8th Parliament · 1st Session
Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 2.30 p.m., and read prayers.
– Has the Minister for Trade and Customs had a reply from the Imperial Government to his inquiry about the fixing of the price of Australian fruits in Great Britain?
– The Secretary of State for the Colonies informs us that the Food Controller cannot see his way to accede to our request that the decontrol of the fruit market at Home shall operate during the season of the year in which Australian apples and pears are on the London market; that that control is to be re-imposed on the 15th November ; that the local crop this year is practicably negligible; and that the bulk of the American importation will arrive after that date, so that the same conditions will apply to it as will apply to our fruit. He states, further, that the Food Controllor is recommending that prices considerably in advance of those fixed last year will be recommended for adoption this year, but that, in view of all the circumstances, he cannot grant our request for a free market for fruit in Great Britain during the coming season.
– Is it the policy of the Government-
Mr.SPEAKER. - The honorable member is not in order in asking a question regarding a matter of policy.
– Is it the intention of the Government that English names shall besubstituted for aboriginal names? I am informed by the Defence Department that one of the conditions under which the Tanunda Club may be re-opened is that the name used shall be English. Now, Tanunda, Eudunda, and similar names are South Australian aboriginal names. Is it intended that these names must give way to English names?
– The honorable member’s glee at scoring a point on the Minister for Defence is evident. I know nothing of the matter to which he refers, but venture the opinion that the adoption of a good English name is better than the use of a name associated with German propaganda.
– I ask the Minister for Trade and Customs when the present shortage of sugar in Australia will be relieved?
– I am glad to be able to say that we have recently purchased a considerable quantity of white sugar. Our refineries have been unable to meet the demand for white sugar, because, owing to industrial and other difficulties, it has been impossible for a considerable time past to build up stocks; but the Government having now purchased white sugar, the arrival of which in Australia we are endeavouring to expedite, we shall be able to relieve the existing shortage very materially.
– Has the attention of the Minister been drawn to a cablegram which appeared in Monday’s Argus, to the effect that there has been a considerable fall in the price of sugar at Havana, and has he made any endeavour to ascertain the truth of that statement?
– I am in touch with the sugar market generally, and am aware of all the circumstancesrelating to the matter, so far as information is available in Australia.
– Have the Government come to any determination regarding the vexed question of foreign exchange and the treatment by the Customs Department of importations from France, Belgium, and Italy?
– Yes; and, in conformity with a notice which I gave recently, I hope to introduce, to-day or tomorrow, a Bill to amend the Customs Act.
Telegraphic Communication with Queensland.
asked the Postmaster-General, upon notice -
– Inquiries are being made, and the desired information will be furnished as early as possible.
Sale of Properties in New South Wales : Delay in Payment.
asked the Acting Minister forRepatriation, upon notice -
Mr.RODGERS. - The answers to the honorable member’s questions are as follow: -
– On the 5th October, the honorable member for Batman (Mr. Brennan) asked the following question : -
With reference to a statement made by SenatorPearce in another place on the 15th May, 1918 (Hansard, 4652), relating to certain Italians resident in Australia, by what means and in what terms was the request of the Italian Government conveyed to the Commonwealth Government or the Minister, or to any authorized representative of the Government or the Minister?
The promise was undertaken to refer the matter to the Minister for Defence on his return to Melbourne. Senator Pearce now informs me that he has nothing further to add to the statement already made in the House of Representatives on 1st July last, in reply to a question by the honorable member for Corio (Mr. Lister), in regard to the repatriation of Italian reservists,
The following papers were presented : -
Public Service Act - Fifteenth Report on the Public Service by the Acting Commissioner.
Ordered to be printed.
War Service Homes Act - Land acquired under, at -
Litligow, New South Wales.
Marrickville, New South Wales.
Consideration resumed from 16th September (vide page 4680), on motion by Sir Joseph Cook -
That the first item in the Estimates under Division 1, The Parliament, namely, “ The President, £1,100,” be agreed to.
– I desire to offer a few remarks in connexion with the Budget statement delivered by the Treasurer (Sir Joseph Cook), on 16th September last. Honorable members will note, on the first page of the reprint of the Budget speech, that the Treasurer called attention to the fact that the estimated revenue for 1919-20 had been exceeded by £6,436,000. That excess was largely made up from four or five items. The estimate in respect of Customs was exceeded by £3,750,000, in respect of the Post and Telegraph Department by about £500,000, in connexion with the income tax by about £2,300,000, and from succession duties by about £800,000. The surplus earnings from the Commonwealth steam-ships were estimated to amount to £780,000. Apparently, however, there were no earnings at all, because I note that the space devoted’ to the line “ Commonwealth Line of steamers “ shows a blank under the heading of “ Actual.”
– I explained that.
– The Treasurer did so at a later stage. Detained enemy vessels were estimated to yield a profit of £1,045,000. Actually, however, the total was only £344,000. The Treasurer announced that the total direct taxation received during the year was ‘£20,270,000, and he estimated that he would receive still more during the current financial period. There is one subject to which honorable members should particularly turn attention. I refer to the matter of shipping tonnage, which will naturally interest honorable members of the Corner party. The Treasurer said -
One aspect of this trade which may be mentioned is the overseas shipping, which, in 1014, represented an inwards tonnage of 5,275,000 tons. During the war the tonnage decreased, until, in 1917-18, the amount was 2,456.000. Increases have since occurred, and the amount for 1919-20 is estimated at 3,696,000 tons.
On page 13 of the reprint of the Budget speech the Treasurer points out how much our own vessels carried. Under the heading, “From Australia,” it is shown that the ships of the Commonwealth line conveyed 276,000 tons of wheat, 27.600 tons of wool, and 116,000 tons of general cargo. If we assume that those figures represent an average, then, only about one-half, or three-fifths, of our Commonwealth liner tonnage is shown to have been available for the carriage of wheat. Now, if only three-fifths in that year could be employed on wheat transport, less than 2,000,000 tons of our shipping will be available to take away this year’s harvest. Prospects for the coming season are of the brightest, and it has been estimated that the Australian harvest will be between 150,000,000 and 160,000,000 bushels. Let us take the lower of the two estimates. There will be required for home consumption and seed wheat about 35,000,000 bushels, leaving actually more than 3,000,000 tons of wheat to be sent overseas.
– Besides our wool.
-If we estimate the same tonnage of wool and general cargo, then only about two-thirds of the tonnage of our Commonwealth vessels will be available for the export of wheat. But there is still another factor. Before the war about 1,000,000 tons of coal was sent from Australia every year. If the item of coal is an addition to, and not included in, the item “ General Cargo,” we shall not be able to ship half the quantity of our wheat which will be available for export.
– That is, assuming that shipping this year will be the same as last; but there should be an improvement.
– The shipping figures for the best year we have known amounted to rather more than 5,275,000 tons. The Treasurer stated -
This matter of tonnage, which is the only measure available of the volume of our national trade and commerce, would appear to suggest that there is much leeway, both in production and exchange, to recover, and a call is made for the united efforts of all Australian citizens in this direction.
It appears to me that we shall produce more than we shall be able to send away this year. Most honorable members are of opinion that it is advisable to convert as much of our wheat into flour as possible, in order to economize in shipping space. That policy will have the further advantage of leaving the offal in Australia.
– There has been an increase of 1,500,000 tons in one year, and if we get a similar increase this year we shall be all right.
– If we mill the wheat in country centres, less railway trucks will be required to send it to the coast.
– That, also, is a good idea. The increase last year was not as’ great as the Treasurer stated. In 1917-18, the shipping amounted to 2,456,000 tons. In 1919-20, it was estimated at 3,696,000 tons, representing an increase of only 1,240,000 tons in three years. The Treasurer pointed out that, while the actual revenue was £6,400,000 more than the estimate, the expenditure also was about £1,000,000 greater than he had anticipated. I have read the Budget statement carefully, and I can find no explanation of that increase in expenditure. I would like the Treasurer to take, an early opportunity of dealing with the desirability of obtaining more tonnage and explaining the increase in actual expenditure by close on £1,000,000.
– There is an explanation in the Budget speech.
– I have not found it. In the Financial Carnival, published in 1913, the Treasurer made some striking statements. In fact, one would almost think that some of them were culled from an Age article of the present year.
– Those statements were quite true then.
– I wish to put some of them on record. I have always objected to any man, irrespective of whether he sits in Parliament or in an editor’s sanctum, trying to blacken the name of Australia. The Treasurer, when a public man in a responsible position, made these defamatory statements in 1933, and the newspapers to-day are only following his example. I always object to any man, no matter what party he belongs to, crying stinking fish. We invariably find that that policy re-acts upon ourselves. The Treasurer said in the FinancialCarnival -
It is time that the people paid more attention to the financial carnival being runby Mr. Fisher.
Substitute Sir Joseph. Cook for Mr. Fisher, and the statement may be applicable to the finances of to-day. He continued -
The control of the finances is of the slenderest and feeblest kind. There appears, indeed, to be no time to attend to the business side of the nation. The Estimates are pushed over to the last, and often rushed through, a Department at a time. There can be no economy when the public -accounts are left practically to look after themselves. It is true as ever that the safety and stability of the nation depend upon sound finance, and “ the very alphabet of sound finance is economy “ in the public expenditure. There is no cleverness in clapping on taxes and throwing them round like a spendthrift.
That is worthy of the Age or the Argus at its best.
– It was all true, then.
Mr.TUDOR. - And the press say that it is all true now. I do not say that the Treasurer’s statements were true in 1913, or that the newspaper articles of to-day are true. We are repeating the experience of America, where political parties, in denouncing each other, have used arguments which have had the effect of defaming the nation to the outside world.
– I am obliged to the honorable member for this testimonial to my economical instincts.
Mr.TUDOR.- Apparently, the Treasurer has lost those instincts. He stated, rightly so, that the statements being made by the press and others in defaming Parliament and the financial position of the country, are being quoted on the other side of the world to the detriment of the nation’s credit. The statements made by the Treasurer in 1913 had that effect as much as have the Age articles of to-day. Any responsible parliamentary leader who allows himself to be used to denounce the party in power by publishing a series of articles, such as the Financial Carnival, does serious damage to the credit of Australia. One gentleman who entered this Parliament a few years ago actually believed the statements contained in that publication. He came into Parliament with the conviction that £3,000,000 per annum was spent on contingencies. He soon “ lost the number of his mess.” In his Budget speech, the Treasurer submitted a summary of the gross and net public debt. He stated the gross debt as £335,496,489, from which he deducted the indebtedness of the States for loans raised by the Commonwealth in London for State public works, and for loans for soldier land settlement, wheat silos, &c, £12,120,806; outstanding capital expenditure on war service homes, £4,783,083; present capital value of ships purchased out of war loan money (omitting wooden ships), £4,297,544; and other recoverable expenditure charged to war loans, £2,550,000, leaving the net public debt at £311,745,056. Why have the wooden ships been omitted from that calculation? The honorable member for Dalley (Mr. Mahony) has been endeavouring to obtain from the Government information as to whether or not it is correct that the whole of the wooden ships have been a failure; and that, although the Government are endeavouring to get rid of them at any price, the companies that had undertaken to purchase them have refused to complete the deal, with the result that the ships are still in the possession of the Commonwealth to-day. There is in the Budget statement another paragraph on which the ex- Treasurer (Mr. Watt) may be able to explain the abandonment of his mission in Europe: -
The Commonwealth Government, on being asked to appoint a representative to the Conference, nominated the late Treasurer (Mr. Watt) then en route to England. Mr. Watt having since resigned, the Government have given instructions to Mr. J. It. Collins, Secretary to the Treasury - now in England - to attend the Conference as Australia’s representative.
It would be interesting to hear the result of that particular conference; at any rate, I am personally anxious to know what was done.
The Minister for Trade and Customs (Mr. Greene) was asked a question to-day in relation to sugar. On page 11 of the printed copy of the Budget speech the Government take a great deal of credit in this connexion. They tell us that from February, 1919, to July, 1920, 123,988 tons of foreign sugar were purchased at an average cost of £43 9s. 5d. per ton delivered to the Australian refineries, and that the present Australian crop is expected to yield 170,000 tons. The Government purchased the whole of last year’s crop - not the current crop now being harvested - at about £21 per ton, or 2¼d. per lb. That is raw sugar, and the cost of refining and distribution is not more than id. per lb. At any rate, the Government got about 160,000 tons at that price, and purchased 123,000 tons at an average cost of £43 per ton. This means, over the whole, an average of not more than £33 per ton ; and the people of Australia wish to know why they have to pay £56 per ton and still have difficulty in obtaining supplies. That £56 a ton means 6d, per lb., and yet the Government admit they are making a profit of at least £23 per ton. Figures were given in March last by the Prime Minister showing the cost of refining and other charges, and these do not come to more than £6 per ton. The Government tell us that they bought sugar at less than 3d. per lb., or £28 per ton, and that they landed 123,000 tons at an average cost of £43 odd.
– Is that refined sugar?
– No ; it is sugar delivered to the refineries. Every housewife to-day has more difficulty in obtaining sugar than in obtaining any other commodity. Last September, or over twelve months ago, the Government knew how much sugar was required to meet the Australian consumption; and why did they not decide to buy 100,000, or 120,000 tons, or whatever quantity was necessary ? To-day it is stated that the bottom has fallen out of the sugar market, and it is quite probable that the agreement with the Queensland sugar-growers, at £30 6s. 8d., will prove a good thing for them.
– The price will not come below 6d. per lb.
– I admit that I doubt the accuracy of some figures which appeared in the Melbourne Herald, showing the. price to be £7 7s. per ton ; I fancy that a figure must have dropped out. However that may be, honorable members have seen from the cables that there is a financial crisis on the sugar market in Cuba. It is certain that sugar will come down in price, but I do not think it probable that it will be less than 4d. per lb. in the world’s markets for some time to come. I have never heard any town audience object to either the farmer who invests his skill and capital, or the labourer in the refinery, receiving a fair return; but, at the same time, the public wish to know why they they should be called on to pay 6d. per lb. when, apparently, the sugar cost the Government a little over 4d. per lb.
– That is not correct. Wait until you hear the Minister.
– The honorable member will admit that for the 170,000 tons produced last season the producers up to March of this year had received only £21 per ton, or 2¼d. per lb.
– And you will admit also that they practically stopped growing at that price.
– I know; but I also know, according to the Prime Minister, that the 170,000 tons cost only 2¼d. per lb., and that it does not cost more than ½d. per lb. for refining, and so forth. As I said before, we are told by the Government that they imported 123,000 tons at an average cost of £43 per ton, or less than 4½d. per lb., and if only a small portion of the sugar cost that price, and the other cost 2¼d., this brings the price up to 3½d. for sugar for which the people are paying 6d.
– If you know all about it, tell the House where the money is going. The Government are getting nothing out. of it.
– The Government will get something out of it; but I hope, if they domakea profit, they will not, as on a previous occasion, offer to hand that profit back to certain sugar constituencies on the eve of an election. If there is any profit, the whole of the people ought to have the advantage of it.
– The honorable member will find the explanation of the excess expenditure last year on page 3 of the Budget statement. There we see £484.000 for the Post Office, £247,000 for pensions, and £130,000 odd for the Australian Wheat Board, as profit on the sale of cornsacks. Those are the three items.
– That does not explain why the people of Australia are paying 6d. per lb. for sugar which- cost only 4d.
– I thought the honorable member had done with that point.
– No, but, the Treasurer is apparently trying to side-track me by directing my attention to page 8 of the Budget statement.
– That was in reply to your remarks about the excessive expenditure.
– I beg the honorable gentleman’s pardon.
– Is not the Government losing thousands of pounds daily on sugar ?
– How can that be so, in the face of the Treasurer’s own figures, which show that the Government imported most expensive sugar at £43 per ton, as contrasted with the £21 per ton paid to the growers in Australia V
– The Government have no right to make profit out of sugar,
– I cannot see how the Government are losing.
– The Government pay more than £43 per ton now.
– Surely the honorable member believes the Treasurer’s statement that from February, 1919, to July, 1920, the Government imported 123,900 tons of foreign sugar, at an average cost of £43 per ton.
– What was it sold at prior to March?
– Up to March the Government bought sugar at less than £28 per ton. I obtained that information from the Minister after a great deal of trouble.
– That is 3d. per lb.
– Yes ; but two-thirds of the total quantity was obtained in Australia at 2¼d. per lb. My complaint is that the Government have no right to make this profit.
– The Government are not making a profit.
– They must be making a profit. The Treasurer will admit that the Government are selling sugar at £56 per ton.
-i admit one thing - that the Government are not making a profit out of sugar.
– Then somebody is. When the Government obtain 170,000 tons at £21 per ton, and . sell it at £56 per ton, somebody must be making a profit.
– We have been paying £80 per ton for it since March.
– Rubbish ! Does the honorable member dispute the Treasurer’s figures?
– I do not.
– I am quoting the Treasurer’s own figures, and the honorable member has inferred that they are wrong.
– I quoted the average price.
– Quite so. If we multiply 123,000 tons by forty-three we shall get at the cost of that sugar to Australia. The whole of the sugar purchased by the Governmenthas cost them on the average less than 4d. per lb. The Treasurer cannot produce any figures to prove that it has cost the Government, on the average, more than that for the whole of the sugar now being used by the people of Australia.
In the course of his Budget statement the Treasurer said -
With regard to the per capita payments to States, the Acting Prime Minister announced at the Conference of Premiers in January, 1910, that it had been decided to reduce the per capita payments from 25s. to 10s., the reduction being made at the rate of 2s. 6d. per head per annum over a period of six years. The Prime Minister subsequently, in consultatation with the various State Premiers, agreed that this matter should be held in abeyance until the meeting of the Convention to be held for the review of the Commonwealth Constitution.
I want to know when the Convention is to be convened. We have been promised it for the last ten months. Ever since the honorable member for Eden-Moncro (Mr. Austin Chapman) gave notice of his intention to submit a motion on the subject, we have been promised that a Convention will be summoned. Even before then the proposal was in the air.
– Where is it now?
– Well, still up in the air.
– In the hot-air of the Opposition.
– The Opposition, according to the Treasurer’s celebrated pamphlet The Financial Carnival, deals in hot air, but, unlike the right honorable gentleman, I have never blackened the name of Australia or tried to injure its credit. In the same pamphlet the right honorable . member, dealing with the policy of the Labour Government then in power, said that any fool could collect taxes and spend the revenue so obtained like a spendthrift. That is what is being said of him to-day by some outside critics’.
– The chickens have come home to roost.
– They have indeed!
– The Treasurer said that the Labour Government was spending the money like “ toffs.”
– I have never been a “ toff,” and have never had much money to spend, so that I am unable to understand what the right honorable gentleman meant. I want to know, however, what are the intentions of the Government with regard to the Constitution Convention. The newspapers, which profess to know the intentions of the Government, state that in six or eight weeks’ time there willbe an adjournment of this Parliament, and that we are to have a summer session. They state further that the Tariff will not be dealt with before Christmas; that we are to deal with the Budget and certain measures on the notice-paper, after which we are to adjourn for some weeks. I want to know whether, in addition to the Parliament meeting in March next, we are also to have during the same month the sittings of the Constitution Convention?
– First you want the Budget, then you want the Tariff, and next you want the Convention. What are we to do?
– What is still more important is that we should take possession of the Ministerial benches, and that the Ministerialists should come over here.I do not favour the proposed Convention. In my view the Parliament will be shirking its responsibilities, if instead of passing a Bill for submission to the people providing for the necessary amendments of the Constitution, it refers to a Convention the duty of recommending amendments. I do not think thatwe could find in the community seventy-five men who know more about the working of the Constitution andof the directions in which it needs to be amended than do the members of this House. I venture that opinion, not because I believe that we are men of exceptional capacity, but because we have had experience of the. working of the Constitution, and know what are its shortcomings.
– Still, between ourselves, we are a very good lot ofmen!
– The right honorable gentleman had better speak for himself. I claim to be, as Sir Arthur Conan Doyle said of himself the other day, “ just a plain, average man in the street.” When the Convention Bill is submitted, I hope to be able to submit an amendment which will compel Parliament to accept its responsibilities in the matter, and so save the country an expenditure of thousands of pounds.
– The trouble is that the people outside will not agree to the amendments of the Constitution that we frame.
– I admit that. The Age, in a leading article in this morning’s issue, speaks of the Labour party in this Parliament urging that action should be taken to reduce the cost of living, and says that when we had an opportunity, at the last general election, to support suggested amendments of the Constitution we turned them down. That statement is not true. On that question, as on others, the Labour party was divided. The Age did not mention that every member of the National party in the Victorian State Parliament - the Nationalists and the Country party members now struggling for their political existence, - signed a round robin, urging the electors to oppose those amendments, and that every Federal constituency in Victoria turned down their advice, the proposed amendments being accepted by a majority of the people in this State. The Age is not honest enough to tell the people that many members of the Labour party supported the proposed amendments of the Constitution that were submitted to the electors in December last, although the very foundation stone of the whole scheme, so far as the amendments relating to our industrial powers are’ concerned, had been removed.
