House of Representatives
21 October 1921

8th Parliament · 1st Session



Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 11 a.m., and read prayers.

page 12109

QUESTION

TARIFF: SENATE’S REQUESTS

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

– In the event of the amendment of the Leader of the Country party (Dr. Earle Page) on the Treasurer’s Supply motion being lost, as I expect it will be, will the Prime Minister proceed immediately with the consideration of the Senate’s requests for the amendment of the Tariff?

Mr HUGHES:
Prime Minister · BENDIGO, VICTORIA · NAT

– I shall be very glad to proceed with their consideration.

page 12109

QUESTION

HANDLING OF WHEAT CROP

Payment of Contractors

Mr LAMBERT:
WEST SYDNEY, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. What was the contract price paid per bushel by the Australian Wheat Board, and Victorian Wheat Commission and other State Wheat Boards, to. James Bell and Company, John Darling and Son, Dalgety and Company, Dreyfus and Company, ‘ the Victorian Producers Co-operative. Company, and all other persons and companies acting as contractors to the various State Wheat Boards in New South Wales, Victoria, South Australia, and Western Australia, for the handling of the 1920-21 wheat crop, viz.: -

    1. For receiving and loading into railway trucks from farmers’ waggons at country railway stations.
    2. For receiving from farmers’ waggons and placing in stacks at country railway stations.
    3. Fbr loading out of stacks at country railway stations into railway trucks.
    4. For unloading from railway trucks and stacking at shipping port depots.
    5. For loading out of shipping port stacks into railway trucks and placing wheat aboard ship for export?
  2. What was the rate per bushel paid by the. firms and contractors to their country agents or sub-agents in the various States?

Mr HUGHES:
NAT

– The Australian Wheat Board is not in possession of the information. The charges referred to are borne by the State organizations, which have control of handling operations.

page 12110

QUESTION

NEW HEBRIDES

Mr HIGGS:

asked the Prime Minister, upon notice -

Whether he will cause to be printed the most recent protocol between Great Britain and France regarding the New Hebrides?

Mr HUGHES:
NAT

– This will be printed as soon as the Commonwealth Government is officially advised by the British Government that the protocol has been formally ratified.

page 12110

PAPERS

The following papers were presented : -

Audit Act- Finance 1920-21 - The Treasurer’s Statement of Receipts and Expenditure during the year ended 30th June, 1921, accompanied by the Report of the Auditor-General.

Ordered to be printed.

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 8 of 1921 - In the matter of the Australian Postal Linemen’s Union.

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 9 of 1921 - In the matter of the Line Inspectors’ Association.

High Court Procedure Act - Rule of Court -dated 5th October, 1921.

page 12110

QUESTION

BUDGET, 1921-22

In Committee of Supply (Debate resumed from 20th October, vide page 12109, on motion by Sir Joseph Cook) -

That the first item in the Estimates, under Division I., The Parliament, namely, “The President, £1,100,” be agreed to.

On which Dr.Earle Page had moved, by way of amendment -

That the item be reduced by 10s., and that this be taken as an instruction to the Government to reconsider the Estimates fur the purpose of reducing the total expenditure from revenue by the sum of £2,817,108, the amount of the anticipated deficit, in order to square the ledger.

Mr WATT:
Balaclava

.- I have always thought it a pity that Australian Parliaments do not discuss the broad principles of public finance in a non-party spirit; but, although I have been acquainted withmany of them, I have never yet known one thatseemed able and willing to do it. Judging by some of the speeches which have been delivered during the present debate, this Parliament is in this respect no worse and, I regret to think, no better than the others. I say frankly that I am not especially interested in the politics of the. situation that has arisen, but, as a member of the Committee, I am keenly interested in the finances of the country. With your consent, Mr. Chairman, and the patience of honorable members, I shall draw the attention of the Committee and of the Government to what I regard as some of the basic considerations affecting our position as illustrated by the financial statement of the Treasurer. In doing so, I shall endeavour to avoidthe importation of party antipathies likely to disturb honorable members in the discharge of their functions. I propose to postpone until a more suitable occasion the consideration of questions affecting the raising and spending of loan moneys, and to focus my attention, during the earlier part of my remarks, on revenue . and expenditure out of revenue, which I think are the vital issues for the Committee. It is no stretch of language to say that the most prominent feature of the Budget is that our outgoings exceed our incomings. The Budget contains many other features to which attention has been directed, but that undoubtedly causes most anxiety, both to honorable members and to the press and thinking individuals among the public. I have been struck with the lack of sympathy with the Treasurer in the preparation of his Budget expressed during the debate. . Some honorable members have affected to believe that to prepare a Budget in the circumstances of Australia to-day that would have satisfied all parties was an easy matter. As a student of Budgets and one who has prepared seven or eight of them for this and other Parliaments, I cannot recollect, nor have I read of, an instance in which the task of the Treasurer was harder than that which confronted the right honorable gentleman who is now in charge of the Commonwealth finances. Honorable members who, unfortunately for themselves, and, perhaps, for thecountry, have not enjoyed the responsibilities of this high office seem inclined to regard lightly the weight of responsibility that rests on the Treasurer to-day. Broadly speaking, it is true of every Government that the only person whosits upon the Treasury chest in the endeavour to keep it shut is the Treasurer. Every other force is directed to lift him off it, and is applied to that end.

Mr Mahony:

– The present Treasurer is only a lightweight.

Mr WATT:

-Yesterday he fought like a heavyweight, giving a few good blows, and side-stepping others. He fought with a skill that we have not seen excelled recently, though I do not mean to say that he won the fight.

Mr Mahony:

– He will take the count when the debate has finished.

Mr WATT:

– That I do not know. Honorable members opposite may be in possession of secret information which has not been disclosed to me. The force of influence is all against the Treasurer even in the very Cabinet of which he is a member.

Mr Mahony:

– And particularly from the Prime Minister.

Mr WATT:

– I do not speak of the present Government particularly, ‘ but of every Government. I wish the Committee to understand that, so far as my experience goes, the inherent weakness of the form of government which we are operating to-day is the fact that one man, and one only, in nine Governments out of ten, stands up against a deficit and in favour of economy.

Mr Charlton:

– That is due to each Department pushing for all it can get.

Mr WATT:

– Quite so. A few months before the end .of the financial year the Estimates are prepared upon a letter of instruction from the Treasurer to his colleagues. When Ministers receive this letter they instruct their accounting officers to prepare draft Estimates for their Departments. When these are prepared >and are refined, they are sent, under the hand of each Minister, to the Treasurer himself. In due course they are turned over to the- officers administering finance and the preparation of the Budget papers in the Treasury. The requisitions lodged with the Treasurer are those of his own colleagues. Each Minister has his particular projects which he’ desires to push to completion, and his pressure is always exercised upon the Treasurer to give him more money. We have sympathy with the Postmaster-General, which is felt perhaps to a greater extent by country members than by those representing city constituencies, because he cannot secure sufficient money to put his Department in efficient working order according to his conception of its necessities or the desires of honorable members. What does the Postmaster-General do? This, of course, is just an illustration. When his Estimates are cut down by the Treasurer, he makes hia appeal to his colleague and tells him that he must have more money, because he requires to put the telephone system in better order, to give improved postal- facilities, higher wages, or something of the kind. The Treasurer has to say “ No “ if he has not the money. That pressure is all around him. The pressure of deputations occasionally led by honorable members, and individual representations, filters through eventually in the form of financial requisitions to one man, and it depends whether that man is alert and strong enough to say “ No “ at the right time, whether the country whose finances he is administering is prosperous or otherwise. I start with that conception of the conditions which, even in normal times, confront every Treasurer. I say that these are intensified to-day by conditions to which reference has been frequently made in this debate and which are obvious to every member of the Committee.

Having said that, I say quite plainly that the present Budget contains plain proof -to me that the influences working upon the Treasurer - and when I say that1 I do not mean anything improper - have been too strong to enable him to produce a Budget which shows .receipts bigger than expenditure. When the honorable member for Cowper (Dr. Earle Page), who leads the Country party, put his finger upon this feature of the Budget, and upon some other striking features well worthy of comment and notice, the Treasurer said, “ I cannot deal with those figures to-day, but I will take an opportunity of doing so fully and seriatim tomorrow.” That was the promise which the Committee had, but that promise was not fulfilled. The Treasurer, in the speech which he made yesterday, did not do justice to himself, to the Committee, or to the situation. I do not know what was the cause of that. I do not know whether it was, as the right honorable gentleman said, that he had not the figures in time, or that he was summoned to other duties through the illness of the

Prime Minister (Mr. Hughes), but I do say, in no lecturing spirit, but merely in the way of passing comment, that it was the duty of the Treasurer to give the Committee yesterday answers to the statements made by the honorable member for Cowper (Dr. Earle Page). There were many statementsmade by the honorable member with which I do not agree, but whether individual members take a similar view of them or not, they were seriously made by the Eeader of a political party; they involved the fate of the Government, and the right honorable gentleman in charge of the finances for the Government should have accepted the responsibility of replying to them.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– As for instance?

Mr WATT:

– I am not giving instances. I am keeping off instances. I could give the right honorable gentleman many, but I think our tempers will be best preserved if I do not. Instead of answering the statements of the honorable member for Cowper, the Treasurer replied’, I regret to say, in the spirit of the remarks of the honorable member, in observations which were bitter and general, but were not specific. ‘Consequently honorable members who have been studying these matters outside the Departments with keen interest, and more or less knowledge, are at a loss to know whether some statements madeby the honorable member for Cowper are correct or not, since the evidence of the Government has not been produced.

The Treasurer, in the speech which he did make, and in its most important part, took up practically this attitude: After an elaborate analysis of what we may call the unalterable items, most, if not all, of which are special appropriations and commitments involved in the policy to which apparently the House is unanimously committed, he narrowed down the field over which economies could operate, and practically said, “In my judgment, although I intend to watch these Estimates as the year goes on, I cannot reduce them any more.” That was the right honorable gentleman’s dictum. He made that declaration in his Budget, and yesterday re-affirmed that attitude. The Committee may then assume that at this stage the Treasurer’s view is that the items of the Estimates are irreducible, and he put the responsibility on the hon orable member who moved the amendment under discussion, “If you do not accept that view, show me where economies can operate.” The Committee will remember that the Treasurer sneered at the honorable member for Cowper for being a political novice, a tyro. That, asone historical character said on more than one occasion, is an objection which will gradually wear off. He said that the honorable member knew nothing about these things, and had no right to make remarks about older parliamentary leaders. If he knew anythingabout the Budget, he. should show where economies might be made. I have seen Treasurers, on many occasions, and more or less politely; treat in the same way every critic of their Budgets.

Mr Considine:

– Did the right honorable gentleman ever do it himself?

Mr WATT:

– Yes, to test a man’s knowledge or sincerity.

Mr Lavelle:

– Or for other reasons.

Mr WATT:

– Sometimes for other reasons.

Mr Lavelle:

– Would the right honorable gentleman do it again?

Mr WATT:

-I do not think so. I think that old dodge is about worked out. I think if is unfortunate that that should have been the attitude adopted by the Treasurer. Unfortunately it was supplemented by some remarks of the Prime Minister (Mr. Hughes), who evidently took part in the debate when he was ill, and when, in ordinary circumstances, he should not have attended in this Chamber. He had not the opportunity of hearing the arguments which had been used, or the replies which followed them, and; on that account, apart from his natural aptitude, was ill-equipped to take part in the debate. However, the grave responsibility of the situation demanded his attendance and his intervention in the debate. The thing to which I take exception in what he said is that when the request was made that we should live within our income, the right honorable gentleman said’ that that was copy-book maxim. It is old, it is true, as old as original sin; but these old truths frequently bear or demand repetition, and on occasions of this kind, when the Committee, or a very large section of it, is at variance with its financial adviser, I think any honorable member, new or old, private or responsible, is entitled to urge the Government to consider that phase of the situation. To me, the most disquieting feature lies, not in the facts of the Budget itself, but in the attitude, to which I have referred, of the two leading members of the Government. We are spending more than we are collecting. I care not who is at the Treasury - whether it is the chosen representative of the National party, the Country party, or the Labour party.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Let me correct the honorable member. We are estimating to spend more.

Mr WATT:

– That is all of which we are talking.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– But there is a distinction.

