House of Representatives
1 November 1912

4th Parliament · 3rd Session

  1. House of Representatives
  2. 4th Parliament
  3. 1912

Mr. Speaker took the chair at10.30 a.m., and read prayers.

page 5007

SPECIAL ADJOURNMENT

Motion (by Mr. Fisher) agreed to -

That the House, at its rising, adjourn until Wednesday next, at 2.30. p.m.

page 5007

QUESTION

TESTING OF EXPLOSIVES

Mr CHARLTON:
HUNTER, NEW SOUTH WALES

– I wish to know from the Prime Minister if the Government have yet arrived at a decision regarding the establishment of a testing station for explosives. If not, will they, in view of the urgency of the case, expedite action?

Mr FISHER:
Prime Minister · WIDE BAY, QUEENSLAND · ALP

– The Minister of Trade and Customs has been asked to expedite this matter as much as possible, and is doing so.

Mr TUDOR:
Minister for Trade and Customs · YARRA, VICTORIA · ALP

– A letter was sent to me by the Prime Minister dealing with this matter, and the Commonwealth Analyst was at once asked to report whether one or more stations would be needed to do the work effectively. I have asked for as much expedition as possible to be used.

page 5008

QUESTION

PATENT MEDICINES

Mr W J JOHNSON:
ROBERTSON, NEW SOUTH WALES · ALP

– Has the Min ister of Trade and Customs seen the cablegram which appears in to-day’s newspapers -

Before the Empire Trade Commission to-day evidence was given by the delegate from the proprietary medicines section of the London Chamber of Commerce. He pointed out the detrimental effect of the Australian Commerce Act on British exporters of medicines and patent foods. He protested against the adoption of legislation dictated by an interested section - namely, the Government medical advisers.

Will the honorable gentleman give us the assurance that the Government medical advisers have no pecuniary or personal interest in the manufacture or sale of patent medicines ?

Mr TUDOR:
ALP

– I can give the House the assurance that our medical advisers have no pecuniary interest in the manufacture or sale of patent medicines.

Mr PAGE:
MARANOA, QUEENSLAND

– Will the Minister propose the amendment of the Commerce Act to make it tighter?

Mr TUDOR:

– A large number of patent medicines are dealt with in two publications issued by the British Medical Association, entitled Secret Remedies and More Secret Remedies. When these patent medicines are brought to Australia we prohibit their importation until many of the extravagant claims made in respect of their virtues when they are sold in other parts of the world have been removed from the bottles and packages. These medicines are not allowed to be imported with all the extravagant advertising matter which is allowed to be attached to them in other places, but, unfortunately, we cannot interfere in regard to anything that may be done after importation, and the advertisements which are published in our newspapers contain many of the statements which are considered objectionable. I am sorry that our leading weekly newspapers are the worst offenders in allowing the publication of these advertisements which would not be allowed to come into the Commonwealth if imported with the articles. The Melbourne Australasian and the Sydney Bulletin are among the worst . newspapers in the Commonwealth for allowing the advertising of patent medicines by statements which are not allowed to be attached to the medicines when imported. The heads of our Quarantine and Commerce branches who advise the Government in this matter are actuated, I believe, only by the highest motives, their desire being that the people shall get fair value for the stuff that they purchase. I am not in favour of any relaxation of the provisions of the Commerce Act in the direction which seems to have been suggested by the witnesses appearing before the Empire Trade Commission. If the Commerce Act is amended in respect to this matter, it will be in the direction of providing that the ingredients which compose patent medicines shall be published, together with theprice of those ingredients, so that the public may know what they are buying. In some cases patent medicines, whose ingredients have cost only 1d. or½d., have been sold for 4s. 6d.

page 5008

QUESTION

PURCHASE OF STEEL RAILS

Mr HOWE:
DALLEY, NEW SOUTH WALES

– Is the Minister of Home Affairs prepared to make to the House a statement regarding the purchase of steel rails for the transcontinental railway, and the operation of the Steel Trust in connexion with the transaction ?

Mr KING O’MALLEY:
Minister for Home Affairs · DARWIN, TASMANIA · ALP

– We hope to have a few complicated twists straightened out within a few days, and can then put the papers on the table of the House.

Later -

Mr McWILLIAMS:
FRANKLIN, TASMANIA

– In view of the statements in the press regarding the operations of a trust in connexion with the supply of steel rails, which are required for the construction of the transcontinental line, I wish to know whether the Minister of Home Affairs has any information to give to the House?

Mr KING O’MALLEY:
ALP

– The statements are all too true, and very shortly we will lay the evidence bearing on the matter on the table.

page 5008

QUESTION

INTERNATIONAL PEACE CONGRESS

Mr J H CATTS:
COOK, NEW SOUTH WALES

– Is thePrime Minister aware that an International Peace

Congress is being organized by Mr. John Brisken Walker, of Denver, Colorado, to be held in San Francisco in 1913? Has the right honorable gentleman received any notification regarding this Congress? If so, does he propose to take any action concerning it?

Mr FISHER:
ALP

– I am not aware that any communication on the subject has been received, neither do I know the organizer, nor his object. The Hague Conference is an international body, to which the United States of America is a party. In. my opinion, the Imperial Conference is the best device that has yet been arranged for the keeping of the peace of the world. Nations could send representatives to it for the discussion of matters of mutual concern.

Mr Joseph Cook:

– Could other nations send representatives to it ?

Mr FISHER:

– Yes; in the same way as the Dominions send representatives. They would not be bound by any resolution of the Conference from which they dissented. In regard to foreign affairs not connected with peace matters, they would naturally not be represented.

page 5009

QUESTION

FEDERAL CAPITAL

Power Plant. - Public Buildings

Sir JOHN QUICK:
BENDIGO, VICTORIA

– I wish to know from the Minister of Home Affairs whether a tender has been let for the construction and erection of power-plant at the Federal Capital. If so, will the honorable gentleman state the name of the successful tenderer, and the amount of the tender?

Mr KING O’MALLEY:
ALP

– I have accepted a tender, and it will be laid on the table next week.

Mr RILEY:
SOUTH SYDNEY, NEW SOUTH WALES

– What steps, if any, have been taken towards the preparation of plans for the Federal Capital buildings?

Mr KING O’MALLEY:

– As soon as we have decided on the designs for the planning of the city, which should be very shortly, we shall call for designs for the buildings.

page 5009

QUESTION

PARLIAMENTARY OFFICIALS’ HOLIDAY

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– In view of the fact that the House is not to sit on Tuesday, which is a public holiday in Victoria, will arrangements be made to free as many of the officials of Parliament as can be spared from duty on that clay?

Mr FISHER:
ALP

– I shall refer the matter to Mr. Speaker, within whose Department it comes, and who, I am sure, will consider the suggestion sympathetically.

page 5009

QUESTION

ELECTORAL OFFICIALS

Mr GORDON:
BOOTHBY, SOUTH AUSTRALIA

– The Minister of Home Affairs promised, some time ago, to take into consideration the advisableness of reconsidering the conditions of employment and the pay of the officials engaged on the electoral work of the Commonwealth. I wish to know if he has done so, and, in that case, what arrangements he has made?

Mr KING O’MALLEY:
ALP

– This is a big matter, because all parts of the Commonwealth are affected. The Chief Electoral Officer has been ill for some time, but, as soon as he is well again, the whole question will be gone into.

Mr BRENNAN:
BATMAN, VICTORIA

– I desire to ask the Minister of Home Affairs whether he is aware that an indignation meeting of Commonwealth electoral officers is to be held at the Temperance Hall, next Monday, to protest against the scale of pay which they receive, and to confer as to future action ? Will the Minister make a public statement in the meantime, which will allow these officers to know exactly the position in which they stand ?

Mr KING O’MALLEY:

– We would like to do all these things, but, unfortunately, we have to calculate their cost. As soon as we arrive at finality we shall only be too delighted to meet these officers.

page 5009

QUESTION

MOISTURE IN BUTTER

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Is the Minister of Trade and Customs yet in a position to make a statement regarding the attitude of the Government towards the regulation governing the percentage of moisture allowed in export butter?

Mr TUDOR:
ALP

– The matter is still under consideration, but the honorable member for Maranoa spoke to me privately on the subject yesterday, and it was then agreed that the feeling of the House should be obtained by a test vote on the Estimates, and the honorable member promised to move the reduction of the Commerce vote by£1, with a view to obtaining a decision. This will allow honorable members to decide the matter for themselves.

page 5009

QUESTION

NATURALIZATION

Mr GROOM:
DARLING DOWNS, QUEENSLAND

– Will the Minister of Home Affairs lay on the table the instructions which have been issued regarding legislation on the subject of naturalization?

Mr KING O’MALLEY:
ALP

– I shall give the honorable member an answer on Wednesday.

page 5010

QUESTION

DEFENCE DEPARTMENT

Mount Morgan Drill Hall - Statutory

Drills - Liverpool Manoeuvre Area - Australian Garrison Artillery - Espionage

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

– In view of the extreme urgency of the case, will the Minister expedite the construction of the new drill hall at Mount Morgan?

Mr ROBERTS:
Minister (without portfolio) · ADELAIDE, SOUTH AUSTRALIA · ALP

– The Minister is always ready to expedite any work of value to the Commonwealth which may be of extreme urgency. The need for a drill hall at Mount Morgan will at once be inquired into.

Mr RYRIE:
NORTH SYDNEY, NEW SOUTH WALES

– I wish to ask the Minister representing the Minister of Defence whether, under the Defence Act, a magistrate has power to fine a cadet who fails to put in the statutory number of drills?

Mr ROBERTS:

– Yes. The magistrate has power to fine a cadet.

Mr RYRIE:

– If the magistrate has power to fine a cadet in such circumstances, has he any power to enforce the payment of the fine?

Mr ROBERTS:

– Perhaps the honorable member will give notice of his question. I shall then have the position explained to him.

Mr W ELLIOT JOHNSON:
LANG, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What is the position regarding the Liverpool manoeuvre area?

Mr KING O’MALLEY:
ALP

– Matters are now in a state of complete incubation, and I think that everything will be settled shortly.

Mr CANN:
NEPEAN, NEW SOUTH WALES

– Have definite arrangements been entered into between this Government and the Government of New South Wales for the purchase of the private lands within the area?

Mr FISHER:
ALP

– I have promised, on behalf of this Government, to provide the money to pay for the resumption of the private lands within the area, and the Premier of New South Wales has agreed to proceed with their resumption. I have asked the Minister of Home Affairs to go on with the matter.

Mr JOSEPH COOK:

– I desire to ask the Prime Minister what he means when he says that the Government propose to’ find the money to enable the State Government to make the resumption? Does he mean that we shall own the land ourselves, and, if so, under what conditions shall we hold it?

Mr FISHER:

– The Government of New South Wales own a considerable area, which they propose to grant to the Commonwealth. But certain lands are held by private individuals, and it will be necessary to acquire these before the site can be used as a manoeuvre area. The Government propose to hand over to the New South Wales Government the amount required to compensate the private owners of land for the area which will be resumed. The Commonwealth will thus become possessed of the whole area.

Mr Joseph Cook:

– As the owner?

Mr FISHER:

– Yes. It will not be a piece of land over which we shall have sovereign rights, but we shall enter into possession of it in the same way that we enter into possession of any other piece of land for the Commonwealth.

Mr FULLER:
ILLAWARRA, NEW SOUTH WALES

asked the Minister representing the Minister of Defence, upon notice -

  1. In regard to the Conference held in Melbourne on the 23rd of October last, for the purpose of discussing Militia grievances, will the Minister inform the House whether the position which has arisen in New South Wales in connexion with the Australian Garrison Artillery was discussed?
  2. If discussed, whether any decision was arrived at; and, if so, what was the decision?
Mr ROBERTS:

– The report of this Conference has not yet reached the Minister.

Mr CHARLTON:

asked the Minister representing the Minister of Defence, upon notice -

  1. Is it a fact that several weeks ago a Japanese officer was discovered making surveys of several vulnerable points on the New South Wales coast; also that a month ago at Prospect, New South Wales, a party of Germans were arrested while making plot surveys of the natural features?
  2. Is it a fact that after the arrest of the Germans they were released as, under existing laws, there is no authority to arrest for espionage unless the suspected persons are surprised making maps of survey on a military reserve?
  3. If such is the case, has the Commonwealth Government power to take action with a view of remedying such an unsatisfactory condition of affairs?
Mr ROBERTS:

– The answers to the honorable member’s questions are - 1. (a) Certain information has been received by the Department of Defence, but it is not considered advisable to make the same public.

  1. No information has been received by the

Defence Department of any alleged arrest.

  1. The Official Secrets Act 1911 of the United Kingdom is law in the Commonwealth, and it is considered that the provisions of section 6 of that Act empowers the Government to arrest on suspicion any person believed to have committed an offence such as espionage.
  2. Yes.

page 5011

QUESTION

SAN FRANCISCO EXHIBITION

Mr HEDGES:
FREMANTLE, WESTERN AUSTRALIA

– I wish to ask the Minister of External Affairs whether he has been successful in his negotiations with the States to secure combined and suitable representation for Australia at the exhibition which is to be held in San Francisco in 1915?

Mr THOMAS:
Minister for External Affairs · BARRIER, NEW SOUTH WALES · ALP

– I shall be glad if the honorable member will give notice of that question. I do not fancy that we have received any reply to our communication on the subject, but I would not like to say definitely.

