10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m., and read prayers.
Report of Royal Commissioner
– Is the Prime Min ister in a position to say whether the report of the royal commissioner on the affairs of Norfolk Island will be presented to the House before the close of the session ?
– The commissioner’s report was received last week, and I hope to place it on the table in the course of a few days.
– Is the Prime Minister aware that the New South Wales Government has commenced relief works in the South Maitland coalfields’ district, and that a large number of those employed on the works are immigrants who have recentlyarrived from Great Britain? Will the right honorable gentleman, in view of the circumstances, inform miners in the Old Country of the conditions here, and warn them that they may have difficulty in obtaining employment if they come here?
– I am not aware of the circumstances referred to, but I shall have inquiries made. I trust that the honorable member is not trying to create the impression overseas that, at the present time, there is a great deal of unemployment in Australia. No greater disservice could be rendered to this country than to create such an impression abroad.
– I ask the right honorable gentleman to get into touch with the authorities of the Cessnock Shire, and ascertain whether it is not a fact that of 100 men unemployed there to-day the great majority are recent arrivals; and that a great number of recent arrivals are also unemployed at Weston.
– I shall, as I have promised, have full inquiries made into the matter the honorable member has mentioned.
– I ask the Prime Minister whether he will have a special inquiry made to let people know whether the big increase in Customs duties with the consequent high cost of production in Australia is not, to a great extent, accountable for the dearth of employment at present in Australia?
– I am always desirous of obliging the honorable member if I can; but, as he suggests a very wide economic survey of the present position of Australia and its relation to the fiscal system that has been approved by the people, I am afraid I cannot do what he wants.
Victorian Savings Bank and War Service Homes Commission
– Has a satisfactory settlement been arrived at in the dispute between the Victorian Savings Bank and the War Service Homes Commission?
– Certain points were raised by the Victorian Savings Bank regarding the operation of the present agreement between the Commonwealth Bank and the War Service Homes Commission, and the necessary six months’ notice, terminating the agreement, was given by the bank. Since then, however, I have had a conference with the chairman of the War Service Homes Commission and the chairman of the Commonwealth Bank, and I hope that as a result all the difficulties will be removed, and the matter will be satisfactorily settled.
Sir George Buchanan’s Report
– Has the report of Sir George Buchanan on the ports and harbours of Australia been received, and, if so, when will it be available to honorable members?
– The report of SirGeorge Buchanan on the ports of north and north-west Australia was received a few days ago, and I hope to make it available to honorable members tomorrow. As for his general report, I cannot yet say exactly when it will be received; but he hopes to be able to forward it almost immediately. The delay in its preparation has been due to a serious illness from which Sir George Buchanan suffered after leaving Australia.
– I ask the Minister for Health whether it is a fact that Dr. Smalpage has given up all active interest in the department’s investigations into his method of treating tuberculosis. Has the Minister any knowledge of the rumoured early departure of Dr. Smalpage for America ?
– A certain amount of serum is still being supplied from the Commonwealth laboratory for the use of Dr. Smalpage. I have no knowledge of any intention, he may have to proceed to America or elsewhere.
Attack on Mr. Pratten. - Deputation to the Prime Minister.
– The newspaper reports of the deputation which waited upon the Prime Minister yesterday state that at the interview a most violent attack was made on the Minister for Trade and Customs (Mr. Pratten). I should like to know from the right honorable gentleman whether there is any foundation in fact for that statement.
– I received a very large deputation yesterday on the subject of the proposed duties affecting motorists. I have fixed six as the maximum number of persons I will receive as a deputation, but yesterday I think that ten persons were present, all of whom spoke, and each of whom also submitted a prepared statement. One of the speakers was a Mr. Harrison. He, in opening his remarks, dealt with the tariff and its imposts on motorists, and I had to interrupt him, and point out that the tariff had been passed by Parliament, and had no relation to the particular subject under consideration. He made other remarks, and when he had concluded his speech, handed in a statement. I had agreed that any statement put in would be embodied in the notes of the deputation. I did not read Mr. Harrison’s statement until last night; but in perusing it then I found one paragraph which could be interpreted only as an attack upon my colleague, the Minister for Trade and Customs, an attack couched in the most insulting language. No such statement as that submitted in writing by Mr. Harrison was made at the deputation, and I did not know when the deputation was before me what was in the statements which its members handed in. Had any member of the deputation ventured to make such remarks in my hearing as are contained in Mr. Harrison’s statement, I should have insisted upon their withdrawal or the withdrawal of the individual who made them.
– I should like to know if the Prime Minister’s attention has been drawn to a circular distributed among honorable members containing remarks of an uncomplimentary nature concerning the Minister for Trade and Customs ?
– I have not seen the circular referred to. I omitted to say, when replying to the question of the honorable member for Corio, that last night I was waited on by the representatives of the automobile industry in New South Wales, who informed me that they entirely dissociated themselves from the attack which had been made on the Minister for Trade and Customs in the statement in regard to which I have just spoken.
– I should like to ask the Minister for Trade and Customs whether his attention has been called to an advertisement inserted in the daily press by the Town and Country Union, Melbourne, which gravely distorts the actual conditions and circumstances under which the bounty on power alcohol is allocated ?
– My attention has been drawn to the advertisement. As the honorable member says, it distorts the position in regard to the allocation of the bounty on power alcohol, and is one of the many inaccurate statements in circulation just now, which, possibly, are not altogether dissociated from the importing oil interests.