Mr WATT:

– I do not mean to say that the Treasurer can tell me at this stage whether, having just entered the second quarter of his financial year, he has spent more than he has got in. He cannot tell me whether he has or not, and I am speaking of his figures in the sense in which he used them - so much incomings and so much outgoings. He has fought for his calculations; he has said that they are right in so far as they relate to incomings, and he said he would, if possible, reduce the outgoings, but, assuming that his Estimates are correct, we shall be spending this year more than we are collecting. I do not think we need moralize for even three seconds on such a situation. If we go on in that way for any length of time there can be only one ending. I am not predicting that we shall go on in that way for long ; but when I noticed in a Sydney newspaper the other day a statement attributed to the right honorable gentleman that he had budgeted for a surplus, I said to myself, “Another such surplus and this country is undone.” Of course, it is not a surplus. It is a deficit covered and assisted by a carry-over from former years. The Treasurer, however, ought not to use up that carry-over. If it is to be used up, it canbe best employed in reducing the national debt. It may stand for a year or two, through the precarious times, in case we have a deficit; but we should conserve it as though it were other people’s money. The right honorable gentleman I am sure will share that view. If he has to balance the ledger, and that would be the instruction of this country if it spoke, whether with or without the aid of party propaganda, he can do so only by reducing our expenditure or increasing our income. The circumstances of trade or of yield may increase our income, but no man can do more than talk about that, because the datum is conjectural. If, however, that does not take place, and we cannot reduce the expenditure, then upon some Government will fall the responsibility of recommending this House to increase its income by additional taxation.

We cannot go on forlong paying out more than is coming in. I propose, if I am permitted, in a few moments, to show some of the difficulties that still confront the Treasurer in adding taxation. I want to take a few typical cases of what taxation is doing to-day, in order to show my right honorable friend the inherent and, indeed, the insurmountable difficulties which would confront him or his successor. I do not know why the Treasurer, confronted by all those difficulties, should sneer, as he, unfortunately, has done on two or three occasions, at the economy movement. The economy movement is headed, in this State, anyhow, by men who, so far as I know them, have only one desire, and that is to see the National cash-box kept right.

Mr Riley:

– And to keep down taxation.

Mr WATT:

– Yes; and, whether that is possible or not, to see that the Commonwealth shall keep within its income. These men, I should imagine, from what I know of them, all belong to the party to which the right honorable member belongs. They have come forward from a sense of public responsibility, and are endeavouring to energize the public conscience and public opinion on this question. They, of course, make mistakes. I have seen a number of statements made by responsible leaders of the movement with which I cannot agree, and if they knew more of the facts inside the Government’s mind, they would avoid a number of them. It is not right, however, to sneer at them. They are not being paid for the work they are doing. They have no axe to grind. They want really to help the Government. In this State, the movement has gathered considerable momentum, and it expresses, irrespective of party, in town and country alike, the grave and growing concern of a large and important section of this community.

One other feature to which I must refer before passing to other matters is the rumour, and I have no doubt the purpose, that the present Treasurer is to leave for London in the near future, to assume other high responsibilities. I hope there has not been in his mind, and that there will not be in this debate, any influence arising out of that prospective appointment which would make the Committee or the Government less responsible in dealing with the finances. “ From the stand-point of the public, it matters not whether it is Jones, Brown, or Smith, who holds the office of Treasurer. The Treasury responsibilities continue, just the same, no matter who is at the head of it, and I hope that there is no feeling of “After me the Deluge,” although some of the right honorable gentleman’s utterances yesterday, I regret to think, would lead one to believe that he was accepting that view of the situation. The situation has to be faced. The Prime Minister’s utterances yesterday, to which I intend presently to make more extended allusion, recognised that fact. He came into the Committee, ill although he was, and said, “ I can do no more than this: I make you the definite offer that as these Estimates pass through the Committee of Supply, you can reduce them. That offer is governed by only one reservation. The Government will tell you when a proposed reduction affects vital items of their policy, and the Committee must then take the responsibility.” The right honorable gentleman would not have taken up that attitude if he had not realized the strong feeling of this Committee in favour of a reduction of expenditure and the balancing of the ledger.

Mr.McWilliams. - He made the same statement last year.

Mr WATT:

– That may be. I was not here. At any rate, a spirit of gravity appropriately marked his utterance yesterday. On this question of how much we are spending over and above what we are collecting in and for the current financial year, I asked the Treasurer yesterday to cause to be prepared a list showing what I term his legacy items of expenditure. I do not know whether that list isyet available. It should have been placed on the table last night.

Mr.Fenton. -His “ damnosa.”

Mr WATT:

– His damnosa hcereditas arising from his own or his predecessors’ period of service at the Treasury during the waT. I know quite a number of items which could not have matured until about this time - items which could not have been assessed before, but which the Treasury will have to lift this year, and which were incurred during earlier periods. The Treasurer has definitely mentioned only one - the ocean carriage of mails. There was a dispute as to what should be paid, and the item was postponed until it could be finalized by amicable and conciliatory methods. That item has suddenly been dropped on the Treasury table to settle, and the Treasurer has to foot the bill. Within an hour, the Secretary to the Treasury could give the right honorable gentleman items, abstracted from this Budget, which are the accretions of former years, and have to be met out of this year’s revenue. If another Minister speaks during this debate, I hope he will secure the permission of his colleague, the Treasurer, to give those items to the Committee. We shall then be able to see that, instead of the excess of expenditure over revenue for the year being £2,800,000, it is only £1,900,000, or £1,500,000, or whatever it may be. We shall then know more clearly how the matter stands than at present. I suggest that the right honorable gentleman should give the figures to the Committee for what they are worth, because honorable members are entitled to know.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I read a detailed list of these items yesterday

Mr WATT:

– What was the total?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– A matter of nearly two million pounds.

Mr WATT:

– That “nearly” ought to be more specific.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The total amount was £3,490,000, including about £2,000,000 for repatriation.

Mr WATT:

– But I am not speaking about repatriation finance.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No, but we have eliminated that amount.

Mr WATT:

– Then the amount will be about £1,400,000.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– More than that.

Mr WATT:

– Well, that is about onehalf of the declared deficit for the year 1921-22.

Mr BRENNAN:
BATMAN, VICTORIA

– If you keep on much longer there will be no deficit at all.

Mr WATT:

– I can assure the honorable member that a deficit is the hardest thing in the world to get rid of.

Mr Hector Lamond:

– It is charged to the accumulated saving.

Mr WATT:

– Quite so. The Treasurer should take out of this year’s balance-sheet all the figures that should not be in it if the Committee and the country are to know’ the exact position. If he would do this and give us the information in tabular form, and perhaps get it typed for the information of honorable members, it will certainly assist the Committee to a refined and clarified judgment.

I listened carefully to the statement made by the Treasurer as to his probable receipts from Customs and Excise Revenue. At first I was astonished to find that he had estimated” the receipts of over £26,000,000 under this heading for this year. We know the figures for last year, and we know that for the current quarter the receipts are dropping off. The Treasurer knows how much he is short of his first quarter’s expectations in relation to this £26,000,000. Apparently he is guided by the statement that his officers, after contact with the importing community, without undue optimism estimate that £26,000,000 will he the prospective receipts from Customs and Excise Revenue for the current year. No member of this Committee is in a position to contradict that statement. It is all prophecy. We have not the data. All we can do is to attempt, in our own way, to ascertain what is the view of the commercial community, and I am bound to say that, after conversations with those who ought to know the probable flow of trade inwards, most of these authorities doubt the realization of this item. If the right honorable the Treasurer gets £26,000,000, as estimated, God be thanked. He will be a lucky man. I think that he or his successor and his colleagues must expect a probable shortage of income under this heading.

Mr Prowse:

– I thought you were a His;h Tariff”-*-

Mr WATT:

– I am a reasonable Tariffist. I am a believer in the Tariff brought down by this Government. Perhaps the honorable member is not.

Mr Prowse:

– I was wondering why you thanked God for this probable £2G,000,000 from Customs revenue.

Mr WATT:

– That is because I am influenced by more than one consideration in regard to the operation of this Tariff. I am talking now, not from the stand-point of the encouragement of Australian industries - we dealt with all that in the Tariff Committee - I am talking now to the Committee of Supply, and, as a student of finance, I hope that the estimate will be realized, though I think the Treasurer will be a lucky man if it is.

Mr Fenton:

– -It is easy to forecast Excise revenue though, and that is responsible for nearly one-half of the estimated total revenue.

Mr WATT:

– No, it is not. Excise, I think, is estimated to return £11,000,000 out of £26,000,000 total estimated revenue. It is, of course, much easier to forecast Excise revenue. This source of income is not so largely conditioned by the vicissitudes of affairs elsewhere, as by our ability to manufacture and consume commodities subject to Excise duties. However, I leave this .matter now, because we can only entertain the hope,1 even if we express the doubt, that the Treasurer’s expectations will be realized.

On the question of income taxation, I think the Treasurer must be a little more explicit to enable us to make up our minds. He has estimated £15,000,000 under this heading. This is in excess by £649,000 of last year’s actual receipts, and includes £8,000,000 carry-over of arrears. Surely the Treasurer does not mean £8,000,000 arrears of income taxation.

Mr Charlton:

– I think direct taxation is nearly £9,000,000.

Mr WATT:

– How much of this amount is war-time profits tax? , The Treasurer estimates to get £2,000,000, which is’ £83,000 less than last year and £500,000 less than in 1920. There must , be a considerable legacy there of adjustments that have to be made.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is all the arrears so far as we know.

Mr WATT:

– In other words, then, there is nothing to collect except £2,000,000 represented by adjustments of assessments standing over? ,Very well. Then, the arrears of income taxation amount to £7,900;000.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Roughly.

Mr WATT:

– What is the cause of that?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Departmental leniency. We are not an aggressive people.

Mr WATT:

– Well, I am one of those who, from experience, hold the belief that the officials in charge of the Taxation Department are doing their duty very conscientiously indeed.

Mr McGrath:

– Towards the smaller taxpayers, anyhow.

Mr WATT:

– They -are doing their duty with remarkable earnestness, and unless, there is some other special reason, I cannot imagine that arrears in income taxation reach £7,900,000, because that represents more than half of the realization last year, with the carry-over from 1920.

Mr Hughes:

– Over what period would those arrears extend?

Mr WATT:

– They would not be in existence f ot more than one year.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– There is a normal carry-over of about £4,000,000 a year, and it has been increased very largely.

Mr WATT:

– I can imagine that the disputed items, in cases where taxpayers appeal against hardship, would represent a substantial carry-over running into millions.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– And then there is the assumption that the staff is not equal to handling the total assessments.

Mr WATT:

– The staff is equal to it.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No.

Mr WATT:

– The staff was not equal when ‘we imposed the war-time profits tax.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I had to provide £25,000 for additional assistance for the staff last year,

Mr WATT:

– That, of course, is the experience of every Treasurer since the war-time profits tax was imposed. The honorable member for Grey (Mr. Poynton) when he was at the Treasury had to make extra provision, and so did I.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I think’ the carryover last year was £3,000,000 or £1,000,000.

Mr WATT:

– The estimate on one occasion was £2,000,000. Now, according to the Treasurer’s own figures, it is nearly £8,000,000.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– But we have eliminated £2,000,000 of that amount.

Mr WATT:

– The honorable gentleman I think said that the total carry-over was £8,900,000, and we have eliminated £2,000,000, represented by war-time profits taxation.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is the total.

Mr WATT:

– Then -the income taxation carry-over must have been £6,900,000 or £7,000,000, which is much higher than the greatest carry-over of any previous financial year.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is quite true.

Mr WATT:

– The Treasurer would be well advised to inquire into the cause, whether it is due to leniency, or to a breakdown of the machinery, or, again, to a desire on the part of the Government to ‘ have a greater carry-over this year.

Sir Robert Best:

– In some cases, it is due to inability to pay.

Mr WATT:

– No doubt, there will be many causes; but they are all ascertainable, and I am not making any improper demand. I am sure the information obtained would greatly help those honorable members who are endeavouring to test the probability of achievement as set out in the Treasurer’s anticipated receipts for the year. The right honorable gentleman said that there. were so many avenues of production and trade in a prosperous state, he was sure he would get the means with which to overcome this legacy of £15,000,000. But how many avenues of trade were prosperous during the period about which we are talking, namely, from the 1st July, 1920, to the 30th June, 1921? If we review that twelve months - the latter part of the winter of 1920, the succeeding spring and summer, and the early winter of the present year - what man among us can say that much prosperity existed, as compared with former years, in any of the avenues of income tax payment?

Mr Corser:

– There was prosperity among wheat-growers and dairymen.

Mr WATT:

– Wheat-growers will certainly not show up well in. the matter of yield for taxation.

Mr Corser:

– Dairymen will.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Quite so. The revenue from that source -will he well over £3,000,000.

Mr WATT:

– Has the Treasurer the figures in his pocket showing the amount of taxation paid by wheat-growers and dairymen? He will find that it is very small.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– There are as many wheat-growers as there are wool-growers.

