10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 11 a.m., and read prayers.
– In view of the statement published in the press this morning, that the Commonwealth Government intends to ask this Parliament to abolish the per capita payments to the States, will the Treasurer make available to honorable members a report of the proceedings at the recent conference between Federal and State Ministers?
– I understand that the proofs of the report, which were sent to the State representatives for correction, have not yet been returned. As soon as the revised report is available for distribution, copies will be issued to honorable members.
– In the meantime, the Treasurer will not proceed with his financial proposals?
– I ask the Minister for Trade and Customs whether the report of the Tariff Board in regard to the proposed bounty for the cotton industry has been received? If so, will the Government expedite its decision in regard thereto, so that the growers may know at the earliest possible date under what conditions they will producecotton in the present season?
– The report of the
Tariff Board on the cotton industry has been received.It is now having the careful attention of the Government, and a decision will be announced at the earliest possible date.
– Has the Prime Minister seen the serious statement published in the last issue of Smith’s Weekly, wherein it is stated that, owing to what is known as sectional buying in the wool trade, Australian growers were deprived of £6,339,141 during the season 1925-26; the New South Wales growers alone losing over £2,500,000? The article says that the auction sales as now conducted are farcical, and that federal legislation on the subject is needed. Will the Prime Minister investigate these assertions, in order to decide whether steps can be taken to prevent a repetition of the serious lossesnow being sustained by the Australian wool trade?
– I have not seen the article to which the honorable member refers, but any representations made to me by the wool-growers will receive serious consideration.
Motion (by Mr. Bruce) agreed to-
That the House, at its rising, adjourn until Tuesday next, at 3 p.m.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow: -
Article bysir John Ross.
asked the Prime Minister, upon notice -
– I have not read the article referred to, but will take an early opportunity of doing so. The suggestion of the honorable member will receive consideration.
asked the Prime Minister, upon notice -
Will the Government give an opportunity foremployees of other States engaged in the printing industry to apply for employment in the Government Printing Office at Canberra?
– It is intended that, as a temporary arrangement pending the establishment of the permanent office, the staff to be employed at the Government Printing Office at Canberra will consist of Victorian Government Printing Office employees. If it be necessary to engage other employees, consideration will be given to the claims of applicants from other States.
Debate resumed from the 3rd June (vide page 2640), on motion by Mr. Bruce -
That the bill be now read a second time.
Upon which Mr. Charlton had moved by way of amendment -
That all the words after the word “That” be left out with a view to the insertion of the following words in lieu thereof : - “ the bill be withdrawn with a view to eliminating clause 2 and substituting therefor the following: -
Section fifty-one of the Constitutionis altered -
by omitting from paragraph (i) the words “ with other countries, and among the States.” (b)by omitting from paragraph (xxxv.) the words “ Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State ‘’ and inserting in their stead the words, - “ Labour and employment, and unemployment, including -
the terms and conditions of labour and employment in any trade, industry, occupation, or calling;
the rights and obligations of employers and employees;
the maintenance of industrial peace ; and
the settlement of industrial disputes; and”
by adding at the end thereof the following paragraph: - (x1) Trusts, corporations, combinations, monopolies and arrangements in relation to -
the production, manufacture,or supply of goods, or the supply of services; or
the ownership of the means of production, manufacture, or supply of goods, or supply of services.
.- I find myself in a difficulty in regard to this measure, and, judging by the speeches of those who have preceded me in this debate, I am not alone in that embarrassment. Whatever opinions may be expressed in regard to the proposals, their importance and far-reaching character cannot be questioned. The bill seeks to give to the Commonwealth Parliament complete control of industrial powers. I do not think there is any doubtthat such a transfer of authority would be an improvement on the present chaoticconditions, but in discussing proposed changes we must consider, first, whether the principle underlying the artificial regulation of wages and hours is sound, and secondly, whether the provisions in the bill inregard to time and manner of effecting an alteration are acceptable. I listened with particular interest to the speeches delivered by the honorable members for Swan (Mr. Gregory) and Wannon (Mr. Rodgers), for they rightly asked whatwill be the position of the primary producer under the artificial regulation of wages and hours. I am forced to the conclusion that such regulation as practised to-day is economically unsound.
– What does the honorable member mean by artificial?
– I mean the fixing of limited hours of work and the wages for such work without any guarantee that value will be given in return.
– What does that mean?
– I decline to be cross-examined by honorable members opposite. They will have an opportunity, which some of them have been rather loath to take, to explain their views. The artificial regulation of wages and hours is economically unsound, because it cannot be applied to all sections of the community. If an attempt be made to fix the hours and wages of the great primary industries and to artificially regulate their return, the system will break down. I judge, from newspaper reports, that the New South Wales Government has wisely refrained from enforcing the 44 hours week in the primary industries. Responsible people in that State, at any rate, seem to have sufficient sense to realize the argument I am advancing. If the primary producer were to work only 44 hours a week for a fixed return or basic wage of, say, £5 a week, and the product of his labour were merely to be delivered to some government authority without any obligation on the producer to return value for the wages received
– We should have a very dear loaf.
– A very long “ loaf.”
– A very small and expensive loaf. If we attempt to fix the price of wheat on a 44-hour basis, plus the payment of overtime for all hours worked before 8 a.m. and after 5 p.m. and double pay for holidays and Sundays - for Sunday labour is imperative in pioneering districts where water must be carted - the community will have to pay dearly indeed for its loaf. It is likewise with the dairying industry. If we fix the wages of the workers in that industry on the basis applying to secondary industries, and also fix the return on the capital invested, the price of butter will beenormously increased.
– Why not fix the price of land?
– The honorable member wishes to fix the price of everything, and I can quite understand his position. What I do not understand is the position of those who insist that the return on the capital invested in secondary industries shall be protected by legislation in the shape of Customs tariff and the like, and that the wages of the worker shall be guaranteed by legislation in the shape of industrial courts and awards, at the same time leaving those engaged in the primary industries, upon which the whole struc ture of industry rests, to work under the law of supply and demand, and to have their wages regulated by the shifting prices of the world’s market. Take the position of the wheat areas at wheatcarting time. At railway stations early in the morning it is not unusual to see 20 or 30 wagon loads of wheat, some of which has been carted 8 or 10 miles, waiting for the railway station to open at 8 o’clock, because the railway employees, under a fixed award, do not start work until that time. That sort of thing tends to bring about artificial values, and if we attempted to apply the system all around, the whole structure upon which industry rests would immediately collapse. When forced into an impossible economic position by legislation, as the primary producers are to-day, they are compelled to ask the Government for some assistance, to enable them to carry on ; butwhat is the reply given to them? The Prime Minister (Mr. Bruce), when asked by the dried-fruit growers to guarantee the cost of production, refused to do so. He said that they were asking him to accept an impossible formula. Yet the Government, under the tariff legislation, has guaranteed returns to the secondary industries. Last year, when the dried-fruit growers asked for assistance, this Parliament granted it, but at the same time the Arbitration Court granted an increased wage to the workers engaged in the industry. I should be the last man to attempt to lower the standard of living. I am prepared to do everything possible to improve the conditions of the workers of this country. Honorable members may talk about the need for humanitarian legislation as much as they like, but when we take away from any man - I care not who he is, and in what walk of life he moves- the incentive to put forth his best efforts, we take away everything that stands for progress and content.
– How can any employee have an incentive in view of the attitude of the employers?
– I quite admit that too many employers do not give their employees any inducement to take an interest in their work. If the Government’s proposals are carried, this subject could be better discussed when the legislation to be introduced subsequent to their passage is under consideration. The expansion of profit-sharing, and the development that has taken place in the United States of America, seems to indicate that the workers of that country have accepted the fact that the capitalistic system cannot be destroyed, and are, therefore, using their energies to take advantage of that system by becoming employers themselves. It seems to me that in that direction, and by establishing industrial insurance and banking institutions, we shall obtain the greatest progress. The evil of the capitalistic system is twofold - the congregation of capital in the hands of individuals, and the manipulation of credit. A wider distribution of wealth would be a much saner and quicker method of solving the problems of the workers, not only of this country, but also of other countries, than the present system, which tends towards price-fixing all round. The wheatgrowers asked a compulsory wheat pool, but it was found that neither the Commonwealth Government nor the State Governments had power to grant their request. A State Government has power to establish a pool within its own borders, but not elsewhere. We had a very illuminating illustration of the difference between the powers of the Commonwealth and of the States iu connexion with the regulation and control of primary industries when the Victorian Government recently seized a consignment of New South Wales dried fruits that had entered its borders. I believe that that Government also intercepted a consignment of Western Australian dried fruits. The Commonwealth Government is absolutely powerless in such circumstances, and I contend that such a state of affairs is altogether wrong. The Government, since it has introduced these proposals, should have included in them a proposal to control and regulate trade and commerce, because if the powers asked for are granted, it is absolutely essential that we should have control of trade and commerce.
– That would be almost unification.
– The honorable member is opposed to the bill. I have already indicated that I think that the whole position is economically unsound. If by voting against these proposals we could improve the system of regulating wages and conditions, I should certainly sup port the honorable member; but it seems to me that, as a representative of the primary producers, I must choose between the present chaotic system, which leads to needless competition and duplication of State and -Federal awards, and the proposal to have the whole system coordinated and placed under Government control. I would sooner have a bad system well regulated than continue to carry on in the chaotic state that exists to-day. The right honorable member for Balaclava (Mr. Watt), in his excellent speech, said that the wages board system was preferable to the Arbitration Court system, and with that statement I agree. The advantage of the wages board system is that it brings together two interested parties, who know every detail of the industry that they are attempting to regulate. The fundamental weakness of the Arbitration Court is the fact that disputes are taken into the wrong atmosphere. With all respect to the legal members of this House, I say that there is not much incentive in a legal atmosphere to secure prompt’ decisions. If the lawyers engaged in arbitration cases studied their own financial interests, they would prolong the disputes; but both the employers and the employees, sitting together as a wages board, are interested in reaching a prompt decision. That, it seems to me, is the outstanding advantage of the wages board system over the Arbitration Court.
– Has the honorable member ever been on a wages board?
– I confess that I have not, but I have observed the results of the system, and, judged by results, the evidence is overwhelmingly in favour of it. I shall not pursue that subject further because, if the referendum is carried, we shall have to discuss bills to create the necessary machinery to give effect to the decision of the people, and it will then be a more convenient time to speak on this phase of the subject. The honorable the Leader of the Opposition (Mr. Charlton) struck a note that did him and his party credit when he suggested a conference with the Government to deal with the question in a non-party way.
– That has gone by the board as a result of the decision of the Trades and Labour Council last night.
