4th Parliament · 1st Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
Mr. CARR made and subscribed the oath as member for the electoral division of Macquarie.
Mr. SPEAKER reported the receipt of amessage from His Excellency the GovernorGeneral, recommending an appropriation for the purposes of this Bill.
– I wish to know from the Minister of External Affairs the date on which the Northern Territory Agreement Bill will be introduced ?
– It is impossible now to fix the date, but it is intended to introduce the Bill - probably in the Senate - after the financial measures, and perhaps one or two others, have been dealt with.
– Has the attention of the Minister of Home Affairs been drawn to the following statement, reported to have been made from various platforms by the organizer of a political party -
To-day the outback swagman who did not work held the greatest power in Australia. On 13th April they went to different polling-booths and voted fifteen times for labour candidates. A Riverina swagman had outdone the latter by voting twenty times.
Will the Minister have the matter investigated, to see if the statement is true?
– My attention has not been drawn to the statement, but if the newspaper paragraph be an accurate report of the political loose talk of some persons, they must be suffering either from a politically magnified ego, or a pain in the recesses of the intellect. In my opinion, what has been read is a wilful misstatement and a political exaggeration.
– Without following the Minister into the realms, of medical science, where, I think, neither he nor myself are at home, I ask the honorable gentleman whether he will take into consideration the desirability of amending the Electoral Act so that, without making it less liberal, it may cease to give opportunities to a few malefactors to abuse the franchise which Australia enjoys? Will the honorable gentleman consider the matter from a nonparty point of view, ascertaining whether abuses such as have been referred to are possible, and, if so, what can be done to prevent them?
– The Department would like evidence of these abuses, so that it could prosecute the malefactors.
No Court would accept indefinite statements and general charges such as have been made. We have had a thorough investigation of some of the statements which have come under our notice, and have found nothing to bear them out. if the honorable member will give me evidence of malpractice; the Department will follow those responsible for it until they are put into gaol, if necessary. I assure honorable members that we desire to prevent anything wrong in the way of plural voting or personation.’ It is the mission of this Ministry to secure accuracy in everything.
– Now that the attention of the Minister of Home Affairs has been called to the statement made by Mrs. Barrington, the paid officer of a political association, that the Electoral Act has been broken, and that a swagman voted twenty times in the Riverina electorate, will Ke communicate with that lady, asking her to give the name of the swagman, in order that the necessary action may be taken, and justice be done?
– I shall have the matter attended to.
– As it is necessary to provide every facility for persons enrolled to record their votes, and as in New South Wales, at the recent election, a large number of people were unable to vote, as there was no public holiday on election day, will the Minister of Home Affairs take into consideration the advisability of providing a public holiday for future Federal elections?
– I shall have the matter carefully inquired into, because I have always been of opinion that polling day should be a public holiday.
– Can the Minister of Home Affairs state whether the amounts due to divisional returning officers for conducting the recent election have been paid? If they have not, when will they ba paid?
– I was not aware that any of them were not paid. I shall have the subject looked into.
– Is the Prime Minister aware that uncertainty exists in Queensland regarding the policy of the Government in respect to the future of the sugar industry ? Does he know that there is a controversy as to the course to be pursued after ist January, 1913? Was a telegram sent by him to the effect that the Amending Act will remove the limitation as to date, leaving the sugar industry bn same basis as any other protected industry? Does that telegram express the Government ‘policy regarding the sugar industry ?
– The telegram which has been mentioned expresses the policy of the Government regarding the sugar industry. There ‘may be some ground for misapprehension regarding the meaning of the Bill as drafted, which can be removed in Committee, but the intention of the Government is to put the sugar industry on the same basis as any other protected industry in Australia, without limitations.
– Are we to understand that the sugar bounty is to cease, and die Excise duty to be repealed ?
– It is intended that the import duty, the Excise duty, and the bounty shall remain as they are.
– With regard to the proposed legislation respecting the sugar industry, I understood the Prime Minister to announce last, week that the Government intended to go on with these measures without waiting for the results of the Royal .Commission which it is proposed to appoint, in pursuance of a motion tabled by an honorable member opposite. Have the Government considered the advisability of waiting until that Commission has been appointed and has obtained data, ‘ seeing that the proposed measures deal with matters affecting future years?
– The Government have considered the question, and believe that nothing could do greater injury to this great industry than delay. They have thought out their policy, and want simply to eliminate the limitation in the Sugar Excise and Bounty Acts so that they may continue as though the limitation had never been there. It will also be necessary to amend the appropriation section of the Act of 1 90s, as has been pointed out by my honorable friend opposite.
– Will the Prime Minister make it clear whether it is intended to merely remove the limitation as regards the two-thirds and the one-third in the present law, or to continue the Sugar Bounty Act as a permanent Bounty Act without any limitation, until Parliament sees fit to repeal it?
– That is the policy of the Government, as I thought I had made clear. The Excise collected is one pound in excess of the bounty paid, and we want to remove any limitation and make the appropriation for an indefinite time, or, in other words, until Parliament otherwise directs.
– Does the Government’s Bill do that?
– I think it is faulty in one respect.
MINISTERS laid on the table the following papers : -
Statement showing business transacted and details of receipts and expenditure in respect of Post Offices in the Commonwealth, 1907.
The Clerk laid on the table : -
Sugar - Production - White and black labour employed, &c. - Return to an order of the House dated 13th instant.
Tabilk Post Office - Map Showing Telegraph and Telephone Lines - Telephonists’ Leave - Letter Sorters’ Staff, New South Wales
– I wish to ask the PostmasterGeneral a question based upon two letters which I hold in my hand ; one from the shire of Goulburn and the other from the chairman of the Chateau Tabilk Vineyards, in connexion with the post-office at Tabilk. Action has been taken to remove this post-office without giving the people interested sufficient time to protest. The removal is to take place to-morrow. Will the Postmaster-General instruct the Department to stay action until the people interested, who protest vigorously against the proposed change, have time to put in their protest ?
– This is the first I have heard of the matter. The honorable member might have given me some information before. If he had seen me this morning I might have taken action, but I am not disposed at this moment to give instructions to delay action simply on account of the letters to which the honorable member has referred.
– The letters have only just come into my possession.
– On Wednesday last, the honorable member for Cowper asked the following questions : -
An answer to the first question was given, and in reference to the second, the following information has been supplied to me : -
Maps showing the positions of all telegraph and telephone lines in the States of Victoria and Western Australia have been completed. It is reported that those showing such lines in New. South Wales, South Australia, and Tasmania, will be ready for issue very shortly. It is not expected that the Queensland maps will be ready before the beginning of next year.
On Thursday last, the honorable member for South Sydney asked the following questions : -
Interim answers were then given, and the Deputy Postmaster- General, Sydney, has now furnished the following information : -
On Wednesday last, the honorable member for South Sydney asked the following questions : -
In answer to inquiries which were then being made, the following information has been furnished : -
– The Prime Minister referred recently to his intention to have Treasury Bills in readiness to raise money in case of an emergency in connexion with the proposed issue of Commonwealth notes. Can he state whether the Australian banks have yet undertaken to grant accommodation by way of advance on the security of such Treasury Bills when called upon to do so?
– Treasury bills required as a double cover for the Commonwealth note issue will be available to be sold in the markets of the world, and not only to the banks here or anywhere else.
– There will not be time.
– There will be plenty of time.
– Will the Prime Minister ascertain whether it is possible, in the case of Bills to amend existing Acts, to circulate with each Bill a copy of the Act proposed to be amended, with the amendments set out in black type?
– I shall do my best to effect that improvement.
– I wish to ask the Minister of External Affairs whether he will consider the advisableness of sending a representative of Australia to the Dry Farming Conference to be held in the United States in October next, or, in the event of a representative not being sent, whether he will obtain the information gathered there, and cause it to be printed, and made available for the use of Australian farmers ?
– The Government do not propose to send a representative of Australia to the Conference. We shall obtain reports, which will be made available to honorable members, but the question of whether or not they shall be printed will depend upon their nature. I may add that we are obtaining an exhibit of Australian wheat to be shown at the Conference.
Reciprocity with New Zealand.
asked the Minister of Trade and Customs, upon notice -
– The answer to the honorable member’s questions is “Yes.”
asked the Prime
Minister, upon notice -
In reference to his statement on the 14th inst., that the Commonwealth did not apply more than one-fourth of the net Customs and Excise revenue to its expenditure from 1st July, 1909, to 30th June, 1910 -
What became of the difference between the amount of three-fourths, viz., about £8,491,521, and the amount actually paid to the States, £8,084,627, viz., £406,894?
What is the largest amount, previous to the presenttime, that the Trust Funds have been, contrary to law, entrenched upon at the end of any financial year?
Is this the first time that there has been a deficit on current account?
How often have the Trust Funds been taken previous to this year, and on what dates?
From what source was the money found to provide for the present deficit of £444,541 ?
– The answers to the honorable member’s questions are as follow : -
– They were our own Trust Funds under the Audit Act 1901.
– I supply this information in answer to a question which has been pressed on four different occasions by the right honorable member for Swan.
– And each time the honorable member has tried to evade it.
Motion (by Mr. Hughes) agreed to -
That leave be given to bring in a Bill for an Act to amend the Commonwealth Conciliation and Arbitration Act 1904-1909.
Bill presented and read a first time.
In Committee (Consideration of Go vernor-General’s Message) :
Motion (by Mr. Fisher) proposed -
That it is expedient that an appropriation of revenue and moneys be made for the purposes of a Bill for an Act relating to Australian Notes.
.- As this is entirely new legislation, we have no idea of the purpose for which the appropriation is sought. Usually, we know for what purpose an appropriation is recommended by the Governor-General; but the position is different in this case ; and, since when the message is passed, the matter will be out of our hands, I ask the Treasurer to tell us briefly the substance of it.
– The Government have no intention of restricting honorable members in any way. The message is designed to cover necessary expenditure.
– But what expenditure?
– Expenditure will be incurred in setting up the Department, and there will be other ordinary expenditure.
– But ordinary expenditure is generally provided for on the Estimates.
– I think that we are well-advised in saying that this safeguard ought to be taken.
.- I do not wish the Treasurer to deal at present with the various points relating to the proposed note issue ; but I think that he ought to take this opportunity of letting us know exactly what he proposes to do. It seems to me like breaking a butterfly on a wheel to put the forms of the House to this test in order that we may be able to argue whether we should defray the cost of setting up a printing mill for shinplasters when the real issue involved is one of guarantees - guarantees as to our currency and national solvency under this particular method of raising money without paying interest upon it. I submit that we are entitled to know what guarantees we have that these notes will be taken up throughout the country and also what proposals the Government intend to put forward for their redemption when it is demanded? We ought further to be informed what guarantees the public will have that this particular method is not being adopted for the purpose of raising money without paying interest thereon by a Government which refuses to borrow. To my mind, that is one of the greatest considerations. If any Government, merely by issuing more Commonwealth notes, will be enabled to borrow - without paying interest - an amount proportionate to the face value of such notes, the country will have absolutely no check upon its financial operations. This is a stage at which the Prime Minister might well take the country into his confidence in regard to these matters. He has already taken the bankers into his confidence, and he ought not to allow another moment to elapse without equally taking the Australian Democracy into his confidence. I am sure that there will be no attempt on the part of honorable members upon this side of the Chamber to use the forms of Parliament for the purposes of obstruction. But the country is entitled to the absolute confidence of the Prime Minister on a matter of such vast importance.
– When the Bill is forthcoming, the honorable member for Darling Downs will see that the appropriation which is sought in it is properly asked for.
– The honorable the Treasurer always made the late Government explain the position at this preliminary stage.
– No. The righthonorable member is quite in error, except in regard to the Estimates. Undoubtedly there will be appropriations under the Bill.
– They will not be very large, I suppose?
– No; and they are contingent upon certain happenings. I think that honorable members may very well await the introduction of the measure.
– I would like to point out to the Prime Minister that in its present form the message is open, in that the amount to be appropriated is not specified in it. I therefore desire to know whether an amendment in the Bill, either to increase or decrease the appropriation, will not be ruled out of order? In other words, if a difficulty arises in respect of the advance to be made, and if the point be taken that the procedure adopted by this Committee must be governed by the fact that the amount of the appropriation was not specified in the message, will the Prime Minister assist us by bringing down a subsequent message ?
– If that is what causes the honorable member anxiety, I may say at once that no such point will be raised by the Government.
– Is the amount of the appropriation specified in the Bill ?
– The Bill provides for a contingent liability, according to the number of Commonwealth notes issued. If honorable members will await its introduction, they will see that no difficulty such as has been forecasted will arise. In reply to the honorable member for Angas, I wish to say that no limitation will be imposed on amendments by the Government so far as the appropriation is concerned. We desire to obtain the best advice on this question from both sides of the Chamber, and the determination at which it arrives will be a determination of policy.
– When will the Bill be introduced ?
– Almost immediately.
– Assuming that the Bill contains provision for the issue of notes to an unlimited amount, will the Prime Minister afford honorable members an opportunity of limiting that amount?
– Although I am going further than any other Treasurer has ever gone upon a matter of this sort, my reply to the honorable member is “Yes.”
– The Government are asking for a perfectly blank cheque.
– Whilst the issue of Commonwealth notes is a part of the Government policy it is one of those parts which I desire to have threshed out in the interests of the people. We shall, therefore, be glad to hear every point which can be urged both for and against the Bill when it is submitted to honorable members for their consideration. There is no desire upon our part to tie the hands either of our own followers or the Opposition.
-I do not intend to harass the Prime Minister in the course which he proposes to adopt. But I desire to point out that in respect of an ordinary message from the GovernorGeneral relating to expenditure, this particular course is adopted in order that the Committee may have the earliest opportunity of considering the financial proposals of the Government. But it occurs to me that at the present juncture we are concerned, not with the actual cost of printing the proposed Commonwealth notes, but with the actual amount of the notes to be issued, because that sum will really be a first charge upon the revenues of the people of Australia. In other words, it is really a loan which is being raised by the Government, and this being the first step in that connexion, we have a right to ask for the earliest possible information regarding the extent to which our finances are to be pledged by the Bill which Ministers hope will succeed this motion. My request, therefore, is in consonance with ordinary parliamentary procedure, and I hope that in a matter of this kind the Prime Minister will recognise the trifling importance of Parliament by taking it into his full confidence.
– The point raised by the honorable member does not arise at this stage of our procedure. It will arise after the Bill has been introduced. I have already promised the Leader of the Opposition that honorable members will not be embarrassed in any action they may take with a view either to increasing or decreasing the amount asked for under this appropriation. Obviously I do not anticipate that the Opposition will desire to increase that appropriation. But I have already definitely promised the honorable member for Angas that the Government will take steps to give effect to any amendments which may be effected in the measure.
Mr. JOSEPH COOK (Parramatta) £3.40]. - I confess that I have never known of a similar course of procedure to be adopted during the whole of my parliamentary experience. As the honorable member for Wentworth has properly pointed out, this message contemplates, if it contemplates anything at all, the raising of a loan.
– Why should it not?
– I am not discussing that point just now. Why should not the Government fix the amount of that loan at ^150,000,000? “Why should it not? “ There is as much logic in my statement as there is in the honorable member’s interjection. But my point is that we have now reached a stage when a sum to cover certain expenditure is being asked for by the Government. If it is in the nature of a loan, it ought to be specifically stated in the message - because this is an Act of limitation, or nothing at all. Our course in future will be set, and ought to be set, by the terms of the message. I, therefore, say that a distinct and definite limitation ought to be stated. I am surprised that the Prime
Minister has not told us in brief outline what it is that he proposes, as well as the amount which it is in contemplation to raise by this issue of notes. Surely a statement to that effect ought to go with the message. The terms of the message ought strictly to contain a limitation in reference to the whole measure. That is the course of procedure that I have always seen followed, both here and in the States. Why it is being departed from for the first time I do not know. The Prime Minister is practically asking Parliament to sign a blank cheque, to be dealt with in any way the Government may think fit. I do not recollect a case of this kind before, and I suggest that the Government should now state the limits which they propose in regard to the amount they anticipate raising by this means.
.- The practice that is being followed by the Government is one which they, would not allow the previous Government to follow last session, namely, that of asking the House to pass an abstract resolution without any real knowledge of what they mean. I do not consider that that is a good plan. I do not know what the Standing Orders provide, but I know that the practice elsewhere was to attach the Bill to a message of this kind, so that honorable members might know what kind of appropriation the message covered. We have not seen the Bill, and do not know what will be in it. I do not approve of having a discussion on a Bill before we see it. The general rule is to discuss the amount covered by a message on the motion for the second reading. But that course was not allowed last session. Ministers had frequently to make their speeches before the second-reading stage. In fact, we were obstructed at every turn. I do not wish to obstruct business now, but I do think that unless a message of this kind from His Excellency covers a definite appropriation, we ought to have a statement from the Treasurer as to what the appropriation is ; or else the Bill should be attached to the message. I prefer having the Bill attached to the message. I do not know whether our Standing Orders provide that that shall be done; I rather think they do not. But if that course were followed, we should know what we were doing. We do not know what we are doing when we agree to a motion with regard to a message which is indefinite in its terms. It may cover a large sum or a small one. I do not think that an indefinite abstract motion in regard to a question of this kind is one that can be defended.