Mr. NIELSEN.

Mr KELLY:
WENTWORTH, NEW SOUTH WALES

– I wish to ask the Minister of External Affairs whether Mr. Nielsen, who is representing the New South Wales Government in America, is doing any work for the Commonwealth either by way of advertising its resources or otherwise?

Mr THOMAS:

- Mr. Nielsen is in no way employed by the Government, but he has asked us to send him some literature about the Commonwealth for distribution in America, and we have done so.

page 5011

QUESTION

OLD-AGE PENSIONS

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I desire to ask the

Prime Minister whether anything has been done in the matter of reducing the amount paid by way of old-age pensions to inmates of our benevolent asylums?

Mr FISHER:
ALP

– We have not proposed any reduction. There was a benevolent institution in Victoria which was receiving a larger amount by 6d. per week per inmate than was received by similar institutions throughout the Commonwealth. I desired to adjust matters so as to make the amount paid to such institutions uniform, but after going thoroughly into the question, instead of reducing the amount to 7 s. 6d. per week for each inmate, I decided to increase it to 8s. per week throughout Australia. No difficulty should therefore arise.

page 5011

QUESTION

POSTMASTER-GENERAL’S DEPARTMENT

General Post Office, Sydney : Overtime - Telegraphic Lines, Sydney : Classification of Telegraphists - Temporary Telegraphists : Overtime

Mr HOWE:

– I wish to ask the Minister representing the Postmaster-General whether the Postal Department is prepared to pay the overtime which is due to employes in the General Post Office, Sydney, as between the 1st July, 1911, and 1st July, 191 2, at an early date?

Mr THOMAS:
ALP

– I shall consult the Postmaster-General on that matter, and perhaps I shall be able to give the honorable member a reply on Wednesday next.

Mr CANN:

– I desire to ask the Minister representing the Postmaster-General whether the latter will extend the inquiry into the payment of overtime to employes in the General Post Office, Sydney, to all the clerical workers in country post-offices?

Mr THOMAS:

– I have no objection to endeavouring to obtain that information.

Mr RYRIE:

asked the PostmasterGeneral, upon notice -

  1. Whether it is a fact that the lines at the Head Office, Sydney, have been classified for some considerable time in accordance with the new classification of telegraphists?
  2. Why has not the number of telegraphists necessary for the working of 1st Class lines, Inter-State quadruples, and duplex lines been specified ?
  3. Is it a fact that telegraphists, 4th Class, are not being utilized on 1st Class lines?
  4. Is the disposition of 4th and 5th Class officers being maintained strictly in accordance with the classification of lines?
  5. Is it a fact that the employment of 5th Class officers on 1st Class lines is not restricted wholly to cases of emergency?
  6. Have officers at£210 per annum been doing work valued by the Commissioner at£235 for from six to eight years without any increase in salary, or any compensation whatever?

Mr. THOMAS (for Mr. Frazer).- Inquiries are being made, and the desired information will be furnished as early as possible.

Mr KELLY:

asked the PostmasterGeneral, upon notice -

  1. Whether it is a fact that there are 5th Class telegraph officers employed on 1stClass lines, while there are 4th Class officers on duty not working such lines ?
  2. Are Inter-State quadruplex and duplex lines, though valued by the Commissioner at£235, being worked by 5th Class officers, and officers on £210?
  3. What effort is being made to pay officers the value of the work they are performing?
  4. Is it a fact that officers are still required to work roster duty under normal conditions, without recompense?

Mr. THOMAS (for Mr. Frazer).- Inquiries are being made, and the desired information will be furnished as early as possible.

Mr W ELLIOT JOHNSON:
LANG, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

asked the Postmaster-General, upon notice -

  1. Whether temporary telegraphists are still being employed in country and suburban offices in New South Wales, notwithstanding instructions to the contrary issued in April, 191 1?
  2. When will the Minister have the stall hours re-arranged as promised?
  3. Is it his intention to introduce straight shifts and abolish broken shifts?
  4. Will he give instructions that overtime shall bc paid for time worked after schedule time?
  5. Will he make special arrangements to meet the requirements of the busy season?

Mr. THOMAS (for Mr. Frazer).- Inquiries are being made, and the desired information will be furnished as early as possible.

page 5012

QUESTION

LABOUR CALL

Mr PALMER:
ECHUCA, VICTORIA

asked the Prime Minister, upon notice -

  1. What space was occupied by the advertisement in the Labor Call, Victoria, at a cost of £60 for one insertion, as shown in the return made to order of the House and presented on 25th October, 1912?
  2. Will he make a copy of the said advertisement available for the perusal of honorable members?
  3. Will he give the date when such advertisement appeared ?
  4. What was the reason and justification for advertising Eight Hours Day by the Department f External Affairs?
Mr FISHER:
ALP

– The answers to the honorable member’s questions are -

  1. The -back page of a special number, measuring 17 inches by n inches.
  2. Yes. Copy of the publication has been placed on the table of the library for the information of honorable members.
  3. 20th April, 1911.
  4. There was no advertising of Eight Hours Day by the Department. The then Minister was of opinion that it would tend to prevent misconception if an immigration announcement were to appear in a publication which represents a class of the community which was erroneously supposed to be adverse to immigration. Included in the price per page, £60 was for the supply of0 1,000 copies of the publication, which were sent to England for distribution.

I have a copy of it here, and I would be very glad if the honorable member would “look at the advertisement, and also at the article which is contained in the newspaper.

page 5012

QUESTION

NORTHERN TERRITORY: SCHOOLS

Mr MCWILLIAMS:

asked the Minister of External Affairs, upon notice -

  1. The number of State schools in the Northern Territory?
  2. The number of scholars?
  3. The number of teachers?
Mr THOMAS:
ALP

– The answers to the honorable member’s questions are as follow -

  1. Three.
  2. One hundred’ and fifteen.
  3. Two classified teachers ; one unclassified ; one monitor; one sewing mistress.

page 5012

COMMONWEALTH WORKMEN’S COMPENSATION BILL

Motion (by Mr. Fisher) agreed to -

That the Bill be now re-committed to a Committee of the whole House for the reconsideration of clause 1 of the First Schedule.

In Committee (Recommittal) :

Mr FISHER:
Prime Minister and . Treasurer · Wide Bay · ALP

– Honorable members will recollect that when this Bill was formerly under consideration the question arose as to whether payment ought not to be made in case of accident at an earlier stage than was provided for. I promised to consider the matter, and to ascertain if anything could be done in that direction. Since then, the Attorney-General has drafted an amendment to the schedule which provides that in case of incapacity the result of an accident extending over six days, or one week, payment shall be made for the whole week. In its present form the Bill provides that there must be at least two weeks disablement before compensation can be paid for the first week. I move -

That in paragraph (a) the words “if the incapacity lasts less than two weeks no compensation shall be payable in respect of the first week and “ be left out.

If these words are omitted clause 4 will then operate, and any person who is incapacitated for a week as the result of an accident will be paid compensation for that period. I have no doubt that in the case of a bona fide accident extending over a few days it would be much cheaper to make an arrangement of the kind proposed than to set the whole machinery of the Bill in motion.

Mr J H CATTS:
Cook

.- My own opinion is that there should be no limitation of the kind imposed. A man may suffer a most painful injury, and yet be able to return to work within a week ; and, under the circumstances, he ought not to lose compensation. I understand, however, that the Prime Minister thinks that it would be a saving of money to enter into the arrangement suggested rather than put the whole machinery of the Bill into operation, and that he intends to issue instructions to that effect.

Mr Fisher:

– Yes.

Mr J H CATTS:

– I would rather see a direct provision made in the Bill, but in Parliament we cannot get all we ‘ desire, and, under the circumstances, I have to accept the Prime Minister’s decision. I merely wish to say these few words in order that it may not be thought I have forgotten the protest I made previously.

Mr RILEY:
South Sydney

.- There are a great number of men employed at the Fitzroy Dock building destroyers for the Commonwealth under the State Government, who have contracted with the Commonwealth, and I should like to know whether those men will come under the Bill.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I do not -think so. There can be no question about the ability of the State Government to pay any compensation, and, therefore, the Commonwealth could not suffer any monetary loss.

Mr Howe:

– Provision is made for those men already under the Public Service Act of New South Wales.

Mr FISHER:

– I do not think that the Commonwealth is directly concerned in any way, but even if we were, there is ample recourse against the State.

Mr GLYNN:
Angas

.- The honorable member for South Sydney was quite right to ask the question, but I think there is no doubt as to the answer. When clause 6 was under consideration a similar doubt crossed my mind, but I did not think it worth while to raise the point, because I dare say the Government will make some arrangement. The Prime Minister is right to move the amendment he has, though I must say that, in view of clause 4, the Bill is not quite consistent.

Mr Fisher:

– Under the amendment, if a man is injured for six days, he will get a week’s pay.

Mr GLYNN:

– As I say, we are less consistent, but more humanitarian.

Mr HOWE:
Dalley

.- When I interjected a moment or two ago I was not seized of the point raised by the honorable member for South Sydney. I see, however, that, according to clause 6, where the Commonwealth contract for the execution of any work, the Commonwealth is liable for compensation, and I ask whether that does not make us liable for injuries caused to workmen employed by the State under contract with the Commonwealth. It is true that the men at Fitzroy Dock may receive compensation now, in the event of injury or accident, but the question is whether the responsibility will not, under clause 6, lie on the Commonwealth.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– That is a good point to raise, but it is advisable for the Commonwealth to take more statutory power than it needs to employ. I think that the State would see to any cases of accident occurring under such a contract, and there is, I fancy, a reserve power in the Bill regarding contractors. There is power on the part of the Commonwealth to see that the sub-contractor shall place himself in a position to pay compensation, though, of course, failing that, the Commonwealth has to bear the burden. I prefer not to discuss the question of liability as lying between two distinct representatives of the Crown.

Mr WEST:
East Sydney

.The arguments we have heard would be all very well if the Bill spoke of subcontractors, but it deals with contractors.

Mr Fisher:

– I do not think any difficulty can arise.

Mr WEST:

– The King cannot be sued, and New South Wales is a sovereign State.

Mr Fisher:

– We allow the King to be sued. However, I will undertake to enter into negotiations with the States on the point, in order to make sure of the position.

Mr GROOM:
Darling Downs

– This is a provision of which the corresponding section under the Imperial Act, has given rise to considerable doubt. Its object is especially drawn attention to in one of the text-books by Mr. Willis in the following words -

Employment under contractors : Object of the Section. - The primary object of the section it to prevent an employer from escaping liability by contracting with some one else to provide labour or to execute work, and to give a workman, employed by a contractor, a double security for his compensation, which, but for this provision, he might lose through the poverty of his direct employer.

Referring to the words “ any work undertaken by the principal,” in the Imperial Act,he says - “ It appears therefore that the expression limits the application of the section to such work as the principal may fairly be said to undertake the execution of or to engage in, in the ordinary course of following his trade or business, and to exclude all work which he cannot reasonably be said to undertake as part of his trade or business.”

The principle apparently is that if a workman is injured through an accident in the course of his employment, he has to be paid compensation by the employer who is carrying on the business or undertaking. If such an employer sub-contracts a portion of the undertaking, and a workman is injured, the employer is still liable, but if there be an independent contract, say, for the erection of a factory in which to carry on the undertaking, then he contractor becomes liable. I take it that the Commonwealth is putting itself in a similar position as an employer. If the Commonwealth were carrying on large woollen mills any workman injured through an accident in the course of his employment would be entitled to compensation, and the sub-contracting of a portion of the undertaking would not enable the Commonwealth to escape liability. If the Commonwealth contract for the building of a cruiser, either with a private individual or a State, then that private individual or the State has complete control, and becomes liable for any compensation. It will be seen, therefore, that in the case of Federal works in Sydney, carried out by the State under contract with the Commonwealth, it is the State which, having full control, becomes liable. For instance, we agree with shipping companies to carry our mails; we make a contract with them-

Mr Page:

– The principle of a contract is exactly the same whether it be made with the Government or with private individuals.

Mr GROOM:

– Quite so, the principle is that if a man employs another to carry out an independent contract, the independent contractor is to be responsible to the workmen for injuries sustained by them while in his employment. The Commonwealth is taking up that position under this Bill. Whoever directly gives employment to the man in an undertaking must pay him compensation in the event of his being injured in the course of his employment, and this liability cannot be evaded by subcontracting.

Mr West:

– But if a State had no Workmen’s Compensation Act how could it be held liable for injury sustained by its workmen ?

Mr GROOM:

– If, for instance, we arranged with the Government of a State where there was no Workmen’s Compensation Act in force to build a ship for us, it would be fair for us to require as one of the conditions of the contract that the State Government should arrange to compensate any workmen employed by them in the construction of that ship who met with injury in the course of his employment. If we asked a State to carry out any work for us we could request that one of the conditions of the contract be that any of its men injured while carrying out that work should be compensated by it. The Commonwealth could not legislate for the State. My desire is that every State should follow the lines of this legislation. I think that the Bill as drafted will carry out fairly well the principle we have in view.

Amendment agreed to.

Schedule, as further amended, agreed to.

Bill reported with a further amendment ; reports, by leave, adopted.

