5th Parliament · 1st Session
Mr” Speaker took the chair at 3 p.m., and read prayers.
Mr. SPEAKER informed the House that he had issued a writ’ for the election of a member to serve for the electoral division of Adelaide, in the place of Ernest Alfred Roberts, deceased, and the dates appointed in the writ were as follow: - Date of nomination, Wednesday, 24th December; date of polling’, Saturday, 10th January, 1914; and the return of the writ to be on or before Saturday, 7th February, 1914.
– I rise to make a personal explanation. The following paragraph, printed between inverted commas, was published in the Sydney Morning Herald of Monday, 1st December: -
I will just enlighten my friends in front as to the true history of the “ gag “ as used by the Federal Government, and in doing so will offer an effectual reply to the fierce denunciations of Mr. Hughes, who has lately been touring this State. It hari been arranged between Mr. Andrew Fisher and myself that a truce should be Arranged to permit of some of my members attending the funeral of an old colleague. While the Liberal members were absent on this duty, Mr. Fisher attempted to take the control of affairs out of my hands. Knowing that my members would bc back in a few hours, and that some of Mr. Fisher’s supporters were in Sydney, I determined to deal wilh Mr. Fisher, and as soon as the Liberal members had returned effectually requited him for one of the most despicable acts that has ever occurred in Parliament. I ask you was I not justified?
The words that I have read are said to have been uttered by the Prime Minister at a meeting held at Liverpool on tha previous Saturday. As to his statement that an arrangement was made between him and me, there is not a word of truth in it. - I had no knowledge of the facts referred to, and the Prime Minister knew that. I make this explanation now because, although in addressing an immense gathering in Sydney I made the correction, neither of the metropolitan daily newspapers published my statement, and my character is at stake. I was in no way aware that the remains of the lata Mr. Knox were to be interred on the day referred to by the Prime Minister, and was not aware of the absence of any member at his funeral. The Prime Minister knew this when he spoke at Liverpool, because I have already made this explanation in this chamber, and honorable members can read what I have said in the Hansard record of this session, at page 2717.
– Read it now.
– The honorable member may not quote from the Hansard report of the current session, except by indulgence of the House.
– I knew nothing of the circumstances mentioned by the Prime Minister. The division was taken because I considered that an adjournment was the proper thing, following the practice and customs of the House.
– Did the right honorable member enter into any arrangement!
– No. I never spoke to the man, nor to any one else, about the matter.
– It is quite true, as the honorable member, says, that he never “ spoke to the man ‘* - meaning myself, I presume - nor did the “man”
Bay that he had done so. What the “ man “ did say - if he may be permitted to explain - is this, that there had been an undertaking given by the Opposition Whip that no advantage would be taken of the absence of Ministerialists at the funeral. It is a pity that in our controversies we cannot preserve the ordinary amenities of debate. In my fiercest speeches when in Opposition I never so far forgot myself as to refer to the right honorable member for Wide Bay as anything but the head of the Government, or the Prime Minister.
– The words which I have read are between inverted commas. Did the honorable member see, them and correct the statement?
– I am not responsible for the inverted commas; I am responsible only for what- 1 said. The statement is in substance’ correct, except that I did not mention an understanding between the right honorable member and myself. I said that there was an understanding between the Government and Opposition Whips. Had I said anything further, it would have been to repeat the statement of a man who is now gone, but I did not speak to the right honorable member, and made no agreement with him. Nothing was further from my thoughts than to say that. The fact remains that there was an undertaking between the Whips of the parties, and between the Whip and the honorable member’s party in addition.
– It was faithfully carried out.
– It was reported in the Melbourne newspapers of yesterday or Saturday, in connexion with a suggestion for reciprocal trade with France, that the Government is prepared to consider the establishment of reciprocity with any country. I do not know whether the Minister of Trade and Customs was correctly reported on the subject, but I ask him whether the negotiations for the establishment of reciprocal trade with New
Zealand and Canada have gone any further, and whether the Government is likely to do more than consider the matter.
– Nothing further has been done. 1 have not seen the paragraph regarding reciprocity with France, but I have not made any statement to the effect quoted.
Report (No. 2), presented by Mr. Mcwilliams, read by the Clerk, and adopted.
– I desire, through you, Mr. Speaker, to ask a question of the honorable member for Robertson.
– The honorable member is not entitled to ask a question of a private member unless that honorable member is in charge of a Bill, a motion, or other public matter on the noticepaper.
– I was under the impression that similar questions had been asked.
– Do you rule, Mr. Speaker, that an honorable member cannot ask another honorable member a question !
– Standing order 92 provides -
After notices have been given, questions may be put to Ministers of the Crown relating to public affairs, and to other members relating to any Bill, motion, or other public matter connected with the business on the notice-paper, of which such members may have charge.
– Is the Prime Minister aware that a party of eighty-five American tourists are now on their way to Australia by special steamer, via Japan and China, and are due at Brisbane on New Year’s Day, and at Melbourne on the 6th January? As the party includes the New York Giants and Chicago White Sox baseball teams, some of whom are men of influence in America, and ten journalists, is it the intention of the Government to join with the States in doing what is fair in the form of entertainment to such a strong, representative body from our friends in America 1
– This is the first intimation I have had of the advent to our shores of so celebrated a delegation. I hope ve shall treat them as we treat all other visitors, with a cordial welcome.
– Can the Minister of Trade and Customs state definitely when the 2s. 2d. bounty, due on sugar cane delivered between the 1st May and 25th July this year, will be paid?
– I have the whole matter practically completed, and I hope to make a definite announcement to-morrow-
Mv. KING O’MALLEY.- It is- reported in one of the newspapers that the Assistant Minister of Home Affairs says that all railway business now goes direct to the Minister of Home Affairs, and is not sent to the Administrator at Canberra. Is the Minister aware that such was always done under my administration, and that the only things referred to the Manager of the Railways were a few that came up during the election campaign, and that only Federal Territory matters were referred to Canberra? If other matters afterwards went to Canberra, my orders were violated.
-Order! That is going beyond a question.
– I have not seen the paragraph referred to. I can only inform the honorable member that when I entered the Home Affairs Department I found that the honorable member had constituted the Secretary of the Department, whom he also made Administrator of the Federal Territory, Manager of the Commonwealth railways.
– It was so from the start.
– I found that some Railway papers were going up to the Administrator at Canberra, and as this involved delay in dealing with urgent papers, and some circumlocution, I obviated it by having railway papers submitted direct to myself.
– Has the attention of the Minister of External Affairs been drawn to an open letter directed to him, and published in the Papuan Times, at Port Moresby on the 19th November, in which credit is given to the Minister for the good work he has done in having a tri- weekly service to the island, and for other matters which deserve a good deal of commendation? Can the Minister give a definite answer as to when the Government will consider the question of giving our White Australian compatriots in Papua the right to elect at least three members of the Council that governs the island ?
– I have read the letter to which the honorable member for Melbourne refers, and may say that, on a comparison of the conditions of other parts of the British Dominions in which elective councils exist, it seemed to me that the request may be premature. It will be considered in due course.
– Is it the intention of the Minister of Trade and Customs to gazette the Navigation Act before the end of tha year, so that it may become law ?
– It is quite impossible to do so. There is a great deal of preliminary work to be done, which will make it’ impossible to gazette the Act for several months to come. I refer to matters dealing with regulations, organization, and so forth. In the case of all measures like the Navigation Act months are occupied in getting a foundation before a proclamation is issued. It is quits impossible to give an exact date on which this proclamation will be issued; it will be several months before it will be possible to do so.
– Can the PostmasterGeneral inform me what steps are being taken for the construction of a new postoffice at Binalong, that I have asked for, and that has been promised so many times ?
– Arranging for the building of this post-office is a verydifficult job, but I shall see what can be done in the matter.
– A short time since, the honorable member for Wimmera asked me if I could give particulars of the loss on telephone exchanges, and I have had a return prepared. It is as follows : -
The loss on telephone exchanges of£173,812, which includes Central Office administration, interest and depreciation, is distributed as follows : -
– In view of the report which the Postmaster- General has presented in regard to the loss upon the telephone service, I desire to ask the honorable gentleman whether it is the intention of the Government to amend the telephone rates ?
– Nearly all the loss occurs in connexion with the city exchanges.
– Then let the rates be increased.
– In the first instance, I am going to see what economies can be made. I think that the increase in the number of subscribers, the setting up of automatic telephone exchanges, and the adoption of a better system than has hitherto been followed will very nearly, at all events, make the telephone service pay.
– I desire to ask the. Minister of External Affairs whether he has received any report in regard to an expedition under a magistrate having come into conflict with the natives in Papua, and whether it is true, as rumoured, that in the affray ten natives were shot? Has any inquiry been made, or is an inquiry likely to be instituted?
– I have not had any report, nor have I read in the press any statement to the effect that there has been a raid or expedition. It may be that the rumour to which the honorable member refers relates to an expedition that went out to arrest the murderers of a Mr. Werner, who, on the north-east coast, met his death about two months ago. I have received a full report in regard to that expedition, in which some lives were lost, but I may say that the rule is that natives are never to be fired on except it becomes inevitable for the purposes of self-defence, and that, in this matter of respect for human life, on the whole, I think that there has been a pretty good record on the side of the Administration.
– Has the Prime Minister seen newspaper reports which purport to contain the findings of the Select Committee appointed by another place to inquire into the case of Mr. Chinn, who was employed as engineer in connexion with the transcontinental railway, and, if they are correct, will he inform the House what action he proposes to take?
– I know nothing beyond what I read in the newspapers this morning.
– Will the Minister of Trade and Customs state whether it is true that the Customs authorities in Australia have received a message stating that it is the intention of the United States to collect retaliatory duties, and, if he has received such a message, will he lay it on the table of the House?
– No such message has been received by the Department. We have nothing in the Department except a copy of the Tariff Bill as introduced in Congress, and a copy as printed in the British Blue-Books. No copy of the Act has yet been obtained by us. We have made inquiries here from the proper authority, but have not been able to obtain any copies. In the Bill there are one or two clauses referring to what the honorable member described as retaliatory duties - that is. to say, the imposition of duties upon goods coming to the United States, where the country of export imposes a dutyon similar goods from the United States. Beyond that, we have no information in the Department.
-Will the Minister of External Affairs state whether the wandering sheep in the Northern Territory have yet been returned to the fold ?
– The sheep have reached Anthony’s Lagoon, and the report of the Administrator, who saw them there, was that they were in good condition. They cannot travel beyond that point until some rain falls.
– Has the Minister of External Affairs considered whatwill be the effect upon Port Darwin of the proclamation of the Navigation Act?
– I have; and the question of how communication with Port Darwin will be affected by the Act has given me some anxiety.
– In regard to the motion carried by this House some time ago for the appointment of a Royal Commission to inquire into the administration of the Electoral Act, I desire to know whether the Prime Minister has yet arrived at a decision as to what shall be thepersonnel of the Commission, and whether he will announce the names to the House?
– I have arrived at no decision yet, but there does not seem to me to be any overweening urgency for the appointment of that Commission, since the matter is already being investigated at the hands of a Select Committee appointed by another place. I hope, byandby, however, to set up the Commission, and to let the House know its ‘personnel.
– I find that in my copy of the Estimates there has been inserted, since Friday last, a new page, to take the place of page 69, as first printed, in which an error appeared. I wish to ask the Treasurer whether he will have page 166 reprinted, since there is a mistake of £600 in the totals given on that page; also whether we may now take the figures as supplied as being final and correct?
– -I hope so. I believe that during the printing of the Estimates an unrevised page was inserted, and that, since Friday last, steps have been taken to put in the corrected figures on page 69. I was not aware that there was any other mistake, but I shall call attention to the honorable member’s statement, and have the figures revised. I may say that those set forth in the Budget speech are accurate, and that this inadvertence has occasioned much regret to myself, and also to the Treasury.
– I wish to put a question to you, Mr. Speaker. I -find that some person has been tampering with the Estimates submitted to us and laid upon the table of the House.
– They were not laid on the table of the House ; they were only supplied to members.
– Members have been supplied with what purport to he correct copies of the Estimates laid on the table of this House.
– No; it is quite a different thing.
– The Estimates were laid upon the table of the House, and members are supposed to have been supplied with, correct copies for their consideration.. I find that page 69 has been obliterated by the pasting of another on top of it.
– That is the way of it, is it?
– That matter has just been referred to.
– Not every copy has been treated in that way, but only a few.
– There is one page, and that is enough for met
– The majority of the copies are all right. I did not alter it.
– I wish to know, Mr. Speaker, on whose authority this has been done?
– These , Estimates are not the property of the House.
– Do I understand that one set of Estimates is laid on the table, and another set given to honorable members ?
– The honorable member is asking a question, and there must be no debate.
– The question has been answered.:
– Order! The matter cannot be debated.
– I have no desire to debate it.
– How long, Mr. Speaker, can an honorable member continue to ask a question?
– Order ! The honorable member’s question has been prolonged by interjections.
– I ask on whose authority this obliteration of the original sets of Estimates has taken place ?
– I was not aware until now that there had been any alteration made. I know nothing of the matter personally. I am informed that the original Estimates which were laid on the table of the House were correct, but that there was an error in some of the copies supplied to honorable members. I knew nothing of the matter until it was mentioned just now.
– Do you not think, Mr. Speaker, that the error should have been publicly announced immediately it was discovered ?
– That, I think, should be done by a Minister - by the Treasurer.
– Hear, hear!
– Is it due to lack of funds, or what is the reason, that such slow progress is being made with the transcontinental railway at the Kalgoorlie end?
– The slow progress at the Kalgoorlie end is due to circumstances over which, unfortunately, the Department has no control.
– I believe no rails have been laid since May.
– In view of the seeming impossibility of having this chamber properly ventilated, will the Honorary Minister take due precautions, in the building of the Parliament House at the Federal Capital, to insure that proper attention is paid to this matter.
– Every precaution will be taken to safeguard the health of honorable members in the way desired by the honorable member.
Mr. SPEAKER announced the receipt of a message from His Excellency the Governor-General, recommending that an appropriation be made for the purposes of this Bill.
Bill returned from the Senate with amendments.
Is it a fact that his Department lias a collec tion of newspaper cuttings, including excerpts with reference to suicides caused by destitution and unemployment ?
If so, would he give the Mouse the following information from such cuttings for the years 1910, 191 1, 1912, and 1913 (in part) -
The number of suicides caused by destitution and unemployment respectively ?
The number of suicides recorded without the cause being stated ?
Where possible, the dates and names of the newspapers which supplied the cuttings ?
MINISTERS laid upon the table the following papers : -
Telegraphs and telephones, Special Works Account Act - Transfers of amounts approved by His Excellency the GovernorGeneral m Council (dated 3rd December, 1913)-
Patents Act. - Regulations Amended (Provisional) - Statutory Rules 1913, No. 300.
Public Service Act -
Promotion of D. B. Wheeler as Clerk, 4th Class, Auditor-General’s Office, Central Staff.
Appointments of F. L. Hatfield, A. A. Andrews, L. Edwards, as Draughtsmen, Professional Division, Class E, Lands and Surveys Branch, Federal Territory.,
– I move -
That this Bill be now read a secondtime.
I do not think that the Bill is in the remotest way a party matter. As honorable members are aware, the first consideration in regard to the establishment of the national note issue was that we should have an easy, convenient, and safe currency, which would secure the confidence of the public. The issue was founded on a gold basis. The main consideration for a national issue was, as I said, that there should be a currency in which the public should have confidence, especially in times of unrest. Financiers are unanimous that a solid gold reserve is essential to a note issue. It was very unwise on the part of our predecessors, after acting in accord with the advice of the banking community of Australia in regard to the amount of gold reserve, to have taken it upon themselves, without any necessity, so far as I know, to act contrary to that advice. I am of opinion that the advice given by the banking community in that regard was disinterested; in fact, it might be construed as being contrary to their own interests. I may fairly say that it was given solely in the interests of the financial stability of Australia. All Governments are naturally allured by the prospect of having a large sum of money available for public works without having to pay for it.
– What nonsense! You cannot get it without paying for it.
– The honorable member will be able to say that it is nonsense when he gets up to speak. It is not polite of him to say it now. All Governments are anxious to secure considerable sums annually as interest on capital belonging to other people. No one can deny that the note issue of every country in which there is only a limited amount of gold kept as security is a forced levy, and it is naturally very important and valuable to a country to have a lot of money available without having to pay anything for it, but this consideration must be subordinated to the necessity of having a proper financial security. Under the Act, as we propose to amend it by this Bill, there will never be more than five and a quarter million pounds, plus the compound interest on the invest ment of this money, available for invest ment. Of course,honorable members can see that the interest and compound interest on this sum will eventually reach a very considerable total. In other words, the difference between the fiduciary issue of £5,250,000, for which no gold will be held, and the total amount of the note issue, no matter how large it is, will always be held in gold. ‘Under the Act of 1910, introduced by my right honorable friend opposite, it was requisite to hold a reserve of gold to the extent of onefourth of the notes up to £7,000,000, and pound for pound in gold for all notes in excess of £7,000,000. In 1911, this Act was amended, so that it is necessary now to keep in gold only 25 per cent, of the total value of the notes.
– Has that been acted upon ?
– As a matter of fact, it has not been acted upon so far, gold having always been kept up to two-fifths, or 40 per cent., of the total issue. There is at the present time £1,708,000 more gold in the reserve than is by law necessary, or 42.85 per cent., instead of 25 per cent.
– It was never proposed to keep only 25 per cent, reserve. It was to be not less than 25 per cent, at any time, with a working margin of 33 per cent.
– I understand that 25 per cent, was the . minimum, no maximum being fixed. The Bill now submitted provides for a gold reserve corresponding to that of the original Act introduced and passed by my right honorable friend. That is to Bay, we are restoring the position which met with the approval of the financial authorities of this country. We are making this proposal, not because it is considered at the present time that the issue is unsafe, but in order to provide for the future. Every one knows, of course, that we are keeping 40 per cent.: odd, but we want to provide proper safeguards for the future, which none ofus can foresee.
– You are going to throw away £25,000 a year.
– We are not going to do it. In considering the question of the amount of gold reserve required, attention should not be paid to tha whole- issue, but to; the amount that is likely to- remain in circulation, in all cir- cumstances
– What is the present circulation ?.