.- I do not desire to labour the matter, but I should like to ask the Prime Minister a simple question. If we had been dealing with a message relating to the introduction of a loan Bill, would he not then have considered it to be his manifest duty to let honorable members know the amount of the loan he proposed to raise ? I think that it would not only be his duty to do so, but that the Chair would insist upon his taking such a course the moment a point of order was raised. The only difference in this case is that the particular weed is not called by its right name. It is called, and it is, the issue of notes ; but undoubtedly the effect on the people of Australia is exactly the same as if the Prime Minister were asking Parliament to sanction a loan. Because, when the notes are issued, it must not be assumed that the Treasurer is to get nothing for them. He is going to take gold out of circulation, and to put notes in circulation in their place. For every pound note the Treasurer issues the credit of the Commonwealth is pledged. The Treasurer is actually placing the credit of Australia in pawn to the amount of the notes he issues. That being the case, and this being in reality a proposal for the issue of a loan as well as for the printing of notes, I think that our first duty is to ask for at any rate as open a confidence from the Prime Minister as he was enabled to give to the bankers whom he met in conference a short time ago.
– W7hy not reserve the debate until we see the Bill ?
– Because this is our one chance. Did the honorable member ever reserve discussion when a Loan Bill was brought forward? I venture to say that if he desired to protest he made his protest when the message was first produced. I do not wish to make the present stage the basis of an attack upon the principle of the Government measure, but I do say that this Committee will be a traitor to itself if it does not insist upon the Crown’s advisers in this Chamber telling us how far they mean to pledge the credit of this country by their issue of Treasury notes. It is only a fair thing that that should be done. I believe it could be argued - although I do not mean to take such a point where I am afraid that the raising of it would be of little value - that it is improper and against the Standing Orders for the Prime Minister to come down with a Bill which practically commits the credit of the country without letting us know at this initial stage of the proceedings the extent to which he proposes to commit that credit. I urge the Prime Minister to be open and frank. It cannot do any harm if he has nothing to be ashamed of. Let us have it out, so that we may know how we stand. Even if the Prime Minister is inclined to view this House with supreme contempt, he should at any rate treat us as civilly as he was able to treat some bankers the other day. I do not know whether the presence of the Hansard staff debars the honorable gentleman from taking us into his confidence. I do not see why he should not, however. As the Leader of the Democracy he ought at every stage to let the people know what he proposes to do. Otherwise what is the use of democratic government? Where is the democratic principle if the Treasurer insists on doing such things in the dark? I implore the Prime Minister from the point of view of fairness to let us know exactly what he proposes, and the extent to which he intends to pledge the credit of the country. The most feasible suggestion - for we are quite in the field of speculation in dealing with this matter - is that the Government propose to raise by the issue of these notes an exact equivalent to the amount which was proposed to be raised in the Naval Loan Act that is now to be repealed.
– The honorable member must not refer to the Naval Loan Act Repeal Bill.
– I did not intend to refer to that measure, but I am in a difficulty owing to the extraordinary persistence of the Treasurer in his policy of silence. I take it that the country’s obligations will have to be met, and we all know there is an obligation in connexion with .the ships that are being built. We know that the Treasurer has to raise a certain amount of money for that purpose. It would be interesting to know whether this Government, which has always denounced borrowing for defence purposes, propose to raise the money by the issue of Treasury notes.
– I must ask the honorable member not to pursue that line of argument.
– I regret that I am impelled to this line of argument in order to arrive at what the intentions of the Government really are. Surely we are entitled to know the amount to which the credit of Australia is to be pledged; and I really think that, without going into details at this stage, it is not unfair to ask the Treasurer the exact amount for which he is about to ask credit. I do not care how much the printing of the notes will cost. It is a farce to discuss the printing of forms at a cost of about 6s. 8d., when the credit of the country may be pledged to the extent of millions. It is making a farce of parliamentary procedure and parliamentary institutions if we cannot have absolute frankness from the Prime Minister on so important a question.
– We shall not get it.
– If we are not to get it I at any rate voice my protest. I hope that in time the country will realize the manner in which our parliamentary institutions are being conducted, and will insist upon a frankness from future Prime Ministers that has not been vouchsafed by the present Prime Minister.
– This matter deals with currency - not with a loan.
Question resolved in the affirmative.
Resolution reported and adopted.
That Mr. Fisher and Mr. Hughes do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Mr. Fisher, and read a first time.
That the report be now adopted.
At the suggestion of the Opposition the pasage of this Bill was delayed on Friday last at the report stage. I think that honorable members who were then in some difficulty as to its effect are no longer in that difficulty, and that most of them have now made up their minds that the correct thing is being done.
– Can the honorable gentleman say how much is to be credited to each State?
– I cannot from memory say how much is to be credited to each State. I did not anticipate that such a question would arise. The question raised by the honorable member for Richmond was as to whether the money dealt with in this Bill was being properly appropriated per capita. Here I might state the case for the Bill-
The amount borrowed from Trust Funds will be credited to the States on a population basis, as provided in the Bill.
The amounts finally returned to the individual States on account of the year 1909-10 will be arrived at in the usual way - that is, by the bookkeeping process originally embodied in the Constitution and now prescribed by the Surplus Revenue Act.
– That is up till the 31st December.
In accordance with these provisions, the revenue and expenditure of last year were credited or debited to the several States, and the balances were paid over on the 30th June.
– Whom is the honorable gentleman quoting?
– I am giving a state; ment of the exact terms of the provisions of the Bill.
– The honorable gentleman is reading a statement.
– That is so. It has been written down because it is an absolutely technical matter.
– The honorable gentleman said that the balances were paid over. To whom were they paid over?
– I have, when in Opposition, listened to the honorable gentleman opposite deliberately reading from statements, and have taken no exception to it.
– I did not quite gather whether the statement read by the honorable gentleman relates only to 31st December of this year, or is intended to’ relate to 1st July of next year.
– It covers the whole process, up to the time of this Bill being introduced and passed.
– Perhaps the honorable gentleman would not mind reading the statement again.
– If honorable members prefer it, I am prepared to lay the statement on the table. I like, in a matter of this kind, to be accurate; and I venture to say that there is no member of the House, legal or otherwise, who could trust to his memory alone to enable him to deal with this question accurately. This statement, which relates to the Bill now before us, continues -
It was then found that the requirements of section 87 of the Constitution had not been satisfied to the amount of £444,000, namely, that the expenditure of the year had exceeded onefourth of the net Customs and Excise revenue by that amount. It wasalso found that £38,000 had been paid to the States in excess of the balance of the Consolidated Revenue Fund, that is, that the Trust Fund had been encroached upon to the amount of £38,000.
– Was that ,£38,000 paid to the States on a population basis?
– That has been adjusted in the proposal in this Bill.
– The point is that some payments were made. Were they made on a per capita basis?
– The £38,000 is a portion of the total amount that this Bill covers.
– Yes; but I understand that it has been spent.
– It is being re-adjusted.
– The honorable gentleman stated, when asking for Supply, that the amount had actually been paid to the States.
– It had to be adjusted out of the Trust Funds, because it was discovered that we had really overdrawn in our expenditure. I think I have explained, again and again, that in adjusting receipts and expenditure in the six different States, it is almost impossible to be accurate to within £1,000.
– Was the amount of £38,000 paid to the States?
– The amount payable to the States is included in the £444,000. Honorable members opposite ask for a statement from me; and, when I am trying to give it to them, they interpose with a thousand technical questions. I am not at all alarmed at the position I occupy.
– We should like very much to understand it. I hope we may try to do that.
– I do not pretend to have mastered the whole of the. Treasury figures in two or three months ; but I do claim to be able to make a straightforward statement if I am given the opportunity -
The position then was that the Post and Telegraph revenue, Defence revenue, New revenues, &c, together with one-fourth of the net Customs and Excise receipts, had been proved to be insufficient for the expenditure by £444,000 - approximately.
It was evident that the new revenue should have been raised either by taxation or by a temporary loan for revenue purposes. There was no time to raise revenue by taxation, and the Treasurer decided to raise the necessary amount, provided he could obtain the authority .from Parliament, by a temporary advance from the Loan Fund, thus avoiding the necessity of asking the banks for a loan or overdraft. In whatever way this new revenue of £444,000 was raised, whether by taxation or otherwise, it could be credited to the individual States only in one way, namely, on a fer capita basis. Just as the new revenue was alreadycredited in the accounts current on a fer caPita basis, so must this amount be. Had the Treasurer taken still another course, and stopped theoldage pensions expenditure (which practically caused the overdraft) to the amount of £444,000,. the effect on the individual States would have been precisely the same. Instead of the Statesbeing credited on a population basis, as is proposed, their expenditure would have been relieved of an amount which had been debited tothem on a population basis.
That, I think, puts the matter as clearly as the Treasury can state it to the House.
– Will the balance of £444,000 due to the States be paid asif the alteration as regards the bookkeeping had not taken place?
– There will be no alteration in the bookkeeping system. The balances of the Consolidated Revenue Fund will be returned to the States as usual.
– Speaking hurriedly, I think that the statement, sofar :is it goes, is correct, though I do not know whether it goes the length an explanation ought to.
– I do not desire to keepanything back.
– I am sure the Treasureris endeavouring to obtain approximate justice under rather difficult circumstances, and it may be that there is really nothing to complain of. The point arises, whether there has been a technical compliance with the Constitution and the Surplus Revenue Act, and, if not, whether the method now adopted gives the States much to complain of, the circumstances being somewhat unique. I understand from what the Treasurer says that the Stateshave had all collections credited, and that they have been debited with the expenditure over the one-fourth share of the Customs and Excise and other revenue to which the Commonwealth is entitled, and which has been found inadequate. In making these debits there has been an encroachment to some extent on the chief sources of revenue, namely, the Customsand Excise, which should have been credited to the States; and in order toput matters right - to recoup the threefourths to the extent that it has beendrawn on for the purpose of meeting obligations under section 89 of the Constitution, the Treasurer is asking for an advance, as it is called in the Bill, .fromthe Trust Funds to the revenue. The statement very properly points out that, as soon as this money is taken from the
Trust Funds - subject to one point to which I shall draw attention - it becomes revenue apportionable per capita amongst the States under the Surplus Revenue Act.
– Is it revenue at all?
– Subject to the one point I have mentioned. Section 4, sub-section 1, paragraph b provides - 4. (1) The Commonwealth shall credit to each State-
That appropriation having been cancelled, if it is cancelled by the Bill, or, at all events, having come into revenue under the terms of the Bill, must be either transferred revenue or “ other “ revenue - that is, of the genus of new revenue. If it is new revenue it is creditable to the States per capita, as the Prime Minister has explained ; and so far he seems to be correct.
– Surely it ceases to be revenue after it once gets into the Trust Funds ?
– I do not think so. At all events, the statement has brought us to this - that money taken from the Trust Funds is apportionable per capita, or, in other words, is credited in the books to the States. There is another point as to which we have had no adequate explanation. It is permissible to meet these debits under section 89 out of the threefourths; in other words, it seems to me that, to the extent to which the States have been debited in reference to the three-fourths, we have to cancel that debit and make a new debit of the new revenue creditable in the books under the terms of the Bill. So much revenue has been credited to the States out of the Trust Funds; but the difficulty I have is, that there is still in the books a debit against the three-fourths. Must that not be cancelled, and the amounts drawn from the three-fourths paid to the credit of the three-fourths, and the debits there were formerly against the three-fourths, made against revenue under this Bill? If that is done, the difficulty arises that the threefourths at present is apportionable according to collection. The Surplus Revenue Bill of last week provides for the first time for the apportioning of the threefourths amongst the States individually on a per capita basis. The law up to the present is that the three-fourths is divisible according to collection, and when, therefore, there is created by this Bill a fund to enable the Government to replenish the three-fourths, it seems to me as if the apportionment would have to be made according to collection. I may be wrong, but that is how it strikes me.
– I am told that the honorable member is in error.
– I hope so, though I do not think there is much at the bottom of the matter. I should like to ask the Treasurer whether, supposing he did do this, what would be the difference? Supposing he debited the States with what he formerly took from the three-fourths, what would be the difference to the States?
– There is another important question - how much of the £444,000 is “ other “ expenditure, and how much is transferred expenditure?
– There is a distinction to which I have already referred; but I should not like to go into the point without looking closer at the measure. The honorable member for Flinders asked a question as to whether this can be regarded as revenue; and my reply is, that I rather think it can. There is a somewhat ambiguous paragraph in the beginning of the Surplus Revenue case to which I desire to draw attention -
The Commonwealth Parliament has authority to appropriate money out of the Consolidated Revenue for a specific purpose, and money so appropriated, although not yet actually disbursed, is “expenditure” within the meaning of section 89 of the Constitution, and cannot form part of the “ surplus revenue “ distributable among the States under section 94 until the actual disbursement of it for that purpose is no longer thought necessary by the Government.
There is a passage somewhere in that case, to the effect that it is no longer surplus revenue until the purpose has lapsed. Does it then become surplus revenue, or is it new revenue? The Bill says that it is new revenue. If it is surplus revenue - I do not think it is, though there are phases which seem to indicate that it may be - it must, under the Surplus Revenue Act No. 15 of 1908, be credited in accordance with the collections. Subsection 3 of section 4 of the Act provides that, after crediting and debiting the revenue, new and transferred, and the expenditure, new and transferred, as prescribed in the previous sub-section, the Commonwealth shall, in each month, ascertain the balance of revenue over expenditure, and shall pay it to the State - not to the States - as “surplus revenue.” Until now these balances have been returned to the States according to collection. If this money, after having been taken out of the Trust Funds, becomes again surplus revenue, it must be paid according to collection from the States. That is required by both the Constitution and the Surplus Revenue Act. It is exceedingly difficult for a layman to explain away these difficulties, though, of course, they may be overcome. If the Treasurer could make a statement as to the difference between the result of paying this amount as arrears of the three-fourths and the result of paying it in accordance with the Bill, it would aid honorable members in coming to a decision as to the merit of his proposal, for which there may be a great deal to be said.
– I am advised that this money cannot be considered as other than new revenue.
– I believe it to be new revenue, but that does not settle the difficulty. It is new revenue, but only new revenue to be credited to the States fer capita. Although credited to them in the books of the Treasury, it still remains a debit, as being the balance of the net threefourths of Customs and Excise revenue for the last financial year not yet returned to them. Is it intended to transfer this debit to a new credit? If that be done, it will be necessary to repay the amount according to collections from the States. The Treasurer has explained the matter up to a point, but not sufficiently to instruct us as to the purposes of the Bill.
– - It appears that at the end of the last financial year there was due to the States about £444,000, which was not paid to them before the 30th June last. Had it been paid before that date, it would presumably have had to be paid in accordance with the Braddon provision in the Constitution.
– That would depend upon how it was raised.
– According to a statement of accounts which I have before me, the total Customs and Excise receipts for the year amount to so much, and the cost of collection being deducted, the net revenue is divided between the Commonwealth and the States, the latter receiving three-fourths. Does the sum of £444,000 which I have mentioned appear in the Treasury books as a debit to the States as money which they should have received last year under the Braddon provision?
– I think so.
– Although the sum of £444,000 appears on the credit side as new revenue, when the debt comes to be discharged are the States to be paid, not as before, in accordance with the Braddon section, but under a new per capita system?
– The money having been raised on a per capita basis, what legal power have we to distribute it otherwise?
– Under the Constitution and the Surplus Revenue Act, new revenue must be credited to the States per capita, but I am referring to debt due to States generally and individually, being the unpaid balance of the three-fourths returnable to the States during 1909-10.
– Is it a deferred payment ?
– Yes. The States may very well say, “ We do not care whether you call this sum mentioned in the Bill new revenue or not. As you have obtained other revenue by the collection of Customs and Excise duties during the financial year 1909-10, we are entitled to threefourths of it.”
– The Constitution requires that new revenue shall be distributed in accordance with population.
– That is so, taken in conjunction with the Surplus Revenue Act 1908. In the balance-sheet, certain receipts will be shown as old revenue, and other receipts as new revenue, amongst the latter being, I understand, the £444,000 taken on loan from Trust Funds. These sums being added together make up the revenue for the year. On the other side are shown the amounts due to the States under the Braddon provision and the other liabilities of the Commonwealth. We still owe the States this £444,000, they not having been paid the full amount due to them on the operations of the year. The debt due to the States by the Commonwealth is the balance of the amount to which they are entitled under the Braddon provision. What we wish to know is, are the States individually to be paid as they would have been paid had the money been handed to them before the close of the financial year, or is a new system of payment to be introduced with respect te this balance of the debt due? Bookkeeping is one thing, but paying is another. As a matter of bookkeeping, this sum of £444,000 and other sums obtained in various ways may be treated as new revenue.
– And new revenue must be distributed on a population basis.
– Such new revenue as that obtained from patent and licence fees and other sources is, of course, distributed on a population basis. But under the Bill, the £444,000, to which I have referred, will also be treated as new revenue. As to the payment, of the debt due to the States under the Braddon section, the Bill does not say that it shall be paid to the States on a per capita basis. It simply says that the Treasurer shall credit the States on a per capita basis in his bookkeeping generally. The question which 1 put to the Treasurer several days ago was this : When he comes to pay the States, and make up the balances for the whole year, will he see that the States get their threefourths of the Customs and Excise revenue just the same as though there had been no deficit at all?
– That is the intention.
.- In spite of the Treasurer’s statement, which is more satisfactory to-day in its general nature, I doubt if he has yet caught the point that I shall once more put, free from legal technicalities. The Treasurer, as part of his policy, is taking £450,000 from the States. That amount has to be, and is, taken during the Braddon period. To meet his own exigencies he refused to fulfil the requirements of the Braddon section. He is also going to deduct £450,000 from the States threefourths. What reason is there, in making that deduction, for the introduction of any new principle whatever? Why not maintain the same principle of collection and distribution that has existed under the Constitution, and exists now, for the whole of that period? Putting aside the legal question altogether, what argument is there, as a mere’ matter of business, for such a change? The Treasurer’s reply, or the only one which he appears to rely upon to-day is, that he is compelled to alter the distribution because it comes into a period in which, under our own law, it has to be treated as new revenue. My reply to-day, as it was on Friday, is that this is caused by his own act in bringing it forward nominally - and it can only be nominally - into a new period. Why should the States, or any of them, suffer for his act? I do not know which State suffers. I have seen a newspaper estimate professing to show that. Victoria and South Australia have to make up between them something over the £70,000 to be divided between the other States, but am told that is not an official statement, and, therefore, it may be erroneous.