Bill, by leave, read a third time.

page 5014

DESIGNS BILL

Bill returned from Senate without amendment.

page 5014

LOAN BILL

In Committee (Consideration of GovernorGeneral’s message) :

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I move -

That it is expedient that an appropriation of moneys be made for the purposes of a Bill for an Act to authorize the raising and expending of the sum of£529,526 for the acquisition for Commonwealth purposes of property in Perth, Western Australia, and expenses incidental thereto, and to redeem loans raised by the Government of South Australia on account of the Northern Territory and the Port Augusta railway.

This motion covers two classes of operations. The first of these is the purchase, primarily for a General Post Office, of a large valuable and improved site in Perth.. The purchase price amounts practically to £170,000, and the improvements on the land at present will bring in a net return to the Commonwealth of about 5½ per cent. The policy of the Government with regard to loans on Commonwealth security has been fixed under a Bill brought down last session, which provides that the rate of interest on Commonwealth investments shall be per cent, plus per cent, sinking fund. I think that the provision of a sinking fund is a salutary principle to adopt, inasmuch as it is likely to lead to the exercise of greater care in making investments. It may be contended that this undertaking should not be provided for out of loan money. Such a. contention, however, is, I think, an unreasonable one. It would mean, for instance, that if any State desired to hand over to the Commonwealth its right, title, and interest in all its functions and undertakings, the Commonwealth would not be able to avail itself of the offer. It would be impossible for it to pay for them out of revenue, and consequently, although the State enterprises and functions were returning more than would be the interest payable on an ordinary loan, we should be unable to take them over. It is proposed to improve this site, and to erect upon it a General Post Office and, other buildings, and the policy of the Government is that the improvements made shall be paid out of the ordinary current revenue of the Commonwealth.

Mr Fenton:

– What are the Government doing with the old Post-office site?

Mr FISHER:

– That will go over, by arrangement, to the State, and we shall receive from the State, in respect of our indebtedness for transferred properties, a credit amounting, I think, speaking from recollection, to double what we are paying for this site. The arrangement will be a successful one for the Commonwealth, and will be beneficial in enabling us to make provision for the erection of, not only a new post-office, but other Commonwealth offices. The site, which is a most desirable one, is convenient to the railway station. It is proposed to run a street through it, and to erect a General Post Office on the right-hand side of that street, if I remember rightly, coming from the railway station to .the city itself. The area is a very considerable one.

Mr Joseph Cook:

– Are the Government going to utilize the whole of the space ?

Mr FISHER:

– Yes; the post-office buildings, however, will not occupy the whole of it. As I have already mentioned, the site is improved, and it is estimated that even after the new Postal buildings have been erected the property will return 3^ per cent. ‘ That being so, even if we were unable to do anything with it at the present time, it would be a profitable investment, earning for us more than the interest we allow on Commonwealth investments. It is a property that will be. constantly improving. I think it is a mistake for the Commonwealth not to secure larger areas in the growing cities of Australia to meet the necessities of the future. So far, there has not been sufficient enterprise in that respect. I hope the day is not far distant when there will be laid down a policy which will enable the Commonwealth Government to map out certain areas in growing cities ana towns - especially seaport and permanent towns - for future use in connexion with our public offices.

Mr Groom:

– The only thing to do is to ask the States, when laying out a town, to set aside areas for Commonwealth buildings, just as they now set aside areas for State buildings.

Mr FISHER:

– The honorable member for Darling Downs has taken an interest in this matter, and has tried to induce persons laying out townships to set aside for Commonwealth as well as for State purposes suitable areas of land. I do not think it would be unjust to require, as a condition of title, that such areas should be set aside ; but, of course, it would not be possible for the Commonwealth to do anything in that direction. The most urgent duty that rests upon us at present is to see that we secure areas for Commonwealth buildings that may be required now or in the future. It would not be wise to invest a very large sum in such a way, but I think that where property on which a return equal to the interest that we had to pay could be secured, we should make a good bargain. I have mentioned that the improvements made on this land will be constructed out of revenue. There is a sum of money on the Estimates towards those improvements, and I may add that the Federal Capital lands are being dealt with in the same way. In other words, the freehold is being purchased out of money in the hands of the Commonwealth and available for investment, while the improvements are being paid for out of revenue. The policy, I think, is a sound one.

Mr Joseph Cook:

– Are the Government adopting the same principle in regard to the Commonwealth offices in London?

Mr FISHER:

– The estimate is that, after paying for the freehold and for the erection of the necessary buildings, we should still have a margin of profit, having regard to the amount that we are at present paying by way of rent for the High Commissioner’s offices, &c. The structure in London will be a permanent investment that can be justified on its merits.

Mr Joseph Cook:

– Will it be more permanent than this will be?

Mr FISHER:

– Yes. At present we are paying rent for the High Commissioner’s offices. Were we to pay for a building of this kind right out, we should be using up our revenue unwisely, and might not be able to undertake the work, had we to do so. The Commonwealth had its post-offices transferred to it by the States.

Mr Joseph Cook:

– At Perth, a new post-office is to be built.

Mr FISHER:

– The old post-office is to be returned to Western Australia, and that transaction will reduce our indebtedness to the State. We require .£153.000 for the acquisition of property in Western Australia, and £71,945 for the redemption of loans incurred by South Australia in regard to the Northern Territory, which will become a statutory obligation upon the Commonwealth, some of them being about to mature.

Mr JOSEPH COOK:
Parramatta

– The Treasurer is to be congratulated upon the inauguration of a sound loan policy.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– This is the second Loan Bill.

Mr Fisher:

– I would not care if it were the fifteenth.

Mr JOSEPH COOK:

– Quite so. The Prime Minister is not now in the Hobart Conference.

Mr Fisher:

– I did not make one statement at Hobart and another here.

Mr JOSEPH COOK:

– The right honorable member is not now assisting in the framing of the non-borrowing plank of the Labour party’s platform, and therefore takes a much more reasonable view.

Mr Fenton:

– The Labour party’s policy is not non- borrowing, but the restriction of public borrowing.

Mr JOSEPH COOK:

– It used to be stated shortly as a non-borrowing policy.

Mr Howe:

– By whom?

Mr JOSEPH COOK:

– By the Labour Leagues, the Labour Conferences, and the Labour programme.

Mr West:

– The first, to which the honorable member belonged, did not have it.

Mr JOSEPH COOK:

– I never subscribed to a Labour platform, as I have said a score of times. I congratulate the Prime Minister on having escaped from the thraldom of these Conferences. His present position is, no doubt, due to national necessities. I should have thought, considering the views that he and those associated with him hold, that they would have striven to purchase the land they require out of revenue, to avoid placing a charge on the people for a period of sixty years, leaving the buildings, which are said to be of a permanently reproductive character, to be constructed out of loan money. I find that the term now in the Labour party’s platform is “ Restriction of public borrowing.” What I had in my mind was Mr. Jelly’s advocacy of non-borrowing.

Mr Roberts:

– Mr. Jelly is associated with your “ gelatinous compound.”

Mr JOSEPH COOK:

– He was the Labour candidate who opposed the honorable member for Boothby little while ago, circulating throughout the electorate a leaflet which emphasized the nonborrowing policy of this Government.

Mr Roberts:

– The honorable member should apologize for his mis-statement.

Mr JOSEPH COOK:

– There has been no mis-statement. I have contrasted the attitude of the Prime Minister, when occupying a responsible position here, with his attitude when perambulating the country seeking votes. The policy of the Labour party now is “ Restriction of public borrowing.”

Mr Fisher:

– It never was anything else.

Mr JOSEPH COOK:

– Not so far as the official programme was concerned.

Mr Fisher:

– Nor so far as my speeches were concerned.

Mr J H Catts:

– The State platform is just the same.

Mr JOSEPH COOK:

– It is now.

Mr Howe:

– It always has been.

Mr JOSEPH COOK:

– It has been modified in recent years.

Mr J H Catts:

– Not within the last ten years.

Mr JOSEPH COOK:

– Then let us say that it was intended that less borrowing should be done by the Labour party than by the parties which preceded them.

Mr J H Catts:

– We want a different system of borrowing.

Mr Fairbairn:

– Borrowing at higher rates !

Mr JOSEPH COOK:

– The Labour Government of New South Wales last year borrowed £6,000,000 at the highest rates ever paid.

Mr J H Catts:

– For works returning interest-

Mr JOSEPH COOK:

– There is no foundation for that statement. If the honorable member takes into account the unproductive works dealt with in the Railways Commissioners’ reports, and elsewhere, he will see that the railways of the States are not paying.

Dr Carty Salmon:

– ls it the new policy of the Labour party to borrow to pay interest?

Mr Fenton:

– Sometimes money has to be borrowed to pay off loans contracted by former Governments.

Mr JOSEPH COOK:

– The Prime Minister is charging the Commonwealth of Australia with interest payments over a period of sixty years to discharge a debt contracted by South Australia.

Mr Fenton:

– The honorable member for Parramatta does not believe in sinking funds.

Mr JOSEPH COOK:

– I believe in them, but the Prime Minister does not believe in them much.

Mr Fenton:

– Nor do I. I thought the honorable member was a bit sceptical about them.

Mr JOSEPH COOK:

– I am not so expert a financier as that. I regard a sinking fund as a healthy check on extravagant borrowing, though in a country that is constantly borrowing there is a good deal to be said for the contrary view. A sinking fund is a substantial check on excessive borrowing when you have responsible Ministers, but not when the caucus is in power. In New South Wales there is now a wild orgy of borrowing such as the State has never before known.

Mr J H Catts:

– In New South “Wales £10,000,000 of capital expenditure is not earning interest, but that debt is a legacy from a Government with which the honorable member was connected.

Mr JOSEPH COOK:

– The Labour Government in New South Wales, now iri power, spent £6,000,000 of loan money last year, and is trying to borrow another £6,000,000 this year. Although the Labour party speaks, of the restriction of public borrowing, the Labour Secretary for Public Works in New South Wales an nounced the other day that he would like to borrow ,£30,000,000.

Coming back to the loan policy of the Commonwealth Government, this is the second Loan Bill introduced by the Prime Minister. He has not told us where he is going to get the money?

Mr Fisher:

– From the Trust Funds.

Mr JOSEPH COOK:

– Then the right honorable gentleman intends to borrow money already appropriated for definite and specific purposes. That is where the right honorable gentleman is getting his funds. He is borrowing money which under our Constitution has already been spent.

Mr Fisher:

– That is not so.

Mr JOSEPH COOK:

– The money is regarded constitutionally as having been spent, and is accounted for in the Estimates each year as having been expended.

Mr Fisher:

– It has been appropriated, but not spent.

Mr JOSEPH COOK:

– It has been appropriated and spent constitutionally.

Mr Groom:

– The High Court held that the funds represent expenditure.

Mr Fisher:

– It held them to be expenditure, but not money spent. The High Court has some sense left yet.

Mr JOSEPH COOK:

– Constitutionally speaking, this money has been spent. It has been placed against specific items, and only awaits disposal on those items. It is from these sources that the Prime Minister proposes to obtain the funds with which to begin his borrowing policy. We are already paying in interest alone £720,000 or £730,000 a year.

Mr Fenton:

– Interest on the Northern Territory loans is included in that amount.

Mr JOSEPH COOK:

– Of course. It covers liabilities that we have undertaken, and upon which we have to pay interest each year. The present debt of the Commonwealth is £6,370,000. If we add to that the cost of the transferred properties on which we pay interest each year, our total indebtedness may be set down at £16.038.000. But that sum does not represent our total liabilities. There should be added to it £9,000,000 odd in con’nexion with the note issue.

Mr Fisher:

– Against which we ‘have £4,000,000 in gold, and £5,000,000 ‘‘odd lent to the States.

Mr JOSEPH COOK:

– As a matter of fact, we are supposed to have assets which can be set against every penny of this loan money. The total liability of the

Commonwealth to-day is approximately £26, 000,000.

Mr Groom:

– What is the amount of interest payable on the transferred properties?

Mr JOSEPH COOK:

– It is , £436,000. The value of those properties is approximately , £9,000,000.

Mr Fisher:

– Including South Australian indebtedness, which is a transferred debt, our total indebtedness will run up to nearly £15,000,000. All that is inherited.

Mr JOSEPH COOK:

– Quite so. The total amount of our indebtedness is about £16,000,000.

Mr Fisher:

– The Northern Territory represents about , £4,000,000.

Mr JOSEPH COOK:

– The total Commonwealth debt is £6,371,000, and the transferred properties represent an additional liability of , £9,358,000. Now, the Prime Minister proposes to float another modest loan of half-a-million sterling.

Mr Fisher:

– Oh, no. Only of £153,000. Of the proposed loan £71,000 represents South Australian indebtedness.

Mr Groom:

– The Prime Minister proposes to increase our total liability by about , £150,000.

Mr Fisher:

– Yes.

Mr JOSEPH COOK:

– We are going to pay interest upon it for another sixty years at least.

Mr Fisher:

– We shall pay interest, and also contribute to a sinking fund.

Mr JOSEPH COOK:

– I do not understand the principle which the Prime Minister applies to these borrowing operations. He is going to borrow money with which to purchase land in Perth, with the buildings which are upon it. He is going to borrow money to buy land and buildings in the Capital Territory, and he is also going to borrow money with which to purchase land, and erect buildings in London. Where does he draw the line? On what principle is he proceeding? He has laid down the principle which has been proclaimed from the housetops all over Australia that the Government do not believe in borrowing for expenditure on public works.