Mr WATT:

– I am not referring to numbers ; I am speaking of the yield from a taxation point of view. .Tho right honorable gentleman knows how few pay taxation under the heading of wheat-growers and dairymen, and of the total number who pay a nominal tax, what a small percentage contribute 80 per cent, of the whole yield of revenue, from this source. Let the right honorable gentleman also remember, when he is thinking of what confronted the wheat-growers and dairymen during the twelve months of which I am speaking, what happened to the metal market and those big taxpayers who produce metals. Let him also remember what happened to those who handle meat, big taxpayers also ; and what happened to those of the mercantile community who handle stocks manufactured here or imported from overseas. In conversation with ‘ one of our largest importers, I learned that he was grumbling about the fall of prices which the consumers were rather inclined to welcome, and when I asked to what extent the firm had been obliged to write down their stock, I was informed that its loss would be £100,000. This means that the firm will show no profit during the year under review. It will probably show a very big loss. And what has happened to that firm has happened to many, others who carry big stocks and have been fighting to keep, prices high in order to avoid losses. That is to say, it has occurred to thousands of the biggest income taxpayers of Australia for the last financial year.

Mr Jowett:

– It has occurred in the tanning industry.

Mr WATT:

– Yes; also in the tanning industry, which was prosperous during the war, but has been subjected to the same influences, and has suffered enormous losses in the period of which I speak. If we take a directory and pick out the classes of trade from which the Treasurer hopes to. get his .revenue we will see that the lowest returns of profits have been made for this period than have been made since the Commonwealth established this system of taxation.

Mr Corser:

– Will not the manufacturing classes pay income tax «o.n greater profits ?

Mr WATT:

– Some of them will do so, but others who bought their raw material at high prices, and have had to face the writing down of the values of imported stock, will not do so. At the <ame time the manufacturing classes seem to be in a better position than the importers, but from both sets of men the Commissioner of Taxation surely already knows that the yield will be small as compared with that of former years.

Let me now leave that aspect of the Budget where we have to dip into the realm of prophecy, and about which Ave can merely hold our individual views.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– While importers have been obliged to write down their 1 stocks, and dispose of them at quitting rates, the nimble retailers with plenty of money have been picking up stocks cheaply, ,an.d writing up their prices.

Mr WATT:

– How much do the “nimble” retailers ;pay in income tax?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– A good .deal.

Mr WATT:

– The bulk of the income tax paid by the big retailers of Australia is derived from such firms as Foy and Gibson’s, Anthony Hordern’s, Farmers, David Jones’ and Charles Read’s. In fact, they can. all be told off on the fingers of the two hands, and still leave a finger or two to spare.

The Treasurer deserves a good deal of credit for having increased the contribution to the sinking fund to 1 per cent.

Mr Hector Lamond:

– In that regard the credit which he deserves has not been given to him.

Mr WATT:

– That is so, and this increased contribution from revenue makes the Budget higher by about £2,000,000.

Mr Hughes:

– That seems to explain the whole trouble.

Mr WATT:

– It does not, because the Treasurer came to this Parliament for authority to increase the sinking fund contribution. Therefore, this increased expenditure has been incurred through a statutory obligation recommended by himself. But it explains that we would not have been having these rows if we had not had to pay this increased contribution. If we also could eliminate the legacy items we would have bad a Budget that would probably he about equal to our income, a fact which other speakers, in their criticism, have not recognised. However, we must not be con tent to leave the matter there. I hope that we can devise a system of reorganizing taxation and expenditure which will permit us- to set aside a larger sinking fund. We want the baby to pay as little of the war debt as possible. We want to pay as much of our own share as we can, and the wealth of Australia, notwithstanding the difficulties confronting some sections at the present time, would justify our imposing taxation for the provision of a sinking fund where we might not he justified in levying it for the purpose of raising money to spend in a Department. That is a point for the consideration of the Government. For a moment I want to deal with a question of taxation. A Royal Commission was appointed by the Government to inquire into taxation matters. I do not know if that Commission has reported, but if it has, the report has not been tabled. I should like to ask the Treasurer whether the report is in his hands?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No.

Mr WATT:

– Not yet? I know it is not possible to direct a Royal Commission in the matter of submitting its report. It is time we had it.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have done my best to obtain it.

Mr WATT:

– I believe that. It is time those who were appointed to advise His Majesty were informed that the report is expected before the Supply debate is concluded. It ought to have been made available before the Budget speech was delivered. I trust that from this report we shall get some guidance for the Government and the country. I do not know whether the Commission is so balanced that we shall be able to accept in toto its findings and recommendations; but let us hope there will be some good resulting from its investigations which will help us in our deliberations, because the further I look into taxation to-day the more I’ realize the imperative necessity for a reorganization of the system. Taxation of all kinds was imposed under emergency conditions during the war period, and I was one of those who had something to do with it. I can enumerate four men who were- concerned in the question of additional taxation, and I believe 1 am correct in saying that not one of them had the time or the opportunity to pause to see the incidence of that taxation, and how it bore upon all classes of the people. Now we have an opportunity of doing that. Looking into the future, and considering generally the incidence of taxation, I am convinced that we are doing wrong in taxing some people as we are, and we ought to have the courage - whether the Commission’s recommendations are in that direction or not - to have the facts examined and proper redress made. It will, I think, be interesting if I quote a few cases that I have examined, not through the Taxation Department, but through the individuals themselves. The best way to understand how taxation is pressing upon the community is to take different classes and interests. The cry comes most strongly from the pastoral industry, and it will be interesting to examine the actual position of some of those concerned, which I have not attempted to check with the Taxation Department, but which the Treasurer can verify through the Commissioner. These instances explode, to my mind, a number of the theories as to how wealthy pastoralists have become during, the war period. It explodes the belief that the pastoralist is the “Darling of the gods,” and the most fortunate man in our community. It will probably be found on investigation that the position of those engaged in the pastoral industry is similar to that of men engaged in other industries and other sections of the community. I propose to quote four cases-

Mr Hector Lamond:

– Are they representative of the whole industry, or of one particular area?

Mr WATT:

– Not of the whole industry. I think these are naturally hard cases, and indicate the true position of men who have a grievance. The first case, which I shall ,term as “ A,” concerns a limited liability company carrying on a grazing business. The cash income for five years, from .1915-16 to 1919-20 inclusive, totalled £124,817. The expenditure during the same period in cash on all accounts other than taxation was £104,492. Taxation amounted to £21,772, and to this must be added £1,105 to provide for depreciation. The total outgoing, therefore, of this company was £127,369, and its actual deficit £2,552.

Mr GROOM:
Minister for Works and Railways · DARLING DOWNS, QUEENSLAND · NAT

– That does not include capital expenditure.

Mr WATT:

– No. Against that must be placed the difference in stock, which I have taken out as regards sheep, cattle, and horses. Taking the same period from the 30th June, 1915, to 30th June, 1920, on the stock carried there is a difference of £5,797 in favour of the latter date, from which amount has to be deducted the deficit of £2,552, so that the net gain of the enterprise after paying all taxation on this huge expenditure is £3,245 for five years’ operations. In addition to the taxation mentioned further amounts totalling £3,887 were assessed, but on these facts being placed before the Commissioner that payment was remitted in full. The profit from the enterprise for five years before providing for taxation was £25,017 or approximately 5 per cent, per annum on the capital employed. Under the present system £21,772 was demanded and £3,887 remitted, leaving after the Department had collected all it had demanded nothing for the owner, had not the Commissioner remitted the payment of £3,887. The average amount of capital employed, which varied, was £103,733, and honorable members if interested can see what proportion of the income has been paid in the form of Federal and State taxation.

I shall now take the second case, which shall be known as “ B,” which concerns a one-half partnership in a grazing firm, the operations of which covered the period from the 30th June, 1914, to 30th June, 1920. The total cash income from the partnership for that period was £115,925, and the expenditure other than taxation, £87,254. The taxation amounted to £2,584. The total outgoings were £89,838, showing a surplus of £26,087. We have to adjust live stock which shows an increase by the methods employed by the Taxation Commissioner of £1,335, making the profit for the six years £27,422, one-half of which is £13,711. From this amount he had to provide £4,914 for interest on borrowed capital, £1,417 for taxation, and there is a deferred pending application for the remis sion of £2,742. If that relief is not granted his outgoings for capital borrowed and for taxation will be £9,073 on £13,711, showing a return for six years of £4,638. This is an average of £663 per annum on an investment of his own money of £16,048, without taking into consideration the amount of money borrowed. In view of his indebtedness to the Taxation Department how is he ever likely, with such a small return, to be able to pay back his borrowed capital and redeem his mortgage?

Mr West:

– Did’ he not put the mortgage as a set off?

Mr WATT:

– This man’s finances so stood after all the set-offs had been acknowledged. I now take case C, that of a grazier, covering the years from 1914 to 1919. His total cash income was £286,003, and his total cash expenditure, other than rates, taxes, and assessments, £165,863. For depreciation of leases and plant he allowed £2,353, making his total outgoings, other than taxation, £168,219, and leaving a net income for the six years of £117,784. On adjusting his stock values he showed a loss, admitted by the taxation office, of £30,012, which reduced his net income to £87,774. For rates, taxes, and assessments he paid £33,505. There is a disputed and deferred item of £17,187, and if the decision goes against him, his taxation will be £50,692, leaving his ‘ total net income over the period £37,082. These figures analyzed show that this man is paying on his gross income lis. 6d. in the £1 in Commonwealth and State taxation, and I do not think I need stress the case further than to mention that fact.

Mr Fenton:

– Do the figures apply to income tax only, or to land tax as well?

Mr WATT:

– They apply to taxation of every kind. Now I come to case D, that of a Queensland grazier, whose operations are for three years to 1st July, 1918. His cash income was £98,469, and cash expenditure, apart from taxation, £77,856, leaving a net return of £20,613. His stock at Federal standard value- rates was assessed at £8,165, showing a net return of £12,448, after paying £4,323 in income and land taxes. In addition an assessment has been made on him by tha Federal Commissioner for £14,810 for income tax, which means that he has to pay £19,133 out of a net’ income of £12,448. This taxpayerwas on the point of selling his property to meet his assessments, but on the facts being pointed out to the Commissioner payment was deferred, and whether or not it is to be levied remains to be seen. This man is carrying on just the kind of business we desire on the suitableareas of this country, and I wish to abbreviate two other illustrations associated with the pastoral industry. The net income of a grazing firm was £235,644 in four years, and it was assessed to pay £147,238 in State and Federal taxation. Then, the proprietor of a grazing proposition, over a period of six years, had an income of £172,082, and he paid £92,754 in cash to the Commissioners. There is a dispute with the Federal Commissioner as to £6,300, and if he is called upon to pay that he will have paid £99,054 out of his income of £172,082. If these be facts, and the Treasurer can inform his mind regarding them, there is, with regard to this class of interest, an urgent demand for immediate and drastic revision of the system If we compel men to go out of business by making the business unprofitable, this country will suffer undoubted damage, and on the very areas we wish to see populated. I am no advocate for the graziers. I am the representative of a suburban constituency in which, maybe, a number of graziers reside; but I would not advocate a revision of taxation in their case if I believed they could fairly pay what is demanded. In my opinion, taxation may, by exploitation, seriously injure our basic industries. And that is what my investigation leads me to think and believe is now happening.

Inow wish to deal with the amendment before the Chair, which invites the Committee to return the Budget to the Government.No self-respecting Government could accept this amendment; and I was rather surprised that the Treasurer (Sir Joseph Cook) did not emphatically say so yesterday. I am glad to say, however, that the Prime Minister (Mr. Hughes) quickly made up his mind, and later unmistakably expressed it. The life of any Government which acceptedsuch an amendment would not be worth a week’s purchase in this or any House. The Go vernment havetaken absolutely the right view. This, whatever its design, is a want of confidence motion - its effect is that, and no other.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The party who moves the amendmentsay they do not wish it to be accepted as a want of confidence motion.