– In view of the shortness of the time available for the referendum campaign, can the Prime Minister say when the session will close?
– At the moment I cannot do so, but I hope to make an announcement during the next two or three days.
Agenda Paper - Possible Absence of
Representatives of Canada - Appointment of Governors-General
– Has the Prime Minister yet received the agenda-paper of the forthcoming Imperial Conference ? If so, I should like to know when it will be made available to honorable members, and when the right honorable gentleman will make a statement to the House in relation to it ?
– I have received from the British Government a cablegram which is the culmination of many messages that have been exchanged between London and Melbourne relating to the agenda-paper for the Imperial Conference. It reads as follows : -
The opening date of the conference has been fixed for 5th October. As to the agenda for the conference, it has been agreed that, as in the past, its work should include a general review of foreign policy and defence, and of questions to which they give rise, and that it should consider the development of a system of communication and consultation ‘between the Governments of the Empire on matters of common concern.
The following are chief economic questions which will be on the agenda : -
a general review of inter-Imperial trade, present and future, including a discussion of the work of the Imperial Economic Committee and the position of the Empire Marketing Board;
communications, under which heads will be included the work of the Imperial Shipping Committee and the question of commercial air services;
the exhibition within the Empire of Empire films;
the question of securing agreement as to liability of State enterprises to taxation.
In the latter part of this week or during next week I shall lay this communication on the table in the form of a paper, and move that it be printed.
– I should like to ask the Prime Minister if he has been correctly reported in the press as having said that if Canada is not represented at the Imperial Conference, Australia also will not be represented.
– It is obviously undesirable that the Prime Minister of Australia should proceed to Great Britain unless an Imperial Conference that will be representative of the whole Empire is to be held there, and as Canada has a larger population than any of the other selfgoverning dominions, a conference in the absence of representatives of Canada would be one from which no great results would accrue. There is no certainty at the moment as to the exact position, and I am anxious to learn at the earliest possible date whether Canada will be represented at the conference, because it is impossible for us to proceed with our general arrangements until we are in possession of that information.
– Has the Prime Minister seen in the press a cablegram stating that if Mr. McKenzie King succeeds in retaining power as Prime Minister of Canada he will submit a motion at the Imperial Conference to give the dominions the right to nominate their own governors? I should like to know if the right honorable gentleman is prepared to fall in with that view, seeing that five of the Australian States have already petitioned the British Government to secure the right to appoint their own governors.
– The honorable member may not argue the matter.
– If the honorable member wishes to know whether the Commonwealth Government would support at the, forthcoming Imperial Conference a proposal for the appointment of governorsgeneral by any other than the present method, my reply is that it would not,
– In connexion with the visit to Australia next year of His Royal Highness the Duke of York, could the Prime Minister, in his usual tactful manner, drop a hint to the British Admiralty that Australia would much appreciate a visit from one of the battleships recently launched, which should be ready about that time?
– The suggestion of the honorable member with regard to a visit by a modern battleship will receive consideration from the Government.
– I ask the Minister for Defence whether all arrangements have been made for the reception of Mr. Alan Cobham, and whether, in view of the greatpublic interest attached to theflight, those arrangements will be made public?
– Instructions have been issued to the Department to make all necessary arrangements, and at a later date I shall let the honorable member know what they are.
Am Board Inquiry - Statement of Policy
– I ask the Minister for Defence whether the Air Board has finished its inquiry into the recent fatal aeroplane accident at Point Cook, and when we may expect his promised statement on air matters generally?
– I understand that the inquiry will be completed this week or early next week. The statement I promised will be made on the Estimates.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow: -
Spiritfor Fortifying Wine
asked the Minister for Trade and Customs, upon notice -
What was the amount of excise collected during the period 1st July, 1925, and 30th June, 1926 (inclusive), on fortifying spirit for wine?
Sale of Expropriated Properties
asked the Minister representing the Minister for Home and Territories, upon notice -
– The information is being obtained.
Retirement of Mr. Harrison
asked the Treasurer, upon notice -
Whetherhe will place upon the table of the library all the papers connected with Mr. Harrison’s retirement from the Note and Stamp Printing Department, including the evidence heard by Major Jones, chief of the Commonwealth Investigation Branch of the Attorney-General’s Department?
– The papers will be made available, at the Treasury, for the honorable member’s perusal.
– On the 16th July, the honorable member for Hindmarsh (Mr. M.Makin) asked the following question -
I am now in a position to furnish the following replies -
Use of Spirit in Aviation.
– On the 16th
July, the honorable member for Brisbane (Mr. D. Cameron) asked the following question -
I am now able to inform him that it is understood that the Commonwealth Oil Refineries does not at present produce an aviation spirit conforming to specifications required for use in the Air Force machines, though they could do so at a moment’s notice in case of emergency. The present demand for aviation spirit is not sufficient to justify their allotting special storage facilities for such a highly volatile spirit. Some tests with the ordinary Commonwealth Oil Refineries No. 1 grade motor spirit have been made by the Civil Aviation Branch, and, though the machines were successfully flown, the trials to date have not been comprehensive enough to enable a reliable report to be made in regard to its suitability for aviation purposes.
The following papers were presented -
Commerce (Trade Descriptions) Act - Regu lations Amended - Statutory Rules 1926, No. 82.
Customs Act - Regulations Amended Statutory Rules 1926, No. 88.
New Guinea Act- Ordinance of 1926 -
No. 14 - Public Service.
No. 15 - Police Offences.