– I do not think so. I assume that the offer is still open; I should be very sorry to think otherwise.
It would almost ensure the acceptance of these proposals by the people, if both parties in the House gave them their blessing; but, even then, we should have quite enough opposition. In discussing this matter, we cannot lose sight of the projected legislation in connexion with the Per capita payments. Whatever criticism may be levelled at the Government, one cannot accuse it of going slow; I should rather say it can be charged with going at a gallop. Nor can we accuse it of balking at big issues; but rather of attempting unduly to rush matters of farreaching importance.
– Does the honorable member suggest that the Government has more courage than judgment?
– The honorable member’s interjection makes that suggestion. Time, however, will tell whether the suggestion is merited. It is questionable tactics to arouse the antagonism of the State Governments,, and at the same time to rush to the country trying to take certain industrial powers from them. The Government has not answered the pertinent question asked by the right honorable member for Balaclava - Why all this urgency? This’ is not ordinary legislation. Proposals for the amendment of the Constitution require prolonged deliberation, not only by this Parliament, but also by the people.
– The right honorable member for Balaclava is “ in the breeching.”
– And that reflects great credit on him. The right honorable member justifiably asked when it was proposed to bring ‘ in legislation to give effect to the present proposals, if they are approved by the people; It would appear to me that it cannot be done this year, and the right honorable the Prime Minister did not give any indication of when he proposed to do it. If effective action cannot be taken this year, and if we are to have a constitutional session of the Parliament next year, it would be wiser to deal with this matter iii conjunction with the other important matters which most of us agree must be considered in connexion with the proposals to amend the Constitution. An expenditure of £80,000 or £100,000 should not be regarded lightly. In former referendums, the people, if they did not under stand the questions submitted to them, could refrain from voting, but under the conditions of this referendum, they will be compelled, by law, to register a decision, whether they understand what they are voting on or not. There is a danger that many people who will fail to understand the issues will vote “ No.” It is also to be considered that the work of this Parliament must be held up during the taking of the referendum; urgent legislation will have to remain in abeyance while we make the appeal to the people. No member of the Government has given adequate reasons for rushing this proposal through. I . shall vote, however, with the Government. I disagree with the honorable member for Swan (Mr. Gregory), that one is acquiescing in the artificial regulation of industry by voting for these proposals. If we are going to regulate industries, the method- proposed by the Government is better than the present system. It is due to the right honorable member for North Sydney (Mr. Hughes) that some of us should pay him the compliment of saying that the work he has done in the past in endeavouring to secure alterations of the Constitution stands to his credit. He, more than any other man in this Parliament, has worked to secure alterations on the lines now proposed, and whatever view we may take of his political beliefs and actions, we cannot question the splendid work he has done in endeavouring to re-shape the Constitution so that it may function more efficiently in the interests of the people of this country.
.- The view which I take of this measure cannot be doubted, seeing that almost exactly three years ago, in this chamber, when speaking of industrial arbitration, I advocated as the best solution of our present difficulties the transfer of industrial arbitration to the Federal Government. I tried in that address to discuss many aspects of the question. I see no reason to-day to alter any of the opinions I then expressed, except one, to which I shall refer directly; and I see no cure for the chaos into which industrial arbitration has been rushing in this country, except the proposals now made by the Government. The debate has become somewhat in- volved, in that the merits of arbitration itself have been discussed, as well as the form of arbitration which the Government may propose when it has obtained the necessary power to legislate on the subject. This is not an opportune time to discuss the last-mentioned phase of the subject, but, when the subsequent bills come before this House, all these questions of form and procedure may aptly be debated. It is not fair at the present time to discuss a proposal for a referendum in the light of this or that view of the form the judicial powers will eventually take.
– The people will want some indication of how theproposals will be carried out.
– It is impossible to give that indication. The Government may state its proposals, but they may be very much modified before the bill is passed.
– And a subsequent government may amend the bill.
– That is so. For that reason, this whole question must be considered apart from the subsidiary question of the form of the bill.
– But the subsidiary question will arise whether the Government asks for full powers for this Parliament or whether it asks for something else.
– Undoubtedly. But the actual form in which the powers may be granted will be determined by honorable members; and we should consider this proposal apart altogether from that matter, for we have no light on it at present.
– Still, we may judge somewhat from the past.
– There is an important departure in this proposal from previous methods of dealing with industrial disputes. It is proposed now that complete power to fix industrial conditions shall be vested in an independent authority. That is highly desirable, for there is no doubt whatever that the principle of compulsory industrial arbitration has been obscured by discussions based on purely political motives and in accordance with the demands of certain classes of interests from time to time. The matter should have been studied in a scientific manner, so that its economic effect on the whole industrial life of the community could be determined. Up to the present, it has been a class fight, and the honours have been with the stronger party; but it is high time that it was removed from the realm of party politics and investigated by a calm, scientific, deliberate, and trained authority. The part of my speech of three years ago that I wish to modify reads -
We must recognize that the principle of industrial conciliation and arbitration has come to stay, and if the machinery to give effect to it is not yet as complete and effective as it might be, the remedy is to be found,not in abandoning the principle, but in using every endeavour to improve the legislation.
At that time, I, and most other honorable members, believed that there was no alternative to compulsory industrial arbitration; but a great deal has happened since then to shake our confidence in the principle, and I wish to make it perfectly clear now that I do not believe in it; but, at the same time, I do not think it is practical at present to abolish it. Public opinion would not support such a move until at least one more attempt has been made to make the machinery work.I feel that it will be impossible ever to make it work, but in consideration of the feelings of those who are enamoured of the principle, we ought to make an effort to do so, if only for the purpose of satisfying them that it is unworkable. The taking of this step will hasten the abolition of compulsory industrial arbitration.. It must be patent to everybody that the time is not distant when all the State arbitration courts and authorities will be absorbed in the Federal court. The judgments of the High Court to the effect that Commonwealth awards must override State awards force one to that conclusion. I believe that when only one arbitration court is operating, people will begin to concentrate on the actual basis of the system, and that they will soon come to see that it is fallacious, and must be ultimately abandoned. I can even see a glimmer of hope that it will be abolished not by the consumers, who suffer under it, but by the employers and employees themselves. The debate on this bill has been one of the most informative and best that I have heard in this chamber for a long time. The principles enunciated by the honorable member for Wannon (Mr. Rodgers), and the honorable member for Swan (Mr. Gregory) were sound. They argued that industrial arbitration must ultimately be abolished, because it is economically unsound. I agree with them. But I wish to ask them how much further they will be towards its abolition if they vote against this measure?
– They did not say that they intended to vote against it.
– I know that, and I suggest that if they desire compulsory industrial arbitration to be abolished, it will be advisable for them to support this bill.
– Hear, hear!
– That, in my opinion, will be taking a distinct step towards its abolition; for it will detach the application of the principle from the sphere of political clamour and contest, and attach it to an independent and scientific authority. Close consideration by such an authority of its effect on the general economic position of the community must soon lead to its abandonment. In my opinion, we have made a considerable advance in the study of industrial questions in the last few years. The right honorable member for Balaclava (Mr. Watt) whole-heartedly condemned the arbitration system yesterday and advocated the adoption of the wages board principle, while the honorable member for Wannon (Mr. Rodgers) urged that we should adopt a system of internal agreements in industry. Our experience of wages boards is limited almost to Victoria. It seems to me that the fatal objection to that system is that it leaves out” of account altogether the interests of the general public. It is true that the employers and employees may, under it, get together and make an agreement which is satisfactory to both parties, and so maintain peace in their industry; but that is not sufficient. “ Industrial peace at any price” is a foolish slogan, for we cannot have industrial peace if . the interests of the general community are disregarded.
– Will not the same objection arise if the method suggested by the honorable member for Wannon is adopted ?
– No; as I shall proceed to show. The example given by the honorable member for Moreton (Mr. J. Fran cis) showed how the wages board system may fail. Our experience with the coal tribunal is certainly no inducement to us to adopt that method generally, particularly in connexion with large industries. Our trouble has been that we persist in limiting our discussions to the increasing of wages and the limiting of hours; and it must be remembered that a reduction in the hours of work is tantamount to an increase in wages. People argue that if there is a reduction in wages there must necessarily be a decline in our standard of living, for, they say, wages make the standard of life. But that argument is fallacious. Our standard of living does not depend upon the amount of wages received, but upon the ratio of wages to the standard level of prices. T should like to draw the attention of honorable members to a most interesting and instructive book entitled The Secret of High Wages, that has been recently published by Messrs.” Austin and Lloyd, two engineers who went from Great Britain to America to inquire into industrial conditions there. Although it is only a small book, it has created quite a furore in the Old World, and more wisdom is compressed into its small compass than is to be found in any other book that I know of on the subject. It is really an account of the industrial conditions of America, and it shows how the present state of prosperity has been reached there. I should like to see the book in the hands of every adult person in Australia. In this book the principle which I have just enunciated is stated, and it is clearly proved that prosperity does not depend upon wages, but upon the ratio of wages to standard level prices. Most interesting figures are given comparing conditions in America with those in England. If wages are fixed by the prices of goods, as is done in this country under our Arbitration Court, because the cost of living is taken as the basis for wages, we shall never arrive, so the authors of this book say, and I think, soundly, at any improvement in prosperity.
– Our experience shows that.
– I think it does. The system we have been following here is followed in the Old Country, and is the cause of a great deal of the industrial trouble there to-day. I may be permitted to quote some figures from this publication to show how things work out in America and in England. In America there is no restriction upon output, and no restriction upon what a man may earn. These are the two important things which bring about cooperation between employer and employee. There is no restriction on output or upon earnings, and, on the other hand, it is recognized that only efficiency shall be retained, whilst inefficiency must be discarded.
– What are we to do with the inefficient ?
– The inefficient in one industry may be efficient in another. The idea that because a man is inefficient in one industry, that industry should carry him, instead of his finding employment in one in which he is efficient, cannot be justified.
– The trouble is that in every walk of life we have too many round pegs in square holes.
– That is just what I am saying. The system adopted in America puts that right by putting the round pegs into round holes, and the square pegs into square holes. That is what we need in every branch of industry. The system so works out in America that men earn enormous wages, and yet the prices of goods are kept low. The wages do not affect the cost of living, because high wages are set off by increased output. We hear a great deal in our arbitration courts to the effect that increased wages are beneficial, because highly-paid workmen are most efficient. That would be quite correct if we could ensure that extra efficiency would produce an extra output. But it is not so, because here with increased wages we are having restrictions upon output: Increased output does not do any injury to the worker, because he shares in the profit derived from it.
– Does the book referred to by the honorable member say anything about he inefficiency of employers or managers *1
– Of course it does.