Mr.Considine. - And a very good thing for the workers of this country that those amendments were turned down by the people of Australia.
– I am not discussing that point; I am simply referring to the unfairness of certain newspaper critics.
The Minister for Trade and Customs is now in the chamber, and I shall, therefore, refer again very briefly to the sugar question. The Treasurer, in his Budget statement, said that from February, 1919, to July, 1920, 123,900 tons of foreign sugar had been purchased, at an average cost of £43 per ton, which is equal to about 4½d.. per lb. -We also obtained the whole of last season’s Australiangrown sugar at 2¼d. per lb. It is only in respect of the sugar delivered since June of this year - and very few mills started crushing in June - that we have had to pay 3¼d. per lb. In respect of the sugar obtained before June, we paid only 2¼d. per lb. In other words, we purchased 170,000 tons of locally grown sugar at 2¼d. per lb., and 123,900 tons at 4½d. per lb., plus the cost of refining in each case. Thus the average cost could not have been above 3¼d. per lb. The refining and other charges would not amount to more than¾ d. per lb., making a total average cost of 4d. per lb.; yet the people of Australia are called upon to pay 6d. per lb. I should be glad to have an explanation.
– The honorable member can obtain an explanation. His figures are all wrong.
– . They are not. Will the honorable member say that I am in error in stating that the Government purchased 123,900 tons at £43 per ton? If those figures be correct, did it ‘cost the Government, on the average, more than 4½d. per lb. for its sugar?
– The honorable member’s calculation is based on three fallacies. When it suits me to do so, I shall reply to him.
– Very well, but it is not fair to say that my figures are based on three fallacies. Is it wrong to say that you purchased the Australian-grown sugar at 2¼d. per lb? Is it a fallacy to say that £21 per ton is equivalent to 2¼d. per lb. ?
– That the price of sugar was £21 per ton is the honorable member’s first fallacy.
– That is all that the growers get. When the Prime Minister went to New South Wales in March last, and made an agreement to increase the growers’ price by 3d. per lb., the price of Australian-grown sugar was increased to3¼d. per lb., or £30 6s. 8d. per ton. If those figures are fallacious, it is the Treasurer who is to blame, not I.
– I do not dispute the Treasurer’s figures; but I say that the honorable member’s calculations are wrong.
– This all comes of turning back.
– I have the better end of the stick in this matter. The growers know that they get only £21 per ton. Their position is much like that of the wheat-growers, to whom the Prime Minister promised 5s. per bushel for their wheat delivered at the railway sidings, and to whom he now says that, whether he will pay that amount depends upon whether the wheat is sold or not.
The Treasurer tells us that the States and Commonwealth taxation now amounts to £10 13s. 9d. per head of population, and the Customs and Excise taxation to £4 2s. 3d per head of population. In 1900-1, the Customs and Excise taxation was only £21s. 5d. per head of population ; by 1912 it had risen to £3 4s. 5d. ; and it is now £4 2s. 3d. The right honorable gentleman tells us that he hopes to get £26,000,000 in Customs and Excise revenue, of which £15,000,000 - or £3 per head of population - will come from duties on beer, spirits, and tobacco. In Victoria, however, they may carry “ no licence “ next week, or may do so in some electorates. I do not know what the boundaries of the metropolitan electorates are, but it is possible that in the future the district on one side of a street may be dry, and on the other side wet.
– In that case the revenue will not be affected.
– No; all that will happen will be that the value of the publichouses in the wet area will be increased. The distance between South Richmond and North Richmond is only half-a-mile, so that if those districts remained wet and Central Richmond went dry, the people living in Central Richmond would still be only a quarter of a mile from an hotel at the most. The Treasurer proposes to increase the excise on tobacco, cigars, and cigarettes by id. per oz., or 8d. per lb., an increase which is expected to yield £8,000 in Customs duties and £367,000 in Excise duties.. I object to the man who smokes a common tobacco, worth only from 8s. to 10s. per lb., having to pay the same increase in duty as the man who smokes expensive cigars worth between £4 and £5 per hundred, the weight of which is about li lbs. On 1 lb. of common tobacco the increase in duty will be 8d., and on li lbs. of cigars worth perhaps £5, the increase in duty will be only ls. Similarly, the increase in duty on cheap cigarettes, bought at 6d. for a packet of twelve, will be the same as on the expensive cigarettes sold at 30s. per hundred, which are smoked, it is said, by women like those to whose habits the Lady Mayoress called attention the other day. On the 2i lbs. of tobacco contained in 1,000 cigarettes, worth £15, the increase in duty will be only ls. Sd., and cheap cigarettes, worth one-eighth as much, will have to pay the same increase in duty. I hope that the Treasurer will endeavour to apportion the load of taxation more fairly. He told us in his Budget speech that the entertainments tax was to be abolished so far as certain kinds of entertainments were concerned ; but the Senate, arrogating a right which it does not possess, has insisted on the retention of the present duties. I should like to know what action the Cabinet intend to take in the matter? Were I in ‘office, and flouted in this way by that Chamber, I would refuse to collect the tax. According to the Budget-papers, £10,856,380 was collected in income tax in 1918-19. of which amount about £7,000,000 came from persons whose incomes exceeded £1,000 a year. The various State Governments have endeavoured to fix the prices of commodities, and Arbitration Courts have been established to fix minimum rates of wages. We have said that flesh and blood shall not be treated like commodities, but that each man shall receive wages sufficient for t.hp maintenance of a family in decency and comfort, that being the basic principle behind our arbitration system. Now, if it be right to fix maximum, prices and minimum wages, it should be right to fix maximum profits and maximum incomes. When members of another place threw out the Government’s entertainments tax provisions, they said that, under the new rates, there are people paying Federal income tax at the rate of 8s. 6d. in the £1, and, in addition, State income tax at the rate of 3s. in the £. Persons such as those are in enjoyment of incomes amounting to more than £10,000 per annum. It is “up to” the Government to say that there shall be a limitation of profits - that there shall be a fixing of the maximum profits which any proprietary company may make. I admit that it would be a difficult matter to fix a maximum profit in respect of an individual’s dealings; but if the Government were to increase the income tax by 10 per cent, in respect of persons earning more than £1,000 per annum, they would be able to release all individuals earning less than £1,000 a year. I have pleaded time and again that the Government should raise the exemption.
– Persons in Australia earning up to £1,000 a year pay less income tax than people similarly situated in any other country that I know of. They pay only about half as much as in New Zealand.
– In his Budget speech the Treasurer made public the following particulars under the heading of “ Direct and Indirect Taxation “ : -
Although it is not a pleasant duty for a Treasurer to propose new taxation, the figures which I have quoted, and the reasons already given, will clearly demonstrate that not only must additional taxation be imposed, but it is equally certain that Australia has not been taxed to the extent which was justifiable during the currency of the war. That the taxation of the Commonwealth has been light as compared with New Zealand and the United Kingdom will be seen from the following figures, comparing the taxation for the year 1919-20 : -
According to these figures, the taxation in New Zealand is more than one-third higher than in the Commonwealth, and in the United Kingdom more than double.
It is apparent, therefore, that we are let off lightly compared with those countries. I do not wish to make the burden of taxation lighter, except upon people who are the least able to pay.
– The man at the top pays more here, and the man in the middle ranges of income pays less, compared with persons similarly situated in those countries.
– I would make the man at the top pay still more. According to particulars furnished by the Treasurer, there are twenty companies in Australia which are in receipt of profits amounting to more than . £100,000 per annum. I am anxious to get at the people best able to bear the burden. If we have the right to fix a minimum wage, we have an equal right to fix a maximum income. We should have the right to decide upon a limitation of profits.
– I think that all the fixation to-day has failed to bring down prices very much.
– I admit that, and that very often it depends upon the person administering the business.
– There have been Judges in three States fixing prices, and still the cost of living has soared higher than ever.
– It is quite possible that such would be the case, no matter who might have been employed on the job of fixing prices. The remark might even apply to the gentleman whom the Government have selected to go to Great Britain as their immigration agent. I refer to Mr. Barnes, the gentleman who fixed the price of meat. He may know something about meat. Indeed, he ought to; but I hold that he is not capable of representing the Federal Government as an immigration officer in England.
– Who is fit to do so?
– The Prime Minister (Mr. Hughes) said, referring to Mr. Barnes, that he had come out to Australia and made good. I do not think that that gentleman ever earned1s. on the land in all his life. He was a butcher, and an official of the Butchers Union in Queensland. The Prime Minister said Mr. Barnes had organized the Butchers Union. The secretary of the Butchers Union in Melbourne, Mr. Charles Anderson, has done more in one minute to organize the butchers than Mr. Barnes has ever done. Mr. Barnes came down south, and he went over to Tasmania also.
– He went there first to call out the slaughtermen from the abattoirs.
– I know that I was not speedy enough for Mr. Barnes in one of our conferences. He was a direct actionist, but now he gets this nice fat job from the Government. However, I do not wish to indulge in personalities. I will say that Mr. Barnes does not represent the party represented by honorable members on this side of the House.
– He knows both sides.
– Politically, he does; but that can be said of any man who cares to change over from one side to another.
– The other side is glad enough to have that kind.
– Your folk have welcomed them, too.
– Of course, every party welcomes recruits.
– Hear, hear ! “ While the light holds out to burn- “
-“ The vilest sinner may return.” I would say to the Treasurer, “ Come back over here, Joe, while there is yet time.” Perhaps the Treasurer and 1, whohave done a little “gospel” work together in the past, may again be found side by side on the same platform.
– Is there anything of that kind in The Financial Carnival?
– No ; but the. Treasurer called attention in his publication to some interesting figures respecting the cost of various Federal Departments during the financial year 1909-10. For example, the Federal Parliament cost £31,458; and, in 1912-13, £34,154. But the estimate for 1920-21 is £311,000, while the actual expenditure last year was £348,000. That appears to be a very high figure.
– Elections are a factor there
– They, no doubt, would considerably swell the total. In The Financial Carnival the Treasurer pointed out that the Prime Minister’s Department cost, in 1912-13, £50,200. The estimate is now £317,000. the Treasury cost £644,000 in the same year; the estimate is now £737,000. The” Attorney-General’s Department in those clays cost £48,000; the estimate is now £114,000. The Home and Territories Department cost in 1912-13, when it was known as the Department of External Affairs, £527,000; the estimate for 1920-21 is £556,000. Ordinary items, under Defence - Military, are estimated this year at £1,797,000, as against a total of £2,500,000 in 1912-13, and £961,000 in 1909-10. The Trade and Customs Department cost £395,000 in1912-13; the figures for to-day are £879,000.
– Honorable members are saying on this side that they are going to endeavour to economize on the item of parliamentary expenditure. If the honorable member sets them going, he will soon know all about it.
– I shall not set them going, except in the right direction. I shall never vote to bring about economy at the expense of efficiency. I shall never vote to cut down our old-age and invalid pensions. In fact, I am always on the look-out to try to have them increased. The honorable member for Adelaide (Mr. Blundell) and the honorable member for Fawkner (Mr. Maxwell), as well as several honorable members on this side, have urged the Treasurer, time after time, to give consideration to the blind. To see blind personsbegging on our streets is a disgrace to civilization; but, until this Parliament realizes its responsibility, and proceeds to give these unfortunate folk pensions which are adequate to keep their families in comfort and decency, we cannot prevent them from publicly begging. I hold that persons in receipt of pensions should be permitted to earn proportionately as much to-day as when pensions were originally granted. When it was decided to pay pensions at the rate of10s. a week, it was determined, at the same time, that pensioners should be permitted to earn up to 10s. a week. Now, on account of the high cost of living, we have increased the rate of pension to 15s. a week. At the same time we should allow pensioners to earn up to 15s. a week.
– That would bring thousands more within the scope of our pensions legislation.
– And would involve the payment of £750,000 more per annum.
– I cannot contradict the Treasurer’s statements; but, at the same time, I fail to see that such would be the case.
– We calculated’, when the additional 2s. 6d. was granted, that it would cost the country about £800,000 more. That extra 2s. 6d. will cost us, this year, £1,400,000. A great many more persons have come in.
– I cannot see that what I desire will alter the qualification of the individual. A person is either qualified or not qualified to receive a pension. I trust, however, that the Treasurer will look closely into the whole position. Surely we should try to make pensioners more self-reliant. Sir William Irvine, when he was a member of this Parliament, denounced this kind of legislation, and called the programme of the late Mr. Deakin a “ gelatinous compound.” He talked of the sapping of the fibre of the individual, and the like. However, we have got beyond that stage. Let us place our pensioners in relatively the same position as when we originally granted pensions. Since 1911 the purchasing power of the sovereign has decreased nearly 100 per cent. Instead of reducing his allowable earnings to 5s., we should allow the pensioner to earn 15s. per week. When we are dealing with the Departments I shall have something to say in regard to repatriation. To-day I have contented myself with dealing with, matters which I regard as of more urgent importance. I hope that the Government will, during this debate, indicate their intentions in regard to the Tariff. The present uncertainty is causing business to be hung up. In . regard to the question of exchange, a press telegram from Sydney said that £30,000 worth of one line of goods was held in bond pending the Government’s decision in regard to an alteration of the basis of exchange.
– The honorable member clamoured- as much as any one else to have a chance to discuss the Budget. Now he has got that, he asks for something else.
– I think I only asked the Treasurer once or twice when he would introduce his Budget.
– A pledge had been given by the Treasurer that he would introduce it early.
– But for having to. raise the second peace loan in a hurry I should have introduced the Budget a month earlier.
– I congratulate the Treasurer on the success of that loan. The war has taught us self-reliance, not only in regard to finance, but also in regard to production. I have always advocated the encouragement of Australian industry, and, though I disagree from the Treasurer in regard to a number of things, he will admit that I have stood firmly for the protection of Australian industries during the consideration of every Tariff.
– The honorable member has caught the Treasurer at last.
– And he has roped in the honorable member also.
– I am not so sure of that. We are certain of the attitude of some members only when they are attached to the Government that introduces the Tariff. I would not be too sure of the Protectionist sympathies of some honorable members on the Treasury benches if they were not members of the Cabinet. I am anxious to know what the Government intend to do in regard to the exchange problem. Business men desire the present suspense to be removed, If the Government intend to declare that the present system shall continue, many importers will ship goods back to the country whence they came. The House should also know on what date the consideration of the Tariff is to be resumed.
In regard to the proposed Federal Convention, my view is that Parliament should not shirk its responsibilities. We should proceed to make those amendments of the Constitution which experience has shown to be necessary. There is not one honorable member who will deny that some alterations in the Constitution are necessary; and this Parliament knows what those alterations should be better than can any Convention that can be elected. No doubt some members of this Parliament will be elected to the Convention if they nominate; but it will be better for Parliament to accept its own responsibility, and not leave the alteration of the Constitution to any outside body. We know how far the Constitution has prevented the Commonwealth Parliament from doing its work. Let us deal with the necessary amendments as soon as possible. I ask the Government, too, to intimate to the House what business they intend to proceed with during this session, and whether it is their intention to allow some of their proposals to stand over till next year.
– The Committee is indebted to the Treasurer (Sir Joseph Cook) for having kept the promise given first by the Prime Minister (Mr. Hughes) and then by himself, that the House would have ample opportunity to deal with the financial statement and the Estimates before Parliament went into recess. I congratulate the Government upon having, for the first time in many years, submitted the financial statement to Parliament comparatively early in the financial year. The Budgethas been a great disappointment to the majority of the people. Nobody had anticipated such a very large increase in the proposed expenditure. Under the new Tariff, which presses very heavily upon many people, revenue has been flowing in through the front door in a marvellous manner, but it has been rapidly ebbing out at the back door owing to the increase in expenditure. I am one of those who think that the financial position of Australia to-day is such as to demand that we cry a halt and consider our position. The indebtedness of the Commonwealth is appalling. During the years 1920 to 1925 the States will require to find £160,848,368 to redeem loans that will be falling due, and during the same period the Commonwealth will require to raise £162,753,641 for the same purpose. That means that a total of over £335,500,000 of indebtedness will fall due during the present and following four years, and at a time when the financial market is the worst that has been knownduring the history of Australia. The State debts, which are falling due, bear an average interest of 3½ to 4 per cent. He is a bold man who will say that those loans can be renewed under less than ‘about 6½ per cent., if the money market remains in anything like its present state. The Commonwealth, to-day is paying nearly that rate of interest, and it will be found that the States will have to pay 6½ per cent. for all renewals. Imagine what that will mean. The interest bill on the amount of £335,500,000 of the Australian people will be increased by over 60 per cent. In the totals I have mentioned, I have not included the considerable indebtedness of municipal and shire councils, harbor trusts and other local and public bodies, but the whole of the indebtedness, whether standing in the name of the Commonwealth Government, or the State Governments, or the municipal bodies, bears upon the same people. Remembering that in the next five years Australia will be called upon to redeem debts totalling over £335,500,000, the position is such as should make us pause and declare to-day that the time is at hand for calling a halt in the increase of expenditure.
– In what respect? Is the honorable member speaking of loan expenditure?
– It is time to cry a halt in the carnival of expenditure which has been in progress during the last four or five years.
– How are we to meet our obligations to the soldiers if we stop spending?
– I thank the Treasurer for that interjection, which gives me the opportunity of saying that my argument entirely excludes the expenditure on the returned soldier and repatriation generally. That is a debt of honour, which is written deep down in the heart of the Australian people, and not even the most bigoted economist is prepared to retrench at the expense of the returned soldier in respect of either pensions, repatriation, or housing. That obligation, men of all shades of political thought, in and out of Parliament, are prepared to honour to theutmost. I desire to add also that I am excluding from my remarks all expenditure upon war services. Whatever mistakes may have been made during the war, we must have regard to the fact that the Government were sailing in an uncharted sea, Australia . having had no previous experience of war. For that reason I am excluding war expenditure from my contention, although there is ample grounds for severe censure. The expenditure, excluding war services, has increased from £37,067,434 in 1916-17 to an estimated expenditure of £69,112,123, in the present Budget, and although the receipts have risen in that period from £34,067,434 to £63,364,700, the expenditure has overrun them, and theTreasurer is required to levy upon the surplus of last year and to propose heavy additional taxation in order to make his accounts balance. I wish to be quite fair, however, and I congratulate the Treasurer on the fact that he is taking a very much larger percentage of war expenditure out of revenue this year than ever was done before.
– In view of all the criticism and abuse I have had, I think I should have adopted the line of least resistance and brought in a popular Budget without taxation.
– In addition to the Commonwealth and State debts, which I have mentioned as maturing during the next five years, there is a floating debt of £42,696,500, due to the British Government for the maintenance of Australian troops and Admiralty charges in connexion with the war - the financial obligation which Mr. Watt went to England to adjust. That is a pressing debt on us to-day.
– Who is pressing us?
– My information is that the British Government are desirous that-
– They are not pressing us.
– They want the money.
– If Australia is facing financial difficulty, we must remember that what Great Britain has done in connexion with war finances is simply marvellous. She has financed practically the whole of the Allies excepting America, part of her indebtedness being incurred for that purpose. We know that in the first twelve months after the war, that little country paid off £260,000,000 of her debt, and in the second, year will pay off over £300,000,000, or over £560,000’,000 in the first two years. Whatever shades of opinion there may be amongst us, we must take off our hats to Great Britain in recognition of the way in which she has faced her financial obligations. The British people are beingheavily taxed, and superhuman efforts are being made to restore credit by securing a reduction in the rates of exchange. From this Australia will reap as. much benefit as any, and, under all the circumstances, I doubt if it is creditable to us to owe Great Britain nearly £50,000,000 as a floating debt. ‘ This is a matter which we shall have to arrange in some way with Great Britain, and it ought to have been arranged before.
– You are arguing that we should do more than we are doing.
– I am not arguing anything of the kind, but merely suggesting that, instead of having this as a floating debt, we ought to arrange to make it a loan, to be redeemed in a certain time, and, certainly, we ought to pay interest.
– We are paying interest on it. Nearly £5,000,000 in interest will go between now and November.
– At what rate?
– At 5½ per cent.