– I am advised that whether it was raised last year or this year does not make a bit of difference.
– My argument is that it ought not to make any difference. The money is due to the States on a certain principle, and in certain proportions between themselves - proportions well established by the practice followed under the Constitution eer since Federation began. But if the Treasurer will take £450,000 from them, why not take it in exactly the same proportions as always before, so as to preserve that principle intact, instead of, for no good reason that I can see, introducing a new principle. That may be perfectly good in a new period and in new circumstances. No one will take exception to it then. When the States are paid on the per capita system any deductions will be properly made per capita also. Whether I have failed or not to make the point clear, I shall not repeat myself, but simply state that the cause of all the confusion is the insistence of the Treasurer on having two systems running at once. First comes the constitutional system - giving the three-fourths under the Braddon section - which continues until 31st December this year, and the second a new principle cutting the first down to 25s. per capita, which, for the current six months, is to run side by side with the first.
– That is not so ; the honorable member is in error there.
– I assure the honorable member that, as a matter of fact, what I am saying is incontestable. He may have arguments to satisfy him that he is taking a lawful course in departing from it. I am not arguing whether the honorable member has or has not reason for that ; but it is an indisputable fact that the two systems are running side by side,’ the Constitution requiring us for six months to pay the States their three-fourths, and the Treasurer, by his Bill, substituting 25s. per head to them from 1st July this year. That cannot be denied. That is the whole purpose of his Bill ; and if it does not do that, it does nothing.
– The effect of the double provision which has been commented upon, has been got rid of by the amendment of the Bill.
– Not in this matter. I am simply showing that the cause of the confusion, difficulty, and delay is the Prime Minister’s insistence upon his new 25s. a head displacing the three-fourths, which he has introduced from 1st July this year.
– Indeed, I do not take that ground at all.
– Then, I should say the honorable member has no ground to take. It certainly is because of his double method that the Treasurer has temporarily involved us all in this debate. Whatever the Bill does or does not do, the course he is taking, whether legal or not, is inappropriate, unwarrantable, unnecessary, and has involved all this confusion.
– The Leader of the Opposition has anticipated a good deal of what I intended to say. I had not the pleasure of hearing the debate upon this question, but have taken the trouble to inform myself of it, and it seems to me that there are no real technical difficulties involved. I listened, with the greatest care and attention, to the memorandum prepared for the Treasurer by his officers, and it served only to introduce confusion into a very simple question. They put it in this way : “ Here is a sum not exceeding £500,000 which may be taken from the Trust Funds for the purpose of paying back the deficit owing to the States. Because it is taken from the Trust Funds, it is new revenue, and in paying it back to the States, because other payments to the States in the past have been made on a per capita basis, we must pay it on a per capita basis also.” Am I not right in my statement of the case?.
– That is correct - in accordance with the bookkeeping sections.
– There are two or three points in the memorandum which will not hold water. I shall draw attention to them, and then I think I can show that the memorandum itself has no relevance to the real and simple question before the House. In the first place, whether this money to be withdrawn from the Trust Funds is revenue at all or not - upon which I do not want to express any very strong opinion, after what the honorable member for Angas has said - I am convinced that it is not new revenue, because new revenue is expressly defined by section 4 of the Surplus Revenue Act 1908 to be : -
Those are all perfectly explicit statements of revenue received into those Departments in the ordinary course. This money is and always has been in the Treasury in the shape of Trust Funds already appropriated to other purposes by Parliament -
So that clearly, as the Treasurer will admit, this money does not come under either of those definitions. But, even supposing it were new revenue, the memorandum goes on to say that, if we are going to use it to pay the Commonwealth’s debts to the States, we must pay it per capita > that because the deficit arises from extra expenditure by the Commonwealth, that that extra expenditure in the States is per capita, and that, therefore, we ought to make it good by repaying it on a per capita basis. The answer to that is that there is nothing to show that the whole, or any part, of that expenditure was per capita. So far as it was excess departmental expenditure it was not, and the Treasurer has not given us any information, nor have his officers apparently given him any - because I assume that he has supplied us with all the relevant information that he has.
– I have.
– Then the officers of the Treasurer have given him no information as to the proportion of the £444,000 which has been expended in the various States on transferred Departments, and the proportion which comes within the term “ other “ expenditure.
– How could they say it was for certain particular work?
– I do not think that they could.
– We could say what was expended, for instance, on old-age pensions.
– Possibly in connexion with some matters the information could be given. But there is a distinct fallacy in both parts of the memorandum presented to the Treasurer by the Treasury officials. Even if the memorandum were right, it has nothing whatever to do with the very simple issue before the House, because, even supposing it were new expenditure, the Treasurer is not concerned with the allocation of the expenditure of the present financial year. What he is concerned with is the payment of a debt incurred during last financial year. That is the whole question.
– We are not here concerned with the payment of a debt.
– We are.
– We are here concerned with surplus revenue.
– I think not. The Constitution gives the States whatever rights they have in this regard, and whatever rights they have now, they had on 30th June last. No matter how we may find the money to pay what is due to them, we cannot alter the amount due to them in the aggregate and individually on 30th June last. It was not then determined, although it could have been, for the whole basis necessary to arrive at a determination was available. All that was necessary was that the Treasury officials should go into the figures. Had they done so, they would have said at once, “ There is £120,000 due to Victoria “ - I am using imaginary figures - “ £150,000 due to New South Wales ; £40,000 due to Queensland, and so forth.” The debt was shown in the books ; and it is unalterable, whether the Treasurer finds the money to pay it in the aggregate to each State individually, out of the Trust Funds, by means of special taxation, or by borrowing on the London money market. Whatever course he may take to find the money cannot affect the amount which is payable to the States individually.
– Does the honorable member contend that the States must have received three- fourths as individual parts of the Commonwealth?
– No. I am simply pointing out that on the 30th June last - before this Bill was brought before the House - there was a certain position. Let us assume that the Treasurer of Victoria says to the Commonwealth Treasurer, “ I find, from your receipts of Customs, that you have received so much in the aggregate from Customs, and that you have collected such and such a proportion of that amount in Victoria. I find, further, that the expenditure on transferred Departments in this State was so much, and that your total’ other ‘ expenditure was so much, of which the Victorian expenditure amounts to such a sum.”
– But the adjustments have never been on a per capita basis.
– I am speaking of what the law as it existed on 30th June last required us to do.
– Does the honorable member say that the Commonwealth is under an obligation, or that it is possible, to absolutely adjust the finances on 30th June?
– No; I do not suggest such a thing for a moment. I admit that a certain time is allowed for making adjustments, but that cannot in the slightest alter the amount which, it seems to me, ought to have been calculated to be due on 30th June. At one time the Constitution regulated that matter, but it is now regulated by the Surplus Revenue Act. Take the amount due to Victoria. It is a simple sum in arithmetic, all the elements of which perhaps were not actually ascertained or calculated on the 30th June last; but they were all available. Money has come into the Treasury from Customs, and there has been “transferred” and “ other “ expenditure. The Treasury has the records of both that collection and that expenditure, and all that requires to be done is to ascertain the amount.
– The apportionment.
– No, all that is necessary to be done is to make an arithmetical calculation from figures in the possession of the Treasury. I admit that all Treasurers require a certain time to do this. They could not be expected to have it done “on the nail,” but the time at which it is done’ does not alter the amount of the debt. It would be impossible, subsequent to 30th June, to “ cook “ the Treasury accounts, for they are all in the Treasury as on the 30th June. I do not wish to see the Commonwealth Parliament placed in the ignominious position of having passed an Act which may subject the Commonwealth to an unanswerable claim of £30,000 or £40,000 on the part of one of the States. Take the case of Victoria. The Leader of the Opposition referred to some figures taken, I understand, from the press-
– I said the statement was not official.
– And I do not know whether or not it is true; but the point is that, if the Government adopt the system they propose, they will pay some States many thousands of pounds too much and others many thousands of pounds too little. If they did pay some States too much, that would be no answer to a legal claim brought in the High Court by the States which had been paid too little. We should not allow ourselves to drift into a position in which we might have an unanswerable claim brought against us for £30,000 or £40,000.
– We are not under an obligation to pay the States in any particular way.
– I thinkI shall be able to show the Attorney-General that we are. We can alter, hereafter, as we are doing now, the distribution of current or future income and expenditure. The Constitution gives us that power.
– I do not say that we were not under an obligation to pay the States in this matter. What I do say is that we are under no obligation to pay them their three-fourths in any particular way. They may be paid per capita or in any other way.
– I do not agree with the honorable and learned gentleman, and 1 do not think that he appreciates the full meaning of what he has just said. The position is simple. If the Government were depending merely on the Constitution I should agree with the AttorneyGeneral’s contention that section 87 does not apportion the money, but the Constitution contains other provisions which do affect the apportioning of it. I refer to the bookkeeping sections. We wiped out the bookkeeping sections of the Constitution, and substituted other machinery for them by means of the Surplus Revenue Act, which, read in conjunction with section 87 of the Constitution, has the effect of apportioning the amount returnable to the States. So that a simple sum in arithmetic is presented to any man who has the official figures before him up till the 30th June in each year. Under the Surplus Revenue Act, that is the whole position. Any one of the States - Victoria for examplehas therefore a right to say, “ No matter what disposition of this revenue the Commonwealth may make during the current financial year or in the future, during the last financial year a law was in force which created a debt to this State of so many thousands of pounds on the 30th June.” Surely the Treasurer is not going to ask the Committee to fall into this position
– I do not want to fall into anything ; but other members of the Op position entertain a distinctly opposite view from that which the honorable member has expressed.
– I have not heard any opinion expressed other than that which I am now voicing. The only statement I have heard from which I differ was one by the honorable member for Angas, to the effect that, under certain circumstances, this money might be regarded as revenue. But that has nothing whatever to do with my contention, which is that, on the 30th June last, we owed, and still owe, to each State, a definitely ascertainable amount. Let us assume that, in the case of Victoria, it is £100,000. The Government do not ask Parliament to alter that amount. As a matter of fact, I do not think that Parliament could alter it. I say that the sum which was due to each State on the 30th June last is still due. But the Treasury officials, after considering the whole matter, have, apparently, arrived at the conclusion that the amounts due to our creditors can be entirely altered according to the particular source from which we take the money with which to pay them.
– By increasing the amounts . to be returned to some States, and decreasing the sums to be paid to others.
– Exactly. By returning to some States more than they are entitled to, and by paying others less than they are entitled to. Why is it urged that this course can be adopted? Merely because we choose to take the money with which to pay them from the Trust Funds, and because the Treasury officials say that the Trust Funds are “ new “ revenue, and that such revenue may be distributed amongst the States per capita.
– The Treasury officials do not say that.
Mr.W. H. IRVINE.- They say that, inasmuch as the deficit may have been incurred by “other” expenditure which would be charged against the States upon a per capita basis, this “ new “ revenue, so far as it is used to pay extra expenditure, should be distributed in the same way.
– That is a very clear legal deduction.
– The honorable member talks about legal deductions. I am not talking law, but the plainest common sense. At any rate, I am endeavouring to talk common sense. Lawyers are not altogether devoid of common sense, and I am attempting to apply the little of which
I am possessed to the consideration of this matter. It would be a great pity for us at this stage to adopt a mode of paying last year’s obligations- obligations which have nothing whatever to do with the current financial year - under the method that is now suggested. Of course, we are empowered under the Constitution to readjust our financial relations with the States for the future. All I say is that by this extraordinary and artificial means the Government are endeavouring to pay too much to some of the States and too little to others, and that they are attempting to justify their action by saying, “ We do so because we have taken the money with which to pay them from a certain source.” The point has been well put by previous speakers, so that I need not elaborate it. But if the Bill becomes law in its present form I think that the Treasurer will be faced with claims on behalf of some of the States which will be absolutely unanswerable.
– I cannot agree with the contention of the honorable member for Flinders that any wrong has been done by the Government, or that we could have done what we desire to do in any other way. From his own admission it is perfectly clear that in the adjustment of the financial relations between the States and the Commonwealth it is impossible to so accurately estimate the position that on the 30th June there shall be no amount outstanding. Now, for the purposes of my argument it does not matter whether £500,000 or £5,000 is outstanding on that date. The question which we have to consider is, “ How is the balance to be paid over?” I venture to say there has never been a time when there has not been some amount outstanding, although it may have been the small sum of £5,000. But can it be denied that after the first five years of Federation this Parliament had a right to make any arrangement it chose in regard to the allocation amongst the States of the three-fourths of the net Customs and Excise revenue? So long as we pay that amount in the aggregate, after the first five years of our Federal history, we have always had a perfect right to pay it as we pleased. We can pay it on a per capita basis.
– It has to be paid in accordance with the law.
– I do not deny that. But, so far as this Bill is concerned, and the money with which it deals, the law says in effect, “ Here is money which belongs to the Commonwealth when it had it, and which was paid into a trust fund.” By paying it into that Trust Fund it fell under paragraph b of section 4 of the Surplus Revenue Act, and was debited to each State, according to the number of its people.
– Debited or credited?
– Debited. Now we propose to take that money out of the trust fund into which it was paid, and I submit that the purpose for which we are taking it out is not material to the measure before the House. That is to say, the question as to whether the States ought to have returned to them their threefourths of the net Customs and Excise revenue upon a per capita basis or in any other way has nothing whatever to do with the manner in which the money which was paid into the Trust Fund shall be dealt with, if it be taken out of that fund for any purpose. Directly it is so taken out and thrown into the hotchpot again it has to be credited to the States in the same way as it was debited to them. Paragraph b of section 4 of the Surplus Revenue Act reads -
The Commonwealth shall debit to each State -
This trust account is “ other “ expenditure. We paid the money into it, and we now desire to take it out. Therefore, we are perfectly justified in crediting it to the States in the way that we propose. In fact we must do so.
– How do the Government intend to return to the States the balance of the three-fourths of the net Customs and Excise revenue?
– In any way that we please and the law permits.
– In what way do the Government please?
– Does the honorable member say that after the first five years of our Federal history we had not the right at any moment to make what arrangement we pleased in regard to the distribution of the three-fourths of the Customs and Excise revenue ?
– In what way do the Government propose to pay the balance of the three-fourths now?
– We propose to credit the money advanced from the Trust Account as set forth in this Bill.
– Per capita?
– Undoubtedly. We propose to credit the money which we now take from this fund on a per capita basis. I submit that that is the only way in which it can be done. There is not the slightest injustice to the States. It is not, as the Treasurer said, a question of the payment of the three-fourths in any way, but of how we are going to deal with this money. I submit that in doing this we are not only acting in the best way, but in the only way in which we could have dealt with this money.
– And the Government do that, although they increase the payment to some States, and decrease the payment to others.
– That is a matter with which this Bill does not deal, but is for subsequent adjustment. What I say in relation to- this particular amount is that it was debited against the States when it was paid into the Trust Fund, and it must be credited in the same way to them when it is paid out. No law is violated nor is any injustice done.
– What the honorable member for Flinders has said seems to me to be incontrovertible. It is as clear as anything can be made, that the requirements of the States must be met, and they must be met in a particular way until that way has been altered by Act of Parliament. The way to test the matter is this : If the additional money required - say, £450,000 - had been derived from Customs and Excise there would have been no question of paying back on the basis of collection. But inasmuch as the money has not been collected from Customs and Excise, the Government are proposing to differentiate the method of paying back what the States are clearly entitled to, and what we admit that they are entitled to. But there is another question ; it is this : Is the money in this Trust Fund revenue at all?
– It becomes Commonwealth revenue when we take it back and use it for revenue purposes, obviously.
– I take it that what the Government are doing is practically raising a temporary loan. The money proposed now to be raised by loan is money that has been contributed by the States not upon a uniform basis at all. Nearly every penny paid into this Trust Fund has been raised by the States in precisely the same way as every other portion of the revenue is raised; that is to say, some of the States - say, Victoria and New South Wales - have contributed, we will suppose, ros. per head more to the Trust Fund than have the other States. Now, the Government are coolly taking the money out of the Trust Fund again, and, instead of giving it back to the States as they actually contributed, they are going to pay them per capita; which will mean that some of the States that actually paid more than other States will only get equal amounts per capita returned to them. I look away altogether from the legality of what is proposed to the elementary justice of it. The Government had other ways of getting over the difficulty. It seems to me that when you go to a fund which has been created and built up by the States on a basis which is not uniform, and you temporarily borrow that money, you ought not to pay it back to the States in discharge of their demands. upon a different basis than that on which you raised it. To do so seems to me to contravene all the elementary ideas of justice. The only excuse that I know of is that this was done to obviate going to a bank and getting temporary accommodation to discharge the obligations of the Commonwealth. I have not heard either from the Attorney-General or from the Treasurer any justification for calling this “ new expenditure.” How is it new? It seems .to me that it is old enough. It is money which has been contributed by the States, and has been paid, for some purpose or other, into a Trust Fund. I admit, of course, that when the money reaches the” Trust Fund it is regarded under the Act of Parliament as expenditure which is paid away; and, therefore, when we propose to take it out of the Trust Fund it can only be by way of temporary loan. But I should like to know from the Attorney-General and from the Treasurer what makes a loan as ap: plied to revenue “new revenue”?
– “ New revenue “ is well defined.
– It is. It is strictly limited revenue, raised by the Departments pf External Affairs and Home Affairs, the Treasury, and the AttorneyGeneral’s Department.
– It is revenue other than revenue from Customs and Excise.
– Does “new revenue “ include all that ?
– I think it does.