– The total issue is between £9,000,000 and £10,000,000, but not half of that is in circulation. I shall! refer to that later on. We should, take into consideration, in dealing with this: matter, all the factors which may cause’ financial stress, and must estimate what amount of notes would remain in circulation under all adverse circumstances. We should make every endeavour to arrive at that circulation which we think will be the least that is likely to occur, and having arrived at a conclusion as- to- that point, I think we must keep pound for pound in gold above that amount. The experience of the world shows that in financial matters we must “gang warily.” We shall act wisely if we. model our system- on others that have been well tried, instead of entering upon, doubtful experiments.
– Good old Conservative S
– The honorable member, like myself, comes from a Conservative country and- a Conservative race. We cannot afford to disregard the experience, of others.’ Let me deal first with the financial system of. Great Britain. The fiduciary issue of the Bank of England, that is, the issue against which no gold is held, amounts to £18,450,000. ‘ For all notes issued in excess of that sum the bank is compelled 6d hold £1 for £1 in gold. On the 5th November last, its position was as follows: - Notes issued, £53,597,130; securities held, without gold, £18,450,000; gold, £55,147,130; total, £53,597,130. The gold reserve is the difference between the fiduciary issue and the value of the notes in circulation. In Canada, in respect to the first 30,000,000 dol., or about £6,000,000 of Dominion notes, there must be held a reserve of 25 per cent, in gold and securities guaranteed’ by the British Government. The amount held in gold must be, at least, 15 per cent, of the value of the Dominion notes issued up- to> 3Q-,0”00-,000 dol., that is, £900,000-. For amy notes issued in excess of a value of 30,000,000 dol., or £6,000,000, the Government must hold- dollar for dollar, that is,. £1 for £1, in- gold. We propose that for notes’ issued in excess of £7,000,000 there shall be a reserve of £1 for £1 in gold. The financial system of the United States of America is somewhat complicated, its currency not beingregarded as a good ^ one; but the Americans have seen the wisdom of keeping good reserves, against Government issues. There are several kinds of currency there; First come- the greenbacks. They were originally issued during the Civil War, and circulated at a discount during the suspension of specie payments between- 1-862 and 1879. They are widely known by name, but form only a small part of the paper currency of the United States of America. By law their maximum circulation is limited to 346,681,016 dol., or about £71,000,000. Against the issue of greenbacks, the Treasury is compelled to hold a reserve in gold of 150,000,000’ dol., or about £31,000,000, that is, a reserve of 43 per cent. The gold certificates constitute another form of currency, their lowest denomination being 10 dol. The Treasurer holds against them dollar for dollar in gold. On tha 30th. June,. 1912, the gold certificates amounted to 943,435,618 dol., or about £194,000,000, against which there was a reserve of the same amount held in gold. We are dealing now with a great country, whose people speak our language, and are progressive and desirous of doing all that is possible to. promote their advancement, yet that is the reserve they hold in gold against the issue of gold certificates. There are also silver certificates, which, on the 30th June, 1912, amounted to 469,224,400 dol., or about- £96,000,000. Thf» whole- of these certificates were represented- by silver dollars in the Treasury vaults. These dollars-, if sold as metal, would, at present prices return 45 per cent, of their face value. There is,, further, a. small issue- of Treasury notes, the remnant of notes issued under the Sherman. Act of 1890-. On the 30th June> 1912,. there were in- circulation 2’,915,570- of these notes, or about £600,000. The re. serve against- these notes- is held in the Treasury- in silver dollars-, its- metal-lie value being about 45- per cent, of tha value of the notes. Lastly, there are- the) National Bank notes,, which are not issued by the Government.. Every National Bank has authority to issue notes rap- to a value not exeeding the par value of the United States’ bonds which- it has- deposited in the Treasury. Should the market value .of the bonds fall below pax, the note issue must not exceed that value. There is a further limitation which prevents .a .bank from issuing notes of .a value exceeding the amount of its capital .stock actually paid up.. A bank is not required to keep any particular reserve of money against its notes, hut it is required to keep in the Treasury a sum equal to 5 per cent, of the circulation. Of course, the banks have also reserves against their general liabilities. On the 1st September, 1911, the issue of th<» National Bank notes was valued at 69’, 982,033 dol., or about £143,000,000, »-nd on that date the National Banks !<eld 895,475,406 dol., or about £184,000,000 in coin. Government paper money, and clearing house certificates, while their total liabilities amounted to 8,448,024,889 dol., or £1,736,000,000. The total amount of Government paper money in -circulation in the United States of America on the 30bh June, 1912, and the reserves held for redemption purposes was : “Notes in circulation : greenbacks, 337,697,321 dol. ; gold certificates, 943,435,618 dol.; silver certificates, 469,224,400 dol.; Treasury notes, 2,915,570 dol. ; totalling 1,753,272,909 dol., or £360,000,000. The metallic value of the reserves held against those notes was : Greenbacks, 150,000,000 dol. ; gold certificates, 943,435,618 dol. ; silver certificates, “ 214,546,000 dol.; Treasury notes, 1,333,000 dol., being metallic reserves of a total value of 1,309,314,618 dol., or £269,000,000. The value of the metallic reserves held against Government notes in circulation in the United States represents nearly 75 per cent, of the amount of the notes. Many features of the American note issues are unsatisfactory, but at least it can be said that Americans have recognised the necessity for keeping very substantial reserves against Government issues. The question of currency reform is now before Congress. Both in Great Britain and in Canada the principle has been recognised that, after a certain point has been reached in the circulation, gold must be stored to meet the full amount of the issue above that point. In the United States, also, the reserves are of a very substantial character. The purpose of this Bill is to bring Australia into line with Great Britain and Canada in this matter. That is our only object. It is not a political matter, -so far as I can see. It is not a matter in which anything as .desired except security. I know it as very convenient to have a lar,g.e amount <of money which ‘we should otherwise have to raise.
– What 1].as that to do with the point.?
– It has a great deal to do with it. It was the only point the honorable member ‘had m -his view - that a large amount of money would be available for public -works.
– I did not use it. I left it all to you to ‘bungle with.
– The honorable member is not too complimentary. Perhaps his -deserts ‘are far greater than mine. I am not finding fault with him. I know that while he was in office he always -kept 40 per cent, cr over of reserves. I believe ho. gave an undertaking to that effect.
– A verbal promise.
– And that has not been departed from since he left office. It was quite open to us to act in accordance with the law if we so desired, but we did not do so. In estimating the amount of Australian notes which will probably always remain in circulation, we must look at the amount in circulation when the issue was in the hands of the banks before we undertook the business. The following are the average figures for the June quarter in the following years : -
These figures do not include the Queensland Treasury notes, which, on the 30th June, 1910, amounted to £1,579,000, of which £815,000 were held by the public, and £764,000 by the banks. Including the Queensland notes held by the public, the total amount in circulation on the 30th June, 1910, was £4,563,000. It must not be forgotten that the notes of the banks were all held by the public, whereas the Australian notes are not all held by the public, a great number of them being held by the banks as till money, which, I think, accounts principally foi the difference between the amount of the circulation in 1910 and the apparent present circulation.
– The ‘banks did not pay duty on their till money previously.
– No ; because the notes were not in circulation ; and I do not .see why they should pay for what they did not use.
– The banks had a very cunning way of evading the duty.
– To some people, banks seem te be like a red rag to a bull. I have always looked upon banks as friends. I have never had any trouble in dealing with banks.
– Perhaps the right honorable gentleman will say why the banks take the notes when they do not require them.
– The transport of gold is not easy in a country like this, and it is far better, and more convenient, for- the banks to have notes than to hold a lot of gold; also the temptation to robbery is not so great with notes as with gold.
– Will the right honorable gentleman make it plain that the banks are not compelled to take the notes unless it suits them to do so?
– The banks certainly find it convenient to do so. If they did not find it to their interests, they would not take them. On the 30th November, 1911, the Australian notes in circulation amounted to £9,899,000, and of this the banks held £6,058,129 in their tills. On the 8th September, 1913, the circulation of Australian notes was £9,266,408, and on the basis of the figures of the 30th November, 1911, it would appear that the banks at present hold in their tills about £5,559,000, leaving only £3,707,000 in the hands of the public. It seems safe to say that the note issue of the Commonwealth will not be likely to fall below £8,500,000, being, say, £4,500,000 held by the banks, and £4,000,000 held by the public. That is the minimum we think we are likely to have, even in any usual conditions, but we must consider the possibility of great financial stress. As I have already said, under this Bill the fiduciary issue of the Commonwealth will be £5,250,000. It will never be any more. Just as the Bank of England has a fiduciary issue of £18450,000, so the fiduciary issue of Australia will be £5,250,000, and for that amount there will be no gold held. The first £7,000,000 of the issue will be divided thus -
I would like to point out we have a se?curity which, I think, I advocated when I was thinking of this measure, and that is the power to raise money by Treasurybills for redeeming or paying Treasury notes.
– That is as old as the hills.
– It may be, but it is very valuable.
– It was passed twenty years ago in Queensland.
– I do not see the need for this interjection when I am saying something with which the honorable member agrees. I think it is a very valuable power, because if there is a run on the Treasury, and there is any money to be obtained anywhere, the Treasurer will be able to arrange by a negotiable document for money to redeem or pay the notes. It is a good power, and a great power, but I hope it will never be required. However, it may be found to be useful if ever the time comes; but I think it is better to rely on the resources of the strong-room, for all contingencies.
– It is no good relying on that. The Bank of England could not.
– If the honorable member has those views, he should advocate having all the gold in. But we do not keep all the gold in reserve, because it is convenient for us to have the use of the fiduciary issue for our public works of a reproductive nature. That is what the money is there for ; that was our friend’s intention.
– It was all lent to the States.
– Yes, but we were to get it back as soon as there was need to pay for the trans-Australian railway. How else could we pay for that railway, or for any of the other works in hand ? Will the honorable member answer me that?
– We could borrow on the open market.
– But the Leader of the Opposition claims that he believes in borrowing from ourselves, which means borrowing from the note issue; that is the only means he would have of paying for these works, except by paying for them out of revenue.
– You had a surplus of £2,250,000 left to you.
– That is out of revenue, as T have said. The system of holding pound for pound in gold in respect of an issue in excess of £7,000,000 has received the support of the prominent bankers of Australia. At the time of the passing of the Bill, in 1911, many protests were made which did not have, from their point of view, the desired effect.
– They were against it altogether.
– As I have already said, I believe their advice was disinterested; that it was advice given in the interests of the country.
– They were not unanimous.
– I shall not say much more about this Bill. It will be a declaration to the people in Australia, and elsewhere far beyond the limits of the Commonwealth, that the chief consideration we have in view is safety, and not altogether one of profit. I repeat that our main object is that there shall be a currency in which the public shall have confidence in times of financial unrest. The desire to “ borrow from ourselves “ is all very well, so far as it goes; but we must not forget that it means that we are borrowing from moneys supplied by financial institutions and others in this country, in return for paper money, which we give them, with a promise to redeem it on demand. We are getting this money from these institutions, paying them “nothing for it, and investing it. None of the interest that we obtain by investing it goes to the credit of those who have supplied it to us.
– Do they not get a £1 note for every sovereign - a note that is equally as good as a sovereign ?
– It is as good as a sovereign here, but nowhere else.
– The banks need not take these notes if they do not want to do so.
– I do not wish to argue the point. All that I say is that our paper is not a security in other parts of the world.
– Why trouble about other parts of the world?
– The honorable member makes me think that I know absolutely nothing, because he knows so much more than I do. I wish to say, in conclusion, that the main object we have in- view is that there shall be a currency in existence in which the public can have confidence in times of financial unrest, and that the desire to borrow from ourselves must not be our first consideration, but must rather be subordinated to the financial stability of the Commonwealth.
.- I understand that it is the intention of the Government to agree to the adjournment of the debate; but I should like to speak for a few minutes before asking leave to continue.
– Will the honorable member permit me to explain that the motion carried previously was, as I understood, that after the second reading had been moved the House would go into Committee on the Senate’s amendments in the Loan Bill.
– Were those words put in? I think not. The Prime Minister told me across the table that, after the Treasurer had moved the second reading of the Bill, the debate would be adjourned, and other business would be called on. I shall not speak at length. I disagree entirely with the statement made by the Treasurer that the primary object of the Australian Note Issue Act was to provide funds for investment in Commonwealth and other securities. The purpose and object which we had in view was to create an absolutely secure paper currency, which, backed up by the resources of the Commonwealth, would be as good as gold itself. The Treasurer has dealt with the metallic reserves or the currency of the various countries, and has suggested that there is a danger in holding the minimum reserve of 25 per cent, against the Australian currency. I think that he is wrong.
Nineteen years of experience in Queensland has taught successive State Treasurers, no matter to what party they have belonged - men who are totally disinterested in the matter - that a gold reserve of not less than 25 per cent, is ample and sufficient to meet all emergencies. That has always been recognised as meaning a working gold reserve of anything from 33 per cent, down to 30 per cent., so that the Treasurer has been able to invest a large amount, and the State has secured a revenue from it. The Treasurer of the Commonwealth is now proposing to give up £25,000 this year, while, in respect of every £1,000,000 increase in the note issue in the future, he is prepared to give up £40,000 of revenue that rightly belongs to the Commonwealth.. He is going to do this, he says, because there is some danger. I do not wish to misrepresent him, but the Treasurer iterated and reiterated the statement that there was a danger of the gold reserve proving insufficient at a time of financial crisis. I do not agree with him. The right honorable gentleman spoke of the representations made to him by certain bankers, who, I may say, I asked to meet me when I held office as Treasurer because they had written so much in opposition to our proposal. I had frequent conferences with them; but not one of these bankers said one word in favour of an Australian note issue of any kind. They’ were all against the proposal, and made no secret of their antagonism’. There was one absent from their number, .a banker of considerable eminence - I refer to Mr. Ralston, the general manager of the Queensland National Bank. I knew his opinion on the subject, and I know that it has never varied. Mr. Ralston was the one man in that institution who saw the collapse coming. He predicted it, and he was the .one man whom, when the collapse did come, every person interested in the bank desired to see appointed as general manager. He is its general manager to-day, and the bank stands high among the financial institutions of the Commonwealth. But Mr. Ralston does - not object to a gold reserve of not less than 25 per cent. I was sorry to hear the Treasurer speak of the note issue as having been established to provide money to be invested in Commonwealth securities. As a matter of fact, he is a happy man to-day because this money is available.
– But that is not the point.
– The Notes Fund was invested otherwise before now. It was invested with the States, and could have been invested in British consols. It was earning lately an average of about 4 per cent., whereas the Treasurer is borrowing from it at 3£ per cent. I should like to see him go into the money market, even with all the resources of the Commonwealth behind him, and try to borrow money here at the same rate.
– He would have to pay about 4 per cent.
– I am not speaking now from any party point of view. The Government are borrowing from this Trust Fund for at least £ per cent, less than the rate at which they can borrow in the open market to-day. The Trust Fund is thus being depleted, and depleted openly by virtue of an Act of Parliament. There is also in the Notes Act a provision by which all the earnings from the investment of the Notes Fund are allowed to accumulate. They cannot be paid into the Consolidated Revenue and used. At the present time the accumulated interest and compound interest amounts to £355,000, and in a fewyears the .earnings from the investment of the Trust Funds and the accumulated interest - if the system is not destroyed by the Ministry, and those who think with them - will more than cover the face value of the note issue itself. As to the amount represented by notes in circulation, I believe the statement made by the Treasurer is an exaggeration. I think that an attempt has been made to arrive at an honest statement of the position, but I am satisfied that there are far more notes in circulation, and that there would be still more if they were put out as they ought to be.
– Did Queensland have a note issue of £4,000,000?
– The Queensland note issue was on a different basis. Under the Commonwealth Act no bank or person is asked tq take a note unless application is made at the Treasury for a Commonwealth note and gold is presented in exchange for it. The Government say, in effect, to the people, “ You are not asked to bring the gold to the Treasury unless you wish to obtain notes for your own convenience, but should you do so, we shall be glad to see you whenever you wish to convert your notes into gold.” Any one who hints that the issue is a forced one to obtain money for the Commonwealth, or for investment purposes, nas never read the Act, or discussed the matter with those who are familiar with its purport. Queensland, having been used to a State note issue-, uses twice as many notes per capita as are used in Victoria and elsewhere, where the people have been accustomed to a gold currency. Can we wonder at the citizens of Victoria desiring a gold currency, having regard to the fact that a little over twenty yearsago they were left with the paper of private banks, which was worth less than its face value? The same state of affairs occurred more or less in every State.
– There is only one instance on record of the paper of any Victorian bank not being good, and that was a very insignificant bank.
– While that is true, the worker, or any man of little means, who held the paper of these banks at the. time, was robbed of half its face value, because he could not afford to wait the time necessary for him to get 20s. in the £1. I do not want to have to go into the whole history of these matters again. Those who could afford to hold the paper money in question had it honoured at its face value in time. A national currency will prevent that. A currency, whether it consists of copper, silver, gold, or paper, should have the resources of the nation behind it, and should always be redeemable at its face value. I was apprehensive, owing to the constant repetition by the Treasurer of the statement that this was a convenient way of obtaining money as Commonwealth loans, that certain people, quite honest in their intentions, might believe that this was a forced issue for that very purpose. I ask leave to continue my speech on a future occasion.
Leave granted; debate adjourned.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
Motion (by Mr. Fisher) agreed to -
That the second reading be made an Order of the Day for to-morrow.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
Bill received from the Senate, and (on motion by Mr. Fisher) read a first time.
In Committee (Consideration of Senate’s amendments) :
A Bill for an Act to authorize the raising and expending of the sum of Three million and eighty thousand pounds for certain purposes.
Senate’s Amendment. - ‘Leave out “ Three million and eighty thousand,” insert “Two million three hundredand eighty thousand.”
Clause 2 -
The Treasurer may from time to time under the provisions of the Commonwealth Inscribed Stock Act 1911-1912 borrow moneys not exceeding in the whole the amount of Three million and eighty thousand pounds.
Senate’s Amendment. - Leave out “Three million and eighty thousand,” insert “ Two million three hundred and eighty thousand.”
Item 2. For the construction of a railway in the Northern Territory from Pine Creek to the Katherine River and southwards -£400,000.
Item 5. For the purchase of land for Defence purposes -£300,000.
Senate’s Amendment. - Leave out items 2 and 5, and make necessary alteration in total of Schedule.