Mr WATT:

– Tax-gatherers apologize for calling; but they get the money all the same. Honorable members will be quite sure, from what I have felt it my duty to say, that I am not satisfied with the Budget in all its phases. I have dealt with it in three respects to which I think criticism should be directed, and in another in regard to which I think suggestions might be made.I am asked to register my displeasure by throwing the Government out.That is clear, and it is the only thing that is clear in the whole situation; beyond that, all is just about as dark as midnight. What is going to happen if we do throw the Government out ? Australia requires, in my opinion, stability in her governmental affairs just as much to-day as she did during war time. Our problems are big and various, and our responsibilities are great - so incalculably great, that I doubt whether we realize them at the present time. Are we likely, by overthrowing the Government, to secure stability? If I could see that as a result, I should vote for the amendment ; but I cannot see it. Betweenmy honorable friend, the member for Cowper (Br. Earle Page), who leads the Country party - and, I think, considering his brief lifein politics, leads it very well -and honorable members opposite, Ido not see any link that would make a homogeneous party on the Treasury benches if the present ‘Government were overthrown. That is the plain position. As far as I am concerned theGovernment or the party that wins this vote can have an election as soon as it likes. The moreI see of thisParliament the more I believe that an election is the only tonic that will cure it. This vote is not a cure as far as I am concerned. Therefore, I turn to some other alternatives. T want to know how those of us who have strong views about the need forsaving money can achieve our purpose withoutthrowing the Government out.I do notdesire to dictate to anyone,butI merelydescribemy own attitude. I noted carefully what the Prime Minister (Mr. Hughes) told this Committee yesterday. He said, if I interpret his words correctly, “ There are items of policy in this Budget in regard to which the Government cannot give Parliament a free hand, but if the Committee can show the Government how to reduce expenditure when the Estimates pass through Committee of Supply, the Government will welcome it.” I wish to add only one thing. I am prepared to accept that suggestion, in the hope that the one man who is fit to go to the Treasury, if a vacancy occurs there, is sent there. That man is the honorable the Minister for Trade and Customs (Mr. Greene). I ask no promise or acknowledgment. I believe he is vigilant and firm, and, if permitted to administer the affairs of the Treasury during the remaining three-quarters of this financial year, will bring this Budget out in the right way.

Mr Wienholt:

– If he is permitted?

Mr WATT:

– I believe he will fight for his own hand. I have no bouquets to give him. In the event of a vacancy occurring at the Treasury, and the honorable the Minister for Trade and Customs being sent there, the opportunity given to the Committee of suggesting economies will be all right. Does the Committee desire economies to be effected in that way, or will it take the more drastic course of cutting off the head of the Government ?

Mr Charlton:

– Are you censuring Sir Joseph Cook?

Mr WATT:

– I have already done that in my own mild and polite way. I am prepared to accept the suggestion of the Government, and take the responsibility of recommending reductions in the Estimates. In view of the opportunity that we have of making a practical attempt at retrenchment, or economy, I shall vote against the amendment proposed by the honorable member for Cowper (Dr. Earle Page).

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

. - I have listened to the remarks of my right honorable friend the member for Balaclava (Mr. Watt), as I always do, with a very great deal of interest. I was particularly interested in his concluding remarks, because they amounted to this : “ The Government is not up to snuff, but I cannot see a better one.” That is as it may be. I shall leave the matter there. The honorable member has his own responsibility, like every other honorable member of this Committee. What I am concerned with just now is his criticism of the Budget. I will begin at the beginning, where he began when he complained that no attempt had been made to balance the year’s, accounts. Is this something new that I have done?

Mr Considine:

– He said it was as old as original sin.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Yes, that is so. In this respect I have simply followed the lead of my right honorable friend, who did the same thing in every Budget that he presented to this House. It has been done ever since we have had Budgets. It has never been done in any other way. It would have been better if my right honorable friend had made that .alteration himself, instead of complaining that I am not doing it. I am simply doing what every Treasurer has done, in the history of Federation to date.’ There are instances in which my right honorable friend has deliberately budgeted for deficits, after including up to £3,000,000 df surplus, and with additional taxationin the bargain. He used every penny of his surplus in a Budget about half the size of the one I am presenting.

Mr Watt:

– I presented no Budget half the size of this one. I only presented one Budget to this Parliament, and that was in war time.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It was in 1918-19. It was provided in that Budget that £3,000,000 surplus should be taken into the accounts for the year and that all of it should be expended during the year, with a great deal more in addition. I am not going nearly as far as the * right honorable member went in that year.

Mr Mcwilliams:

– Does that make your Budget any better

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is not the point. Why am I to be condemned for something which other Treasurers, from the year 1, have always been allowed to do without condemnation? My complaint is that I am subjected to different treatment from that meted out to other

Treasurers, and for doing what other Treasurers have done in the State and Commonwealth ever since Budgets were presented.

Mr Watt:

– Did you say the States and Commonwealth? You are making very extraordinary statements. I presented six Budgets in the State, and have never budgeted for a deficit yet.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The point is that, having a surplus, the honorable member included that surplus in his Budget for the year and said he would spend it during the year.

Mr Watt:

– In the State of Victoria the Treasurer is not allowed to do it. In the Commonwealth he is compelled to do it.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Then you have done it twice, including the Budget which my honorable friend (Mr. Poynton) presented. Because I do it, it is all wrong. When anybody else does it, it is all right. There is such a thing as playing the game fairly, and it is not fair to blame me for doing in my Budget what others have done in previous Budgets.

Mr McWilliams:

– Did you criticise them for doing it?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have nevercriticised that aspect of previous Budgets, at any rate.

Mr Watt:

– Are you quite sure?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Not quite. No one knows better than my right honorable friend that the same method is adopted in any business.

Mr Watt:

– No, it is not. We do not produce budgets in business.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No; but you publish balance-sheets in which you carry forward balances from one year to the next, and show a total at the end of each year, just as we do. Bank balances are made up in precisely the same way. There is nothing new about the practice. My offence and my wrongness is that I have followed these precedents, always believing them to be sound. I am now learning for the first time in the criticism put forward in this city and in this Committee that everything about the practice is wrong.

Mr Fenton:

– The honorable member is happier to-day than he was yesterday.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have not been unhappy. These things come and go; I have had thirty years’ experience of parliamentary life, and I think that no man has faced adverse political circumstances more often than I have done, and honorable members who have known me long will say that I have generally faced them as cheerfully as most people. Honorable members will find in their Budget papers that exactly the same thing has been done all through the years as I have done in connexion with my Budget, and the suggestion which has been made that rather than do this we should impose taxation in order to balance the accounts of the year when we have a surplus of £6,600,000, is the most shocking proposal I have ever heard.

Sir Robert Best:

– No one has ever suggested that.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It has been suggested.

Sir Robert Best:

– Not at all. He would be a fool who would suggest such a thing.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member should not be so positive unless he knows.

Sir Robert Best:

– I have heard no such suggestion.

Mr Hector Lamond:

– A good deal occurs in the honorable member’s absence.

Mr Considine:

– Are not honorable members on the Government side a happy family?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Happy family or not, I am determined to place the facts before the Committee.

Mr Riley:

– If the Treasurer had imposed additional taxation he would have come in for more condemnation.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Of course.

Several honorable members interjecting,

The CHAIRMAN:

– Order ! It is impossible for the Treasurer to proceed amidst this interruption.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have been admonished by the honorable member for Balaclava (Mr. Watt) for daring to sneer at the economy stunters in Melbourne. I am sorry I offend the honorable member in this way, but he does not see my point of view; he sees only his own. These economy stunters are his friends; they are not mine. Therefore, he is not a good judge of what my attitude towards them should be. He has not been the subject of their castigation- throughout the year as I have been. He has nothad manufactured statements pouring on his head day after day in this city as I have had since I have been at the Treasury. So far as the Melbourne newspapers and organizations are concerned I have neither had a chance to make good nor bad. The moment I went to the Treasury the Victorian newspapers and organizations set upon me as if I were a pariah, and if I have made some reply to them it is because I thought I had the right to do so. There are economists and economists in this State of Victoria. I have met economists from the country districts, and have found them to be fair and reasonable men seeking only that which was fair and reasonable, and above all not seeking political ends. But they are of a very different type from the economists in the city, some of whom have been prosecuting this cry for political purposes only. I do not mind if I do sneer at these people who, in the garb of economy, are seeking quite other purposes. I am not and never have been an enemy of economy; I know only too well how necessary it is, but I hope to distinguish always between those who seek economy for the ends of economy, and those who pretend to seek economy for quite other political purposes. That is my reply to the honorable member for Balaclava when he accuses me of sneering at this economy movement. I deny his’ charge. I have never sneered at any economy movement. All my life I have been in favour of economy, and last year’s operations in the Treasury are the best of all replies to any statements these outside critics may make regarding me. I began with a surplus, and I estimated, as the honorable member for Balaclava and every other Treasurer has done, to spend some of it during the ensuing year. Instead, I did not touch a penny of it, but increased the surplus by another £1,000,000. The only reply I get is bitter criticism, and my critics see only this one fact, that the accounts for this year will not balance by over £2,000,000. How do they know? They assume that the Treasurer has done everything he intends to do during the year, and that he will sit still, allowing the Treasury to run itself and money to be paid out at anybody’s will and request. That is an ab surd view; it is not correct, and it is not fair. These are Estimates only. They do not mean that at the end of the year the precise amounts mentioned in them will be tabulated as they are estimated. There is a year’s work ahead of the Treasurer yet, and that work will tell upon the Estimates. If the Treasurer be wise and firm, he will try to save everything he can out of the surplus that is being carried forward. That I did last year. I increased the preceding year’s surplus; but there is not much encouragement to economize. I could as readily have made the £6,000,000 surplus fly. I could have responded to every request that was made - and there were many every day - during the year. Some of those who criticise this Budget have been the most persistent in their requests for expenditure.

Mr Mathews:

– Especially Prowse and Hill, the biggest sinners of all.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The Treasurer will get their votes.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am not seeking votes. I am here to state simple facts.

Several honorable members interjecting,

The CHAIRMAN (Hon J M Chanter:
RIVERINA, NEW SOUTH WALES

– Order! If honorable members will persist in interjecting, notwithstanding the calls of the Chair, I shall have to take more drastic steps.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I could have dispensed with the surplus as readily as other Treasurers have done many times before; but I worked on my estimate right up to the end of the year, with a view to not touching that surplus, but adding something to it. Por doing this, the very people who were most clamant in their demands upon the Treasurer now condemn me for having been extravagant.

Mr Jowett:

– They do not condemn you, sir.

The CHAIRMAN:

– The honorable member for Grampians is out of order.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– So far as I can see, the estimates of revenue will be realized. The honorable member for Balaclava has put to the House everything that tells against the revenue, but he has not said a solitary thing about the favorable omens. The outstanding basic facts are there for anybodv to see. Last year was a good one.

Honorable members interjecting,

The CHAIRMAN (Hon J M Chanter:

– I submit again to the Committee that this conduct is very unseemly. It is also a breach of our own rules, and is distinctly unfair in the circumstances. The Treasurer has certain responsibilities, and he is not being given an opportunity to state his case as he ought through honorable members continually interjecting and challenging one another across the chamber. I have made several appeals to the Committee this morning on behalf, not only of the Treasurer, but of others. I ask honorable members not to defy the Chair, but to assist in preserving that order and dignity which should be. maintained.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I can only repeat that I believe the estimates of revenue will be realized.

The case is very simple regarding the Customs, notwithstanding what the honorable member for Balaclava has said this morning. I have consulted authorities, one of whom is well known to my honorable friend - in fact, is a friend, of his. This authority has assured me, as I have already told the House, that the big importers have full orders in London, and that in the second half of the year there will be very large importations into Australia. May I say this further about the Customs? I take responsibility for the items, of course. I have not manipulated them; they are the carefully tabulated estimates of the officers of the Department whose business it is to prepare them. The Minister for Trade and Customs will tell the House that I did not alter a line of the Estimates he sent to me. I discussed the items with him, of course; but no alteration has been made.

Mr Gregory:

– Go back to last year’s Estimates, which were nearly £4,000,000 out.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

-Who could have forecast what the additional values would be or the condition of affairs in London last year, which made all costs abnormal? The banks came to me and begged of me to pour out our reserves in gold in order to assist them to bring even more imports in. Nobody can forecast these violent fluctuations of trade and commerce, particularly in these days when the world is upside down.

I am not pretending that all the estimates of revenue will be realized. One would be a fool to pin himself down to every line, having regard to the present condition of the world. We can only do our best.

Mr Gregory:

– What amount do you estimate will be in arrears? About £4,000,000?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– As much as will reduce the arrears at the end of the year to a normal amount. Last year we did not press people, knowing the difficulties they had in getting ready cash. Those arrears are being gathered in now. In the previous year there was £3,000,000 or £4,000,000 outstanding.

Mr Prowse:

– Are you charging them interest on the outstanding amounts?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No, except in cases where there has been default. There is £3,000,000 or £4,000,000, at least, to be gathered in this year to reduce the outstanding arrears to a normal amount. Last year was abnormal in every way; therefore, it is reasonable to suppose that with this extra £3,000,000 or £4,000,000 we shall have not less than £650,000 over the actual amount gathered in last year. That is providing, really, for a lesser amount being collected from last year of the ordinary income by three or four millions. I think that is sufficient allowance to make, and my officers are of the same opinion. As a matter of fact, I cut down the official estimates finally submitted to me by the Income Tax Department by £500,000. That is all I have done to them.