– I cannot say. I should think, for instance, that postal and telegraph revenue paid into a Trust Fund could be fairly treated as “ new revenue.” There is also a doubt in my mind as to whether an ordinary loan from a Trust Fund can be treated as “ new revenue “ when applied to the liquidation of our constitutional obligations to the States. I cannot conceive of any other method which would be so nearly what is called “ pointing,” as this really is.
– The honorable member cannot call it that.
– I cannot call it anything else. It is “pointing” when you take this revenue which has been paid by the States on an unequal basis - the contributions of the States varying as widely as possible from each other - and, putting it into this Trust Fund, take it out again, and, instead of giving it back to the States in the same proportion in which they contributed it, you give it back to them per capita.
– That is a new point.
– They will get their threefourths.
– It seems to me to be a point of justice, as to whether the States, having contributed this revenue upon an unequal basis, should now only receive it back in liquidation of their claims upon a basis which is entirely different.
– No, no; the honorable member is in error. The States will actually get their money in exactly the same way as they have always done.
– Except that some will not get as much as they ought to get.
– Yes, they will get exactly what they ought to get.
– Will every State get the same amount as it would get if £450,000 more revenue had been derived from Customs and Excise?
– The Attorney- General said exactly the reverse a few minutes ago.
– That cannot be so. Suppose there had been £450,000 more revenue from Customs and Excise. Does the Attorney-General think that each State would have contributed precisely the sum the Government propose to pay to them? Obviously each State would then have received back in very different proportions. The amounts are set out in the newspapers, showing what the States would be receiving. The difference is consider able. It amounts to £50,000 or £60,000 in the case of Victoria. I have not the precise figures in my mind, but the amounts as between different States vary very materially.
– What I said was that the amount to be finally returned to the individual States will be upon the bookkeeping basis, as provided in the Surplus Revenue Act.
– That may be, but to do that the honorable gentleman has to beg the whole question, and must describe this revenue as new revenue, and treat it as new revenue, and not as ordinary revenue.
– It has been debited against the States, and it has now to be credited to them. When we come to the distribution to the individual States, the actual amount to be paid to each will’ be estimated under the bookkeeping provisions in the usual way.
– There is a somersault.
– It is perfectly clear.
– I understand what the honorable gentleman has said, but it seems to me to be grossly unfair that after this money has been gathered from the States upon a differential basis, that is to say, the per capita contribution from each varied materially, so that one man paid more than another, according to the State in which he happened to reside, we are going to pay it back to the States as though every man in each State contributed an equal amount. That seems to me to be grossly unjust and unfair.
– I confess that the statement made by the Prime Minister this afternoon did not make this matter clear to me. It did not seem to me to go far enough, or to touch the real point at issue, namely, the basis on which the States are to be paid the £444,000. As I understand it, so much money is due to the several States. It was due on the 30th June of this year.
– It is arrears now.
– That is so. Had we had the money in hand, it would have been paid to the States on the three-fourths basis. We were short financially at the time to the extent of £444,000, and now, according to the Prime Minister, it is proposed to take the amount by which we were short from certain Trust Funds, and recoup the States on a per capita basis.The honorable gentleman’s statement explained clearly how the repayments were to be made on theper capita basis; and that, in the opinion of himself and the Treasury officials, moneys in the Trust Funds are what is termed new revenue, and must, when distributed; be distributed on the per capita basis. But in no sense is it explained why the States should not be paid the shortage due to them on the same basis as they would have been paid had there been no shortage. That is what I desire to have cleared up, and until it is explained I must admit that I cannot understand the position of the Prime Minister or of those who are advising him. The honorable gentleman’s statement assumed that the Trust Funds must necessarily be new revenue, which, if distributed amongst the States, must be distributed on the per capita basis, and in the circumstances I must ask the honorable gentleman how we could put any money into the Trust Funds, and subsequently call it new revenue, when we were unable to pay to the States the three-fourths of the net Customs and Excise revenue which was due to them? It seems to me that money can only be placed in a Trust Fund from the one-fourth of the net Customs and Excise revenue which the Commonwealth is by the Constitution allowed to retain for its own expenditure. If we have retained and paid into a Trust Fund money in excess of the one- fourth Customs and Excise revenue to which the Commonwealth is entitled, it seems to me that we cannot call it new revenue, to be distributed on the per capita basis, because, manifestly, it was a portion of the threefourths of the net Customs and. Excise revenue which ought to have been paid to the States. To the extent to which the Trust Funds at present hold an amount of money which ought to have Been paid to the States, it cannot be termed new revenue, and ought not to be distributed on the per capita basis. If that point is worth anything at all, I think that we should be able to take from the Trust Funds the particular amount due to the States, and which ought to be paid to them on the threefourths basis. I contend that it ought never to have been placed in the Trust Fund during any one of the ten years covering the operation of the Brad don section, if we were financially in difficulties, and unable to pay the States their threefourths of the net Customs and Excise revenue. I do not know whether the Prime Minister sees fit to make any alteration in the Bill in the direction I have indicated, but unless he does so I am personally at a loss to understand how he will extricate himself from the difficulty in which he appears to me to be.
-i am informed that there is nothing illegal in the provisions of the Bill.
– Four honorable gentlemen who are reasonably high in the legal profession have made statements to the contrary, and it may be that there are others who hold a similar view.
– The honorable member for Angas does not agree with the honorable member.
– The honorable member for Angas agrees entirely with the argument adopted to-day. I adopted his, and went on from it.
– The honorable member for Darling Downs does not agree with it.
– I do.
– I might ask the Prime Minister why we should create any legal difficulty at all, if it be possible to avoid doing so. I confess that I saw nothing in what was said by the Prime Minister or the Attorney-General to-day to show that this money which is due to the States will be paid to them on the three-fourths basis, to which method of distribution it appears to me they have a legal right.
– That is the basis upon which the money will actually be paid.
– I understand that the Attorney-General said that this afternoon. The Prime Minister said precisely the same thing on Friday, but there is nothing in this Bill to indicate how it is going to be done.
– This Bill does not deal with that. It deals with taking money out of the Trust Fund.
– I am aware of that, and it is contended that the money taken out of the Trust Fund must be regarded as new revenue - though that point has not yet been settled, and must, when distributed to the States, be distributed on the per capita basis.
– Must be credited to them on that basis, which is a very different thing.
– I understand, from the statement made by the Prime Minister, that this money is being taken out of the Trust Fund to meet a debt due to the States, and to the extent of that debt it is to be distributed to the States on a certain basis. If it is to Be distributed on the basis of this Bill, it will be distributed on the per capita basis, but the point is that it is due to them on a different basis.
– The honorable member will see the difference between crediting the States with money in the way in which they have been debited with it, and distributing the amount.
– If the amount taken from the Trust Fund is to be regarded as new revenue, it will, under the provisions of this Bill, have to be distributed to the States on the per capita basis.
– No; credited to them on the per capita basis.
– I submit that that does not touch the real point at issue. A moment or two ago the Prime Minister admitted that a certain amount of money is due to the States, and that the payment ought to be made on a particular basis, taking it out of the Trust Funds and crediting or paying it to the States under the provisions of this Bill. But the Bill will not permit of the money being paid to the States on the basis on which it is due.
– There is nothing in the Bill that affects the Treasurer in that way; the money will be paid on the bookkeeping basis.
– But the Bill says that the money will be paid per capita.
– We might have saved the whole of this debate if the Attorney General had told us that before.
– The Prime Minister, in my hearing, said on Friday last that the money would be paid on the bookkeeping basis.
– The Prime Minister gave that assurance, but he coupled it with this Bill ; and the difficulty is how we can pay the money on the bookkeeping basis, when it has to be paid under this Bill.
– The whole question is one of bookkeeping under paragraph b, sub-section 1, section 4, of the Surplus Revenue Act.
– If the Government now take the stand that, irrespective of this Bill, they intend to recoup the States the money due on the three-fourths basis,I am sorry that there should have been any debate.
– That is so - it always was so.
– The Attorney-General said exactly the opposite in the course of his speech.
– My contention, and that, I believe, of other honorable members, is that this money must be paid on the basis on which it is due. All along we have been informed that this Bill is to give the Ministry power to take certain moneys in order to pay what is due to the States, and the Bill demands that the money shall be paid on a per capita basis. How can the two things agree? First, the Prime Minister told us that the money will be paid on the three-fourths basis, and then that he is obtaining the money from a particular source, and that the circumstances demand that it shall be distributed on a different basis.
– Because it is new revenue.
– It has to be credited on a per capita basis - that is, the whole thing.
– I greatly doubt whether the Government, being short in their payments to the States, were justified in paying money into the Trust Funds to the extent to which they were short, and regarding that as new revenue.
– We had a right to put that money into the Trust Funds as we did, and to take it out subject to parliamentary sanction.
– I see nothing in the Constitution to say that any one year of the Braddon section period can be held, financially, to stand alone. My contention is that if at any time during that period we are short of the three-fourths, we have no right to put the money into Trust Funds and call it new revenue. If by some mischance it has been put into Trust Funds, we have a right to take it out to the extent to which we are short, but I do not wish to debate that now. The statement of the Prime Minister to-day, if possible, made the position clearer than even the Bill does, if it be allowed to stand absolutely alone, taking no notice whatever of the deficit. But the Prime Minister has associated with the Bill a deficit that has to be repaid on a certain basis, though the Bill only allows crediting or distributing on absolutely another basis.
– That is the whole difficulty.
– That is the only point that has been at issue all along, and it is a point on which, I confess, I am unable to see clearly. My desire is that the matter should be made clear, so that we may not have the States in the future taking action against us for moneys which may be due to them on a particular basis, and which we seek to pay them on another basis - another basis which, while it may give the whole of the States an amount equal to the three- fourths, will not give to each individual State the exact amount due, some getting more and some getting less. I do not think any great difficulty would result if the Prime Minister could see his way clear, as he asserts, to pay to the States, irrespective of this money from the Trust Funds, an amount equal to the £444,000 on the three-fourths basis, on which, I believe, they can claim it.
– That is the bookkeeping basis ?
– Yes. If that were done no great harm could follow the Bill being allowed to pass in its present form. The only difficulty, as the honorable member for Flinders pointed out, that can arise, is from certain of the States not receiving money which they believe to be due, and which I believe to be due, and from their taking action against the Commonwealth. We have the assurance of the Prime Minister, however, that the States will not be able to do this, because they will receive the money on the three-fourths basis.
– I do not wish to add unnecessarily to the debate, but a remark which has fallen from the Attorney-General within the last ten minutes satisfies me that the whole of our discussion this afternoon has been carried on under a misapprehension. The whole House has been under the impression that Ave were discussing the principle contained in clause 3, which provides that the money advanced be credited to the several States in proportion to the number of their people. The Attorney-General and the Prime Mininster certainly spoke quite consistently with the idea of the payment to the States of the balance due for 1909 on a per capita basis ; it is only within the last ten minutes that we have learnt from the AttorneyGeneral that it is now proposed to pay the States in the same proportions as if there had never been any arrears, and everything had been settled up for the year in regular order.I desire to know whether the Prime Minister, and also the AttorneyGeneral, have not changed their view. According to the dictum of the AttorneyGeneral, the House this afternoon has not been discussing the Bill, but another question as to the proportions in which the States are to have returned to them the arrears for 1909. We are now told that these arrears are to be paid as they would have been paid at the time they were due; whereas the Bill, which we are supposed to have been discussing, provides for the payment per capita.
– No, no; the Bill says the amounts shall be credited per capita.
– It seems to me that though questions of law are involved, it is really a matter for clear-headed accountancy. The Treasury found itself unable to make to the States complete returns for 1909, and it is now sought to do so by borrowing from the Trust Funds. I quite agree with the honorable member for Flinders that it does not matter whether we borrow from the Trust Funds, a bank, or a private individual - that has nothing to do with the question.
– Or raise the money by taxation.
– It has equally nothing to do with the question, because clause 2 authorizes the taking of the money from the Trust Funds, and clause 4 provides for its payment; and as soon as the borrowing is justified, and the repayment is provided for, we have done with the Trust Fund and its source altogether. It does not matter where the money came from before it went into the Trust Funds, any more than it would matter how a bank had got it, supposing that the Treasurer had borrowed from a bank instead of taking from the Trust Funds.
– Strictly speaking, the honorable member’s remarks are out of order.
– It would seem that the whole debate has been out of order as irrelevant. Most honorable members have been under the impression that clause 3 provides the method according to which these arrears are to be paid to the States. The honorable members for Flinders and Darling Downs, the Leader of the Opposition, and, I think, both the Prime Minister and the Attorney-General, have been under that impression.
– That clause does not provide the method of payment ; it provides the method of crediting.
– What has been discussed has been the method of paying the arrears to the States.
– The discussion has been out of order, as irrelevant.
– Why were we not told that earlier? I ask the Prime Minister if clause 3 is not intended to provide the method by which the States shall be paid the arrears of the last financial year?
– The Prime Minister would be out of order in answering questions.
– I shall answer the honorable member’s questions when I speak in reply.
– I submit that it is fair to ask the honorable member now whether we are to regard clause 3 as providing the method in which the arrears of last year are to be paid to the States.
– New revenue, however raised, can be credited to the States only on a per capita basis.
– That is not an answer to my question. For some years, I had the conduct of one of the most complex set of mercantile books used in commerce, so that I profess to bring to bear on this question accountancy. experience as well as legal knowledge. Therefore, I ask the Prime Minister why the States are dragged into this matter at all? They had nothing to do with the appropriation from the Trust Funds. What, then, are they to be credited with? They have not contributed any more revenue to the Treasury. Had the Government borrowed the money from a bank without the authority of Parliament, and were it now asking to be indemnified, would it provide in the Bill for the method of paying to the States the arrears of last year? Would the States be brought into the question at all ? They have had nothing to do with this transaction. Money has been borrowed from a Trust Fund, just as it might have been borrowed from a bank ; but the States had no part in the borrowing. We are now considering a measure indemnifying the Government for their action respecting the Trust Funds. Why should we credit or debit the States at all? I admit that the Bill is a means of getting money to pay the States the arrears of the financial year 1909-10, but clause 3 is absolutely redundant and unnecessary. I come now to the question which has been debated, but which has not much to do with the Bill. It is this : The Prime Minister found that he was unable to pay the .States the balance of the money due to them, under the Braddon section, for 1909- 10, and proposes to draw upon a trust account. But, as the honorable member for Flinders said, that cannot touch the question of the proportions in which the States are entitled to be paid. If I had a tenant paying rr.e a pound a week up to the end of June, and had made up my mind to charge him 30s. a week for July, I could not interfere with his tenancy up to the end of- June, -but must take his pound a week up to that date. It is exactly the. same in this case. There was a constitutional method of paying to the States their proportions of the three-fourths of the net Customs and Excise revenue, and because we delayed paying them we cannot now alter the method in which we pay them. As the honorable member for Flinders says, although the Treasury could not make up their accounts until after the end of June, they cannot alter their method of making them up, and, therefore, they must pay the money back to the States after the end of June, according to the method of distribution which applied up to the end of June.
– The debt has become due.
– Yes, there are arrears of existing debts. It is satisfactory that the Prime Minister should assure the House, and I hope the assurance will be noted, that the States will be paid the arrears as they would have been paid if they had been paid at the time they were due.
– Oh, yes, I never said any thing else at any time.
– I hope the House will note the further statement that clause 3 is not intended to indicate the method under which the States will have returned to them the money which -was not returned to them- when it was due, but that it has some inexplicable application to the Trust Funds in which the States are said to have an interest.
– - I nave carefully followed the arguments, both of the legal members and of those who make no claim to legal knowledge, but the only question I am concerned about is whether the attitude the Ministry have taken is legal. After listening to the legal gentlemen, I am in just as big a knot now as I was before, but the whole question seems to be whether the half million pounds shall be paid to the States per capita or otherwise. I consider that all Commonwealth revenue left after the Commonwealth has taken its one-fourth is surplus.
– What about the States’’ three- fourths ?
– That is surplus after we have taken our one-fourth. I base my view on section 94 of the Constitution, which reads as follows : -
After 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.
This means - and the right honorable member for Swan gave the point away - that for the last five years the Commonwealth could have paid the States on a per capita basis if it had liked, but the right honorable member said the Commonwealth had never done so. What is there in the Constitution to prevent Parliament or the Government paying anything that was due last year on a per capita basis ?
– The Government say they are not going to do it.
– Do not say that.
– I understand the Government are going to pay to the States the £444,000 on a per capita basis, and I maintain that they are legally justified in doing so. We were invited to apply our common sense to the problem, and accordingly I apply my common sense to the reading of section 94 of the Constitution, which allowed Parliament, led by the Government, at any time during the last five years to pay all surplus to the States on a per capita basis.
– They could have made provision for future adjustments on that basis, but they did not do so. They made another provision, on which the States relied.
– But they are making provision in this Bill to do so.
– But the debts have already accrued under a former provision.
– The fact that it has not been done in the past in that way has nothing to do with the matter.
– That would be making the Bill retrospective.
– Not at all. If Parliament had met before 30th June last the Government could have taken the same course as they are taking now, and there would have been nothing unconstitutional in it, because at any time during the last five years they could have arranged to pay the States per capita. It is evident, therefore, that most of those who have addressed the House this afternoon have been trying to pin the Prime Minister and the AttorneyGeneral down to some specific point which suited themselves. They said that their attitude was not assumed for political purposes, and I do not say that it was, but I have always been cautious about accepting from an Opposition any advice which I do not understand. I am satisfied that the Opposition are not always considerate of the position of the Government. I simply wish to be satisfied in my own mind that I am doing the right thing in following the Government which I support. There may be many members, like the honorable member for Adelaide, who are wavering. I and the rest of the members of our party will always listen to that honorable member with attention, because with his parliamentary knowledge he is worth following, but 1 believe that, like myself, he simply wants, to be satisfied that the course taken by the Government is correct. He and others who have listened to the witching wiles of the Opposition might have taken a different .stand if my reading of section 94 of the Constitution had presented itself to them, and if they had realized that the Government are justified in paying the States on the per capita basis now, seeing that they could have done so at any time during the last five years.