– I propose, after making a few observations, to move that the amendments by the Senate be disagreed with. First, I * should like to refer to the excision of the two items of the schedule. Without saying anything in regard to the constitutional powers of the Senate, I may say that it seems somewhat unusual, in our procedure at any rate, for another place to interfere in this way with the financial arrangements of the House. I regret the fact very much, because, although it may not appear a very great matter to honorable senators, it reminds one of the fable of the boy and the frogs - what may be sport to them is very troublesome tons. The Senate is not the financial House - at any rate, it cannot originate expenditure - and it is peculiar that it should mangle or excise items from the schedule of an important measure sent down by the House of Representatives, and thereby interfere with the financial control of the Commonwealth, and upset the financial arrangements of the Government. It is not enough to say that the Senate has the power to do this; we all have powers which we do not exercise, and I must express my very great regret that the position should be as it is. Whatever Government may be in power, it deserves a good deal of consideration from the States’ House in regard to finances. In the present case we certainly deserve more consideration than we have received in our efforts to carry on the services1 of the Commonwealth as they were left to us by our predecessors. We have not resorted to increased taxation, nor tried in any way to place additional burdens on the people of the country. On the other hand, we have, under very difficult conditions, and in a very short time, done our best to carry on the services. I, myself, have a hope that the Senate will reconsider this matter when the Bill is returned.
– I hope it will not!
– If the honorable member were in the place of the Government, he would, not express such an opinion as to the action of a majority of members opposed to him in another place. I think the honorable member would use very much stronger words than I intend to use - as a fact, I do not intend to use any strong words - in regard to the situation. I should like to deal with the two items omitted from the schedule. The first item I refer to is that of £300,000 for the purchase of land for defence purposes. Included in that amount there is £44,600 for the purchase of land for rifle ranges in New South Wales. What is the use of spending our money on our land forces unless we have rifle ranges on which our young people who are being trained to arms may practice? What is the use of equipping an army with good rifles and good ammunition if they cannot shoot straight? This House has times out of number impressed upon the Government the necessity for rifle ranges, but our friends who represent the States in another place say that we must not borrow money from ourselves for that purpose. It is not as if we proposed to go on to the market for the money. We are doing what my right honorable friend, the Leader of the Op position, often boasted about, borrowing from Trust Funds that we have in hand, but practically almost altogether from -the note issue.
– You said you were not too sure about it when the Bill was before the House, and that you might have to go elsewhere.
– I did’ not say that we had to go elsewhere. I said we should do it somehow, but we are going to borrow this money from ourselves, and to get it practically for nothing. We have to pay for it, but we pay the interest to ourselves, and it goes into the Trust Funds, and enlarges them. There is a sura of £6,000 for the purchase of land for a rifle range at Adamstown, £5,600 for land for a rifle range at Bathurst, and £3,000 for land for a rifle range at Bulli; whilst an item of £30,000 appears for purchasing land for a new metropolitan rifle range in Sydney. I” would ask the honorable member for East Sydney to think of his native city, and not to vote against these items, when we can get the money practically for nothing by borrowing it from ourselves. The existing ranges at Randwick and Long Bay are now overtaxed, and a new range to provide for an additional 200 targets is now required, while provision must be made for the extension of the Citizen Forces during the next few years. I think the land required in this case is already purchased. There is an item of £2.500 for the purchase of land for a rifle range at Redbank, Queensland, and £1,200 for the same purpose at Narrogin, in Western Australia. The total for rifle ranges in New South Wales, Queensland, and Western Australia is £48,300. I now come to military purposes generally. We have agreed to buy land for a manoeuvre area at Liverpool for £112,000. This was a bargain made by the Fisher Government, who left us to pay for it, the land being obtained from private people. Unless this vote is passed, there will be no money legally available to pay for it. There is an item of £50C for land at Tomaree, in New South Wales, and £4,500 for land at Enoggera, Queensland, for buildings, and to provide grazing for remount horses. There is a sum of £5,000 for the acquisition of additional land at Keswick, South Australia, to provide accommodation for buildings for remount sub-dep6t, stables, and buildings, for the Remount Army Service Corps. There is £7,000 for land for a remount depot at Launceston, Tasmania; £1,250 for land for a Naval Reserve drill hall at Williamstown, Victoria; and £1,100 for a Naval Reserve drill hall at Albany, Western Australia. It is proposed to spend £120,350 in the various States, and in the Federal Territory, on the following four items : - Acquisition of sites for drill halls, mobilization stores, and other accommodation for Citizen Forces, £70,350; “sites for ordnance stores, £15,000; acquisition of land for buildings for Aviation Corps, £10,000; and acquisition of land for Commonwealth purposes at Jervis Bay, £25,000. The whole of these items make £300,000 for the purchase of land for defence purposes. Honorable members iu another place have passed six items out of eight, including £170,000 to purchase land for post-offices, but they have excised the item of £300,000 to buy land for defence purposes. Land is a most permanent and valuable asset,- the foundation of all wealth, and, as a rule, increases in value. It has increased in value, at any rate, in Australia up to the present time. The whole trouble in regard to this matter arises from a fetish in the minds of my honorable friends opposite, and their friends in another place, that borrowing for anything connected with defence ought not to be allowed for a moment. That idea has no reasonable or logical foundation.
– What did Gladstone say about ‘that ?
– I have no doubt he said something wise, but, as an old fellow told me once when I was a boy, and said I thought he was blowing hot and cold - “ circumstances alter cases.” I do not see the least difference between borrowing for one thing and borrowing for another, in the way of land, at any rate. I do not see how it can be right to borrow money from ourselves to provide machinery to build warships, or to construct conduits, or to ‘ buy land for post-offices, or to buy land in London on which to erect Commonwealth offices, or at Perth for a post-office, or at Canberra for general purposes, and at the same time be wrong to borrow money to buy land for these very necessary defence purposes.
– The one is productive and the other is not.
– I do not know that there is much return to be obtained from some of those items. Surely, rifle ranges and manoeuvre areas are required. The other item is the sum of £400,000 for the construction of a railway from Pine Creek to Katherine River. I can hardly blame my honorable friends opposite for the omission of that item by another place, because I believe they are all in favour of it, but they have great influence, I understand, in that quarter, as well as here.
– Are the Government sincere in this item?
– We brought it forward, and I am asking that it be restored .
– Not a single Government supporter voted for it in another place, in addition ‘to the two Ministers.
– How many voted against it?
– One Government supporter was present, and if he had voted for it, the item would have been passed.
– Then I think he ought to have voted for it. The honorable member asks if we are in earnest in this matter. In the policy statement of the Government it was definitely set out that the survey for the railway from Pine Creek to the Katherine was ‘nearly completed, and that a Bill would be submitted to authorize the construction of the line. It was also clearly stated that a trial survey was being made for connecting by railway Port Darwin with Port Augusta, viti the Macdonnell Ranges, and with the eastern railway systems, viti Camooweal, so as to open up the country for agricultural and pastoral settlement. This proposal is part of a great project connecting the Northern Territory with the rest of the Commonwealth. This policy has, I think, received the support of practically all parties in this Parliament. I find the Northern Territory a very difficult problem, one of the most difficult we have to deal with, and an immense expenditure is necessary if we are going to make it reproductive in a short time. So long as I can see daylight ahead, I always say, “ Go ahead,” in regard to great projects that can be made reproductive, but I confess that, with the information before me, I have a difficulty in the case of the Northern Territory.
– Then you are not very keen on this item of £400,000?
– Yes, I am. I have come to the conclusion that we can do nothing with that country unless we open it up by giving it means of transit. If we do not want to leave it waste, we must build railways through it. We must either give the Territory back to the kangaroos and the blackfellows, or provide means of transit, though I do not see how the country can be made to give a quick return for the expenditure upon it. It is not as well watered as I thought it was, and, indeed, the more I investigate the problem of its development, the more difficult it seems. The last Minister of External Affairs, speaking upon the Bill to authorize the survey of a route for the extension of the line from Pine Creek to the Katherine River, said -
We are legally, as well as morally, bound at some lime to connect Pine Creek with the Port Augusta and Oodnadatta railway. . . . The policy of the Government is to have the survey made as soon as possible, in order that we may come down with a proposal for the immediate construction of this 56 miles of railway. . . . We feel that a proposal which practically means a direct expenditure of ,£500,000 will be a fair and legitimate instalment to go on with. I therefore ask the House to pass the Bill.
Senator McGregor, addressing himself to the same Bill in the Senate, said -
We practically pledge ourselves to vote for the construction of the line. To my mind, this railway is. urgently required, and ought to bp proceeded with as rapidly as possible.
He made other similar remarks, with which I shall not trouble the Committee. The Bill was passed in this House without division, and, I believe, went through the Senate in the same way. The route of the line has been surveyed at a cost- of £6,000, but the line will take another two and a half years to construct, because of the remoteness of the district, the difficulty of getting labour, and other causes. The obstacles in the way of making the Northern Territory self-supporting are many and great.
– The tight honorable gentleman did not say that eighteen months ago.
– Yes, I did; and T told the honorable member what he ought to do. I think that my remarks had some influence with him, because I was not speaking without knowledge and experience. Mr. Deakin, when Prime Minister, asked me whether I thought we should take over the Northern Territory, and I have no doubt that, had I replied that we ought not to have anything to do with it, he probably would not have moved further in the matter, because he relied on me a good deal in these things.
However, I advised him to take it over, though I said, “I do not know what we shall do with the Territory when we have got it.” Certainly we must open it up by means of railways.
– The problem is not too big for Australia to face.
– No ; but there is a desire for a quick return from expenditure. The Senate, by amending the Loan Bill, reversed a policy to which many senators were already bound. The Government has a right to expect from the other branch of the Legislature, as the States’ House, the utmost consideration and support, especially in carrying out its financial arrangements. Every one knows that financial difficulties exist. Probably we should not have put some of the items into the Loan Bill had we been able to get the money from ordinary revenue without increasing taxation. I had great difficulty in making both ends meet when preparing the Budget, and I believe that I reduced the demands of the Departments by more than £2,000,000.
– Is it not always the case that the Departments ask for more than can be given to them ?
– I think that the demand on this occasion was greater than usual. We have had unexampled prosperity and good seasons during the last three years, and our expenditure has increased as the revenue has expanded. I have had other experience of that. I was Premier and Treasurer of a small State, which I saw rise from insignificance to a position of some importance, and I know that its expenditure increased as quickly as its revenue. Notwithstanding the increase of revenue, we have not been able to- do more than we have done, and, having: Trust Funds in hand from which we can borrow, I think that we are pursuing the best course possible. We are not going on to the market to borrow small sums, thus, perhaps, injuring our credit; we already have the money in our hands. This is simply a bookkeeping transaction. I see no reason why we should not use the money, and carry out works that have to he done. We are applying £170,000 to the purchase of land for postoffices; £300,000 to the purchase of land for defence; £425,000 to the construction of conduits; and £175,000 to the purchase of machinery for Cockatoo Island, these sums totalling £1,070,000. I ask honorable members how we can carry out the great works that have been spoken of if we do not borrow; works like the Naval Bases atCockburn Sound, Westernport, and Port Stephens, where we shall have to spend millions in providing docks for the accommodation of not merely our own. warships, but also those of the Empire.
– When will the money be paid back, if it has to be borrowed in time of peace?
– We must make this provision in time of peace. The right honorable member, I suppose, would impose more taxation on the people. But the land tax of which the Labour party is so proud produces only £1,500,000.
– Make it produce more.
– The money cannot he got without ruining the people. If you try to pay for these works out of revenue, your name will he anathema in the months of those who possess anything. Is it to be said that we can carry out great national works, such as the construction of the Naval Bases, the development of the Northern Territory, and the building of the Capital City, with revenue? I should not like to propose to do that, or to support it. I believe rather in borrowing the necessary money at a cheap rate of interest, providing the interest and sinking fund instalments from revenue, so that within a’ limited number of years the loans may be repaid. That is how we manage our own private affairs. No private individual has cash in hand for big operations. The merchant, the banker, and every one else, when engaging in a big undertaking, pays in the first instance a deposit, and wipes off the balance by instalments. What is a good method of conducting a private business cannot be a had method of conducting public business. We do not want extra taxation. A tax, like a bullet which has ricochetted, often hits those whom it is not desired to hit, and who can least afford to be taxed. Surely the community is sufficiently taxed already. I move -
That the amendments be disagreed to.
.- I think that it would he wise to deal with the amendments separately. Suppose we have a general discussion, and then ask the Chairman to put the amendments one by one.
– That can be the understanding.
– The Treasurer has made a carefully-prepared speech, and on that I congratulate him. He complains of the action of the Senate, not on constitutional grounds, but because it may lead to consequences which will create difficulties later on, and may have results which will be fatal to the true representation of the people. In my opinion, that question does not arise on the present occasion. The Senate has amended a Loan Bill, not a Bill for the ordinary services of the year. The Treasurer has told us that we must provide, by means of loans, for -our defence expenditure, and that at a time when the country is at peace. He practically says that we should build our defence works, and manufacture our ammunition, with borrowed money, to be repaid out of revenue.
– He did not speak of borrowing to pay for the manufacture of ammunition.
– He said that we could not provide for defence directly out of revenue, and that defence works must be constructed with loan money, the interest on the money borrowed and . the instalments to the sinking funds to be provided for the repayment of the loans to be taken from revenue. Rifle ranges are an annual defence expenditure, and they are not works of construction of a permanent nature. Their annual upkeep is almost equal to the original outlay. The expenditure on building the Fleet is practically an annual expenditure, because there will be a large amount of money annually demanded from the Treasurer to keep the Fleet in the same condition. What I want to bring home is the folly of borrowing for defence purposes in times of prosperity. If in good times we use other funds than those supplied by way of taxation for defence purposes, where will our credit be in time of war, or when war is pending? What self-respecting people would involve their credit in the time of peace ? Where would it end ? If the Treasurer borrows this year for annual necessities, he will need to borrow next year for the same thing, and so on, until he will pile up a loan indebtedness for defence purposes that will be an annual burden sufficient to crushthe people. The Treasurer claims that we shall pay if off. Of course we shall, but only in a Pickwickian sense. We will borrow to-morrow to .pay off the loan of yesterday.
– We must provide these things in time of peace to get ready for war.
– The late Government built the Fleet Unit out of revenue.
– But you had an extraordinary windfall.
– The revenue estimated to be received this year is equal to that we estimated to receive, and, though there were obligations which the Prime Minister was compelled to indorse, we left a surplus of £2,650,000.
– So you should have done, with all the money you had. Your revenue increased by a million, and your expenditure decreased by a million. You intended to spend it all, you know - every penny of it.
– Yes; we appropriated the whole of the revenue we thought we should get, but some of it was not expended . How different is that fact from the statements made during the election campaign by the Prime Minister and others supporting honorable members opposite, statements wilfully and viciously made by men who knew betterthat we had increased the indebtedness of the Commonwealth by about £10,000,000. The Treasurer knows that this statement was made wilfully in pamphlets bearing the names of supporters of honorable members opposite. We incurred no indebtedness in connexion with the Northern Territory. On the other hand, we paid off £200,000 of the indebtedness taken over from South Australia, and, as’ we went along, we paid out of revenue the whole of the expenditure on the Territory.
– You did it through the expansion of the Customs revenue and the land tax.
– We did it out of the annual revenue contributed by the people. The Treasurer anticipates just as good times as we had; in fact, the conditions are better now than they were during the period of the previous Government. In 1911, there was a loss of about 8,000,000 sheep. There is no such thing at the present time. Conditions all round are better. There is to be a record wheat crop; we are promised a re cord cane crop in North Queensland; and the price of wool, everything being considered, though it will not be a record, will be undoubtedly exceedingly good. Yet the Treasurer wails, and he received close on two and three-quarter millions to begin with in the shape of the surplus we left.
– But you left a terrible expenditure behind you.
– Where was it?’
– In all the Departments, which have grown. There is £7,000,000 for the Post Office Department, and £6,000,000 for Defence.
– We paid all the Defence expenditure from revenue.
– What is the good of boasting about what you did? Any one would think that you did it yourself; whereas you simply lived in good times.
– I do not mind the Treasurer’s interjections. Some of the party opposite will not talk here, but they will go outside lying wilfully, and making all kinds of false statements. It is the duty of the Treasurer to put his finger on these points, to inform the Committee of the facts, and not make statements by-and-large. Until we left office we paid for everything that could be paid for, and in the short interval before the end of the year the present Treasurer quite rightly, upon assuming office, paid every account he could.
– I simply told them to pay all accounts as usual. They would have done so without my telling them, I suppose.
– I made special efforts before I left office. I desired that every account that could be got in should be got in and paid.
– That is always done.
– It is not. My regret was that we were not able to get fs the accounts for the construction of the ships.
– What has that to do with the Loan Bill?
– I am coming to the point. The Bill was introduced by the Treasurer in a carefully prepared speech, which he afterwards published for the information of honorable members and the press. I am not complaining of that, but I ask him if he will be good enough to inform me whether his speech on the Loan Bill was part of his Budget speech ?
– It was part of the financial policy of the Government, lt certainly is a prominent part of the Budget.
– When we are dealing with procedure, we are entitled to know whether we are proceeding on right lines or not. I do not complain of the Treasurer publishing his speech at the expense of the country; I think it would be well if more of that were done.
– It did not cost more than a pound or two.
– The Treasurer did right; he conferred a benefit on honorable members, on the press, and on the country; but when the Prime Minister says that the speech on the Loan Bill was part of the Budget, I disagree with him.
– I said it was part of the financial proposals of the Treasurer . That is a very different thing.
– I think it was a good thing for the Treasurer to publish his speech, and I do not disagree with the State having to pay for it. Incidentally, now, the Prime Minister might tell us what conclusion has been arrived at regarding the re-printing of other members’ speeches.
– If you are hanging your point on the publication of my speech, you are hanging it on very little. I wrote a report on the matter, and I wish it had been put on the table.
– Even that would have been better than some of the arguments of the Treasurer, because he has said that he would buy ammunition, if necessary, out of loan funds.
– I did not say that.
– I said nothing about equipment.
– The annual expenditure on rifle ranges?
– I said “ land for rifle ranges.”
– That deteriorates.
– No; it increases in value.