The honorable member for Balaclava asked me, during his speech, to give him a tally of the war legacy amounts which I have had’ to take into the Budget this year. I told him I had submitted the details to the House yesterday. He was absent, perhaps, when I read it. The total is £3,470,000. From that I deduct £2,000,000 for repatriation, leaving nearly £1,500,000 under these war items as legacies. In addition, there is the other legacy of £200,000 for the carriage of war mails, and there are other items which I have not had time to gather in yet. These legacies arising from the war in this year’s Budget will not be much less than £2,500,000, a sum sufficient to balance the deficit, so that the actual

Mr Riley:

– Not at the cost of employment throughout the country, I hope?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Exactly! Not at the expense of somebody or other! That is the trouble. I am told by the Leader of the Country party that it must not be at the expense of the public servants, that it must not be at the expense of the soldier. On the contrary, the Leader of the Country party says that money must be found for the soldier, and that it must not come out of loan. The honorable member piled up a list of things which had to be financed from revenue - a list which appeared to me to be appalling. Then, in the face of that, the honorable member said, “ Take back your Estimates of expenditure from revenue and cut them down by nearly £3,000,000.” He said, in effect, “You must put about £10,000,000 on to your revenue expenditure. Then you must take your. Estimates back and reduee them by about £3,000,000.” Was ever a more preposterous position taken up by any honorable member of this House?

Mr Austin Chapman:

– The honorable member suggested a method.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Whatwas that?

Mr Austin Chapman:

– More taxation!

Mr Jowett:

– Who suggested that?

Mr Austin Chapman:

-The honorable member’s leader. It is the suggestion of the party in the corner.

Mr Jowett:

– Oh, no!

Mr Austin Chapman:

– Well, you cannot have it both ways.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I say, calmly and deliberately, that the speech of the Leader of the Country party cannot be seduced to terms of practical finance, by any means, or in any circumstances, except by the imposition of very considerable additional taxation.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Good management cannot touch the problem.

Mr Fleming:

– Good management has not yet had a chance to do so.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member could bring it about, of course, but I have to confess that I cannot do so. I cannot double the sinking fund from revenue. I cannot fmd all the soldiers money from revenue, as the honorable memberfor Robertson (Mr. Fleming) has suggested. I cannot do all that and at the same time let everything alone which he says must be left alone. The honorable member says, “Let the Post Office alone; let the public servants alone; let everything that goes under the name of extravagance alone.” I cannot do what he would have me do without imposing additional taxation. And seriously, I am certain that he could not do so either. The honorable member knows how much I want to be left alone.He has never known me - nor has any other honorable member - to be one who desired to hang on to these benches. I occupy my present position, whether the honorable member for Robertson may believe it or not, trying to do my duty by this country.

Honorable Members. - Hear, hear!

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– And I do not wish to retain the Treasury portfolio for one moment after I shall have found that I cannot continue to do my duty. But when leaders of parties in this House make serious propositions for the expenditure of millions and millions of fresh obligations, and, at the same time, tell me to take back my Estimates and reduce them, I can only say that they are either ignorant or are playing a part. I have now f urnished all the facts as I know them. I shall state them once more: there are to be millions more for the soldier, out of revenue; but the Government must not borrow any more money for the soldier. One of the complaints uttered concerning the Budget is to the effect that I am borrowing £11,000,000 this year for the soldier. But the Leader of the Country party says that isnot right. Then the honorable member says, “ You must not skin the soldier.” That is to say, there is to be not less money, made available for the soldier, but more. The complaint of the honorable member for Darwin (Mr. Bell) is that the Government are not spending more upon the soldier ; but the Leader of the Country party says, “You positively must not skin ‘ the soldier, and you positively must not borrow. Therefore, you must come down more heavily upon your revenue for the soldier.” How bewildering! There is to be a bigger sinking fund out of revenue; and there must be a big dip into the revenue for the soldier, over and above the money which the Government have already provided. Next, the Leader of the Country party adds, “Do not touch the public servant; keep his increments going.” After which he says, “ Take the Estimates back and cut them down by £3,000,000.” If the Committee is anxious to have the Estimates pruned, all right! It is for the Committee to say. But it is for the Committee to say, also, in what direction the Estimates shall be pruned. All that honorable members have done so far is to point out the directions in which the Estimates must not be pruned. Honorable members do not even leave the Treasury a free hand. They say, “ You must not touch this; you shall not touch that; and you must certainly leave the other thing alone. You must increase this ; you must add to that ; and you must emphatically pile on something there.” And then honorable members tell me, “ It is for you to say what you are going to do. We do not know, and we cannot tell you. We cannot even give you an indication. But you must do it somehow or other. By some general plan of reorganization it must be done.” Honorable members cannot have their cake and eat it. They cannot have increased expenditure and pruned expenditure at the same time. There is the contradictory problem presented in the speech of the Leader of the Country party. If there were a genuine desire to save the £3,000,000, and to add it to the surplus at the end of the year, all would be well. If I remain in the Treasury it will be done - if it canbe compassed - irrespective of any vote which may be taken in this Chamber. I do not care what this Committee, or the House, may do or say ; but I value my own sense of duty and self-respect, apart altogether from other considerations. I shall do this year as I did last year. I shall fight every day of the year to try to prevent undue expenditure. But honorable members of the Country party are not prepared to trust me, it appears.

Mr Jowett:

– There is nothing personal against you, sir.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– This is the best year pastoralists like the honorable member have ever had. They are about to enjoy the biggest surplus they have ever known. But all the honorable member says to me, in return, is-

Mr Considine:

– “ Out !”

Mr HIGGS:
Capricornia

.- I have a great deal of sympathy with the Treasurer (Sir Joseph Cook) in connexion with the remarks of the honorable member for Balaclava (Mr. Watt). I think that the honorable member must have been reading one of Kipling’s books, in which it is suggested that the best way to get along is to employ blarney and the buckle end of a strap. There was a good deal of blarney in the speech of the honorable member for Balaclava; but there was also, to my mind, a gross impertinence and an insult contained in his suggestion that the Treasurer, in view of projected happenings, had said to himself, “After me, the deluge!” I do not know, and it has not been definitely or authoritatively stated by any one, that the Treasurer is about to depart for London to take up the office of High Commissioner. My own opinion is that there is no one better qualified to occupy that high position; and the Treasurer will pardon me for saying, in his presence, that I consider that while he has been Treasurer, and especially during recent times, he has carried out his duties in a very courageous manner, regardless of the opinions of persons who might possibly use influence to prevent his appointment. We ought to remember - and I bring it under the notice of honorable members opposite, who apparently intend to range themselves in the division with the members of the Country party -

Mr Lavelle:

– Listen to this advice!

Mr HIGGS:

– I urge honorable members opposite not to interrupt me. There are honorable members opposite for whom I entertain the highest respect, and whom I would not treat as in the same boat with certain wild and impossible extremists. It is a pity that these honorable members of the party never forego an opportunity to interrupt me, because they thus lose some of the benefits of a long political experience, which they might profit by were I allowed to express my thoughts without interruption. There is no nation in the world which participated in the war which is not now suffering great industrial and financial unrest. Indeed, I think the only country which at present is in a sound financial position is the United States of America. Our financial difficulties in Australia are due in part to a greater enlightenment of public opinion than there was formerly. When I was about ten years of age, Crimean heroes were to he seen in Sydney, who, their legs having been shot off, had to move along the streets in a sort of a box cradle, lifting themselves on their hands, which were cushioned with a cloth pad. “ This was allowed, because public opinion was then not as enlightened as it is now. To-day, every one is desirous of doing his level best for those who fought for the country, and that has meant the spending of millions of pounds on repatriation, on the buying of farms, and the building of homes for soldiers, in finding employment for them, and in giving them vocational training. No one proposes that that expenditure shall be decreased.

Mr Jowett:

– We do not object to that expenditure.

Mr HIGGS:

– Your Leader objects to it. He thinks that money should be obtained for these purposes out of revenue; but that is impossible. Shortly after Armistice Day, I had a conversation with the late Mr. Russell French, discussing with that very able ‘banker what would probably be our duty in the future. He then said, “ You will have to proceed very gradually. You cannot stop borrowing all at once.” That is the present position. The Government is asked to balance the ledger. To do that it must increase taxation.

Mr Jowett:

– It might’ spend less.

Mr HIGGS:

– If the Government does not increase its revenue, and reduces its expenditure by retrenchment, it will cease to spend money on goods and services for which it now pays, .and that will increase the unemployment of the Commonwealth. At the present time there are 42,000 men out of work in .Queensland. Their unemployment is due to causes which I need not mention now, though, in part, to the aftermath of the war.

Mr Fleming:

– Do you say that we get a retu’rn for all the money the Government expends?

Mr HIGGS:

– Not for all of it. If the honorable member went through the Departments he ‘would probably find instances of wasteful expenditure. He might find some officer, who is being paid £4 or £5 a week, whose services were not worth £1, or 30s. a week. The same thing may be happening in the higher grades of the Service. In ordinary circumstances! such men would be dismissed, and I presume that in due course they will be retrenched, or other work found for them.

I do not agree with the honorable member for Balaclava (Mr. Watt) that we should within thirty years pay off the debts incurred for the war. He says that we should put even more than 1 per cent, of our indebtedness into a sinking fund each year to do that; but I think if we put by annually an amount equal to £ per cent, of our indebtedness, that would be sufficient, because it would pay off our liabilities in about fifty years, where a sinking fund of 1 per cent, would extinguish them in about thirty-seven years. We must remember that this country, for which our soldiers fought, and which they have kept under the British flag, is a rich possession to hand on to posterity. A jester has asked,. “ What has posterity done for us?”; but I do not advance the argument in a jesting spirit when I say that posterity must bear its share of the great debt incurred to keep the country for the British race, and that, therefore, a sinking fund of $ per cent, is sufficient preparation for the extinction of our indebtedness. According to to-day’s newspapers, Britain ia at present in a worse position than she has been in for about a hundred years, that is, since just after the close of the Napoleonic wars. The Government of that country has spent £48,000,000 in recent years in assisting unemployed families. This Parliament has not been called upon to authorize such expenditure. I submit to members who are asking for retrench- ment, and to those .persons in the city of Melbourne, referred to by the Treasurer, some of whom are candidates for seats in this Parliament, that we might very well proceed, for a few years, at any rate, as we are now going, borrowing, if necessary, £1,000,000 or £2,000,000 each year, to balance the ledger. We may consider ourselves lucky if we have not to borrow more than that for the purpose. The honorable member for Balaclava (Mr. Watt) said that it is the duty of the Treasurer to sit on the Treasury chest and keep it shut; but it is the duty of other Ministers to assist him, and members of Parliament should not approach him to endeavour to get him to expend public money unnecessarily.

Sitting suspended from 1 to 2.15 p.m.

Mr HIGGS:

– I should like to intimate to honorable members what I think will happen during the next few years. I mentioned this morning that it was stated by Mr. Lloyd George that never during the past 100 years has the industrial and trade position been so bad in the United Kingdom as it is at the present time. That period takes us back to a time within a few years of the Napoleonic wars. In this connexion let me remind honorable members that at the close of the Napoleonic wars the Government of the United Kingdom had to borrow money at 7 per cent. The Commonwealth has never yet had to pay 7 per cent, for money. It is an old saying that “ History repeats itself,” and I believe that what took place in the past after the Napoleonic wars will take place during the period following the recent great war.. A very high rate of interest was charged for borrowed money in 1814, but as the conditions of trade, commerce, and industry were restored to normal, there was such a large increase of wealth, and money became so cheap, that the British Government were able to convert their high-priced loans into consolidated stock at the low rate of 3 per cent. I do not look for any relief for the people of Australia, or, indeed, the people in any of the countries affected by participation in the war, for some years - not until trade, commerce, and industry ;get back to normal, and money becomes cheaper, when each country, including our own, will be able to convert 5 per cent., 6 per cent., and 6i per cent, loans into consolidated loans, bearing interest, if not as low as 3 per cent., then at a very much lower rate than that at which money can be obtained to-day. It is, in my view, in that way that we shall be able to decrease the burden upon the .general public.

Every one looks to the Treasurer to cut down expenses. Ministers will have to help the Treasurer as far as they can to do so, and members of this House will have to refrain from approaching Ministers in charge of Departments to induce them to consent to any but legitimate and reproductive expenditure.

Mr Foley:

– On the Burnett Lands Settlement scheme, for instance.

Mr HIGGS:

– The honorable member refers me to a State Government undertaking. The Commonwealth Government, may be associated with the Burnett Lands Settlement scheme only by making advances to the* State Government to carry it into effect. It will be the duty of all the Governments, State and Commonwealth, to see that money is borrowed only for reproductive works. No money should be expended out of loan funds, except, perhaps, for defence purposes, unless there is an absolutely reasonable prospect of a satisfactory return from its expenditure. Railways, for instance, should pay cost of maintenance and interest on money borrowed for their construction.