– In a somewhat long parliamentary experience, I have never seen, except on one occasion in a State Parliament, and in one case in the Commonwealth Parliament, any material reduction made in the discussion of the Estimates item by item. I remember when the Deakin Government were in office, that Mr. Watson, then a member of this House, proposed, in a ruthless manner, a reduction of the Defence vote by one-half. I think he proposed to reduce the vote from something like £650,000 to £325,000, and that reduction was made at one fell swoop. If there is one thing more unpalatable than another to members of Parliament in discussing departmental Estimates, item by item; it is to criticise and secure the reduction by a few pounds here and there in the salaries of individual officers. Personally, I have never done so, and I do not propose to do so now. I am prepared, when we are on the Estimates, to say that all increases over a certain amount shall be postponed for the present year, thus dealing with them as a whole; but I consider it not only useless, but beneath the dignity of a Parliament such as this is, and unfair to the officers in question, to go through the items salary by salary, and haggle and wrangle over a few pounds. I can remember how successful Mr. Fisher was, as Treasurer, in asking honorable members to show him where he could cut down his Estimates - to put their finger on the items they desired to have reduced.
– The present Treasurer has done the same thing.
– I never knew a Treasurer who did not. The Leader of the Opposition (Mr. Tudor) has referred to the proposed increases in the various Departments, and I shall not weary honorable members by repeating the figures. I should, however, like to refer to the Prime Minister’s Department in order to show that from 1917, when the cost involved was £152,208, the expenditure has increased year by year to £234,567, £312,907, £312,443, and it may be anything for the coming year. While there is this increase in the Prime Minister’s Department, there is no corresponding reduction of expenditure in other Departments. The Prime Minister’s Department, like Aaron’s rod, swallow up all others. It deals’- with a portion of the shipping work, a portion of the Home Affairs work, and a portion of the Customs work; but, as I say, we find no corresponding reduction in the expenditure of the other Departments. As a matter of fact, every Department shows an increase, and the expenditure of the Prime Minister’s Department is going up by leaps andbounds. Apart from the expense, it is not in the best interests of administration that the work of one Department should be cut up and divided with another. To-day the Prime Minister’s Department has absorbed, and is absorbing, functions which make it absolutely impossible for any Minister to give the many matters dealt with the attention they deserve. Therefore, I hope that during the consideration of the Estimates steps will be taken to insure that each Department performs its own work.
We are asked where reductions can be made. If we wish to see an absolute parody of government, we have only to turn to the Northern Territory. I called for a return recently, and was supplied with some figures. I find that the total population of the Territory is 2,770, and that the number of adult malesis 1,883. To govern that number of people there are 339 officials, and twenty subsidized miners.
– Surely you know that that is not a proper setting of the facts ?
– It is an absolutely proper setting; of the facts.
– What about the natives up there?
– If the Treasurer takes the view that the natives are getting very much advantage from the administration in Darwin, he will find himself in a very small minority.
– They really are getting advantage; notwithstanding what you say, they have to be looked after.
– After, the revelations of the recent Commission, the less said about looking after the natives the better. Even if we leave aside the native administration, we still have some startling figures. To govern these 2,770 people the expenditure last year was £107,448.
– For a territory bigger than Europe.
– How many of the officials are outside a very small range of Darwin ? The comparison suggested is not a fair one, because we know that practically the whole of the officials are centred in and about Darwin. Personally, I think that Darwin would be better governed if we removed three or four of the leading officials. A man who has returned from Darwin expressed the opinion that if we provided a good doctor, a good police magistrate, and” a good superintendent to look after the natives, we might remove most of the other officials.
– Who said that? It sounds like an old maid giving advice about rearing children!
– That was said by a man who has been to Darwin, and who knows a great deal about the subject. What is the effect of the present administration? The Commission of inquiry which sat in Darwin revealed a condition of things that was certainly not satisfactory; so unsatisfactory was it that practically the whole of the leading officials have had to be removed, and I believe that now there is a happy-go-lucky, goasyouplease system of administration, under which we can never make progress. 1 may say that the man to whom I am referring is not one of the officials concerned in the late inquiry. Then there is the Port Augusta-Oodnadatta railway. In 1919 the deficiency in connexion with that railway was £357,784, and in 1920 it was £375,736, while it is estimated that this year it will be £458,703. I know very well that there are difficulties, but the expenditure in those directions will have to cease. We have arrived at a time when Australia must face the position. During the last two or three years we have been getting an enormous return from primary production. This has not only kept down the loss on the rates of exchange, but has added vastly to the wealth of Australia. We have, however, the very disconcerting fact that while the Prime Minister has been urging increased production - and every man in Australia who thinks on the subject agrees with him - we have some very startling figures set forth in the Budget-papers. The area under crop decreased from 18,528,234 acres in 1916 to 16,806,380 acres in 1917, to 14,298,982 acres in 1918, and to 13,332,393 last year. That is a very startling reduction. When we find that during a period of four years the acreage under cultivation has fallen from 18,528,000 acres to 13,332,393 acres, we must recognise that the position is exceedingly serious. Heaven only knows what is going to happen to Australia when wheat, wool, and minerals return to their normal values.
– We shall have to manufacture more of our own requirements.
– Yes, and follow the example of China by building a great wall around Australia, shutting every one in and preventing the entrance of newcomers !
In regard to wheat, which is one of our staple products, I find that in 1915-16 the area under cultivation was 12,484,512 acres; and in 1916-17 it was 11,532,828 acres. In 1917-18 the area had fallen away to 9,774,658 acres, while in 1918-19 it was reduced to 7,990,165 acres. Thus within four years there was a reduction by one-third in the acreage under wheat. These are very serious figures. So long as the present price of wheat is maintained, our actual export figures will show a good return; but when we get back, as we must do sooner or later, to normal conditions, the position of Australia, with such a decreased acreage under cultivation will be, to say the least, exceedingly awkward.
-Does the honorable member know of any legislation we could pass that would prevent people turning from one form of production to another?
– No ; but when dealing with the financial position of the Commonwealth, it is important that we should have regard to these matters. The export of our primary products means much to Australia, and the seriousness of this falling-off cannot be too strongly emphasized. In 1918-19 our pastoral exports, including dairy produce, represented a total value of £63,923,935, our exports of leather were valued at £2,096,577, our exports of agricultural products at £21,235,304, and our mineral exports at £12,007,941, all coming direct from the land, out of a total export value of £106,000,000 for the year. I quote these figures with the object of stressing the point that any serious reduction in the acreage under cultivation in Australia is a matter of the gravest concern, and must have a very important bearing upon our financial outlook. I do not wish to weary the Committee by quoting too many figures, but it is almost impossible to discuss a Budget without making reference to statistics. I have not been in the very best of health during the last few weeks, and have, therefore, not been able to prepare for this debate as I should have liked to do.
I hold that, at the present time, we cannot afford to increase the salaries of the higher-paid officers of the Service. The Minister for the Navy (Mr. Laird Smith) knows that we have in charge of the post-office at Newtown, in his electorate, one of the most deserving postmasters in the Service. Newtown is an important suburb of Hobart, and the accounts passing through the hands of the postmaster there amount to over £50,000 per annum. Yet, after a life-time spent in the Department, this officer is receiving slightly less than £4 per week. The linemen in the telegraph branch of the Department receive more than he does.
– That is not the only case of the kind.
– It is typical of cases occurring from one end of Australia to the other. When men occupying such responsible positions receive only £4 per week, or even less, we cannot fairly increase the salaries of the more highlypaid officers to the extent that is proposed in the Budget. Casual labourers working on our telegraph lines receive more than many of our postmasters in important centres, and if the Committee is not in a position to deal a little more generously with these lower-paid public servants it has no right to increase the salaries of those at the top of the Service.
– Provision is made in the Estimates for an increase of nearly £600,000 in respect of the Post and Telegraph Department. The increase is to enable the payment of award rates.
– I shall not at this stage deal with the Defence Estimates, but I certainly do not intend to support the very large increase which is proposed in respect of the expenditure of that Department. I referred the other day to the naval expenditure, and I repeat that we are making a grave mistake in spending practically £3,500,000 on keeping in commission vessels of the type now constituting the Australian Navy. In connexion with the universal training scheme, provision is made for the expenditure of £350,500, and for a further expenditure of £72,950 for camps. The total expenditure in respect of the Military Forces is increased from £750,135 in 1919-20 to £1,391,975. Such an expenditure, coupled with a naval expenditure of three and a half millions for which the Estimates provide, is more than this country is in a position to bear. Apart from that, I doubt very much whether it is in the best interests of Australia that boys of tender years should be placed in camps for the long period now proposed.
I have said that I do not intend to deal with the Estimates item by item, but I undoubtedly think that there must be a reduction in the proposed administrative expenditure. In order that that may be brought about, I move -
That the item be reduced by £1, as a request to the Government to reduce the total expenditure by at least £1,000,000.
.- I desire to direct the attention of the Committee to a gross waste of public money which has been allowed to go on for quite a considerable time without any effort on the part of the Government to stop the leakage. I allude to the vast expenditures entailed in the construction of wooden ships in Australia. The whole history of the construction of such vessels for the Commonwealth is a tragic chapter of failure upon failure. In the first place, we had the Government entering into contracts with American shipbuilders for the construction of wooden vessels of a particular design. Representatives of the Commonwealth were employed to see that the work was properly carried out, and yet when those ships were handed over to the Commonwealth they were found to be for all practical purposes unseaworthy. Ship after ship, after its maiden voyage, cost thousands of pounds to repair. We paid big salaries to professed experts to supervise the work of building these ships in the American ship-yards, but the statements made by the Minister who was then in charge of shipbuilding clearly support my contention that notwithstanding that supervision a gross waste of public money took place. There has also been a great loss of public money in connexion with the building of wooden ships in Australia. Contracts were entered into with local firms, but during the process of construction the Government suddenly discovered that the vessels that were being built to their order were of a quite useless type, and, as the Minister pointed out at the time, it was found that it would pay the Government to cancel the contracts and pay compensation rather than complete their construction. They therefore paid to the Wallace Power Boat Company £55,000; to Messrs. Hughes, Martin, and Washington, £72,500; and to Messrs. Kidman and Mayoh, £52,000; or, in all, £179,500 for the cancellation of contracts which would never have been entered into by men who were advised by experts had they given proper consideration to the subject.
– What we paid is less than half of what America paid for the cancellation of the same tonnage.
– The Minister excuses himself on the plea that because America did a greater wrong, he must not be blamed for the wrong he did.
– Could the honorable member know that the war would suddenly cease in 1918 ?
– He did not protest against the construction of wooden ships until the war had ended.
– That is absolutely incorrect. As Hansard will show, I attacked again and again the policy of the Government regarding the construction of wooden ships and the adoption of the Isherwood type of construction for steel ships. The Minister, in justifying the payment of money for the cancellation of the contracts for the construction of wooden ships, said that there were two wooden vessels under construction which it would be wise to complete, because they would be useful in Australia. Those vessels were the Burnside and the Brae side.* They were then being built by Messrs. Kidman and Mayoh, the firm to which the Government paid £52,000 for the cancellation of part of its contract. But while they were still under construction, the Government made an arrangement with’ Messrs. Burns, Philp, and Company to sell them for £90,000. In reply to a question asked by me, the Prime Minister said that the amount paid to date on the vessels was £112,320 12s. 10d., and he said that he could not tell me what the full cost would be until the vessels had been completed. Now, all who have any knowledge of shipbuilding or other building know that progress payments do not much exceed 50 per cent, of the value of the complete work.
– As a matter of fact, under the agreement we paid 90 per cent, of the value of the work done.
– But the sum of £112,320 mentioned by the Prime Minister would not exceed 50 per cent, of the contract price for the completion of the two vessels, and yet the Government was prepared to sell them for £90,000. Surely these facts call for a reply from a responsible Minister.
– The transaction may have been a good business one, on the principle of cutting the first loss.
– As I-have said, the Minister justified the cancellation of the contracts for the other wooden vessels on the ground that the first loss would be the least, and in that he may have been correct; but he went on to say that it would pay to complete these two vessels. If it is attempted to justify this proposed sale to Messrs. Burns, Philp, and Company by the excuse that it was to cut the first loss, I ask why the Government did not cancel the contract for their construction when it was cancelling the contract for the construction of the other wooden vessels that had been arranged for. Messrs. Burns, Philp, and Company have since discovered that the vessels are useless to them, and will not complete their bargain. They say that the work is so rotten, and the designs so faulty, that they will not complete the purchase.
– How do you know that?
– Will the Minister deny that Messrs. Burns, Philp, and Company have declined to purchase these vessels for £90,000 ? The Prime Minister admitted the fact in this House, andI know it to be so. But in answering a question which I asked him, the Prime Minister said that there were certain matters in dispute, and that, therefore, it was not advisable at present to make a public statement on the subject.
– When was that?
– About five or six weeks ago. When one of the vessels was put into dock for a survey, it was found that its keel, instead of being straight, was twisted. Possibly the Government shipbuilding experts had had a brain wave, and had conceived a new method of ship construction Whereby the keel of a vessel might be fitted to the furrows of the waves, with a view to the prevention of rolling. Whatever the explanation, the fact is that this country has suffered an enormous loss. We were supposed to have experts engaged in overseeing the work of construction, and the Prime Minister furnished me with the names of those employed. The chief executive officer for shipbuilding in Australia drew up the designs and plans. But the country has lost hundreds of thousands of pounds over the business - a matter which is too serious to be treated lightly. I demand an explanation from a responsible Minister. I wish to know why the Government determined to go on with the construction of the Burnside and the Braeside, instead of cancelling the contracts for those vessels when they cancelled the other contracts. Next, I wish to know why, having determined to complete them at a cost of something like £200,000, because they would be useful, it was arranged to sell them to Messrs. Burns, Philp, and Company for £90,000. Lastly, I wish to know why the vessels were not properly constructed, and why thoroughly seasoned timber was not used in their construction. The Minister may say that the sale to
Messrs. Burns, Philp, and Company was intended to cut the first loss ; but in that case he must explain why the contract for the building of the vessels was not cancelled when the other contracts were cancelled. He will have to show why it was agreed to sell these two ships for £90,000 when it was considered that they would be quite seaworthy.
– We merely wanted to throw that item of £52,000 away.
– There is no doubt about that.
– There could be no other motive, of course.
– I want the responsible Minister to furnish an explanation.
– No explanation which I could give would satisfy the honorable member.
– The people desire to be satisfied, and it is of no. use for Ministers to endeavour to treat the matter lightly. It is one which has cost this country thousands of pounds, and a full and clear explanation is due.
.- I regret that the honorable member for Yarra (Mr. Tudor) should have made use of the remark that the Government must have been making many thousands of pounds out of the sugar business. Any one with knowledge of arithmetic should perceive that the Government were actually out of pocket, perhaps to the extent of several millions sterling, at the end of June last. I draw attention to the remarks of the honorable member for Yarra, as recorded in Hansard, page 590. The honorable member, when addressing himself to the Sugar Agreement, on18th March last, quoted from a report as follows : -
Before the war, Java raw sugar could be landed in Australia duty paid for £17 to £18 per ton. On the 4th February, 1020, sales of Java raw sugar were made at £57 per ton nominal. The exchange ‘ was at that date adverse to the Australian buyer to the extent of about 35 per cent., and this, of course, adds to the cost accordingly. Leaving out of acaccount, however, the effect of the adverse exchange, and adding £6 12s. 9d. per ton, the present difference (after allowing the maximum discount) between raws and refined, for refining and distributing wholesale, that would bring the price of refined sugar to £63 12s. 9d. per ton wholesale, which would mean nearly £35 per ton above the present fixed price.
– Is the honorable member in order in quoting from the record of Hansard for the current session?
– I did not notice that the honorable member was quoting from Hansard. He appeared to be referring to notes. I point out that he will not be in order in quoting Hansard reports of the current session.
– I shall content myself by adding that the honorable member for Yarra said that in February last sales of Java raw sugar were made at £57 per ton. He continued that the Commonwealth Government were making a profit on the sale of that” commodity. He said the Government had bought sugar from the Queensland grower for £21 per ton. He failed to show, however, that that sum of £21 did not include the cost of freight, bags, and refining, which meant that upon the sale price of £29 5s. per ton the Government were making a serious loss on every pound of sugar sold to the consumer ; and it was in order that the loss should be made good by users of sugar that the retail price was raised. The honorable member for Yarra further remarked, optimistically, that the price of sugar would be down to 4d. per lb. before long.
– I do not think the honorable member said that.
– He said that he did not think it would be lower than 4d. per lb. Considering that Germany is not producing half her pre-war sugar supplies, and that Russia is producing, probably, nothing of her former beet sugar supplies, while Belgium, France, and Spain are producing a very small portion ; and taking into further consideration the world’s increased consumption, how can one look for a reduction in price? It is estimated, indeed, that there will be a shortage of production to the extent of 7,000,000 tons of sugar. Australia is in a very happy position to be able to get sugar for 6d. per lb. In view of the prospects of increased production in Queensland, I do not expect that the price ofsugar will become higher than at present for some time; but to say that the cost will be reduced from 6d. to anywhere near 4d. per lb., and that the Commonwealth Government have been making money out of the taxpayer, is entirely wrong. The honorable member . for
Yarra forgot to mention that the grocer must get his profit out of handling sugar.
– The grocer does not get much.
– Quite true; and that fact disproves the argument of the honorable member for Yarra that, when the Government were paying £21 per ton, plus freight, refining, commission, &c, prior to March last, they were making an inordinate profit by selling at £29 5s. I say, rather, that they were making a serious loss. If we care to examine the figures relating to the period prior to March of this year, and decide to set down a loss of½d. per lb. on 100,000 tons of sugar, it will be seen that the total loss amounts to about £500,000. 1 do not think any ‘honorable member would care to see non-users of sugar taxed to make up the loss ; but all must agree that the difference should be made up by users of sugar, by the medium of an increased retail price. The honorable member for Nepean (Mr. Bowden) referred to the fact that cheap sugar had encouraged the jam-making industry of Australia, and that that had reflected prosperously on the small fruit-grower, and had encouraged manufacturers of condensed milk and. like products. It must be obvious, then, that the fixing of the price of sugar in Australia has been a wonderful thing for the people ; and the remarks of the ‘ honorable member for Yarra were, therefore, unjustified.
– I propose to devote some attention to our note issue and gold reserves, and I realize that in doing so I may be accused of endeavouring to make Australia’s position look bad. I do not ‘hold with the criers of “stinking fish”; but I say that the man who deliberately misleads the people, who, by his utterances in this Parliament, would persuade the public that our position is much better than it is, and who would so cause the people to live in a fool’s paradise, is doing far more harm than the individual who prefers to make known the facts, bad though they may be. We are told that all is well with our finances. We have read much regarding our note issue and gold reserve; but I am doubtful whether this country is ever likely to get back to the basis of gold currency. The leading na- tions of the world are conducting their finances so much upon paper currency, and so much credit is outstanding between nation and nation, that it will be impossible for us to return to anything like a gold standard. I question, indeed, whether the gold standard has been anything but a myth for the past 100 years. In the course of his Budget statement, the Treasurer (Sir Joseph Cook) referred to the gold reserves of the various nations, and made comparisons with our own. He announced that the gold reserve in Australia was equivalent to 77 per cent. ; in the United Kingdom, to 30 per cent.; in France, to 15 per cent.; and in Italy, to 9 per cent. The Australian note issue is actually only about 5 per cent, of the paper currency of this country. Within the British Empire the issue of paper money provides no indication of the actual amount of paper currency. In continental countries, where the gold reserve is lower, the cheque is very sparingly employed. The chief paper currency is the note issue; and the gold reserve, in comparison with that issue, provides a clear statement of the position. In Australia, however, our note issue - as I have just said - is not equivalent to 5 per cent, of our paper currency. The cheque - the illegal paper currency which the banks have evolved - forms 95 or 96 per cent, of our total paper currency. According to the Treasurer, the total bank deposits increased from £247,414,000 in 1914 to £3S5,120,000 in 1919. If we profess to have a gold basis and a convertible currency, every depositor can present his cheque to the bank and demand gold in exchange; so where does the Treasurer get his gold reserve of 77 per cent.? If we have a gold basis, the depositor can demand gold for his cheque, just as he can for his notes.
– Who told the honorable member that the depositor can demand gold for his cheque?
– I know he cannot; neither can he get gold for his notes. Therefore, all this talk about a gold basis i? humbug, camouflage, and nonsense. We are really trading on the united credit of the nation. The Treasurer’s statement that we have a gold reserve of 77 per cent, against the note issue means nothing, for the simple reason that the actual de posits to the credit of the people in the various banks total £385,000,000; and, in addition, there is £23,000,000 worth of notes in the hands of the public. Against that total of £408,000,000, is £44,000,000 worth of gold. I am pointing out the stupidity of continuing to delude the people into the idea that we can have a gold basis.
– All the financial experts of the world are stupid humbugs because the honorable member says so.