Mr Fisher:

– It has not been proclaimed by me or by any responsible person in the Labourparty.

Mr JOSEPH COOK:

– Then the Prime Minister is sadly misrepresented. I read in the Age this morning that a Liberal candidate, speaking in Melbourne only last evening, said that he believed in the Labour party’s policy of paying for public works out of revenue and not out of loan funds.. In view of the statement of the Prime Minister I must immediately write to him and tell him that he is mistaken, and that the Government do not believe in constructing public works out of revenue. The Prime Minister believes in paying for public works out of loan funds just as Liberal Governments have done from time immemorial.

Mr Fisher:

– We do it, and we do not talk about it.

Mr JOSEPH COOK:

– Of course, the Prime Minister leaves us to do the talking in regard to these loan operations. He would rather say nothing about them. I have never heard the right honorable member say a word about the non-borrowing leaflets which are so industriously circulated throughout the country at election time. He is the first Prime Minister to introduce the borrowing policy for the construction of public works. That distinction belongs to my right honorable friend. Every Liberal Treasurer before him has had to foot these obligations out of revenue.

Mr Fisher:

– Liberal Treasurers did nothing, and they left the whole machinery out of gear.

Mr JOSEPH COOK:

– I am very sorry that I. have to remind the Prime Minister of this circumstance.

Mr Fisher:

– I am sorry that the honorable member has not a bigger audience.

Mr JOSEPH COOK:

– I am always glad to provide the Prime Minister with a little amusement, but I admit that I am not good at the business. Consequently, I have to fall back on hard facts. What is causing the Prime Minister so much amusement is the simple statement of fact that this is the first Government to inaugurate the policy of constructing public works out of loan funds. Every Liberal Treasurer who has preceded the Treasurer has constructed them out of revenue. Where that has not been possible the public works have not been undertaken. I do not agree with” the policy that has been adopted through all these years. To construct our public works out of revenue was well enough when we had huge surpluses. But when we are increasing the taxation of the people for the ordinary purposes of government it is not fair to tax them for the carrying out of huge undertakings of a reproductive and permanent character. I congratulate the Government upon having inaugurated this sensible policy, and I hope they will continue it.

The Prime Minister is going to purchase land and property in Perth out of loan funds. But at the same time the Government propose to expend out of revenue £479,000 upon the construction of underground conduits which will practically be everlasting. Yet we are to pay for perishable buildings in Perth, and to build a High Commissioner’s office in London, out of loan funds. At the present time there is a building being erected in Melbourne in connection with the post office at a cost of £108,000. That money is being taken out of revenue. What is the reason for this distinction? Why has not the Prime Minister the pluck to stand up and say that the Labour party’s policy of constructing these works out of revenue has failed? Why does he not tell the Labour conferences from year to year that the plan will not work any longer, and that the nonborrowing plank has broken down.

Mr Fenton:

– The plank was restriction of public borrowing.

Mr JOSEPH COOK:

– In any case it was only a bit of irony and political makebelieve, seeing that this Government is the first to inaugurate the policy of constructing public works out of loan moneys.

Mr Groom:

– Has the Labour Government in New South Wales borrowed any money for public works?

Mr JOSEPH COOK:

– Last year they expended £6,000,000 of loan funds in carrying out public undertakings. They had the biggest “go” of any Government that has ever held office there. Men are being turned away by the hundred, because the money will not hold out. The Prime Minister, however, is in a much happier position, inasmuch as he has £1 5,000,000 of trust moneys to fall back on.

I am not quite sure whether the right honorable gentleman is justified in dipping into those trust moneys, every penny of which is hypothecated for a definite purpose. I could understand the position if he were raising a temporary loan from trust funds, but there is no indication of anything temporary in the transaction. In my opinion, we ought not to inaugurate the policy of raising permanent loans from trust moneys, which themselves do not form a permanent fund. The right honorable gentleman, of course, has a perfect right to make the fullest use of the funds at his disposal, but he has no right to float practically permanent loans out of funds that are constantly fluctuating, and are already hypothecated. The theory of trust investment all over the world is that the securities shall be, in their very nature, permanent, secure, and at the same time liquid ; and that is not the case with these investments. It seems to me as though the Prime Minister is sneaking in a loan policy.

Mr Fisher:

– Oh!

Mr JOSEPH COOK:

– And saying very little about it. The Prime Minister will not talk very much about this transaction when he gets on to the platform, but would rather that it was conducted with the greatest secrecy.

Mr Page:

– The honorable member for Parramatta will talk enough about it.

Mr JOSEPH COOK:

– I should think so; I shall point out, as I am doing now, that this Government, with restricted borrowing on its fighting platform, is the first to set up the theory that we must borrow for the construction of public works.

Mr Page:

– Why need we talk about the matter if the honorable member isgoing to do so?

Mr JOSEPH COOK:

– Honorable members opposite will not talk much about it, because the borrowing is rather awkward in the face of the plank in their platform. I should like to know why the Prime Minister proposes to find funds for the speculation in Perth out of loan moneys, while a concrete and practically everlasting building like that of the Military College is to be provided for out of revenue to the extent of £ 113,000?

Mr King O’Malley:

– The purchase in Perth is not a speculation, but a fair investment, which I am prepared to take off the hands of the Government.

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– I understand the honorable member for Parramatta to ask why the Government do not pay for the erection of the Military College out of loan money ?

Mr Joseph Cook:

– I asked the Prime Minister to point out the distinction between the two works.

Mr FISHER:

– The announced policy of the Government cannot be mistaken by the honorable member. The Government of which he Was a member introduced a Bill to provide for the raising of £3,500,000 by way of loan.

Mr Joseph Cook:

– That has nothing to do with the matter before us.

Mr FISHER:

– That Government proposed to raise £3,500,000 for naval and military defence. On that occasion, on behalf of the then Opposition, I stated that under no circumstances short of war or invasion would we raise money by loan for defence purposes. That is the reason, which should be well known to the honorable member, why the present Government pay for defence out of revenue. A State that is not prepared to meet its annual defence expenditure out of revenue does not know what its duty is.

Mr Joseph Cook:

– Then there is no civilized country in the world to-day that knows its duty, according to the dictum of the right honorable gentleman.

Mr FISHER:

– The country that has the largest navy pays for its defence out of revenue.

Mr Joseph Cook:

– No, certainly not.

Mr FISHER:

– It has done so.

Mr Joseph Cook:

– No, certainly not.

Mr FISHER:

– Great Britain has not increased its indebtedness in any way on account of its annual defence expenditure.

Mr Joseph Cook:

– Yes ; it is doing so constantly.

Mr FISHER:

– That country has increased its defence expenditure on account of war, and in some cases on the eve of war, but the annual indebtedness as represented by the national debt, in the aggregate, is lower to-day than it was before the beginning of the great naval programme. Does the honorable member for Parramatta deny that?

Mr Joseph Cook:

– No, I do not.

Mr FISHER:

– Then why does the honorable member say that Great Britain does not provide for its annual defence expenditure out of revenue ?

Mr Joseph Cook:

– I say that Great Britain borrows for the construction of works in connexion with the Navy.

Mr FISHER:

– The naval expenditure of Great Britain has been practically doubled in the last ten years, and yet the national debt is smaller, in the aggregate, than before.

Mr Ryrie:

– That does not say that the Imperial Government do not borrow for defence purposes,

Mr Joseph Cook:

– It does not touch my point at all

Mr FISHER:

– How could Great Britain borrow and not increase the amount of its indebtedness? As to the interjection of the honorable member for North Sydney, it is true that Great Britain expends more in one year, perhaps, than in another, but, at the same time, the annual revenue is sufficient to enable the Government to redeem any advances in a few years.

Sir John Forrest:

– What did the Prime Minister say about a seventh borrower ?

Mr FISHER:

-I said that I viewed with horror a seventh borrower going on the money market, and I am not going on the market. There are funds in the Commonwealth available for investment, and the investment under consideration is a good one. I said that I regarded with horror a seventh borrower going on the money market, except in case of pending war - an emergency equal to war, for which provision must be made. Any responsible man, whatever his opinions might be regarding: borrowing in general, who would fail in his duty in a crisis of that kind ought not to be permitted to do in-‘ jury to his country. Honorable members opposite endeavour to forget that at a time, when they knew well what was the. condition of the finances of Australia, and when they had made an arrangement with. the Premiers under agreement to enable them to control the amount of the Customs and Excise revenue, they proposed, in the teeth of the fiercest opposition, to raise by loan , £3,500,000 for the construction of a fleet.

Sir John Forrest:

– We could not make a commencement without it.

Mr FISHER:

– The present Government have constructed a fleet without raising a penny by way of loan.

Sir John Forrest:

– Could that have been done, if the finances had been in the same condition as they were when we were in power?

Mr FISHER:

– The late Government were out in their calculations in this matter to the extent of about £3,500,000.

Sir John Forrest:

– This is only bluster. Look at the change which has come over the finances. Why be ungenerous ?

Mr FISHER:

-I do not desire to be ungenerous.

Sir John Forrest:

– The right honorable gentleman is ungenerous, all the same.

Mr FISHER:

– My remarks are inreply to the honorable member for Parramatta, who, in addressing himself to the subject. raised his voice now and again by way of emphasis. I am stating historical facts.

Mr Joseph Cook:

– Will the right honorable member come back to the point ?

Mr FISHER:

– The honorable member for Swan has interjected that the present Government have more money than had the Government with which he was connected ; but, as a matter of fact, the late Government handled a great deal more money than they found themselves capable of expending. A sum of £6,000,000, to which the Commonwealth was entitled, was refused by that Government.

Sir John Forrest:

– Did not the Watson Government do the same?

Mr FISHER:

– The Watson Government had a brief existence of about four months.

Mr Joseph Cook:

– Those were the days in which the Labour party laid it down that only £500,000 a year should be spent on defence.

Mr FISHER:

– The Watson Government had a brief, trying, but very distinguished existence of less than four months ; and the Prime Minister of that time had not the opportunity to deal with the finances. However, he did, as far as he could, initiate public works and pay for them out of revenue.

Mr Joseph Cook:

– “Initiate?” What does the Prime Minister mean ? The public works were initiated ten years before.

Mr FISHER:

– The members of the present Opposition took the first opportunity to get rid of Mr. Watson, not because he was doing ill, but because he was doing well. And there is another little incident worth a reference. During the first eight years of Federation, the Government, with which honorable members opposite were associated, or were behind, spent on public works-

Sir John Forrest:

– The honorable member was “ behind,” I think !

Mr FISHER:

– We were “behind,” but we could not direct.

Mr Joseph Cook:

– No; but the Labour party could prevent.

Mr FISHER:

– Speaking for myself, I had to make a choice, like us all ; and I chose to support the Government that was more in touch with my way of thinking, especially on great national questions. Those who were members of the early Parliaments will remember that those who now represent the Opposition denounced everything Australian. Every broadand general proposal was denounced as dangerous; even the White Australia policy, and the immigration restriction legislation, were denounced in the fiercest and most outrageous language ever used in a Parliament.

The CHAIRMAN:

– Order!

Mr FISHER:

– I shall not trespass further. The expenditure on public works during the nine years of office of honorable members opposite was £4,098,749; whereas, during our three years of office, we have expended, out of revenue, £10,002,000. Does the honorable member desire a better answer to his inquiry as to what we are doing? He also spoke’ of the difference between a conduit for telephone purposes, which he said was indestructible, and a piece of land in London.

Mr Joseph Cook:

– I referred, not to the land, but to the buildings.

Mr FISHER:

– Very well. We have embraced opportunities that offer for the construction of these conduits at a time of financial prosperity. That is my answer to the financial critics who view these matters from afar, and in the light of what they have gathered from very tainted sources. It is suggested by them that the Government are expending millions in excess of the amount spent by other Governments. My reply is that we are constructing permanent works out of revenue. If we were squandering the revenue on services which would not be of more than passing utility there would be something in their criticism. But the fact is that we are expending our money on permanent works, one section of them being, as the honorable member for Parramatta has admitted, practically indestructible. No finer compliment could be paid to a Government than the criticism of the honorable member that we are expending revenue on works of permanent utility - works not for to-day or to-morrow, but of enduring utility. Can a country suffer financial injury when its Government adopts the course of expending its surplus revenue on permanent improvements? Returning to the question of the Perth Post Office, perhaps honorable members will be interested to have some further particulars in regard to it. The date of acquisition was 28th August, 1911. The land has a frontage of 335 ft. 9 in.to Wellington-street, by a depth of 403 ft. 5 in. to Murray-street. It comprises an area of 3 acres o roods 16 eight-tenth perches, and the cost of acquisition is £166,370. There are sixty-eight business premises on this site, including one hotel and two coffee palaces. The number of main buildings on the site are four fronting Wellington-street, five fronting Murraystreet, and an arcade. The rents received are at the rate of £9,500 per annum. It is estimated that the return from the property, taking into consideration the cost of acquisition, including interest and the upkeep of the premises, will be at the rate of s per cent. The site is close to the railway station, and is admitted by all who know Perth to be most convenient for the purposes of a general post-office. We are proposing to pay for the land out of Trust Funds in the hands of the Treasurer, and to erect out of revenue a new post-office which will be suitable for the requirements of this growing capital for many years to come. We can pay for the building out of revenue without any difficulty. The honorable member for Parramatta perhaps made his best point when he asked, “ Why pay for building in Australia out of revenue and fail to do so in respect of land and buildings in London?^ The circumstances, however, are altogether different. The policy we have adopted in respect of large or costly purchases of land in Australia is that the purchase money shall be provided out of loan account. We have adopted that policy in respect of the Federal Capital area. What is the position with regard to transferred properties? They consist of land and improvements which were held by the States prior to Federation, and the Deputy-Leader of the Opposition might just as well ask us to pay for the whole of those transferred properties out of revenue as to suggest that we should pay for portion of the Federal Capital Territory out of revenue. One has only to consider the suggestion for a moment to realize how ridiculous it is. Buildings that are not of a permanent character, however, should be erected out of revenue. I also take the view that, except in times of emergency or war, our Defence expenditure should be met, as nearly as practicable, out of the annual appropriations. That is a sound and healthy principle.