No. 16 - District Courts.
No. 17- Public Service (No. 2).
Public Service Act - Regulations Amended - Statutory Rules 1926, No. 95.
In Committee of Supply: Considera tion resumed from 16th July (vide page 4314), on motion by Dr. Earle Page -
That the first item in the Estimates under
Division I. - The Parliament - namely, “The President, £1,300 “ be agreed to.
– On Friday last I was pointing out that during the four years in which the sinking fund has been in operation, the amounts paid into it have counterbalanced new borrowings, so that the National Debt has been kept practically stationary. The net debt on the 30th June, 1922, was £339,200,105, and on the 30th June, 1926, it was £338,841,476, showing an actual reduction of almost £160,000, notwithstanding that during the four years the population had increased by 481,000. In other words, the national debt was reduced by £4 19s. 6d. per head. That is very pleasing reading to honorable members, and more so to the general public. Charges of extravagance and excessive taxation are made against the Commonwealth Ministry, but the taxpayers must be gratified to know that there is one parliament in Australia that is reducing the load of public debt. Another gratifying feature of the Budget papers is the evidence of reduction in the working costs of government departments. In 1921-22 the cost of administration was £2,952,000, and for the year ended 30th June, 1926, working expenses had actually been reduced to £2,874,000, and it is anticipated that during the current year the amount will be still further decreased. Those figures are an eyeopener to me as they must be to the outside public, especially having regard to the increase in population and the progressive awards of the Arbitration Courts. Actually the cost of maintaining the civil service has been reduced from 10s. 9d. to 9s. 2d. per head of population. In spite of the charges of ‘extravagance this reduction of administration costs is a feather in the Government’s cap, and will be warmly approved by the taxpayers. The activities of the Commonwealth Bank also call for favorable comment. In 1924, we were threatened with a financial crisis. Men in commerce hardly knew what the morrow would bring forth. The position of the primary producers was very precarious. Within a few months Australia had to export £140,000,000 worth of wheat, wool, and other primary produce. For each £100 worth, of goods we exported we received only £90. It was a severe trial for the banking institutions of this country, and the Commonwealth, through the instrumentality of the Commonwealth Bank, came to the rescue of the private banks by offering to advance £15,000,000 worth of notes. That action enabled our exports to be sent oversea, and gave us a quid pro quo, the amount of exchange being reduced to only a few shillings per cent. Although £15,000,000 was made available, the gross amount taken by the banks on any one date, and refunded by them within a short period was only £2,800,000. The Commonwealth Bank then carried Australia through one of the worst financial crises it has experienced, and for that action, if for nothing else, it deserves the thanks of this Parliament.
The Government has been criticized for its housing scheme, which, it is alleged, will trespass on State preserves. That may or may not be so, but if we cast our minds back to the last election we find that the housing plank in the platform of the Nationalist party was received by the electors with hearty approval. In his policy speech the Prime Minister said that the Government was prepared to finance a housing scheme to the extent of £20,000,000. That is a wise policy. Housing should not be exclusively a Commonwealth, a State, or a municipal matter; for any authority that assists the people to obtain homes of their own confers a lasting benefit on the community. If all the people of this country lived in decent homes, this would become a con tented democracy. A few months ago there was evidence of a disturbing bolshevik element in this country, and even to-day some of the proposals of the Labour party are too bolshevistic for honorable members on this side to accept; but such views would largely disappear if the workers were provided with better houses. When I was in Adelaide a few weeks ago some of the 1,000 homes that are being erected by the Government on the outskirts of the city were pointed out to me, and I was told that many of the occupants of them, although they were Labour supporters before they acquired their own homes, had ceased to vote Labour. In that locality the Nationalist candidate polled as many votes at the recent election as did the Labour candidate. The Commonwealth Government would be well advised to proceed with its housing scheme as soon as possible. I assure the Prime Minister that there is a burning anxiety in many parts of the Commonwealth to know when the scheme will be launched. The workers realize that it offers them the only chance they are likely to have of obtaining homes of their own. The State Governments are doing all they can, and are eagerly awaiting the promised assistance of the Federal Government. I cannot see that the launching of such a scheme would encroach on the rights of the States, or would be objectionable as a measure of socialism.
On Friday last I mentioned the expenditure of the Defence Department, and I said that because it was small it would probably be pleasing to honorable members of the Opposition, who do not favour a large expenditure on defence. The Inspector-General of our * military forces (Sir Harry Chauvel) has just drawn attention to the inadequate provision made for defence, and has urged that more money should be spent in that direction. I do not pose as a military expert, but I venture the opinion that much more money than appears on the Defence Estimates is spent on defence. The cost of making and maintaining roads, for instance, could just as properly be included in defence expenditure as the money spent on ports and harbours. Good roads are essential for defence.