– Only Parliament “may provide,” not the Government.
– The honorable member knows that when I referred to the Government I meant the Parliament. In spite of the Opposition, the Ministry is the Parliament, now at any rate.
– Even with that point in my mind, I should not have agreed to retrospective legislation.
– This Bill will be retrospective only as from 1st inst.
– But we are dealing under this Bill with accounts prior to 1st July-
– I admit that. I feel, however, that I have only to satisfy myself that we shall be acting constitutionally in distributing this money on a per capita basis. As long as we act constitutionally no appeal to the High Court can undo what we propose, and, as a matter of fact, the Parliament at any time during the last five years could have done what it is now proposed to do. I shall support the Government’s view of the position, and I trust that their followers generally will do so, feeling sure that they have given careful consideration to the whole matter, in conjunction with the Treasury officials who have submitted to us a memorandum on the subject.
.- The honorable member for Melbourne Ports takes up the position, that under this Bill the Government can make these payments in any way they please, irrespective of the Surplus Revenue Act, which was in operation on 30th June last. To my mind, that is an utterly untenable position, and one that this Parliament cannot take up. We cannot make this Bill apply to any time during which the Surplus Revenue Act 1908 was in force. The point that I wish to bring especially under the notice of the Prime Minister in this connexion is this : Under the Bill he proposes to take away money from the Trust Funds, and to credit it, in the bookkeeping system of the Commonwealth, as new revenue, so that it will be distributed amongst the States on a population basis. The honorable gentleman states further that it is to be credited as new revenue on a per capita basis, and that that is not necessarily the basis of payment. To my mind, however, the moment we credit these funds on a per capita basis, in the bookkeeping system of the Commonwealth, that becomes the basis of payment. The basis on which these funds are credited in the bookkeeping system must be the basis of payment.
– They will not be credited differently than they would have been had the money been raised before 30th June.
– That is the point to which I am coming. On 30th June last the books of the Commonwealth dealing with these matters contained certain entries, and when those entries were collated there were certain results/ This deficit is actually created by certain entries in the books of the Commonwealth, which stood at certain figures on 30th June last. It is utterly impossible for the Treasurer to hold that the short payments to each individual State in regard to net revenue from Customs and Excise amounted to the sum per capita which will be returned to the States under this Bill, and become the basis of distribution. The moment we pay back this money to the States in this way, that way must become the final basis of distribution. I have here figures supplied, according to the Argus, by the Treasury which I wish to place on record, so that if in the long run our contention that these deficits in respect of the payments to the different States are not what they would work out to be under the per capita distribution, we shall know how we stand. The Argus writes -
The following figures were furnished by the Treasury -
– Do I understand that the honorable member is reading an article commenting on a Bill now before the House?
– I do not know that it comments on the Bill, but it certainly comments on the financial position.
– I do not wish to interrupt the honorable member, but I point out to him that he will not be in order in quoting an article commenting on any Bill before the House.
– I am not sufficiently versed in the rules of the House to determine whether or not I should be in order in reading this statement, but I should like to quote the figures.
– The honorable member will probably be in order in doing so.
– The figures I am about to quote are irrespective of the sum of £50,000 which the Treasurer when asking for Supply stated had actually been paid out of the Trust Funds to the States. That is to say, in the course of payments actually made by the Commonwealth to the States, the Trust Funds were drawn uPon to an amount which on 30th June last stood at £50,000, and I hold that that £50,000 could not have been paid on a per capita basis.
– I thought that the amount was £37.000.
– It was re-adjusted.
– I am . taking the figures used by the Treasurer when asking for Supply. The figures I refer to are these: The balances actually due to the States on the 30th June last were - New South Wales, £110,811 ; Victoria, £184,316; Queensland, ,£31,660; South Australia, £49,990; Western Australia, £19,130; and Tasmania, £10,987. Under the per capita system of distributing the total deficit of £406,894, the adjustment in the case of New South Wales will be £150,730, or .£39,919 more than the Treasury said was actually due ; Victoria, £120,520, or ,£63,796 less than the Treasury said was due; Queensland, £53,720, or £22,060 more than the Treasury said was due; South Australia, £38,580, or £11,410 less than the Treasury said was due to that State; and Western Australia, £25,400, or £6,270 more than the Treasury officials say is due to it; and Tasmania, £17,050, or £6,063 more than they say is due to it. That is the contention in a nutshell. The proposed adjustment on a per capita basis will not return to the States the amount which was due to each. If the Prime Minister holds that it is possible to do .what the Bill contemplates, namely, to return .this money to the States on a per capita basis, and still to pay each the actual amount which was due to it on 30th June last, I confess - as one who has some knowledge of accountancy - that I do not know how it can be done. When I first spoke upon this matter, I was under some misapprehension as to the way in which the Commonwealth accounts were kept. But I am clear upon it now, thanks to the head of the Treasury, who very patiently explained the system to me. I repeat that if this money be credited to the States on a per capita basis, that basis will immediately become the basis of distribution.
– There is nothing in the Bill which says that.
– But, under the bookkeeping system, it must be so. When money is credited to a State on a per capita basis, that circumstance in itself makes the per capita basis the basis of payment. According to the Commonwealth books, on 30th June last, a certain amount was due to each State. This Bill ought, therefore, to lay down that each State shall receive from the Treasurer exactly the amount which was then due to it.
– The Bill does not provide that.
– Precisely, but it should provide it. I agree with the honorable member for Flinders that this money cannot be regarded as new revenue. But if it were so regarded, clause 3 of the Bill would be superfluous, because under the bookkeeping system the Treasurer already has authority to credit it upon that very basis. The Attorney-General has argued that because this money has been paid out of surplus revenue upon a per capita basis it must of necessity be distributed upon that basis. I do not see that that follows at all. If the payment were in the nature of a refund for all time there would be some justification for his contention. But so far as this sum is concerned it has simply been borrowed for a specific purpose, and will have to be repaid. Consequently the manner in which it was paid into the Trust Funds cannot affect the basis of distribution.
.- I feel that there is not so much in the point which has been raised during this debate as there appeared to be earlier in the afternoon. I find that the readjustment which is proposed by the Government is the result of the Commonwealth having undertaken to pay old-age pensions during 1909-10. Having discharged its obligation in that connexion out of Trust Funds, the amount taken out of those funds has been debited to the States on a per capita basis. If the Commonwealth had not paid old-age pensions to the extent of £444,000, that amount would still be debited to the States per capita, and they would have had returned to them the whole of the sum to which they were entitled under the bookkeeping system. Under this Bill the Government propose to take out of certain Trust Funds, which represent unexpended balances from votes authorized by Parliament, the sum of £444,000 pending the receipt of revenue by the Commonwealth . to meet this temporary loan. When that revenue is at the command of the Treasurer it will be repaid into the Trust Funds in exactly the same way as it is to be. taken out. The whole amount will then be distributed amongst the States . under the bookkeeping system as authorized by the Constitution. Under these circumstances, I fail to see how it can be urged that some of the States will get more, and others less, than they would have received had the money been distributed amongst them at the close of the last financial year.
– The difficulty arose as the result of associating the Bill with the money which is due to the States.
– The Government propose to take temporarily from the Trust Funds the sum which I have mentioned for a specific purpose. They will merely borrow it until such time as they can adjust the accounts from revenue. Having adjusted those accounts, the final distribution of the money will be made on a per capita basis. Therefore, I fail to recognise any ground for opposition to the Bill.
.- T rise with considerable diffidence to address myself to this question, although I confess that the position has been so clarified by the speeches which have been delivered, and especially by the remarks of the honorable member for Adelaide and the honorable member for Parkes, that it has now assumed quite a different aspect from that which it presented earlier in the day. I admit that previously I experienced considerable difficulty in regard to clause 3, and for the same reason that actuated honorable members opposite. However, the position has now been made perfectly clear. Of course, I regard the Bill, not so much from the legal, as from the plain business stand-point. This is a measure to empower the Government to transfer money from a certain fund to another fund, and to provide a method for repaying it. It does not attempt to interfere in any way with the distribution of that money amongst the States. That is dealt with by another measure, and also by a section of the Constitution, behind which the Government cannot go. Therefore, the question is merely one of a temporary adjustment of the finances. The final adjustment would not in the slightest degree be affected by the transfer of moneys from one account to another. Suppose that I have six creditors, and that I borrow £1.000 to help me to meet my liabilities to them. I am not compelled to pay by giving each of them an equal amount at one time; but in my final settlement of accounts, I am compelled to pay them in full that to which they are entitled. Similarly, the Government are taking this money from a Trust Fund to meet a certain liability to six creditors - the States. They are not by any means compelled to credit the amount to those creditors in any particular way ; but in the final adjustment that must be made as up to the 30th June they must meet their liabilities to those six creditors on a certain basis. For that reason, I see no necessity for clause 3 whatever. I am not concerned with how the Treasurer is going to credit each State with its share of the £444,000. But I am concerned that in the final adjustment each State shall receive the amount to which it is entitled under the bookkeeping sections of the Constitution. The Minister may have a certain reason for the introduction of clause 3, but the whole debate has gone on the assumption that because an amount has to be taken from the Trust Funds, therefore an equal method of distribution must be followed. This Bill has nothing whatever to do, and professes to have nothing whatever to do, with the distribution of the proportions of the amount to the States. That is entirely provided for in another direction, and must be honoured by the Treasurer in a particular manner. I presume that the amount which will actually cover the sum that is proposed to be borrowed from the Trust Funds, and to be transferred to the Consolidated Revenue to meet the liability, will actually cover the amounts really due. But there is no necessity, because that is so, why the transfer of the accounts and the credit to the different States need be mentioned upon any particular basis. Therefore, while it is very; good of the Treasurer to show how he proposes to allot the money to the different; States, I see no reason for clause 3 being in the Bill. This is a Bill to authorize the transfer of certain moneys. Clause z gives authority to borrow the money, and clause 4 gives authority as to how it is to be paid back. What the Treasurer may do with the money in the interval has practically nothing to do with us, so far as concerns this Bill, because he must distribute it upon a certain basis eventually - and that is exactly the difference betweenthe word “credited,” as used in clause 3,. and the words “distributed,” or “ adjusted,” or “ transferred “ as used by honorable members opposite in opposing the clause. It seems to me that, though the clause is absolutely harmless, it is also absolutely useless, and, therefore, the discussion on the matter has been wide of the point, because we are not proposing to deal with the distribution at all, but simply with the borrowing of money from a certain fund, which the Treasurer eventually proposes to pay back to that fund.
Question resolved in the affirmative.:
Debate resumed from 22nd July (vide page 682), on motion by Mr. Fisher -
That this Bill be now read a second time.
.- I may say at once that I do not intend to oppose the repeal of the Naval Loan Act 1909, although I regret that, in introducing this Bill, the Prime Minister did not give us more information. I do not suppose that the repeal of an important Act of this kind has ever been proposed by a Treasurer in a speech of so few words. It is always, difficult to deal with financial measures before the Budget Speech of the Treasurer is delivered, as the information then supplied must, of course, very much influence our criticism. I do not, however, suppose that we shall have the Budget Speech for some time.
– As soon as we can.
– “As soon as we can.” Of course, every Treasurer desires to deliver his Budget as soon as he can. I am sure that my honorable friend is as anxious as any Treasurer has ever been.
– The States are-more fortunate now than they used to be, because they know exactly what they are to get.
– Perhaps that is so, inasmuch as the States will get their 25s. per capita. But we, as the representatives of the people in this House, are also interested in the Budget. It is very difficult for us to criticise financial Bills as we have been doing without having before us the financial position of the. Government. I may say, in passing, that I deprecate a custom that seems to have sprung up in this House, of honorable members, who have every opportunity of discussing matters that come before us, but refrain from stating what they have to say on the floor of the House, publishing in the press, in a distant part of the country, reflections upon their fellow members. I think that what we have to say to one another we should say to each other’s face, and that we should not publish through the press in some other part of Australia what is intended to be personally abusive to honorable members who sit in this Chamber. I do not care twopence for what the Attorney-General says about me.
– I hope the honorable gentleman will connect his remarks with the question before the House.
– I think the Action taken by the honorable gentleman recently was intended to be personally abusive, and I desire to treat it with contempt.
– Order !
– We are in some difficulty in dealing with this measure. Speaking generally, an Opposition is not likely to object to the repeal of a Loan Bill. As a rule we find a Government trying to pass such a Bill and the Opposition criticising their proposal, because financial measures nearly always involve increased taxation. In this case we have a proposal for the repeal of a financial Bill. If I thought the repeal proposed was a genuine one, I should not only support it, but should congratulate the Government upon being able to bring it about. But, in my opinion, this measure merely continues a political cry which we have heard from honorable members opposite throughout the country for some years. While they were in Opposition they raised the no-borrowing cry, and it was a good one for them.
– No borrowing for defence ?
– I believe that, at one time, the cry was no borrowing for any purpose, but now it has become a cry of no borrowing except for specially reproductive works. I repeat now what I have said on many occasions before, that, in my opinion, this no-borrowing cry, coming from honorable members opposite, has never been anything but a political sham. When they raised this cry there were two objects which they had in view. First of all, they desired to pose as a very economical party, as desirous of living within their means, and conserving in every way the finances of the country. On the face of it, that, of course, is a most excellent platform for any party, whether in Opposition or in office. Every one says that he desires to be economical, but, very often, those who preach economy are not the most economical. It was, no doubt, a very good thing foi honorable members opposite to go before the electors and tell them that their desire was that there should be no borrowing.
– No borrowing, for defence.
– The honorable member says no borrowing for defence. We might be placed in subjection, our hearths and homes ruined, and our country taken from us, but the honorable member would have no borrowing for defence. I can quite understand the cry of no borrowing on the ground of- economy, but to refuse to borrow for the advancement and development of the country might be to do it the greatest possible injury. There was, however, a second object which honorable members opposite had in view in raising the cry, and I am unable to find words in which too strongly to deprecate it. Those who have raised the cry do not practise it. I am not aware that members of the Labour party in the different States are very averse to the borrowing of money for public purposes. I know that the toilers and workers, the men who are paid weekly or fortnightly, are usually most anxious that great public works should be carried out for the simple reason that the adoption of such a policy secures to them good and lucrative employment. Such employment cannot be found for the people in a new country unless the Government enter upon a developmental policy, since private persons have not sufficient capital to enable them to find employment for a very large number of people. A great developmental policy of public works, such, for instance, as I carried out myself in Western Australia, if I may refer to it in passing, secures good and lucrative employment for thousands and tens of thousands of men.
– Providence came to the honorable member’s rescue with a good find of gold.
– Fortune favours the brave. Those who in charge of the destinies of a new country would sit down and refuse to exercise the powers of the State by borrowing, to develop their patrimony, are of no use to Australia. The objection I have to the cry of the party opposite that there should be no borrowing has been that they insinuated, and in some places boldly stated, that we, who are opposed to them, have been reckless and have wasted the money that has been borrowed in the past. So far as the cry is raised for the purpose of preaching proper economy there is nothing to be said against it, but it has been used as a political weapon against those who have been carrying on the affairs of Australia practically since its foundation. I suppose it is little more than fifty years since Australia made a real start, and any one who looks around and sees what has been done in that time will admit that we have good reason to be satisfied with what has been accomplished. The no-borrowing cry has been very useful to the party opposite, but it has been unfairly used, because it has had for its object the discrediting of those who have believed in borrowing in order to develop the resources of this great continent. While I advocate public borrowing for the purpose of developing the resources of the country, no one is more adverse to borrowing for projects which are not likely to be successful, and of permanent benefit to Australia. Honorable members opposite know as well as I do that public borrowing has, to a large extent, made Australia what it is today. There has, of course, been also private borrowing, but to that I need not refer on the present occasion.
– I ask the honorable member not to go into the general question of borrowing ; this is a Bill for a specific purpose.
– This is a Bill to repeal a Loan Act, and I desire to refer to the general question, though not in many words.
– I point out that if I allow the honorable member to go into the general question, I must permit similar latitude to other honorable members.
– I do not wish to press the matter more than to say that borrowing has, on the whole, been good for Australia, and for all those whom honorable members on both sides represent. There is no better place in the world than Australia for men of ability and enterprise; indeed, there is no better place even for those with no ability and no enterprise. The railways alone represent about 60 per cent. of the public borrowing, and the railways of Australia pay their way. This measure I regard as a mere placard. The Australian naval unit, which the Loan Act passed by the late Government sought to create, will he provided all the same, and the naval policy represented by that Act will be carried out, despite the repeal. We are not to have a mosquito fleet of thirty or “forty torpedo boats, but a fleet that cantake to the sea; and, altogether, as I say, the policy ofthe late Government will be brought into operation. The only difference will be that the people of Australia will be called upon to provide the cost in two years instead of, as provided in the Act being repealed, spreading it over sixteen years. Honorable members opposite act on the principle that there are more people who have no means than there are people who have, and that therefore the latter may be insulted with impunity.
– Order !
– Then I shall say that honorable members opposite feel at liberty to speak disparagingly of those who, by their enterprise, have secured a position in the country, knowing full well that they themselves have no enterprise. If we cast our eyes, I do not say around this House but around Australia, we find that there is scarcely a man ofenergy and enterprise who, by hard and well directed work, has helped to build up this country, whose support goes to the party opposite. I know, of course, that the private policy of those honorable members is not in accord with their public policy ; in public they would have us believe that they do not desire anything for themselves, whereas in private they get everything they possibly can. We all know that we cannot injure a branch of a tree, and certainly not the trunk, without doing injury to all its parts.
– The green bark may be removed without killing the tree.