– Greater financial experts than were ever in this House have advanced the argument I am now using, and their opinions must be respected. The Treasurer is telling the people that he proposes to increase the gold reserve to an amount approximating more closely to that of the notes of which it is the backing. The newspapers have a great deal to say in criticism of the paper currency, and the danger of currency inflation. Where was the gold that these critics worship during the national crisis in Great Britain? Gold is always the first thing to desert a country during’ a crisis. If the British Government had not suspended the Bank Act, and issued nearly £200,000,000 worth of non-convertible paper currency, a financial crisis would have occurred in Great Britain, just as would have occurred in Australia if we had not taken measures to prevent the public demanding gold. I am protesting against the deliberate attempt to fool the people with the idea that there is anything like sufficient gold in the Treasury and the banks to meet the demands that can be made against them. It is better for the Government to let the general public know that we are trading on the united credit of the nation, and. upon that alone is our currency based. When a national crisis comes, unless the whole of the united wealth of the nation is thrown into the balance, and the paper currency guaranteed by the National Parliament, the cheque-paying banks and other financial institutions will close their doors. The only stability they can have is based upon the united credit of the nation.
– What makes the united credit?
– The wealth of each and every individual, and the power of this Parliament to tax that -wealth in order to pay the interest on our loans.
– There is also loyalty to the Empire.
– The loyalty of the financial magnates does not go far unless it can earn a big rate of interest. “With regard to the proposed increases in taxation, I enter my protest against the inequity of the Government proposals. The taxation on tobacco, cigars, and cigarettes is to be increased by a flat rate of £d. per oz. The poor man’s pipe is to pay the same tax as the expensive cigar and the drug-infested cigarette, and, having regard to the relative prices of the different articles, the percentage tax on the poor man is double or treble that on the richer class of smoker. Again, the Treasurer estimates an increase in Customs and Excise duties of £4,425,000; but the estimated increase of receipts from the War-time Profits Act is only £1,370,000. Customs and Excise duties are mainly a tax upon the masses of the people; and for this Parliament to raise more revenue through that medium than through the taxation of war-time profits violates that fundamental principle of taxation that the burden shall be placed on the shoulders of those best able to bear it. The Government are taxing the pennies of « the poor, and allowing the pounds of the rich to escape. The exceedingly high profits that have been Made by the commercial community since 1914 might -well be levied on to the extent of £10,000,000, instead of only £1,370,000. Even then, the burden upon the wealthy interests would be nothing in comparison with the increased taxation that is being placed on the poorer classes by means of Customs and Excise duties and the special impost on tobacco.
.- We have heard a good deal about sugar this .afternoon, and I rise not to plead the case of the big capitalistic interests, which can well look after themselves, but of the South Australian Fruit-growers’ Cooperative Society. A fire at St. Peters in February last destroyed what was practically the largest jam factory in South Australia, and created a critical position for fruit-growers. They were likely to be robbed of a market for their product when this co-operative society, of which many of the growers are mem bers, came to the rescue, and converted large quantities of fruit, principally plums, into pulp. One would have expected that every effort would have been made to let the society have adequate supplies of sugar; but its plant has not been able to work at more than half pressure, because a sufficient supply of sugar has not been obtainable. On the other hand, Tasmanian and Victorian jams are being imported into South Australia. Evidently sufficient quantities of sugar can be made available to the big private manufacturers in Victoria and Tasmania to enable them to not only supply their home markets, but to also export to other States and Great Britain and America. There is something wrong when a dinkum “ co-operative concern, in which the shareholders are mainly fruit-growers, is not able to get sufficient sugar for the utilization of the products of their orchards, whilst private firms can engage in wholesale export. Part of the explanation of the anomaly seems to be that during the war some of the large firms in Tasmania and Victoria had contracts for the supply of jam to the Imperial Government, and on that ground were able to secure large quantities of sugar. It would appear that because these firms had war contracts in 1918, and were then allowed a certain quantity of sugar, they are to be supplied on the same basis this year, 1920. The society of which I speak has opened a factory at Nurioopta, in my electorate, and the company is importing £6,000 worth of new machinery; but it has been informed by the Colonial .Sugar Refining Company that the necessary sugar cannot be supplied.
– Is preference given to the big jam manufacturers?
– That seems to be the case in Victoria and Tasmania. I have always claimed, and I honestly believe, that the big capitalistic interests have a bigger “ pull “ on this Government than has any co-operative concern, and this instance seems to support my view. I hope that the Government will see that this society receives fair treatment, because if any difference is to be made it certainly should be in favour of cooperative enterprises of- the kind.
– I desire briefly to review some of the items in the Budget. Up to the present there seems a disposition to regard certain expenditure as sacrosanct, simply because it is war expenditure - the idea being that, because it is war expenditure, the details ought not to be criticised. No doubt the obligations to our soldiers are sacred, but I do not see why the methods of carrying out those obligations should be beyond criticism. Although the war has been over now for a couple of years, our war expenditure is still a very substantial sum, and the money should be spent in a way to produce the best results. The expenditure now being considered by the Public Accounts Committee in connexion with the purchase of saw-mills, no doubt, broadly comes under the heading of war expenditure, but certainly that should not remove it from criticism. Already it seems to me the investigations by the Public Accounts Committee are producing results, inasmuch as it is suggested that one of the principals has lost his memory, and . is becoming like Mr. Georgeson, of wheat fame in New South Wales. I notice that the Ministerial, reply to the criticisms levelled against the conduct of these transactions is to the effect that interest has been provided for in a sinking fund ; but Mr. Barton has said that the estimated profits are quite . independent of the question of interest - that it is quite a different matter. It was stated that the profits will be between £300,000 and £400,000 if certain timber were cut by, I think, Mr. Driver, at a certain price.
– Are you going to discuss that contract now 1 It is not usual to discuss a matter which is being inquired into in public and is sub judice.
– I do not know whether this particular case is sub judice, and thus comes under Mr. Speaker’s ruling.
– I think it is.
– I beg to draw attention to the state of the House. At least the members of the party to which the honororable member addressing the House belongs ought to be here to listen to him. [Quorum formed. ]
– I was referring to an instance in which, in my opinion, due care has not been exercised in the spending of public money. I venture to say that throughout the whole administration of repatriation it would be easy to find similar examples of expenditure without proper foresight and proper judgment. The honorable member for Franklin (Mr. Mc Williams) has congratulated the Government on finding so much of the necessary money out of revenue, but, personally, I think the whole should be provided by revenue; in any case, the mere fact of finding the money out of revenue is no excuse for wanton waste or extravagance. If the whole of the business connected with the War Service Homes is conducted in the same slipshod way in which this business of the purchase of saw-mills-
– Do you think you ought to discuss that matter now ?
– I merely mention it as an illustration, but, of course, I can give others if needed. One, which cannot be regarded as sub judice, is that of the purchase of timber for the various States. The Commonwealth Government is finding the money for the building of these homes, and other repatriation efforts. Millions of money are being found for each State to spend at its own sweet will on the settlement of soldiers; but each State is practically holding up the Government in regard to the supply of timber. We are even told that there is no timber available on Crown lands in Queensland or in New South Wales for this purpose; and, as I said before, the whole business of repatriation seems to be done in a very slip-shod way. In connexion with disbursements for land settlements, there are instances such as those now being discussed in New South Wales. I do not know whether I am out of order in referring to another matter which is sub judice, namely, the purchase of land, and the general conditions of soldier settlement in New South Wales. It would seem that everything in connexion with this branch of repatriation is sub judice; and that is simply because there is a general impression amongst those who ought to know that the whole of the work is being done in such a very casual fashion: This money, even if it is out of revenue, should be expended in the most careful and systematic manner.
There are a few other matters in the Budget to which I should like to refer. First, there is a provision which the Treasurer tells us he is making for a sinking fund; and while I congratulate the right honorable gentleman, I can only express my regret that he is not making more provision of the kind.
– I confess I share your regret.
– It seems to me that it is not very creditable to Australia - either on the part of the Commonwealth, or of the States - to be continually appealing to the Old Country for money when so much is needed there for the purpose of building up industries and the reconstruction of her commercial stability. The time has come when we here should “ cut our coat according to our cloth “ ; when we should get down to bedrock in governmental expenditure, and cut out, as far as possible, all Government undertakings which have no definite justification, and which are not proper commercial propositions. We ought to scrutinize every financial proposal on its merits, and cease talking as we did when the war spirit was on us, and we were dealing with millions in a way we dealt with thousands in pre-war times.
– The fact is that, through the war, our public works have been very much starved.
– It is questionable whether we should continue the policy of public works development which in Queensland has led practically to the pauperization of the whole community. Public works having been brought practically to a stand-still during the war, we ought seriously to consider whether it is proper to revert to the old-time policy. We find that in the Queensland railways, for example, the revenue per employee five years ago was £102 per head per annum, whereas it has now dropped to £17 per employee. That is well below the standard wage. Meantime the basic wage is continually changing. A fortnight ago it was £3 17s. per week in New South Wales, whereas to-day it is £4 5s.- per week. Such conditions, with money only procurable at abou* 8 per cent. , absolutely prevent the undertaking of public works, and it is a very open question whether a bis public works policy should be entered upon by the Government in view of the fact that money is so dear at the present time.
– I had in mind maintenance, and not new works, when I spoke a few moments ago.
– The maintenance of public works should be provided for out of revenue, and not out of loan account, at this stage of our history.
– It does come out of revenue.
– That is not the practice on the part of all the States.
– It should be.
– It should be; but like the provision of a sinking fund in connexion with our public debt, the practice is not universal. I would point to the example of the United Kingdom, which has already paid off a large part of its war debt, and is making provision to liquidate its entire war debt within twenty years. Alexander Hamilton pointed out to the people of America after the War of Independence that no country could hope to prosper while it was carrying round its neck, 60 to speak, the millstone of a public debt incurred for war purposes. That is the position of Australia to-day. We have a war debt of something like £335,000,000, which in the bulk is not represented by any tangible asset. I admit that in return for that expenditure we have our safety; but we have no tangible asset. The. time, I repeat, has come “ to cut our coat according to our cloth.” We should get to bed-rock, and ascertain in what Department we can reduce expenditure. The Government should minimize expenditure, and bring down a Budget to insure that taxation will not unduly increase without at the same time effecting a very considerable reduction in our public debt.
We can reduce the cost of living in only one way. Increased taxation and increased governmental expenditures must necessarily increase the cost of living. If there was ever a time when there should be an attempt to pay off some large part of our public debt it is now, when the oversea prices for our primary products are so high. With butter realizing, as it is to-day, 274s. per cwt., it is much easier to pay off £100 of our war debt than it will be when butter is fetching only 112s. per cwt., as may be the case within the next three or four years. One ton of butter to-day will pay off more than twice the amount that it will be possible for us to pay off our war debt five years hence. And so with regard to wheat and wool. If ever there was a time in the history of Australia when we should have regard to this question of increased production and reduced governmental expenditure it is now. I make no complaint of the incidence of taxation. I do not complain of its being high, because, in my view, now is the time when we should tax ourselves with the object of reducing our public debt. Every £1 by which we reduce our debt to-day may be worth £2 in the very near future.
Government expenditure can be lessened by the prevention of overlapping in the existing Departments. There are many Departments which at once suggest themselves as being among the primary causes of overlapping, and of these the Prime Minister’s Department stands out on its own.
– I wish the honorable member would deal with the Estimates of that Department I invite him to take the items, one by one, and to show me where a reduction could be made.
– I am not going to deal with the items seriatim, but I shall tell the right honorable gentleman what is taking place almost every clay of the weekin connexion with the Prime Minister’s Department.
– Refer to the increases in the Estimates relating to the High Commissioner’s Office in London, and ask the Treasurer if he approves of them.
– We are spending about one-fourth of what Canada is spending in that direction.
– And Canada is getting far more for her money. Quite recently, we read in the press that the question of the placing of an embargo on the export of sheep-skins was dealt with, not by the Minister for Trade and Customs (Mr. Greene), to whose Department it properly relates, but by the Prime Minister and his Department. The Prime Minister called a conference of all those interested, and the Minister for Trade and Customs, in whose Department the matter should be, was not even present. The Prime Minister’s Department is duplicating the work of other Departments. The cost of the Prime Minister’s Department is being continually increased, because other Departments are not allowed to exercise the whole of their functions. They are not allowed to deal in their own way with their own work.
– But these things do not increase the cost.
– Then why is it that the cost of the Prime Minister’s Department is steadily growing?’ If it is not undertaking additional work, why is it that its Estimates are increasing?
– Here are a few reasons, if the honorable member wants some. For instance, in respect of the Prince of “Wales’ visit there is an item of £54,000 in the Estimates of the Prime Minister’s Department; while a grant for the relief of distress caused by the maritime strike amounts to £33,000.
– May I ask the Treasurer why there was such an increase in last year’s Estimates for this Department.
– The honorable member does not wish to hear of these items. It would be fatal to his argument to listen to them.
– Why is it that during the last four or five years increases of such magnitude have taken place in connexion with the Prime Minister’s Department ?
– For much the same reason.
– The Prince of Wales has not been coming here every year. The main reason seems to me to be that the Prime Minister’s Department is, so to speak, constantly putting a finger into every other departmental pie. It does so to a degree that should not be tolerated by the Ministerial heads of other Departments.
– Nearly all the items to which the honorable member has referred have paid for themselves.
– I admit that the warhas paid for itself, just as the visit of the Prince of Wales to Australia has paid for itself, in demonstrating the loyalty of the people of this part of the Empire. The war has paid for itself, but not in actual cash. If it can be shown that various transactions relating to other Departments are properly undertaken by the Prime Minister’s Department, then why have those other Departments? Why have the various other Ministerial portfolios?
-What matters does the honorable member think should remain with other Departments?
– I have given one instance of action taken by the Prime Minister’s Department in relation to a matter with which the Department of Trade and Customs should have dealt, and it is characteristic of the whole of the work of the Prime Minister’s Department. One can scarcely pick up a daily newspaper without finding in it instances in which the Prime Minister’s Department seems to be arrogating to itself duties which should be performed by other Departments.
– It is all because you have a one-man Cabinet.
– I do not say that; but I object to one general departmental Administration.
Another matter which needs some explanation is the administration of the Northern Territory. Everything relating to the administration of the Territory is being . allowed to drift. Nearly twelve months haveelapsed since a Commission was appointed to inquire into the conduct of affairs there; but a permanent appointment to the position of Administrator has not yet been made. We have seen in the press - although no information on the subject has been given in Parliament - some reference to the appointment of a gentleman to take charge of this important Territory, which seems to be a veritable sink for public moneys. I do not propose to weary the Committee by quoting figures showing the expenditure per head of the population there; but I think we might reasonably ask why the cost of administration is so much more than it was when the Territory was controlled by South Australia. The white population is not larger, and although the Treasurer suggests that the black population has increased, that, I think, is very doubtful. In any case, the administration of the Territory in relation to the aboriginal population . could not be responsible for the expenditure of hundreds of thousands of pounds. If the money now being sunk in the Territory were expended, as it might very well be, in proving conclusively that white men can live in the tropics, and in demonstrating the methods by which they could be profitably employed there, there would be some justification for the expenditure. As it is, the expenditure is growing year by year with no tangible result. We have in respect of the Territory an accumulated deficit for which there is nothing to show, and the time has come to put a stop to the drift. If the Northern Territory is to continue to be a sink for public moneys, what is going to happen in connexion with our mandates over the Pacific Islands? What is going to happen in respect of our administration of Papua and German New Guinea? Are we not going to adopt some definite line of action in respect of our services in those Territories? Has not the time come when the Government should have a settled policy such as will not result in continued loss in the administration of these Territories? If in Papua, German New Guinea, and the islands of the Pacific, over which we have a mandate, we are to have a repetition of what is taking place in the Northern Territory, then I venture to say that the taxation of the Commonwealth will soon be doubled, and that there ‘will be no sinking fund to liquidate our public debt.
The question of unforeseen expenditure is a matter of much importance. Last year the estimated revenue was exceeded to the extent of nearly £6,000,000, and the expenditure’ automatically increased to practically the same extent. It is a good thing when one’s income exceeds one’s anticipations, but when there is a corresponding increase in expenditure the position is different.
– We had to collect that additional revenue.
– But surely it did not cost £1 for £1 to collect it.
– It costs £1 15s. 9d. per cent. to collect our revenue. Show me any big institution in Australia which is doing its work at a cheaper rate !
– But why, if the Government secured an additional £6,000,000 of revenue, did it cost £6,000,000 to collect it?
– It did not.
– Then why did the expenditure increase automatically in practically the same proportion as the increase in revenue.
– It did not.
– All these are definite leakages which must be stopped.
– Our direct taxation has increased from about £2,000,000 to £20,000,000, while the cost of collection has increased to the extent of only £360,000.
– The honorable member for New England (Mr. Hay) reminds me that what we want is a torniquet to stop the bleeding. We are sugguesting the application of a torniquet- in the shape of a reduction of £1,000,000 in the public expenditure of the Commonwealth - and such a pressure on the main artery as will seriously diminish the outflow, while not interfering with the health of the patient. The prevention of loss of blood will, in fact, improve it.
Another place has already dealt with the Entertainments Tax Bill. I regret that I was not here when that measure was under consideration. I should certainly have voted against it believing that the reduction in the entertainments tax for which it provided was unwise, but now, in consequence of the rejection of the Bill by the Senate, there is an extra £300,000 available.
– No; be accurate - it is £200,000.
– Still, even £200,000 is something, and I suggest that it should bp set aside to increase the sinking fund and bring nearer the time when the war debt will be absolutely wiped off. 1 congratulate the Government on being sufficiently bold to put on the Estimates a decent sum of money to provide facilities in connexion with the Post and Telegraph Department, because that means real economy. The whole history of the Department is that if you increase facilities you increase business. That is the principle upon which Rowland Hill went. Sir Robert Anderson pointed out in his report in 1915 that it was expenditure on these subsidiary lines - which may of themselves be unprofitable - that created the volume of business which made the whole concern profitable. I regret that the extra halfpenny has been put on the letter postage rate, because I do not believe that that is the way in which we shall increase the revenue. It may possibly hinder the proper postal development of Australia, but I am glad to see that the whole of the extra amount which the Treasurer anticipates receiving in to be applied to increasing the facili ties, especially in the country districts. That is the way in which the postal and telephonic services are going to be made absolutely self-supporting, and even paying. In America telephones are at least three times as common as they are in Australia.
– And three times as expensive.
– They may be, but they are “three times as common, and there the service pays handsomely, whereas in Great Britain and Australia, where telephones are relatively few, they do not pay.
– This is the result of the paragraph in the Age to-day. You had better get the actual figures.
– I only came to Melbourne to-day. I have been in America, and every farmhouse that I saw in the Western States and in Ontario and Canada generally had a telephone, provided by a private company. There it is as essential to the selector as is the axe with which he fells his trees. From my experience of my own district, I am confident that the provision of telephones and proper facilities throughout the north coast of New South Wales would quadruple the present revenue from that source, without making any marked difference to the cost of running the service. In fact, it would probably make it a much cheaper service per employee than it is now.
– They say that in the city the more telephones you put in the costlier the service becomes.
– But that is not so in the country. In South Grafton, some twenty years ago, we could not get any service. Finally, three of us had to subscribe for three telephones each, and six other people each subscribed for one. This made fifteen subscribers, and the Department then established the system for us. Inside of six months there were over thirty people on that service, and now I think there are 250, although the number of people in the town has not increased. The very fact that the facilities were there caused the subscribers to join. There are dozens of places where the Department would have the same experience. Take the case of Gladstone. I am glad the Postmaster-General mentioned this fact, because I have a letter which I sent to the Postmaster-General recently, showing that there were scores of people trying to induce the Government to erect a through line. They were all ready to connect up. The Government are simply losing all the time the revenue which they would be receiving from that line. “Works of that sort are real economy, because they represent the economy which will produce an immediate result. They will not merely bring in direct revenue, but will induce people to go on to the land and enable them to settle and continue there. We have delivered to us every day bulky articles on immigration. What is the use of immigration if those who come here from other lands simply settle in the cities, as they are doing now? Before the war, 90 per cent, of them settled in the cities. The only way we can get them to the country is to provide the necessary facilities. If those are put in, the experience of every other country situated similarly to Australia is that they will pay handsomely and keep the .people on the land under something like civilized conditions.
– The city congestion is an evil all over the world.
– It is a much greater evil in Australia, especially in the honorable member’s own State, 54 per cent, of the population of which is congregated in the capital city. Whatever policy that State has adopted, it is almost certain that, if we adopted the reverse, it would bring about a considerable amount of decentralization. The measure of decentralization that this Parliament can achieve is practically limited by the provision of proper postal and telephonic facilities for country residents. I express my appreciation of the fact that the present Postmaster-General has done his best in that respect to meet us, and I congratulate the Government on going as far as they have gone. Still, there are many other ways in which the question of economy can be dealt with.
– You people must be all right, but in my electorate they have not given me a single mile of new line.
– They have given me only promises of developmental lines, but I am now told that the material is now coming to hand, and that all the old promises will be redeemed.
– You want all these things, and yet you want to cut the cash out.