I realize that this debate is leading up to a burning subject. In the minds of the public there are three outstanding things that are now receiving the attention of this Government. The first is the per capita proposal, the second is the referendum, and the third is the petrol tax. I have heard the question discussed, ‘ Is Pratten’s petrol proposal protective V That question must be answered by this House. I understand that the Prime Minister does not regard the tax as protective; but it appears to me that it .is both protective and revenue producing. Some of the Customs duties agreed to by this Parliament recently were rather high; but even if we regard the petrol tax as purely a protective duty, it is not a high one. If any industry should be’ protected, it is that which supplies liquid fuel. While there is peace between the nations, Australia can obtain her requirements of liquid fuel from overseas; but there may come a time when those happy conditions will cease. The tax provides a measure of protection to the shale oil industry. What would be the condition of Australia if supplies of liquid fuel from overseas were withheld ? Australia can supply only about one-tenth of the petrol needed for industrial purposes in this country. In view “of the many attacks made on the Government in connexion with this matter, I was gratified to read in the Sydnev Baily Telegraph, last week, an article supporting this tax. It will be useful to open up shale’ deposits, even if they are not immediately developed. It has already been ascertained that certain scientific work has to be undertaken before oil shale deposits can be expected to produce on a commercial basis. In view of the need for meeting to some extent our requirements of liquid fuel, the proposed action of the Government appears necessary. When it was stated during the election campaign that the Government, if returned, would spend £10,000,000 to £15,000,000 during the next ten years on road construction, the announcement was rapturously received by country audiences. I do not know whether candidates suggested that the money it was proposed to spend would be obtained from revenue, or whether additional taxation would be imposed in order to meet the cost of the Government’s road policy, but any candidate who did not mention the probability of extra taxation did not act honestly.
– What candidate said that extra taxation would be imposed for the purpose ?
– I was not a candidate at the general election, but in supporting others who were eventually elected, I admitted that such a course would probably be necessary.
– Is success more important than veracity ?
– On that occasion success and veracity went together. Every candidate I supported was returned to this Parliament.
– Nothing was said about imposing extra taxation.
– Any one who did not suggest that additional taxation for the specific purpose of main road construction and maintenance would be imposed misled the electors, as it must have been apparent that insufficient money would be available, unless additional revenue were raised. An extra duty upon petrol to provide money for road construction is the most equitable form of taxation. When taxation matters were under consideration in the New South Wales Parliament two years ago, I was, with others, responsible for holding up, for at least three months, a measure authorizing the collection of taxes based on the weight of motor cars. The Treasurer at that time believed in a tax on petrol being imposed, but said that the imposition of such a tax was a Federal and not a State matter. It will be seen that if a State tax were imposed on, say, petrol or tires in New South Wales, the purchasers of those commodities would obtain their supplies in another State in order to escape the tax. Taxation based upon the weight of a car would be inequitable, as a person who used his car for, perhaps, a short run on a Sunday afternoon would have to pay the same tax as the owner of a car plying for hire, which might perhaps clover hundreds of miles a week. If a petrol tax is imposed, the users of cars will be taxed, in proportion to the extent to which they use the roads.
– The users of the Commonwealth Oil Refineries spirit would not pay anything.
– A number of motorowners are using the Commonwealth Oil Refineries product-, and I believe the only complaint concerning that spirit is that the supply is unequal to the demand.
– But the users of that product, do damage to the roads, like other motorists.
– That is a phase of the question with which I intend to deal later. Although the Federal Government intend to impose a tax on petrol, I do not see why there should be an outcry from motor users generally. There are certain persons whom it is hard to convince that the action proposed to be taken is not in their interests. Although more money is now being spent on road construction and maintenance, it is generally admitted that many of our roads are in a worse condition now than they were in 20 years ago, owing largely to the heavy increase in traffic. In the early days, perhaps, only one sulky would pass a given point on a country road every hour, but, to-day, a motor car passes the same place, perhaps, every few minutes. A sulky, travelling about 7 or’ S miles an hour, would have little or no effect upon the road, but motors travelling at 20 or 30 miles an hour do considerable damage. The important work of main road construction and maintenance has grown to such dimensions that the State authorities are unable to cope with it, and, consequently, the Federal Government is proposing the imposition of higher petrol duties in order to raise sufficient money to meet the cost. The proposal of the Government, in this connexion, has met with a good deal of opposition, and is unpopular with the press. No Government can afford to be unpopular with the press.
– The press is ‘largely instrumental in influencing and moulding public opinion. Although the present Government was returned with a larger majority than any other Federal Government, its action, in certain directions immediately caused friction, and, consequently, heat ; but a government would be unworthy of further support if it surrendered to opposition. The referendum proposals, which I intend to support, are being vigorously opposed by the press, which, because of its wide circulation, has a greater influence upon the public mind than the opinions expressed in this Chamber. The Government is only referring the referendum proposals to the people, and is not deliberately attempting to interfere with State rights. Almost every newspaper in Australia is opposing the proposed additional petrol tax, but, in imposing the tax, the Government is giving effect to the policy on which it was elected. I should be willing to consider any other proposal whereby the important work of road construction could be carried out without raising the necessary money in the manner proposed. I cannot, however, understand the attitude of honorable members from Western Australia. Three-fifths of the £15,000,000 to be made available to the States will be distributed on a population basis, and the balance on a territorial basis. If the whole of the amount were divided on a population basis, Western Australia would receive less than £1,000,000, but on the proposed basis of distribution it will get about £2,500,000. The sum of £1,500,000, raised in the eastern States, will be provided for the development of Western Australian roads, and yet opposition to the proposal comes from the western State.
– We are complaining of the incidence of the taxation.
– Why should Western Australia complain, since it is to receive £2,500,000, whereas on a population basis it would be entitled to less than £1,000,000?
– That has nothing to do with the point.
– That is my view of the case. If all tho money were to be raised by the taxing of petrol users they would have cause to grumble; but in the past, so far as New South Wales is concerned, money for the maintenance of roads has been raised by means of municipal or shire taxation.
– The revenue derived from the registration of motor vehicles in New South Wales is now used for road maintenance.