– There is another book published which shows that managerial inefficiency contributes 75 per cent, to the waste of industry.
– There is in no country more done to secure the elimination of waste than is done in America. I can assure the honorable member for Maribyrnong (Mr. Fenton) that if he will read this book he will find that it contains most valuable information. It is one of the latest publications. It attracted world-wide attention, and became a famous book in a few weeks. In order to show how the system adopted in America works out, as compared with the result obtained in England, I quote the following: -
Mr. Hoover, the United States of America Secretary of Commerce, in his annual report, made public on 29th November, 1925, the Department of Labour index of the movement of wages and prices from 1920 to 1925, using the 1913 levels as the unit of 100. The price percentages represent the average wholesale prices of all commodities.
The figures given are as follow :-
These figures show a substantial diminution of prices of commodities associated with a very marked and steady rise of wages. Again, taking 1913 levels for a unit of 100, the corresponding figures for Great Britain were as follow : -
In the last year the wage rates in Great Britain were 170, as against prices 174, whilst in America the corresponding Britain were - Wages, 228; prices, 150. These results are due to the fact that wages in England are fixed by prices of commodities, as they are here, whilst in America prices are fixed by output. I have searched our statistical register, but I have not been able to obtain figures exactly corresponding to these for Australia. There is, however, sufficient evidence to show that here wages rates and prices act in relation to each other, as they do in Great Britain, and not as they do in America. The right honorable member for North Sydney (Mr. Hughes) in discussing this bill laid it down as an axiom, which cannot be disputed, that there is an insuperable incompatibility between capital and labour, that we must recognize that, and that it will always exist. That, I believe, is a fallacy. It may perhaps seem impertinence on my part to say so to a gentleman of the great experience and special knowledge of the right honorable member, but I am emboldened to do so from the facts and figures which may be gathered by reading of the industrial position in America. In that country there is concord and compatibility between capital and labour. I may be told that that has not always been the case, but the fact remains that there is in the United States of America practically no unemployment, except in local centres and local industries, and of a temporary character. The great mass of labour in America is always employed, and at very high wages.
– The only freetrade country !
– Of course. America is the largest freetrade area on the face of the earth.
– The honorable member is breaking out in a new vein.
– It has always been so. The honorable member for Yarra (Mr. Scullin) likes to jeer, but the facts are against him. It is easier to laugh a fact down than it is to controvert it. The policy of industrial co-operation adopted in America renders its protective policy practically insignificant so far as its internal industry is concerned.
– I wonder the honorable member does not vote in this House for America’s brand of free trade - high duties.
– The honorable member has not understood what I said. I said that the internal industry and internal work of America is far more important than her outside industry, and the whole of her internal industry is carried on under free trade conditions. The vastmajority of her industries are not affected to the extent of a flip of thu finger by her tariff.
– Is that not true of all countries ?
– lt is not true of this country, with its small population. If the honorable member challenges me, I tell him that the fact that the protective policy of America is practically nullified so far as its effects on industry are concerned is shown by the fact that she put no restriction whatever on the importa tion of labour for 30 years. America imported 30,000,000 people in 50 years.
– Yet every time there is competition with American goods her protective duties are increased automatically.
– The honorable member does not know what he is talking about. In view of these facts, which are being brought home to different branches of industry, and to the public which has to pay the bill all the time, I .believe that the yeast of a sane economic policy is gradually working in the public mind. I think that before long our absurd system of compulsory arbitration will go by the board. I hope, for the sake of Australia and the advancement of civilization, that some of the saner principles I have been talking about will find their way into the minds of both employers and employees. I am not one of those who say that all the fault lies with one side. I never have said so. I think that the crass stupidity and ignorance of employers have been as much responsible for trouble as have the obstinacy and lack of public spirit of the employees.
– More so.
– That is a matter of opinion, and the honorable member cannot help showing a little bias.’ I hope that the principles to which I have referred will be adopted here. I believe that their adoption is the only way to secure industrial peace and advancement. I do not think the time has yet come when we are going to bring about what we desire by the abolition on the part of the Government of industrial arbitration. It can only be brought about by a change of opinion amongst industrialists on both sides of industry. But as soon as ever we are ready to adopt some such scheme as I have referred to, I believe that industrial arbitration will fall from our shoulders like a worn-out garment. We shall have no further use for it. It will die of inanition. It will not be wanted, and will itself sink into the limbo of forget fulness.
– We have to eliminate the element of class hatred.
– Of course, that is at the bottom of the whole trouble, and compulsory arbitration, instead of trying to bring about co-operation between employers and employees, accentuates and magnifies their differences every time a case is brought before the court. Until those who at present favour compulsory arbitration are prepared to adopt sane and common-sense methods of dealing with industrial trouble, we cannot abolish the Arbitration Court. We must wait until the common sense of the public abolishes it. All that we can do, and it is but a poor second best, is to try and improve the machinery in order to keep it going for a time. That is the way in which I regard the subject. We must keep the existing machinery going for a time until common sense makes it clear to the community that we do not want it at all. It is on these lines I am supporting the bill, and on these lines I spoke three years ago. The present position is intolerable, and the basic economic principles underlying industry must be scientifically studied in a calm atmosphere, away from the heat of party politics. I should be very sorry if the adoption of this proposal led to all industrial issues being decided on the floor of the House in the heat of party discussion. Tt is theoretically possible that that may happen. Parliament may delegate these responsibilities to an authority, but it can also withdraw them.
– In the last analysis, these matters cannot be taken completely out of the control of Parliament.
– T - The Parliament can delegate to the created authority such powers as it chooses, with certain limitations and qualifications. The extent to which this may be done is debatable, but I sincerely hope and believe that Parliament will have the common sense to keep these matters out of the atmosphere of party politics, leaving them to be calmly studied by an independent authority. If these matters are brought into the political arena, this Parliament will be converted into a bear garden. It will have no time to deal with big national questions, such as our relations with other countries, and its atmosphere will become corrupted by all those forms of political bribery which are associated with the present industrial system. The Government must give careful consideration to the nature of the authority it proposes to establish. In my speech three years ago, I strongly urged that if a Federal industrial judiciary were created, it should have a branch in each State, with a resident judge.
– Does the honorable member support the proposal for the appointment of industrial judges?
– I would prefer the establishment of State branches of the Federal court, with a resident judge sitting with assessors. I developed that idea in my speech on the subject three years ago.
– That would be absolutely essential.
– At present it is not essential, and it is suggested that the powers to be taken under this bill may be delegated by this Parliament to State tribunals. To that procedure, there are grave objections.
– Is it not proposed that there shall be a right of appeal from the State tribunal to the Federal tribunal?
– This Parliament cannot possibly lay down such a condition. How can it declare that a State arbitration court shall give a right of appeal to the Federal court?
– We can vest the State courts with Federal jurisdiction.
– If they choose to accept it.
– Will the State Governments allow us to monopolize their courts? Instead of investing State courts with power to deal with particular quarrels - their services will be requisitioned only occasionally - that procedure would make possible further delay, overlapping, and confusion - it would be better to have, in each State, a branch of the Federal court, presided over by a resident judge. These proposals will effect more people than is generally realized. Statements have been made as to the probability of this and that section of the community voting for the proposed amplification of Federal powers. If, as I believe it must, the jurisdiction of this Federal court extends to what are known as Government instrumentalities, at least 1,000,000 persons connected with the public services will be affected. There are many people in those employments who are entirely dissatisfied with the present system and the inconsistencies arising out of the operation of various wages boards and arbitration courts, and they will welcome any proposal to establish a unified system such as we expect to develop out of this bill. If the court does its work properly, it cannot award uniform wages and hours for all Australia. Some honorable members seem to have regarded that as the natural corollary of the proposals that the Governnent has put before us.
– The Prime Minister pointed out that that would not happen.
– I wish to emphasize that point. The Federal court would not, and should not, propose uniform wages and working conditions throughout Australia.
– It could not reasonably do so.
– One of the strongest arguments in favour of the creation of State branches of the Federal court is that a resident judge would acquire knowledge and understanding of local conditions, especially if he had the assistance of assessors. The decisions of the branch courts could come before the central court, which, exercising a coordinating power, would see that the system operated fairly throughout the Commonwealth. It is absurd to suppose that because a particular industry exists in two States so dissimilar as Tasmania and Queensland, the hours of labour and wages should be identical in both. A proper study of economics would prevent such an award. The Government has been criticized for showing undue haste in bringing forward these referendum proposals. I do not endorse that objection. If haste has been shown it has been justified. Events have marched quickly since the last election, and critical circumstances have arisen which require prompt treatment. But the procedure for amending the Constitution is properly safeguarded by certain inevitable delays. It is improbable that the decision of the people upon these questions will be known before August. The House will not be in session then, but who will suggest, that from August until the early part of next year is too long a period to allow the Government for the drafting of the detailed measures that will follow an affirmative vote by the people. The details of those measures will require the most careful attention, and it is only right that the Ministry should have ample time before submitting them to Parliament. Another objection urged against these proposals is that they are an invasion of State rights. I have always advocated the conservation of State rights, but these proposals are not on all-fours with many others which may be regarded as an undue trespass upon the State domain. The power now sought to be transferred is judicial rather than administrative, and in any case, the opinion of the people is to be sought by referendum. My objection to the proposed abolition of the capitation grant is that it involves a distinct abrogation of State rights by the exercise. of the Federal financial power without direct reference to the people. Effect to the proposals in this bill can be given only if the people so decide; and it is advisable that they should be consulted upon this issue now rather than that these amendments should be referred to them in conjunction with others which may be suggested during the proposed Constitutional session next year. I hope that such amendments will not be many. Tho need for amending the Constitution is grossly exaggerated, being prompted by certain specific and narrow interests. I hope that the attitude of the public towards the proposals will be conservative. It is easy to talk of the Constitution as not being sacrosanct, but it is better to be conservative than to make hasty changes in it. If at the end of the constitutional session to be held next year, proposals to amend the Constitution are to be submitted to the people, I should much prefer them to be submitted separately. If presented to the people as a whole bundle of proposed amendments, their minds will be filled with confusion, doubt and opposition. I am glad that the present proposal is being submitted to the public separately. It is possible that by educating the public mind on this subject we shall get ah intelligent vote, and. as voting is compulsory, we should at least have a decided expression of opinion from the people that will leave no doubt as to what they consider to be the duty of this Parliament.