– But pruning, such as is done by honorable members opposite, is not likely to do any good. As I said before, the cost is to be provided in two years, whereas the late Government intended to spread it over sixteen years.
– We do not say that it must be provided in two years.
– But it will have to be paid in two years, seeing that the ships being built under the Act we are repealing are to be finished in that time.
– But we may spread the payments over more than two years.
– Only by borrowing or taxing the people more. I wish the Prime Minister would be more explicit and open in this House in regard to public matters. I must say that I never had so much trouble in getting information out of any one as I have in getting it from the honorable gentleman. He is very fair spoken, and full of good sentiments, but he goes round about a question rather than answer it in a straightforward way.
– He has to, coming straight out of the caucus !
– I see no reason why the Prime Minister should not answer questions in a straightforward way, instead of making it necessary for members to ask the same question several times, and even then without any satisfactory reply. The Act which is now being repealed gave authority to borrow ;£3>50?>°°° at 3 per cent, with which to build an Australian Navy ; but we are informed by the Prime Minister that that object is to be carried out notwithstanding the repeal. The interest would represent £105,000 a year, and a 5 per cent, sinking fund .£175,000 a year, or more if it were possible, during the sixteen years, showing a total, under these two heads, of £280,000 a year.
Sitting suspended from 6.30 to J. 45 p.m.
– The question for us to consider, in dealing with the Bill, is whether it is better that the Naval Loan Act shall be allowed to stand, so that the money necessary for the construction of the proposed naval unit shall be borrowed on the terms I have described, or whether the Act shall be rePealed, and the Government be permitted to find it in some other way before July, 191 2, when the fleet is to be completed.
An armoured cruiser has been ordered, and is now under construction ; but we have not yet been told by the Prime Minister how he intends to provide £3,500,000 during the next two years to pay for it, and the rest of the fleet, which is to be ready in July, 19 12. I do not think that in any Parliament not constituted as this is - where the Government has a large and, if I may say so, obedient majority - an Administration would be allowed to treat honorable members so cavalierly as we have been treated in this matter. In the Parliament of Western Australia, I introduced many measures providing for large expenditures ; but always felt it incumbent upon me to explain clearly and fully to honorable members what was expected to be the result of the proposed expenditure, and how the money was to be found for it. We have not been told how the Government propose to find £3,500,000 during the next two years. If the fleet is to be completed by the 1st July, 19 12, the Government will have to raise, by taxing the people, £3,500,000 in two years. The question is, which is the best course for the Australian people? That is a matter which honorable members opposite will have to take the responsibility of determining, and, therefore, I need say no more about it. I should have very much liked, on an occasion such as this, to hear from the Prime Minister and Treasurer a statement as regards ways and means. I should have liked to know the positionof the finances. When the honorable member proposes to repeal an Act for raising £3,500,000, he must have in view another method of raising that sum. However, as he has not vouchsafed us that information, I can only express the hope that he will make his financial statement at the earliest possible moment. I shall wait for the delivery of the Budget before discussing the financial position of the Commonwealth. In fact, I am not in a position to do so, and* I think we ought not to be called upon to vote on these financial measures, including nearly all the Bills that we have been dealing with during the last fortnight, before we know what the responsibilities or plans of the Government are. We have had to discuss these financial measures without any but the most general information in regard to the present position of the finances, and how they will appear on the 30th June, 191 1. I intend to move no motion in opposition to the- proposal of the Government. The repeal of the Act is not, in my opinion, a genuine action. 1 look upon it as a make-believe, and time will .prove that I am right. It it does not, then I shall be shown to be wrong; but I believe that this is one of those cries that honorable members opposite have persisted in for many a long year while in Opposition. While such cries are suitable for an Opposition when they are trying to gain the citadel, they are quite unsuited to the requirements of the party now they have gained their objective. I believe this proposal to be unwise and contrary to the best interests of the country, but until the whole financial position and the Government’s financial policy are before us, it is impossible for me to speak with authority. I also think that the action now taken by the Government, supported by a large majority of the House, is the beginning of a system of oppressive taxation, which will injure most those whom it is intended to assist. These oppressive burdens, it seems to me, are to be imposed for the sake of taxing a section of the people which is not supposed by honorable members opposite to support them. I reiterate that the proposed repeal of the Act is unwise, and that the policy which dictates it’ will injure most those in whose interests it is said to be put forward.
.- I rise, with great pleasure, to support the Bill. It would be most unwise for the Commonwealth to enter into a borrowing policy for Defence, and I know of no civilized country which has borrowed for that purpose. Great Britain has for many years constructed her huge Navy, and built up her Army, out of revenue, and we should do so also. I am aware that Great Britain has been forced to borrow when involved in war, but she has never borrowed, that I am aware of, for Defence purposes in time of peace. Fancy our borrowing £3,500,000 ito build war-ships which high naval authorities tell us may become obsolete even in eight years. Although it was proposed to put a heavy burden on the shoulders of the poor taxpayers in order to liquidate this huge debt in the course of sixteen years, I hold that if we borrowed in order to create a navy, it would be a disgrace to the legislators of the Commonwealth. I am strongly opposed . to borrowing, because I have gone deeply into the question, and read some of the highest authorities on the matter. I propose to quote from that excellent authority and great barrister-at-law of the Inner Temple, London - John Morrison Davidson. He quotes from the report of a Select Committee of the House of Commons, which sat at the close of the Napoleonic wars in 1815, and it must be remembered that these figures relate to borrowing for the purpose of carrying out a war that was forced on England by Napoleon. The Committee found that the public debt was increased by ,£580,916,019, and, although the taxpayers of Great Britain gave an 10 U for that huge sum, all they actually got was £348,519,612. That means that for every £100 with which the taxpayers were burdened, they got only £60 in actual cash. The author comments -
By this means, on the three per cents alone; the Nation has been squarely defrauded of £232,396,407, and on this fraud it is still paying interest ! Of the whole funded debt of £816,311,939 in 1816, there was actually received but £476,721,058. On this latter net sum something like £2,300,000,000 of interest has already been paid, and we are going on at the rate of nearly ^30,000,000 per annum.
Yet in face of such figures, the right honorable member for Swan and others on- that side recommend us to continue the borrowing policy in Australia. It would be madness to borrow this enormous sum. I have not the reference at hand, but I remember reading an admission made last session by, I think, the ex-Minister of Defence that, although we were going to give our IOU for £3,500,000 under the Naval Loan Act, we should actually receive only about £3,000,000 ; in other words, £500,000 would be swallowed in expenses.
– I never said that. The honorable member should not attribute to me a statement for which he has no authority.
– I am speaking from memory ; and have not had time to look up the reference. 1 put the matter fairly, and I do not think that the honorable member can say that I did not. The Australian States have borrowed £250,000,000.
– The honorable member must not enter upon the general question of borrowing.
– I do not intend to do so, sir. I desire only to show that we should be foolish in entering upon a borrowing policy ; and I seek to clench my argument by pointing out the indebtedness of the States.
– We know all about that. . .
– Perhaps so; but one would not think so, having regard to the way in which the Opposition advocate a borrowing policy. It is said that the State could not carry on without borrowing, and that it is wise to borrow for reproductive works. If works are likely to be reproductive, however, there is no need to borrow to provide for them.
– The honorable member must not deal with the general question.
– I regret that I am restricted within such narrow limits. I wish to show why the Labour party are opposed to a borrowing policy. We object to borrowing because it places on the taxpayers a terrible burden, and we hold that it is wholly wrong to borrow for defence purposes. We are asked “ How, then, shall we get the money with which to construct our Navy?” I do not hesitate to say that if I had my way, we should obtain from the landlords of Australia sufficient to pay for our defence. The workers are willing to serve in the ranks, as I have served ; they are willing to lay down their lives, if necessary, in the defence of their country ; and the least the other side can do is to give back a little of the wealth they have taken from them by paying out of their land revenues for the defence of the Commonwealth. We have a rich country, and surely we ought to defend it. Mr. Knibbs tells us that in New South Wales, South Australia, Victoria, and Queensland, last year the raw products going into the factories were valued, in round, figures, at £52,000,000, and that after they had been made up into manufactured articles, by human labour and the use of machinery, they had the enhanced value of £86,000,000, or an increase of £34,000,000. Assuming that the wages bill and cost of superintendence absorbed £I5, 000, 000, and allowing 10 per cent, in respect of machinery, factories and lands, which would absorb, approximately, £4,000,000, we have a balance of £15,000,000 which has gone into the hands of a few people ; and we ask those people to give a little of that enormous sum towards the defence of Australia.
– How is the land tax going to enable us to get at those men?
– If the honorable member consults Michael Fleuschiem, who went from Germany to England, and did so much for the Old Land, he will learn that a land tax is the only impost that the landlord cannot transfer to the shoulders of his tenant. I should not be in-order in explaining why that is so; but at some future date I hope to be able to do so. Our policy is sound. We believe that the Commonwealth should not borrow except in case of extreme emergency, or for work that will be immediately reproductive.
– The proposed note issue really means a borrowing policy.
– I admit that it may be so regarded; but under that system, we shall not experience the misfortune of having to pay interest. Honorable members may laugh; but if they know anything of political economy, they must recognise that the gold of which they speak so much is inanimate. It is dead, and they favour a naval loan policy to give life to it. Capital is alive only when it can, vampire like, suck the life’s blood out of the workers. That is why gold must be kept moving. In putting a stop to the policy of borrowing, we shall strike at the bed-rock of the capitalistic system ; and that is why the Opposition are so strongly opposed to our proposal. Our opponents speak of their energy ; but who ever heard of a man becoming wealthy-
– The honorable member must confine himself to the question before the Chair.
– I am adopting the line of argument followed by the right honorable member for Swan.
– I did not understand the right honorable member for Swan to follow the same line of argument ; but if he did, he was out of order; and the honorable member will not be in order in adopting it.
– Then, I trust that the Opposition will henceforth confine themselves strictly to the Bill itself, and not attack us as if we were political ignoramuses. I desire to show that we are working on a sound economic basis, and that the Opposition know that we are. In the old days, the capitalists in England prayed for a war so that they might be able to let out their money and burden the workers with the payment of interest as they have been burdened for many years.
– Who told the honorable member that?
– Personal experience has taught me. Judging by a reference which the honorable member made to me recently, he knows a little about my private affairs. I cannot say whether he obtained the information from a bank; but I have sufficient sense not to allow any capital to remain idle. But to return to the question from which I have been drawn by the interjections of honorable members opposite, I wish to show, not only to honorable members, but to the people generally, that we know what we are talking about. I hope that the day is far distant when Australia will have to borrow either for land or naval defence. What security should we have to offer for a naval loan? Something that will be obsolete, the authorities tell us, in eight years.
– Sixteen years.
– It may be sixteen; but if the honorable member goes into the question fully, he will find that the life of the average war-ship at the present time is only eight years, and with the rapid progress which is being made in aerial war-ships, I question whether they will not become obsolete in a much shorter period. In conclusion, I wish to congratulate the Government upon having brought forward this measure at such an early date in the session. By passing it, we shall save the taxpayers of this country a considerable sum of money. Under the Naval Loan Act of last year, we should have borrowed £3,500,000, and for it we should have been required to repay in interest and principal, during the next sixteen years. £4,480,000. If we construct our Navy out of revenue, we shall save the taxpayer that enormous sum, and if we do that we shall have done a work which will well warrant our being sent here to represent, not a section, but the majority of the people of Australia, namely, the workers.
.- This Bill is worthy of some praise in that it is about the shortest that has yet been presented to Parliament.
– And it is the most effective.
– It will be decidedly effective. The Act which it seeks to repeal is one which provides for the purchase of an Australian Navy by payments distributed over sixteen years. The proposal of the present Government is that that. Navy shall be purchased out of revenue, and that the payments for it shall be spread over five years. It will be seen, therefore, that the difference between the -two schemes represents a period of eleven years. Upon all occasions when the policy of borrowing for the creation of a navy has been discussed in this House, a great deal has been made of the fact that Great Britain pays for her Navy out of revenue. But surely it was to be expected that an old-established country, with a history extending over nearly 2,000 years, would pay for its defence out of revenue.
– She did so from the very earliest times.
– But we cannot compare the period when bows and arrows were used in warfare with the present, when battleships cost about £2,000,000 each. The more the Naval Loan Act of last session is examined, the more just does it appear to be. It provides for the repayment of the money by means of a 5 per cent, sinking fund within sixteen years. It also enacts that if the Commonwealth has any surplus revenue available that revenue shall be devoted towards the redemption of our naval loan. Now the life of a modern battle-ship is considered by naval experts to be about sixteen years, and consequently by the time our vessels became obsolete the loan expended upon their construction would have been pain off.
– Admiral Beresford sets down the life of a battle-ship at ten years.
– The majority of naval experts set it down at about sixteen years. Of course, a great change may occur at any time - a change which nobody can foresee - and one which may entirely alter the life and utility of these vessels. The invention of a new submarine or of a new type of air-ship may render them obsolete to-morrow, and we should then be burdened with a dead asset. But in purchasing an Australian Navy it seems to me a proper thing to provide for a sinking fund of 5 per cent., so as to enable our naval loan to be redeemed in not more than sixteen years. Great Britain is a country which is fully developed, whereas Australia contains a vast territory, but only a small population. We require every shilling that we can command, both of public and private money, in order to develop it. It has cost more than £250,000,000 of Government money, in addition to £100,000,000 of municipal expenditure, to settle upon our lands the population which is already there. I do not know how much private money has been borrowed.
– It has cost £480,000,000 of private money to settle four millions of people in Australia.
– Order !
– Did the owners of private money lend it without security?
– There has been no hypothecated security of any sort.
– Order ! The honorable member must not deal with that question.
– If the Naval Loan Act of last year be repealed, we shall have thrown upon us the burden of paying off the cost of our Australian Navy within the next five years. Now, I hold that if we are to succeed in building up this great country, we require every shilling, both of public and private money, that we can command. There is room in Australia, not only for public, but also for private enterprise, and for any amount of the latter. Viewing the question from a national stand-point, I fear that under this Bill we are setting out to stifle private enterprise.
– Private enterprise does not provide battle-ships.
– But it will supply the sinews of war. It will develop Australia, if it be allowed to do so, in a way that public enterprise cannot develop it. It is impossible to associate public enterprise with pioneering work. I feel sure that if we summarily repeal the Naval Loan Act of last year we shall simply be taking money out of one pocket in order to put it into another pocket.
– We shall take a little of it out of the rich man’s pocket and put it into the Docket of thepoor man.
– I should not have the slightest objection to that. But will that be the result of passing this Bill? Experience has shown that the diversion of money in that way does nothing but harm. As a matter of fact, the money would not find its way into the pockets of the poor man. By stifling private enterprise, we should only injure the working man.
– Order !
– It is very difficult to refrain from replying to misleading interjections. This Bill embodies a great question of principle - the question of whether or not we are going to initiate a borrowing policy in Australia. My own opinion is that loans should ‘be authorized only for reproductive public works. I have always held that view. Of course, it may be said that an Australian Navy would not be a reproductive asset.
– It would be.
– At any rate, it would protect many a reproductive asset. Life is pretty well a choice of alternatives, and we cannot always get exactly what we want, but have to take the best that we can get. In the present instance, we have either to borrow £3,500,000, and to repay it by annual instalments of 5 per cent., extending over sixteen years, which is the life of a modern battle-ship, or we have to take it from the wages fund of this country. The capital of Australia was estimated by Mr. Coghlan to be about
– It is now£1,200,000,000.
– Mr. Coghlan’s estimate was made five years ago, and that is the only calculation that we have had concerning this most important fact. I have spoken to the Commonwealth Statistician, Mr. Knibbs, about the matter, and he points but that it is very difficult to arrive accurately at the total wealth of the country.
– It is impossible ; such an estimate can only be a guess.
– Will the honorable m ember confine himself to the Bill ? If I allow him to proceed on the line he is pursuing, other honorable members will wish to reply to him.
– What I was desiring to point out was that we have either to borrow the £3,500,000, with a redemption fund at 5 per cent., which would pay off the loan in sixteen years, or we have to take the money out of the pockets of people who would otherwise invest it in private reproductive enterprises. We cannot have the matter both ways. We must either borrow or diminish the capital of Australia to this extent. The late Government, faced with the same position, thought that it was a reasonable thing to borrow the money, remembering, of course, that Australia was a new country, and that we are not only paying our way, but compelled to build railways, to erect buildings, to construct tramways, and to promote enterprises in every direction. I consider that it would be a most popular thing in England for Australia to borrow £3, 500,000 for this purpose. Our creditors would be glad to see that the people of Australia were borrowing for the purpose of constructing a splendid navy which would protect the £250,000,000 which they have invested in this country. Mr. Coghlan estimated the total income of Aus tralia at £179,000,000 per annum, of which £127,000,000 was enjoyed by people having an income of under £200 a year, and £52,000,000 by those having an income of over £200 a year. Of the latter sum about one-half was calculated to represent the incomes of professional people, leaving £26,000,000 as the amount available to employers and the class of people who have to pay interest on borrowed capital, and to invest money in various ways, with the object of enlarging their business. If honorable members opposite will consider the matter for a moment they will realize how much has been done during the last twenty-five years to develop Australia out of this great savings fund. Look at our steam-ships. I had the misfortune to travel twenty-five years ago in the horrible litle cockle shells that ran along our coasts. Now I travel in palatial steamers, which have been built almost entirely out of the savings of private individuals. It is now proposed to trench on this investment fund, and to exhaust it to some extent ; for Australia cannot at one and the same time enable these people to have savings to invest in building up this great continent, and also refrain from borrowing. If it has cost £480,000,000 to put over 4,000,000 people on this continent, I calculate that it is going to cost at least £200,000,000 to settle another 4,000,000 here. We have, of course, done a great deal of work, and have made the country quite good enough to carry, perhaps, 10,000,000 without duplicating very many of our undertakings. But, at the same time, we require to develop this continent to a far greater extent, and to make it a place where 10,000,000 or 20,000,000 people can live. If we are going to trench in every way on the revenues available for private enterprise, we shall prevent Australia being developed as we desire. You, Mr. Speaker, are not permitting a general discussion on this Bill ; you are confining debate entirely to the question whether the Naval Loan Act shall be repealed. Therefore, I have to confine my remarks to the point actually before the House. But I may be permitted to say that, in my opinion, we are differently situated from the people of the Old Country. They can meet their expenditure out of revenue, but we in Australia, while paying for development, have to draw upon our capital as well. We are just starting. We have 15,000 miles of railway where we ought to have 50,000 miles ; we have 4,000,000 of people where we ought to have 40,000.000. If in developing this continent we are going to proceed in a huckstering spirit, and to say that we will have no loans unless we can see an immediately profitable return, we shall not build up this country. Therefore, I think that the Government are not doing well for Australia by cancelling this small Loan Act for the raising of £3,500,000.