– Yes ; but a few years ago it was not. The old form of taxation for road purposes has served its purpose, and something further must be done, because practically every road receives a great deal more wear than it did formerly. Sir Alexander Peacock recently deplored what he described as the decay of the true federal spirit. I admit that the spirit existing among the people today is different from that of 25 years ago; but it can hardly be said that the attitude that Victoria and New South
Wales adopted towards one another prior to federation was commendable. During the Federal Convention and at the subsequent referendum we in New South Wales were asked to believe that we were about to federate with certain thieves across the border. No doubt, a similar feeling existed in Victoria regarding New South Wales. Consequently the Constitution was framed in an atmosphere of suspicion. Although it may have been suitable for that period, it does not necessarily meet all the requirements of the present time. During the last quarter of a century there has been a great war, and the financial position of Australia has undergone a tremendous change. Twentyfive years ago motor cars were practically unknown. Factories have since increased to an enormous extent, and the population, which was then less than 3,000,000, has more than doubled. I do not go so far as to sav that I am a unificationist; but whether or not unification is our goal, we are all marching in that direction, and must inevitably continue to do so. The Commonwealth Government is now accused of encroaching upon State rights. Although the cry that State rights should be preserved commanded a good deal of attention in New South Wales ten or twelve years ago, I am inclined to think that a person who took up that theme today would have a small following. I disagree with Sir Alexander Peacock, because I consider that the federal spirit has increased. The boundaries between the various States are now generally regarded as being merely artificial. The interests of the eastern half of Australia are recognized as being similar to those of the western- portion, and any Government that did not legislate along the lines adopted by the present Ministry would receive -short shrift. I intend to vote for the petrol tax, because I supported it on the hustings, and regard it as essential. Nobody likes direct taxation; but I feel sure that after this tax has been in operation for a while its benefit will be realized by all sections. In the United States of America, which is noted for its good roads, motor tires are guaranteed to give four times the mileage obtained in Australia.
– That is an absurd comparison:
– It is due to the good highways of that country ; and if the roads of Australia could be improved to such an extent that the mileage of tires was doubled, motorists would have no need to complain of the petrol tax. The mileage varies in different parts of the State in accordance with the quality of the roads. I deplore the necessity for a tax on tires, and I hope that the tire manufacturers in Australia will not look upon it as a protective duty; they are already sufficiently protected under the tariff. The Government might well provide in its proposal that the manufacturers shall not use this tax as a means of obtaining additional protection.
– Why not make it an excise duty ?
– I am prepared to do that, so far as tires are concerned. The petrol tax, however, should be protective to a slight extent to assist local industry. There is no reason why the price of petrol should be raised to any considerable degree; but if the distributors of imported petrol had to pay the extra 2d. a gallon, it would be unfair to them.
The present Government has done much in the interests of the primary producers. Some persons even say that the Treasurer (Dr. Earle Page)’ is “running” the Ministry, and that its legislation is all in favour of the primary producer. They now object to the petrol tax as injuriously affecting the primary producer ; but they cannot have it both ways. Practically every primary industry has been assisted under the present administration. Much has been done in the interests of the cotton industry, which is in its infancy. Its prospects in North Queensland are indeed bright. In most of the cottongrowing belts a lack of rain is almost unknown ; but, unfortunately, the growers during the last twelve or eighteen months have experienced a severe drought. That is a bad start for a new industry. The Government is, however, sympathetic towards it; and, no doubt, it will in time be placed on a proper footing. The wool industry was in practically the same situation. Had the wool-growers not received assistance, they would have been in a serious position. In wheat-growing alone we appear to be making progress. Today, wheat is reaped in places where, twenty years ago, it was not thought possible that it would grow. There was a time when it was considered that, with the exception of the area in the vicinity of Perth and Fremantle, Western Australia was practically a desert; but, last month, more wheat was exported from Western Australia than from any other State. Our fruit and wine industries also show promise of development. Those engaged in the dairying industry are to be congratulated on having as Minister for Markets and Migration one so interested in their welfare. The appointment of Mr. Paterson as Minister for Markets and Migration is very popular in my electorate, where there are numbers of dairy farms. In the dairying industry there is not a 44 hours week, and practically no minimum wage. In order to make a living, not only the dairymen themselves, but their wives and children also have to work long hours. The Dairy Produce Export Control Board, last year, saved the dairy farmers of the Commonwealth at least £20,000 in connexion with marine insurance. Further advantages will no doubt accrue to them from the operations of that board.
– They need assistance.
– Yes, and they deserve it.
While I agree that the national debt should be kept as small as possible, I admit that if this country is to be developed, expenditure must be incurred. In connexion with the Northern Territory alone, the Commonwealth has undertaken a big liability. The east- west railway also meant a considerable outlay; and the annual losses on that line are still considerable. These undertakings and other developmental schemes add to the financial burden of the Commonwealth, and necessitate the borrowing of money. In this connexion, the Government is to be commended for having provided for a sinking fund. A considerable increase in the national debt is undesirable. Those who framed the Constitution could not have foreseen the great war, which added £400,000,000 to Australia’s national debt.