.- The report in this morning’s Argus of the discussion that took place in the House yesterday contains this interjection by the right honorable member for North Sydney (Mr. Hughes) to the speech of the honorable member for Batman (Mr. Brennan) - “ Every one of you voted against the proposals in 1919.” That statement is contrary to fact, and casts a reflection upon several honorable members of this House, including myself. I myself appointed and paid persons to take charge of committee rooms which were used in the referendum campaign of 1919. The Leader of the Opposition at that time, the late Hon. Frank Tudor, the present Leader of the Opposition (Mr. Charlton), Senator Gardiner, the honorable member for South Sydney (Mr. E. Riley), and many other members of the Labour party spoke during that campaign in support of the referendum proposals. I should like the Argus to remove the impression that honorable members on this side of the House did not assist the Government during the referendum campaign of 1919.
.- It has been quite a pleasure and an education to me to listen to certain of the speeches on this bill, and for that, if for no other reason, the Government is to be complimented for having introduced it. It would be a good thing if the whole economic position of Australia could be calmly considered. I have listened carefully to the speeches of the honorable member for Swan (Mr. Gregory) and the honorable member for Wimmera (Mr. Stewart), and I largely agree with them. I also agree with the honorable member for Perth (Mr. Mann) that the Government has offered no constructive suggestion in place of the present method of regulating hours and conditions of labour. Australia to-day realizes that the Arbitration Court, in its polygamous character, has taught the worker that kissing goes by favour. If the one thing does not suit, then the other will. This has brought about a Gilbertian situation in Australia. ‘ The bill will at least remove the polygamous character of arbitration by preventing the wooing of one party and then the other. It is held by some honorable members that this measure is the introduction of unification. Unification has no special significance to me. Any legislation that may be characterized as tending towards unification, if for the benefit of Australia, will receive my support. As the honorable member for Perth has indicated, the appointment of a judicial court will not solve our economic conditions as they have been solved in the United States of America, except possibly that the new standard of fixing wages will enable the court to investigate, in the interests of both capital and labour, the effect of the payment of wages and the rendering of services upon the economic position of Australia. If the court merely adopts the old system of fixing wages on the cost of living, the only alteration will be the establishment of one court to> fix wage3 and conditions as against the present method of having two authorities fixing different standards. The right honorable member for North Sydney (Mr. Hughes) yesterday pointed out that under the Constitution the powers of this Parliament, elected on adult franchise, was limited. The people of Australia and the members of this Parliament feel that certain things should be done in the interests of this country, but owing to our paper Constitution we are powerless to do them. For many years it has been generally admitted that the Constitution should be altered to give greater powers to this Parliament.
– We should have plenary powers.
– The principal Parliament of Australia should undoubtedly have plenary powers but we are helpless, because of the limitations that have been set up, and we cannot secure the necessary amendments because of the shibboleths that have been raised, one being State rights. I believe that State rights could and should be clearly defined. We should increase the number of States in Australia, and thereby increase the status of the Federal Parliament. The opinion of the people, respecting their varying needs, would then have a greater field of expression in this Parliament. To-day half the people with a common need are centralized with a community of interest. The other half, with all the other needs, is widely distributed. Under our present system of States we cannot obtain the representation that is necessary to develop this great country. There is too much centralization. Every honorable member must have felt the truth of the remarks of the right honorable member for North Sydney, when he clearly depicted the weakness and inability of this House to carry out such legislation as the people wanted. The time is therefore ripe to alter the Constitution to allow the wishes of the people to be carried out.
We are their representatives. These proposals are not,’ as has been suggested, being placed before the people in a precipitate manner. Almost the same powers have been asked for previously. The subject was discussed at the elections, and many of us intimated that it was the intention of the Government to seek greater powers under the Constitution. The bill has been discussed in this House and the newspapers throughout Australia are publishing the debates. If this measure is passed, we shall place the position before the people, and it is probable that they, feeling the need for amending the Constitution, will approve of the proposals. It has been stated that this matter should be postponed until a constitutional session is held at Canberra next year, but, to my mind, it is too urgent to permit of delay. I agree with the honorable members for Wimmera (Mr. Stewart) and Swan (Mr. Gregory) that the farmer is hit every time, and all the time by the effect of arbitration court awards. I recognizethat unless this court is to be clothed with additional powers of investigation, the position will not be improved, except that the work will be carried out in a more efficient manner, thus lessening the opportunity for strikes. When any additional cost is placed on the community, 96 per cent, of it falls upon the primary producer, because it is by the export of primary produce that 96 per cent, of the wealth of the people is created. I hope that the pro. posed court will have power to give consideration to the effect of its recommendations. Two authorities cannot .function successfully in the same sphere, and thai is why I favour the creation of one authority with judicial powers not possessed by the existing court. I agree that combines are not necessarily injurious, and sometimes may be of benefit. In the United States of America there’ are big companies that have operated to the benefit of the people, not only of America, but also of the world. As examples, there are the Ford Motor Car Company and the Swift Meat Company. Mr. Swift sends me every year the annual report of the directors, in which emphasis is always laid on the amount by which they have been able to reduce the price of meat to the consumers. One of the reports stated that 750,000,000 lb. of meat had been handled that year, and that a- profit satis- factory to the company had been made. The’ profit actually amounted to oneeighth of a penny per lb. of the output. In other words, if the company had sold to the consumer at one-eighth of a penny per lb. less, it would have made no profit. I am quite satisfied that the company would purchase as economically as possible, and it has to sell in competition with, other firms.. In that concern the greatest reward is given to the employee who can show how to sell to the consumer at a lower price; but it appears to me that in this country the man is paid the most ~who can show a combine how to extract more from the public. That seems to be the fundamental difference between the methods of conducting business in the two countries. Mr. Henry Ford has expressed views similar to those held by the Swift Company. He pays his nien higher wages than the union rates, and he has made himself fabulously wealthy by rendering cheap service to the community. There are two large combines in Australia over which this Parliament and the people have no control - the combine of capital, particularly of manufacturers, and the combine of labour unions. Both of them may be of great value, but in any case this Parliament should have power to control them. I support the bill, not merely because a, Nationalist Government is in power, for .any power the people give to this Parliament, future governments, be they national or labour, will be able to exercise. It is a pity that constitutional questions should be discussed on party lines. The Government, in submitting these proposals, has not acted in a partisan way. Tt desires power over everything that may restrain the trade or hamper the progress of this country. Austrafia is a great prize, and we should not -allow combines to strangle it. We do not wish to so hobble industry as to retard legitimate progress. Legislation that will stop any combination of persons, whether unionists or capitalists, labourers or farmers, from operating detrimentally to the people is desirable. This is the people’s Parliament, and it should govern. That is the only logical conclusion a true democrat can reach. I am not much concerned as to whether wages -boards or arbitration courts are the means employed to settle industrial disputes. There seem to be many arguments in favour of wages boards, and some solid ones- against them.; but one fact that ap- peals to honorable members from other States is that representatives of Victorian constituencies favour them. That would seem to indicate that experience of wages boards in this State has been satisfactory. One example that made me think was the Hibble Commission, which is really a wagesboard in the coal industry. Mr. Hibble was appointed an impartial chairman to meet the coalowners and coal workers. Those two sections had a difference of opinion, and the coal owners said to the coal workers, “ We can pay you so much if we receive so much for our coal.” The reply was. That is easy,” and Mr. Hibble only had to say, “ I give that my blessing.” But what about the people ? Has that transaction been an economically sound one ? Not at all, for it has increased the cost of coal to the people, and has reduced their capacity to compete in the undertakings in which they use coal. That kind of wages board does not appeal very strongly to me. I hope that the new court will deal with industrial questions scientifically, so that all the people of Australia will benefit.
Sitting suspended from 12.55 to 2.15 p.m.
Debate (on motion by Mr. Makin) adjourned until a later hour.
Motion for leave to bring in a bill for an act to repeal the Surplus Revenue Act 1910, by leave, withdrawn.
Message recommending appropriation reported.
In committee (Consideration of the Deputy of the Governor-General’s message):
Motion (by Dr. Earle Page) agreed to-
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Surplus Revenue Act 1910, to grant and apply out of the Consoli dated Revenue Fundsums for the purpose of financial assistance to the States and for other purposes.
Standing Orders suspended : resolution adopted.
That Dr. Earle Page and Sir Neville Howse do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Dr. Earle Page, and read a first time.
– I move -
That the bill be now read a second time.
Three years ago this Government was able to effect a great administrative reform by amalgamating . the Commonwealth and State income taxcollecting agencies. This resulted in a saving to the Commonwealth of about £200,000 annually, and rendered unnecessary the services of 600 officers who werepractically duplicating work that State officers were doing. The reform also involved the adoption of a uniform assessment form in practically all the States, and so was a great convenience to the general taxpayer.It is now proposed to effect another reform. Since the one collecting agency has been operating, we have had the burlesque of the Commonwealth Government levying taxes which the State Governments have solemnly collected, the State Governments paying themover to the Commonwealth, and the Commonwealth giving them back to the States. It is now proposed to end this burlesque. It is also proposed that the Commonwealth shall evacuate the field of land taxation, estate duties, and entertainments taxation. This also will result in a consider able saving in the administration, and will be of convenience to the taxpayer. At the same time, the Government will cease the capitation payments to the States, and make certain reductions in the rate of income tax on both companies and individuals. It is proposed to recoup the States for the loss of the capitation payments by making certain special grants to them. These proposals will ensure a saving to the taxpayers in each State of about £50,000, and more than that in some States.
– Why could not the Treasurer convince the State Premiers that that would be so?
– The State authorities were afraid to discuss the matter, for they knew that the Commonwealth figures were incontrovertible. It was for that reason that they adopted the attitude they did, and that we witnessed such a farce at the conference held in Melbourne a few days ago. Under the provisions of this bill, special grants will be made to Western Australia and Tasmania, in accordance with the proposals that the Government has already submitted to the Premiers of those States. The discontinuance of payments of subsidies by the Commonwealth to the States has been regarded as inevitable ever since federation was first agreed upon, as is shown by the fact that the Constitution gave the Commonwealth Go>vernment complete control both of Customs and excise revenue, and of all forms of direct taxation. The only matter that, was left for determination was how and when payment should be discontinued. A careful reading of the discussions that took place at pre-federation conferences also indicates that it- was generally thought that the Commonwealth Government should some day take over the State debts, and manage them and pay the interest on them. Provision was actually made in the Constitution for that to be done, and it was set out that if the Commonwealth revenue was not sufficient to pay the interest bills, the States should be levied on to make up the deficiency. This plainly indicates that nothing would be returned to the States. Included in the Commonwealth Constitution was a section that is commonly known as the “ Braddon blot,” which provided that for a period of ten years after the consummation of federation, three-quarters of the Customs and excise revenue should be returned to the States. In 1910, when the Braddon section ceased to operate, there was substituted for the return to the States of three-fourths of the total Customs and excise revenue a per capita payment of 25s. per head of population, which has continued ever since. In the discussions which took place when the first capitation payment was being considered, it was stated that if at any time during the continuance of the agreement a state of war should arise, so that the whole of the revenues of the Commonwealth might be required for national purposes, making it necessary for the Commonwealth to levy direct taxation, the term of ten years fixed for the operation of the per capita agreement might be reconsidered, and it might even be suddenly brought to an end.