– Speaking from our experience it does not in all cases. I do not agree with the Treasurer’s view of the matter. ‘ Nothing will make me believe that in prosperous times we should allow this £300,000 to be expended from loan funds for military purposes. It was in discussing the Loan Bill that the trouble arose, a point which I discussed earlier in the day. I ask the Treasurer now, whether, on the first day the Loan Bill was debated, he indicated in any way what he proposed to do?
– I was under the impression that I said I was going away from the House, and I thought you knew.
– I heard the Treasurer say, “I am going now”; and I said, “ 1 have no objection.” The Treasurer whispered to one or two honorable members, but I knew nothing of the circumstances. I opened my speech by saying that the character of the address just delivered by the Treasurer was of such a nature that it deserved some immediate reply going out alongside it. I made no complaint of the absence of the Treasurer, because, having been Treasurer, I knew there were other duties to be performed than those involved in staying in the chamber, and that there had been complaint on many occasions about the absence of Ministers. But no communication reached me directly or indirectly from any one concerning the circumstances. After I had spoken for a considerable time, I said to the Minister of Trade and Customs, who was the only Minister in the chamber, that I had arrived at a period of my speech when I thought the debate ought to be adjourned, and the Minister said he would like to see the Prime Minister.
– That is so; I said that I would not consent to an adjournment, but that I would see the Prime Minister.
– When the Prime Minister came into the chamber I made my request to him, but he refused to accede to it.
– Did the Opposition Whip say anything to the right honorable member while the division was being taken ?
– Then, what did he mean when he said that he could not drive his men out - that he asked some of his men to go out, and that they would not do so ?
– I cannot give evidence concerning that which I do not know. The Prime Minister should get the information first-hand. Ask the Opposition Whip.
– The right honorable member does not forget the” statement made by one of his colleagues?
– I do not know of it.
– He was quite aware of the matter.
– I cannot say whether the statement of the Prime Minister is correct or not, because I do not know. I am not in a position to say when or how the statement was made.- I do not recollect it, but I do not say that it was not made.
– The Prime Minister is referring to the statement that was made next day, when the Government Whip sat between the honorable member for Yarra and another honorable member on his side of the House-
– The Government Whip crossed over, and sat behind me whilst i was speaking. I could hear some conversation going on, and as it was disconcerting to me, I asked the honorable member to be good enough to sit on his own side of the House. Nothing more passed between him and myself, and all the reiterated nonsense, and worse than nonsense - all the wilful misrepresentation - is quite beside the purpose.
– What does the honorable member say is wilful misrepresentation ?
– The statement that I at any time knew anything at all about the interment of the remains of the late Mr. Knox on the afternoon in question, or that I had knowledge of any scheme to defeat the Ministry. Following the established practice in this House, I asked for leave to continue my speech. The Prime Minister, by the way, spoke of the Bill as being part of the Budget speech. He went back on all the traditions of this House, and then complained because I took steps to protect the rights of the House.
– Does the right honorable member forget when he and the honorable member for West Sydney, while in office, declined to give us an adjournment of the debate on the Conciliation and Arbitration Bill ?
– Order ! I cannot allow this dialogue.
– Does the Prime Minister wish to suggest that he would be justified in misrepresenting me if some wrong in the matter of procedure had been done him in another Parliament?
– I made no misrepresentation .
– Order ! I have allowed a considerable amount of latitude.
– The honorable member for Capricornia, the honorable member for Yarra, and the honorable member for Maranoa knew that I was going to Mr. Knox’s funeral.
– Order! I have ruled the whole matter out of order.
– I hope you will not do so, sir, after allowing the Leader of the Opposition to talk about it for fifteenminutes.
– There is a clock in the chamber. I am entirely in accord with the Treasurer in regard to the development of the Northern Territory. Indeed, I go further. I have said, in my own electorate and elsewhere, when such a policy ‘was very unpopular, that it is the duty of the people of the Commonwealth to provide the money necessary to open up the Northern Territory. We must either do that, or allow some one else to do so. My view is that no other Government can take up this work, and that we must, therefore, shoulder the responsibility. I think that Mr. Deakin, when Prime Minister, and the present Treasurer, who held the same office in his Ministry, made not too good a bargain in regard to the taking over of the Territory. The South Australians were rather too good for them.
– The Commonwealth made a -splendid bargain.
– Be .that as it may, the Deakin Government, on behalf of the Commonwealth, entered into a contract with South Australia for the transfer of the Territory, and it was our bounden duty to shoulder the responsibility. We took over the Territory, and, as I have already pointed out. we actually reduced the indebtedness” although we have been accused of accumulating it. Coming to the amendments made by the Senate, I am unable to support the striking out the item of £400,000 for the construction of a railway in the Northern Territory from Pine Creek to the Katherine River. I am not sure that we have, or ever shall have, before Parliament sufficient evidence to enable us to come to a satisfactory conclusion on all points concerning works for the. development of the Territory. We shall have to take, a great deal of, shall I say, haphazard information. But, as I believe that we ought to proceed with developmental works, and that we must make a beginning in this direction, I must support the item. The railway, when constructed, will be part of the main trunk line, and, therefore, in agreeing to its construction, we shall only be shouldering part of the burden that was provided for under the agreement made with South Australia.
On the other hand, I shall support the amendment made by the Senate striking out the item of £300,000 for defence purposes. ‘ The Senate, in my opinion, in eliminating that item, has merely discharged its duty. Apart altogether from the way in which the Bill was carried through this House, I feel that the Senate has discharged a public duty in eliminating the item. The Treasurer was at great pains to show that the late Government had expended loan moneys in laying conduits.
– Not out of loan money, but out of revenue paid into Trust Funds.
– The Treasurer now says that the works were paid for out of revenue !
– I did not say that the works were paid for out of loan account. I said that the Senate had agreed to the item providing for the construction of conduits, but had drawn the line at the defence item.
– The Treasurer meant to say that, no doubt, but he did not convey that meaning.
– The words used by the Treasurer certainly conveyed the impression that we had used loan funds for the construction of conduits for postal purposes.
– The late Government paid £600,000 into a Trust Fund, and they used that money.
– When we had a surplus we placed it to the credit of a Trust Fund for a particular purpose, in order, that the engineers could map out a scheme of work for more than one year. We believed that in that way we could obtain the best results from the money expended. Our desire, was to secure a continuity of works, and, under our system, we avoided a break or stoppage of work at the end of the financial year.
– I explained that
An the Loan Bill..
– Quite so; but in these days even a mistake is picked up, and used to show that we expended loan money on works such as those to which reference has been made.
– I did not say that the late Government had done so.
– Very well. The spending of this £300,000 on defence is intended merely to provide for annual services.
– It provides, amongst other things, for the purchase of land.
– There may be something in the proposal in regard to the Liverpool Manoeuvre Area.
– It is “ borrowing from ourselves,” you know.
– The Treasurer was very disingenuous in his argument regarding the purchase of the Perth Post Office site. The property is improved, and is bringing in 4 , if not 5, per cent, on the money paid for it. That was why we provided for its purchase out of Loan Account. There is every prospect that, after the land necessary for the post-office has been used, the property remaining will produce sufficient income to pay interest on the purchase money.
– I did not object to it.
– It was one of the best things we did.
– Will not the same argument apply to drill halls ?
– Tell me of a drill hall that brings in revenue.
– But we have to pay rent for the use of halls for drilling purposes.
– That is merely a charge for the annual services in respect of the training of our soldiery. It is practically on a level with the provision for feeding an army, or for providing leather straps, and so forth, for the troops. Drill halls are not rent producing. They depreciate as time goes on, and have to be renewed, and a certain amount of revenue must be appropriated from time to time to provide for building and other requirements.
The Treasurer dealt at length with the point as to “borrowing from ourselves.” It is true that we have borrowed from our Trust Funds, and that they have been revenue producing. It is true,, also, that the present Government had nothing to do with bringing those funds into existence. Indeed, many of their supporters - not all, I am happy to say - condemned them. The Treasurer is a little touchy on the question of the note issue, but he has told the press before to-day that, when in office previously, he contemplated something of the kind, and left a draft Notes Bill and memoranda behind him. The system in Australia was initialed by Queensland in 1893. The financial crisis gave birth to it. A Conservative Government then in office saw that the interests of the people could be protected by the State indorsing the notes of all the banks then existing
– Order ! The right honorable member’s time has expired.
.- Perhaps it is rather presumptuous in me to suggest how the Treasurer shall deal with a Loan Bill, but I think it was quite unnecessary, under the circumstances, for him to deliver the long speech he did this afternoon. As I take it, we are now dealing with only two or three items in the schedule.
– That is all I dealt with.
– The honorable member was nearly an hour discussing the principle of borrowing.
– I occupied only a little over half-an-hour.
– Well, it seemed like an hour.’ The Senate, by agreeing to several of the items, has practically adopted the principle of borrowing. I candidly express my regret that the Senate has not agreed to the item of £400,000 for a railway from Pine Creek to Katherine River. I agree that the only way in which we can develop the Northern Territory is by opening up means of communication; and it is unfortunate that this Railway Bill was not introduced sooner. The fact that the Government are introducing the measure at this period of the session raises the inquiry whether they are really in earnest in regard to it.
– And the honorable member says that after wasting three months of our time !
– We cannot refer here to what takes place in another House, though, of course, we shall have full opportunity to do so on the platform. It does seem strange to me, on looking at the division that took place in the Senate on this item, to find that not a single Government supporter there voted for it.
– The honorable member is now doing what a moment ago he said that he ought not to do.
– There was only one Government supporter in the Senate at the time; the other honorable senators were away.
– At any rate, the one Government supporter in the Senate voted against the item. If the Government were in earnest, they would endeavour to carry their Bills, not only here, but in the Senate. I hope that when this Bill goes to another place, this item will be accepted, and I intend to support the Treasurer in his proposal to disagree with the amendment of the Senate regarding it. As to the other item, however - for the purchase of land for defence purposes - I shall support the Senate. I feel that, as far as possible, we ought not to borrow money for defence purposes.
– Only in the case of Cockatoo Island, I suppose?
– That is hardly fair, because that is a transferred property.
– What is the difference ?
– I trust that I am dealing with this particular matter free, as far as possible, from party view. I take it that the Prime Minister, the Treasurer, and every member of the House, is anxious that as little money as possible shall be wasted on defence - I take it that that is the honest view of us all. It does not matter whether it is in Australia, England, Germany, America, or any other country, nor does it matter what Government may be in power, there is always a tendency to waste in defence expenditure, however much anxiety there may be to prevent it. This applies to every Department of State, but more particularly to the Defence Department. There may come a time, of course, when it will* be absolutely necessary, in order to carry out some great scheme, to resort to borrowing for defence purposes; but I am against the principle. I must confess that I rather regret the Senate did not object to the item of £175,000 for machinery, machine shops, and construction of wharfs at Cockatoo Island. In this House the “gag” was applied, and we proceeded on absolutely party lines, so that there was no fair opportunity given to honorable members oh either side to express their opinions by a vote on this item.
– I think that that item would have been reduced in this House.
– I, too, am inclined to think so.
– The honorable member must not refer to any items in the schedule other than those immediately before the Committee.
– I am referring to this item only incidentally.
– The Standing Orders do not permit even incidental reference.
– I shall vote against the item of £300,000 for the purchase of land for defence purposes; but, as I said, I shall support the Government in reference to the £400,000 for the railway, in the Northern Territory. I trust that the Government will be successful in obtaining the £400,000; and, although they have wasted twelve months by not pushing on with this work-
– We have been only a few months in office !
– Quite so; but the delay there has been will prevent anything being done until after the rainy season.
– We cannot do anything until we get this Bill passed.
– I admit that; but if this railway proposal had been dealt with in the early part of the session, we could have secured twelve months’ work; as it is, we shall have to wait until after the rainy season. I trust, however, that this item will be agreed to, and that in a day or two the Government will be in a position to proceed.
– I have been waiting to hear from the Leader of the Opposition, and from the honorable member who last spoke, some reason for taking this item of £300,000, for land principally for defence purposes, out of the ordinary category of loan expenditure, but I have not heard one argument that will hold water. I cannot understand the reasoning that accepts items of a perishable character, and refuses to vote one farthing of loan fund for items which are imperishable and unalterable.
– We voted in this House against the item of £175,000 for expenditure at Cockatoo Island.
– I know; but honorable members opposite are prepared to vote for other items of a perishable character, which will require renewing from time to time, while they decline to accept the one item which will not require renewing, but will last for all time, as a permanent asset. Indeed, the only result of this expenditure will be to increase the value of this asset. The honorable member for Barrier, when in office, voted to pay the Government of New South Wales £867,000 for a dock in that State.
– A transferred property.
– A transferred property, yes, but a property which will require this Parliament, so far as we know, to pass an appropriation every year, there being no provision for redemption of transferred properties. There is no sinking fund established in connexion with the properties, and, therefore, there is an obligation to find £30,000 for interest each year on a loan to purchase machinery that is constantly becoming obsolete or wearing out, and some of which has to be renewed almost immediately. They vote loan money for that purpose, and place us under the obligation to renew the machinery from time to time, and pay interest for all time, while they jib at the proposal to purchase land, which cannot deteriorate, but must grow in value every year,
Take, for instance, the item for the Liverpool area. For about a couple of years of their life, the late Government were negotiating with the New South Wales Government to get this land without purchase, and the understanding was that the New South Wales Government were to buy the land, and the Commonwealth Government were to pay them a rental based upon the interest on the purchase money. Those gentlemen, therefore, were quite willing that the State should borrow money to purchase this land and pay the interest in perpetuity on the transaction ; yet, when the question arises of our purchasing the area for ourselves, they decline, on some supposed principle, to undertake loan obligations respecting it. Where is the difference in principle between the New South Wales Government borrowing money for the purpose, and our paying interest to the New South Wales Government upon it, and our straightforward proposal to spend our own money and relieve ourselves of the obligation of paying interest to that Government? My honorable friends must be either politically hypocritical or must have some other object in view which I do not pretend to understand. They gather about them their political skirts in holy horror. They say, “You must not borrow for defence purposes,” yet they have borrowed for defence purposes. On- the very Estimates which they are going to vote us, I presume provision is made for £30,000 to be paid to the Government of New South Wales for the taking over of the Fitzroy Dock without parliamentary sanction.
– How many of your supporters voted for this item ?
– Is that in point just now ? Does the principle of the thing rest upon the votes ?
– The votes ought to rest upon the principle.
– I do not understand the reasoning of honorable members who agree to purchase out of loan moneys machinery, for a dock for purposes of defence, and who have already contracted obligations amounting to at least half -a- million pounds on account of machinery and equipment for that dock, and who yet refuse to vote for this item.
In the item of £876,000 for the purchase of the dock in New South Wales, the value of the land itself is set down at about £300,000; the balance of half-a-million is for machinery and equipment, which will require to be renewed ; yet we are told that, it was because this item was connected with the defence of the country that it was rejected.
Every civilized country in the world borrows money for purposes of defence. In the “last return sent to us by -the Imperial Government there is a table of figures showing what the cost of defence is. I find in the charge for defence an item of £1,300,000 ‘ being annually paid for the purposes of paying off a loan for the purchase of similar things to those for which we are asking money in this Bill.
– During a time of war.
– Not during a time of war. I am speaking about the -purchase of sites for docks and similar things.
– And they bought some land from Lord Hopetoun at eighty years’ purchase.
– Did the Fisher Government put eighty years’ purchase on their dock expenditure? Did they put any period to it? Really, they are quite out of court in this matter. If the Imperial Government want to put down a new dock, or anything like that, -which means equipment pure and simple, they borrow for it, and the interest is charged for it each year. In our case the money is not for equipment. It is purely and solely for land, which cannot decrease, but must always increase in value. I hope honorable members will agree to put this item through, because it is a very serious matter, and they themselves were quite willing to allow their confreres in the State of New South Wales to borrow the money and buy the land.
– We have nothing to do with what they did.
– I should think so, when the late Government were negotiating with them with that very object in view, until the State Government finally turned down the proposition, after trifling with it for three solid years. I do not say that my honorable friends opposite trifled with it, but their confreres in the State did, because the matter of the Liverpool Manoeuvre Area was almost completed before we left office on the last occasion. The moment Mr. Holman and his friends came in they began to finesse with the arrangement, and finally succeeded in turning it down, and our predecessors were driven to the point of saying, “ We shall have to take the obligation on ourselves.” We must get the area, and so the Government now propose to purchase it themselves.
– Why must you get the area?
– For the same reason that we must have an area on which to train the troops in every State. We cannot get it without paying for it. How does the honorable member justify the borrowing, of money to purchase perishable products, and the refusal to borrow money to purchase land, which does not wear out?
– Cockatoo Island will be always there when we are dead and gone.
– Only about £300,000 of the £850,000 was for land. The rest was for . equipment, which wears out every day; and the late Government bought that out of loan money, and made no arrangement to pay it back. It is a perpetual obligation.
– They were not on the Treasury bench long enough.
– They were on the Treasury bench long enough to conclude the agreement which bound you to pay £30,000 a year in interest in perpetuity. The moment they leave the Treasury bench they say it is a bad thing to borrow for land. Now that we are following their example, the thing which was right when they were over here is all wrong when they are over there.
The honorable member for Barrier must not go back on the Northern Territory item, which is his obligation;, but here again, apparently, we are carrying it through in- quite the wrong way.. He tells us that we ought to have begun earlier, but he and his friends over there prevented us from doing anything for a solid three months. Who has ever heard of my honorable friend raising his voice in advocacy of his proposal going through earlier? During the last five months, the honorable member sat there, knowing that the year was- passing, and never once reminded us of the fact until it was too late to do anything, but now that he thinks we have “ fallen in,” so far as. this year is concerned, he asks, “Why did you not do it before?” If the honorable member knew it, why did he not suggest it before ?. It was his proposition. We are trying faithfully to carry it out,, but he ignored it until - so. he says - we. lost the- year over it. Nothing that, we do is right. We try to honour their obligations,, and. get no thanks, from them. They say,. “ You. should have done it in a different way.”
– Do- you think it is a proper thing to go on with ?
– It would not be in this Bill if we did not. think so, and the reason we did not- go on with it before was- that we could not get it through this House before..
-. - -You ad-ways- had the “ gag “ available.
– Does the hond’able member suggest that we should have “ gagged “ this thing through?
– I did not suggest anything of the kind.