It is unfortunate that the Commonwealth should have departed from the policy of a uniform railway gauge for Australia. Had I been a member of this House at the time, I should have opposed the construction of a 3-ft. 6-in. railway in the Northern Territory. The Commonwealth Government, and the Governments of New South Wales and Queensland are at present engaged in the construction of a railway of 4-ft. 81/2-in. gauge between Kyogle and South Brisbane, which, whencompleted, will give a railway of standard gauge from Albury to South Brisbane. I should like to see the country between Gippsland and Eden-Monaro served by a railway. At present, the Victorian railway terminates at Orbost, and the New South Wales line at Bombala. Between those places is some fertile country which, for want of railway communication, is still practically “no man’s land.” A glance at the railway systems of Victoria and New South Wales will show how neglected this portion of the continent is, so far asrailway communication is concerned. With proper facilities for transport, the country would be capable of carrying a large population. It would probably have . been better if that area had been included in Victoria, as, apparently, the authorities in New South Wales do not concern themselves about it. There is no need to go to the Northern Territory to find undeveloped land in Australia; this huge tract of country awaits development between Melbourne and Sydney. I suggest that the Government should communicate with the Governments of New South Wales and Victoria with a view to the construction of developmental railways in that portion of the continent. At Twofold Bay, an excellent port exists. About 100 years ago Captain Boyd landed there, and later he expressed the opinion that that port was equal to any on the Australian coast, with the possible exception of Sydney. Believing that a big city would develop there, he invested large sums of money in Eden, but, unfortunately, the government of that time and subsequent governments also concentrated their energies on developing Melbourne and Sydney, with the result that the port of Eden is in practically the same undeveloped state to-day that it was in 100 years ago. Eden possesses not only a good harbour, but also a rich hinterland. A proposal to develop that port was at one time referred to the New South Wales Public Works Committee, but that committee, which recommends only those schemes which show a prospect of immediate success, rejected it. Had the committee been in existence at the time, it is probable that the SydneyBathurst railway would not have been taken across the mountains to open up that fertile country.
The CHAIRMAN (Mr. Bayley).Order ! The honorable member has exhausted his time.
Mr. LAZZARINI (Werriwa) [4.10).-
I am wondering if, when he was talking about the power of the press, the honorable member for Eden-Monaro (Mr. Perkins) had in mind the attitude of the press during the last general election, or whether he was thinking of the report he is likely to get in the newspapers tomorrow morning. He says that we cannot afford to offend the press. The Labour party has always had to fight that section of the press which represents the interests of its wealthy advertisers and supporters, and in spite of this opposition it has been in power in every State and in the Commonwealth, and before long will again be in control of the Commonwealth. Possibly the honorable member remembers the smoke screen of misrepresentation which was thrown out by the press during the last election. History has shown that in nine times out of ten the press represents the views, not of the great masses of the people, but of the wealthier sections of the community. The honorable member said also that he supported financing of the Government’s road policy by a petrol tax. We heard nothing about that policy at the election.
– I dealt with it myself.
– The Treasurer did not tell the farmers that in order to carry out its roads policy the Government intended to tax the petrol used in farm machinery. Judging by the speech delivered by the Treasurer his policy is “ a surplus at any price.” National development and more liberal treatment for oldage pensioners, as well as the removal of the anomalies in connexion with the payment of invalid pensions, mean nothing to him.
– This Government has given more concessions to old-age pensioners than any other government in the history of the Commonwealth.
– This Government has done nothing. When the Treasurer was Leader of the Country party he criticised the then Treasurer, whom he charged with having manufactured a surplus. On that occasion he was taken severely to task by the then Prime Minister, the right honorable member for North Sydney (Mr. Hughes). I now in vite the Treasurer to read what the press has to say about his budget. I quote first of all the Sydney Morning Herald, of the 9th July. That newspaper states -
Dr. Page’s handling of some important features of Treasury business on this occasion is not to be commended. . . . And the accounts have been presented in so confused a manner that it is only by complicated calculations that the real position can be ascertained. . . . The effect of the manipulation must be to make those who take some pains to study the condition’s for themselves more and more suspicious of the bona fides of the Commonwealth’s scheme for readjusting Commonwealth and State financial relationships.
The Sydney Morning Herald represents the party which supports the present Government, but we may be sure that, notwithstanding what it may say to-day, it will support the Ministry at the next election. The Daily Telegraph of the same date offers this criticism.
It is no use continually reminding us that we have a big war debt, the interest of which has to be paid wholly out of taxes. For if the taxpayer had only that burden to carry he would not need to grumble. But, seeing that, since five years ago, the reduction in department running expenses amounts to only £158,000 a year, it is easy to see how the money goes. In 1921 the departments were still inflated by the result of war stalling, which required vast numbers of officials to be engaged at any price for emergency work. Deflation is a very slow process when the departments are costing only such a trifle less than in the peak years.
The Sun of the same date states -
Dr. Page, however, hides a surplus of over £2,500,000 with the same care - and success - that an ostrich displays in its traditional ruse to escape from the hunter. He is a little shy about surpluses. If one has too big a surplus the pestilent fellows who pay the taxes ask, “Why not reduce taxation?” and, as all who have studied politics know, to reduce taxation is ultimate torture to all good Treasurers. Reducing Treasurers became extinct with George Turner.
The Sydney News, the business man’s newspaper, has this to say about the budget -
The people usually have the Parliament and the Government that they deserve. Because the electors have submitted without much complaint to the heavy taxation imposed upon them, the burden is now to be increased. Because they can easily be fobbed off with specious statements, Dr. Page waters down his big surplus, and expects the. trick to succeed. And succeed it will, while the people are too indifferent to bother about the nation’s finances. Heavier and heavier will grow the burden of taxation while the electors tolerate a Treasurer who trifles with figures and the distress of the people.