– That is not correct.
– It is absolutely correct. I can quote from a dozen places in Hansard to show that members of the honorable member’s party spoke on this question, and dealt with this matter when the Fisher Government introduced the bill to give effect to the agreement.
– The honorable gentleman’s party wanted a referendum to make the payments permanent.
– The position was made clear in this House by an honorable member of the party on this side who, I think, is now Chief Justice of Victoria, and others, as well as by members of the Labour party. It was pointed out .that if a war occurred, it might be necessary for the Commonwealth Government to invade the field of direct taxation, and there would then be a possibility of the per capita payment being reduced or abolished even before the ten years provided for in the agreement had expired. One member of the Parliament put the position in a few short words. He said that if it were found necessary for the Commonwealth to go into the field of direct taxation, that would be tantamount to taking the per capita payment back. The war spoken of, and possibly anticipated, in those days, did occur, and it left behind it a largely unproductive debt of nearly £400,000,000. The unproductive debt is practically twice as great as the whole of the debts of the States at federation. The Commonwealth has been forced into direct taxation because of that huge debt. It has actually raised in the field of direct taxation something, like £21,000,000 during some of the years of the past decade. On estimates based on the low rates of interest current before 1910 it was recognized that if the Commonwealth operated the constitutional section empowering it to take over State debts it would be possible for it to take over only £174,000,000 of those debts, and would have to depend upon the revenue of the States for interest on the balance. Now we have a debt which is more than twice the amount of the debts of the States prior to federation.
The Commonwealth is carrying that debt and how, then, can it be said that we have surplus revenue out of which the pr.r capita payments can continue to be made ? Any one who considers the matter must realize that with a debt service of £400,000,000 to deal with there can be no true surplus in the accounts of the Commonwealth, to distribute to the States or any one else. The war did not merely bring into existence a huge unproductive war debt for Australia; in addition, it placed new duties on the Commonwealth. It brought about a new Australian outlook on many of our problems, and especially on the problems of deve101)ment and migration. The war imposed upon the Commonwealth new duties in connexion with repatriation, provision for war service homes, and development, the necessity for the adoption of a national system of health and for dealing with the unification of railway gauges and with migration. It is a remarkable thing that of all those activities in which the Commonwealth has been engaged since the war there is not one in which it has engaged on the same basis as that adopted in the making of per capita payments to the States; that is to say, the population basis. The reason, of course, is that the per co-pita basis has been proved by experience to be inequitable and unsatisfactory. In no other federation in the world is a similar system operating, because it has been found to be unworkable and impracticable. Every Commonwealth Government since the war has recognized, and quite definitely asserted, that the capitation system must go. It is impossible for us to continue it. During 1918-19, the right honorable member for Balaclava (Mr. Watt) dealt with the matter at conferences with State Premiers. So did the right honorable member for Worth Sydney (Mr. Hughes) and Sir Joseph Cook when he was Treasurer. This Government has also dealt with the matter, and has pointed out the farcical nature of the position in which we are placed in raising money in direct taxation fields simply for the purpose of paying it to the States. It is true that the urgency of ending the matter was to some extent mitigated, for two reasons. One was that in 1920 the Massy Greene tariff was imposed, and markedly increased the revenue of the Commonwealth. The second was that the cost of national schemes of development, and other national activities, had not reached its peak during those earlier years. If one examines the present position of Commonwealth revenues and expenditure he will see that there is no possibility of returning anything to the States out of the Customs and excise revenue. If one compares the ensuing year with 1920-21, he will find an increase of expenditure on the following items: - Old-age pensions, £4,000,000; interest on railways and other works, £600,000; interest concession, soldier land settlement, £300,000; migration, £300,000; grants to Tasmania and Western Australia, £800,000; the increased interest payable on our war debt owing to the increased rates which had to be paid for the last two conversions, £800,000. These amounts together represent an inescapable additional expenditure of £6,800,000. This amount roughly corresponds with the total increase in Customs and excise revenue between .the same years. Despite this, there has been a reduction of £6,000,000 in Commonwealth direct taxation, taking £14,600,000 as. the figures for 1925-26. It is clearly evident, therefore, that it is not possible now to use any supposititious surplus of Customs and excise revenue for the purpose of subsidizing the States. If we consider the commitments of the Commonwealth we shall find that many are essentially commitments which, if we were not federated, would have to be borne by the States, and would more than absorb the whole of the Customs and excise revenue at the present time. For war expenditure and war pensions we pay approximately £29,000,000 a year. “ Of this amount £20,000,000, representing interest and sinking fund on war debts, cannot possibly be reduced for nearly 50 years under the terms of our debt reduction scheme. . lt is a compound interest scheme designed to repay the debt in 50 years. There is a general impression that because’ we pay off a certain amount of the debt each year the interest charge must automatically become less. That might be correct if we were not trying to pay off the debt as a whole, continuing to pay interest into the fund as we cancel the bonds we buy back. We have to pay a sum of about £5,000,000 for defence. The States had. defence systems before federation., and at the present time with the growth of population if they had still to. main-: tain separate defence systems these- might easily be more costly than the. present federal scheme. For old-age pensions for the ensuing year we require over £9,000,000, and for the maternity allowance about £700,000. We are incurring expenditure in connexion with the preservation of public health. This should be a State responsibility, but we have tried to bring about a certain degree of uniformity and a national policy, for instance, in the treatment of venereal diseases, a matter forced upon our notice by investigations during the war. For naval construction we are providing during these four years something like £1,500,000 a year. We have to meet increased interest on railways;, in some cases constructed in accordance with the. terms of the solemn compact entered into when the Northern Territory was taken over. We must incur expenditure in connexion with the scheme for the unification of the railway gauges of Australia. It is imperative that this unification shall be carried out if we are to place ourselves on a basis of competitive production with other countries. It will thus be seen that it is not possible for us to make, payments to the States out of the Customs revenue, because this is more than absorbed by the expenditures I have indicated, and no surplus is left for distribution. In these circumstances we have to levy direct taxation for the purpose of the per capita payment. It has to be borne in mind that this taxation is levied upon the very persons who are called upon to pay the taxation “levied by the States. As the States are collecting money from them each year, no one surely will contend that it is wise for us to continue the present practice. We say that we believe in federation, and in the federal principle being perpetuated if possible, and that this will assist that principle. I know that honorable members opposite say that they believe in unification. They say so quite frankly. The Deputy Leader of the Opposition (Mr. .Anstey), in his speech .on my budget in 1924,. said that in his opinion, instead of raising £26,000,000 through Customs, and £16,000,000 by direct taxation, the larger amount should be raised by direct taxation, and the smaller amount by Customs taxation. I notice that another member of the Labour party in this State, Mr. Duffy, said that it was the purpose of the party, if they brought in a national insurance scheme, to pay for it out of income tax, without contributions from employees. If that course were followed, there would be - if possible - still less of Customs revenue to give back to the States than there is at the present time. At present we are bearing, out of that revenue, the cost of services that are essentially State services. We say that the proper thing to do to perpetuate the federal system is to formulate some plan whereby we can preserve the financial independence of the States. Accordingly we bring along this proposal, which substitutes a field of taxation surrendered for the per capita payments. If at the same time the per capita payments were discontinued, the remission of direct taxation to a similar amount was not made, the States would be in danger of being financially strangled, and unification, for financial reasons, would be in sight, as the Labour party desires. Our desire is to adjust this matter now, when it can be done without undue hardship, and when all the facts can be taken into consideration. In looking through the history- of these payments, I find that for 1909-10 £8,492,000 was paid by the Commonwealth to the States. For the following financial year only £5,196,000 was paid.
– That was an abnormal year.
– But in the one year there was a drop of £3,000,000 in the payment to the States as a result of the re-adjustment. In subsequent years, it is true, the amount steadily rose again in accordance with the increase in population; but even now, sixteen years later, it is not yet as great as in 1909-10. In 1918-19 the then Treasurer, the right honorable member for Balaclava (Mr. Watt), proposed that the payments to the States should decrease at the rate of 2s. 6d. per head each year for six ears, and thereafter a fixed payment of 10s. per head should continue for a definite- period. Had that proposal been adopted, by 1925-26 the States would have been receiving £4,500,000 lees than the Commonwealth is paying them to-day. The per capita payment would have been practically halved. This Government does not desire to impose such harsh conditions upon the States. They have big responsibilities ; theirs, to a large extent, is the responsibility of development and the provision of many services, and we wish to make an equitable arrangementat the same time as we terminate the vicious principle that has operated ever since the Commonwealth entered the field of income taxation in 1915, and even since 1910, when the Federal land tax was first imposed. I notice that the Deputy Premier of New South Wales (Mr. Loughlin), who is a Labour stalwart, contends that land taxation is properly the province of the States, and that the Commonwealth has no right to invade it. The Commonwealth has been raising revenue from taxation fields which, we are told, properly belong to the States, for the purpose of repaying to them an amount equivalent to what we levy in taxation.
– What was the reason for the introduction of the land tax ?
– I should like to hear the views of honorable members opposite on that point, because in a letter published in the Age recently Senator Grant challenged the statement that the Federal land tax was introduced for the purpose of burstingup large estates, and said that that effect was merely incidental to an endeavour to raise more money.
– He did not say that.
– Senator Grant’s letter read -
In the Age of yesterday some statements were made regarding the Federal tand tax which call for a reply. It is incorrect to say that this tax was imposed’ for the purpose of “ bursting up “ large estates. The main purpose of the tax was to levy an annual tax. upon the owners of the Commonwealth the unimproved value of whose estates exceeded £5,000. Incidentally, it may have had the effect of bringing about the subdivision, either real or imaginary of certain estates, and following upon such subdivision the amount of the annual tax varied to a small extent.
There is the statement of a responsible leader of the Labour party, that the purpose of the land tax was not to break up large estates. In to-day’s newspaper Mr. Loughlin said, “ I certainly think the land tax should be handed over to the States altogether.” Those are the views of responsible members of the Labour party.
– If those views represent the opinions of the Labour party the speech of the honorable member for Wannon (Mr. Rodgers) yesterday, represented the opinion of the Government on the proposed amendment of the Constitution.