– I do not understand the attitude of my honorable friends opposite in regard to the Loan Bill. Items which might fairly have been criticised have passed unheeded. Having agreed to the purchase of obsolete machinery with loan money, I do not see how my honorable friends can object to buying with loan money new machinery with which to replace the old.. Our proposal to borrow to purchase land is something quite different, since we shall have an asset which will increase in value as the years go by, and by no change that can be thought of will fall in value. I hope that they will not persist in their attitude in regard to this item. If they do, it will certainly mean that we shall not be able to develop our defence scheme as we wish to develop it. They make no alternative proposal; they simply say, “ You must not borrow for defence. We borrowed £867,000 for defence, but you must not borrow £300,000.”
– The country decided in. 1910 that there should be no borrowing for defence.
– If so, the Labour party must have outraged the feelings of the electors, as it certainly outraged the principles of parliamentary government, by contracting,, behind the back of Parliament, to purchase land and obsolete machinery for a sum or nearly £1,000,000. We have made straightforward proposals, asking Parliament to deal with them item by item. They provided loan money to pay for the Commonwealth buildings in London.
– That is not defence.
– It is not half so important, and a building is a perishable thing,
– It will last our time.
– So will the Fitzroy Dock.
– Much of what we are spending borrowed money upon at Cockatoo Island will have to be replaced long before, in the ordinary course of events,- we go- hence. Why are honor able members- opposite straining at this gnat - the borrowing of money to purchase land for defence purposes - and swallowing the camel - of the paying for perishable things out- of loan money, thereby creating an obligation which will- last until the end of time ?
.- The Treasurer and the Prime Minister must know that in 1910, if the country decided anything, it was that money should not be borrowed for defence purposes. I shall vote against the borrowing of £300,000 for the purchase of land. As for the expenditure on Cockatoo Island, I agree with much that the Prime Minister has said, but I have no desire to embarrass the Government by voting against it. At the same time, I am determined not to go against the generally expressed will of the people regarding defence expenditure. Many of us would have liked to deal with these items when the Loan Bill was going through Committee, but the “ gag “ was applied, and we had not an opportunity to do so. The Government must have known that the item to which the Prime Minister has referred was opposed to the expressed will of the people, and I cannot understand why it was placed in the Bill. The country will indorse our action in protesting against this. The Prime Minister said this afternoon that in other countries loan money is used for defence purposes, but I am ignorant of the fact. I do not know any place where items have been put into a Loan Bill to provide for defence. I agree with the honorable member for Barrier that less care is taken to scrutinize proposals for the expenditure of loan money, whether on defence or on anything else, than is taken to scrutinize proposals for expenditure from revenue.
Sitting suspended from 6.30 to 7. £6 p.m.
– The matter of defence was settled at the 1910 elections, and the ‘ Government knew, when. they put this item in the Loan Bill, that the Senate would not pass it. As the result of the 1910 election, eighteen senators were returned pledged to the policy of “no borrowing for defence purposes “; and, after the recent election, eleven members were returned to the Senate pledged to the same policy. So there are twenty-nine members in the Senate who cannot vote for borrowing for defence purposes. Expenditure on defence is like paying an insurance premium. No man would borrow to pay his insurance. I believe that if the last Government had continued in power they would have paid for Cockatoo Island out of revenue.
– More taxation?
– We all know the Treasurer’s propensity for borrowing in his own State, which was built up on borrowed money. The State had not sufficient revenue to carry on without borrowing. In the absence of loans it would have been in Queer-street. That the bold policy laid down by the Labour party - that there must be no borrowing for defence purposes - coincided with the sentiment of the people of Australia was shown by the result of the 1910 elections.
– You would tax the people out of existence.
– I do not know what the Government are thinking about. I do not know how they are going to spend all the money, including the surplus left to them and what they propose to borrow.
– They should take a lesson in finance from your New South Wales leaders.
– There was not an honorable member opposite who told the people at the last elections that it was intended to borrow for defence purposes. We all know that a borrowing policy leads to extravagance and carelessness. There is not that judicious control over expenditure that there is when money is spent from revenue.
– That is why you spent last week in trying to help the most extravagant borrowers of all the States.
– The honorable member often makes statements that cannot be borne out. I am satisfied the Government never intended this proposal to go through. If the item is struck out, the Treasurer will be able to finance these purchases without breaking the cardinal principle of not borrowing for defence purposes that Australia has laid down. At the last election, the Prime Minister, who was once cheered for the democratic sentiments he uttered on public platforms, said nothing about borrowing money for defence purposes. All he troubled about was to cast stones at the late Government in the matter of extravagance, and to make statements that he could not bear out on the floor of this Chamber. If the honorable gentleman is ever sorry for anything, he should be sorry for some of those statements. My constituents are entirely opposed to this policy of borrowing, but I suppose the Treasurer has been so accustomed to State finance that he cannot get away from it, and seeks to apply the tame policy to the Commonwealth. Whoever writes the history of our Australian Parliament must give this credit to the late Government - that they endeavoured to carry out expenditure acaccording to their income, and to do so without borrowing. I am equally opposed to the proposal to borrow £170,000 for post-offices. I think the Postal Department should be conducted out of revenue, as has been the case so far. We have set an example in the matter of carrying on the postal business out of revenue. The Treasurer can provide the money asked for out of revenue if he likes. Certainly the policy set out in the Bill will injure our defence scheme. Australians are anxious to see that scheme carried out, and one of the main reasons for their loyalty to it is the fact that it was to be paid for out of revenue. What is more pleasing to the people of Australia than to know that their Fleet is paid for. It is one of the grandest things the people of Australia have ever had. There are so many works in Australia that are built out of borrowed money thatit is pleasing to find something that has been paid for. Every other country pays for defence out of revenue.
– What? Lands for defence purposes ?
– They may borrow to purchase land for dockyard purposes, but they do not do so without making provision for the redemption of the loans. We do not make that provision.
– There fs a sinking fund attached to the proposed loan.
– I cannot understand why, in time of peace, a country cannot make provision out of revenue for its defence. There may be justification for asking our sisters, cousins, and aunts from whom we are going to borrow, to advance us money in time of war, but at a time of unequalled prosperity, I cannot understand a Government who are supposed to be financial geniuses asking the people of Australia to go into debt for defence purposes.
– It is just the time to borrow.
– No business firm would do it. They would reduce their debts in time of prosperity. It might be necessary for the honorable member for Riverina to borrow during a period of drought, but with a splendid crop of wool the honorable member would not go to the banks for assistance.
– You have had a good say; let us get on.
– I quite agree that I have had a fair share, but I feel very strongly in this matter. If there is one constituency which, more than another, is opposed to the system of borrowing, it is that which I have the honour to represent, and I should fail in my duty if I did not enter an emphatic protest against the proposal to expend loan money for defence purposes. If the amendment omitting the item of £300,000 be agreed to, I feel certain that the Treasurer will go on with the purchase of the lands for defence purposes covered by it. Most of the land is required for rifle ranges, and many of these ranges are not so urgent that they could not stand over until next year if the Treasurer found it impossible to provide for them out of this year’s revenue. I hold that we must provide out of revenue for our defence system. By laying down such a policy we shall safeguard ourselves against extravagance, and give to the people some guarantee that we shall not spend on defence more than is absolutely necessary to make our system effective. If we begin to borrow for such a purpose the people will become dissatisfied, and a certain measure of opposition to the defence system is bound to be engendered. On these grounds, I feel that we ought to agree to the Senate’s amendment. If I had an opportunity to vote against the item to provide for postal works out of loan moneys, I would do so.
.- I am just as strongly opposed to borrowing for defence purposes as is the honorable member who has just resumed his seat, but I do not regard in the light of ordinary expenditure a proposal to borrow £300,000 for the purchase of rifle ranges and manoeuvre areas which will be used not only by the present generation, but by those who come after us. It seems to me that the Opposition do not distinguish between proposals to borrow for upkeep or maintenance and proposals to borrow for establishment. That is one reason why I hope that the amendment will be disagreed with. Another reason why I oppose the amendment is that, if I understand the Treasurer rightly, we have already arranged to purchase most of the land covered by the items of £300,000 for defence purposes. Most of this expenditure was incurred by our predecessors, and we are bound to honour it.
– Did we not honour their Dreadnought?
– I hope that the Commonwealth will do what the States in this respect have always done. The States have invariably honoured their obligations, and the Commonwealth should do the same. Honorable members opposite seem to think that there is no limit to the revenue that we may raise. I do not hold that view. The States will require every penny they can secure, and if the Commonwealth persists in providing for all services out of direct taxation we must injure the States by reducing their sources of taxation. In that respect there is a great difference between the proposals of the present Government and those made by their predecessors. The ex-Treasurer in his first year of office was certainly saddled with a deficit of £400,000, but he inherited an arrangement which gave him during his three years of office something like £14,000,000 additional revenue. Not satisfied with that, however, he and his party imposed a land tax which yielded him something like £4,000,000. They went even further. By their legislation in respect of the note issue they deprived the States of a considerable amount of revenue. .
– Nearly £100,000 a year.
– I know that Queensland was deprived of something like £30,000 a year, and that it received nothing in return. To-day I came across an extract from the first speech made by Mr. - now Sir Edmund - Barton, as Prime Minister of the Commonwealth, in which he said -
We have taken over from the States treat obligations through the Customs duties, and you should recollect that when the Commonwealth Imposes its Tariff - which cannot be until after Parliament has met - the Commonwealth power of taxation becomes exclusive, so that none of the States can afterwards interfere with the exercising of that power. That is taken from them, and you must see our enormous responsibility, and we must see that we exercise that power so as not to cripple the States. They’ are left now with as many obligations as they can carry, and more, unless their power of taxation is properly protected. If you take away from them the power of taxation through the Customs, how rauch more necessary is it that you should endeavour to conserve to them the other means of taxation, the principal of which is direct taxation. How suicidal, then, how worse, even insane, would be a policy which would take all the Tariff and levy direct taxation, and so dry up the springs from which the States might hope to make up any shortages. It is necessary to leave direct taxation to them, not constitutionally, but as between man and man, and in the distinction between common-sense and lunacy.
Further on, he said -
There must then, I say, be no direct taxation by the Commonwealth unless under the pressure of some great national emergency, and not even then, if it can be avoided.
I say, with the utmost confidence, that that was the distinct understanding on which the States were induced to support Federation, and that it was violated by honorable members opposite at the first opportunity. I grant that land taxation for the purpose of preventing the aggregation of large estates is an excellent thing. I grant also that land is a fit subject for taxation for defence purposes; but it is not the only thing that should be taxed. What have my honorable friends opposite to say in regard to giltedged securities? Should they not be taxed for defence purposes? Then again, have we no privilges in this country that are well worth defending, and which ought to be taxed to assist in providing for their defence? The point that I desire to emphasize is that we cannot go on providing out of revenue for everything relating to defence.
– Does the honorable member believe in borrowing for defence purposes?
– I unhesitatingly believe in borrowing for the purchase of land which will prove beneficial, not only to the present generation, but to those who come after us. I do not see how we can carry out a proper policy of defence without borrowing. On that ground, also, I support the motion to disagree with the Senate’s amendment. We cannot provide for our enormous scheme of defence by direct taxation alone. Such a policy is not fair to the States. We cannot make the Commonwealth prosperous at the expense of the States. By attempting to do so we shall be putting the cart before the horse. Make the States prosperous, and the prosperity of the Commonwealth will follow. If, however, that policy be reversed, injury to the States must result. A.s to the item providing £400,000 for the construction of the railway from Pine Creek to the Katherine River and southwards, I think that it should also be reinstated. It seems to me to be absolutely necessary to enable us to make the best of a bad bargain. We must build railways in the Northern Territory; but the question of the route which the line should take after leaving the Katherine River is well worth considering. We have a very serious problem to solve in the Northern Territory. So far, we do not seem to know the way out of the difficulty. My own opinion is that the Northern Territory must be settled just as every other part of Australia has been settled. The pastoralists must go there first, and closer settlement will follow. The proper way to encourage the pastoralists to go there is to give them good leases on fair terms, reserving the agricultural flats, or the right of making reservations from these leases when the time for closer settlement comes. On these grounds I support the Treasurer’s motion that the amendment be disagreed with. I cannot understand the inconsistency shown by another place in passing an item providing for the purchase of land for post and telegraph purposes out of loan account, while eliminating an item providing for loan expenditure on land for defence purposes. The land is not perishable, and the probabilities are that the areas to be acquired will increase in value. Then, again, another place has shown its inconsistency by passing an item of £175,000 for machinery, machine shops, and construction of wharfs at Cockatoo Island. Surely that item is not defensible if the other is not. I hope that the motion to disagree with the Senate’s amendment will be carried. I do not wish to introduce the apple of discord, but I should not be displeased if the amendment made by the Senate were fought on the broad ground that it goes beyond the constitutional rights of another place.
.- When I spoke a little while ago I omitted to mention a fact which I think it is important to bear in mind in connexion with this item. As to the Liverpool manoeuvre area, these obligations have all been incurred. The land has been resumed, and must . be paid for. I should like to point out, however, that it will be remunerative in more senses than one. For instance, we are paying 2s. and 2s. 6d. per week for the agistment of each of our remounts, and we are hoping to save a large part of that expenditure when we get this manoeuvre area into our own hands.
– Is it good grazing country?
– Some of it is under water.
– A river runs through it, and that, I think, is an advantage, and not a disadvantage to the land. It is good grazing country, and we expect to keep our own remounts there.
– How many acres does it comprise ?
– I forget the exact area, but I think the original pro- posal was to take over 40,000 acres. That, believe, has been extended to about 60,000 acres. It is a huge tract of country. We are, in addition, getting a large slice at the back of it, which is now, I think, under the trusteeship of the Water and Sewerage Board. We have also the privilege of running our horses on that area.
– Is it part of the catchment area of theSydney Water Supply ?
– No; it is land that is under their trusteeship, and it will be a valuable reproductive asset. It will not be dead money in any sense of the term ; indeed, it would not be dead money if it did not return a penny. I take it that money spent in defence is not dead, but is payment for the insurance of the country. In the present case we shall save a large amount in the direction I have already indicated, and there isa further saving. Every year, when we have the manoeuvres, we get a bill for compensation for damage caused by the troops; and this money we shall not have topay if we buy the land. I wish honorable members to get into their minds the fact that this area will be reproductive in actual money, because, in the first place, we avoid the payment of compensation, which is a substantial sum each year, and then we avoid thepayment of the money for the agistment of horses to theextent of 2s. or 2s. 6d. per head. As to £120,000 of this expenditure, it will, as I say, earn money, and be in the very best sense of the term a perpetual reproductive asset.
.- The reasons given by the Prime Minister for supporting the original Bill are very logical, but he misses the real question, which is, whether we should borrow the money to buy this land. What the honorable gentleman says about possessing the land, and thus saving the money for the keep of the horses, is beside the point. I admit that from a military point of view this land is necessary; but three years ago there was a Government returned to power because they opposed borrowing for defence purposes.
– And in three years the people turned that Government out !
– Another branch of the Legislature, which represents the people of the country, hasdeclared that we shall not borrow for defence.
– The honorable member must not refer to what occurs in another place.
– Does the honorable member suggest that land in the Defence Department is more volatile than land in the Postal Department?
– Land in the Defence Department may grow in value like other land, but land resumed for the Post Office earns money, and is part of the commerce of the whole Commonwealth. There is, however, no profit directly produced from land acquired for defence purposes.
– Does the honorable member object to the nationalization of land?
– The honorable member is trying to take me away from the point. We do not object to the Government owning this land and paying for it, but we say that it should be paid for out of revenue. The late Ministry left a surplus of £2,600,000, which is ample to buy this land right out. The whole of the British defence is paid for out of revenue, and no money has ever been borrowed at Home for the purchase of war vessels. If we establish the principle of borrowing we shall evade direct taxation for defence, and we cannot see where such a policy will end. If we do borrow for defence, we may be sure that the military authorities will ride right over the country. The Labour party are pledged to oppose any scheme of loan moneys for defence.
– They have passed £175,000 for this purpose upstairs.
– The Chairman will no.t allow me to refer to’ what takes place “ upstairs “ ! There is a large tract of land at present lying idle in the’ Federal Territory that could be used for the horses, and also as a manoeuvre area.
– Is the honorable member aware that the late Government resumed land for the Duntroon Military College, and paid for it out of loan?
– Yes, but that land is in Federal Territory, and there is a vast difference between the proposal before us and the resumption of the whole of the land for the purposes of the Capital. Duntroon happens to be within the Federal area, and I venture to say that the money so invested will return a handsome profit, because people will settle in the vicinity.
– I am talking of land acquired for purely military purposes at Duntroon.
– That property was resumed for the purposes of the Federal Territory.
– And it would have been resumed whether the Military College was there or not.
– Yes; that is part of the 900 square miles.
– Of course it is.
– And we are utilizing that part of the Territory for military purposes.
– Exactly, as we should utilize the land at Liverpool when we have paid for it. Will the honorable member tell me the difference between the Liverpool area and Duntroon?
– Yes; the one is where the Federal city is to be built.
– But it had to be bought out of loan.
– Every thousand pounds that is spent on the Federal Territory will enhance the value of that land, and will eventually prove a good investment for the whole of the people. When the Federal Capital becomes a large city, future generations will point with pride to the fact that we secured so much land there as a profitable undertaking. On the other hand, the Liverpool manoeuvre area will be so much waste land, suitable only for encampments and manoeuvres. I do not say that it may not increase in value, but it will be used only for those purposes. I am very sorry that, for the reasons I have stated, I shall have to vote against the Government. This country is large, rich, and willing enough to pay for defence without borrowing; and I believe that the people of the country will indorse the action of honorable members on this side.
– It is a well-known saying that you cannot get a joke into members of the nationality of the honorable member for South Sydney without performing a surgical operation; and it seems to me that the simple principle of loan money, as distinguished from consolidated revenue, is one that none of the Labour party is able to receive into their systems without a similar performance. The honorable member for South Sydney has talked about logic, and one would really think from his demeanour that he had a monopoly of that commodity; but the honorable member does not seem able to distinguish between one thing and another. Because he thinks it improper to pay for a ship, which is a perishable purchase, out of loan money, we, therefore, should not pay for land such as this at Liverpool by that method. With regard to ships, we know exactly what the Labour party did, and what the Liberal party did. The Liberal party did not propose to pay for ships out of revenue, but made an arrangement under their Bill to pay for the whole of the Fleet out of loan money, with a sinking fund that would completely repay the whole capital cost in fifteen or sixteen years. When that Bill was introduced, Ministers pointed out that they had ascertained that sixteen years was the estimated life of the vessels, and, therefore, they provided that the whole capital cost should be paid at the end of that time out of the reserve fund raised each year for the purpose. “Mr. Joseph Cook. - Or sooner, if possible.