– -I thought the honorable member took no notice of newspaper criticisms.
– I am merely putting on record the views of the newspapers referred to. The Guardian states -
Commonwealth Budgets from Dr. Page are financial lunacy. Though existing arrangements made Australia pay ber war debt to Britain twice as fast as Britain pays her war debt to America, Dr. Page must needs fling another £1,000,000 of extorted tax into that bag. The £2,7S(i,000 which he has squeezed from Australian pockets by his Blunder Budget has robbed the workers of that amount of industrial expansion and of increased active employment.
It is now about three years since the Commonwealth Government made arrangements with the British Government for the funding of the Australian floating war debt of about £90,000,000, representing payments made by Great Britain on account of the Commonwealth. Shortly afterwards Britain concluded negotitions with the United States of America for the funding of her war debt at 3£ per cent., and since America furnished Great Britain with a considerable portion of the money with which she financed Australia’s war expenditure, it is obvious that as we have to pay Britain 5 per cent, on our debt of £90,000,000, the British Government is making a profit of lj per cent, on the transaction. The right honorable the Prime Minister (Mr. Bruce) undertook, when last he was in England, to approach the British Government with a view to obtaining concessions, but up to the present nothing has been done.
I turn now to the roads policy of the Government, and I invite honorable members opposite to say what they are going to do about it.
– We will tell you.
– More information should have been furnished in the budget. It is nearly twelve months since the last Federal elections, and Parliament will go into recess again in a week or two. The budget and the Estimates for the next twelve months will be passed, and we shall then go into recess until the Parliament is removed to Canberra. There is some talk of a meeting in January for a month or. two, probably to enable the Government to obtain temporary Supply to carry it over the winter, so that it will be unnecessary to sit at Canberra during the cold months. The Government has proposed an expenditure of £20,000,000 on the building of houses. What is it going to do about that? Where is its scheme for the building of houses? It is twelve months since all these promises were put before the electors, but we have no practical schemes submitted to give effect to them. I can sympathize with the references of the honorable member for Eden-Monaro to the necessity for good roads, because his electorate is’ probably worse served in this regard than any other electorate in Australia. I am able to say so, because I travelled over the electorate during the last by-election campaign there. There is a road in the district called the Prince’s Highway. but if the Prince is not better as a king than the Prince’s Highway is as a road, there will be trouble for the Empire in the future. A tax is to be imposed on petrol to get in some money for the purpose of road construction. In the Eden-Monaro district there are mountains of granite alongside roads over which at present it is dangerous to travel, and there is no reason why the Government should not find employment for many of the thousands who are now unemployed in Australia in the building of good roads in that district. Its scheme for road construction would appear to depend on the use of imported petrol and the amount of revenue which can be derived from the tax proposed upon it. If motorists prefer to use Commonwealth Oil Refineries petrol, there will be no revenue derived from the tax, and no roads will be made by the Commonwealth Government. Three years ago the Prime Minister told the people of England that everything was all right in Australia, and they would do well to come out here. He told them that a commission was appointed to submit a scheme for unemployment insurance. Where is that scheme? The commission is still sitting, and tens of thousands of pounds of the taxpayers’ money have been wasted without result. We shall probably receive no report from the commission until the dying hours of this Parliament, and then the Government and its supporters will go to the electors promising that an unemployment insurance scheme will be brought forward. A health commission has been appointed, and what is it doing?
– It has completed its report. .
– What is the Government going to do about it?
– The State Ministers for Health are to meet the Commonwealth Minister this week.
– I see- the Ministers for Health are meeting this week, and Parliament is to close the week after. The various schemes for national insurance, health insurance, unemployment insurance, road construction, and housing will be scrapped by the Government. The Treasurer led a political party here a few years ago, and I should like to know what has become of the Country party’s policy. Apparently it has been scrapped, also. Honorable members will recall the mighty boast about decentralization, and the intention to establish the factory alongside the primary product. What has the Treasurer done about that? He has put a stranglehold upon State finances, and so has prevented the State. Governments from, carrying out work to bring about decentralization, which, but for his action, they might nave undertaken. The honorable gentleman went about the country with his thirteen points, one of which was decentralization. He delivered a lecture in ray electorate on the question, and some of my people were concerned about it. They thought there was some prospect that something would be done to bring about decentralization. It was thought that rural credits would bo established through the Commonwealth Bank, and money would be made to available to bring the secondary industry and the factory into the district in which the primary product was produced. It was believed that in that way rural centres would be developed ; but we have found the financial arrangements of the Commonwealth conducted in the interests of the Country party’s policy of freetrade.
Reference is made in the budget to the policy of the Loan Council. Clause 5 of the agreement with the States reads -
The Commonwealth shall not raise new money in Australia, but shall satisfy its requirements by overseas borrowing.