– In his Budget statement, the right honorable gentleman assured us that the cash for the postal services is coming out of the extra postal revenue. If that is so, why should he talk of cutting the money out? What is the use of having a strong Commonwealth immigration policy if we are going to cut its throat as the people come here?
I have indicated directions in which I think economy can be exercised. The time has come for the Commonwealth to tell the States straight out that if it is going to supply them with money, it must have at least some measure of control of the whole question of repatriation, whether it is constitutional or whether it is not. If it cannot have some measure of control, it is up to the Commonwealth to cut the stream dry at its source till the States come to terms, and do something that is commensurate with the sacrifices made by the men who went to the other side of the world.
– A few days ago the honorable member for Fremantle (Mr. Burchell) asked “the Prime Minister (Mr. Hughes) a question regarding a report in the Argus of an interview with myself concerning the activities or inactivities of the Commonwealth Ministry in the matter of certain official correspondence belonging to Mr. Peter Simonoff, who is here as the official representative of the Russian Soviet Republic, which correspondence the Ministry were detaining through the Post Office. The Prime Minister, in reply to the honorable member, said that my statements were absurd, and that there was not a word of truth in them. I have communicated with Mr. Simonoff, and find that the Prime Minister, or, at any rate, the Prime Minister’s Department, was fully aware of the truth of the statements that I made as to the facts of the case. The Department was not ignorant of the circumstances, because a considerable amount of correspondence took place between it and Mr. Simonoff dating from the 13th February of thi? year. On that day Mr. Simonoff wrote from Sydney to the Prime Minister, stating, amongst other things -
It is not necessary for me to send any credentials, they being withheld by your Government at the time of my appointment in 1918. But I would ask you, Sir, to instruct the respective Departments of your Government to return to me all my papers taken from me and detained through the Post and Telegraph Offices; also my correspondence and draft for £1,200, as far as my information goes.
He received a reply on tine 25th February from Mr. M. L. Shepherd, Secretary of the Prime Minister’s Department, acknowledging his request for the return of the papers. On the 27th February he wrote again to the Prime Minister as follows: -
Sir, - In answer to your letter of 25th inst., I informed you that some papers and letters (I do not remember all of them now) and a wallet were taken from me by officers of the Military Intelligence Department in Melbourne on my, detention in November, 1918. Numbers of cablegrams, letters, documents, and a draft for £1,200 were sent to me from Russia and from London during 1918 and 1919, but as the orders of the Commonwealth authorities to the Post Offices were not to deliver such to me, I did not receive them. The draft was sent to me about February or March, of 1918. In the circumstances I am unable to furnish any more particulars on the matter. The papers and the wallet taken from me were handled during my trial by the Commonwealth- Solicitor in Sydney. After the trial I instructed my solicitors to ask for the return of those papers, but the Commonwealth Solicitor informed my solicitors that the papers were returned back to the Military authorities. So I find it rather inconvenient for me to hunt them from Department to Department.
As to the above-mentioned correspondence and the draft, I could not give more information than that they were held up, so far as I understand, through the Commonwealth authorities; that is, it is known by me that such matter was sent to me, and it is also known by me that there was an order of the Commonwealth authorities to the Post Offices not to deliver such to me. And beyond that, not being in the secrecy of your Departmental Offices, I know nothing. Therefore, I cannot inform you exactly what, when and by whom is detained. It is much easier for you, sir, to instruct the respective Departments to return to me whatever they have detained belonging to me personally or as the representative (Consul-General) of the Russian Government, or if they have not such matter to inform me to that effect.
This was acknowledged on 1st March by Mr. Shepherd, with an intimation that inquiry was being made with regard to certain papers which Mr. Simonoff alleged were taken from him by officers of the Military Intelligence Department. On the 13th March Mr. Young, Deputy Post master-General for New South Wales, wrote to Mr. Simonoff as follows : -
With reference to your communication of the 13th February, 1920, I have to intimate that as the Commonwealth Government has not accepted you as the Consul or unofficial agent of Russia, your request for the delivery to you of letters, packets, newspapers, money orders, telegrams, &c, addressed to the Russian Consul or Consulate, cannot be complied with.
On 24th March a similar reply wag received from Mr. Thomas Bright, Deputy Postmaster-General for Victoria. On 5th May another communication was received from Mr. Shepherd, as follows: -
In compliance with the request contained in your letter of the 27th February, asking that certain papers which were taken from you by the military intelligence officers be returned, I desire to inform you that these papers have been forwarded to you under separate cover.
To that Mr. Simonoff replied on the 7th May -
Your letter of the 5th instant, with enclosed documents, to hand. Thanking you for same, I desire to inform you that, together with these documents, were taken, from me some others which are still not returned, such as a wallet, a notebook, private letters from my relations from Russia (about six years old), cablegrams from London (from Mr. Litvinoff ) , &c. But the main thing I desire to remind you of is that in my previous letters I asked you to return me not only the abovementioned things, but also documents and correspondence (including a draft for £1,200) which were, according to my information, detained by officers of your Government through the Post and Telegraph Offices. However, answering my previous letters, your Department evaded this matter altogether. This is only confirming my information, and therefore I repeat again my request to instruct the respective Departments of your Government to return to me all that matter, or explain why should not it be returned.
On the 12th May Mr. Shepherd acknowledged the receipt of that letter, stating that all the papers taken from you have not been returned,” and saying that further inquiry would be made in the matter. Again, on the 20th May, he wrote that-
Advice has been received from the Department of Defence to the effect that there is no knowledge of any papers belonging to you other than those returned to you on the 5th Mav. Moreover, nothing is known of the £1,200 draft referred to by you.
To that Mr. Simonoff replied -
With reference to your letter of the 20th May, in which you state that advice has been received from the Department of Defence to the effect that there is no knowledge of any papers belonging to me, other than those returned to me on the 5th May, also that nothing is known of the £1,200 draft referred to by me, I desire to inform you that it does not make any difference for me which of your Departments is holding those things. ‘The fact remains that the wallet, pocket-book, cablegrams from London, and personal letters to me from Russia were taken from me (together with those returned to me), but not returned. Where are they? I do not know. If the Department of Defence does not have them, somebody must have them, if not destroyed. Likewise stands the question with my correspondence (including the draft) addressed to me personally, and as to Russian Consul. L know that such things were sent to me during two years. I know that they were not delivered to me by the orders of your Government, and, if you know nothing of them, somebody must know, and perhaps when it will be convenient for you to know about them I believe you will know. But for the present it seems that we have to know nothing of them, and therefore the question may be thus ended.
I have read this correspondence to show that the statements which I gave to the Argus representative were correct, although the Prime Minister, replying to what was apparently an inspired question by the honorable member for Fremantle (Mr. Burchell), said that the whole thing was absurd, and that there was not the slightest truth in those statements. The correspondence which I have read, and which I presume is on the file in the Prime Minister’s Department, shows that for six or seven months Mr. Simonoff was demanding from the Prime Minister’s Department the return of official correspondence. It was to that that I alluded in the interview with the Argus representative. I said nothing about private correspondence. The Commonwealth Government has prevented Mr. Simonoff, as the official representative of the Russian Soviet Government, from obtaining his official correspondence, and also from getting the draft which has been referred to. What was said by the Prime Minister about my interview with the Argus representative, applies strictly to his own statement, namely, that it is absurd and inaccurate in every particular.
.- The honorable member for Cowper (Dr. Earle Page) gave us an address in which, so far as I heard him, he seemed to favour the economy of increased expenditure, for which a great deal could be said at the “present moment. Australia is an immense, undeveloped continent, and it would be extremely uneconomical for us, even in a time of straitened finance, to be content to leave things as they are. No private person who held a property worth improving would be content to lose money by allowing a temporary tightness of the money market to prevent him from developing it. In this regard, the honorable member made a splendid vindication of the Budget. It is chiefly a Budget of development. But not only is Australia a heritage, on which we must spend money in improvement; it is also a country which is open to attack from all sides, for which we must provide means of defence. If the Budget be analyzed, it will be seen that its proposals for expenditure are mainly in one or other of these directions. There may be wastefulness in some of the Departments, but no Government has ever succeeded in entirely preventing waste, though undoubtedly at a time like this, the Government should do all in its power to see that every £1 expended gives due return.
The honorable member said that he does not agree with a great deal that has been done in connexion with repatriation, nor does any one else. But taken by and large, remembering that the Department of Repatriation has had to proceed along an absolutely new and unbiased track, there is not so much fault to be found with what has been done by it, and those who have been closely in touch with our returned men know that, on the whole, its expenditure has been justifiable. I agree with the honorable member for Cowper that a great deal that has been done in the way of land settlement is open to serious criticism, but difficulties will always arise in the settling of people on the land, especially when the men selected have not been bred to country pursuits.
– The land settlement part of repatriation is also a State matter.
– That is so, and the Commonwealth has no control over what is done by the States. Because of this independence of Commonwealth and State activities, troubles must arise in connexion with land settlement which cannot be prevented until an agreement has been made under which the States will hand over to us the land for the settlement of which by returned soldiers they want us to provide money. At present the Commonwealth, through its Repat- nation Department, is finding the means for settling returned men on the land, and the State Lands Departments are running the show; and you cannot avoid dissatisfaction when one man pays and another calls the tune. With divided responsibility, satisfactory results are almost impossible.
– The States only borrow from the Commonwealth the money spent on land settlement for the repatriation of soldiers; they must pay it back to us.
– Certainly; but we are finding the money, and have no say in regard to its expenditure. I think that the difficulties which thus arise can be ended only by the States handing over to the Commonwealth the control of the land on which soldiers are to be settled.
I do not propose to speak about the Commonwealth shipbuilding activities, because they have formed the subject of an inquiry of the Committee of Public Accounts, and that body will shortly lay its findings before Parliament.
The honorable member for Cowper gave well-deserved praise to the PostmasterGeneral for improving telephone and telegraph communication in the country. Undoubtedly the increasing of expenditure on those services is really economical, because, with anything like commonsense management, it must stimulate production to such an extent that the gain to the community will more than balance the outlay. I do not think, however, that the honorable member was quite fair when comparing our facilities, to their detriment, with those of America. Undoubtedly, in America the telephone has come to be looked upon almost as a necessary of life, and nearly every home and farm, is in touch with a township. But it must be remembered that telephone charges in that country are two and a half times what they are in Australia. However, I cordially agree that anything which can be done to extend these facilities will tend, not only to the development of new districts, but also to an increase in the production of country already occupied.
This evening I wish to deal with matters of very much more moment than those which may be said to have merely a local interest. We are living in times absolutely unprecedented, and we ought to deal with matters from the broader aspect of the future of civilization, of the Empire, and of this young country of ours. To confine our attentions to affairs of purely local interest, or even continental interest, just now, is to be playing on the edge of things at a time when we ought to be extending our vision beyond anything we have looked at in the past. One of the troubles of Australia is that its people have been too much inclined to be insular in their vision. The great majority of Australian born - and I am one of them, so that I oan speak freely - ‘are inclined to think that the coast of Australia is the edge of the world so far as they are concerned, but to-day, whether we like it or not, we must broaden our horizon, because our position has changed absolutely from anything we have known in the past, so that at present it seems to me a very dangerous expedient to criticise the Government for having increased our expenditure. I am quite aware that, with newspapers and some of the more conservative and meaner people of Australia, it is a very popular policy to cry out against an increased Budget, but there are others with sufficient belief in their country and enthusiasm for it to realize that, if this money is expended only reasonably well, we shall get a good re’ turn for it.
I wish to point out that our position to-day, just at the end of the greatest war the world has ever seen, can quite properly and very favorably be compared with that of Great Britain about 100 years ago, when, at the end of the Napoleonic wars, public and industrial affairs, economics, and everything else were in a state of flux. I wish to draw attention to the position occupied by Great Britain in 1816, and show by a set of parallel figures how Australia stands to-day. With an area of 120,000 square miles and a population of about 22,000,000, Great Britain had, in 1816, a public debt of about £902,000,000, a revenue of about £62,000,000, and an expenditure of about £65,000,000, while the gold guinea was worth 27s. in paper money. Now, let me take the position of Australia after it has emerged from the greatest war the world has ever seen, in which it played a noble’ part, doing the right thing and the only thing which its people, bred as they are, could do, and not stinting expenditure in doing 60.
Australia, in this year of 1920, with an area of about 3,000,000 square miles and a population of about 5,000,000, has a public debt of £400,000,000, a revenue of £53,000,000, and an expenditure of £98,000,000, of which a large proportion is war expenditure carried over to this year ; the ‘ expenditure apart from the war being about £52,000,000. And today the sovereign is worth about 25s. in paper money.
– The public debt of the Commonwealth and the States is about £800,000,000.
– And in 1816 England bad a lot of local debts in addition to the £902,000,000.
– Australia has also a lot of municipal debts.
– The local governing bodies in England are almost on a par with our State Governments. Our local governing bodies cannot be compared with the British local governing bodies. Has the honorable member ever perused the history of local government in Great Britain? I think that he would find that the debt of British town councils and county councils was, in 1816, greater than the burden of State and municipal debt in Australia to-day. At any rate, the figures I have given indicate that the position of Australia today is very much superior to that of Great Britain 100 years ago. But did the people of Great Britain at that time sit down and do nothing; did they raise the cry of economy or attempt to restrict the development of the Empire ? No ! On the contrary, like good business men, and men of strength and courage, they launched out more extensively than ever, and the result was the establishment of the finest Empire on the face of the earth. They had courage and the vision, and saw the way in which to develop an Empire, which, large as it was then, was as nothing compared with’ what it is to-day. There is, with us, too much fear and trembling - as if we were on the brink of disaster - too little belief in the future of this country and the Empire. If in this time of stress and strain, when we are suffering a recovery from the effects of war, we would only follow the example of our forefathers at the end of the Napoleonic wars, and have the courage to face the period of recuperation as men, without dimming our vision of the future, our progress during the next 100 years should be even more rapid than that of Great Britain during the past century. I have some further figures of comparison between the state of Great Britain in 1816 and that of Australia to-day. In Great Britain, in those days, wages were 2s. per day, whereas the price of a sheep was £2, and that of a bullock was £20, and wheat cost £2 15s. 6d. per quarter. In Australia today wages aTe about 14s. per day, and the price of a sheep is about 30s., and that of a bullock from £18 to £20. In regard to public debt and public expenditure, Australia compares favorably with the position of Great Britain 100 years ago, but how much more favorably does it compare in the matter of wages paid today as against the wages paid in Great Britain 100 years ago, seeing that the British worker in those days was drawing a wage one-seventh of that which is now paid in Australia, while the price of primary produce was just about the same as it is with us at the present time.
Sitting suspended from G.S0 to 8 p.m.
– Prior to the adjournment I was drawing comparisons between the state of Great Britain a hundred years ago and that of Australia to-day. I was trying to convince one or two doubtful members of the wonderful future awaiting this country if we would only look upon the subject with . the samebreadth of vision as did our forefathers in the Old Country a hundred years ago. Only within the past three or four hours I have been told that there is but one river system in Australia which is capable of carrying anything like an irrigation system. The person who made that statement claims to know something of Australia; but - thank Heaven ! - he was not born in Australia. No man living can claim to thoroughly know Australia and its possibilities. From my own limited knowledge and experience, however, I am convinced that there are dozens of places and river areas far from the Murray system which are capable’ of producing irrigation schemes to carry millions of people. The north coast country of New South Wales alone will some day carry as many people as are in Australia at present; and there are various other portions of the continent which are also capable of carry- ing their happy millions. I have been endeavouring to show how much better off is the wage-earner in Australia than was the wage-earner in England at the end of the Napoleonic wars. There is no country on earth where primary products and the necessaries of life are cheaper or more easily obtainable than in Australia. But the relationship of currency to goods is the standard of prices. As goods increase so prices fall; while, as currency increases, so do prices rise. One of our troubles, not only in Australia, but throughout the world, is that there has been too great an increase of currency compared with the increase in production of goods. As a matter of fact, while goods production has been decreasing at an alarming rate, currency has been increasing more rapidly than ever before. The relationship of primary produce to wages is a factor affecting the welfare of our primary productions. In Australia the primary producer stands in a much worse position relatively to the great body of the community than did the primary producer in Great Britain during the period which I have mentioned, for the reason that the relationship of primary produce to wages is about seven times worse here to-day than in Britain in those days. A short time ago I was speaking of the natural increase of flocks and herds, and urging that their owners should not be taxed until they had realized upon them. With regard to that argument, the Treasurer (Sir Joseph Cook) said, “ The honorable member’s method, is very simple. It would enable the farmer to escape most of the taxation.” It would not do so because, sooner or later, he would be bound to realize on his natural increase - if it was to be of any use to him and the country at all - and when he did realize he would naturally pay his share of the taxation. When direct taxation was imposed on primary producers there was in this country very little indirect taxation. In my State, at any rate, there was practically Free Trade; and taxation was imposed on primary producers in order to carry on the governmental services of the country. Since those days Customs duties have been imposed, but we have not in any sense relieved the primary producer of his burden of direct taxation. To-day the man who raises the raw products upon which this country lives is paying double taxation all along the line. Even if my method of taxation should have the effect of relieving the primary producer of a great deal of his burden of taxation, it would be only fair. Australia has adopted Protection, and Protection is bringing millions of pounds to Australia for investment; but, if we are to take full advantage of the position, if we are to encourage both our primary and our secondary industries, we must relieve primary producers to a large extent of the unfair burden of double taxation which has been placed upon them. The fact that we have come through the war crisis in a solvent condition is due to the tremendous sums raised from primary production. In 1918. the value of our pastoral produce amounted to more than £98,000,000; of agricultural produce, to more than £58,000,000; of the dairy, poultry, and bee-keeping industries to more than £33,000,000; forestry and fisheries, to more than £7,000,000; and mining, to more than £26,000,000. Those figures represent a total from sources of primary production of nearly £223,500,000. In the same period the product of manufacturers returned a little over £75,000,000. The primary products of this country, and the money raised from those sources, carried us through the period of stress, in respect of which, however, we shall have to pay for many years to come. It is a short-sighted policy for Australia to crush these industries with double- taxation. By all means let us have a Tariff if Australia believes in it; and let us have the money which is coming to us from the Old Country for investment here; but, in the name of honesty, and for the future safety of the country, let us relieve the primary producer of ‘ the now unfair, direct taxation imposed upon him before the Tariff was introduced. The financial position of Australia is such that it will need all our resources to meet our commitments and carry us through. During the years 1922, 1923. 1924, and 1925, the State and Federal debts to be redeemed will amount to £226,000,000. I furnish that total for the benefit of those honorable members who, this afternoon, were saying that we should take State and Federal figures together. Personally, I think that a wrong method to adopt. However, of that total which I have pat mentioned nearly £127,000,000 must be redeemed by the Commonwealth. In whatever way we examine the outlook, therefore, we are bound to bear very heavy taxation for some time to come; and, if we are to pull this country through while we are redeeming our debts, we must do so by equal distribution of the burden upon primary and secondary production.
– If we converted our loans now we would have to pay a much higher rate of interest than we were called upon to pay when they were floated.
– True; yet, if we manage our affairs properly there is no reason why the rate, when we are called upon to convert our loans, should not be much lower than to-day. But, unless we encourage production all round, instead of in a one-sided fashion, we shall probably have to pay quite as high a rate, when we renew, as we should have to pay if we were compelled to renew our loans at this moment. Oh the other hand, if we manage prudently, and show to the world that we are capable of developing this marvellous country along natural lines, there is no doubt that when we must convert our loans the rates will be much lower than to-day.
– Is it fair that primary producers should be made to carry an extra tax by the fixation of prices as well as by straight-out taxation ?
– I am endeavouring to show that the primary producer is already over-taxed, and I am. not worrying about a little increase in the matter of postal duties, as is the honorable member. To complain, as he has done, is to miss the mark altogether. Postal duties are paid by all alike throughout the community, and there can be no fairer form of taxation.
– I stated that the increased postal duties might have the effect of reducing revenue.
– I do not think that at all likely. I hold, rather, that the increase in postal rates will prove of great benefit. Since the country is in need of increased revenue, the Government have adopted the most direct, efficient, and evenly distributed method of securing that additional revenue. A tax, to be of real use now, must be one which will provide a quick return, and cost little to collect. It must be distributed as widely and evenly as possible, and there is no proposition which more satisfactorily meets those basic require ments than the increased postal duties. I have no fear that their imposition will have the effect of reducing revenue. There can be no fear of our preventing this country from going ahead by imposing fair taxation. We cannot restrict development by the imposition of a tax spread over a whole community; but we would be doing so if we were to continue to over-tax one section of the community, as we now do.
– The increased postal rates are, in effect, a one-sided tax in that they will be almost wholly carried by the cities.