– I am merely showing that according to some Labour leaders, the Commonwealth is collecting from a field of taxation that belongs to the States an amount equivalent to the money it hands back to them in the per capita payment. The Government desires to treat the States equitably and as generously as possible, so that they may not be embarrassed during the period of financial re-adjustment. It accordingly embodied itsviews in a memorandum and invited the State Premiers to meet Federal Ministers in conference to discuss them. Our suggestion was that the Commonwealth should discontinue the taxation of the income of individuals. The receipts from that source approximate the total amount of the per capita payment, but unfortunately the collections and payments in individual States do not correspond exactly, and to help those States which would be disadvantaged by the re-arrangement we offered to make a special payment. We asked the State representatives to discuss our scheme, and if they disapproved of it to submit a constructive alternative. Instead of doing that, they stood on what they alleged to be their moral rights. They denied the right of the Commonwealth to discontinue the per capita payment. At theconclusion of the conference the Prime Minister told them that they had not made good their claim to the possession of a legal, constitutional, or even moral right, to the per capita payment, that the Commonwealth Government was determined to end the present system; but the Commonwealth Government was willing to come to an arrangement which would enable them to keep their finances in order during the transition period. It is remarkable that at a similar conference three years ago no mention was made of moral right. This was the unanimous resolution of the State Premiers in 1923, spontaneously put forward -
Not merely were they prepared to surrender all claims to Customs revenue, but they were willing to make certain compensatory payments to the Commonwealth if it would evacuate the field of income taxation.
– How many of the States agreed to that?
– All of them voluntarily put forward that proposal, but Commonwealth Ministers declined to accept a scheme which would make the supreme Parliament of Australia dependent upon the subsidiary Parliaments of the States for a subsidy to enable it to carry on. Such an arrangement would be intolerable, and would be more destructive of the Federal ideal than anything that could be suggested. We offered, however, to evacuate the field of direct taxation - of income tax on individuals - upou conditions similar to those set forth in the memorandum submitted to the State Premiers recently. After considerable discussion, four of the six States agreed to that proposal, subject to certain adjustments. Our offer was based on the actual figures for the previous year. The State representatives asked that it be based on those of the current year. The conference was held in May, and the complete actual figures could not be available before the end of June. Our officers prepared certain estimates, and the State officers prepared others; naturally, the estimates of the State officers were much the lower.
– And both were wrong.
– No; subsequent collections proved that the estimates of the Federal officers were approximately correct. As the two sets of estimates were irreconcilable, the conference resolved that the further consideration of the scheme should be postponed until actual figures for that year were available. The
State Treasurers handed to the Prime Minister the following resolution : -
The States are unanimous in expressing their appreciation of the altered proposals now submitted by the Prime Minister in respect to the field of income taxation, and in view of the far-reaching effects of the proposals, suggest that the further consideration of those proposals be postponed until Saturday,9th June, 1923, to enable each State to give full consideration thereto.
Queensland was not represented at the postponed gathering on the 9th June, 1923, but its Government telegraphed that it was prepared to accept the arrangements proposed by the Commonwealth, subject to an adjustment on the basis of the actual figures. Tasmania was not represented, and New South Wales dissented from the resolution. We concluded that, if the final agreement were deferred until August or September, the preparation of State budgets would be unduly delayed; accordingly, the proposal was deferred for twelve months. Unfortunately, it has been postponed much longer than that. The fact that this readjustment has been delayed six years beyond the statutory period fixed for the continuance of the per capita payments does not justify its further postponement, and the Government considers that the vicious principle of one authority raising taxation for another authority to spend should be terminated at the earliest possible date. I repeat the statement that the States did not advance any moral claim in 1923, but, on the contrary, spontaneously submitted an offer which differs but slightly as regards the fields of taxation vacated from the scheme which the Government put forward this year. This moral right on the part of the States seems to be an intangible and indefinable thing. Originally the States received back from the Commonwealth threefourths of the Customs and excise revenue. Later, that was substituted for a per capita payment of 25s. per annum. In 1919 Sir William McPherson, the then Treasurer of Victoria, suggested that that payment might be reduced by1s. per annum. Apparently the payment could be reduced to a shilling or even a farthing per head, and the moral right of the States would be preserved! Honorable members will realize how slender are the grounds on which this moral right rests. At the recent conference, the State representatives refused to discuss the Commonwealth scheme, and confined themselves to a declaration of their moral right; but no man can talk long without disclosing something of his inner thoughts, and various speakers mentioned ways in which State finances would be embarrassed if the Commonwealth scheme were persisted in. The conference having failed to arrive at an agreement, the Commonwealth Government studied carefully the speeches of the State representatives, and now submits this amended scheme, which, I think, fairly meets all objections that can be reasonably offered to the previous proposal. The principle is essentially the same in both. The Commonwealth undertakes to evacuate a definite field of direct taxation.
– Was this scheme put before the State Premiers as an alternative?
– No ; they denied the Commonwealth’s right to readjust these payments in any way. We asked them for an alternative to our proposals, and they replied, “ No ; we stand on our moral right.” We asked them to allow their officers to confer with the Federal officers in order to arrive at an equitable statistical basis for an arrangement. They declined to do that. The Commonwealth Government was, therefore, thrown back upon its own resources, and I think that the scheme that I am now proposing to the House meets adequately the difficulties which the State Premiers anticipate. Beyond the moral objection that was raised by the State Treasurers, they opposed the proposals mainly because the collection of tax from the various fields of taxation which we were evacuating would make them unpopular. They frankly said so. The following is the memorandum setting out the Government’s proposals: -
1.Land Tax. - The £2,111,000 represents the average collections in the three years ended 30th June, 1924, and does not include taxes on Crown leaseholds. This basis of estimating theamount of tax has been adopted as the collections for 1024-25 and 1925-26 include arrears of the tax on Crown leaseholds. The actual collections in 1924-25 were £2,519,711, and the estimated receipts in 1925-26 total £2,800,000. The distribution amongst States is on thebasis of the taxable lands in each State, as shown in the assessments for 1922-23, which amounted to £2,143.343. Since 1922-23 the valuations have materially increased. At the present time, land taxes are imposed in all States except New South Wales. The Commonwealth land tax wasfirst imposed in 1910-11. The rates were increased in 1914-15 by approximately 30 per cent. In 1918-19 a further increase of 20 per cent. was imposed. The rate of tax was reduced by 20per cent. in 1922-23.
The Government proposes to evacuate entirely the fields of taxation in regard to Land, estate duties, and entertainments, and at the same time to remit taxation on companies’ and individuals to the extent of 40 per cent. The memorandum Sets out the adjusting grants that will be made to the States. Under these proposals, the State Governments can be in a substantially better position than they are to-day, and the people will pay less taxation. Each of the States will gain an advantage of at least £50,000 for its taxpayers.
– How will the position of Western Australia be made better by giving that State £152,000 for a loss of £188,000?
– We have made provision for a special grant of £450,000 to Western Australia.
– Was not that apart altogether from these proposals ?
– It will be remembered that when the grant of £450,000 was proposed earlier this year, the diminishing grant of £97,000 was to be subtracted. Therefore the total amount voted for Western Australia this year is £363,000.
– Is not that cutting into the special grant for Western Australia ?
– No ; because the diminishing payment is now incorporated in the grant of £450,000,. and remains stationary for five years, instead of diminishing. The amount to be paid to Western Australia for special assistance will, instead of diminishing, remain stationary for the next five years. This is set out in clause 4 of the bill.
– Western Australia will really lose by these proposals.
– No. The taxpayer of Western Australia will receive £413,000, instead of £353,000, as was anticipated last year.
– The adjusting grant of £152,000 is only for one year.
– The whole position of the grants in column 9 will be reviewed each year in accordance with the position of the Commonwealthfinances. We can deal only with one year at a time in regard to the adjusting grants to the States.
– So far as the permanent arrangement is concerned, Western Australia will lose £188,000 and gain £152,000.
– That column deals only with the temporary arrangement for one year. There is to be an arrangement with Western Australia for five years, which puts her in a better position by £10,000 each year.
– Surely it is not proposed to make a special grant each year to adjust the differences under this scheme 1
– We anticipate that the expansion of the fields of taxation will more than compensate the States for any losses under this arrangement.
– That is arguable.
– The figures of the Income Tax Department show definitely that the suspension of the payment of 25s. a head to the States will be more than balanced by the growth of the fields of taxation in respect of income and land. The Government has nothing to hide in this matter. We are trying to bring about a satisfactory financial arrangement with the States. The whole of our efforts during the last three years have been in the direction of securing cooperation. I cannot understand the States refusing to discuss this matter, in view of the readiness to discuss our proposals that has been shown by them in regard to. roads and other activities. Even in connexion with those matters, we invited the State Ministers to confer with us. They found certain difficulties in our proposals, on roads, for instance, and at their request substantial modifications were made in them. In discussing these present proposals, however, the States took the stand that they had moral rights, to preserve, which, as a matter of fact, had already been given away by previous governments in conference with the Commonwealth. For the first year tha loss to the Commonwealth revenue will bo £1,527,852, while State taxpayers will gain to that extent. It is idle for the State Treasurers to suggest that this arrangement will penalize their taxpayers.
– They are looking further than the day.
– These proposals, if carried, must have a beneficial effect, because the States will obtain fields of taxation that are rapidly growing.
– Do I understand that at the end of the month the Commonwealth will discontinue the payment of 25s. a, head, and that in the meantime the States are to reimpose the taxes given up by the Commonwealth.
– During the interim period, while the State taxes, are being collected, the Commonwealth is willing to lend to the States, without interest,, such moneys as will permit them to carry on their ordinary services. Such loans are to be recouped as the taxes are collected. Clause 7 of the bill deals with that matter. Two fields of taxation - entertainments and probate duties - can be readily entered by the States. The third field of taxation is land, which is really a State matter. Every one who thinks on this, matter must realize that as the States provide railways and other facilities for land settlement, they are more closely connected with land taxation, subdivision, and development than we are, and in that field they should be more competent than we to impose just taxation. All the States, except New South Wales, which has a small land tax of only £2.000,. are in the land-tax business, and it will simply be necessary for them to re-arrange their rates. They will be able to employ the same officials and to use the same information as at present.
– How can they aggregate estates?
