten years commencing on1st January next?
– Not in South Australia.
– I do not wish to assume that the Labour party intended anything which they tell me honestly they did not intend ; but that is what I understood from the text of the Brisbane Conference Scheme and the debates in this House.
– This Bill undoubtedly does permit of a payment of 25s. per head, taking into account the amount to be paid under the Braddon section during the first six months of the present financial year : but under it the States will not have received for a period of ten years the threefourths of the net Customs and Excise revenue, and thereafter 25s. per head.
– I promised this for ten years in substitution of the agreement.
– I do not wish to say any more upon the question. The point was raised, during my absence from the Committee, that the payments made under the Bill must be by equalmonthly instalments so that the power of the Government to take into account the amount paid during the first half of the year in making this payment of 25s. per capita will be cut down. I do not think that that power is limited, nor do I think that the monthly instalments need be equal. In leases and other documents as a rule we have the words “equal monthly instalments” when the instalments are intended to be equal.
To hold that the instalments must be equal would be to render the whole clause an absurdity, because if that were the position we could not deduct from the proposed payments the amounts set forth in the schedule. We could not deduct them in respect of die first half of the year because the Braddon section would prevent that being done; and if the deduction were made during the second half we should not be making a payment of 25s. for the whole year by equal monthly instalments. I therefore hold that the alleged check on monthly payments does not exist in the terms of the Bill and that the Government can during the next half-year cut down the payments to an amount that, having regard to what has been paid under the Braddon section during the first six months, ‘ will make the total payment for the year equal to 25s. per head.
– With the exception of the statement made by. the honorable member for Flinders, nothing has been advanced that affects the validity of this Bill. Several honorable members have declared that we are going to give, not for ten years but for only nine and a-half years, the per capita allowance of 25s. per annum. It appears to me, first of all, that what we are going to do under this Bill is exactly that which we have promised ; that we are proposing to do .it in a way which the Constitution will permit; that the States will not be deprived of any revenue, and that in the circumstances we are clearly entitled to expect that the Bill shall receive the assent of the Committee.
– I have only two or three remarks to offer in reply to the Attorney-General. My recollection of what he said during the recent election campaign is quite contrary to the statements to which he has just given utterance. The honorable gentleman said during the campaign, in the most unequivocal terms, that his party pledged themselves to return to the States for a period of ten years 25s. per capita per annum. As a matter of fact, under this Bill they will do nothing of the kind. They are pledging the Government to give 25s. per capita for nine years.
– Oh !
– I wish the honorable member for Melbourne would cease his ugly noises.
– Ugly noises to the honorable member.
– I must ask to be protected . from the honorable member’s insults. He has been indulging in this sort of thing all the evening.
-The honorable member for Melbourne is out of order.
– What we said we would do for the next ten years was exactly what the Government of which the honorable member was a member proposed to do, except that we would not embody the arrangement in the Constitution.
– I have heard that for the first time since I came back to this House. It is not what the honorable member told the people of New South Wales. He promised definitely that the Labour pr.-;; would give the States 25s. per head per am. n for ten years after the expiration nf the Braddon section. That is not what he is proposing to do under this Bill. The more I think over this matter the more I am convinced that, if the question is tested, the High Court must rule that whatever is done subsequent to the expiration of the Braddon section must have no relation, in the way of modification, to what has been done during the operation of the Braddon section. The very purpose of this Bill is to modify the ten years’ period during which, under the Constitution, the Braddon section must operate. The Bill has no other purpose. If the law is a canon of common sense, as laid down by the honorable member for Parkes, it seems to me that that is a result impossible to obviate.
.- We have been informed by the honorable member for Parramatta that the effect of the Bill is to modify the operation of the Braddon section by a period of six months.
– Modify its effect.
– We are informed of this in such terms and such a tone as would lead many people outside to believe that it is something entirely new and dangerous to the States. May I point out that this is precisely what the honorable member for Parramatta’s party proposed to do.
– The Constitution was to be amended to authorize it.
– It would have been placed in the Constitution had the people permitted it.
– It is the same thing with a vital difference.
– If to-day there is something of an exceptionally dangerous character in the proposal, then surely yesterday, figuratively speaking, when the honorable member himself made an identically similar proposition, the same danger must have existed. Precisely the same danger existed in it when the honorable member for Ballarat proposed it, as exists in it today when some other person proposes it.
– TheLabour party objected to it in some of the States.
– I cannot answer for what some of the Labour candidates did in other States, but in South Australia I know that they favoured the return by the Commonwealth to the States of 25s. per capita for ten years in lieu of inserting the agreement in the Constitution in perpetuity. I know also that they advocated dating the arrangement from the1st July of the present year.