– Or sooner, if possible. We know very well that this review ground is not only for the people of to-day or to-morrow, or even for the people of this century; it will remain there for all time ; and it must be admitted that the people of each generation are under an obligation to pay for the use of that ground. Why should we today pay the capital cost of a property which is to be handed down for the use of subsequent generations?. It is a fair position to take up that each generation shall pay the interest on the capital cost of the land, because each generation will benefit by if; and, therefore, the capital cost comes within the category of loan expenditure. It remains in suspense; and each generation should pay its contribution from time to time in the shape of interest. There never was a more appropriate opportunity for spending loan money than in buying a permanent^ property of this sort, which is to be ‘used for all time, and for which the people of all time should pay in the shape of interest. Take the other item of the proposed railway. We know that in Australia to-day there are national railways without which this country would be fifty years behind the times, and those railways have been paid for out of loan moneys. Why? Because each generation should contribute its quota, seeing that when the railways earn profit it will go into the pockets of those who pay the interest. We assume, or hope, that this railway is part of a scheme, that is going to produce some profit in the future. We may be sure that its value will be enhanced with the development of the Northern Territory; and if it is going to be enhanced, or even retain its present value, it is future generations who will make money out of it. Members of the Labour party, who talk about logic without understanding the definition of the term, say that the people of to-day should pay the capital value of the railway, and give it to future generations, without asking those generations to pay any interest. Honorable members on that side of the House ought to know that if we pay for it to-day out of revenue it will cease to be an asset bearing interest upon subsequent generations, and that the only way in which we can make subsequent years and subsequent generations pay their quota is by making the purchase money part of our borrowing. There is a complete absence of logic in their argument; and I cannot understand how they can apply the term to their criticism, because both of these are permanent assets? I admit that they do not earn money at the present time, but the Liverpool property will save the Government each year from renting some big property for the purpose, as they may have had to do in the past, and will undoubtedly have to do in the future as population thickens. We are, therefore, investing in a property for the benefit of the people for all time, and we are investing in a railway which stands on exactly the same footing as all the railways of Australia. If we had not borrowed for them, we could not have had them. How could Australia have paid for those £200,000,000 worth, of railways if it had adopted this “ lolly-shop “ sort of principle of the Labour party that everything must come out of the till ? We cannot do it, but we can pay the interest on the money, and can require each subsequent generation to pay its share. There is nothing but logic in the policy of the Ministry in insisting upon having these two works included in the Loan Bill ; and T shall do my best for them, not only by voting for them, but by persuading my colleagues as to the justice, wisdom, and logic of voting to send the items back to the Senate.
.- The. honorable member for Parkes, in his nice, courteous, and superior manner-
– Why not say schoolmaster manner? I always adopt that manner with children.
– I shall not give the honorable member credit for a schoolmaster manner, because I do not think that, with the Conservative attitude which he takes up on all these questions, he goes very deeply into anything - not even in his great work on Liberty and Liberalism. The honorable member put forward what he calls the only logical doctrine, and, of course, any one who differs from him is illogical, and knows nothing about the question. I am bold enough to differ from the honorable member. He argues Chat, as this- is a permanent asset, the purchase money should remain on loan, and that we should pay interest from one generation to another, so that those who come after us will be compelled to pay a portion of the cost. Does the honorable member apply that doctrine to the action of the various States when they sell the land, and take the money from the present generation, and saddle future generations with a penalty they have no right to bear ? If the’ honorable member is logical, let him object to that practice. He speaks about the money borrowed to build our railways. Australia has borrowed nearly £300,000,000, but not more than from £26,000,000 to £30,000,000 has actually been brought here at all ; and we have paid nearly £300,000,000 in interest, and still owe the original £300,000,000. That is the policy the honorable member advocates. There are but two methods by which money can be obtained for governmental purposes - loan and taxation. In either case, the people have to pay for all of it all the time, with this difference, that if they are taxed directly to obtain £1,000,000, when they have paid that £1,000,000 there is an end of it; whereas if the £1,000,000 is borrowed, say, at 3 per cent., which, I suppose, would be the ordinary rate at which the honorable member would have borrowed when he was in the New South Wales Government, at the end of fifty years £1,500,000 would have been paid in interest, and the original £1,000,000 would still be owing. That is the policy which the honorable member desires us to adopt. If we are going to borrow money for this purpose, and the honorable member is anxious for us to be logical, it is logical for us to retain the land of this country, and not allow a solitary inch of it to go out of the hands of the State.
– If we have no sovereign power over the land how can we hold it ?
– I am speaking of the general principle. The honorable member belongs to the Conservative party , which would give away or sell everything, run up a big overdraft, and pass the burden on to the people, quite satisfied so long as somebody else had to pay it. We, on this side of the House, however, hold strongly to the view that we ought to be prepared to pay for our own defence.
– Except at Duntroon and the dock, I suppose ?
– When the dock question, which is a special one, comes up I shall deal with it I do not know what this land is like, but I am told that it comprises from 40,000 to 60,000 acres, and that we are paying £300,000 for it.
– Oh, no; £120,000.
– Then that is somewhere about £2 an acre. In that case it must be very poor land, which will not carry a great number of horses. The honorable member will not save a great deal at 2s. per head upon the number of horses that it will carry. If it is of any good at all, the honorable member would have no possible chance of getting it at that price. As time goes on, and land becomes scarcer, no doubt it will increase in value; but, in any case, whatever land we get for defence purposes we should be prepared to pay for out of revenue and not out of loan.
– I atn well aware of the fact that on the many occasions on which my respected predecessor introduced the subject of the Liverpool manoeuvre area it was treated as a subject for hilarious chaff, and that his persistency in endeavouring to secure justice for the people affected by the resumption was always a matter of mirth, but I can assure honorable members that it is far from that. It concerns the wellbeing and livelihood of seventy or eighty orchardists, vignerons, and small farmers. They are not large holders, and for over four years they have , had the ban of resumption hanging over them. They have not been able to sell or improve their holdings, but have been living in a state of uncertainty and doubt. They were assured that the Government intended to resume the area, and so have been waiting for something to be done. When these facts were brought before me, I waited upon the Departments concerned, and after I had practically worn out their doormats, Ministers proved sympathetic, and began to move in the matter. Iu the last three months three valuations have been made of the property, and offers have been submitted, with the result that some of these have been accepted, and the owners have compromised themselves by purchasing property elsewhere. Now the proposal is that the money shall not be passed. If that is agreed to these people* will not know what to do. Honorable members opposite are continually expressing their sympathy with the small man. These are all small men; there is not a Riverina squatter amongst them. They are simply dependent upon the holdings they occupy. They are workers, and have no big banking accounts behind them. During the past four years these people have been in a state of uncertainty. Their fruit has been at the mercy of soldiers, crops interfered with, fences destroyed, their cattle have been driven away, and now it is proposed not to provide money to complete a bargain that has been made with them. The suggestion that this item should be struck out is one of the most iniquitous that has ever come before this Chamber. Many of the land-holders within the area have reached a time of life when it is too late to make a fresh start. Are they to be kept waiting another twelve months for the settlement of their claim ? It is said that the expenditure would not be reproductive, but what can be more reproductive than expenditure on defence, to insure the safety of the people, and to guard their possessions 1 Such expenditure is like expenditure on life insurance. The land in this area has a big prospective value. Seeing . that it is within 20 miles of Sydney, the Government, in my opinion, are not giving enough for it. Some of it may be of indifferent quality, but that along the river is capable of growing anything, and it will be worth considering whether it should not be placed, under cultivation to grow feed for the remount depots. For four years those holding land in the manoeuvre area have been unable to sell, and have not known what to do. I trust that they will be no longer kept in this most unsatisfactory position.
.- The Prime Minister spoke of the amount of money that is to be saved in the agistment of horses when the Liverpool Manoeuvre Area has been acquired; but the ‘ Government are paying £120,000 for 60,000 acres, which is about £2 per acre.
– I think we are buying about 40,000 acres.
– That is about £3 per acre. The poorest land in Victoria is worth nearly as much as that, and it would not keep many goats, let alone horses. If there are rich river flats, and one or two orchards within the area, the rest of the land cannot be much good, though, of course, we know that good orchards .are often found in very poor country. In any case, I do not think that many horses will be grazed on the area. The honorable member for Parkes was. for borrowing with both hands. As I looked at his agitated face, I almost fancied that I could see the three balls hanging ‘above his head.
– Was he as bad as Holman )
– Holman has been on his defence for the past few weeks, and has come out fairly well. The Ministerialists who sit on the corner benches expected to come back smiling, but there is a sad look on their faces to-day. The Prime Minister speaks of saving a great deal by grazing horses on the Liverpool
Manoeuvre Area, but the interest bill will be something like £4,000. That would pay agistment for a good many horses.
– At 2s. per week, it would pay for the agistment of 800 horses.
– We shall have to pay this sum to the money lender.
– The honorable member would pay the whole amount straight down.
– If I were in favour of buying the land at all, I would say pay for it out of revenue. If we are going to spend £120,000 -for a manoeuvre area in New South Wales, what are we going to spend in Victoria, South Australia, Queensland, Western Australia, and Tasmania for the same purpose?
– The whole of Tasmania would be needed to- make a manoeuvre area.
– Why should we borrow for a manoeuvre area in New South Wales alone? The policy of the Labour party is against the borrowing of money for defence purposes.
– Except so far as the Fitzroy Pock and Duntroon are concerned.
– The honorable member for South Sydney answered the Prime Minister’s interjection. The Duntroon Military College is a very small speck on the Federal Capital area, and we did not borrow money to erect the buildings that arc there. Honorable members opposite form a borrowing party. They talk of leaving things to posterity, forgetting that we are paying nearly £12,000,000 per annum in interest on money borrowed by earlier generations. We have been paying interest for years, and still owe the principal.
– The money has been well spent, and the railways are reproductive.
– We should be using bullock drays to-day if it had not been borrowed.
– I am not a retrogressive, but I do not believe in borrowing on the smallest provocation. The Treasurer asked who pays for defence.
– There is th» land tax.
– The proceeds of theland tax for three years do not cover one year’s expenditure on defence.
– The proceeds fromthe land tax have been for the Fleet. Some 14,000 persons have paid for theFleet, and you do not thank them.
– Some 2,000 of then* are living out of Australia.
– And 231 paid half theamount.
– It is the masses of the people who pay for defence, and for everything else, and it is time that some’ of their burdens were shifted on. to the shoulders of the rich, who are alwaysdefended by the honorable members for Werriwa, Parkes, and Swan. The Fitzroy Dock was not acquired solely for defence purposes. Had the Fisher Government remained in power, it would have been used to build and repair not merely war vessels, but also vessels for use by the Customs Department, the Quarantine Department, the Lighthouses Department, and the Administrations of Papua and the Northern Territory. The dock will be as useful to the Commonwealth as are the Newport Workshops to the Government of Victoria. It will be a money-saving proposition. The Prime Minister has said that the land is worth £300,000, and the dock is worth a considerable sum.
– It is the largest in Australia. “Mr. FENTON.- Yes, and the only dock that can take the flagship. Moreover, the dock is a going concern. Byandby the repairs of our warships will probably be made at Jervis Bay and other places, and few of them will go to Cockatoo Island; but Australia has a coast-line of 8,000 miles, and will require a fleet of vessels for the services I have just named. The Fitzroy Dock must be regarded, not merely as a defence proposition, but also as a commercial proposition, defence work there being relatively unimportant for the future. Besides, we have not borrowed money to pay for the Fitzroy Dock; we are taking -over the dock as a transferred property, just as we took over the post-offices, Customs Houses, and other public buildings. It was a good thing to take it over. The present Government are the friends of the contractors. They seek, wherever they oan, to give work to contractors. They would rather let a contract than purchase a dock in order to build their own boats.
– “Why not, if they can save the taxpayers’ money?
– They are not saving the taxpayers’ money. The Commonwealth has done better by day labour than the States have done under the contract system.
– Not in New South Wales.
– I can refer the honorable member to a reply given by the Minister of Works in Queensland to a deputation.
– The honorable member is getting rather wide of the item under discussion.
– Members opposite are favorable to contractors, and are desirous of putting work in their way, rather than carry it out under their own auspices and supervision; and anything that I can point to in order to show that the day-labour system at Cockatoo Island Dock is better than the contract system should be permissible in this debate.
– Incidental reference to the matter may be permitted, but I cannot allow the honorable member to elaborate it. The Cockatoo Island Dock does not appear on the schedule of the Bill.
– The Prime Minister very extensively harped on the Cockatoo Island Dock when he was speaking. I have read with pleasure the very vigorous reply given by Mr. Barnes, the Minister for Works in Queensland, to a- deputation of builders and contractors. He gave numerous instances in which considerable sums of money had been saved by the Queensland Government in carrying out public works by day labour.
– A reference to the question of day labour versus contract labour is quite wide of the matter under discussion. If I permitted the honorable member to debate that matter, there would be practically no limit to the subjects that could be discussed upon the question before the Committee.
– So far as I am concerned, I think borrowing for defence purposes is a very wrong policy to pursue. The honorable member for Franklin the other night denounced the defence expenditure in very vigorous terms, but I presume that when the division bell rings he will be found voting to borrow £300,000 to carry out certain defence works. I was touched by the appeal of the honorable member for Nepean. I sympathize with the small land-holders, and I know that the people occupying the land referred to have been in a dilemma for years past; but, nevertheless, I wish to know if the Treasurer is going to pursue the same course in regard to other State: If the item is struck out, I have sufficient knowledge of the Treasurer to know that he will not allow the matter to go by the board.
– Something else will need to go out.
– It might be better to borrow money for some other purpose than for this, but I have no desire to increase the interest bill. If we borrow this money under this Bill we shall need to pay in interest £12,000 annually, which sum would buy a good many things in connexion with defence.
– Is not the money we get out of the taxpayers’ pocket worth , something to the taxpayers?
– I asked the Prime . Minister whether all this money was to be . borrowed from Trust Funds.
– It is.
– The Prime Minister said some of it, no doubt, would be, but that for the rest it would be got wherever it could bo obtained.
– It will all be got. from the Trust Funds.
– Even that will not-in- . duce me to vote for this item.
– Nothing would.
– The Treasurer would have been in a pretty fix to-day had it not been for the fact that he is able to put his hand into some of the full purses left by the late Government. First of all, we left him a surplus of £2,650,000, and we so wisely invested the Trust Funds that the Treasurer is able from time to time to use them. I am opposed to borrowing, but all the same, I hope the Treasurer will see that the piece of country at Liverpool is purchased.
.- I could quite understand the honorablemember for Maribyrnong if the party to which he belongs had ever shown any objection to borrowing, but they were the very first to borrow. They borrowed £10,000,000. The honorable memberboasts about their £2,500,000 surplus, but what about the £7,500,000 wasted, if borrowed money is all wasted. I do not think it is ; but. if the contention of the honorable member - that it is wasted - is correct, then his own party is responsible for wasting something like £7,500,000. The only reason why an attack can be made upon the honorable member is because his arguments are entirely wrong. It is clear to every one but the honorable member that if the money is put to any use, and returns interestand frequently it has enabled development to take place in Australia that could not otherwise be brought about - borrowing is good. If a- man borrows £300 to buy a cottage, he is able to have his home for £15. a year, or 6s. a week. Is he then not infinitely better off than by paying some one else- 12s. a week? In the latter case, he must continue to pay rent, and will never be better off, but in the other case, at some time, the cottage may belong to him. If, in six years, he is enabled to pay off half the loan, he has only 3s. a week to pay. I use this as an argument to show that every worker in the community would be better off if he could borrow a little capital. Fortunately, some honorable members opposite have the good sense to recognise that capital borrowed at a reasonable rate, and expended in a reproductive manner, is of advantage to the whole community, but the. honorable member for Maribyrnong does not seem to have grasped the meaning of one of the planks in the platform of his party - borrowing for reproductive works. The Labour party oppose the borrowing of £400,000 proposed to be spent on a railway in the Northern Territory. Without going fully into the merits of the question, I am bound to say that it is the policy of the Labour party that has committed us to this expenditure. Had it not been for the taking over of the Northern Territory, the Commonwealth Parliament would not be dealing with the matter, and as honorable members opposite claim that they are developing the Northern Territory, surely they will not ‘allow party feeling to induce them to strike out the proposal to build a railway which undoubtedly will tend to the development of that Territory.
– Who said the Labour party were going to do that? Not one of the Government supporters voted for it in the Senate <
– lt does not seem as if there was very much collective sense in another place at present. I hope the majority there will not take this as a reflection. I cannot understand why the construction of a railway in the Northern Territory should be blocked. Manifestly the work cannot be done out of revenue in a single year; it is most unjust to ask that it should be; therefore if the railway is to be built, the money must be spent out of loan funds. In the Loan Act of 1911 passed by the Labour party, provision is made for a sinking fund of at least a £ per cent., to be paid every year, towards wiping out any loan. I have no quarrel with that provision ; it is a wise one in many cases; but one is the less able to understand why there should be any objection on the part of this Committee to a proposal of this kind. I could understand it if honorable members say there is to be no development in the Northern Territory. If the Labour party admit that they made a mistake when they took over the Northern Territory, and when they provided a quarter of a million on their Estimates last year, and pledged us to expend £280,000 this year, I can understand their objection to this proposal; but as the development of the Northern Territory has been their policy in the past, and as 1 presume they would have continued that policy, surely honorable members opposite are not going to oppose this item merely because a body of men elsewhere have seen fit, perhaps for party purposes, to strike it out. We should put this matter. above party. The House of Representatives is the guardian of the people’s money. I. am surprised that honorable members do not regard with considerable jealousy amendments made by another place in relation to financial matters, which are left practically to the jurisdiction of this House. The House of Representatives was set up by the Constitution as the guardian of the financial rights of the people, and it should take care that its rights are not violated. We should unite in declining to allow amendments of this kind to be made by a body of men who are not as representative as we are.
– They are elected on the same franchise as we are.