– If I thought that the cities would have to pay as against the country, I would support the imposition even more strongly, for the reason that country people to-day are bearing a double burden of taxation as against the one burden shouldered by city people. Some people think that primary production can carry everything we may care to place upon it; but - strong and vital though it is - it can be overburdened. Shortly before the war, and actually at the outbreak of the war, Russia carried nearly as many sheep as Australia. It had infinitely more goats, nearly as many camels, and far more horses. It produced 51 per cent. of the world’s rye, 25 per cent. of the world’s oats, 33 per cent. of the world’s barley, and 22 per cent. of the world’s wheat. To-day, alas, where is Russia? Millions of her people are ‘dying of starvation, because the system of currency and of transport broke down, because no reasonable consideration was given to the producers of that country. Recently I received some correspondence from Russia, and this is one of the statements contained therein : -
The peasant will not givehis grain till he can be given in return not mere money but goods. “ Why should we work to feed the towns when the towns will not work to give us clothes? I cannot clothe my children in roubles.”
Later on the same correspondent says : -
Before the war, when I went to town, I carried my money in my hand, and brought back armfuls of stuff I had bought. Now I take in an armful of money, and what I bring I can carry between my finger and thumb.
That is what has happened in the greatest producing country in the world, and we must not forget that strong as are our primary industries, they can be destroyed.
– And they are being rapidly destroyed by the Government.
– There is no doubt’ that our primary producers are labouring under injustice to-day, and I am endeavouring : to point out exactly where the trouble arises. Neither side has, up to the present, really appreciated the full significance of the burden Which they carry. Unless we arrive at a saner view of the position, unless we realize that our wonderful primary industries can be destroyed, and unless we do something to establish them upon a firm footing, we shall be heading straight for trouble. Do honorable members appreciate . the fact that, during the past five years, our sheep have decreased by 10,000,000, and . our dairy cows by 100,000? Yet we hear bitter complaints from honorable members opposite regarding the increase in the prices of the products of these industries. It is only because of those increased prices that our primary producers have been able to pay their taxation, and that Australia is solvent to-day. But, unless some relief is afforded to these men, they will not continue to carry on as they have carried on hitherto. Everybody knows that the owners of freehold estates, who have added to the production of this country by breeding high class stock, and so improving our flocks and herds, are rapidly selling out. I know dozens of men who . are realizing that the burden of taxation upon the land-owner to-day is altogether too great. They cannot bear this double system of taxation. It is breaking them down, and as a result they are selling out. At the present moment our stud flocks all over Australia are being destroyed. The great industries which are the chief source of our wealth are being undermined and injured, because we do not realize the common justice of releasing them from the initial tax which was imposed upon them before we altered our system of taxation, which now bears upon them with undue harshness. The only remedy for this state of affairs is for the Government to recognise the position and to do what they can to relieve the overburden of taxation which our primary industries are carrying. About eleven months ago a meeting was held at the Royal
Colonial Institute in London, at which there were gathered together men from all parts of the Empire, for. the purpose of dealing with the question of Empire production. I propose to read a few lines from some of the remarks which were made upon that occasion. The chief speaker was the Hon. G. H. Roberts, M.P., who said: -
I am told that we can buy from foreign countries just as easily as from the Dominions; but our experience of trade with the Dominions shows that there is a strong sentiment between the Dominions and the Mother Country, which makes it possible for us to enter into better agreements with them than with foreign countries. . . . But with the lessons of the past, we cannot allow this question of food supplies to be dealt with in a haphazard fashion, and one reason I am present to-night is to identify myself with a movement which has for its purpose the development of home production and the organization of Empire resources.
Later on he said -
We have certainly incurred some debt to our Dominions. It is for us to help to develop their resources with the aid of British labour and British capital.
To-day, British capital is coming here in millions. But British labour is not coming at anything like the rate that it should. During the last century the Empire has been losing the greater part of its strength by the drift of its population to countries outside the flag. If the war has taught us anything it is that the Empire is wide enough to hold all British blood.
– If it has taught us anything, it is that the recent war was not a war to end wars.
– The honorable member knows that he is talking nonsense.
– I have said the same thing for three long years.
– I would expect it. Even, the honorable member could not believe that the last war was going to end wars. As long as human nature is what it is there will be war.. Havelock Wilson, who is also something of an authority upon the affairs of the Empire, at the meeting to which I have referred, said -
If they could only bring together the 490,000,000 people in the Empire, and treat the Empire as a home market, and produce everything possible within the Empire, we should, he believed, witness one of the greatest eras of prosperity that we could ever dream of.
Viscount Milner, -who. everybody will admit, is a man of standing and ability, said -
Inasmuch, then, as we have to import so much, it is very important that we should buy from people who want in return to buy our goods-
– Viscount Milner - be is a good German.
– .The honorable member talks about Viscount Milner being a German. When did the honorable member endeavour to do his best for the Empire in time of trouble? What right has he to talk of Lord Milner as a German?
– What right has the honorable member to quote his utterances as a guide to us?
– Order!1 I have repeatedly called the honorable member for Calare to order, but he takes no notice of my call. I must ask him to cease his interjections.
– This is the sort of stuff which does so much to degrade this Parliament and Australia. It makes one’s blood boil, when one hears those who have done nothing for the Empire casting aspersions upon men like Viscount Milner, who have given their time, their abilities, and their energy in its defence. Viscount Milner said -
Inasmuch, then, as we have to import so much, it is very important that we should buy ! from people who want in return to buy our goods - and here comes in the fact - that the greatest customers for what we produce in this country are other nations of the British Empire. . . . It is an uphill game at present to get a move on in the developments of the dependent Empire, and one of the reasons is that people are extremely ignorant of the capacities of production that the Empire has.
We require a wider knowledge of the Empire and a closer relationship within it, not of a political, but of a commercial character. We need to realize that if the various portions of the Empire will only work together as they should, if the outlying Dominions will only set themselves to understand each other, and to ascertain what particular products they can best produce and exchange with the sister Dominions, and if we will only do justice to those industries which were our main, support during our days of trial and stress, the future of Australia will be such that we shall be able to laugh to scorn the doubts that have been cast upon the Budget. We shall be able to banish the little fears which prompt people to say, “ You must not spend money in this country. It is not able to stand it.” In view of our wonderful potentialities, we cannot spend too much within reason. We may go on improving our heritage to the extent that wo can find the money with which to do it, and if we only exercise ordinary common sense, that expenditure will be repaid a thousandfold. It is a poor spirit in which to face the reconstruction period upon which we have entered which prompts one to growl about the expenditure here and there of a few shillings when we know that the developments which are possible in this country are such that if we only do our duty to ourselves, to our ancestors, and to the thousands of boys who will never come back to us, we shall create an Australia which will be the pride of the southern hemisphere.
.- The honorable member for Robertson (Mr. Fleming) has painted a very rosy picture of what will happen if we have good government and good administration in this country. But I have been wondering whether he himself is quite satisfied with the incidence of taxation, and also that there is nothing upon the Estimates submitted for our consideration which partakes of the character of extravagance. While the honorable member has painted a fairly rosy picture, he has certainly not said too much regarding the wonderful resources of Australia. He may expect a good deal from the future, but there are many persons who expect even much more than he does. I am sure that honorable members opposite will be pleased when they realize the magnificent resources of this country and the glorious liberties which they enjoy.
– More or less.
– They are generally more when honorable members opposite remain opposite. There are a good many persons in Australia who entertain the pious hope that they will continue to remain in Opposition. I have just culled from an evening newspaper a report of the Women’s Labour Con- ference which waa recently held in Perth. There have * been previous memorable conferences in that city, of which I shall say nothing to-night, because unless this country were very prosperous there would be very little hope of the desire of these ladies being realized. It was resolved that the State Governments should control food, housing, and clothing - although some of the ladies- do not ask for too much of the last-named necessary - and that the Federal Government should hold all supplies of wheat, wool, and other staple commodities, which were to be sold to the people at the cost of production, plus a reasonable profit; alternatively, a heavy tax should be imposed upon exports. Those ladies must have been influenced by the remarks of honorable members opposite. By a majority of one vote, the conference resolved that all transport on railways, and so forth, should be controlled by the Government, and be free to the people. Private registry offices were condemned - why, I do not know - and pensions for mothers and children were demanded.
– State your reasons against those proposals.
– I do not see how any reason can be urged against them; they err on the side of sweet reasonableness. Can the honorable member offer any objection to a man going on the land to raise cattle and sheep, and grow wheat? Why should he make a profit? I am quite sure that if others did not go upon the land to produce without profit, the honorable member would be one of the first to volunteer, together with those other honorable members who interjected so heatedly when reference was made to such reasonable requests.
I can appreciate the difficulties which confront the Treasurer in the preparation of his Budget. We have just passed through an abnormal period, during which there was necessarily a great deal of interference with the ordinary trading of the community, and a lot of unusual expenditure. Departments have grown enormously, and probably that growth was warranted to some extent while the war was in progress; but a long time has elapsed since hostilities ceased, and we are surely justified in urging that this country should now return to normal conditions. I quite approve of the Trea surer’s action in insisting that a large proportion of the war expenditure shall in future be paid from revenue, and that a sinking fund shall be established in connexion with these obligations. Those are matters ipon which one can congratulate the Treasurer, but I think we are justified in demanding economy in administration, which even a casual perusal of the Budget statement and Estimates will show to be necessary. There must be a limit to the taxation per head of our people. The honorable member for Robertson (Mr. Fleming) spoke in glowing terms of the resources of this Commonwealth. A wonderful country has been built up for us, but I aim afraid that the old pioneering spirit, which achieved so much, is dead. To-day we do not find, people going out into the back country, .and taking all the risks and hardships of pioneering. On the contrary, there is a tendency to concentrate in the cities. We must continue building up and developing the country, and must increase our population rapidly by immigration. That is our only hope, because we must endeavour to reduce the taxation per head. In 1916-17 the revenue of the Commonwealth was £34,000,000 - a large amount of (money to get from less than 5,000,000 people. It increased to £36,000,000 in 1917-18, to £44,000,000 in 1918-19, and to £52,000,000 in 1919-20, whilst the estimate for this year is £63,000,000. While we have heavy taxation, the cost of everything must be high. With such a big revenue, we naturally expect the Treasurer to provide for a large proportion of the war expenses from ordinary income. In the year before last £21,000,000 of the total revenue of £44,000,000 was absorbed in paying for war expenditure. Last year £24,000,000 of revenue was expended on war services, and this year the Treasurer estimates to expend £36,000,000 in the same way. I repeat that I am pleased that the Treasurer is insisting that a large proportion of these war costs shall be met out of revenue.
– What about a wealth levy to pay our war debt?
– I shall suggest methods of taxation that might well be adopted for the purpose of raising more revenue without placing an unduly heavy burden on the people. We have to face very large commitments. War pensions this year will absorb £7,000,000, and I think that item will increase. There is also the interest on short-dated loans, and a sinking fund for them.
– Why should war pensions increase?
– I think greater demands will be made in many instances within the next few years.
– I am hoping that we are pretty well’ at the top of that expenditure.
– We must be near the maximum ; yet further demands must b« made, owing to the high cost of living.
I do not agree with the honorable member for Robertson in his view of the indebtedness of this country. The States have the sovereign right to go oh the London market or anywhere else to borrow money, and we know how extravagant the majority of them have been in the expenditure of loan money during the last ten years.
– If I bad my way I would deprive them of that power.
– I am a great believer in home rule. The closer we can bring to the people the expenditure of public money, the more the people are able to realize how the expenditure has to be met by taxation, the greater the care they will take to see that money is carefully and properly expended. Greater public control over the expenditure of taxation is bound to be better for the people. The public debt, State and Federal, amounts to nearly £800,000.000. There are, in addition, certain commitments for which the Treasurer must make provision in the very near future. Amongst them are Treasury Bills to the amount of £8,900,000, a debt of £42,696,000 to the Imperial Government for the maintenance of Australian troops during the war, and an advance of £2,500,000 from the Imperial Government, which I believe will be provided from revenue this year. For land settlement of soldiers, the States have been promised advances totalling £33,000,000, in addition to what has been already loaned to them by the Commonwealth. I wish to make it clear that although this money for land settlement of soldiers is being found by the
Commonwealth, it is merely loaned to the States, which accept full responsibility for it. Concessions have been made by the Commonwealth in regard to the interest on this money ‘ during the first two years, and very properly so, because the money is to be expended on the soldiers. War service homes will probably absorb £30,000,000, war gratuity bonds to the amount of £25,000,000 will mature in a few years, and the Commonwealth will also have to redeem war savings certificates to the amount of over £5,000,000. Our total commitments thus amount to between £148,000,000 and £150,000,000. When we are discussing public expenditure, and considering what new works should be proceeded with, we should understand thoroughly what our existing commitments are. Some months ago the Prime Minister (Mr. Hughes) spoke of spending large sums of money in making the railway gauges uniform. I think the Treasurer stated, by interjection, that the cost of that undertaking would be about £26,000,000.
– For the trunk lines only.
– I calculated that the complete scheme would cost over £80,000,000, but of course that expenditure would extend over a number of years. It is the duty of Parliament to seriously study these questions, for how can we agree to the expenditure of large sums of money without knowing exactly what we are already committed to ? We should look forward a little. I have enumerated certain specified commitments which will increase the total public debt of Australia to approximately £950,000,000. We must make provision also for the expenditure on the Murray River waters scheme, one of the finest works ever suggested in this country. Although it is of no political concern to my State, I have always advocated it. I am glad to see in progress a work of such great utility, and one which should open up many new closer settlement areas, which will produce wealth, as the Mildura area is doing today. Schemes of this kind should receive the support of every honorable member, because they will tend to make the community prosperous and contented. It would not be true economy to curtail expenditure upon works of that sort. Prior to the war, I should have said that the work of establishing a uniform railway gauge should be undertaken ; but in view of the financial obligations to which we have been committed because of the war, that is a work which might be delayed, because while it might cheapen some things and would be magnificent from the point of view of defence, it would not produce additional revenue.
– All future railway construction in Australia should have the adoption of a uniform railway gauge in view.
– That is so. We have to bear in mind’ that the Governments of New South Wales, Western Australia, and Queensland are all talking today of going on the market to borrow large sums to carry out developmental policies in their respective States, and one would not be far wrong in estimating that in the next two years the public debt of Australia will amount to something over £1,000,000,000. That is an appalling debt for 5,000,000 of people. I am satisfied that we shall find it extremely difficult in. the future to borrow money at anything like a reasonable rate of interest. The honorable member for Robertson drew attention to the necessity for the redemption of short-dated loans. I intend to refer to the fact that large sums of money which we have borrowed at 3£ per cent, are redeemable this year, and we may have to pt’.y 6 per cent’, for the money required for the purpose. That must mean increased taxation. We have to face these things, and in doing so we must realize the necessity for economy in administration.
There are three things which should appear in the forefront of our policy, and they are immigration, production, and economy. We must have a comprehensive immigration policy, because we must fill up the empty spaces of this country. The map sent over to me by the North Australian Development League has created intense interest in Victoria. It shows that the country which is practically confined to the coastal fringe of Australia covers an area in which might be included, with the exception of Russia, all the countries of Europe, with their ‘ many millions of people. It does seem strange that a Japanese laundryman should know more about Australia than a great proportion of the people of this country know about it. It is, however, a fact, because the map to which I refer was published in a Japanese magazine.
– Is the honorable member frightened of the Japanese?
– I am not frightened of anybody, but I am endeavouring to remind honorable members that, in accordance with the law of nations, unless we people and develop this continent, we cannot expect to continue to hold it. What justification can we put forward for holding this huge area of country if wc do not do something to people and develop it?
– Why is the’ honorable member supporting the present Government, who are retarding development?
– I do not know. whether the honorable member is one of a number of persons who were up in the Northern Territory recently helping to develop that area. When people like Vestey Brothers, who are prepared to spend enormous sums of money in developing the country, find all their expenditure and work useless because they have been subjected to strike after strike, and to interference with their industry, how is it possible to expect the development of the country under the conditions which prevail in the Northern Territory?
I have said that we should put in the forefront of our policy, immigration, production, and economy. I am hoping the Government will go in for a big immigration policy. The decrease in the area e of land brought under cultivation in Australia is due, to a great extent, to the fact that the primary producers cannot secure labour. 1 do not wish to see artisans coming here, but I do desire that good farm labourers should be introduced, to whom we might give a helping hand, and who might become prosperous settlers in our community. Those are the people we want, and I felt sure that the wonderful advertisement which our soldiers must have given of Australia in the Old Country would have led many of such people to come to Australia.
– With proper organization there is room for thousands of artisans.
– This country might carry a population of 15,000,000 easily.
– Suppose that 2,000 immigrants arrived here next week. What would the honorable member do with them ?
– Does the honorable member mean to tell me that there would not be work for them ? There would if persons like the honorable member would leave them alone.
– I would not interfere with them. Where would the honorable member put them?
– I am expecting that large numbers of people will come here, and that most of the immigrants will be English reservists. I hope that we shall have men coming here possessing small sums of money. I wish to make it plain that the men whom the Commonwealth are going to send home as agents in connexion with their immigration scheme must be men in whom the utmost reliance can be placed. I do not desire that our agents should paint for people in the Old Country highly coloured pictures of the conditions prevailing in Australia.
– We will not stand Barnes. We shall communicate with labour throughout Great Britain.
– I do not know the men who have been selected as agents for the Government’s immigration scheme, but they should be men in whom we can place the utmost - confidence. I do not desire that immigrants after they arrive in Australia should be able to complain of the statements which were made to them in the Old Country. We want a plain story put before intending immigrants. They should be informed as to what they will have to put up with and how they must battle if they are going to be successful as settlers. Only men who will be prepared to work can hope to do well in this country. I have previously said that there should be a hostel established in every city, and that the immigrant, with his wife and kiddies, should be received at the boat and taken to the local hostel, and should be taken care of there until he is placed in employment or upon the land.
– We should never get them out of the cities if we did that.
– Would we not? Surely there are no members in this House so stupid and so ignorant as to contend that this country cannot accommodate more people. Some honorable members appear to be under the impression that to introduce first class immigrants to this country would be hurtful to us. I ask them to consider the marvellous progress which has been made in Canada as the mult of pushing railways out into the country and introducing population. Cannot honorable members appreciate the fact that if we can introduce immigrants who will become producers they will increase the wealth of the country and the prosperity of the people they represent?
– We cannot have immigration and cut down railway expenditure at the same time; and yet the honorable member talks of railways being pushed out.
– ‘I say that no true economy would countenance the stoppage of public works of a productive character. I want to stop only the waste of public money. For instance, I am desperately opposed at the present time to the expenditure of public money at Canberra.
– Would that not provide for labour?
– It would, but not for productive labour. The expenditure of money at Canberra is an -extravagance which we cannot afford at the present time. Honorable members cannot have forgotten the answer to a question I asked in this chamber yesterday in regard to the Naval Department from which it appears that £640,000 has been expended on a Naval Base, and it is now found that the place selected is not suitable for the purpose, and it is necessary to establish the Base somewhere else. I believe that the same thing may be said with respect to the expenditure upon the Aviation School. Surely we are justified in denouncing extravagance of that sort.
– Why does not the honorable member vote against the Government responsible for it?
– The honorable member knows why all the gross extravagances of which I complain were started by his party. It is necessary that we should have increased production, and should offer increased facilities for settlement upon the land. We must assist development by the construction of railways and by the establishment of irrigation works in connexion with other rivers as well as the Murray. It may be said that these are works that should be undertaken by the State Governments; but that is no reason why the Commonwealth should not lend a hand in carrying them out, not in order to provide labour only, but to establish reproductive works which will promote the settlement of people on the land, and so increase production.
I do not wish to ga into details with regard to taxation, but if I held the position of Treasurer at the present time I should certainly impose a big tax on all luxuries. There is not the slightest doubt that in this country, as well perhaps as in every country in the world at the present time, people are far more extravagant than they were before the war.
– Our luxuries are taxed now.
– Not to the extent they should be. I would impose a bigger duty on spirits and a special tax on all high-class goods.
– Why not put a tax on trousers, and then we can all wear kilts?
– I should not mind going so far as to impose a special tax on any suit of clothes costing over £10. I should certainly put a tax on war profits made by big corporations. I think that we are justified in asking big commercial organizations that made bigger profits during the war than they made in pre-war years to bear their share of war expenditure.
– We have hit them pretty hard this year when 1,700 or 1,800 pay £4,000,000 in taxation.
– What is that in comparison with the war-times profits taxation of other countries? What the Government have done is to tax the profits of people who have had to borrow money to pay the tax, while big corporations are enabled to make bigger profits.
– It is easily seen that you are not in any of those corporations !
– I have no care for corporations.
The Leader of the Country party (Mr. Mcwilliams) has moved that the vote be reduced by £1 for the purpose of urging a reduction in administrative costs.