– There was no mention made of the date.
– I mentioned the date.
– Then the honorable member was unfortunate in that his utterances were not reported.
– Perhaps that has been my misfortune throughout my political career.
– The honorable member did not know that it was possible to accomplish the object In view by means of this ingenious draftsmanship.
– I am not concerned with the ingenious drafting of the Bill. Apparently, there is no great fault to be found with it by the honorable member. The Leader of the Opposition has contradicted my statement that a date for the initiation of the Financial Agreement had been mentioned by the Labour candidates in South Australia. I repeat that they emphatically fixed the date as the 1st July of this year. They advocated the substitution for the Braddon section of the Constitution of a provision authorizing the return to the several States of 25s. per capita for a period of ten years.
– In Western Australia, the Labour candidates urged the adoption of a twenty-five years’ period.
– That may be so. But perhaps I may be permitted for a moment - only for a moment - to overlook Western Australia, and to reply to the statement which was made by the Leader of the Opposition. Honorable members on this side of the House have just had thrown at them, by the honorable member for Parramatta, the suggestion that a proposal of a most dangerous character is now being submitted, and that the States are being interfered with in so shocking a manner as to offend the sense of justice of all the Judges of the High Court.
– Who said that?
– That is practically what the honorable member alleged against the proposal which is now under consideration. We were told by him that during the first six months of the current financial year it is proposed to give a certain amount to the various States, and that during the second half of that year it is proposed to take so much from them. Thus he sought to convey to the public the impression that the proposal embodied in the Bill will take something from the States. It is true that under the measure the monthly payments may not be quite what they would have been had the agreement which was entered into between the late Government and the State Premiers been ratified by the electors and embodied in the Constitution. But if under that arrangement £5,000,000 would have been returned to the several States during the financial year, under this Bill the same amount will be paid to them within the same period. The honorable member for Parramatta has alleged that the Government intend to make excessive payments to the State during the first half of the financial year, and to make certain deductions during the second half of that year. But I submit that when the balance is adjusted on the 30th June, 191 1, the same amount will have been paid to the States under this Bill as would have been paid to them under the agreement made by the late Government.
– But for entirely different considerations. The Premiers distinctly refused to consider those terms in connexion with a ten years’ period.
– There, of course, the honorable member has a distinct advantage over me, inasmuch as I do not know what the State Premiers said. Whatever they said was uttered in a secret caucus, of which I was not a member, and so far the Leader of the Opposition has not favoured us with the substance of their deliverances. I do not know what are the different considerations to which he alludes. But I do know that under this Bill the several States will receive, during the current financial year, precisely the amount which they would have received under the agreement which was entered into by the late Government. Further, that remark is applicable to a period of ten years. Why an honorable member should seek byspecious reasoning to prove that honorable members upon this side of the Chamber are doing something which would shock the sense of justice of any Judge is to my mind incomprehensible. At the end of the ten years’ period it will be for the Commonwealth Parliament, in the light of the knowledge of the financial situation,, which it will then have, to reconsider the whole position. Of course I recognise that under the scheme propounded by the late Government that agreement would have been embodied in the Constitution. By the adoption of that course there would have been created in the States such a vested interest that a minority of about one in ten would have been able to withstand all the pleas of this Parliament and of the majority, and to have entirely ignored the difficulties which it imposed upon Federal growth.
– I would direct the honorable member’s attention- to the fact that the question under consideration is clause 2. While I have allowed him considerable latitude he is now getting right sway from that clause.
– I do not desire to debute the subject generally, but in the circumstances I thought that I might be permitted to offer my opinion in reply to some of the general statements which have been made. Much of the difficulty seems to have arisen because of the attempt of the Government to make the Bill operative from the date suggested by honorable members opposite. Had they been content to continue to make the payments to the States in accordance with the provisions of the Braddon section till 31st December next, and had they during the succeeding six months deducted from the amounts returnable to the States such a sum as would have given the latter 25s. per head for the whole financial year, all this debate would have been obviated. The result would have been precisely the same.
– The one course would be straightforward; the other is crooked, underhand, and mean.
– To my mind, the unfairness is in the allegation that this is not a straightforward way of doing what is in tended, especially as the honorable member is unable to deny that each and every State and the Commonwealth will, at the end of the financial year, be in precisely the same position under this proposal as they would have been under the proposal that he himself asked the electors to approve. Had the Government taken advantage of their power, instead of endeavouring to please honorable members opposite by placing in their Bill a statement to the effect that the 25s. payment shall start from the 1st July of this year, there would have been no debate. But we have here another instance to show how unfortunate it is when one side in politics proposes to do something which previously pleased the other side, because then the other side professes to be displeased.