– An elector in Western Australia, voting for the Senate, has nine times as much power as has an elector in New South Wales voting for the same
House. That being so, it cannot be said that the two Houses are elected on the same franchise. Apart from the constitutional position which we ought to take up, I think we should unite in supporting the item of £400,000 for a railway in the Northern Territory. As to the rejection of the item of £300,000 for the purpose of our land defences, I would point out that honorable members in both Houses of Parliament have assented to the raising of money for postal works. It is not right to ask the people in any one year to pay for things which will be used by the people year after year. If, as in the case of items 6 and 7, provision had been made for paying off this particular money within a certain time, I could have understood the objection. Provision is made in clause 2 for paying off items 6 and 7, at the rate of 5 per cent, or 6 per cent, a year, which means that under the Inscribed Stock Act they will be paid off in fifteen and a half years. Had I been consulted, I might have urged that the. item relating to machinery should be paid off in less than that time. That item, however, has not been rejected. I. am unable to understand how advocates of perpetual leasehold do not grasp the fact that, in providing for these defence requirements out of loan, we are simply putting forward something in the nature of a perpetual lease. Under a perpetual lease rent is paid year after year, whilst in the case of a perpetual loan rent is also paid year after year. The Opposition, therefore, are stultifying themselves. Another point is that the land to be now acquired for defence purposes will not be committed necessarily to those purposes for all time. It may be devoted to some other purpose. Surely we are not going to have our present big military expenditure going on year after year. We find that we cannot accuse the Labour party of cutting down the defence expenditure. We learn that they were committed to the provision of a Dreadnought, submarines, and other vessels, and that they would have committed us to a’n extra military expenditure of £4,000,000.
– Which would have been followed by an income tax.
– By other taxation. Every additional million that is devoted to defence means cutting down the possibility’ of paying an additional 4s. a week to old-ase pensioners, and some members of the Opposition have said that our oldage pensioners are not getting enough.
– They are not.
– Then vote to keep down the military expenditure. We now understand that our party has cut down the military expenditure this year by £4,000,000.
– Who told the honor” able member that? ‘
– Do I understand that the honorable member now says that when his party told the people they were, going to do all these things they were merely talking? I ought to know that the political promises of the Labour party are made only to be broken, and that when they gave this further promise they were only trying to catch the unwary, the gullible, and unthinking. The appeal of our party was to the sensible electors of the Commonwealth, and they returned us with a majority, despite the promises made by the Labour party, in which, the honorable member now admits, he did not believe. As this land, on the showing of the Labour party, is not committed to defence purposes for all time, the objection could have been raised that we were borrowing too soon to provide for its acquisition. That objection, however, has been effectively disposed of, because the whole of the military manoeuvres were carried out by the late Ministry on these very grounds, and it was only because notice of resumption had been given by the late Government that it was necessary to resume them. Then the question arises as to how they should be paid for. I hold that the provision of land is unlike the provision of war material, which should come out of revenue. Even the cost of your ships, if they are to last for a certain time, in a small community like ours, should be spread over ten or twelve years. In the course of a few years the whole of our defence may be on the naval side, and in that case the land now being acquired for military purposes will not be so used. In any event, it would be unjust to call upon the people this year to pay for property which at some future time can be sold to advantage if the purchase is a wise one. I trust that, for the reasons I have given, the Committee will reject the amendments made by the Senate.
Mr. SPENCE (Darling) r9.381There is no quarrel between the Government and the Opposition in regard to borrowing for reproductive works, but the Labour party are strongly of opinion that defence should be provided for but of revenue. That principle is generally recognised in older countries, and I am astonished that it is not observed by the present Government. The policy taken up by the Ministry indicates that if there were no loan funds available to them there would be no defence system. That, indeed, was the policy of the Liberal party when it was in office before. They were going to borrow to build our Navy. The present Government are greatly concerned about the taxpayer when we suggest that he should be called upon to pay for defence, but they apparently hide the fact that the same taxpayer has to pay the interest on money borrowed, for which interest he gets no return. Defence is a matter entirely separate from any other. The Prime Minister has pointed out that it would be very profitable to take over this manoeuvre area because of the saving that would be effected, and so forth; but that is merely trying to separate this land entirely from the defence policy of the country. We cannot get away from the fact that the horses to be placed on this land are part of the defence equipment, and, no doubt, it would be advisable to get possession of the land in order to make a saving in this connexion. But this does not justify our borrowing money for the purpose. The whole conception of defence by the Liberal party seems to be bound up in borrowing. If we were ever unfortunate enough to be attacked by a foreign power we should have to appeal to somebody for money, and if we keep piling up our indebtedness under this head in time of peace, what position should we find ourselves in when we came to face an enemy ? We should reserve our borrowing powers as much as possible for any emergency. Some honorable members opposite seem to regard getting into debt as a virtue, and the only other section of the community which seems to hold similar views is that represented by the churches, who feel that when they are in debt they can more readily and effectively appeal to their adherents. In private life, however, I am sure that honorable members opposite feel that it is not a good thing to be in debt, and inculcate that lesson into the young people for whom they are responsible. There is no analogy between the construction of a railway and the provision for defence. If this land were to return some income, no doubt it would effect a saving in the defence expenditure, because there is no proposal that the. money- should be placed to ordinary revenue. The interest, however, on the £300,000 will have to . be paid by the taxpayer, who gets nothing in return. Honorable members opposite will no doubt tell me that I would take the money to pay for the land out of the taxpayers’ pockets; and that is quite true. No sensible persons in business would borrow money and pay interest if he had the necessary capital available; and the Government have the capital, seeing that they have the power to tax those who can well afford to pay. I do not believe that the people of Australia grudge what they have to pay for defence, however unsatisfactory such expenditure is. It is considered an urgent necessity that, although not a warlike people, we should be put into a position to defend this magnificent country, and all the privileges we enjoy. Just imagine a Government seeking trouble with another place over a small sum like £300,000! It would appear that the Government are so anxious to borrow that they will not even give up this item. The honorable member for Werriwa put forward what specious arguments he could in support of his party, but they did not appear to me to carry much weight. It is admitted that this land would be a good asset for all time, whereas ships may go down, or get out of date-; but this fact does not justify our borrowing money to secure the land. The whole defence policy and scheme should be considered as one, whatever may be the result when the change comes, of which the honorable member for Werriwa seems to be hopeful. I am rather surprised he should have taken up the position he does, because he is thoroughly opposed to the development of our land forces. His idea is that we ought to have only a Navy, but he now appears to be the apologist for the Government in their proposal to borrow £300,000 for this land. As I say, the people are prepared to pay the necessary taxation, but the Government have not the courage to impose the taxation on the well-to-do people, who in this respect are let off more lightly here than in any other part of the world. They are all doing well, and ought to be taxed, in fairness to the rest of the community. I am opposed to this item, and I hope that it will be rejected, and that we shall thus, once and for all, put a stop to borrowing for defence purposes.
– This item of £300,000 is one of the legacies oi commitments from the previous Government, and it now devolves upon the present Government, somehow or other, to find the necessary money. The question seems to be simply whether we shall pay for the land out of revenue or out of loan moneys. I can see an analogy between actions of the late Government and the proposals now before us. The Loan Act of 1911 provided for the acquisition of land in the Federal Territory at a cost of £600,000. Where is the distinction between borrowing money to buy land in the Federal Territory and borrowing money to buy land in the Liverpool manoeuvre area? Can it be urged that land in the Federal Territory is reproductive, or likely to be reproductive within a reasonable time? Is it more likely to be reproductive than the land of the Liverpool manoeuvre area ? The latter, when not used for defence purposes, might be leased for agistment or other purposes, and thus be made in some degree reproductive; at any rate, it could be made quite as reproductive as the land within the Federal area. We also find that the late Government borrowed £226,000 to redeem Treasury-bills issued by the South Australian Government on account of the Northern Territory. Can it be urged that the Northern Territory is reproductive, or likely to be reproductive for a considerable .number of years ? At any rate, when they occupied the Treasury bench they borrowed £226,000 to pay for work which is not likely to be reproductive for a very long time. The £300,000 item in this Bill includes £112,000 to purchase land in the Liverpool Manoeuvre Area, and £70,350 for the acquisition of sites for drill-halls, mobilisation stores, and other accommodation for Citizen Forces. The money will not be wasted if spent for those purposes. The land will always be there, and can be transferred by the Commonwealth at any time. It is altogether different from putting the money into warships, which become obsolete in fifteen or twenty years’ time. The Government are quite right to borrow money for the purposes set out in the, Bill. As a previous speaker pointed out, if we do not find money for these drill-halls we cannot properly carry out our defence system. I understand that the works are to a large extent already under contract to be carried out. The Government are committed to them, and the question is, how we are going to get the money. If we are to pay for the whole of the commitments of the previous Government out of revenue, I do not see how it can be done, unless we impose taxation of a very serious nature. We have certainly got to nurse the baby. The case has been manufactured for us by the previous occupants of the Treasury bench, and we are not justified in finding the whole of this money out of revenue, particularly as future generations will reap a far greater benefit from the expenditure than we shall ourselves.
The railway from Pine Creek to Katherine River in the Northern Territory was part of the policy of the previous Administration, and it has been recommended by the whole of the authorities connected with the Territory. If we are to develop that possession our main point of attack must be by opening it up by means of a railway. I gather, from the attitude of honorable members in another place, and of honorable members opposite, that there is no objection to constructing the railway out of loan money, but that the real reason for the omission of the item is that the previous Government had linked up with the proposed railway construction a Socialistic undertaking in the shape of Government freezing works on the shore near Port Darwin.
– The Government have knocked the Government freezing works out.
– That is exactly why this item has been treated in such a silly way in another place.
– It was one of your own supporters that knocked it out there.
– My information puts a totally different complexion on the matter. I believe that if the freezing works had been included the item would have gone through quickly. We cannot develop the Territory unless we encourage grazing by means of railway construction, and after grazing will come that closer settlement which every one so much de- sires.
.- The facts of the case with regard to the Fitzroy Dock are really very creditable to the late Government. When it was decided to build the’ destroyer Warrego the then Govenment entered into an arrangement with the New South Wales Government to pay 8 per cent, over and above the actual cost for the use of the island and the necessary machinery. When the Fisher Government came into- power they decided to take over the island and the whole plant. By doing so they saved the Commonwealth 8 per cent, on the total cost of construction of our warships, and this meant a saving of hundreds of thousands of pounds. We have spent about £850,000 in that case, and have secured a valuable asset. We can build there any ships that we require, and we have the largest dock in the whole Commonwealth - a dock that can accommodate the battleship Australia. I am prepared to support the item for the construction of the railway to the Katherine River. That part of the country cannot be developed except by railways, and if there is a division on that item I shall support the Government. We are not regarding this matter as a party question at all.
– 1 hardly think we shall have a division on that item.
– Some of the supporters of the Government think we are committed to oppose it, but we consider that the Northern Territory should be developed irrespective of who is on the Treasury bench, and the railway extension to the Katherine River ought to be made in any case. It is part of our main railway system, and we ought to send the item back to the Senate, with a message insisting on its reinstatement in the Bill’. There is, however, no justification for borrowing money for defence purposes. The electors have given the Government no warrant for such a policy. Some Government supporters are trying to get out of the awkward position in which they are placed by saying that the land will become valuable. No doubt it will. We do not oBject to the Government taking over the land, but it must be paid for out of revenue. To pay for it with borrowed money would be to set a very bad precedent, of which future Governments may try to take advantage. If we cannot pay for our defence out of revenue we have no right to undertake such an expensive scheme. We are spending over £5,000,000 out of revenue on defence according to this year’s Estimates, but that does not seem to satisfy the Government, for they propose to borrow another £300,000 to augment that sum. The time has arrived for them to call a halt. They could acquire the land and pay for it out of revenue at the rate of so much every year.
– We have taken possession.
– I sympathize with- the people who have land in the Liverpool area. We are not treating them fairly, and we ought to do so. I am satisfied that if the Senate insists on rejecting the item of land for defence purposes, the Treasurer will find ways and means of financing the £300,000 required. He has the handling of a surplus of £2,600,000 left by the late Government, and yet he asks Parliament to sanction the borrowing of another £300,000. The honorable member for Parkes went round the country denouncing the late Ministry for extravagant and wasteful expenditure, but in the last Supply Bill brought down by the present Government, the sum of £246,000 was included for military and naval expenditure for one month only. That is an enormous sum. The Government came into power on the cry that the Fisher Government had been extravagent, but they are spending money wholesale themselves. They told the farmers that the Fisher Government had spent every penny they could put their hands on, but the Fisher Government never proposed to borrow money for defence purposes. The Government are prepared to spend not only the surplus, together with an increasing revenue, but a large amount of loan money as well. I hope they will pursue that policy for our sakes, because the effect will be seen at the next election. We have seen a forecast of what is going to happen in the last few days in New South Wales. The Government have been six months in office, and what have they done for the farmers? They have heaped up expenditure, and have borrowed money. I advocate the cause of the farmers on every occasion, and I hope honorable members who represent rural constituencies in this Chamber will call a halt in regard- to loan expenditure. We should always have to pay interest on the money, but while there is plenty of revenue coming in, that should be made sufficient for all our requirements. I trust, therefore, that when a division is taken, Ministerial supporters will vote in consistency .with their platform utterances. Some honorable members got into this House simply by denouncing the extravagance of the Labour Government, but not one of them has attempted to cut down a single item of expenditure on the part of the present Government. I should like to strike a note of warning as far as they are concerned. The people have already spoken upon this question. They threw out the Fusion Government when it went to the country with a Loan Bill for three and a half million for defence purposes, and returned one of the strongest Governments that ever sat in this House. That Government built up the Navy, and formed the nucleus of our land forces, and established small arms, clothing, and ammunition factories - all out of revenue. If the Treasurer will take a friend’s advice, he will withdraw the disputed item, for it is of no use for the Government to force a crisis over this matter. If they do so, they will get the worst of it. If they go to the country on the question of borrowing to buy manoeuvre areas and sites for drillhalls, it will be the worse for them. I hope that the Government, in the interests of the party and of the country, will see the wisdom’ of withdrawing the item, and not use it to cause a dispute with the Senate, which has rights, just as we have.
.- I am glad to know from the kindly remarks of the honorable member for South Sydney that our opponents are coming to sympathize with the farmers. What the Government propose is in the interests of the farmers. Instead of taxing them to provide £300,000, we are asking them to pay only 4 per cent, on that sum annually. Honorable members opposite strain at a gnat and swallow a camel. The honorable member for South Sydney had a good deal to say about the saving of 8 per cent, in connexion with the acquisition of the Fitzroy Dock, but his arguments apply much more forcibly in favour of the proposal that I am discussing. The sum of £70,300 is set down for drill halls.
– That is for land. The buildings are provided for on the Estimates.
– From going through the country, I know that most of the drill halls occupied by the Department are in a dilapidated condition. If we require efficiency, we must provide proper accommodation for our cadets and trainees. These drill halls for the most part are being rented from the capitalists, to whom the Labour members are so much opposed. In many cases, £50 and £60 a year is being charged as rent for sheds which could be built for £250, and would cost only £10 a year in interest. If we built 280 drill sheds at £250 apiece, they would cost £70,000, interest on which, at 4 per cent., would be £2,800. For similar sheds we are paying altogether £12,400 a year in rent, so that by borrowing money to erect sheds of our own we could make a saving of £9,600 a year. That amount capitalizedcomes to £240,000 at 4 per cent. If private individuals entered into a softgoods business, and made it their rule not to borrow to buy cotton goods, but to spend borrowed money on woollen goods only, the arrangement would not be more ridiculous than the contentions of the Labour party in regard to Commonwealth borrowing. Why, if we may borrow £300,000 for the Postal Department, should we not borrow a like amount for the Defence Department, supposing it to be in the interest of the taxpayer ‘ to do so ? If by borrowing to construct drill halls we can save over £9,000 a year, ought we not to do so ? I am sure that the honorable member for Darwin, if he could borrow at 4 per cent, and get a return of 20 per cent., would not hesitate to do so ; and if honorable members would do this in managing their private affairs, why should they not do it in the interest of the country at large?
.- For straight-out hypocrisy and unpardonable opposition to the proposals of the Government, the present position of the Labour party is almost without parallel. When in power, the party introduced two Loan Bills to cover an expenditure of about £3,000,000.
– For reproductive work. .
– One million pounds was for the construction of the line from Kalgoorlie to Port Augusta, and £600,000 for the acquisition of land in the Federal Capital Territory.
– That is a good investment.
– That is beside the question; I am discussing the policy of borrowing. At one time, our opponents formed a non-borrowing party. Then there was a re-adjustment of their platform, and they favoured the restriction of public borrowing. Now they are again a non-borrowing party.
– We are in favour of borrowing for reproductive works.
– The Labour party is a non-borrowing party when it suits it to be so. In New South Wales, it is a whole-hog borrowing party. The party’s plank in connexion with defence is *’ Naval and military expenditure to be allotted from proceeds of direct taxation.” The Prime Minister has said that he remembers when the Labour party thought that about £500,000 a year would pay for the defence of Australia, but last year it spent about £5,500,000 on defence; and, although it holds that military and naval expenditure should be paid for from the proceeds of direct taxation, only £1,4.00,000 of that amount was so obtained. That sum was taken from the land-holders, and well-to-do classes, like the manufacturers, for whose benefit the national policy of Protection, in which I believe, was framed, were allowed to escape. Under the Labour policy, the Minister of Defence himself, unless he happened to own £5,000 worth of unimproved land, would pay nothing directly towards the defence of the country. The balance of the defence expenditure is contributed by the community at large through indirect taxation. I do not think that it is commendable for a party to specially tax some 14,000 persons for the defence of the country, leaving untaxed many who are better able to bear taxation. Other purposes for which the Labour party got permission to borrow were these: - For the purchase of land and the erection of buildings in London, £600,000; for the redemption of Treasury bills issued by the Government of South Australia on account of the Northern Territory, £226,000; and for the payment to South Australia of the amount expended from revenue for railway construction, £34,476; the several items in the first Loan Act totalling £2,460,476. The schedule attached to the Loan Act, No. 22 of 1912, was as follows: -
When on the hustings I laid down my attitude on the question of when it is right for a nation to borrow. I believe that if there be no imminent or present danger on the shoulders of a nation, as far as possible the defence of the country should be carried on from each year’s won wealth. The nation should defend every home and every life, and who is the Australian worthy of the name who would not weigh in with his little lot for the defence of the country, allowing for bread and butter exemptions?