Mr Foley:

– From what date?

Mr HIGGS:

– As soon as .possible. We should endeavour to secure a return to normal conditions as soon as possible, and for Australia our normal period was that immediately before the war, when we were doing well.

Mr Foley:

– Do not all members of State Parliaments, when asking for a railway, declare that it will pay from the jump?

Sir Robert Best:

– And that it is a national railway !

Mr HIGGS:

– I know that every railway asked for is deemed to be a national railway; but I believe that the people of Australia will have to consider whether it would not be better for them, instead of building so many railways, to build better roads leading to those already constructed.

It was pointed out by the honorable member for Balaclava (Mr. Watt), and I think also by the Leader of the Country party (Dr. EarlePage), that the Treasurer has over-estimated the amount of revenue he is likely to receive from income taxation. As the Treasurer has said, it is a very difficult matter to estimate what the incomes of pastoralists and farmers will be during the next year or two. There is so much of speculation about the prices to be obtained for wool and other primary products that it must be difficult to say how incomes from pastoral and farming pursuits are likely to be affected.

Mr Austin Chapman:

– Does the honorable member not think that the officers of the Taxation Department are able to make a very good estimate of probable incomes ?

Mr HIGGS:

– The honorable member has had considerable experience as a business man, and I ask whether he is prepared to say thatincomes from wool during the present financial year will be so reduced that the income tax revenue from pastoralists is likely to be materially affected? I suggest this consideration to the honorable member: As against the possibility, and perhaps probability, that the incomes of pastoralists and mining companies will be reduced during the present financial year, it should be borne in mind that we are just completing a Customs Tariff, which, in my view, will enable manufacturers, business people, and mechanics in Australia to increase their incomes in such a way as to balance any possible reduction of incomes from the primary industries. Before the war, we were importing into this country the manufactures of other countries to the value of £70,000,000 per annum. Many millions of pounds worth of those goods might have been manufactured in Australia. That £70,000,000 was being sent abroad and received by people on the other side of the globe who did not contribute anything to the cost of government in Australia. We are endeavouring to alter that position, and if we manufacture in this country a considerable proportion of the goods which we have previously imported, our manufacturers and mechanics carrying on the different industries concerned will, contri- bute more to the revenue from the income tax.

I would suggest to employers and employees in Australia that they should endeavour to get together and try to bring about peace within the Commonwealth. I know that, unfortunately, there are some people who believe with Karl Marx in what is called the materialistic conception of the universe. Workers are being taught that all the ills that flesh is heir to - the whips and scorns of time,

The oppressor’s wrong, the proud man’s contumely,

The pangs of despis’d love, the law’s delay,

The insolence of office, and the spurns

That patient merit of the unworthy takes, will be swept away if we can only abolish capitalism.

Mr Considine:

– The honorable member used to tell the workers that.

Mr HIGGS:

– No, never. Capitalism consists of rent, interest, and profits. When the honorable member who is so disorderly as to interrupt me puts money into the bank, the interest which it earns is a part of capitalism. When a man builds a house inwhich he does not live, but which he rents to a tenant, the rent paid for it is a part of capitalism. When a man who is in business sells commodities at a profit his profits constitute also capitalism. The people who preach the doctrine to which I have referred are causing a great deal of unrest, and I would say to employers that the payment of higher wages is) not the only remedy for industrial unrest. Employers who are in a position to do so - and there are many of them - should f ollow the example of those who are endeavouring to make the lot of their employees more comfortable by providing them with better accommodation and workshops, better sanitary conditions, and improving their daily lot in every way possible. There are, for example, some newspaper proprietors in this country who have made hundreds of thousands of pounds whilst the workshops in which their compositors work have not been changed, and are still the unhealthy places which they were forty years ago. The proprietors of some newspapers here that continually preach the necessity for sanitation and better hygienic conditions for every one else, have their literary staffs shut up in little offices that are a disgrace to them, and which must affect the health of their employees. I believe that employers generally should set to work to improve the lot of their employees in the way I have suggested. That would bring about healthier conditions, and there would not then be so many additions to the so-called “ Red Army,” which is very largely recruited from men who have become unhealthy in their occupations, and think that if the present order of society were changed perfect health and perfect happiness would result. That is a fallacy. Human passions will still require to be controlled whatever form our civilization takes.

As for ourselves as a National Parliament, I think we should get back to our Constitution. We should not indulge in activities which properly belong to the State authorities. We are entitled to assist the States in. every way. I take, for example, the question of the Wheat Pool, which is agitating the country at the present time. Our friends of the Country ‘party are very much interested in this question, and very naturally, as wheat production is one of the staple industries of Australia, and the farmers are entitled to a fair return for their wheat. To my mind, the question of dealing with the marketing of wheat is one for the State Governments, and not for the Federal Government, except that the Federal Government might stand behind a State Government in the matter financially. If the Government of a State desires to borrow money to finance the farmers in the marketing of their wheat, the Commonwealth Government should come forward and be prepared to stand behind it, to enable it to borrow the money required. If we confine ourselves to our own duties as a National Parliament, the expenses of carrying on the government of the Commonwealth will be very much less, the people will be very much better satisfied, and the Commonwealth will be in a better financial position, and, indeed, in a position of security. We have, for example, certain Federal duties to which we might well devote attention. Defence is one of them, our relations with foreign countries is another, and the creation of new States is also a matter to which we should give consideration. Then there is the standardization of railway gauges throughout the Commonwealth, which, although partly a State matter, should likewise concern us. There is, further, the question of the assistance to be given the States in the national work of irrigation and water conservation. We might even go so far as to say to the State Governments, “If you are. prepared to build main roads throughout your States, we will finance you to the extent of £1 for £1.” These, to my mind, are the matters to which the Commonwealth Parliament should devote its attention. Economy should be practised, of course; but I, do not think anything would be gained by turning out the Government:

Mr PROWSE:
Swan

– I do not hide the fact that when I entered this « House it was my intention to give reasonable support to the National Government. The country had returned the National party in stronger numbers than any other, a-nd it therefore devolved upon them to take up the reins of government. I determined to give them a reasonable modicum of support, for the reason that their preelection pledges, speeches, and slogans were very similar to my own. They made great promises of economy; they told the people that not one penny of unnecessaryexpenditure would be indulged in, and that the aftermath of the war was such that it was absolutely essential that the country should be governed on the most economical and careful lines. I am forced, however, to the conclusion that the Government are not carrying out the pledges they made to the electors. Whilst I may admire the Prime Minister (Mr. Hughes) for his promises, I dislike him for his disregard of them. The country is still clamouring for the promised economy, and is still expecting the Government to exercise economy, but there is no indication of the expectations of the people in this regard being realized. Those who examine the Budget will find it impossible, even by the greatest stretch of imagination, to credit the compiler of it with being an economist. To live within one’s income may be a copy-book maxim, but it’ is none the less a wise one. The Treasurer (Sir Joseph Cook), who seeks so much power, seems to gloat over honorable members in this corner who claim to be, if. I may use the term, a non-party party, their sole desire being to insure the proper government of the country. If they, as representatives of the people, call for genuine economy, they are blackguarded by the Treasurer for their presumption, and are told that the Government will not submit to such impertinence on their part. We, just as much as members of the Ministerial party, are here as the representatives of Commonwealth divisions; and whether we are here for the first time or not, the fact remains that the people have chosen us to speak on their behalf. Even if we are not so capable of camouflaging the real position by the ecclesiasticism of politics, we are here, at all events, with a genuine desire to improve the conditions of the people we represent, and of the country generally. The Treasurer, in compiling his Budget, should have had as good a knowledge of the financial prospects of the country as is possessed by ordinary citizens. The one thing concerning which he seems to he pretty sure is his estimate of expenditure. He is not so sure of his estimate of revenue. Having regard to conditions as we find them to-day, no optimist could como to the conclusion that the annual revenue of- Australia during the next decade is likely to be bigger than it is to-day. In my opinion, we are on the mountain peak of revenue. The prices of everything we produce have been at high-water mark, but the world is now getting back to normal conditions. It is returning more speedily to normal conditions with respect to those products upon which we rely for our living, and from which we have to obtain the money to employ our labour, and pay our debts. Prices in respect of such items are decreasing with infinitely greater rapidity than are the prices of other things which we have to buy. The Treasurer makes that a definite excuse for the high figures mentioned in his Budget. He said, in the course of his Budget statement -

The following articles, largely used by the Works and Post Office Departments, will give some idea of how difficult it is to keep costs down. Between 1914. and 1921 cement increased in price about 100 per cent., insulators 100 per cent., switchboards to contain fifty lines 250 per cent., common battery wall telephones 160 per cent., hardwood timber 200 per cent., canvas 300 per cent., galvanized-iron wire 200 per cent., sheet galvanized iron 179 per cent. Bricklayers’ wages have increased 77 per cent.

That statement goes to show the cost of production in Australia. The very high Tariff that has been imposed by this Government has added to the difficulties of the primary producers^ who have to compete in the world’s markets. Australia, let it be remembered, lives chiefly on the money obtained from our primary products, v

Mr Foley:

– When the duties on hardwood were under discussion, the honorable member adopted a different attitude.

Mr PROWSE:

– No. Throughout the consideration of the Tariff I opposed high duties, and shall do so again.

Mr Foley:

– But not the high duty on hardwood.

Mr PROWSE:

– Yes, I opposed the proposed duty of 10s. per 100 on hardwood. That was an excessively high rate.

Mr Richard Foster:

– The honorable member had better look up Hansard. I had to do so the other day.

Mr PROWSE:

– This subject is too important to be treated lightly.

Mr Foley:

– I am not treating it lightly. I thought the duty ou hardwood was too high.

Mr PROWSE:

– I also thought so, but, as I told. the honorable member at the time, the duty ultimately imposed was the result of a compromise. Seeing that the price of timber has doubled since 1918, and .that the cost of ‘building is so high as to make it practically impossible for a labourer to buy a house, I am surprised that the Labour party supported the high timber duties.

The ex-Treasurer (Mr Watt) referred to the incidence of the income tax, which is a matter of very considerable importance. He pointed out very clearly and properly that the incidence of the tax as it stands bears very heavily upon certain primary producers.

Mr Austin Chapman:

– And unfairly.

Mr PROWSE:

– Most unfairly. I invite honorable members to differentiate between the claims which the ex-Treasurer made and the point that I am about to make. I am not attacking the principle of a graduated tax upon income. The plan that I have in mind would not impinge upon it in the least ; but one of the natural consequences of a graduated scale is that citizens who obtain their living in an uncertain and irregular way naturally drop in for a heavier burden of taxation than waa actually intended. No one can go into the rural parts of Australia and hope by carrying o/i primary production of any kind, which is subject to droughts, floods and fire, to make a regular income. The people engaged in primary production are taking part in the most important employment in Australia. If people did noi; advance into the country and develop Australia’s resources, our cities could not exist, and those who engage in so laudable and desirable an occupation should at least be placed on an equal footing with other citizens in the matter of taxation. I am not here to plead for preferential treatment of primary producers, but I am here to ask, on their behalf, for a square deal, and to see that they shall be placed on an equality with other citizens. I am pleased that the justice of the averaging system has been admitted by the Treasurer in his Budget statement, but the proposed amendment of the Act will be insufficient to afford relief in the directions I have indicated. The right honorable member for Balaclava (Mr. Watt) read to the Committee certain statements. I also have a statement showing the actual income of a taxpayer I know. Over a period of seven years he reaped a net profit of £12,330, which was 5 per cent, on his capital outlay. On this he paid in taxation £2,219 under the old system, whereas had he received his income in annual quotas it would have amounted to £1,761 per annum, and he would have paid £841 to the Taxation Department. I should like now to indicate what will happen under the amendment projected by the Treasurer, taking the same amount and figures. Instead of paying £2,219, or IS per cent, of the net ^profits, in taxation, he would pay £2,429, or 19^- per cent. Therefore the primary producer gets no relief under this scheme. I am glad it is before us, because honorable members have an opportunity of looking into it, and I take it that the Government are ready to consider any reasonable suggestion. I object to the Taxation Commission wandering all over the country, as though climatic conditions had anything to do with the incidence of taxation, spending money and taking a great deal of evidence before coming to a conclusion on this question.

Mr Foley:

– They have not come to A conclusion yet.

Mr PROWSE:

– After twelve months sparring for time concerning this injustice, the Government still have no report from the Commission. As a matter of fact, this was not a suitable subject for inquiry by a Royal Commission of this nature. It should have been referred to some one with a judicial mind, and capable of seeing from matters of fact that there was a fair deal between the citizens of the Commonwealth. The Treasurer has asserted that, under the averaging system of taxation, there would be a reduction in revenue this year.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Yes, I said that.