Sir John Forrest:

– It is much heavier on the people.

Mr FISHER:

– That cannot be so. In war time, the expenditure, as we all know, is far greater than it is in normal circumstances. The debt which then accumulates has to be spread over a number of years, so that in times of peace the ordinary annual expenditure has still to be met, plus a portion of the indebtedness incurred as the result of war. The assumption of the right honorable member is that we could go on constantly piling up debts without suffering’ any disability.

Sir John Forrest:

– It is easier to. pay a large amount by instalments than to pay it in one lump sum.

Mr FISHER:

– But the country could not pile debt on debt and continue to be in a sound financial position.

Sir John Forrest:

– Other countries keep going.

Mr FISHER:

– The countries that have tried to keep going in that way are not worthy of consideration to-day.

Sir John Forrest:

– But the people are being ruined by having an extra burden of taxation placed on them.

Mr FISHER:

– I have said already that, in times of prosperity, it is a distinct advantage to pay for permanent works out of revenue, and for the interest derived from those permanent works to be going into. the Consolidated Revenue, instead of being paid to bondholders. Every loan raised carries a J per cent, sinking fund. Perhaps honorable members will allow me to point out what is done with the trust funds. So far as the Australian Note Trust is concerned, I have, at the request of honorable members of the Opposition, not allowed the gold reserve to fall below 40 per cent., although I have never considered it desirable to keep such a high gold reserve. I have kept it above 40 per cent.

Mr Joseph Cook:

– The honorable member allowed it to run down to 41 per cent, the other day.

Mr FISHER:

– And I intend to keep it down.

Mr Joseph Cook:

– It would be very interesting to know how the right honorable member manages to keep it just over 40 per cent.

Mr FISHER:

– I invite the honorable member to consult the Secretary “to the Treasury, who will explain everything to him. I have not allowed the gold reserve to fall below 40 per cent., because I promised the Opposition that I would not do so, although the law merely provides that it shall be not less than 25 per cent.

Mr West:

– The Prime Minister promised that he would do nothing to bring it down to 25 per cent, until after the next general election.

Mr FISHER:

– Quite so.

Mr Joseph Cook:

– The gold reserve went down with a sudden rush, and stopped when it reached 41 per cent.

Mr FISHER:

– Because it is my duty, as Treasurer of the Commonwealth, to see that the money of the people shall be earning interest when it is not otherwise required. Would honorable members like to see large sums of public money lying dead and earning no interest? I desire, in this connexion, to refer to statements that have been made as to injury done to trade and banking in consequence of the Australian note issue. There is not a tittle of foundation for such an assertion.

Mr Gordon:

– Has i: not taken a lot of money out of the banks?

Mr FISHER:

– No. The banks are not called upon to bring a single sovereign to the Treasury.

Mr Gordon:

– They must have notes.

Mr FISHER:

– They take notes only for their own convenience. When they had their own note issue, it was on the clear and distinct understanding that they had a gold backing to every note that they put out. If that be so, it is difficult to understand how they can be injured by depositing with the Treasury a sovereignfor every note issued to them, any more than they were by keeping gold in their own coffers as a backing for the notes which they issued themselves. Ever since 1893, Queensland has had its own State note issue. Have the banks up there even complained? Did their representatives go about whining and asserting that the State note issue was injuring them? Not at all. It has been left to powerful institutions down here to endeavour to seize upon the Australian note issue as a political weapon. Let any honorable member ask the general manager of the Queensland National Bank - a bank which has had to meet difficulties enough in its time - whether he thinks that the Australian note issue is dangerous or injurious to him as a banker, and he will tell him quite frankly that the suggestion that it is injurious to the banks is all humbug and nonsense.

Mr Joseph Cook:

– Who has been complaining of the note issue?

Mr FISHER:

– The honorable member has. He and others have said that it has had an injurious effect on banking.

Mr Joseph Cook:

– I have not mentioned the note issue.

Mr FISHER:

– The honorable member said that I was proposing to appropriate money which was necessary for other purposes.

Mr Joseph Cook:

– I spoke of the Trust Funds.

Mr FISHER:

– The gold reserve forms part of the Trust Funds. Other people outside have taken up this matter and declared that the Australian note issue has been disadvantageous to the. banks. I reply that it has not.

Sir John Forrest:

– The right honorable member knows that his Government copied the note issue from us.

Mr Roberts:

– And yet the right honorable member complains of the note issue.

Sir John Forrest:

– No; I have never complained of it.

Mr FISHER:

– Perhaps the right honorable member for Swan will pardon me if I mention that, as far back as 1893, I heartily supported the proposal for a Queensland State note issue, although at the time my party were a little apprehensive about it. .

Mr Groom:

– Sir Hugh Nelson initiated the Queensland note issue.

Mr FISHER:

-I do not think he initiated it.

Mr Groom:

– He was responsible for it.

Mr FISHER:

– He was not only responsible for it, but he absolutely believed in it. Born Conservative and capable financier that he was, he did not hesitate to say that no private institution should be allowed to issue paper money.

Mr Joseph Cook:

– Many other Conservative financiers have said the same thing.

Sir John Forrest:

– The honorable member knows that he found papers relating to the matter in the Department.

Mr FISHER:

– Had we remained longer in office on a former occasion, we should have done this before the right honorable member had had a chance to write his memorandum. What we have done was done in Queensland years ago. This is no new thing.

Mr Joseph Cook:

– It is not a great reform discovered by this Government?

Mr FISHER:

– That has never been claimed for it. We thought it would be a good thing to do, and did it when we got the opportunity.

Mr Joseph Cook:

– Following old Con servative statesmen !

Mr FISHER:

– We are ready to adopt sound views, whether they proceed from Conservatives, Liberals, or any other source. We desire ideas.

Sir John Forrest:

– Did not the right honorable member read the correspondence on the subject that was in the Treasury?

Mr FISHER:

– No. I purposely refrained from doing so.

Sir John Forrest:

– Why?

Mr FISHER:

– Because I had no need of the information. As an answer to those who say that by our note issue we have tied up money, let me read this statement of the Australian notes account, giving particulars of the investments on 30th September last -

I have read that statement, not to show the interest earnings made by the Commonwealth, but to show that we are not keeping the money tied up. It has been put out for investment as a bank would put it out, though, of course, a State cannot place money to the same advantage for commercial purposes as private individuals, who may turn it over three or four times in a year. Let me read also this statement of the general trust fund, giving particulars of investments to the 30th September, 1912 - -

The total interest earned amounts to about £270,000.- The interest on notes investments cannot be used by the Government, but, as it accumulates, must be reinvested by the Treasurer at interest and compound interest, and thus creates an additional backing for the Australian notes. The criticism offered on our note issue was that it was dangerous and mischievous, that it would destroy trade and injure the banks, but now the right honorable member for Swan tells us that in establishing it we stole his clothes - that he would have done what we have done.

Sir John Forrest:

– What I would have proposed would have been different.

Mr FISHER:

– I understood from the right honorable member’s first interjection that his scheme was so like ours that I might be said to have stolen his ideas.

Sir John Forrest:

– The right honorable member had my Bill.

Mr FISHER:

– 1 told Mr. Allen that I did not need it, and the papers were not opened. Whatever the right honorable member proposed to do as Treasurer would have been done for his Government and party. What, then, becomes of the politic;’.! criticism of the note issue? I hope that after this revelation we have heard the end of it. A similar system operated successfully in Queensland for nineteen years. The banks there, with all their faults, were more virile and did not squeal. The people of the State said that the State issue was more satisfactory than the bank issues, and the Government marie a profit by it. Now the whole Commonwealth makes a similar profit. I believe that the issue will continue and increase, and an ample reserve will he kept to meet all emergencies. T shall be glad at all times to assist the Governments of the States as much as possible, and the banks, too, if we can, in the ordinary way of business.

Mr JOSEPH COOK:
Parramatta

– The Prime Minister has made a most interesting speech, hut he has entirely misconceived the point of my criticism. He has accused me of attacking -his proposal, whereas I complimented him upon its introduction. I sa;d that he VOS on the right track, and I merely asked one or two pointed questions of him.

Mr Chanter:

– The honorable member did not say that at Deniliquin. He said there that the Prime Minister was on the wrong track.

Mr JOSEPH COOK:

– The honorable member is at liberty to read what I said at Deniliquin.

Mr Chanter:

– I have read it, and the honorable member dare not say in this House what he said there.

Mr JOSEPH COOK:

– Will the honorable member get the report of what I said at Deniliquin, and point to any statement in it which I dare not make here?

Mr Chanter:

– Yes.

Mr JOSEPH COOK:

-What I said there I will say here - every word of it. If it be a good policy to purchase land and buildings in Perth and London out of loan money why is it not a good policy to adopt generally with respect to like works? That is the point which the Prime Minister missed. He did not come within degrees or miles of it, so that my criticism remains unanswered. We did not want to hear anything about the success of the note issue. We know all about it. We did not want to hear anything about the history of the Labour party in this House, though the Prime Minister made a most audacious statement when he said that Mr. Watson initiated the policy of constructing public works out of revenue. He ought to know that there is not a tittle of justification for that statement. He ought to know that that has been the policy adopted ever since the advent of Federation.

Mr Fisher:

– I know what Mr. Watson attempted.

Mr JOSEPH COOK:

– What did he attempt that somebody else had not attempted before?

Mr Fisher:

– ‘He attempted to bring the Post Office up to date.

Mr JOSEPH COOK:

– He never submitted any estimates to the House.

Mr Fisher:

– He never had a chance to do so.

Mr JOSEPH COOK:

– The Prime Minister answers himself. Mr. Watson did nothing at all in this respect. It is a most audacious claim to say that he initiated the policy of constructing public works out of revenue. It was the policy of Sir George Turner, and that policy has been continued up to the present time. I say that it is a wrong policy. The Prime Minister admits that it is a wrong policy, for to-day he is seeking to alter it. He is the first Prime Minister who has attempted to alter that policy which has been in vogue since the inception of Federation. But he is not altering it in a straightforward way. He ought boldly to say to the country, “ We cannot go on constructing public works out of revenue. The thing has got beyond us. We must, therefore, construct public works out of loan funds in a sensible and businesslike manner.”

Mr Fisher:

– Have I not said that?

Mr JOSEPH COOK:

– No. But I do not wish to be interrupted, because my time is limited. I have the “gag” imposed upon me, whereas the Prime Minister has not.

Mr Finlayson:

– The honorable member put it on himself. He voted for the limitation of speeches.

Mr JOSEPH COOK:

– I was not aware of it. The Prime Minister has stated that no Government would attempt to pay for defence works out of loan moneys. Does he not know that every Government in the civilized world is doing it to-day? Germany is building ships out of loan funds. That great over-sea nation, I suppose, has as much business ability as have the Prime Minister and his party.

Mr Fenton:

– What is being done in Great Britain?

Mr JOSEPH COOK:

– For all such works as are proposed here, money has been borrowed from time immemorial.

Mr Fenton:

– For the construction of ships ?

Mr JOSEPH COOK:

– No. I am dealing with the construction of concrete buildings in Australia. The Prime Minister has said that no Government would ever dream of erecting a concrete building out of loan moneys. But Great Britain is doing it today, and every civilized country in the world has done it from time immemorial. According to the Prime Minister these countries have no sense or business ability. Well, the world will judge between them.

The right honorable member pointed out that, during the past three years, the Government have spent £10,000,000 on public works out of revenue. That is quite true. Where did they get the money from ? Surely out of the arrangement which we made with the States and which the Prime Minister and the Attorney- General declared provided for too big a return to the States. The Prime Minister wished to return the States less and to retain more. Out of that fund the Government have got all these rolling millions, which, with the land tax, have amounted to £18,000,000 more in three years than any previous Government ever received. It would be strange, indeed, if, out of that £18,000.000 the Government could not find a million or two more than did other Governments for the construction of public works.

Why did other Governments spend less on defence? Because my honorable friends opposite who kept them in power said, “ £500,000 must be the limit of the expenditure on the land defences of Australia.” That is what they said to Sir George Turner, and to other Treasurers. They cried, “ You must not spend more. If you do, out you go.” This money, therefore, by their own decree, had to be returned to the States. Now the Prime Minister taunts us for having done what he and his party compelled us to do if we were to remain in office.

Let honorable members get this fact into their minds : that while we have been spending more on public works we have been taking more out of the pockets of the people. These rolling millions have not dropped out of the heavens. They have been taken out of the pockets of the taxpayers. Today our public works alone represent an expenditure of 18s. per head of the population. That means that every family today is paying £4 10s. annually for the privilege of building these works for future generations. Every working man to-day, who cannot get a house of his own over his head-

Mr Fenton:

– How much have we increased the taxation of the Commonwealth ?