.- The right honorable member for Swan used the word “ sham “ very frequently in his speech. He said that this Bill to repeal the Naval Loan Act was merely a sham - a political cry. Now the word “sham” means something unreal, false, and deceitful. But if there is anything real about our proceedings at present it is the proposal of the Ministry to repeal the Act in question. To find reasons why we should repeal it we need to go back a year or two to the initiation of the panic that was responsible for the measure. There was a panic originating in the Old Country owing to the efforts of politicians who wanted to displace the Government then in office, aided by the ship-builders whose yards and plant were comparatively idle, and who wished to furnish employment. There was an outcry that the country was in danger. Honorable members will recollect that when Sir Josiah Symon came back from England, he stated publicly that it was freely admitted that the cry that the Empire was in danger was a political move on the part of some interested parties.
– Order ! Will the honorable member confine himself to the Bill?
– With great respect, I am giving reasons why the Naval Loan Act should be repealed. I want to show that it was passed in a state of panic. It will be remembered that there were certain newspapers-
– Order ! The honorable member cannot pursue that lineof argument.
– I cannot show why this Act should be repealed without offering some arguments in favour of that course, and the argument that I offer is that the Naval Loan Act was brought forward by the right honorable member for Swan and others as the result of a panic created by newspapers for interested purposes.
– That was eight months ago.
– The Daily Telegraph of Sydney published a leading article in which the statement was made that the Empire was in danger, and on the same date a leader to the same effect appeared in a newspaper published in one of the other States. To my mind the object was similar to that of those who were responsible for the panic in the Old Country, and it was to damage a certain political party. Honorable members opposite wished to have something to say against the members of this party. They created a panic, and the Naval Loan Act was the legislative outcome of it.
– There was a bit of a panic .on 13th April last.
– The verdict of 13th April was won-
– The honorable member must confine himself to the question.
– If you had allowed me, sir, to finish my sentence-
– Order ! I have allowed the honorable member some time in which to connect what he is saying with the question before the House, but he has not yet clone so.
– I respectfully submit that the proposed repeal of the Naval Loan Act opens up the whole question of a borrowing policy.
– Order ! I have already ruled repeatedly that it does not. If the honorable member will look at the title of the Bill he will see that it does not open up the question of a borrowing policy at all. It deals specifically with one matter to which I ask him to confine his remarks.
– With great respect I remind you, sir, that this is a Bill to repeal the Naval Loan Act. Honorable members opposite have taken up the position that we have no right to repeal that Act, and that if we do so we shall be taxing the people of Australia wrongfully. Surely I may, in the circumstances, be permitted to show reasons why we should repeal the Act? I was about to say that on 13th April-
– Order*! The honorable member must not continue that line of argument. If he does I shall have to ask him to resume his seat.
– I shall put it in this way. We received the mandate on the 13th April last to repeal the Naval “Loan Act. We are now carrying out that mandate, and when the right honorable member for Swan accuses us of being guilty of a political sham he does something which he has no right to do. The Naval Loan Act was passed by a majority constituting the party now represented by honorable members opposite in a time of panic and without any mandate from the people of Australia, because they were not prepared to adopt a form of taxation, which we are prepared to adopt, in order to find the money required for naval defence purposes. While the right honorable member for Swan complained that the Treasurer had not indicated where he was going to get the money, he admitted that honorable members on this side proposed to get it from land taxation. It is claimed by honorable members opposite that if we resort to land taxation we shall be depriving the producers of Australia of the wherewithal to pay wages and carry on the development of the country. I ask how in the name of all that is reasonable we are to carry on the development of Australia by borrowing £3,500,000 for the construction of war vessels? Is not the proposal of the party on this side to raise money for such a purpose by land taxation a better one than that of honorable members opposite, which was to raise the money bv taxing the people indirectly through the Customs? They suggested no other means of raising the money required. They proposed no direct taxation, no income tax or land tax, and if they mentioned any form of taxation at all for the purpose it was a proposal to tax the tea used by the people of Australia.
– There never was any such proposal made, from this side.
– Who made that proposal ?
– The proposal was made by newspapers representing the politics of honorable members opposite.
– Order ! I ask the honorable member not to follow up that line of argument.
– I respectfully submit that I should be allowed to show the distinction between the policy adopted by honorable members opposite and the policy of this side, as disclosed in this proposal to repeal the Naval Loan Act.
– Exactly, but the honorable member need not quote the election lies which were told throughout the country.
– I submit that honorable members opposite could suggest no way to obtain the money required to meet the loan of £3,500,000 for which the Naval Loan Act provides other than the indirect taxation of the people. The proposals of the present Government are more economically sound and equitable than were the proposals of honorable members opposite, and people need not fear the action of this Parliament in repealing the Naval Loan Act. There are people in this community who may well be asked to bear some of the expense which’ will be rendered necessary by the repeal of the Naval Loan Act. The millionaire is not unknown in the Commonwealth.
– There are very few of them.
– Only the other day we were informed that a man who had died left £3,000,000. If he were alive to-day he would be a proper person to appeal to to provide some of the £3,500,000. The Melbourne Argus, which is a keen supporter of honorable members opposite, mentioned recently that about ,£1,500,000 per annum could be raised by means of a land tax. That money might very well be used to assist in paying the £3,500,000. But 1 take it that the real reason for proposing the repeal of the Naval Loan Act is that we, on this side, propose to pay as we go for defence purposes. I do not think it would be right for us to retain the Naval Loan Act on the statute-book and raise £>o! 500,000 which would probably have to be paid by the people who will come after us. It is possible that some honorable members present will be alive twenty years hence when this money would have to be repaid if the Naval Loan Act were allowed to remain on the statute-book, but I have said that we believe in paying as we go. The Australian citizen who is working for wages is doing a very great deal now for defence, and the people who are not doing what they ought to do are those who own large landed estates, but who will probably be called upon during the next few months to contribute more equitably to this end.
.- The honorable member who has just resumed his seat started by saying that the Naval Loan Act was brought into existence at a time of panic, and he went on to detail the particular kind of panic. It was not, according to him, a genuine panic, caused by genuine danger, but a panic engineered for political purposes and for the private ends of those interested in ship-building. I should be very loth, indeed, whatever my political views, to place so low an estimate on patriotism and national watchfulness as to suggest that the ebullition of Imperial patriotism that reached its culminating point some eight months ago was due to no higher, no loftier motives, than that to which he alluded. The honorable member went on to say that the reason he desires the Act repealed is not that there was no justification for the panic, but because the party to which he belongs desires that we shall pay for our defence as we go. I venture to think that no more casuistical invention could be framed - no two more conflicting Bills could be introduced on one and the same day - than the proposal we have before us to do away with a Naval Loan Act that sought to raise £3,500,000 to build ships that were not merely to represent the platform appeals of mouthing platitudes, but meant to meet a great pressing Imperial danger, and a Bill which in truth does not seek to borrow money, but which seeks to take money without interest by pledging the national security and credit.
– The honorable member must not refer to that matter.
– I am afraid that I shall be in some difficulty if I am not allowed to refer to the other methods of the Government for . raising money. The honorable member who preceded me referred more than once to the Government’s more direct systems of raising money by taxation, though he did hot tell us the particular system that is to take the place of honest borrowing.
– The honorable member must not discuss that matter.
– If you rule me out of order, Mr. Speaker, there is very little use in my contesting your decision.
– The honorable member must not speak in that strain.
– I mean to convey that I feel it absolutely useless to attempt to prevail against your decision in the judgment of this House ; and that is obvious to every one who realizes the position you hold, and my incapacity to correct honorable members in their mistaken judgment. I made some notes of the honorable member’s speech, but I find that I am not permitted to refer to those other methods of raising money, such as robbing the till or debasing the currency.
– The honorable member must withdraw that remark.
– I withdraw the remark if it is ruled, that I am not permitted to make that reference.
– The honorable member must withdraw the remark.
– I do withdraw it; though I cannot understand the freedom with which the honorable member for Cap.ricornia was able to refer to other methods of raising revenue, such as land taxation. In the course of his remarks, he made an appeal to the prejudices of this or that section of the people by saying that the particular section that was to be attacked under certain class legislation should pay for the defence of this country. All I have to say is that I think the liberty we enjoy in Australia to-day - a democratic liberty that is shared by every fellow citizen, is surely worth fighting for and safeguarding, apart from considerations of class or selfinterest. Surely there can be nothing grander to contend for than that democratic liberty which entitles honorable members to take their seats before you, sir, in this Chamber.
– And even to allow the honorable member to address this Chamber.
– 1 can admit that the enjoyment I have in addressing this Chamber is one which I owe largely to the perfunctory kindness of my honorable friends opposite. All the same, without casting any reflection on the honorable member for Gwydir, any more than he casts on me, I can only say that even if I am not more fit than he is to address this Chamber briefly, I cannot do so at such length. The causes that called this Naval Loan Act into existence were not causes over which we had any control in Australia; they were furnished in the preparations of the Empire’s enemies ; and even while we continue in this country to mouth our platitudes, those enemies are constructing their engines of destruction. If my honorable friends opposite, by any other system in their power, can raise the necessary money as quickly by more honest means, well and good. No one will be more pleased than I if, by any other methods of financing, they can, with equal celerity, bring into being this Fleet of Australia, this unit of the Imperial Navy that the late Government created. As honorable members know, in the last Parliament I expressed the view that the defence of the country should be met out of revenue and that only in times of great national crises, when defence was necessary to be improvised before revenue was possible to be raised, should we break the rule.
– I think the honorable member voted the other way. Why has he changed his opinion?
– I have always held that opinion. All I say is that the responsibility to finance this Fleet’s construction without delay rests on the shoulders of the Government.
– And the Government are prepared to take it.
– As a new member, unused to interjections, and incapable of taking my own part, I appeal to you, Mr. Speaker, to assist me to make my remarks as clear and as brief as possible by saving me from the particular type of interjection to which I have recently been subjected.
– This is terrible!
– From the Treasury bench - a place which, in his wildest dreams a few years ago, he never hoped to reach - the Minister of Trade and Customs says, “This is terrible!”; but some people are never satisfied. The responsibility rests on the Government, and they must see that the Fleet is called into efficient being as early as it would have been by the late Government under the powers given by the Naval Loan Act. If they do not, they are taking risks with the security of the Commonwealth, and if they take those risks, they are endangering the liberty of every Australian citizen and the security of the Commonwealth as a whole. The question is too big to be played with, and the Government should show how they propose, apart from loans, to raise the money with which to build the ships. If they can raise the money without recourse to certain devious methods, which I feel it is out of order to accurately describe - if they can do this honestly, and are really raising the money out of revenue - well and good ; no one will be better pleased than I, who wish them Godspeed, and bid them go ahead ! But if they cannot, let them cease the cant and hypocrisy of pretending to repeal Acts, even while seeking other and not more honest means to achieve their object. I desire to make my position clear, though I do not know whether I am out of order in recommending the Government to adopt the ordinary common-sense methods of capitalizing the value of what they hold after computing its life and yearly paying into a trust fund out of revenue an amount equal to the year’s fractional part of the total capital cost. The amount provided for in the Act which it is sought to repeal is £3,500.000. Were the total capital value to be £3,500,000, and the probable life of the ships ten years, the Government should pay into a Trust Fund annually £350,000, so that when the capital value had ceased to exist by reason of the deterioration and obsolescence - to coin a word-of the Fleet, there would be a sum accumulated from revenue more than sufficient to replace it. We must deal in a comprehensive, businesslike way with every great public instrument such as that which it was attempted to create under the Naval Loan Act. If honorable members are real patriots, whose patriotism carries them torward beyond the hustings, they must make great sacrifices, not only to give effect to this or that party fad, but tq make the country secure by some sane measure of defence. Whilst I support the repeal of the Naval Loan Act, 1 wish it to be understood tha<t I hold that the Government should show conclusively that it can raise immediately the necessary funds by taxation, and can meet the danger that menaces us in a more honest way than that proposed by the late Government
Mr. ATKINSON (Wilmot) [8.57J.- Last session the Fusion Government, in providing a new military and naval defence system for Australia, created an epoch in British history. Its proposal Cor financing its scheme gave rise to great discussion. Ministers wished to borrow the money needed to pay for the ships which were to be built; and, in my opinion, that, considering the circumstances of the time, was as good a proposal as could be made. To satisfy the national aspirations of the people, the ships were required quickly. There was not money in the Treasury with which to pay for them, and it was proposed to raise a loan which we had justification for thinking would be repaid within ten or twelve years.
– The proposal was eighteen years.
– The loan might have been repaid in ten years. Under the Fusion Government’s arrangement, the naval unit could have been provided for without the imposition of additional taxation. The sum of £3,500,000 was to be borrowed at 3J per cent, interest. The community would have done better by borrowing the money at that rate, keeping its own funds in its pocket, than by taxing tself to find the amount, because it could earn more than 3J per cent, by investing its own money in ordinary commercial enterprises. I have no objection to the course which this Government asks us to take; but I do not think that it will do better for Australia :ha>! the Fusion Government did. That Administration introduced a sound and continuous defence policy. Its action in that respect will live in history. Future generations of young Australians will have their attention directed to it in their history books, when most of the other projects about which we are now talking have sunk into, perhaps, well-merited oblivion.
– The Attorney-General made history in the’ matter of defence.
– It was the Fusion Government which gave effect to the people’s aspirations for a proper defence system.-
– What about the Dreadnought ?
– It is being built, and the present Government will have to pay for it. This Government is going to carry out the defence policy initiated by its predecessor. If it can obtain, out of the ordinary revenue, enough money to pay for defence, it will do well; but it must be careful to see that the development of the defence system is not retarded. The people indorsed what we did ; but we must keep going, and much money will be needed. If, whenever a new ship is required, or some fresh expenditure is necessary, new taxation has to be proposed, the electors will not respond readily. But we must have a defence system which will be adequate in time of war. I hope that Australia will grow so fast that, although our defence expenditure may increase, the cost per head of population will not increase. It seems probable that it will be difficult to provide efficiently and adequately out of revenue for our defence. Defence preparations cannot be delayed until war breaks out. When a country has been plunged into war, it is too late to commence borrowing for the building of a fleet. A nation, for its own protection, should, at all times, show possible invaders that it is strong enough to repel their attacks. Australia must put herself into a position to do that. The call upon us is not so heavy as it would be were we independent of Great Britain. It would be very difficult for us to build and maintain a fleet which could meet that of Japan.
Our task is made lighter by the fact that we are a member of the co-partnership of nations known as the British Empire; but we must do our share in the defence of that Empire, and, if we have one obligation more pressing than another, it is to maintain an efficient naval defence. If this Bill will interfere with or curtail, the scheme started last session, I hope it will not be passed, but the Government have taken up this policy, and the onus of keeping our defence up to a better standard is upon them. If they are able to do it out of revenue, every one in this House will be satisfied. It is to naval defence that Australia and the Empire must look. The Navy is our first line of defence, and we shall be plunged from time to time into a large expenditure if we are to do our fair share towards the defence of ourselves and the Empire generally. It will, therefore, be a very serious matter if there is any danger of impairing our defence system. The Government, however, appear to have made up their minds to repeal the Act. The Bill is short - perhaps the shortest that will be introduced this session - but it means a lot, because if we in this House are not very watchful there will be a great danger of the scheme of defence which the Parliament adopted last session, and which I am sure the country indorsed, not being carried out as we intended.
– What is the danger?
– The danger is that the Government, by repealing this Act, may put too heavy burdens on the shoulders of the producers and the people generally, so that when we want the large sums of money that will soon be required the people may not be prepared, and, in fact, may not be able, to find as much as the necessities of the case will demand. If that ever comes about, a most grave and serious danger will at once present itself to Australia. I sincerely hope it will not. The Government, by implication, although not directly, are telling the House that the danger will not arise. The onus is upon them, and I hope, for Australia’s sake, that their prophecy will be verified.
– I am rather surprised at the speeches which have emanated from the Opposition on this question. They remind me of the saying that if those who fan the flames of war and urge on nations to fight, per medium of newspapers and so forth, had to do the fighting, they would not be quite so bold. It seems to me that the boldness is very much taken out of the side which honorable members opposite profess to represent] - the wealthy people of this country - when it is proposed to touch their pockets in order to pay for our defence. The beauty of the situation is that the Mother Land, when the recent panic arose, did not propose to go in for a borrowing policy to build more Dreadnoughts. She did not make little of herself before Germany by saying, “ We will float some large loans to get a few more Dreadnoughts.” Her credit is good, and she could borrow plenty of money if she wished, but I am proud to think that the patriotism of the British people in England, Scotland, and Ireland was very much greater than the patriotism displayed in the speeches of honorable members opposite to-night. It was immediately proposed in Great Britain to put on higher taxation to meet the increased expenditure on naval defence. I should therefore hope that what we have heard this evening is more an attempt by the Opposition to mark time than a serious effort to burke the patriotic step which the Government propose to take, of repealing an Act of which I, as a young Australian, am absolutely ashamed - a measure which would have inaugurated our defence system by borrowing. It is miserable, mean, and unpatriotic to take up that attitude. I cast my mind back to the time when the French received that awful blow from the Germans. When they had to pay the enormous indemnity, did they borrow or propose to borrow ? They set to work with the grandest spirit of patriotism imaginable, and raised the money, and paid Germany. I hope that a similar feeling will animate the breasts of all Australians, rich or poor, so that we may establish a proper system of defence, and pay for it ourselves.