.- The statement of the honorable member for Adelaide may be quite correct, that he stated on the platform in South Australia that the agreement that” he and his party were prepared to make should start from the ist July last. But I am afraid that all that he said to his constituents will not help us very much if this matter comes before the High Court and it is contended that we are contravening the Constitution by an attempt to get round It.
– If we pay three-fourths to the States, do we not comply with the Constitution ?
– If we pay threefourths to the States until the end of this year, and then deduct from them so much that we do riot really pay them more than 25s. per head for the’ twelve months running from the 1st July last to the 30th June next, we may be contravening the Constitution by endeavouring to do indirectly something which we could not do directly. The High Court may say, “ You shall not do by indirect means what you cannot do directly.” Then, again, if the monthly instalments are not to be equal, the whole field is left very wide. We are going to pay to the States a’ fixed amount. That amount is known beforehand, because it is to be based upon the census to be taken on the 31st December next. If that arrangement does not bind us to equal monthly instalments, I should like to know what it does mean. This is a serious matter. It is not a party affair. We are trying to pass a Bill which should do credit to Parliament. If we are overruled by the High Court, we shall place the Commonwealth in a worse position than it would otherwise occupy. It would’ suit the States to have our legislation overruled, because, until we could pass another Act of Parliament, they would be entitled to the continuance, under the Braddon section, of payments which would be more than we are prepared to make to them.
– There is a great difference between the proposal of the Bill which was submitted to the people at the referendum and that to which we are now asked to agree. The Premiers representing the States made concessions in order that the Financial Agreement might be embodied in the Constitution. The clause under consideration proposes to repeal certain legislation passed by Parliament to effect the distribution of revenue to the States. The Government propose to pay 25s. per head per annum. The point has been raised that they have not provided the machinery to deal with the apportionment of the revenue hereafter. The honorable member for Adelaide says that the opposition is based on political motives. It is not so in my case, because I am prepared to approve any reasonable arrangement to settle the difficulty. I state at once that the1 proposal of the Government is a reasonable one ; not perhaps so reasonable as I should have hoped to get, but that is another matter. Are the Government satisfied that the provisions of the Bill will give effect to their intention? The arguments to the contrary have been clearly put from this side. With all due deference to the Attorney-General, whose ability in dealing with general questions is well known, I hold that he has not given any clear answer to satisfy the Committee that the Government are even carrying out their own intention. After the second reading of a Bill has been affirmed, our duty is to make its provisions as perfect as possible. Now the question is, will this clause carry out the intention of the Government. Certain discrepancies have been pointed out by legal members on this side, and the AttorneyGeneral has been asked to specifically answer their objections. He has risen and made a declamatory address, hut he has not answered them in any’ sense. 1 for one now wash my hands of all responsibility, which of course the Government must take. I have been in no way actuated by party hostility to them. I desire to see this question settled, and, even though the Government’s proposal may not be what I should like altogether, still I am prepared to accept it. But I am unable to see that the provisions in die Bill will carry out definitely, without fear of controversy in the High Court, their intention.
Clause agreed to.
In Committee of Ways and Means: “Motion (by Mr. Tudor) proposed-
That section two of the Excise Tariff i§o; he amended by omitting therefrom the following proviso
Provided further that the doty of Excise payable on sugar produced from cane delivered for manufacture in the years One thousand nine hundred and eleven and One thousand nine hundred and twelve shall be respectively two-thirds and onethird of the aforesaid rate.”
– It will be remembered that on a previous occasion the members of this House were called upon to consider a Sugar Excise Bill and a Sugar Bounty Bill. Very great difficulty was then experienced, because it was not possible to discuss one Bill without referring to the other - the two measures were inseparably connected. If a general discussion could take place- on this motion, it could cover the whole ground of the two Bills and thus save time. I suggest that at this stage progress might be reported, and that on another occasion the Minister should place the whole question fully before the Committee so that a general debate could take place on his statement.
– * would remind the honorable member for North Sydney that the Bill is not yet introduced. I shall be very glad to co-operate with him in securing an opportunity, if possible, to get the two measures discussed at the same time. We are only now asking leave to’ bring in a Bill.
– -We want to avoid two discussions.
Question resolved in the affirmative.
Resolution reported and adopted.
That Mr. Tudor and Mr. Hughes do prepare and bring in a Bil! to carry out the foregoing resolution.
Bill presented by Mr. Tl-dcs, arid read a first time. .
House adjourned it 16.30 p.m.
Cite as: Australia, House of Representatives, Debates, 19 July 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100719_reps_4_55/>.