Mr PROWSE:

– Well, I challenge the statement, and will proceed to show that it will not affect the revenue in the way the Treasurer suggests. I shall prove that an income of £4,000, which returns a revenue of £511 17s. 6d., will still return that amount, and will not be affected in that way by these projected alterations. No relief is to be given to the oppressed taxpayer, and I want this Committee to thoroughly understand the position in order that the injustice may be remedied. The Treasurer objected to my Leader (Dr. Earle Page) characterizing the construction of the Budget statement as clumsy. In the absence of a better word I say this taxation scheme is extremely clumsy.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I objected to your Leader saying that I dummied the figures, and faked the Budget. I think that was a most insulting statement, and so would you.

Mr PROWSE:

– The right honorable the Treasurer has made statements that were infinitely worse than those made by my Leader, and I do not admire him now nearly as much as I did previously. Here are ‘ two illustrations showing the incidence of income taxation under the averaging system and the old method. For convenience I shall call them “ A “ and “B.” Both taxpayers are in receipt of £10,000 a year, the only difference being that I shall reverse the figures in each case, as I want honorable -members to note the difference in the amounts paid by them on an income of) £10,000 : over a period of fire years. In one case I shall start with a big income figure, and end with a little figure, and in. the other I shall start with a little and end with a big income figure. It will be seen that the man whose income is” falling “ gets it in. the neck,” arid is knocked out, while the man whose income is rising gets off very lightly. In my schedule the taxpayer “ A “ has a revenue of £4,000 in his first year, £3,000 in his second year, £2,000 in his third year, £1,000 in his fourth year, and nothing in his fifth year. Under the Treasurer’s forecasted amendment he will, in his first year, pay the same income tax as at present, namely, £511 17s. 6d. on £4,000, representing 30.7ld. on the full amount. In his second year, with an income of £3,000, the average for the two years will be £3,500, and he pays on the £3,000 at the. rate of £3,500, £344, as against the former charge of £303. In his third year, with an income of £2000, the average for the three years will be £3,000 a year. Therefore, while his. actual revenue may be only £2,000, he will be taxed at the rate of £3,000, and pay £202 in income tax, as against £149 under the old arrangement. In his fourth year, with an income of. only £1,000, the total for. the four years will be £10,000, and the average £2,500 per year. Therefore, on £1,000, actual income, he will be taxed at the rate of £2,500, and pay £87, as against. £47 under the old tax. In his fifth year, with no income at all, he will still have an average of £2,000 a year, but will not be taxed, hut over the five-year period he will pay £1,146, as compared with £1,013 under the old’ tax. If he had re- ceived an annual income of £2,000, he would have paid a total of £746 for the five years.

Mr West:

– It was your own proposal that the income of primary producers should extend over three or four years.

Mr PROWSE:

– I want the primary producers to be put on the same footing as others. In the case of B, I reverse the figures and take the position of a man who starts with nothing but gradually improves hia position, until he is making £4,000 a year. Although he also earns £10,000 in five years, he only pays’ £520’ in tax; as against £1,146 in the case of A. Can that be regarded’ as equitable?’ In another .case, with the largest earnings in the middle of the period, the man who has an irregular revenue pays £839, as against £746 which he would have paid on a regular income of £2,000 a year. I am pointing out these figures to show that the primary producers have a genuine grievance, which is not remedied by the clumsy attempt the Treasurer has made.

The Prime Minister (Mr. Hughes) told us yesterday that he had always been in favour of developing the country and encouraging primary production; but how can he expect development of the country when such inequitable taxation is imposed upon primary producers? Surely it is within his power, and that of his Ministers, to bring down a measure that will be more equitable. The continual decline in the price of commodities is making the farmer’s occupation so increasingly unattractive that it will be a marvel if many more people do not leave the land and flock to the cities. We are told of the immense amount of capital that has been invested in secondary industries. It “is an advantage to the community up to a certain point, but if it should serve to induce people to leave the land and go to the cities to earn a livelihood, it would become a calamity rather than something to be desired. The Treasurer reminds me of the astuteness of St. Paul -

Perceiving that the one part were Sadducees and the other Pharisees . . . he cried out, “ I am a Pharisee, the son of a Pharisee “ . . and when he had so said; there arose a dissension between the Pharisees and the Sadducees, and the multitude was divided.

In the same way, the right honorable gentleman wants to get out of his present difficulty bv irritating the Country party. Avoiding the real issue, he seeks to make out that we only .propose to effect a saving by “ sacking “ every one and thus offending the Labour party.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I never uttered such a word in the whole of my speech..

Mr PROWSE:

– Then I would like to know what other inference one could draw from the right honorable gentleman’s remarks. He may be able to refute the use of a word- or a phrase, but the sense of his remarks was what I have indicated. He attempted to make honorable members sitting on the right of the chamber feel that they must vote to save the Ministry because certain honorable members in the Corner proposed to tip the public servants out of office and bring about a general retrenchment; and further, to cease building public works.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I never uttered such a word.

Mr Maxwell:

– The Treasurer said the very opposite. He said that the Country party did not propose to sack the public servants.

Mr PROWSE:

– Bankruptcy follows upon the inability of a private individual to live within his means. How would honorable members regard a person who, having a beautiful home ana a retinue of servants, which he was able to maintain on an income of £10,000 a year, declined to cut down his establishment on finding that bis income had been reduced to £5,000 a year? Yet that is exactly the attitude of the present Government.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I suppose that the private individual whose case the honorable member is citing would immediately begin to discharge his retinue of servants.

Mr PROWSE:

– Seeing that the head of a family, who, despite a reduced income, declared that he must spend up to his former income would soon be faced with bankruptcy, it would ultimately be worse for the servants in his employ, because the whole establishment must speedily collapse.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I see. A calamity would follow unless he discharged all his servants.

Mr PROWSE:

– At any rate, it is a very sound principle for the Government not to spend money upon works regardless of cost simply for the sake of spending it; because money spent in this way will whirl back like a boomerang upon the labouring man, hitting him harder than anything else. We have already had instances of this in Australia. Had the work of building the transcontinental railway been carried out by contract it would have been completed at half the cost. It is certainly true that the working men were employed for a longer period, and were paid £8,000,000 for their services; hut that £8,000,000 has been a millstone upon the line ever since, and because of it no worker will ever be able to get cheap transit over the railway.

Mr Hector Lamond:

– The fares on the transcontinental line are the cheapest in the world.

Mr PROWSE:

– Yes; by working the line at a loss. Another instance is to be found in the Wyndham Meat Works, in Western Australia. The State Labour Government declined a private offer to build the works for £250,000, and carried out the construction by day labour, at a cost of £800,000. The object in building the meat works was to enable the people of Perth to get cheap meat, and to realize the full profit of the cattle in that remote part - at least that was the cry of the Labourites -but the people of that city will never get cheap meat from them, because the works are so overloaded with capital expenditure. It is true that the labourers got out of the work of construction £500,000 more than they expected to get out of a private firm, but, as a consequence, they are obliged to pay more for their meat than they would otherwise have paid. In the same connexion it is foolish for us to spend money on building ships when we can buy them at half the price. It may be very fine for our workers to have employment in building steamers. I have heard it said here that, so long as these vessels are made in Australia, it does not matter what they cost; but the cost of each individual vessel is a plaster upon it that will stick to it wherever it sails the waters, and be a handicap upon its freightage for all time, throwing it quite out of competition with other countries engaged in the shipping business. Other countries can sell us all the shipping we require at a very much less cost than we will be obliged to pay if we Ibuild our own vessels.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Not newlyconstructed vessels.

Mr Hector Lamond:

– The poor Australian cannot do anything!

Mr PROWSE:

– I thought that I would hear that cry. I am anxious to have things built in Australia, and I do not see any reason why vessels cannot be built here as cheaply and as efficiently as they can be built elsewhere. We have the coal, the iron, and efficient men; but if we are to .pay half-a-million more to build a vessel here than to buy one elsewhere, how oan we afford to use it? It could not carry the deadweight of capital cost. 1Sir Joseph Cook. - No new orders for vessels have been placed since the armistice.

Mr PROWSE:

– I am delighted to hear that statement.

Mr Poynton:

– You have heard it several times before.

Mr PROWSE:

– And is it not intended to go on with shipbuilding?

Mr Poynton:

– The Treasurer does not say that.

Mr PROWSE:

– Until the price of building ships in Australia can nearly compare with the price at which they can be bought, I shall not support any Government that will continue to build them here, because it will mean a repetition of the experience we have had iu connexion with the transcontinental railway. with its continual deficit, or that of the Western Australian Government with their meat works.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The decision in regard to. the building of further vessels has not to be made for at least twelve months.

Mr PROWSE:

– I urge the Committee not to spend money even to the extent of pledging a future that certainly, from a financial standpoint, threatens to be exceedingly dark for years to come. We ought to live within our means, not only as a protection to the working man, but also for the sake of every other person in the community. If we spend money beyond our means we impose a great penalty upon the future. It might be reasonable for a man to mortgage his future if he could rely upon that future being better than the past; but our future, according to reasonable, thinking men, is a down dropping of prices for all our commodities. In such circumstances it is foolish for us to imagine that we are not likely to receive less revenue from that source. The Treasurer can reasonably estimate his expenditure and, most likely, spend all the money voted.

Mr Poynton:

– It has not been done yet.

Mr PROWSE:

– No, because the votes for works have not been fully spent. As regards revenue there is a ten to one chance that it will be very much under the estimate, because there is every probability of the returns not being as favorable as the Treasurer anticipates. I mentioned in the House before that Victoria was in a parlous position after the land boom twenty-five years ago, and the Commonwealth at present is in such a condition that its affairs should be administered in a careful and capable manner. At the time of which I speak, the late Sir George Turner was Treasurer, and he dealt with an exceedingly difficult problem in an efficient manner. There are people who have lived to bless the deceased gentleman for his courageous attitude on that occasion.

Mr Mathews:

– It was not Sir George Turner, but Sir James Patterson.

Mr PROWSE:

– If the late Sir George Turner had gone blundering on, regardless of the future, it is difficult to imagine what the result would have been. He decided that the State would have to live within, its income.

Mr Poynton:

Sir George Turner was not in power at that time.

Mr PROWSE:

– He was Treasurer of Victoria about twenty-five years ago. Victoria to-day can borrow at a lower rate of interest than any State in, the Commonwealth, and its taxation is lower than any other State. I believe it is possible for the Commonwealth, even at the present juncture, to live within its means, and if such a policy is adopted, some will live to bless those who are governing the Commonwealth to-day. We are really directors of a syndicate which we have been appointed to manage, and it would be unfair to the shareholders if we did not seriously consider the question of expenditure. I should like the Treasurer to have replied to his critics in a more -business-like way, and in a helpful rather than in an abusive manner. He is really our chairman of directors, and should give the shareholders a satisfactory statement concerning the actual position.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have had it “ in the neck “ long enough. I shall have it no longer.

Mr PROWSE:

- At the inception of Federation the estimated expenditure was £750,000 per annum for the services rendered to the community, and the right honorable gentleman knows the fabulous amount which . has , now been reached. Prior to 1900, the States- were peacefully working out their own salvation; but when Federation was established the States were deprived of many of their powers. Apart from a few important services in which the Commonwealth and States can co-operate, I do not know that any great advantage has accrued. There has been a tremendous increase in the expenditure, with the result that additional burdens have been placed upon the people. The State and Federal taxation imposts are about equal, and there is now a double tax on those who are endeavouring to develop the country.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We are not imposing any additional taxation. What is the point in this?

Mr PROWSE:

– I was not referring to the taxation, proposals of the right honorable gentleman, but directing attention to the position which has arisen. I waa nearly going to refer to Federation as a white elephant, or as an incubus upon the people in many parts of the Commonwealth, particularly those resident in States distant from the Seat of Government. The present system has placed a serious burden upon the people, and we are not progressing at the rate that might be expected, or securing reasonable advantage for the price we are paying.

In 1913-14 we had 35j637 public servants, and in 1920-21 there were 50,566, or one to every ten adults in the Commonwealth. I am not in a position to say whether every public servant is earning what he is receiving, or whether such a large number is needed; but I doubt whether the administration is such that these men are able to do the work efficiently. I believe in the best payment for satisfactory service, and I am totally opposed to niggardly remunerations being paid to efficient officers. The system introduced into the Commonwealth and State Public Services .encourages men to bo merely time-servers instead of men of merit, and the Public Service’ is becoming’ enlarged in such a way that one wonders where it will end. A Royal Commission, appointed to inquire into Public Service matters generally, after making exhaustive investigations, referred to the great laxity existing, and to the fact that there were more men employed in some Departments than were needed. I am not in favour of keeping men in positions if there is no work for them.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Who is?