Mr JOSEPH COOK:

– That is quite an irrelevant question.

Mr Fenton:

– We are making the rich man pay a little bit of it.

Mr JOSEPH COOK:

– I am pointing out that the honorable member is making the poor man pay to the extent of 18s. per head more per annum, or £4 10s. per family. That is where the funds which have been expended upon public works have come from. Yet we have in office a Government which boast of the way in which they have expended money out of revenue. Let my honorable friends tell the working men of Australia that they are annually paying £4 10s. per family to construct huge edifices for the benefit of those who may come after. It does not matter to the Government that the working man cannot make ends meet. They compel him to pay 18s. per head, or £4 10s. per family, to put up huge buildings in Australia for the benefit of those who will succeed us. That is a policy of which they boast. But it is a policy which has to be paid for. That is what the Prime Min ister should tell the people when he goes on to the public platform. He will say, “ Look at the grand things we have done for you,” and if the working man has any sense he will reply, “ Yes ; but you have fleeced me to do it. That £4 10s. per annum would have enabled my family to have enjoyed many little luxuries which it had to forego.”

Mr Fenton:

– The honorable member wants to obtain a loan without interest.

Mr JOSEPH COOK:

– I want a business to pay its way and to renew itself from time to time from its capital account.

Mr Archibald:

– The honorable member wants to cut out his own State - to beat New South Wales in the matter of incurring indebtedness.

Mr JOSEPH COOK:

– No. That record belongs to the Labour party. We make them a present of it. The Government are taking more money out of the pockets of the people to-day than has ever been taken by any preceding Government. They are boasting all the time that the working man has to pay the bulk of the taxation-

Mr Archibald:

– He always has to do that. He had to do it on low wages when the honorable member’s party were in power.

Mr FISHER:

– Hear, hear ! Good men were looking for work at 5s. per day.

Mr JOSEPH COOK:

– When ?

Mr Fisher:

– In the days of Liberalism.

Mr JOSEPH COOK:

– If the Prime Minister will look up the first speech which I delivered when his Government came into office he will find that I then placed upon record in Hansard the ruling rates of wages, and these supply the answer to his reckless statement. To-day the working man gets less out of his wages than he did three years ago. That can be proved. The Government are taking out of his pocket by way of extra taxation £4 10s. per annum more than was taken out of it before they came into office.

Mr Archibald:

– We are taking it out of the pockets of the rich.

Mr JOSEPH COOK:

– Nothing of the kind. Have we not just passed a Bill authorizing the payment of £5 to every rich woman who has a baby? The poor working man is being taxed to the ground in order to throw money into the lap’s of rich women. Surely a greater joke was never perpetrated in this country.

Sitting suspended from 1 to 2.30p.m.

Mr JOSEPH COOK:

– I have no intention to occupy more time, and I should not have detained honorable members to the extent I have but for the large and spacious financial outlook of the Prime Minister, who took advantage of this simple little Bill to discuss the finances of the whole world.

Mr Page:

– The honorable member made him do it.

Mr JOSEPH COOK:

– No; that is beyond my powers. Not only did the Prime Minister discuss the finances of the world, but he pointed out what a great and virtuous Government this is, and how wise and statesmanlike all its actions have been. The Prime Minister, this morning, dissociated himself from any atom of credit for the Notes Bill by saying that he has slavishly followed the conservative financing of Sir Hugh Nelson, in Queensland. Until now, I had thought that this note issue was some novel idea on the part of the present Government; but we find that the Prime Minister is treading a wellbeaten track, and will, therefore, be able to lay no claim to any financial pioneering. On the contrary, he has harked back to twenty years ago, and is, as he says, slavishly following the conservative financing of the State of Queensland in the bad old days.

Mr Archibald:

– The honorable member for Parramatta is fifty years behind the times still.

Mr JOSEPH COOK:

– If so, I am still thirty years in front of the Government, because its chief virtue and credit to-day lies in the fact that the Prime Minister has gone back, even twenty years, to copy the legislation of Sir Hugh Nelson and others. If it be good to go back twenty years, it should be good to go back fifty years. If the Government stay in office a little longer, they will be able to set up as representing the real old Conservatives of Australia, and will justify the criticism over here. Borrowing is now added to their policy, and borrowing in a time of inflated revenues and prosperous seasons for a purpose which the Government have before declared should not be the subject of borrowing.

Mr Roberts:

– What would the honorable member do in the circumstances?

Mr JOSEPH COOK:

– I shall get quits with the honorable member at once, and let him off by saying nothing.

Mr Roberts:

– That is characteristic of the Fusion - it does nothing.

Mr JOSEPH COOK:

– This is a Loan Bill for the purchase of property for a post-office in Perth, and there are other proposals to borrow for the purchase of land and buildings in London, the Federal Capital, and elsewhere. There is a plank in the Labour platform, modified in recent years, declaring for the restriction of public borrowing. This meant, unmistakably, that the Labour Government would borrow for purposes other than those for which other Governments have borrowed ; and yet the Labour Government is the first in Australia to borrow for the construction of public works.

Mr Archibald:

– The Government borrow from themselves.

Mr JOSEPH COOK:

– The Government borrow money from trust funds, every penny of which has been allocated to specific objects. I raise no objection to this proposal, because it inaugurates a system that ought to have been inaugurated a few years ago. It is not a proper policy to build permanent reproductive works out of revenue. This taxes the people unnecessarily and unduly; and I have quoted figures to show that, for the public works in these Estimates alone, every family in the community pays, on the average, 2,4 10S. The honorable member for Hindmarsh has said, by way of interjection, that the average is higher ; and the only result is that honorable members opposite will be able to go on the platform and point to the public works that have been constructed out of revenue. But the answer of the working man will be, “ But see the money you have- taken out of my pocket to build them with.”

Mr Riley:

– See what we have put into his pocket !

Mr JOSEPH COOK:

– The working man is beginning to realize the situation, as honorable members will find at the ballotbox. The working man will say by his vote, in unmistakable fashion, that whatever may have been put into his pocket, a great deal has been taken out.

My next point is that the Government have had £18,000,000 more revenue in the last three years than any previous Government have had ; and, notwithstanding that fact, they are forced to a policy of borrowing for public works.

Then, I contend that we should be chary how we borrow and tie up money out of the Trust Funds. We ought to resort to these Funds in a sparing way, and for well-defined purposes; at any rate, there should be nothing done in the direction of expenditure which will tie the money up. These Trust Funds should be left as facile as possible of acquirement should they be needed. While the workmen of the community are being asked to provide these increased revenues for the purpose of putting up buildings for future generations, who will certainly give us no thanks - while those proud edifices are rearing their heads - the only consolation will be that of saying, during the regime of the Labour Government, each workman paid over £12 out of his earnings in the three years for the use of somebody after he is dead and gone. The Government are forced, by sheer circumstances, to depart from the policy of no-borrowing. We have the anomaly that, while the building in London is provided for out of loan, a building in Melbourne, to cost ,£108,000, is paid for out of revenue, although the building here is for a post-office, and will earn money, and the building in London will earn nothing directly, although we may hope it will do so indirectly. It is not a good policy to pay for huge, practically everlasting, buildings out of current revenues, which really means out of the pockets of the people. Therefore, I think we ought to congratulate the Government on the fact that they are at last adopting the policy of providing capital expenditure from capital sources, and initiating a course which, if followed logically, will lead them to the good old so-called Conservative financing, the advantages of which they are begining to see after three years of office.

Mr GROOM:
Darling Downs

.- This is the second occasion on which the Government have proposed the raising of a loan, and it is rather interesting to note what is the Labour policy in this regard, as gathered from the published platforms of the party. In New South Wales, in 1909, we find that the policy of the Labour party was the “ Restriction of public borrowing,” while the fighting platform provided for the cessation of borrowing, except for the redemption of loans, for completing works already authorized, or for reproductive works which would pay in interest from the beginning and provide a 1 per cent, sinking fund. Under such conditions as these, I am afraid we should never have authorized a loan of £1,000,000 for the construction of the transcontinental railway, or for the erection of Commonwealth buildings in London. In Victoria, the Labour platform of 1898, which I believe is still the same, provided for the restriction of public borrowing, except for the conversion of loans; and the platform of the Commonwealth Labour party of 190* declares for the “Restriction of public borrowing.” Judging from present circumstances, we may take it this vague phrase means borrowing whenever it is necessary to do so - that borrowing is restricted only by the financial necessities of the situation. On the public platform, however, the claim is continually made on behalf of the Labour party that they are against borrowing ; and this was an issue raised at the Boothby byelection, in which Ministers, and honorable members opposite, took part. The Government are to be congratulated on taking a step which every other Government in Australia have had to take. When we are face to face with big undertakings, it is impossible to finance them out of current revenue. We must borrow ; and it is to be hoped that, after these two Bills have been passed, the Government and their followers will realize that they are as much pledged to borrowing as any other party in the Commonwealth.

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– But from whom are we borrowing?.

Mr GROOM:

– From whom is the State Government of New South Wales borrowing?

Mr Fisher:

– From the Commonwealth.

Mr GROOM:

– Did they borrow from the Commonwealth the £6,000,000 which they have recently expended? Were they borrowing from the Commonwealth when they tried to negotiate a loan on the Continent ?

Mr Cann:

– They did not try to do so.

Mr GROOM:

– At all events, an attempt was made on their behalf to borrow on the Continent, and they have certainly gone to England to borrow. The Labour party throughout Australia, whether they be in power in the States or in the Commonwealth, have come to realize that, whether they like it or not, they must resort to a borrowing policy. The followers of the Labour Government are against borrowing, but those of their party who take office and responsibility, and have to face the financial difficulties of the country, have to admit that the policy of borrowing which they condemned in the past is inevitable.

Mr Riley:

– Does the honorable member object to this Government borrowing from the Trust Funds?

Mr GROOM:

– Not at all. Every loan has to be considered on its. merits. But when the Government have exhausted the Trust Funds where are they going to bor row? It is estimated that the Kalgoorlie to Port Augusta railway will cost £4,000,000. Is the whole of that sum to be borrowed out of the Trust Funds? Mr. Page. - Yes.

Mr GROOM:

– I do not know where the Trust Funds are to come from.

Mr Page:

– That is all right; don’t worry.

Mr GROOM:

– That is the policy of, the honorable member’s party. “ Build up your expenditure; pile up your public debt; but don’t worry !” The ultimate solution of all the difficulties of Australia is a “ don’t worry “ policy.

Mr Page:

– No; that is only the honorable member’s way of putting it.

Mr GROOM:

– The policy of the Labour party is, “ Let us tax the people as freely as we like, and don’t worry.” That is the policy of this anti-borrowing Government.

Mr Joseph Cook:

– That is the word I wanted. The “ anti-borrowing “ Government.

Mr Roberts:

– You are all “anti’s” over there.

Mr GROOM:

– Our honorable friends opposite are going to their “ uncles.” Last year they obtained authority to raise a loan of £2,460,000. They obtained authority, first of all, to raise £1,000,000 as a first instalment towards the cost of the Kalgoorlie to Port Augusta railway. The estimated cost of the construction of that line is £4,000,000, but if it is to be constructed in the reckless way that has been indicated during this session no one can say what it will cost. Then they have obtained power to borrow £600,000 as a first instalment towards the cost of the Federal Capital. The building of the Capital will cost far more, and, apparently, is to be provided for by means of a borrowing policy. Then again, they obtained authority to raise £226,000 to redeem Treasury-bills, which is very natural, and a further sum of £34,000 in connexion with the Port Augusta railway. At page 5 of the Estimates, dealing with special appropriations under the heading “ Commonwealth Inscribed Stock,” there appears an item of £60,000 concerning which I should like some explanation. At page 70 of the Budget-papers there is a reference to a loan of £2,460,000 which has been authorized, and £700,000 of which has beer* raised, and in respect of which there is a permanent annual interest charge of £24,500. That is in respect of a special appropriation under the Inscribed Stock Act. I wish to know whether the item of £60,000 covers interest on the balance of the amount which the Government contemplate raising under the Act of 191 1?

Mr Fisher:

– I cannot say, off-hand; it probably relates to the £1,000,000 raised for the Western Australian railway.

Mr GROOM:

– Is any other Loan Bill to be introduced this session?

Mr Fisher:

– No.

Mr GROOM:

– The Government have obtained authority for a loan of ,£1,000,000 in respect of the Western Australian railway. Is it their intention to secure authority this session to raise a larger loan in respect of that work?

Mr Fisher:

– I do not think it will be necessary.

Mr GROOM:

– Then the real position is that the Government have actually obtained authority to expend £2,460,000 of loan money, and are now seeking authority for a loan of £150,000 for the purposes of the Perth Post-office site. An important feature of this proposal is that the Government, for the first time, are introducing a policy of borrowing money for the acquisition of sites for post-office buildings. At the inception of Federation, Sir George Turner desired authority to raise a small loan to place the postal service of Australia on a proper footing. The Inscribed Stock Act which we passed last year was, in effect, simply a re-introduction of the Bill then introduced by Sir George Turner, and which was opposed by some of the Labour party. The Labour Government, in this Parliament, are now initiating the very policy against which some of their party protested at the beginning of Federation. Had that policy been initiated then, many complaints regarding the inefficiency of the postal and telephone services of the Commonwealth would have been avoided.