– That is done at present in connexion with the probate duty in Tasmania, and it can be done in land taxation if any State so desires-. In our income-tax proposals we offered the States the use of our central office machinery, to enable them to aggregate, and we still offer them those facilities in connexion with the 40 per cent, reduction in income taxation. A conservative estimate of the taxation we raise from these ‘three sources is £3,700,000. Under the scheme now submitted, the States will need to raise only £4,000,000 of income taxation as compared with £7,500,000 under the previous scheme, and they will have five fields over which to distribute their taxation. The £50,000 extra subsidy will be of great advantage to the smaller States. In the case of Tasmania, with a population of, approximately, 200,000, it will amount to about 5s. a head, and in Western Australia it will amount to from 2s. 6d. to 3s. The proposal allows the States further to utilize the field of company taxation if they dosire to do so. We are proposing to remit some of the taxation from companies, and that, to a certain extent, will overcome the’ difficulty that, was foreseen when it was suggested that the Commonwealth should evacuate the field of income taxation on individuals while retaining the income taxation on companies. The adoption of that proposal might have checked the formation of companies. There is no doubt that the pooling of the savings of the people in joint-stock companies engaged in industrial enterprises ought to be encouraged rather than discouraged, and in making the reduction the Government had that in view. The States have sovereign powers of direct taxation, and they can distribute their taxation in any way they like. If they distribute it so as to make a man’s taxation three times as heavy as it was before, that will be their fault, not ours, for there is no State whose taxation will be trebled by the abolition of the per capita payments. On the contrary, the scheme secures the advantage of reduction to the taxpayers. With increasing Customs revenues we may be able to make reductions in income taxation.
– What about concessions in Customs duties?
– It may be possible to make them, too. It was pointed out strongly in the memorandum that one reason for our taking action was that an obligation rested upon us to make concessions, if possible, in revenue duties, because they increased the cost of living. At the present time we pay money to the States, and to that extent we are prevented from giving relief in the fields of taxation that we control.
– That statement does not square with the public utterances of the honorable the Minister for Trade and Customs (Mr. Pratten).
– At any rate, it squares with the Government’s policy. Last year the Customs taxation on 49 articles was reduced. A second advantage of this scheme is that it provides machinery, which is operating at the present time, for the aggregation of incomes if the States desire to aggregate them. The States collect taxation for us, and the liaison between our commissioner and the State commissioners is close.
– If the Commonwealth vacates the field .of taxation entirely, there will be no such machinery.
– Under the present proposals, there will be machinery for the aggregation of income tax, because we shall still collect £6,000,000 of income taxation. If the States desire us to continue machinery for aggregation purposes in land tax, we shall be pleased to do that at their expense. The State Governments are more directly under the supervision of the taxpayer than the Commonwealth Government is, and the taxpayer will thus have more influence in preventing excessive rates from being levied. Duplication of authority will be overcome in three fields. The general effect of the scheme will be that the Commonwealth will surrender £7,7S7,000 of taxation, and capitation payments amounting to £7,687,000 will be discontinued. Advances will be made to give each State a margin of £50,000 without allowing for special assistance to Western Australia and Tasmania. If it is possible to make further tax concessions, we shall have a field in which that can be done in accordance with the policy of the Government.
– Is the Government making any arrangements with the States to cease to collect certain taxes simultaneously with the States imposing them ?
– We shall cease to collect the taxation and to make the per capita payments on the 30th June, and the States will impose taxation as from the same date. With the entertainments tax we could do as we did with the Tattersalls tax; we could continue to collect it for a certain period and remit the proceeds to the States.
– If this bill is passed will the per capita,* payments be discontinued on the 30th June?
– That does not give the States long to decide.
– The bill is introduced now in order to give the States as long as possible. We tried to come to an agreement with them in May, and the bill has been presented as soon as we could prepare the figures and information. Clause 7 of the bill shows exactly how we are prepared to meet the States. We simply say that for the future we shall not continue this vicious system, which cannot, from any point of view, be justified.
– Surely a month is not sufficient time to allow the States to make up their minds on a policy relating to the imposition of new taxation in four fields.
– They may have to make up their minds on the entertainments tax fairly quickly, but on the probate duty, the income tax, and land tax, all they will have to do will be to make up their minds when framing their taxation bills next year. They may ask us to continue the collection of the taxes for a time.
– They cannot decide that until they call their Parliaments together.
– They can decide when they call their cabinets together. If they do not take time by the forelock, we cannot be blamed for that.
– How can the Commonwealth continue to collect taxation after 30th June, if the taxation acts are repealed.
– The Government has given notice of motion for the introduction of bills to repeal certain acts, but some of them will continue in operation until the acts repealing them are proclaimed. If it takes a State Parliament three or four months to pass the necessary legislation, we can continue collecting these taxes in the meantime. There will be no interregnum during which taxes will not be collected. Until the States have made up their minds we simply need a request from them not to proclaim the repeal of those acts whose repeal would result in loss of revenue to them.
– The State Governments cannot make that request without the sanction of the State Parliaments.
– The Governments of the States can make it. That is what governments are for. The scheme will bring about the almost complete separation of Federal and State finances, and it is a step towards the complete separation of taxation activities. The Commonwealth will cease to collect three taxes, and will retain portion of the income tax. It recognizes that the income tax is an elastic tax, from which the taxpayers may claim relief. The arrangement we are making will leave the way open for further relief when conditions are favorable. This meets the objection to the original scheme that the surrender of income taxation to the States would destroy the prospect of relief in the limited fields of taxation remaining.
– Will those fields of taxation be surrendered for all time?
-No. Should there be another war we might have to reenter every field of taxation. No one can take from this Parliament the right to levy taxation. We desired to come to an agreement with the States, but when they refused to agree to anything, there was only onecourse to follow, and that was to use our powers under the Constitution. Under this scheme two States will raise all their own requirements, and the other four - the less populous ones - will raise nearly all their requirements. South Australia, for instance, will raise within £22,000 of its needs. Payments to these four States is an essential part of the scheme, because of the unequal benefits to them that would result if any attempt were made to meet their needs by a further surrender of income tax. The scheme is on the lines of the recommendations by the Royal Commission on Taxation. The recommendations of the commission were as follows: -
For the sake of clearness, we repeat that, as the ultimate and permanent solution of the problem, in our opinion -
An allocation of subjects of direct taxation between the Commonwealth and the States should be made. (b)The power to impose income tax should be exclusively vested in the Commonwealth.
The power to impose other existing forms of direct taxation - land, probate, or succession, entertainments - should be exclusively vested in the States, subject only to the overriding powers of the Commonwealth in the case of war.
It is pointed out in this connexion that, under section96 of the Commonwealth Constitution, the Commonwealth Parliament may grant financial assistance to any State on such terms and conditions as Parliament thinks fit.
The only departure from that is that both the Commonwealth and the States will impose income taxes; but this departure really favours the States. The commission pointed out that any scheme for harmonization or amalgamation which left the Commonwealth and State authorities both demanding revenue from the same people by the same mode of taxation could at best be only an imperfect remedy for the existing disabilities. It was practically the unanimous opinion among the witnessesthe commission examined that a delimitation of spheres of taxation was desirable. The members of the commission were of the. opinion that only by a delimitation of the spheres or an allocation of subjects of taxation between the Commonwealth and the States could an orderly and satisfactory system of taxation be brought into operation in Australia. The new arrangement will be economical, because three taxes which the Commonwealth itself at present collects independently of the States, will be discontinued. Taxation staffs will not be required by the Commonwealth for land tax, estate duties, or entertainments tax. Practically all the States are collecting taxes in these fields, and the collection of somewhat higher amounts of tax will not be proportionately more costly. When the Commonwealth and State income tax staffs were amalgamated, it was possible to dispense with the services of several hundred Commonwealth officers. As a large number of offices was abolished in a short periodbecause of a change in the Government’s policy regarding taxation collection, the Government provided for compensation to officers whose services were no longer required. This was done under the provisions of the Income Tax Collection Act 1923-24. The change that is now to be made will also render the services of many officers unnecessary. As this will follow a change of Government policy, the Government has decided to grant compensation to officers who now become surplus under these arrangements, on a basis similar to that provided in the Income Tax Collection Act.
I wish now to refer to the collection of taxation on interest on loans. At present the States cannot tax interest on Commonwealth loans issued in Australia; but all loans issued since 1918 are subject to Commonwealth income taxation. It is recognized that the 40 per cent. of income tax surrendered by the Commonwealth includes a relatively small sum of tax on interest on loans which the States will not be able to collect from the bond owners. This, however, is compensated for by the fact that the estimates of the yield of the surrendered land taxes, estate duties, and entertainments tax may confidently be said to be on a conservative basis. That is to say, it may be expected that these taxes will yield more than the Commonwealth has set down in respect of them in the table showing the effect of the scheme. The land tax figures, for instance, which were falling in 1922-3, have since been continually increasing.
– Mostly for the reason that arrears are being collected.
– No ; there is a continual increase in the value of land in consequence of the increased population. I turn now to the matter of the special assistance proposed to be granted to certain States under the provisions of the bill. Requests made to the Commonwealth by Western Australia and Tasmania compelled the Government to give consideration to the basis upon which the Commonwealth should assist a State. The Commonwealth, in the opinion of the Government, cannot assume responsibility for State difficulties that are due to geographical position. Before a State can reasonably expect assistance, it must point out definitely how the policy of the Commonwealth has been disadvantageous to it. The whole position of Tasmania and Western Australia has been very carefully examined, and it has not been demonstrated that those States have suffered any disadvantage that they would not have suffered had federation never been consummated. Advantages of federation must be set off against the alleged disadvantages, and every State has reaped advantages. It is not possible to assess in money on a balance of account the alleged Federal disabilities of Western Australia or Tasmania. But the Commonwealth is interested in securing the stability of each State, and it has considered the matter from that view-point. A deficit is not, in itself, ground for assistance ; otherwise bad finance would be encouraged ; and a money grant is not really a solution of the financial embarrassment of any State. The main essential in rendering useful aid is to ascertain the causes of trouble and to remedy them. It iswith that object in mind that the Commonwealth Government has considered the requests of Western Australia and Tasmania. It must be remembered that the framers of the Constitution recognized the need for special financial treatment for Western
Australia, and that State was enabled to retain its own tariff on a sliding scale for five years. When the per capita arrangement was introduced in 19.10-11, Western Australia received a special grant of £250,000, reducing annually by £10,000. In 1925-26 that grant was approximately £97,000. In spite of this assistance, however, strong representations were made to the Government that Western Australia had suffered so severely under federation that she deserved still more consideration. The Government therefore appointed a royal commission in 1924 to inquire into the whole position. Unfortunately, the recommendations of the commission were not unanimous either as to the disabilities or the remedies that should be applied. One commissioner considered that secession was the only remedy. As an alternative, he joined in a majority recommendation that Western Australia should be granted its own Customs and excise tariff, and that in the meantime it should receive a special grant of £450,000 per annum. A third member opposed the tariff suggestion and recommended a grant of £300,000 for ten years. Both recommendations involved discontinuance of the present diminishing giant. The Government made a temporary grant in 1925-26 of £450,000, less the present special grant of approximately £97,000. Since the royal commission proceedings, the Commonwealth Government has made an investigation of the matter. It has ascertained that Western Australia has made substantial progress under federation. Wonderful advances have been made in agriculture, and there has been a large increase in population. It appeared to the Government that the difficulties from which the State has suffered could be stated under three headings. The first of these “was the war, which, of course, affected not only Western Australia, but the whole world. The second difficulty was the decline of the gold-mining industry, and the difficulty in establishing the agricultural industry on a proper basis. During the period of the changeover from gold mining to agriculture huge deficits accumulated on the State railways, which were operated at a tremendous loss. The heaviest railway deficits corresponded remarkably closely with the total deficit in the State finances.