Mr PROWSE:

– The Leader of the Labour party in the State Parliament’ of Western Australia, when speaking on the Address-in-Reply, said that every servant should earn what he receives; and that is what we should insist on. Lt is time the Government gave us some indication of what they intend doing. The whole position is governed by, political influence, and from that it should be free.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– All appointments are. made by the Public Service Commissioner.

Mr PROWSE:

– I know all about that. Does the Treasurer wish me to believe that political influence has been entirely removed from the Public Service of the Commonwealth?

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I want the honorable member to believe that I cannot recollect getting a man into the Public Service during the whole of my public life.

Mr PROWSE:

– I did not suggest that.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I speak for myself. I cannot voice the opinions of others.

Mr PROWSE:

– Of course not ; but I have heard honorable members in this Chamber say what they intended doing for the public servants. Is that not political “touting”?

Mr Hector Lamond:

– The honorable member is hesitating a good deal before saying, what he favours.

Mr PROWSE:

– We must pay public servants well when their services are required, and, if necessary employment cannot be found for them, they should be placed elsewhere.

Mr Brennan:

– Does the honorable member believe in the competitive system of admission?

Mr PROWSE:

– A very excellent idea would be to refrain from increasing the number. A certain number will be retiring each year, and the efficiency of the Service would not be impaired if the Government declined to make further appointments for at least a few years. In reply to the honorable member for Batman (Mr. Brennan), I certainly think men should be admitted to the Public Service on qualification. If, however, the honorable -member means that when once admitted men shall remain there, no matter how lazy they may become, or how little they may really earn, I cannot follow him.

Mr Brennan:

– I do not wish you to infer that.

Mr PROWSE:

– The Prime Minister (Mr. Hughes) declares that he has always said that he is ready to help the primary producers; and, of course, he has, because that is good political stuff to talk. During the- elections, at Elmore, the Prime Minister said that the Wheat Pool must remain, and at Bendigo he told the electors that he had always been in favour of it; but, just a few days before the elections, he announced that he would have no Pool, and that the Government would return to pre-war conditions. Altogether it is very difficult to know what the right honorable gentleman does mean, although he asks, “ What do the farmers mean ? “ In reply, I may tell him that, in February of last year, the Prime Minister complimented the primary producers on introducing to him a deputation representing what he described as the finest organization of farmers in the history of the world. Every State in the Commonwealth waa represented on that deputation, which laid before the Prime Minister the proposal that had been agreed upon. The Prime Minister, however, simply “ threw cold water “ on the proposals of the farmers, saying that he could not introduce compulsion, because he had promised a few men in South Australia, who described themselves as a farmers committee, that there would be none. The result of the Prime Minister’s reception at that depu tation was the disintegration of the organization, whereas he ought to have given a lead to the people of Australia, and repeated what he declared at Bendigo last week, that he regards (he continuation of the Pool as our only way of salvation. Now, however, when the whole fabric has broken down, he declares publicly that he was always in favour of the Pool, and that, unless every one concerned is in it, there is no good in the idea.

Sir JOSEPH COOK:
Treasurer · PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The newspapers in this city now are urging the farmers to have another compulsory Pool.

Mr PROWSE:

– The farmers of Australia unitedly agreed on plans which they conceived to be the best for the development of this industry, which brings in £50,000,000 of the revenue on which the people live, though some honorable members seem to regard the latter fact very lightly. Honorable members opposite organize for the regulation of the sale of the commodity they have to sell, and their organizations are very jealous about admitting any one into their “Pool.” Honorable members opposite, however, would not mind getting into any Pool. The primary producers organized in order to secure a fair deal from the world and the people of this country. The producers pay high freights and high prices for their machinery, and all they require ; and their organization is not only in their own interests, but in the interests, of Australia. I ask honorable members just to read the speech of the Prime Minister on 5th February last, and see whether he regarded the idea favorably. He now flamboyantly asks, “ What do the farmers want? “

Mr Hughes:

– Hear, hear!

Mr PROWSE:

– I refer the honorable gentleman to the report of the deputation to which I have referred, and which he described as the finest he had ever known.- On that occasion he gave utterance to a long tirade, . saying he would like to help the farmers, but he had made an electioneering speech to a few quasi South Australian farmers attached to the middlemen ‘ that there would be no compulsion. In 1917, 1 think, there was a scheme ‘ presented to him under which, we desired to organize before the war ended, so that proper marketing arrangements could be made. This was known as the McGibbon scheme, and was approved by all farmers’ organizations. In both of the schemes to which I have referred provision was made for local consumption, with representation of the Government to see that it was carried out with due consideration for the consumer. Tt was a most reasonable scheme, but it was stultified and rendered inoperative by the lack of sympathy on the part of the Prime Minister. He might have given a lead to the State Governments, but did not, although he admits that a fall in the price of wheat means a loss of millions of money to this country. The honorable gentleman may try to rid himself of responsibility in this regard, but he will find it a difficult task if he reviews his promises and speeches. I have watched this business from the commencement, and know every move and turn in it. If the Prime Minister is now sincere in his desire to learn what the farmers want, I can tell him that it is expressed in the proposals placed before him in February, 1920, but it is now much too late to take effective action. Victoria and Western Australia have already decided on a plan, and one is projected for New South Wales; and the time for the honorable gentleman to act was when we waited on him in 1920.

Mr Hughes:

– The honorable member at that deputation said he wanted a compulsory Pool.

Mr PROWSE:

– And the Prime Minister told the people at Bendigo the other day that a Pool was no good if one man was out of it.

Mr Hughes:

– I did nothing of the sort.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member for Swan (Mr. Prowse) voted against a compulsory Pool while the Prime Minister was away in England.

Mr PROWSE:

– That statement is not correct, like many other statements from the same quarter. I should like the honorable member for Hume (Mr. Parker Moloney), when an opportunity occurs, to explain himself.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I would like to hear an explanation.You will never explain that away.

Mr PROWSE:

– The honorable member himself will have something to explain later. There is one fact, however, that is very pleasing to me. Although there are no women members of this Parliament, the women outside are beginning to think for themselves; and there are certain gentlemen in this House very anxious to attend the meetings of these women, who are having a tremendous influence in politics to-day. We have not heard lately so much about the price of bread. Honorable members who represent city consumers have found it a splendid “gag” for a considerable time to deceive the people, but they have done this for so long that even the women are beginning to consider what is “ in it.” It is the influence of these women that has changed the minds of some honorable members. At a meeting of the Australian Women’s National League recently, a paper was read by a prominent member in which the following occurred: - people could not expect to get a cheap loaf of bread nowadays, because it cost the farmer at least 6s. to grow a bushel ot wheat, and then there were all the expenses of freight and gristing and distribution before the wheat fell into the baker’s hands. She thought that people ought to pay a high price for bread cheerfully -

Honorable members will have to change their tune when they go to these women’s meetings in the future -

Why need they strive for a cheap loaf? It did not add materially to the family’s weekly bills - not nearly so much as the rise in the price of admission to picture theatres -

Honorable members laughed at me when I said the same thing some time ago -

There were too many people watching to see that they did not pay more than was just for the loaf of bread, although so many wanted to make them pay less. She could not understand the antagonism of the Farmers Union to the Australian Women’s National League. When it grew older and wiser, it would discover that the league was the best friend it had. We could not afford a cheap loaf under existing conditions.

Mr Riley:

– Who is the lady?

Mr PROWSE:

- Mrs. John Booth, and she is to be complimented on having a very broad, national Australian view.

Mr Riley:

– Has she any children? What does her husband do?

Mr PROWSE:

– I am not acquainted with her husband. I feel that honorable members . are justified in sup- porting the motion of the Leader of the _ Country party. We must he consistent with our election pledges. I do not consider that any Nationalist member who votes for the amendment is breaking his pledges. To be true to his pledges, he must vote for the amendment, which represents an honest attempt to try to live within our means. I contend that it is possible to live within our means. If it is not .possible now it never can be. We are mortgaging the future. The Treasurer ‘has quoted the deficits in the Budgets of the various States. Can that give any consolation to the taxpayers ? The Treasurer hides behind tho States as if they afforded him an excuse. Western Australia has a hig overdraft. It is too big, I admit. We do not want to pay heavy taxes to the -State of Western Australia and to the Commonwealth as well. The Treasurer talks about reducing overlapping expenditure. Since we are the same people, speaking the same language, why do we need two Electoral Departments and two Taxation Departments? This avoidable overlapping was mentioned during the recent election, and long before then, but nothing has been ‘ done. We aTe informed by the Treasurer that, the States will not agree to Unification. As it takes two to disagree, it seems that the Treasurer must be disagreeing. He has certainly made arrangements in my State for the collection of taxation by one authority.

Mr Hughes:

– Why is the honorable gentleman “ stone-walling “ bis own amendment?

Mr PROWSE:

– The vote on the amendment will be taken quite soon enough for the right honorable gentleman. In Western Australia we have unified, or made an attempt to unify, in the matter of collection of taxation. It is a most imperfect attempt. - It is desirable that the States should agree with the Commonwealth in regard to the value of stock for taxation purposes. In Western Australia we have to put two different statements on the one form. The way the people in Australia have .been kicked from pillar to post is heartrending. If the Government would set itself the task of rectifying these things by amending Acts, giving the people who pay the taxes as little trouble in doing so as possible, it would ‘be doing some good. Every sensible man knows that we must pay taxes to keep the country going after the great war, which I ana glad we came through successfully, birt let us do it in a businesslike way.

Mr BAYLEY:
Oxley

.- When the right honorable the Treasurer submitted his Budget three weeks ago, he was followed by the honorable member for Moreton (Mr. Wienholt),, who, in the course of his remarks, said that in his opinion it was the duty of this country to live within its means. When he made that statement I turned to the honorable member for Darwin (Mr. Bell), and said, “Yes, I agree with that.” He replied, “.So do I.” He andi I saw eye to eye in this matter. Yesterday afternoon the Treasurer made a statement which, personally, I was very pleased to hear. ‘ It was to the effect that the responsibility for altering the Budget rested with members of the Committee. For the last five years I have supported the National party. I have voted consistently for that party, sometimes against my convictions. During the wax and the post-war period I felt that it was of the utmost import- ance that X should sink my personal opinions, and that the National party should speak for the country with one voice.’ But I realize that, as well as being a member of the National .party, I represent the people of Oxley, and I owe it to myself and to them to do my best in their interest. If I vote blindly on every occasion, I am recreant’ to my duty. Yesterday the Prime Minister (Mr. Hughes) spoke even more emphatically than the Treasurer did along the same lines. He went further than the Treasurer, and was- more definite. He said this Committee would be given the opportunity of making alterations in the Estimates. The Prime Minister has told us that this Committee is free- to make such suggestions as it thinks fit, and that those suggestions will be accepted by the Government provided they do not affect vital matters of policy. With that, assurance I am content if I can receive a further assurance that when we come to a detailed study of the Budget not too many items will bc marked “vital,” and that I, and other members, will have an opportunity to vote as “we think fit. To be specific, let me mention one or two items. First, I will take the item of Defence. I- have certain definite opinions in regard to the dangers that confront, or do not confront, this country. When we reach the Defence estimates, it is my intention to place these views before the Committee. It may. be that I, or some other member, will move for a reduction of the Defence estimates. Suppose a majority of members of this Committee como to the conclusion that, in view of the Disarmament Conference which will be held shortly at Washington, no new works in connexion with Defence shall be undertaken, would the Prime Minister deem that to be a matter vitally affecting the policy of the Govern-, ment, or would the Committee bo free to make a recommendation which would bc accepted by the Government?

Mr Hughes:

– In regard to new works, whether the Washington Conference does or does not come to a decision, this Committee is free to make any suggestions it likes, and the Government will abide by th6 result

Mr BAYLEY:

– I would bo glad if the Prime Minister would tell us whether the Committee would be deemed to be taking the business out of the hands of the Government if it moved for a reduction of the expenditure on works proposed in. connexion with any other Department?

Mr Hughes:

– No. The statement I have made applies to all those works that have no relation to the vital matters of repatriation, land settlement, and War Service Homes, or to works that are in part constructed.

Mr BAYLEY:

– With that definite statement from the Prime Minister I rest content. 1 All I. desire is an opportunity for this Committee, as a Committee, to decide how the money of the country shall be spent. As the responsibility has been placed upon the shoulders of honorable members, it rests with us to carry it. I,- personally, am. prepared to shoulder that responsibility. When I go to the people of Oxley, I want to feel that, personally, I have had an opportunity of assisting in the framing of the Estimates.

Progress reported.

House adjourned at 4 p.m.

Cite as: Australia, House of Representatives, Debates, 21 October 1921, viewed 22 October 2017, <http://historichansard.net/hofreps/1921/19211021_reps_8_97/>.