Mr Archibald:

– And we should probably have owed ,£100,000,000 by this time.

Mr GROOM:

– Not at all. The honorable member is evidently judging what our operations would have been by the operations of Labour Governments in New South Wales and other States. Sir George Turner’s policy was that capital expenditure on reproductive enterprises should be provided for by loan, and that provision should be made for regular contributions to a sinking fund.

Mr Finlayson:

– And the honorable member’s Government started borrowing for reproductive enterprises by borrowing to build a Navy.

Mr GROOM:

– That was a proper policy to adopt. . Within fifteen years of the passing of the Act - before the vessels in question had really become obsolete - the money borrowed would have been repaid out of the revenues of Australia. Honorable members opposite have found fault with the policy which they have now ultimately to adopt. There is no consistency in them. When they are in Opposition they will oppose a policy which, as soon as they take office, they are prepared to adopt. When they take office they will do as any Government would do.

Mr Finlayson:

– Then, why complain?

Mr GROOM:

– I am not. I am congratulating honorable members opposite on their loan proposals. I trust, however, that when they go on the public platform they will have the honesty and courage to admit that they ought to retract all that they have said respecting other Governments and their loan policies.

Mr Fenton:

– I think that there is as much honesty, and courage on this side as on that.

Mr GROOM:

– I am glad to hear that there is. We shall test the matter when the occasion arises. To-day, the Government are introducing the very policy which Sir George Turner desired to introduce in the early days of the Federal Parliament ; and those who opposed it then have now to admit that he was right, and that had his scheme been adopted - had we paid for capital works out of loan money and provided a sinking fund - we should, by this time, have paid off those loans; whilst the people of the Commonwealth, during the last ten years, would have had a better telephone and telegraph service than they have had. Some honorable members opposite ask, “Why should we not pay for some of these things out of revenue?” I would remind them that we can place upon the community too heavy a burden of taxation. It is not always wise to charge to the present generation the cost of works the benefit of which will extend over many generations. We are still in a pioneering stage. Those who are doing pioneering work for us in their private enterprises have had to borrow freely. If it had not been for the courage of the men who took up the land and borrowed to enable them to open up the country, our development would not be anything like as far advanced as it is. Many successful men on the land to-day, if they could not have borrowed from the banks, would have been compelled to occupy, throughout their lives, positions as city employes, and they would not have been able to develop the country as they have clone. Not one-half of the great business firms of Australia could have done what they have done without borrowing. The principles that apply in private life apply in the development of national life. We are practically only breaking the soil of our national life.

Mr Archibald:

– Big fortunes have been made out of public borrowing.

Mr GROOM:

– That may be; but, by paying for everything out of revenue, we are placing an unduly heavy burden on the people who are developing Australia. When the farmer is told that he is being required to pay £15 a year in taxation because the money is needed by the Government for the erection out of revenue of works which ought to be erected out of capital, he naturally feels that if he were taxed to meet the interest charge only he would have more money with which to open up and increase the production of the country. To charge everything to revenue would be to throw upon the taxpayers a heavier burden than they can bear, andI congratulate the Government on having now, a second time, admitted that the policy of the party in the past was wrong, and that Sir George Turner was right in proposing that works like permanent post-offices should be paid for out of loans, to be repaid by the establishment of sinking funds.

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– To whom will the Government pay the interest on the money it proposes to borrow ?

Mr GROOM:

– Mypoint is that the Government have admitted that they cannot pay for out of revenue all the public works that the country requires. Whether they borrow from the Trust Fund or some other source, the principle is the same. Besides, the Bill does not authorize borrowing from the Trust Fund only. Under it and the Inscribed Stock Act the Government may raise loans in London or in France. At present, it is proposed to borrow from the Trust Fund, because there are a few hundreds of thousands in that fund. We have been told that the expenditure of £1,000,000 on the Kalgoorlie to Port Augusta railway has been authorized, but where is the remaining £3,000,000 to come from ?

Mr Charlton:

– This is our business.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Mr. Micawber again !

Mr GROOM:

– Yes, they are waiting for something to turn up. Why do they not admit that the money will have to be borrowed, just as the Government of New South Wales are borrowing money?

Mr Archibald:

– The Opposition would not wait long to borrow if there were any Jews willing to lend.

Mr GROOM:

– Has Australia borrowed only from Jews ? Why should a slur be cast on the Jewish people? When Mr. Verran was at the head of a Labour Government in South Australia, was he condemned for going to the Jews for money? No. The Labour party then said that it was a wise and sound policy. Australia has been generously treated by the British nation in money matters, and I hope that this Government and the party behind it will now make the admission from the public platforms that they were mistaken in condemning the Governments of the past for having borrowed, and will admit that they are no better than their predecessors in this respect.

Mr ROBERTS:
Honorary Minister · Adelaide · ALP

– The Deputy Leader of the Opposition and the honorable member for Darling Downs having exhausted themselves on the subject, a few quiet words may be acceptable to the Committee. We have to-day witnessed another of those painful exhibitions which are characteristic of the Opposition, an alarming display of incompetence, inconsistency, and general all-round madness. The Government have introduced a Bill with which the members of the Opposition, by occasional sentences introduced into their otherwise harsh criticism, fully agree. Regarding the Bill itself and its object, they have not a word of complaint ; and, in the circumstances, might naturally be supposed to offer their congratulations. But, instead of doing so, they smite us hip and thigh ; they travel from Dan to Beersheba; they go north, south, east, and west, in and out, under and over, and round about the subject. The jocular interjection of a Ministerial supporter, made when the honorable member for Darling Downs was working himself into a paroxysm of rage - “ don’t worry “ - was seized upon with avidity as defining the policy of the Labour party. The making so much of a chance interjection indicates poverty of logical argument on the part of the Fusionists. Being absolutely at a loss to find in our printed policy or speeches a word of which they could complain, they have had to discuss the actions of the Government of New South Wales, which they have condemned. I have heard of families in which one brother was all that the world could desire, and the other quite the reverse, but in such cases would the good and upright citizen be imprisoned or otherwise punished for his brother’s faults or mistakes? Should I condemn the honorable member for Darling Downs because the Premier of Victoria admittedly made a shocking blunder in interfering with the affairs of an insurance company? Is that ‘form of argument to be permitted?

Mr W ELLIOT JOHNSON:
LANG, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It would not apply. There is no analogy.

Mr ROBERTS:

– Out of the mouth of its energetic Whip, the Opposition is condemned. He says that this line of argument does not apply. If I am not to blame the honorable member for Darling Downs for the shocking blunder of the Premier of Victoria, who possesses the same political leanings, why should he blame the Commonwealth Labour party for something alleged to have been done by the Government of New South Wales?

Mr Harper:

– That is a rotten argument.

Mr ROBERTS:

– The honorable member for Mernda characterizes the line of argument followed by the honorable member for Darling Downs as rotten.

Mr Harper:

– No. I referred to the utterance of the Honorary Minister.

Mr ROBERTS:

– The members of the Opposition are, as usual, quarrelling among themselves. The Fusion has never completely fused. This morning the right honorable member for Swan, whom we all like to see sitting opposite to us, railed at his Deputy Leader because the latter was condemning our note issue, which he said that he believed in.

Mr PARKER MOLONEY:
INDI, VICTORIA · ALP

– He said that he was the father of it.

Sir John Forrest:

– I did not say that I was the first that ever thought or such a thing.

Mr ROBERTS:

– The right honorable member says that he did not exactly originate the idea, but he supported it, and when in office went so far as to write a me morandum regarding it. From his party fall memoranda -

Thick as autumnal leaves that strow the brooks

In Vallombrosa

There we have a typical illustration of the Fusion in politics. The right honorable member wrote a memorandum in which he defined a glorious scheme with which he said he was in full accord. He carefully stuck it in a pigeon-hole, and there it remained until men of action came into possession of the Treasury bench. In these circumstances, where is the ground of complaint on the part of my honorable friends ? I wish now to refer to another phase of this question, and my remarks in this connexion are prompted by the statement of the honorable member for Darling Downs. T have noticed of late that whenever there happens to be one of our agricultural friends in a particular part of this glorious edifice, members of the Fusion turn with almost pathetic eyes in his direction. They make imploring appeals to the farmer. I have a shrewd belief, therefore, that an election must be pending - that it cannot be many months off. Whenever country friends honour us with a visit, these pathetic appeals are made to them. One would almost imagine that every Bill which is brought forward by the Government is destined to spread ruin and dismay amongst the farming community If we believed the statement of the honorable member for Darling Downs this afternoon, we should believe that this measure had some relation to the agricultural community, and that its passing would result in their land being taken from them and put into flower-pots to adorn the window sills of Labour members. But even if it had the effect which they would have us believe, would not they be equally to blame? Have they not said that they support the measure lock, stock, and barrel ? Consequently, if it hurts anybody they will be as deeply in the mire as will the Government and their supporters. But these appeals are merely political claptrap. They are intended to mislead and delude persons whose occupations keep them working such long hours that they are prevented from giving that attention to politics which is necessary to enable them to sift the wheat from the chaff. Why travel back twenty years in order to show what the policy of the Labour party was at that time, and with a view to proving that it is inconsistent? As a matter of fact, the Deputy Leader of the Opposition dismally failed to point to the slightest inconsistency.

Mr Palmer:

– Has not the declaration of the honorable member’s party always been in opposition to borrowing?

Mr ROBERTS:
ALP

– Hear my little friend - where do you come from ?

Mr Palmer:

– The Honorary Minister forgets that the mind is the standard of the man.

Mr ROBERTS:

– The honorable member has asked me if the Labour party has not always declared against borrowing. Little though he seems to know about politics, he knows sufficient to mislead by a question of that description. Generally speaking, honorable members on this side of the Chamber disagree with that form of borrowing which was indulged in by Liberals in the past. We do not believe in running to Uncle in England for every penny that is required to develop the Commonwealth. We do not think that every time a public work is required we should run cap in hand to some person and say, “ Please lend me a sovereign; I want to do something with it.” There comes a time when a nation ought to be self-contained, and able to meet its requirements.

Sir John Forrest:

– Very good in theory.

Mr ROBERTS:

– That is the attitude of the Fusion typified in a sentence. In theory they believe in certain things. But when it comes to the crucial point they decline to put into practice their very excellent theories.

Sir John Forrest:

– The Honorary Minister blows hot and cold, just as it suits him.

Mr ROBERTS:

– I am not like the hermit of old, who is one day in favour of a certain course and the next day is opposed to it.

Sir John Forrest:

– What has been the career of the Honorary Minister?

Mr ROBERTS:

– It has been such that I am on the Treasury bench, and the honorable member is in Opposition.

Sir John Forrest:

– The Honorary Minister turned the late Mr. Kingston out of office.

Mr ROBERTS:

– That is the argument which is always uppermost in the honorable member’s mind.

Sir John Forrest:

– The Honorary Minister remembers the occasion on which he deserted his party.

Mr ROBERTS:

– The statement of the honorable gentleman is incorrect. I dare not say that it is knowingly incorrect, but nevertheless I believe it. I never deserted my party.

Sir John Forrest:

– I thought that the Honorary Minister turned the late Mr. Kingston out of office.

Mr ROBERTS:

– Mr. Kingston was never a Labour man. I turned the right honorable member for Swan out of office with satisfaction and pride, recognising that his presence on the Treasury bench was inimical to the best interests of this country. I remember that at one time he was associated with the late Mr. Kingston, and that that gentleman parted company with him. We have been told to-day that we have been guilty of “ financial extravagance.” Once again I ask honorable members opposite to be specific in their charges. Any man can say, ‘ ‘ You are an extravagant fellow.” Anybody can say in general terms that such-and-such a thing is happening. But it requires knowledge, honour, and uprightness, for an individual to specifically point to where extravagance is taking place. Not an honorable member opposite will vote against this Bill. Consequently, if extravagance be associated with it, they will be guilty of extravagance. I ask my honorable friends to point to one item of extravagance for which we are responsible.

Sir John Forrest:

– What about the £60 expended upon a single day’s advertisement in the Labour Call?

Mr ROBERTS:

– I know nothing about that matter. I am not associated with it in any shape or form. It may be that the Minister responsible has inserted an advertisement in that newspaper. He may have paid £60 or £600 for that advertisement. I take it that it was a legitimate advertisement, and that the Minister has a right to advertise in the newspapers in which he deems it best to advertise. The advertisement, I presume, was not confined to one particular newspaper-

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Yes, it was.

Mr ROBERTS:

– What was its nature?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– It was an advertisement in regard to immigration.

Mr ROBERTS:

– If there is one thing in this world which ought to satisfy my honorable friends it is an advertisement in respect of immigration in a Labour newspaper.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Why pay four times the ordinary rate for that advertisement?

Mr ROBERTS:

– I do not know what rate was paid for it

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– We say that that is extravagance.

Mr ROBERTS:

– I do not know the circumstances. I ask those gentlemen who have been alleging torrential extravagance on our part to point to one item to justify their accusation. With one accord these great financial geniuses, these exMinisters, bankers, chairmen of shipping companies, and owners of terraces of houses, allege torrential extravagance against the Government, but the only item to which they can point in support of their claim is a paltry expenditure of £60 upon an advertisement in a Labour newspaper.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– What about the £500,000 which will be expended in powellising karri sleepers ?