– The French bor rowed scores of millions.
– They certainly borrowed, but they found millions besides. My honorable friends opposite are rather peculiar on this question. They seem to want to play a joke on the public by confounding the financing of undertakings among ourselves with a policy of borrowing money from foreign countries. The broad difference between the two things is that we ought to have sufficient patriotism to find the money required for defence purposes, and not go to others for it. There seems to be a great flutter in the dove-cots of the wealthy the moment we propose direct taxation to find this money.
I am ashamed of them. I wish all Australian citizens well, and would never give a vote in this House to cripple any legitimate enterprise. I was astonished at the argument of the honorable member for Fawkner that the raising of less than £2,000,000 in Australia would stifle private enterprise. That is altogether too thin. I hope this excrescence on our statute-book will soon be. wiped out. I am sure it will be, because the numbers against it are quite strong enough. I wish to refer to the case of little Switzerland, under whose defence policy those who are able to serve train themselves for the fighting, while those who do not serve are taxed to help to pay for it. In Australia we are, by this step, starting a system whereby not only those who will do the fighting, but all of us, will pay for it, and I trust there will be found sufficient patriotism in the general public, whether they are rich or poor, and whether engaged in large or small enterprises, to stand by die Government in the policy of finding the cash within the Commonwealth to provide for our own defence.
– The honorable member who has just resumed his seat described the Act which this Bill is intended to repeal as a mean and despicable means of providing for the defence of Australia. I take a different view. I see nothing mean or despicable in making a purely financial arrangement, and spreading the expenditure involved over a certain number of years during which that expenditure might be considered to be operative. I defended the Naval Loan Act when before the public, although, when previously a member of this House, I resisted on several occasions any proposal for the Commonwealth hastily adopting a policy of borrowing for public works. In expressing my opinions on those occasions I drew a distinct line between what I considered justifiable and ‘ unjustifiable borrowing. The Act which this Bill is to repeal was plainly within the lines of justifiable borrowing. It was necessary at the time to do something in the way of naval preparation to defend this country. It was impossible, however, for the Commonwealth, having regard to the financial circumstances in which it was then placed, and as it is placed to-day, to provide sufficient to make those defence arrangements effective within a reasonable time. The Commonwealth Parliament would have been wanting in its duty to the taxpayers if it had declined to provide for the de>: fence of the country until it could vote the lump sum involved, and I hold that it was to be praised for doing the best it could in the circumstances. The honor-: able member for New England, in con!trasting the action taken by the last Par:liament in passing the Naval Loan Aci with the position in England, totally misunderstands or forgets what was the financial circumstances of the Commonwealth at the time. The Commonwealth’ Parliament was not empowered then, nor is it to-day, to spend more than onefourth of the Customs and Excise revenues for its own purposes. It had, and has, to return to the States three-fourths of those available revenues, and in the clrcumstances I hold that it was utterly im-. possible for it then to make anything like adequate provision for the naval defence of Australia without departing, from the policy of not too hastily rushing into the money market. As a business man, I should have to occupy only three or four, minutes in expressing my opinion on the measure immediately before us. I should say at once, that although I had supported the Naval Loan Act when before the; electors, I would agree to its repeal if the Government had brought the business before us as it ought to have done. But we are asked to commence at the wrong end. We are asked to . repeal the Act before we have made any other provision, and indeed, before we have had placed before us by the Treasurer a statement of the finances. No honorable member beyond those on the Treasury bench or others who may he iri the confidence of the Treasurer knows exactly what were the operations of the revenue and expenditure for the financial year just closed. We do not yet know what the estimated revenue is for the current financial year. We have had rushed within our purview a sheaf of financial measures that will occupy our attention before the session ends, and it is upon the outcome of these alone that we can come to a reasonable business-like con-: elusion with respect to the Bill before us.: If I knew now what would be the result of the other proposals made by the Government I, as a business man, should not hesitate two minutes to vote for the re-: peal of the Naval Loan Act, although, as” I have said, I think that the policy of borrowing for naval purposes was in the circumstances eminently justifiable. It was proposed to repay the amount borrowed within sixteen years, and it was the. confident anticipation of those who had the .responsibility of bringing the Bill before the last Parliament that they might be able to repay it at the end of ten years or before the expiration of the anticipated life of those engines of war on which we were going to spend the money. In such circumstances I should defend such an action, but if the present Ministry can show me that they are in a different financial position j that they have the revenue necessary to carry on the Government of Australia, and to meet this extraordinary expenditure for naval defence purposes, then I shall vote for the repeal of an unnecessary Loan Act. While I do not say that I am not opposed to any unnecessary borrowing on the part of the Commonwealth, I take up my old attitude as a business man, and say, “ If the Government can show me any national work that is absolutely required, and to provide for which it proposes to borrow, subject to a provision that the loan shall be redeemed within the period that may be confidently regarded as contemporary with the life of the work to be created, I shall not resist such a business proposition.” At the same time, if they could show me that their revenue for the year, and the year after next, would meet all requirements, I should be wanting in that business experience which I hope I possess if I voted for the Commonwealth borrowing that which could be provided for out of revenue. If the Treasurer would bring the business before Parliament in the way I think that he ought to do - we have the right to know all the transactions for the past year, to know what the Treasury has received in the shape of revenue, what it has expended, how far that expenditure has exceeded the Estimates placed before the last Parliament, what savings have been effected, what is the anticipated revenue for the current year, and, further, if there is a shortage, how the Government intend to make good that shortages - we should be able to come to a vote on this question in two minutes. The Government, of course, must take the responsibility of the whole of the financial arrangements of the Commonwealth, and therefore I am going to vote for this Bill, but I do think that they should enable us to discharge our duty to our constituents in a more reasonable manner than we are able to do when we are called upon to vote blindly and in the dark upon measures of this kind. If they could tell me that as the result of legislation soon to engage our attention they have reason to believe that they will receive from £1,000,000 to £1,500,000 extra revenue next year ; that the adjustment of the financial relationship of the Commonwealth and the States will relieve them next year from any obligation in that regard beyond a certain fixed amount, and that these altered circumstances and the profits likely to be derived from other measures will enable the Commonwealth to provide for the adequate defence of Australia, I should be the last in the House to defend a loan. I hope there will never be any division of opinion between the two sides of the . House as to the absolute necessity for the defences of this country being sufficient to achieve the end of defending Australia. The Government are taking up this responsibility, and I shall vote for the second reading of the Bill, but I certainly regret that they do not place private members in a position to accept the responsibility of deciding which way they ought to vote by giving the House that information upon which alone we can come to a definite and reasonable conclusion.
– This is the first occasion on which I have addressed honorable members, and I intend that my remarks shall be brief. Before discussing the Bill itself I should like to refer to one or two arguments that have been advanced by the Opposition. It was rather amusing ‘to hear the right honorable member for Swan at the very exordium of his speech declare that he was not going to oppose this Bill. In this connexion, it was gratifying to find in him a Solomon come to judgment, and I was really anxious to learn how many members of the Opposition had, at last, recognised the error of their ways. I am pleased to note that almost every Oppositionist who has spoken upon this Bill has confessed himself a convert to the proposed repeal of the Naval Loan Act of last year. The right honorable member for Swan spoke of the percentage of loan moneys that have been expended upon railways as a justification for the expenditure of loan moneys for naval purposes. But he must recognise, even better than I do, that there is no analogy whatever between the expenditure of money upon railway construction, which is a reproductive work, and its expenditure for the purposes of naval defence. The right honorable member also cast a stigma upon honorable members on this side of the House, and upon their constituents, when he declared that the supporters of the Labour party have no enterprise. That, in my judgment, is an insult to the electors, seeing that, on 13th April last, they returned the Labour party with a majority. The right honorable member will yet have to account to his constituents for that gratuitous insult. Then, in answer to the arguments adduced by the honorable member for Capricornia, who urged that the Mother Country had never yet borrowed for defence purposes, the honorable member for Fawkner declared that there was no analogy between Great Britain and Australia, inasmuch as the former is much older than is the latter. But I would remind him - and it is a tact with which every student of British history is familiar - that, from the very earliest times the people of Great Britain have refused to countenance borrowing for defence purposes. The wealth of that country has always been levied upon to provide for its defence. In its early history the kings of Great Britain were the property-owners of the country, possessing as they did towns and manors, and levying rent charges on other towns which they did not possess. In that way they were rendered liable - as were also, the nobles from whom exactions were made - to contribute to the cost of the defence of the country. I come now to the honorable member for Wentworth, who, in his characteristically grandiloquent style assured us that the naval loan authorized under the Act of last year was justified by the preparations which were being made by the enemies of the Mother Country. Need I remind him that similar arguments were adduced at the time of the Dreadnought scare. But where is that scare today?
– From the cables of two days ago the honorable member ought to have seen where it was.
– We hear very little about it now. When a representative of the late Fusion Government returned from the Imperial Defence Conference, was he able to say that our offer to present a Dreadnought to the Mother Country had been accepted with open arms ?
– Order !
– I hope, sir, that you will permit me to complete my reply to the honorable member for Wentworth. The Mother Country politely but firmly refused our contribution of a Dreadnought. Upon his return from the Defence Conference in London, the representative of the late Fusion Government was only able to say that he had cadged £250,000 from Great Britain to help us to create the nucleus of a fleet here.
– Then vote in favour of refusing that offer.
– I am very pleased that it has not been allowed to go forth to Canada, the Argentine, and other countries which provide for their defence in other ways than by borrowing, that the Commonwealth has been reduced to that expedient. I am gratified to be able to support this Bill which will repeal the Act passed last year under which an undeserved reflection was cast on the manhood and the national pride of this country. What was the proposal of thelate Government? To establish a naval unit to be built in England with £3,500,000 which was to be borrowed from the Mother Country. That was the last act of the Fusion Government. They attempted to sugar-coat this proposition by a promise to establish a sinking fund, which would liquidate the loan in eighteen years.
– Which would liquidate it within fifteen or sixteen years.
Mr.PARKER MOLONEY.- The honorable member has forgotten that it was, not proposed to establish the sinking fund until 1912. So that calculating from last year, it would be eighteen years before the loan would have been redeemed.
– No. That was the latest period at which it had to be redeemed. But it was redeemable within a shorter period.
– It was not proposed to establish a sinking fund until 1912. To my mind the scheme was unsound for many reasons, and I trust that in reciting those reasons I shall be keeping within the limits of proper debate. First of all the late Government had no mandate from the people of this country to justify their launching out upon a policy of borrowing. On the contrary, they had had a direct lesson when, in 1902, Sir George Turner proposed to borrow half-a-million. I only want to show, while pointing out that the late Government had no mandate from the people-
– The honorable member would be out of order in showing that.
– At all events, the Government had something to guide them in the fact that, when it was proposed previously to borrow £500,000, this House rejected the proposition. On that occasion, in 1902, the majority of the members of the late Ministry voted against the policy of borrowing. Consequently, it was the formation of the Fusion that caused those members pf the late Ministry to sink their personal convictions and to vote, in 1909, for a borrowing policy which they had voted against in 1902. Furthermore, 1902 was a drought year, whilst 1909 was a year of unprecedented prosperity. It was the unholy alliance that had been formed that caused these honorable members to sink their convictions. Yet they have the colossal impudence to come to this Parliament and talk about the caucus methods of the Labour party, as if the caucus were a rampant bristling with spears, or some hideous monster of the sea. It is opposed to all the accepted canons of sound financing to borrow money for works other than reproductive. We know, as a matter of fact - and it is admitted by honorable members opposite - that within ten years this particular fleet would have been obsolete. Consequently, the position would have been this : The Government proposed to borrow £3,500,000. At the end of ten years, the Fleet upon which they proposed to spend the money would be obsolete. That means that at the end of ten years, the loan would be only half redeemed, and the Fusion Government proposed -to hand down to posterity a debt of £1,750,000, for which they would have nothing to show. It seems to me that if borrowing is to be in keeping with the principles . of sound finance, the currency of a loan must be contemporaneous with the life of the asset.
– Hear, hear ! And the life of the Fleet is estimated by the Imperial Conference at twenty years.
– But it is admitted, by honorable members opposite who have previously spoken, and who have quoted experts, that the life of a fleet extends only to about ten years.
– The Imperial Conference calculated on the basis of twenty years.
– The Germans allow twenty-five years as the life of their new Dreadnoughts.
– I can quote the case of the Brooklyn, the vessel of the United States Fleet which came to Australia on the occasion of the inauguration of the Commonwealth. Only a few days ago, I read that that vessel is now practically fit only for the scrap-heap.
– She is still on the list.
– Yes ; and that is all she is fit for i Recently, I read in an American magazine that the American Fleet which visited Australian waters would be obsolete in two years. I think it may be assumed that, in putting down the life of a modern fleet at ten years, we are allowing a very reasonable margin. Consequently, I say, in reply to my honorable friend, the honorable member for Parramatta, that the proposal of .the late Government did not satisfy the accepted canon of sound finance that the currency of a loan should be contemporaneous with the life of the asset, because the currency, of the loan they proposed to raise would not have been contemporaneous with the life of the Fleet.
– But we say that it was ; and the Imperial Conference said so, too.
– I wish to put one other point. It was proposed to borrow £3,500,000. But we should not have received that sum. If we reckon the issue at 98J, that is putting it very high. It is the highest figure at which a loan at 3! per cent, has ever been negotiated in New South Wales. On that basis, the loan realization would have been £3,447,500. Reckoning the underwriting at 1¼ per cent., and taking account of inscription charges, brokerage, stamp duty, and so on, the cash available would have been ,£3,364,000. That is a very high estimate. But, basing the calculation on the lines of ordinary negotiations that have taken place on the part of the different Australian States, it if. only reasonable to deduct £60,000 from every £1,000.000. On that basis, we should have had to deduct £210,000 from our £3,500,000. Consequently, the Commonwealth would really have received only £3,290,000. It is a point that is too often overlooked that we should have lost £210,000 by way of negotiation. But such a loss, which occurs whenever a country like ours borrows for defence or other purposes, is avoided altogether by resort to direct taxation. I may point out, also, that the time when the Fusion Government proposed to borrow money was about the worst they could have selected. Why? They proposed to borrow at a time when they had practically proposed to give over, for all time, one-half of their Customs and Excise revenue to the States. The eyes of the financing world were on this loan. What was done on that occasion would have established a precedent in regard to all future loans for Australia. It was, therefore, highly desirable that we should negotiate under the best possible conditions. But the Fusion Government desired to negotiate at a time when, instead of having the whole security of our Customs and Excise revenue to offer, they had only one-half, because they proposed, under the Financial Agreement, to mortgage the balance to the States in perpetuity. I was very pleased to see the Financial Agreement knocked out by the Democracy of this country.
– Have not honorable members opposite done that?
– For ten years, but that is a very different thing.
– Order. The honorable member must not go into that question.
– I really intended, when I got up, not to answer questions. I had enough of that before the 13th April last, and I have no desire to putmyself in the position of a candidate again.I wish to say that to my mind a loan for such a purpose was totally unnecessary because in Australia we produce, per head of our population, more than is produced by any other country in the world. Yet the proposal made on the other side was that Australia, producing more per head of her population than any other country in the world, should go to the pawnbrokers of a much poorer country to borrow money for defence, and thus cast a stigma, as I said before, upon the manhood of our people, who are prepared, not only to build and man their own ships, but to pay for their own defence as well. I should like to say, also, that the borrowing of money for defence purposes throws the burden of defence upon the shoulders of those least able to bear it. From the point of view of equity alone, it might not be out of place for me just to refer to how the wealth of Australia is distributed. I have taken the condition of affairs in New South Wales as a guide, and I find that the accumulated wealth of that State represents, in round numbers,£380,000,000-
– I wish to show that about 25 per cent. of the people of Australia own about three-fourths of the wealth of the country.
– Order. The honorable member must not discuss that question.
– I was trying to advance my point by showing that the proposal of the Fusion Government was to cast the interest charge of the. loan upon the shoulders of those least able to bear it. It is awell-known fact that today in Australia, from Customs and Excise
– Order. The honorable member must not follow that line of argument.
– IfI cannot elaborate that point, I am brought to the conclusion of what I desired to say. I hope that the day is not far distant when we shall have a Commonwealth Bank in Australia.
– If we had such an institution we should be saved the necessity of having to go to the pawnbrokers in London to negotiate our loans. I hope that at no distant date I shall have an opportunity to speak upon some of the matters about which I had something to say tonight. I hope that I shall shortly be able tospeak about the land question, and a Commonwealth Bank. Until then I shall reserve the remarks I intended to make upon those questions. I have said all that it is necessary that I should say in discussing this Bill. I am gratified to know that the stigma cast upon the manhood of Australians, who are prepared to defend their country, will be removed by the passage of this Bill, and I hope it will be a long day before an attempt is again made to borrow money for defence purposes.
Debate (on motion by Mr. Joseph Cook) adjourned.
Order of the Day for the second read ing of this Bill discharged. Bill withdrawn.
House adjourned at 9.52 p.m.
Cite as: Australia, House of Representatives, Debates, 26 July 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100726_reps_4_55/>.