– So they do through the Customs.
– I am talking about direct taxation. I am well aware that the community at large, by indirect taxation through the Customs, pay their proportion. If there he for defence or governmental purposes any requirement which is not a pressing need, it should be got out of the incomes of the people; but, in my judgment, there are insufficient cash reserves in Australia. For the true economic needs of the people there is nothing wrong in a sound policy of national borrowing accompanied by proper safeguards for redemption. Where should we be to-day if the credit of Australia had not been sufficient to enable us to get from the older and more opulent nations - those with cash reserves to lend - the millions we have had to develop the country and defend it? In my opinion, the items for which the Treasurer seeks authority to borrow money are justified, and they have my support.
.- I am struck with the reversal of form of several’ honorable members. When the Bill was before us previously, the honorable member for Wide Bay, about 3 o’clock in the morning, wished to move an amendment to strike out the item of £300,000 for defence purposes, but was prevented from doing so, owing to the “ gag” being moved and carried. I had an opportunity of speaking earlier on that occasion, and I said distinctly that we must borrow for the construction of railways, that if we desired to develop the Northern Territory we must borrow for that purpose, and that if we desired to go on with the Federal Capital money would have to be borrowed; but I picked out three other items, and said that there was no justification in borrowing for them. There is no justification in borrowing for defence purposes in times of prosperity.
– We are borrowing from ourselves.
– If the Treasurer had had his own way we should not have been able to borrow from ourselves. He opposed the Australian Notes Bill, which has given us the nest-egg.
– I do not think you are right in that statement.
– The Treasurer did precisely the same in that regard as in regard to other matters the late Administration brought forward, but not a line of which the present Government are prepared to repeal.
– You have made a misstatement.
– I do not think so. I think that the Treasurer opposed the Bill which has given him the right to obtain so much of this money. When dealing with the Loan Bill, I said I would strike out the £300,000 for defence purposes, the money for constructing conduits underground, and the money to he borrowed for post-office purposes; and I said that the money for the machinery for Cockatoo Island was an item that should not be incorporated in the Bill.
– Your attitude is that we should not borrow for new machinery, but should borrow for obsolete material?
– The Prime Minister admits the Commonwealth has not made a bad bargain in regard to Cockatoo Island, and that it is not entirely for defence purposes, because vessels may be constructed there for the Customs, Lighthouses, and Quarantine Departments. Of course, if the Prime Minister thinks that provision for purchasing Cockatoo Island should not be in the Bill, I am sure another place will oblige him by striking it out. I shall vote for the construction of the railway in the Northern Territory. If we are to develop that Territory we must make the means of transit available for the people who will go there. This is the very best season Australia has ever seen.
– It is the worst season we have had in the north-west of Australia. You speak of Victoria only.
– I am speaking of Australia as a whole. In no previous season has the wheat yield exceeded 100,000,000 bushels. The previous record was 95,000,000 bushels, but this year it is estimated that the yield will be 105,000,000 bushels. Our butter production will be nearly equal to the record season. We have had the best season Australia has seen so far, and we have more taxpayers, yet the Government propose to borrow for defence purposes.
– Do you not know that the revenue is tumbling?
– Yes, it was to be expected. The Treasurer allowed for a certain fall. I do not think he allowed enough. We shall not draw the £750,000 from sugar Excise, but we shall not be paying out £500,000 in bounty, which, will be a distinct saving to the Treasury. If we have not the income on the one hand, we have not the expenditure on the other. If honorable members on the Government side were in Opposition they would be most vigorous in denouncing the proposal to borrow £300,000 for defence purposes. I hope the item will not be persisted in. I am prepared to vote for the railway. We cannot develop the Northern Territory in any other way.
.- The very fact that the Labour party brought down Loan Bills to carry out certain public works is a sufficient answer to the statement made that we are a non-borrowing party. The honorable member for Calare and the honorable member for Wannon, the latter particularly, referred to certain planks in the platforms of State Labour parties; but in no case were they able to show that the Labour party is opposed to borrowing. There have been restrictions on borrowing advocated, but in every case the Labour party have advocated borrowing tor reproductive works. Honorable members opposite very conveniently forget the qualification we imposed. The whole of the opposition to this Loan Bill is directed to the proposal to borrow £300,000 for the purchase of land for defence purposes. The honorable member for Calare suggested that, as honorable members of the Labour party would be quite willing to borrow money at a cheap rate of interest to secure a satisfactory return, there was no reason why the Government should not adopt the same policy. It is a most remarkable statement for any honorable member to make. Honorable members on the Government side do not believe in the Government indulging in speculation; the late Minister for Home Affairs was most severely castigated because he ventured to buy some property in Perth more than was required for postal purposes, on the ground that it was a- speculative business that was bringing in revenue for the outlay; but now the honorable member for Calare applauds the present Government for doing what was .held to be a sin on the part of the late Government. Whatever we say they will say the opposite. One honorable member told me the other day that he did not know what I was saying, but he was against me. The honorable member for Wannon said that we were hypocritical in this matter. The hypocrisy is upon the other side. We have had a settled conviction in regard to the question of borrowing all through the years during ‘which the Labour party has been prominent. We heartily support the items in the Loan Bill to provide for the building of the transcontinental railway, the railway in the Northern Territory, the London office, and other items of that kind which relate to developmental and necessary works for opening up the country. They are really reproductive works, and must bring in a very handsome return to future genera.*: Honorable members must not forget that in 1910 we roundly attacked the Fusion Government in respect of the Naval Loan Act, by which it proposed to raise £3,000,000 for the building of war ships, and we promised the people that if we were returned to power we would repeal that Act. The reason we gave was a very proper one. We have always contended that defence is not reproductive, and cannot come within the category of works and services in respect of which we think loan moneys may properly be expended. There was no need to fly to either direct or indirect taxation for building the Navy. That is a point of which’ I would remind the honorable member ‘ for Wannon. The Commonwealth was then enjoying- prosperous times, and we should have been indulging in hypocrisy of the very worst kind if, as suggested by the honorable member, having sufficient revenue to meet our desires in regard to the building of the Navy, we ‘had resorted to some method of direct taxation to cover that expenditure. It is not necessary for the present Government to resort to direct taxation in order to provide for this defence expenditure of £300.000 The revenue of the Commonwealth is sufficiently elastic at the present time to enable that amount to be taken out of it instead of out of loan account. It is not a fair expenditure from the point of view of the present generation, and it is not a fair handicap to impose on future generations. It means the insertion of the thin end of, a wedge, that, once admitted, must lead to disaster of the very worst’ kind. If, during times of prosperity, when we have available money that may reasonably be spent for defence purposes, we are going to provide for defence out of loan account, then, when times are bad, and the Treasurer has a difficulty in making ends meet, what are we going to do? This is the last of all times when we should resort to an expedient of this kind to provide for defence expenditure. I do not object to £300,000 being spent as proposed for defence purposes. ‘My sole objection is to the proposal that’ the money shall be provided out of loan account. No doubt the Government, with the assistance of its servile majority, will reject the Senate’s amendment, but that will not prevent us from challenging their action in adopting such a vicious principle - a principle that is not followed by any other country. I heartily approve of the proposed item of £400,000 for constructing a railway from Pine Creek to the Katherine River and southwards, but I offer my strong objection to the money being voted before the railway itself has been approved by the House. Here, again, we are asked to agree to a principle that must lead to trouble in the future. Before we were asked to provide funds for the building of the transAustralian railway, the construction of the line itself was approved by the House. The Government have put the cart before the horse in this case, and are asking us to follow a wrong principle. If we agree to it, I fail to see how we can object to further proposals in the same direction.
– Cut it out if you want to. but do let us get on.
– The Prime Minister evidently forgets that he was once in Opposition, and he cannot fairly refuse honorable members a reasonable opportunity to discuss this matter.
– The honorable member has made up his mind, and we all have made up our minds in regard to this item…
– The matter has been discussed half-a-dozen times.
– No one has yet discussed the point that I am raising - the provision of money for the construction of a railway which has not yet been authorized. I do not wish to be unkind; but I can understand the Prime Minister’s anxiety that we should go to a vote. He knows that he has the numbers, and that, whether we proceed to a division five minutes or fifty minutes’ hence, the result will be the same.
– Then, why waste time?
– I am sorry that the honorable member admits that he is so impervious to argument that he is not prepared even ‘to listen to a reasonable statement on an important question. I regret that he thinks it is a waste of time to object to the allocation of public money before we have decided how that money shall be spent. We are asked to sign a cheque for £400,000 in respect of a railway which we have not had an opportunity to discuss. We have not discussed when and how it shall be built, or whether it should be built at all.
– The honorable member supported it last session when his Ministry brought it in, and his leader is supporting this proposal.
– The honorable member’s statement is quite in keeping with the assertions usually made by him. No such proposal was made by the late Government. We approved of a Bill to provide for the survey, and we approved of the construction of the line, but I am objecting to the passing of money for the building of the line before we have considered a Bill to authorize its construction. Had the Fisher Government remained in power we should have been asked, first of all, to approve of the railway being constructed. In years to come honorable members opposite will be the first to object to the principle to which we are now asked to assent. I wish to say how much I approve of the proposal for the construction of a railway from Port Moresby to Astrolabe, and for the construction of wharfs at Port Moresby and Samarai.
– That item is not under discussion.
– I was “ gagged” on the last occasion when I proposed to deal with the item, but I shall return good for evil, and allow the Prime Minister to get to a vote at once.
Amendments of the Senate in title and clause 2 postponed.
Amendment of the Senate, leaving- out the item “2. For the construction of a railway in the Northern Territory from Pine Creek to the Katherine. River and southward, £400,000,” disagreed to.
Question - That the amendment of the Senate, omitting the item “5. For the purchase of land for Defence purposes, £300,000,” be disagreed to- put. The Committee divided.
Majority … … 6
Question so resolved in the affirmative.
Postponed amendments disagreed to.
Resolution reported ; report adopted.
Motion (by Sir John Forrest) agreed to-
That Mr. W. H. Irvine, Mr. Groom, and the mover be appointed a Committee to draw up reasons for the House of Representatives disagreeing to the amendments.
The Clerk read the following reasons as drawn up by the Committee: -
As to Amendment No. 3 -
Item 2. - That it is essential for the development of the Northern Territory that the railway from Port Darwin to Pine Creek should, as soon as practicable, be continued from Pine Creek to the Katherine River and southwards, and that it is not practicable to provide the money for the construction of such lines out of revenue. As to Amendment No. 4 -
Item 5. - That the payment for land purchased for. any public purpose falls essentially within the domain of capital expenditure, and not of current expenditure, and that the amount in this item is necessary to meet commitments already entered into, and that it is impracticable to provide for the same out of revenue.
Motion (by Sir John Forrest) proposed -
That the Committee’s reasons be adopted.
Amendment (by Mr. Fisher) proposed -
That the following words be added to the second paragraph : - “ but the reasons given do not apply to defence expenditure out of loan moneys.”
– It seems to me that the proposed amendment is in the nature of a negative.
– It is an addition.
– It is an addition; but, so far as I can see, it is a negative of what precedes it.
Amendment (by Mr. Fisher) proposed -
That the word “ impracticable “ be left out.
– Why not let us get on with the business?
– Because there is insincerity in the whole thing.
Question - That the word “ impracticable,” proposed to be left out, stand part of the proposed reasons - put. The House divided.
Majority … … 8
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Committee’s reasons adopted.
– I desire to ask the leave of the House to give notice of motion to suspend the operation of standing order 70, “ Opposed Business,” for the remainder of the session.
– That can be done tomorrow.
-If it is left over until to-morrow it will mean that the week is practically gone. I wished to give notice now.
– I object.
– I move -
That the House do now adjourn.
I desired to move the motion to which I have just referred so that we could take opposed business after 11 o’clock on some nights during this week. I understand that some honorable members on the other side profess to want to wind up the session, but I candidly confess that I see no, evidence of it. We have put in the whole night discussing the amendments of the Senate on the Loan Bill.
– You put up man for man.
– That is not so. All the speeches made on this side have been short. The two last were ten minutes each. At any rate, thewhole night has been cut out over this business, and if we cannot make some arrangement to sit a little later, and do a little more business, it seems to me that we shall be here till after Christmas.
.- There is nothing in what has happened to warrant the reflection that the Prime Minister has cast upon the House. . It is absurd for him to assume that it is the duty of the Opposition, or even of his own supporters, to wind up the session without discussing a Loan Bill for £3,080,000. I have never heard any Leader of the House make such a suggestion before. He spoke of some arrangement with some honorable members who were desirous of winding up the session. We are desirous to do so, but only after conducting the business in a business-like way. The Loan Bill was not allowed to be discussed previously.
– That is absolutely incorrect.
– I believe five hours was the total amount of discussion allowed, and an amendment of which I gave notice was not allowed even to be moved. I have known a Loan Bill for £1,000,000 to be tied up for about three months in the Queensland Parliament, and it is ridiculous of the Prime Minister to expect us to allow so vital an alteration of the financial policy ‘of the Commonwealth, for which the Government received no authority at. the elections, to go through without comment. The measure was put through by the misuse of the closure. There was no extensive debate, and yet the Prime Minister complains now that an afternoon has been spent in discussing this important question. I take the challenge of the Prime Minister and honorable members opposite in this matter. If they want to go to the country, why do they not go ? What is all this whining nonsense about the Government being embarrassed? If they find themselves in difficulties, let them take the ordinary opportunities that are open to honorable men occupying their positions. I resent the insinuation that there are some members over here who have been asking the Government to close* the session without reasonable discussion.
– I never said so.
– I heard the Prime Minister say that there were some members over here- who were anxious to close the session as soon as possible.
– I said I understood so. The first time you quote me correctly I shall make you a present.
– If the Prime Minister understood that, I presume he had reasons for doing so.
– Of course.
– I resent the suggestion that any approach was made to the Government from this side to close the session without reasonable discussion on all matters.
– When you were away last Thursday or Friday morning, your Acting Leader, the honorable member for Barrier, asked the Prime Minister to close up.
– The honorable member for Barrier is reported to have asked the Prime Minister if he had any idea when the session was likely to close. I cannot say what he actually did say. That was a sensible question for any one to ask. It is quite different from saying that a £3,080,000 Loan Bill was’ not to be properly discussed. We are getting tired of members boasting outside what they are going to do, and when there is anything likely to be done, or any chance of their going to the country, raising a winning cry that they are being impeded in the transaction of public business. Owing to circumstances over which we have no control, andwhich we all regret, the Government have now a handsome majority, and can do what they please, but, at the same time, so far as the Opposition are concerned, the public business will be fairly discussed until the end of the session is reached in due course.
, - I am sorry to have again to differ from the action of the Defence Department. They are appointing new drill instructors. There are here a number of men who have retired from the British Army, and when the examinations take place, either this or next week, they are giving them a chance to see if they are fit for the positions. We have many young men in our own Forces who are not given the same opportunity. I take it that, as the new cadets come on and have to be trained, the Department will want more drill instructors, and, that being so, they should have given the young Australians who aspire to these positions the opportunity of getting the training which would fit them to go up for this examination. I hope the Honorary Minister will impress on the Minister of Defence the desirableness of seeing if some arrangement can be made for our young men, such as senior corporals and sergeants in our Permanent Forces, who are quite capable of carrying out this work, and willing to do it, to have an opportunity to secure it. I have nothing to say against the Imperial soldier, who may be quite able to do the work, but we should give our young Australians a chance to compete, at any rate next year, when more drill instructors will be wanted.
– I will make those representations to the Minister.
.- My name having been mentioned, I will repeat what I said - the words appear in Hansard -
In view of the very tragic events that have happened lately, I feel sure that the Opposition is in no way anxious to prolong the session unnecessarily. Will the Prime Minister, therefore, kindly take an early opportunity of ranking a statement concerning the work that he desires to have done before the prorogation? It is usual to do so at this stage of the session.
– Apart altogether from the explanation just made, every one in the House knows - the Leader of the Opposition excepted - that there has been a desire manifested on both sides to conclude the session speedily. The right honorable member appears to know, least of what is going on. No one expects him nowadays to know anything about the current business of the country. He is so little in the chamber that he may be excused for not knowing anything about it. True to his tradition of not being in the chamber, he does not know what is going on. Since he returned to Opposition, he has continued his old habit of being out of the chamber when the business of the country is being done. Therefore, he knows little of what his own followers wish for regarding its transaction. When he puts out Iiib chest like a pouter pigeon, and indulges in these mock heroics about going to the country, making vaunting and challenging statements, I say that fustian like that is no good here. The Government will go to the country in its own good time. Let the right honorable member not lay the flattering unction to his soul that he has only to go to the country to walk back to these benches.
– I never make a fuss.
– The right honorable member has never been happy since he went back into Opposition.
– I never squeal like the Prime Minister.
– The right honorable member has done nothing but squeal since he went into Opposition. He has lost all his manners, every shred of his dignity has gone from him, and he is more like a scolding fishwife than anything else.
– Is this kind of ‘ language likely to bring the session to a peaceable conclusion 1
– 1 do not mind much whether it does or not. I wish to correct two statements that the Leader of the Opposition made I never suggested to him that we should pass any of these measures without discussion. He puts into my mouth words that I have never uttered, or thought of uttering. It seems impossible for him to represent me correctly. Another incorrect statement was that no discussion had been allowed on. the Loan Bill. He knows that the items in the Bill have been discussed ad nauseam in connexion with the Works Estimates and the Budget - until the whole subject is threadbare. That was one reason why the adjournment was not agreed to on that memorable day when he made such a huge mistake in tactics. When he says that’ the items in the Bill have not been sufficiently discussed, my reply - is that, in all we are doing, we are following the excellent example that he set when in office. He borrowed money for the purchase of land, and for all sorts of things, and whatever we may do, we shall have an example in what he has done. I hope that, in the future, he will represent the position of affairs correctly, and will not indulge in the fustian that he uses on the few occasions on which he strolls leisurely into the Chamber to bestow his benediction on those who -are hero trying honestly and fairly to conduct the business of the country.
Question resolved in the affirmative.
House adjourned at 11.21 p.m.
Cite as: Australia, House of Representatives, Debates, 9 December 1913, viewed 22 October 2017, <http://historichansard.net/hofreps/1913/19131209_reps_5_72/>.