Mr ROBERTS:

– No £500,000 is to be expended in that direction.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– To construct the transcontinental railway with powellised karri sleepers will cost £500,000 more than would its construction with jarrah sleepers.

Mr ROBERTS:

– The Minister of Home Affairs, after taking the advice of all the experts available, has decided to use powellized karri in preference to jarrah sleepers. The Commonwealth Engineer for Railways, to whom we pay a salary of £1,800 a year, stakes his reputation upon the result of the experiment, and strongly urges the use of that class of sleeper.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– No, he does not.

Mr ROBERTS:

– Again we have a statement that is incorrect.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– He does not “ strongly “ advise its use.

Mr ROBERTS:

– The advice and recommendations of this officer were before the honorable member, and should have been read by him, had he been concerned in securing knowledge, instead of faking statements for the public.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I rise to order. The Honorary Minister has accused me of “ faking statements,” and I ask that the words be withdrawn.

The CHAIRMAN:

– If the Honorary Minister made use of the words, he must withdraw them as unparliamentary.

Mr ROBERTS:

– I withdraw the words unreservedly. I think I may be permitted, under the circumstances, to read the reply of the Minister in regard to the advertisement referred to, which is stated to have cost £60. The Minister stated, in answer to questions, that the space occupied by the advertisement covered the back page of a special number, measuring 17 inches by11 inches; that a copy of the publication had been placed on the table of the Library for the information of honorable members; and that -

There was no advertising of Eight Hours’ Day by the Department. The then Minister was of opinion that it would tend to prevent misconception if an immigration announcement were to appear in a publication which represents a class of the community which was erroneously supposed to be adverse to immigration. Included in the price per page £60 was for supply of 1,000 copies of the publication which were sent to England for distribution.

Honorable members opposite seem to be very hard pressed. For twelve months or two years they have been levelling the charge of extravagance against the Government; but, after talking about £22,000,000 we find that all they allege now is this expenditure of £60 for a special purpose. This, indeed, seems to reduce honorable members opposite to the last stages of absurdity

The CHAIRMAN:

– The Honorary Minister’s time has expired.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It is extremely strong evidence of the poverty of debating power on the Ministerial side of the House that the honorable member whom the whole House regards as the show debating member, or the debating society member of the party, should be put up to answer a solid financial argument. The occasion of this debate is the first time that the Government have had - shall I say? - the bravery to announce that they are about to enter upon a borrowing policy. The attitude of the Government reminds me of a young woman who has just had her first baby, and who, when, her friends gather around and propose to have a little celebration, says, “ Please do not make it public ; I would rather keep it quiet; do not draw public attention to it.” The Labour party desire that the public should know nothing of the fact that they are about to stultify themselves after years of condemnation of borrowing. This is not the first time that the Government have borrowed. They gave £10,000,000 worth of I.O.U.’s to the public in the form of notes, and we know that, on another occasion, they borrowed £2,500,000 out of what they called the Trust Fund, which, however, was made up of the money which they had previously borrowed from the public on the notes. Now it is proposed to borrow in a more direct way; and the Honorary Minister is put up to perform horse-play for half-an-hour, in an expansive House, in order to divert public attention from what is now taking place. I join in the desire to celebrate the conversion of the Labour party to a loan policy. Every civilized country in the world to-day is borowing money for permanent and revenueproducing works, and it has taken twelve years of Federal history to force the Labour party to see the necessity of following, the principle that they might have seen with their eyes blindfolded if they had only kept them open under the bandage. This debate arose over a speech made by the Deputy Leader of the Opposition, who called attention to the fact that while the Government were floating a loan to pay for a concrete building in London, they were paying for brick buildings in Australia out of revenue. The Prime Minister stood here for three-quarters of an hour professedly to explain the inconsistency, but he never touched on it. I am very glad that this loan question has come up again. I have drawn attention to it over a series of years, not only in connexion with the Labour Government, but in connexion with other Governments who have been spending millions of money on works which were intended, not for the benefit of this generation only, but of subsequent generations, and denuding the Treasury of its revenue moneys in order to pay for permanent works. I drew attention to the matter in 1903, and also in 1909. It is a little hard to come down to real solid facts after the sort of circus performance we had from the honorable member who preceded me. In 1.909 I pointed out that we had spent in the previous year no less than ,£900,000 upon buildings which would not only be permanent, but would improve in value by reason of the added interest and importance given to them as post offices. Then in August of this year, I again referred to the matter, and placed before the House the opinions of an expert outside these walls on the absurdity of continuing the policy of the Labour party. Mr. R. M. Johnston, the Government Statistician of Tasmania, published a pamphlet on the subject of loans, in which he said -

The difficulties which now seem to stand in the way as a barrier to the successful discharge of Federal functions and financial obligations are entirely due to a submission to the notions of certain persons possessed with unsound views regarding the science of economies and finance as applied to investments of a profitable and permanent character, especially in relation to State borrowing.

The success of the Australian States in the past has undoubtedly been chiefly due to the sacrifices which the earlier pioneers made, from time to time, in making timely provision for the opening up of Australia’s vast virgin lands, by means of public loans invested in roads, railways, bridges/ jetties, harbors, &c, in advance of the settler. To any thoughtful person it is obvious that at the initial stage of a Colony’s history it would be financially impossible to construct costly works and undertakings of the kind without the aid of borrowed capital.

Since the year 1842 the six States of Australia have practically entered into partnership with local and foreign capitalists in the construction of all such important works, and in no other way would it have been possible to have succeeded in making the initial outlay of over ^240,000,000 in a period of about 64 years, or at the rate of about ^3,750,000 per annum. He concluded with these words -

If this reasonable and proper method were adopted by the Federal Government, it would at once be freed from all the self-imposed financial embarrassments. With existing sources of revenue it could discharge all its just obligations (old-age pensions, navy, and other defence requirements, subsidy of 31s. 3d. per head of population in aid of State revenue, sinking fund for redemption of debt incurred for new costly works, &c), and still have a surplus balance in the hands of the Treasurer of the Commonwealth amounting to nearly £900,000 each year.

There is a sound principle laid down by Mr. Johnston, not for the first time, because it is a principle that has been adopted by the Mother Country, by France, by Germany, by the United States, and by every State in Australia since its inception. Yet this Labour party came into power twenty odd years ago with the announcement that they were not going to borrow money. They have kept up the pretence until now. To-day they put up the Honorary Minister, who played the fool, so to speak, for half-an-hour, to divert attention from the fact that the Labour party have absolutely stultified themselves-

Mr Roberts:

– I rise to order. I desire that the vulgar and personal utterance of the honorable member shall be withdrawn.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I withdraw the statement that the honorable member was “ playing the fool.” I dare say it was perfectly natural.

The CHAIRMAN:

– The honorable member must withdraw the statement without any qualification.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I do. In the course of his speech, the Prime Minister, in answer to a very solid contribution to this debate, made by the Deputy Leader of the Opposition, boasted of the very improved way in which the Labour party had dealt with naval expenditure. He said that the Labour party had paid for their Navy so far as it has gone, and that they would endeavour to continue to pay for it, all out of revenue. But he assumed - and, I may add, presumed - to suggest to the public that the Liberal party, when they introduced their naval policy measure, -were going to pay for what was required out of loans. Now, any one who has ever read the measure which the Liberal party introduced into this House, providing for a Navy for the Commonwealth, will know very well that part of its provisions arranged that the capital expenditure should be paid off in fourteen years by a sinking fund.. The Labour party, according to Admiral Henderson, have provided for a scheme which is not to be paid off for twenty-two years. So that the Liberal party, under their scheme, were paying in fourteen years what the Labour party are spreading over twentytwo. Moreover, the Labour party are not paying for the same class of vessels. We know very well that the Labour party introduced a scheme from which all the larger types of vessels were excluded. They were going to spend ,£22,000,000 on vessels that could not leave the waters of Australia ; whereas the Liberal party introduced a naval scheme which provided for at least three or four vessels capable of leaving Australian waters and helping in the defence of the Empire. The Acting Leader of the Opposition drew attention, as an observant person would, to the inconsistency of the expenditure from revenue and from loans favoured by the Labour party. We are told that the Government are going to pay for the buildings in Perth out of revenue. But they are going to pay for the buildings in London out of loan money. Passing over the gross inconsistency between the present proposal for loan expenditure and the past policy of the Labour party, what possible justification can there be for differentiating between the method of paying for buildings in London and the method proposed for paying for buildings in Perth ? If it is a question of the solidity of the buildings, the Acting Leader of the Opposition has shown that the buildings in London will be of a more permanent character. They will be rent-producing, whereas the Post Office in Perth will not actually produce rent, but will be only for the service of the Commonwealth. No attempt has been made to distinguish between the two, or to show why the one building should be put upon a loan basis and the other upon a revenue basis. My own view has always been that where we have purchased a site for a post-office, or have erected one we should recollect that the building will remain for the use of posterity, and that it will increase in value. It gives permanent service; and each generation should pay its share, in the form of interest, on the outlay. But the Labour party do not realize the force of that idea. A farmer, in however small a way he may be, might wish to have a steam plough. The Labour party would say to him, “You must not borrow money to buy a steam plough, although it will do your work ten or twelve times as fast as you do it now. You must not have a steam plough until you can pay for it out of your revenue.” Consequently, his success would be indefinitely postponed. We are told that the Naval Unit is to be paid for out of revenue, and the Prime Minister, in a fine sort of way, attempted to distinguish between payment for the Naval College and payment for the ships. I should like to say that his theory runs quite contrary to the practice of all the greater countries of the world. He spoke of the British people as never having paid for ships, or incurred military and naval expenditure, out of loan money. Does not the right honorable member know that, after the Boer War, Great Britain added £250,000,000 to her debt? If she added that sum to her debt for carrying on a war, would she not have been justified in adding to her debt by borrowing for building ships? Lord Cromer, one of the most distinguished financiers in the British Empire, the man who restored Egypt to a condition of solvency from one of bankruptcy, actually advocated, three years ago, that no less than £50,000,000 should be borrowed to supply Great Britain with Dreadnoughts. I should like to know what possible consolation Labour members can find in that? The Labour party, as I have said, profess to the public that they are not only opposed to loans, but have never entertained the idea of a loan. I want to reiterate here that the £10,000,000 note issue was nothing more than a loan from the public. It had, moreover, this disadvantage : that it gathered up local moneys instead of inducing the public of Great Britain and elsewhere to put their capital into Australian investments. The Labour party got a loan out of the Trust Funds.

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– And paying interest to whom?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– To the Trust Funds.

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– To the people.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– And the Trust Funds represented the people to whom the notes were issued, so that by the honorable member’s own showing there was a direct loan from the public at a time when the Labour party were condemning the whole principle of borrowing, and professing to be free from that criminal conduct which characterizes other older communities. The Labour party furthermore have continued a loan of £9,000,000 from the States. We owe the States at the present time in respect of the buildings’ we have taken over from them £9,000,000. Have the Labour party made any attempt to pay that out of revenue ? No. They let it stand as a loan, and pay 3½ per cent. on it just as if they had actually borrowed the money from the States. They tried very hard to get 3½ per cent. from the States for advances, while they were allowing the States only 3 per cent. on their other transactions. Then again, the Labour party are drawing from the States in respect of the Customs and Excise revenue some £2,000,000 or £3,000,000 a year more than was previously retained from them. They do not look upon that as a loan. They do not seem to realize that they are denuding the States of that extra revenue which would help them to carry on their affairs. I have only to say that it would be far better for the Labour party to confess at once to the public: that they now realize that a time has come in the history of Australia when money required for permanent and revenue-producing works must be taken out of loan account. They must recognise the general principle thatone generation cannot pay for the hundreds of benefits that as a young country we are going to pass down to subsequent generations. When once that general principle is recognised, we shall put our finances upon a sound basis. As the honorable member for Darling Downs has pointed out, by this system of paying for reproductive permanent works out of revenue, we are depriving ourselves of some millions a year. We are denuding our public services of that amount, and at the same time making the people of the Commonwealth pay an unequal and unjust taxation in order that we may carry on our current works.

Progress reported…

page 5037

PAPERS

MINISTERS laid upon the table the following papers : -

Workmen’s Insurance. - Letter, dated 24th January, 19 10, from the Commonwealth Statistician to the Minister for Trade and Customs, re Workmen’s Insurance in Europe, together with a general apercu on the German system.

Ordered to be printed :

Lands Acquisition Act-

Land acquired under, for Postal purposes, at-

Cockburn, S.A.

Gimlet, W.A.

Granville, N.S.W.

Kojonup, W.A.

Mundijong, W.A.

page 5037

ADJOURNMENT

Order of Business

Mr FISHER:
Prime Minister and Treasurer · Wide Bay · ALP

– In moving -

That the House do now adjourn,

I desire to say that the first businesson Wednesday afternoon next will be the third reading of the Copyright Bill, after which we shall proceed with the consideration of the Loan Bill.

Mr Fuller:

– When are we to get the

Northern Territory Land Ordnance?

Mr FISHER:
ALP

– Next week.

Question resolved in the affirmative.

House adjourned at 3.55 p.m.

Cite as: Australia, House of Representatives, Debates, 1 November 1912, viewed 22 October 2017, <http://historichansard.net/hofreps/1912/19121101_reps_4_67/>.

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