– And he said he desired £1,000,000 of the reduction to be in the Defence Estimate.
– I do not believe in that.
– And the gentlemen opposite are going to vote for the amendment to so reduce the Defence Estimates, and the honorable member is going to help them.
– We will deal with the Defence Estimates when we come to them.
– We are dealing with them now.
– Mr. Chanter, why do you allow the Treasurer to libel us ? Nobody hae ever said such a thing.
– Honorable members opposite have said it.
– I hone that the Treasurer will exercise some control over the expenditure of the Defence Department.
In the Queen’s Hall to-night we had a glorious exhibition of wireless telephony, one of the wonders of the age. A utility of this kind appeals to me. because my constituency, like that of the honorable member for Maranoa (Mr. James Page), is one of enormous distances, and the people there can appreciate the value of the work of such a company as that which is developing wireless telephony. There is now a possibility in the near future of the people who are developing the back country being able to enjoy some of the conveniences of civilization.
– Wireless telephony will promote development more than anything else could.
– A little while ago I had a letter from a settler who lives some 100 miles from Carnarvon, in which he thanked me for the interest I had taken in the extension of the telephone some 100 miles into the interior in that part of Australia, and said that I could tell the members of Parliament that already that line had saved the life of one of his neighbours. It will be a magnificent thing when a man living in . the’ back country is able to get into communication with a seaport, with his nearest neighbour, perhaps 100 miles away, or with a medical man.
– How is it that your constituents are able to get telephones, while ours are not?
– Because the people in my constituency pay for the telephones.
– We have applied for telephones on those terms, and cannot get them.
– Some great and useful enterprises are developed by corporations. It struck me as wonderful when I found that our boys, who went away to the war without any knowledge of aviation or wireless, were able, after a few months’ training, to fly aeroplanes and send wireless messages to the people on the land. That shows what can be done in times of stress, but I only hope that the Defence Department will not be allowed to interfere in other developments as they are interfering with commercial aviation. The Department evidently has made up its mind to precede commercial aviation by carrying our mails and passengers around the coast; but the Government ought to allow private commercial enterprise to step in, and provide such services under subsidy, the Commonwealth taking no responsibility. Should trouble arise in the future, this commercial aviation would be there as a nucleus for the use of the Government.
– I remind the honorable member that a soldier is at the head of the civil aviation business at Home.
– The private people who are seeking to develop this civil aviation in Australia have written to me declaring that they desire no interference by the Defence Department, for they believe that such interference will destroy all chances of an effective system.
– And so it will.
– A private company at Townsville has already undertaken to carry mails at the same cost as they are carried by steamers.
– We are trying to do the same in Western Australia; and I hope that, in the future, we shall have a company carrying passengers and mails even as far as Wyndham. During the war the people in that part of the country were sometimes over two months without a mail service, and we can easily realize what a boon it would be to them to have one, at least, every week. I hope, therefore, that the Government will reconsider this idea of allowing any interference by the Defence Department, which has blundered in many other directions, and will blunder in this.
However, I was dealing with the amendment of the Leader of the Country party; and this I desire to do from the point of view of the administrative costs of the Departments. The honorable member for Cowper (Dr. Earle Page), when he was speaking about the. Prime Minister’s Department, was asked by the Treasurer in what way that Department interferes with other Departments. Why, almost every day we see from the newspapers how the Prime Minister’s Department interferes. The Minister for Trade and Customs is supposed to be in charge of the sugar business, but we find that in this the Attorney-General’s Department also exercises some control. Who is really managing the business? Then, again, if we apply to the Minister for Customs regarding the export of metal, or an embargo on some export or import, we are told to apply to the AttorneyGeneral’s Department.Where there is interference of this kind by the heads of Departments, who are not specially trained, we cannot have good administration. In 1917, the administrative cost of the Prime Minister’s Department was £153,000; in 1918, it was £234,000; in 1919, it was £231,000; in 1920, it was £312,000; and this year it is £317,000. Of course, these sums include the expenditure on the High Commissioner’s office in London, and a number of subDepartments.
– All this new work has been forced on the Prime Minister’s Department.
– Like the mail shipping service.
– I desire to get back to normal conditions. The Prime Minister should carefully study political questions, and keep a general watchall round. In this way he would do much better work than by meddling with so many matters. I can speak with some experience, for I was nine years in a Ministry, and know what is usually left to the Premier of a State. The Departments are administered by men who give their special attention to them, and the Premier is expected to watch events, and give a general supervision.
– You cannot say that the Prime Minister does that!
– I say there is too much interference, and there is an element of danger and great extravagance when a Department grows as the Prime Minister’s Department has grown. I welcome the motion of the Leader of the Country party (Mr. McWilliams), because I think there is room for great reductions in administrative costs.
– Is. not the motion directed to the Defence Department?
– I am dealing with the motion more particularly from the point of view of administrative costs, and I am anxious to return to normal conditions.
– The only way to do that is to cut out these governmental activities.
– Let us repeal the War Precautions Act at once.
– Nobody more than the honorable members in the corner are asking for the increase of these activities.
– We have been asking all along to be left alone.
– We cannot have economy while you ask for increased facilities, which cost money.
– The Treasurer himself was extremely anxious to give us better postal facilities.
– I am not talking about postal facilities, but about the Wheat Pool, the erection of silos, and all those things which you are asking for, and which cost money.
– The silos proposal was brought forward by the Government two years ago, and was seriously considered by honorable members, who regarded the expenditure as justified. In view of the high cost of jute goods and wheat bags, great saving can be effected by the erection of silos ; the only question is whether the work is one that will prove reproductive.
– Does not the honorable member see that even if it is a reproductive work the cost must be shown in the Estimates, and it swells the totals? It is not necessarily an increased charge to the country.
– It has swollen the total of the £800,000,000 of our indebtedness at the present time.
– Take the items of the Prime Minister’s Department, all of which are in Trust Funds, and do not cost the country a penny - such as shipbuilding, the Commonwealth Government Line of Steamers, the Commonwealth Shipping Board, and the Port Pirie Wharf. These cost the Commonwealth nothing, but they swell the Estimates.
– I am dealing with the administrative costs, and I am sure that the Treasurer is just as anxious as I am to get back to normal conditions.
– You wish to go backwards instead of forwards !
– I wish to get rid of the War Precautions Act, and if that is going backward, the honorable member is right. I was under the impression that the honorable member himself wished to get rid of that Act, but apparently I did not grasp what he meant.
– Do you wish the Government to be unable to handle goods for the producers ?
– I wish to get rid of the War Precautions Act, and I believe that the honorable member himself does.
– Since the war the Government has had ample time to pass legislation which the conduct of the war proved to be essential. When we agreed to the continuation of the War Precautions Act for three months after the declaration of peace no one assumed that it would continue in operation all this time. The honorable member for “Wakefield (Mr. Richard Foster) would not have voted for it had he thought it would continue so long.
– When we get permanent essential powers, then we can get rid of the War Precautions Act.
– And the sooner we get rid of it the better, together with all Government interference in trade matters. While we have this interference we must have huge Departments, with the employment of large numbers of people, and the consequent swelling of the Estimates.
– What a pity to find employment for people !
– If the honorable member tells me that, with his increased remuneration as a member, he has increased his expenditure and provided employment, well and good. If we have not proper employment for those in our Departments they ought to be producing wealth outside, not sticking like barnacles to their Government jobs.
Several honorable members have already drawn attention to the huge losses during the past few years in connexion with the administration of the Northern Territory. I think last year the deficiency was £470,000, and as yet we have heard nothing of the Government policy. We have a mandate over German New Guinea. We have to open up and develop that country. Are we going to do any better there than we have done in the Northern Territory?
– The Northern Territory is costing us as much as the transcontinental railway. It is all dead weight.
– And what is the cause? The Government allowed the construction costs to rise to £8,000,000, whereas the line should have been built for £4,500,000. And the Treasurer had an opportunity to keep down the cost, too.
– No, sir.
– I say he had, for although the work had been started before he came into office, he could have called for tenders, and I contend the price would have been very much lower.
– I did call for tenders, and got a price 50 per cent, higher.
– You would have got a price 50 per cent, less if you had accepted the offer from South Australia.
– At all events, we cannot go on as at present in connexion * with Northern Territory affairs. There must be something in the nature of a sound policy. We cannot allow this drift to continue. There are very few white people there now, we have an enormous debt, a vast area of country, and something must be done to develop it. I have never lived there myself, and so I have no personal knowledge of it. Therefore it is not for me to make suggestions. All that I say is that the present policy of drift cannot be allowed to continue. If we are to retain the Territory we must do something to develop it.
– We have to do our best, and still it is going to take us a long time to make ^progress.
– I believe that it will, but I do not agree with this policy of drift.
Last month I received a communication from the Mines Department in Western Australia about the possible discovery of petroleum about 160 or 170 miles south from the coast near Wyndham. Some bitumen has been found there, and the geological report shows the presence of petroleum oil, but whether it will ever be developed into a payable proposition is at present doubtful. Large prospecting areas have been allotted in the Kimberleys to prospecting for oil, and a party from Western Australia, as well as a couple of parties from other parts of Australia, have taken out prospecting leases in the Victoria River country for the same purpose. I do not think it possible to give too much reasonable and -fair encouragement to the people who are prepared to do this prospecting and developmental work.
– Financial encouragement?
– I do not agree with the proposal to pay a bonus of £50,000 for the discovery of oil, because if oil is discovered the lucky prospectors will no: require the bonus, as the oil itself will mean an immense fortune to them. Those who are prepared to form little syndicates should be facilitated in every possible way by having made available to them suitable boring plants under certain conditions, so long as they carry out prospecting work satisfactorily. I would give them the right to prospect over’ certain areas upon the payment of a small registration fee, and in this way encourage them to go ahead, and, if the advisers of the Government recommend it, I would not mind giving them a little financial assistance if there were any possibility of discovering oil.
– When I was in London I was told that it ‘had taken seven or eight years to discover the important oil fields of the world.
– I am not reflecting upon the work of the Government in New Guinea, because I know the Treasurer is deeply interested in the question of prospecting for oil there and obtaining a good deal of useful information in the Old Country. But I say that it would be impossible to over-estimate the value of oil discoveries in the northern parts of the Commonwealth. I do not know whether the Treasurer has read Lord (then Captain) Grey’s description of the northern districts of Western Australia, visited, by him in 1830. He paints a marvellous picture of that portion of the Commonwealth, and speaks of the magnificent land-locked harbor he found in the Kimberley district, capable of accommodating the fleets of all the nations. He says that it is the finest tropical area he has seen in any part of the world. Yet to-day this country in in the hands of the blacks. We want these places investigated. There are indications of coal not far from Derby, and also one of the greatest iron deposits in the world, and if only we can do something to open up and develop those areas, -large numbers of white people will settle there, and we shall be able to hold Australia for the white race.
– What is the object of the motion to reduce the vote by £1 ?
– No man knows better than the honorable member.
– What is the object of the motion? Answer the question.
– To put the Government out, of course.
– The object of the motion is to draw attention to the high cost of administration.
– That is a very laudable object, and if the motion is carried what will be its effect?
– If the honorable member helps us perhaps it will be carried. I will vote for it, and I hope the honorable member will see reason to do likewise.
Mr. Ryan.I see very excellent reasons why I should vote for it.
– But is the amendment loaded ?
– Oh, yes!
– Any honorable member who examines the Estimates must come to the conclusion that the cost of administration is excessive, and that it should be easy to have good administration at a less cost than at present.
.- Unlike the honorable member who has just resumed his seat I do not propose to vote for the amendment. It appears to be nothing more nor less than a vote of censure on the Government, and, if carried, the Government must go out.
Opposition Members. - Hear, hear! .
– The suggestion seems to be responsible for a good deal of enthusiasm among honorable members opposite ; but the contemplation of what will happen if the Government go out does not cause ane any enthusiasm. In connexion with the Budget and the Estimates there are many matters which nearly every honorable member desires to criticise.
– Hear, hear! I should like to criticise it myself.
– Tlie interjection suggests that the Treasurer (Sir Joseph Cook) had this in mind when he prepared it, because he has certainly left himself some loop-holes. If, however, the Government were to go. out on this amendment, we would have to contemplate a Ministry from honorable members opposite, and while I, like my honorable friends in the Corner, am pledged to a policy of economy, I cannot think I would be fulfilling that pledge by putting into office certain honorable members opposite, with the records they have behind them. We would then not have economy in administration. We would have a perfect riot of expenditure. I think it is the duty of every honorable member to point out certain outstanding features in connexion with Australian finance. One feature is the excessive cost of administration, both Commonwealth and State, and it seems to me extremely hard to divorce one from the other, because it is the total cost of government rather than the cost of any individual Government, that is the great blemish on Australian finance to-day. Honorable members. I take it, are not so much concerned at this stage with small items of economy as with the broad principles upon which the Budget is framed. The Budget-papers and the Estimates provide a wealth of information, but I suggest that an extraordinary amount of industry is also required to master their details. Outside honorable members of this House, who really desire to discharge their duties, and, therefore, do give some study to the Budget, there are very few people who truly appreciate the information contained in these papers.
There are one or two points which it is any desire to bring under the notice of honorable members, because it seems to me absolutely essential that these facts should be considered before we can determine our course of action. The first essential is to find out where we are, and to what extent we can meet our .obligations. Can we bring about such economies as ‘will relieve us of the great burden we have to bear; and at the same time insure that our revenue will be sufficient for our needs ? Looking at the broad principles of the Budget, and leaving the individual items for consideration later on, we have at this stage to consider generally what our expenditure is to-day as compared with last year, and to compare it also with the expenditure of the Commonwealth during the period immediately preceding the outbreak of the war. It seems to me that in that way we shall be able to obtain some indication of the possibilities of reducing our expenditure, and that we can deal with the details when we come to discuss the estimates of each Department. That, unfortunately, involves the giving of a wealth of figures if one is to make clear the outstanding points. I need not worry honorable members with all the figures, since they are to be found in the Budget papers, but if I give an outline of them I may, perhaps, be permitted to embody in Hansard the actual details I have taken out.
This year the Government propose to expend £9S,S64,863, as against an expenditure of £97,283,250 last year, whereas in ‘ 1913-14 we spent only £25,332,385. The details are as follow: -
It will be seen that the estimated expenditure this year, as compared with that of 1913-14, shows an increase of, £73,532,451. Our expenditure is naturally placed under various headings. In respect of what are known as the ordinary votes and appropriations, it will be observed that there is an increase of £7,605,149 as compared with 1913-14, while there is also a balancing item of interest on State loans, recoverable from the States, which I shall deal with later on.
– In the loan works figures there is a new item of £3,000,000 in respect of shipbuilding.
– I shall deal with that later on. In the case of the direct ordinary votes and appropriations, there is an actual net increase of £3,321,897 as against the expenditure under those headings last year. The details are set out in the following comparative table: -
In this total increase of £3,321,897, as shown in the table, there are certain items which I should like to put specially before honorable members so that they may fairly judge the proposed expenditure for the present financial year as compared with that of last year. I refer to the increases of £668,121 for old-age pensions; £663,900 military expenditure; £709,087 for the Navy; the item of £305,833 for air services; and £711,500 in respect of the Postmaster-General’s Department. Those several items account for £3,028,441 out of the total of £3,321,897. It seems to me that with all its sins the Government cannot be justly blamed for the increase in respect of old-age pensions. The increase in the naval and military expenditure, and the proposed vote for the air services are matters which honorable members will have to decide for themselves ; but I, personally, am not prepared to reduce those proposed votes by even £1. At a later stage we may proceed to discuss how that money can best be expended on an economical basis, but at present we have only to consider what we have to provide to meet our obligations in regard to defence. With not one of these items shall I quarrel; and the honorable member who would object to the increased expenditure in the Department of the PostmasterGeneral would be a brave man, after what has been said from all parts of the House as to the necessity for increased postal, telegraphic, and telephone services. We cannot quarrel with that increase, since we have all advocated the granting of these additional facilities. We can and should endeavour to see that the money is expended in the best and most economical way, but I feel that we cannot find fault with the Government in regard to the increase in respect of any one of these headings. It is as much the fault of the Parliament as the Government that they are proposed. The only other item of magnitude is that relating to the Department of Home and Territories, in respect of which an increased expenditure of £336,620 is shown. Of that amount, however, £150,000 is in respect of the taking of the census, which is a statutory obligation, while £100,000 is provided for immigration. Allowing for those two items, there is still a considerable increase proposed in the expenditure of that Department, but it may be that there is a complete explanation forthcoming in regard to it.
– There is an item of £50,000 for meteorology.
– I repeat that there may be a good reason for all these increases; but in this general debate on the first item of the Estimates we cannot go into details, nor is it reasonable to expect the Treasurer, by means of interjections, to explain every item. We shall get these explanations when we are dealing with the Estimates of each Department. My object at present is to endeavour to ascertain whether there is any suspicious increase - of which there is ho obvious explanation - that may give us some hope of effecting a substantial decrease in our expenditure. Comparing the Estimates with the expenditure for last year, there does not seem to me to be very much hope of making a substantial reduction. There might have been a riotous and indecent expenditure last year, however, and wc have, therefore, to go back to the expenditure of some earlier period in order to test the position. I propose to test it by comparing the proposed expenditure this year with that of 1913-14. There might have been riotous expenditure even in that year, but the period is too remote to enable us to go into details. We have merely to see whether our expenditure has jumped ahead to such an extent that there must be something obviously wrong with the administration of the affairs of the Commonwealth. The following table may interest honorable members: -
It will be noted that this year, as against 1913-14, in respect of ordinary votes and appropriations, there is an actual net increase of £7,65S,(567. There aTe numerous items which go to make up that increase, and I propose to refer specially to three, which account for approximately £6,000,000. The first of these is an increase of £2,635,735 in respect of invalid and old-age pensions; the second is an increase of £1,610,132 in the Defence expenditure; while the third is an increase of £1,689,000 in respect of the Postmaster-General’s Department. As to the first item, it cannot be gainsaid that it was the deliberate decision of this Parliament that the expenditure on invalid and old-age pensions should be increased, and the Ministry of the day cannot be blamed for it. The increased Defence expenditure is again a very open question. I consider that the Defence expenditure we are proposing in excess of the amount expended on Defence during the comparative period i6 the very lowest that we could expend, if we are to fulfil our obligation bo the people, to take necessary and sane measures to protect the heritage which has come to us. The increase of £1,689,372 in the PostmasterGeneral’s estimates is a big one, but as against it we have balancing items. We have certain revenues as against that expenditure. It is impossible, when dealing with the question on a broad general basis, to say whether the increase is right or wrong until we know what revenue will flow into the Department in consequence of this great expenditure we are incurring.
In regard to the Postmaster-General’s Department, there is one point that I should like to emphasize, and that is as to the enormous increase in the wages bill that has to be paid, owing to increased awards, following upon the increase in the cost of living. When we come to deal with the Estimates in detail, we may challenge any item, and afford the Postmaster-General an opportunity to furnish us with an explanation of it. He may then give certain facts which I have had taken out for me, and which are certainly startling when one discovers that, although there are fewer employees in the Department, the wages bill has increased by over £1,000,000.
It is for the Postmaster-General, at the appropriate time, to explain this fact. These three items, however, account for £6,000,000 out of the total increase of £7,658,667.
There are some very big increases which it is difficult to follow, since they relate to Departments which have disappeared and have been replaced by others. Taking the Departments of the Prime Minister, Home and Territories, External Affairs, Home Affairs, and Works and Railways, we find that two of them - the Department of External Affairs and the Department of Home Affairs - have disappeared, but they are covered by the other three Departments. The increase in respect of them is a vast one, amounting to no less than £1,002,32S, and it is here that a very critical analysis is necessary to determine to what extent the increase is justified. It appears to me that it is possible to account for a certain number of increases by facts which are well known to every honorable member. There are, for instance, the increased activities which the Commonwealth Government have undertaken. Whether they have undertaken them rightly or wrongly is not quite the question at the moment, but they were entered upon in many instances with the deliberate approval of the Parliament, and they have necessitated a largely-increased expenditure. I have no doubt that in the administration of these Departments it will be possible to avoid a portion of this increase of £1,002,328, and, when we proceed to consider the Estimates in detail, it will be our duty to discover whether that can be done. At the moment I confess that I cannot see any great prospect of v substantially reducing the expenditure, as compared with that of 1913-14, by any acts of economy, or of making any material reductions, when we deal with the Estimates of each Department. That, then, is the position with which we are faced to-day in respect of the expenditure on ordinary votes and appropriations.