Now that agriculture has been established on a sound basis in Western Australia, the railways are getting a bigger volume of business, and in the last three years they have shown a satisfactory surplus over interest and working expenses.
– That is not so.
– The surplus in 1923-24 was £90,000, and in 1924-25 it was about £150,000.
– There was no surplus last year.
– That may be so; but the huge deficits of the past are not being incurred now. The Government believes that if Western Australia were relieved for a period from the burden of this deficit the State budget could be readily stabilized. It therefore proposes to make a grant of £300,000 a year for five years. This grant will cover interest and sinking fund charges on £5,000,000 of the deficit. The third factor which has been a difficulty to Western Australia has been the vastness of its territory. The northwest of Western Australia has an area of 52S,000 square miles, with a population of less than 6,000, which burdens the State to the extent of £150,000 a year. In the official case which the Hon. N. Keenan presented to the royal commission on behalf of the State he said -
The burden of rendering the present services . . . falls entirely on Western >ustralia, and the resources of Western Australia are incapable of standing further strain in this regard.
He added that present services - are not by any means sufficient to ensure their objective. They fall far short of what can reasonably be expected if settlement is to progress at all, yet they far exceed what the State has available to spend.
The Honorable J. Scaddan, a former Premier of the State, in giving evidence before the royal commission that I have mentioned - emphatically expressed his opinion -that the development of the present State of Western Australia, comprising, as it does, an area of 975,920 square miles, “ is so tremendous that the task is too much for the State Government. It is too enormous for one Parliament, and the parliamentary representatives generally, to have a complete knowledge of the whole” State and its requirements, while, from the financial stand-point, the task is impossible as well.”
Speaking in the Legislative Assembly of Western Australia on the9 th December, 1924, the Honorable P. Collier, Premier, said. -
The north-west requires special treatment. . . There is an obligation devolving upon the Commonwealth Government to assist Western Australia financially in the development of that portion of our territory. It is almost beyond the financial powers of this State to provide for the necessary developmental works in the north-west, and, at the same time, to find the money required for . . . the more closelysettled portions of the State. It was the duty of the Federal Government to assist us in the development of the north-west, just as they have been finding money for the development of the Northern Territory. . . . I do not see much hope of the State affording any considerable financial assistance to the north-west for some years to come.
Mr. Collier, according to the press report of a civic farewell, referred to suggestions that Mr. Theodore, when Premier of Queensland, had made for the development of Northern Australia. In the Daily News, he is reported to have said, mentioning the north-west -
Something should be done to develop the hidden wealth of that land. It could only be done by the Government - a national Government embarking upon a scheme of railway construction. . . . That was the work of a national Government; in other words, the Federal Government. It was just as much their obligation to look after the north-west as was the Northern Territory, and it had to be remembered that nations could not keep on growing unless they had additional territory where people might settle.
He is reported in the Western Australian to have said -
It is a national obligation for the Federal Government to attend to our north-west, just as much as it is for that Government to take the responsibility of governing and developing the Northern Territory.
The Government of Western Australia cannot develop the south-western portion of the State unless they are given adequate assistance. It is the duty of this Parliament to assume responsibility for the north-west. Consequently, this Government has offered to take over that territory. If that offer is accepted, the finances of Western Australia will be relieved to the extent of approximately £150,000 a year. We are awaiting an opportunity to discuss that proposal with the Government of Western Australia.
I shall now refer to the case of Tasmania. That State has encountered difficulties ever since the inauguration of federation. It did not benefit to the same extent as other States, on account of its isolated position. During the first period of ten years it believed that it suffered loss under the bookkeeping system then in operation, and during the second period of ten years it did not benefit to the same extent as other States from the per capita payments, because its population did not increase as rapidly, the percentage increase since 1911 being 14 compared with the Commonwealth percentage of 34. In 1912-13 the Commonwealth made a grant to Tasmania of £900,000, to be distributed over a period of ten years. In 1922-23, and again in 1923-24, further grants amounting to £85,000 were made. In 1924 additional assistance was given by the Commonwealth refraining from the taxation of lottery prizes. That involved a sum of £111,000 per annum. Provision was also made for a special grant of £85,000 per annum, to be diminished by an amount of £17,000 per annum. Yet this year the Tasmanian Government approached the Commonwealth with the plea that its position was desperate, and that it required assistance to the exent of £545,000 a year! Sir Nicholas Lockyer was appointed to investigate Tasmania’s financial position. He found that a great deal of her trouble was due to internal disorganization, and inefficiency in many ways, but he recommended the granting of a certain amount of financial assistance to enable Tasmania to regain its stability, On the condition that the Commonwealth should control that expenditure. This Government, however, regards seriously the responsibility of supervising the affairs of a sovereign State. Having examined Tasmania’s claim and investigated the whole position, we now put forward a provisional proposition to grant to Tasmania financial assistance to the extent of £378,000 annually during the next two years, after which the position can be reviewed. Tasmania’s railway system has never been a payable proposition. During the last ten years the deficits have increased until they now amount to approximately £250,000 per annum. The Commonwealth Government has offered to Tasmania for a period of two years a grant to relieve the State of the interest and sinking fund payments upon the railway debt. During the last ten or twelve years a tremendous sum of money has been Invested in hu extensive hydroelectric undertaking, which has been a drag on the State revenue. It is expected that within a period of two years this undertaking will be self-supporting. The Commonwealth Government proposes to assist the State in the meantime by allowing the grant of £68,000 to remain stable for two years instead of being diminished by £17,000 a year. We believe that the relief which we pro.pose, combined with development along right lines, will considerably improve the position of Tasmania in the next two years. Meanwhile, the Commonwealth is making available to Tasmania the whole of its scientific resources, to enable it to reach that stage of prosperity which everybody in Australia desires it to enjoy.
Debate (on motion by Mr. Soullin) adjourned.
Constitution Referendum - Immigration: Speech by Sir Joseph Carruthers - Returned Soldiers’ Files.
– I move-
Thai the House do now adjourn.
The Leader of the Opposition (Mr. Charlton) and I have conferred upon the legislation which the Government proposes to put to a referendum of the people. We are to have a further consultation, and I hope that we shall be able to arrive at an agreement which will ensure the acceptance of this very necessary measure of reform.
.- I draw the attention of the Prime Minister (Mr. Bruce) to a speech which .Sir Joseph Carruthers delivered in Sydney last Wednesday, in which, according to the report iri the Sydney Morning Herald, he ascribed the failure of our immigration proposals to a lowering of the standard of morality in the Australian people. That statement will be published in every part of the world, perhaps with exaggerations. It is unfortunate that some of our public men are prepared to make statements derogatory to Australia and injurious to its people. I ask the Prime Minister to controvert this particular utterance.
.- I intend to deliver a lecture to returned soldiers and war widows, and I desire honorable members to thoroughly understand the nature of the address that I shall give. I propose to say that all criminals, even murderers, are entitled to a fair trial. They have a right to examine and cross-examine. But the returned soldier is not permitted to see the files relating to himself-, nor has his agent that privilege. The only concession which is granted to him is that an acquaintance among- the 75 members of the House- of Representatives or the 36 members of the Senate may peruse his file and have his case explained. Although he may produce the evidence of four eminent doctors to prove that his . injuries are due to war service, the ipse dixit of a medical man who is not so publicly known is preferred, and his request for a pension is refused. I maintain that a man who has offered his life for his country should have a fair trial. Let the files be produced and the evidence be given in open court, even though it be before only a stipendiary magistrate. I recognize the sense of justice that actuates the Minister for Defence (Sir Neville Howse). He is prepared to go to the limit which is allowed by the act and regulations. I have found also that the officers of the department are wholly sympathetic towards the returned soldiers. This should not he regarded as a party matter. I have never asked a member of the party on this side to so regard it. I would’ not sink to such a thing. I know that it will be said that the wives and families of soldier’s might not like to know the facts if these files were open to inspection, but I still say with the old Roman, “Let justice he done though the heavens fall.” Let these matters he investigated in open court. If that is done, I shall be content. I shall not accuse any honorable member on either side of being unsympathetic in this matter. The legal conception was placed before meetings of soldiers and -war widows, and resolutions on the subject were carried all over the State. I have not submitted those resolutions, because I believed that the
House would be ready to do something in the direction I have suggested. Many of the departmental officials are sympathetic to some of the resolutions that have been carried. But they have all been turned down. Though I do not like to say it, I think that the whip must have been cracked. I am satisfied that, while the present Minister for Defence is in office,he will see that the soldiers are given fair play. At the same time, I demand for every soldier the right, which is not denied to the vilest criminal, of seeing the charges made against him.
– The honorable member for Melbourne (Dr. Maloney) in and out of season never fails to bring up this subject. One must admit that it is of very great importance, but I express the hope that, in speaking on the subject during the week-end, the honorable member will be perfectly fair to the Minister in charge of repatriation, and will refer those whom he addresses to what I said on Thursday, 27th May, in reply to his motion. I then pointed out clearly and concisely that this question had been considered by a royal commissionin 1924, and that, after mature consideration, the commission came to the definite decision that it was inadvisable, and, indeed, most improper, and would be dishonorable, to allow the files of soldiers, which contain much private information, to be open for inspection. My own file contains a good deal of private information.
– Where would be the disgrace if the file is inspected at the sot diet’s request?
– The honorable member’s file contains no such information, because we haveno right under any act to record a history of his life. I ask the honorable member to be perfectly fair, and to state what I said in answer to his repeated requests that these files should be made available to the individuals concerned.
– The honorable gentleman does not say that he would not give a returned soldier the measure of justice given even to a murderer.
– No, I do not.
– That is all I want.
– I trust that in his week-end speeches the honorable member will be perfectly fair to the Minister in charge of the Repatriation Department, and will quote from Hansard the remarks I made on Thursday, 27th May.
Question resolved in the affirmative.
House adjourned at 4.3 p.m.
Cite as: Australia, House of Representatives, Debates, 4 June 1926, viewed 22 October 2017, <http://historichansard.net/hofreps/1926/19260604_reps_10_113/>.