The next item to which I desire to refer is that of war expenditure out of revenue, with the object of ascertaining whether there is any great hope of reducing it next year. The position is, as honorable members know, that war expenditure out of revenue this year accounts for £36,000,000. In the following table, I have classified the items under three headings - “ Continuing Expenditure,” “Reducing Expenditure,” and “Expenditure thatwill disappear or be materially reduced : -
Under “Continuing Expenditure” I have included such items as interest and sinking funds; interest payable to Great Britain and soldiers’ pensions. The liability under that heading is £27,912,476, and there is no way of shifting it. We have to meet it; next year the amount may be even larger. The total of £5,412,000. under the heading of “Reducing Expenditure,” can be reduced very substantially, and I shall give later an estimate showing the extent” to which it. seems to me we shall be able to cut it down. The expenditure under the third heading amounts to £3,343,000, and that, too, will be materially reduced. There are the amounts paid this year under the heading of war expenditure, but they are revenue payments out of revenue, and I have tried to analyze how far they will have to be. met again. I shall give to the
Committee later the figures showing how far I think they will have to be met in the future.
The next item covers the details of new works and buildings. These amount to £3,070,000. made up under the ordinary headings which appear in the Estimates, and, therefore, need not be repeated here. Of theseamounts £2,984,000 is for the Post Office and for naval, military, and air services, and only £86,000 for other Departments. I have divided the figures in that way because for the next few years, until the League of Nations, if it is ever going to be a great controlling force in the affairs of the world, has got out of its infancy stage, very few of us would care to say that we can reduce our expenditure on naval, military, and air defence. We have to protect ourselves, and while wemay be able to effect certain reductions, if we are going to face the future fairly to-day, I do not think we can justly take anything off without flattering ourselves that our expenditure is going to be less than it will very probably prove to be. Taking the item? only at what they are to-day, it seems to me that we are dealing fairly leniently with ourselves, and may possibly have to meet a greater expenditure than I suggest.
– We are all hoping otherwise.
– I hope there will be none; but when we are looking at the future we cannot act on the basis of hope. We have to act from the point of view of what we may have to meet, and what we propose to do to meet it. Another fact which supports my estimate of £3,000,000 as the amount which we shall probably have to meet in this regard is that during the years 1910 to 1914 our payments averaged about £3,000,000, but we must remember that part of that was in respect of Fleet construction, which ran to about £3,000,000 out of the £12,000,000 expended for that period. We should be fairly optimistic if we took any lower figure than £3,000,000 for these works, at which it stands on the present occasion.
War expenditure out of loan amounts to £25,400,000. Honorable members have all the details before them, and I would only point out that all the items except two are advances which will subsequently be repayable, and are not deadweight loads in any sense of the word. But two items to which I wish specially to refer are £1,470,000 for the Nauru Island Agreement, and £1,210,000 for the Expeditionary Forces. The Nauru Island Agreement item is Australia’s share of the amount paid over to the company that was bought out. The total payment was £3,500,000, of which our share was 42 per cent. That was what we paid in the way of capital to’ obtain a property in which Great Britain, New Zealand, and Australia are all interested. I venture to suggest that that, item is not properly one that ought to be paid out of loan in the existing circumstances of Australia. It is true that we hope it will be a. revenue-producing asset, but, on the other hand, it is a wasting asset, and we have a right to do what Great Britain did. Great Britain did not borrow the money to pay her share, but paid it out of revenue. My own impression with regard to an item such as this is that a little more courage should have been shown. We have to face a lot, but I think we should have faced that. The other item is for the Expeditionary Forces. This appears to me to be an absolute confession of a lack of courage to face the position as it stood. The item is made up of two halves, the total being £2,400,000, of which £1,190,000 is charged against revenue and paid out of revenue, and £1,210,000 is paid out of loan money, the payments being for exactly the same thing in both cases. That, it seems to me, must be an admission that it is a proper charge against revenue, but that nur financial position is not such that we can bear the burden for the moment, and that we are going to defer the payment to a subsequent date.
– Our children will have to pay it.
– I am afraid the payment will have to come a little sooner than our children’s time. Unfortunately, it will probably come on us at a more inopportune moment. Those two items should this year have been charged against revenue, and not against loan moneys, as has been done.
The next item is expenditure from Loan Fund for works, buildings, sites, &c. This is rather a difficult item to deal with. We have here rather to consider the broad principles of national finance, and what should be done with regard to items of the character embraced under this heading. I think the broad principle that is and has been recognised at all times is that a nation should meet its expenditure out of its current “revenue, with certain exceptions. The first exception is that where there is a non-recurring charge, an extraordinary expenditure, which is limited to a short period, it is better to meet it by loan, rather than to disorganize the whole taxation system by raising the particularly increased amount during the period in which it happens to fall. But it must be a non-recurring amount. If it is a recurring amount which is going to extend over a period of years, then our obvious duty is to re-adjust our whole taxation system so that we can meet the charges that are going to fall upon us year by year, and not thereby increase our deadweight debt. The other unfortunate purpose for which loans have ever had to be resorted to in the history of the finance of all .nations is to meet the cost of war. But when loans have had to be raised to meet this, tragic circumstance, the subsequent period of peace has ever been taken as the time when that loan has to be reduced, so that when the nation is again faced with a similar crisis it has the credit and the power to raise the necessary money to defend itself again. The only debt which Great Britain had prior to the last great and tragic war was made up of war loans incurred during the recurring wars of the past, and which had always been reduced in the subsequent periods when peace prevailed. These are the broad principles, but a new one has been grafted on more recently, and is, to a great extent, attributable to the action of the Australian Colonies. The other great outstanding instance is the Prussian Railways. This new principle is that it is legitimate to borrow money if the loan is for reproductive purposes, and if the revenue that you are going to derive from the asset that you have created will be sufficient, to meet the interest and sinking fund on the loan. In Australia we have done this to a great extent. We have borrowed money for reproductive purposes; but in no sense do those moneys constitute part of the deadweight debt with which we are faced today. But under the heading with which I am now dealing, of expenditure from Loan Fund for works, buildings, sites, &c., there is a number of items which it would be very difficult to justify on the ground that they fall within any of the categories which I have suggested as legitimate avenues for the employment of loan moneys. The item which constitutes the great bulk of the money under this heading, that is the £3,000,000 for shipping construction, it is open for us to say does come within one of those categories. So far as that item is concerned, it is a question of the policy of the Government whether it is right or wrong that they should go in for ship construction, but it seems to me that an expenditure such as that, and all other expenditures which are alleged to be for reproductive purposes, should be defined in some way. They are not quite items that should go into a Budget-paper or Budget ‘ statement as a charge against loan moneys. Rather, each should be classed as an advance out of loan moneys to a particular and defined enterprise, and that particular and defined enterprise must have its own balance-sheet to show its position, so that we may judge how far we can take iu at its face value the money which is advanced by way of loan to it, or how far we should write it down to a fair and proper figure which. represents the value of the assets obtained by the money advanced by the Government.
– I understand that the Government have a Trust Fund for that purpose.
– There is a Trust Fund, but I am talking of the way in which items of this sort should appear iu the Budget, and should continue to appear for all time, so that any person who wants to discover the position may ascertain how far the money which the Government owes is represented by reproductive works, and how far by dead-weight debt. He ought also to be able to get the further information of how much money is out in particular enterprises, and to see from other papers the exact position of those enterprises and the value of the security which the Government have got for the money they have expended. That is the question in regard to ships, and it is merged into the great question of State enterprises generally, with which I do not wish to deal to-night. I shall content myself with saying that, if that is the policy, it is presumably an obviously fair item to charge against loan, being of a reproductive character.
– You are a supporter of the Government that brought all this about.
– I am not saying that any of it is grossly wrong. I am suggesting what the position should be if it is to be properly dealt with.
The other items under this heading are not legitimate charges against loan at all. For example, there is an item of £64,000 for the present year for the London offices. So far we have expended something like £977,000 on Australia House. Australia House, in my opinion, is a great and desirable thing. I know that a large number of honorable members do not agree with me, but if it were properly run it would be an enormous benefit to Australia. The point I want to make is that it is the type of thing which, if Australia desires and considers it necessary to have it, she is entitled to the privilege of having, if she can pay for it out of her current income. But she is not entitled to borrow money to put up in London a palace which is actually a deceptive advertisement of Australia, because the view of the public would be very much changed if those who walked past that magnificent edifice generally appreciated the fact that every penny spent to erect it was borrowed money, and that it did not stand for the financial stability of the great Commonwealth of Australia, but was all practically mortgaged to those who advanced the money to build it. One might draw a useful comparison between the position of Australia House and that of the great insurance companies’ offices or the buildings of the great banks. The insurance company or the bank gradually, as years go by, writes the value of its property down and down, so that it may become in time an added security to those whose moneys are intrusted to it. The position of a great nation should be the same. Any building which we have of that character should be paid for out of the revenue of the country, and not be a thing that carries the load of a great debt. The Federal Capital is in exactly the same category. I have expressed my opinion adversely as to the expenditure on that undertaking. That the money should be expended is, how- ever, the deliberate policy of Parliament, and such being the case, the only point I want to raise is that the Federal Capital, if we want it, is a thing for which we must pay, if we can afford to have it, out of our current revenue. When we are in the Capital, we want to know that our great national public buildings are absolutely free of debt, and belong to the nation, and not that they are one of the assets that we have formed in order to raise money. That is the view I take, and any proud nation would take also the view that they are not going to have the whole of their great national buildings practically held in pledge for the people who have advanced money to them. As to the other Defence items, I have read them all through, and I cannot see any that cover more than defence expenditure. Properties are included which have a certain value, but they are not revenue-producing, and a great deal of their value would disappear if they were not needed for defence purposes. In tuy opinion, as we must provide for defence, I cannot see why we should not grasp the nettle, and pay for it out of current revenue. Great Britain has always done so, and one of the things that has given her such financial strength in the past, and will help her in the future, is her courage in meeting her obligations. To my mind, all the proposed expenditure on defence should be from revenue, and cannot legitimately be taken from Loan Funds. For strategic purposes we may have to incur expenditure - such as that on the unification of the railway gauges - which it will .be impossible to provide for out of the revenue of any one- year; but we must raise money somehow for anything that is essential to the country’s protection. Still, there is nothing among the items here that we cannot provide for out of current revenue if we will face our obligations, and thus build for ourselves a position as one of the great sound, stable, financial nations of the world. Our future rests on our ability to do this. For these reasons, I challenge every one of these items, as well as those under the heading of Navy and Trade and Customs. Works and railways expenditure is in another category, and possibly one may except post-office expenditure, because that is expenditure on a great public utility earning a return. But, speaking generally, I say that we must face our obligations, and realize that we cannot go on living on borrowed money. Whatever we spend, except on reproductive works, must be taken out of revenue, so that we may reduce our debts. It is useless to pay money into a sinking fund for the reduction of our debts if we continue to increase their volume. The utility of a sinking fund is questionable if one continues to borrow; but as we have both a deadweight debt and a debt incurred by reproductive investment, our wisest course is probably to reduce our nonreproductive debt by means of a sinking fund, entirely separating the two classes of liabilities.
– Would you favour the increasing of the income tax by 10 per cent to reduce our indebtedness.
– That sort of slapdash remedy would ‘be likely to land the country in disaster. You cannot in that way do what must be done; you must think over matters.
I wish to consider next what we are faced with in the way of expenditure, and what revenue we are likely to get, not this year, but in 1921-1922. After going through the various items, it seems to me that the ordinary votes and appropriations will amount to practically £23,000,000, or about the same as this year. At the most, we may reduce that expenditure by £1,000,000, but it would be foolish to under-estimate it, and merely hope for the best. To meet interest and sinking fund payments £21,000,000 at the very least will be required. I base that deduction on figures that I have already given, which can be referred to.
– More, if anything, Will be needed.
– Yes. The pension expenditure will come to £7,000,000. The reduced war expenditure I put at £4,000,000, and other war expenditure at £1,000,000. New works and buildings will cost £3,000,000.
– I have been told ,by my officers that pensions this year will cost £7,500,000.
– That makes the position worse than I estimate it. Payments bo the States, including the £90,000 paid to Tasmania, will be little less than £7,000,000. Then £4,000,000 must be allowed to provide for works previously paid for from loan funds, and the interest on State loans - £911,250 - must be taken into calculation. That is an item which appears on both sides of the account. These figures make my estimate of the expenditure for 1921-22 just upon £70,000,000. The revenue for the current year is estimated at £63,000,000 odd, including £4,000,000 from war profits tax, the collection of which ceases this year. I assume - though in doing so I am taking a very bold step - that the revenue from Customs duties, income tax, &c. and other sources, will be as much in 1921-22 as is estimated for this financial year; but I have grave doubts about it. We are now collecting Customs taxation during the period of the greatest spending power that Australia has ever known, when, owing to the high prices of goods, the monetary value of our imports has risen very high. I think that it is now at the peak, and as it declines, the Customs revenue will decrease. Then again, a Tariff has been introduced which is designedly protectionist, and should it prove effective in building up our industries, it must reduce our importations, and thus decrease our Customs revenue. Avid further, our income taxation is now being collected for a period of great prosperity, during which returns have been high, and we shall be lucky if, with the same rates of taxation, we get the same results next year. But accepting the estimate for this year, and deducting from it £4,000,000 in respect of war profits taxation, which ceases this vear, the revenue for 1921-1922 > “will be only £59,000,000 odd at the best, and the expenditure for that year every penny of £70,000,000. We are, therefore, faced with the fact that, in 1921-22, we must raise another £10,000,000 or £11,000,000 by way of revenue. That is a serious consideration. The whole position has been brought about because, throughout the period of the war, we did not face our responsibilities. We failed to raise enough revenue by. taxation. We failed to throw the great burden of doing so upon the people when they were prepared to do their utmost, and were willing to suffer and make the greatest sacrifices. That was the period when it might have been possible to impose the necessary taxation. The opportunity was let slip, however; and now we have to make these impositions when their infliction is being most bitterly . resented, and when it is most difficult for the people to bear the added burden. There lies a grave responsibility upon those who guided the financial destinies of the Commonwealth during the war period, in that they failed to insist that a greater share of the war burden should be borne, during the actual years of the war, out of revenue. It is a thousand pities that we did not follow the practice adopted in Great Britain. The Treasurer, in his Budget speech, pointed out that, in the war years, from 1914 to 1919, Great Britain met her expenditure on the basis of 36.17 from revenue and 63.83 out of loan. Australia, during the same time, faced her expenditure on the basis of 17.10 from revenue and 82.90 out of loan. When one considers the expenditure of Great Britain as compared with that of the Commonwealth, and when one thinks upon the burden which the Mother Country had to bear, her enormous task, and the wonderful manner in which she carried it, appear almost inconceivable. However, we know what she did ; and it is a matter for pity that we did not follow in her footsteps. The situation which demanded that Great Britain should face her responsibilities as she did was emphasized by every Chancellor of the Exchequer, from Mr. McKenna onwards. Each had in mind during each war year that, when the British Budget was framed, the taxation foreshadowed in that Budget should be sufficient to meet all obligations, including interest upon loans, and sinking funds in connexion with loans which would have to be raised during that year, should the war end. And it was determined, and put into practice, that if any additional taxation was imposed, it would be taxation the proceeds from which should be employed to reduce the British debt. There is no question but that we must face the position here in Australia today, and that if we do not, it will only become the more acute and disastrous for us sooner or later. The reason why we must do something almost dramatic is that we shall bring home to the world that, as a community, we propose to face our liabilities, and make of ourselves one of the soundest financial States on earth. I do not propose to quote at this stage figures concerning Australia’s pay- ments from this year to 1930, in respect of loans already raised. We need not over-emphasize that point; but honorable members should examine the whole position, and learn how much we have ‘ to meet in each of those years, both in connexion with State and Commonwealth loans. If they -do study the facts, it must come home to them that, unless we are to carry a hopeless burden of interest, we must do something to impress our own people, and the world at large, that we are determined to put our financial house in order. In the years to come, we must constantly have loan conversions. Our last loan cost us 6 per cent. Many of the loans which we shall have to convert cost us only 5 per cent, and 4i per cent., and even less; and, if wc. ure to be compelled to convert at 6 per cent., or even higher, the result will be disastrous for Australia. If, however, we can convince the world that it is our determined purpose to become one of the great solvent States of the world, then we should have no difficulty in raising necessary money. The way in which the recent Victorian loan was received affords a fine indication of what it is to have a recognised position as a nation of good credit. The Victorian loan was one of the few successes recorded over a long period in the markets of the world, and its success was due purely to the fact that Victoria is regarded as possessing sound financial merit - a State whose credit is of the highest. We must try to gain a similar reputation with Australia’s credit generally. There 16 also the fact that we must endeavour to reduce the dead-weight load of debt to-day.
– Hear, hear!
– It is an almost impossible task, but it can be accomplished; and Australia is in a. singularly fortunate position, namely, that if she sets her shoulder to the wheel it is not impossible that the whole of h«r burden might be removed by some such happy factor as, for example, the discovery of oil or of one among quite a number of other considerations in regard to which there are undoubted potentialities. Of course, we must not rest upon the prospect of such possibilities, but must make a start. We must endeavour to make an even bigger effort than is proposed by the Treasurer, in regard to whose 1 per cent, sinking fund proposition, however, I offer hearty congratulations. The right honorable gentleman has evinced more courage than his predecessors. If he will take the people into his confidence, and trust them I feel convinced that they will respond and find the money which is so utterly essential to-day. I repeat that the load of our dead-weight debt must be lifted, must be reduced.
There is only one remaining point which I would stress ; that is, that the world today is an uncertain place. Wars must inevitably recur until that great day when the League of Nations shall have gained the power to prevent them. If Australia were confronted with a war to-morrow - a war in which she had to play a lone part - her financial position would be such that it would cripple her from the beginning. We stretched our credit to the utmost in order to play our part in the late world war. We must reduce our load of dead-weight debt, and place ourselves in such a favorable light that we may obtain all the money necessary to protect this land - a heritage which is well worth any expenditure deemed requisite to afford adequate protection.
.- One feels considerable diffidence iu following the honorable member for Flinders (Mr. Bruce). B>, has made a wonderful defence of the Treasurer’s Budget, and has supplied some figures which will be remarkably useful, not merely to this House, but also to the Commonwealth generally. I think, however, that his speech lacked in one great feature. He could see an early liquidation of our national obligations only by a miraculous discovery of oil or something of that nature. I maintain that we have inherent in Australia the possibility of liquidating our national indebtedness. But before I proceed to show how the Country party conceives that the national debt may be lifted, I desire to say that the National Government are in power to-day because of their promise to the people of Australia that they would exercise the- strictest economy. Had that promise not been given, the Country party’s corner in this Chamber would be fuller than it is. However, we live in hope. But notwithstanding the depleted condition of the Country party benches at the present time, I hope that the economy pledge of which I have spoken shall be strictly fulfilled. I hear jocular ejaculations from members of the extreme Opposition.
– Why “extreme”?
– Because that word best fits the position. At the last general elections a leading newspaper in Western Australia stated that the policy of the Labour, party was destructive, whilst that of the National Ministry was not constructive, and it appealed to- the people to support sound government. However, the Nationalist Government are in power to-day upon a distinct promise that the. strictest economy would he exercised. The means by which the load of national debt may be lifted from our shoulders was suggested by the Prime Minister (Mr. Hughes) at the last election, and was made a leading feature in all the propaganda literature issued on behalf of his supporters, viz., production. That means was not’ even mentioned by the honorable member for Flinders, notwithstanding the excellence of his exposition of the Budget. He has dealt merely in an artificial manner with the financial position of the Commonwealth as it exists today. True, ho dealt with it very cleverly and very wisely. But we require to get oat of the “skipper in the cheese” condition in which we find ourselves, otherwise it will be a case of the vicious circle again. Evidently two-thirds of the estimated revenue for the current financial year is to bo derived from two items alone - I refer to the Tariff, which it is anticipated will yield £26,000,000, and to income taxation, which it is estimated will produce £13,000,000. If honorable members think that they will get any forwarder by collecting £26,000,000 in Customs duties from the people, they are sadly mistaken. If, whilst crying out about the increased cost of living,, they will resolutely persist in adding to that cost, argument is useless. We know, however, that the raising of revenue by indirect taxation is a favorite practice on the part of impecunious Governments. If the process is continued, the day of reckoning mentioned by the honorable member for Flinders will surely come. I am very glad indeed that the postal rates have been increased, because we were assured that the revenue thus derived will be devoted to helping those who axe engaged in rural production.’ Yet I gather from the Budget that the Postal Department is expected to yield a profit this year of £1,241,000. That is an unwise policy - a penny wise and pound foolish policy to adopt. I ask leave to continue my speech.
– In Committee there is no need for an honorable member to ask for leave to continue. If the Treasurer agrees to report progress, and the honorable member is present when the discussion is resumed to-morrow, he may continue to the full time allowed by the Standing Orders.
House adjourned at 10.31 p.m.
Cite as: Australia, House of Representatives, Debates, 13 October 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19201013_reps_8_94/>.