I should like to know what the Minister for Trade and Customs (Mr. Pratten) has to say to that. He repeatedly told this House that borrowing abroad must stop, because it is detrimental to the development of Australia. The honorable gentleman asserted that Australia must finance herself, but he is now a member of a government that proposes to satisfy its requirements by overseas borrowing. No one can challenge the statement that we can borrow overseas only by importing goods from the countries in which our loans are floated. If we float a loan for £1,000,000 . or £10,000,000, whether in Britain or in America, we can do so only by importing the products of the secondary industries of the country, from which the money is borrowed. Every penny borrowed abroad is so much taken from Australian industries, and, as a result of our borrowing abroad, Australian industries are languishing. That is the policy of the Government, and is in accord with the freetrade policy of the Country party. The Treasurer has said that he is acting upon the advice of private financial experts. I do not know who they are, but I know that private financial experts advised Mr. Fisher, when he was Prime Minister during the war period, that it was impossible to raise a loan of £4,000,000 in Australia. They advised that the financial fabric of the Commonwealth would be destroyed if the attempt were made to float a loan of £4,000,000 or £6,000,000 in Australia, for destructive purposes in ‘time of war. It was admitted that we might raise money within Australia in times of peace, for its permanent development and welfare, but the present Government apparently believes that it is necessary to go abroad for money, even for this purpose. Borrowing abroad stifles the policy . of protection. Let no man claim to be a good protectionist if he stands behind a policy of borrowing abroad. The two policies are contradictory
– Has the honorable member noticed that the Queensland Labour Government has adopted the practice?
– Here is the PostmasterGeneral (Mr. Gibson) telling us what the Queensland Government is doing; some other honorable member will remind us of what the South Australian Government is doing, and still another will talk of Mr. Lang and the Workmen’s Compensation Act passed by the New South Wales Government. Why do not honorable members opposite give us something off their own bats? The Commonwealth Government, by the action- it has taken in connexion with the Commonwealth Bank, has left the State Governments no other resource but to borrow abroad. They are not in a position to expand credit in Australia; it is only the Commonwealth Government that can do that. It has absolute power over the banks of the country, .and can dictate to’ them and to the various financial institutions. It is in a position, through the Commonwealth Bank, to bring other banks and private financial institutions to heel. No State Government possesses any such power. When in 1920 publicity was given through the press to the intention of the then Premier of New South Wales (Mr. Story) to introduce a Rural Bank Bill, the Commonwealth Treasurer (Sir Joseph Cook) introduced an amendment of the Commonwealth Bank Act, proposing the transfer of the note issue to the bank, and containing a clause the object of which was to give the associated banks and financial institutions of the country the legal right to refuse circulation of credit instruments of the State rural banks. When that legislation was passed, the chairman of directors of the Bank of New South Wales said that the rural banks would only be feeders to the private banks, because the Commonwealth Government had made them so. I have said that borrowing abroad stultifies the policy of protection, because it can only be done by permitting the admission of the products of the secondary industries of the countries from which the money is borrowed. The Government that pursues such a policy is a revenue tariff government, and not one prepared to give adequate protection to the industries of this country.
By its proposal for the abolition of the -per capita payments to the States, the Government proposes to give up all fields of direct taxation. Our Commonwealth direct taxation had to be imposed to meet war expenditure. The Government proposes to give up all direct taxation and intends to run the Commonwealth on the revenue derived from Customs and excise. This proves that it is” its intention to remain a freetrade government, and depend for the financial resources of the Commonwealth on a revenue tariff on imported goods instead of giving effect to the demand of the people for a protectionist policy. A revenue tariff is the most iniquitous means of taxation that could possibly be adopted. The Government proposes to depend upon indirect taxation, which the taxpayer pays without realizing that he is paying it, and to leave all direct and unpopular taxation to the States.
It is another instance of the Country party giving effect to its policy, not only of freetrade, but also of surrendering all fields of direct taxation to the States. I am not speaking from the State rights point of view; but I think the future outlook of the Commonwealth will be serious indeed if it evacuates entirely the field of direct taxation and depends for the whole of its revenue on excise and Customs duties.
Speaking of the Commonwealth Bank, the Treasurer showed that although for a certain period the bank’s profits had declined, they were picking up again. He implied that this was a normal state of affairs ; but, to my mind, the profits of the bank should never have declined. If the institution had not been hamstrung, its profits would have increased. If it had been allowed to compete openly with the associated banks, and to deal direct with the farmers, by the establishment of branches in rural areas, giving overdrafts at lower rates of interest than those charged by the associated banks, not only would our rural industries have been better developed, but the bank itself would have made a much larger profit, to the detriment of the private banks. I want to show what profits were made by these private banks during the period following the war, when, according to the Treasurer, the Commonwealth Bank’s profits’ necessarily showed a shrinkage. The Commonwealth. Bank having all the resources of Australia behind it, is in a position to take risks which other banks dare not take in the peaceful development of the nation. During the war, no doubt, it did its work well; but it was not established by the Labour party to serve the purposes of war. Its founders had in mind the peaceful development of Australia in the interests of the general masses of the people, and not in the interests of a few individuals. It has not been doing the work for which it was founded. Its operations have been so limited by the present administration that it showed a loss during a period when private banks made an enormous profit. In 1919 the associated banks had a paid-up capital of £35,696,940, their reserves amounted to £23,543,496, and their annual dividends totalled £2,492,637. Five -years later, in 1924, their paid-up capital amounted to £55,496,264, their reserves had increased to £40,384,224, and their annual dividends totalled £5,046,559. Thus, in a period of five years, the associated banks watered their capital to the extent of £20,000,000, and increased their reserves by £17,000,000, while their dividends in one year had increased by £2,500,000. In this period of five years, taking their reserves, watered stock and increased dividends, they actually made £6,000,000 more than the whole of their total capital in 1919, much of which was also watered. These figures make interesting reading. These profits were made at a period when we were called upon to stretch the financial resources of the country to the uttermost in order to keep development going and to keep people employed. Yet the Commonwealth Bank retired from open competition with the private banks, leaving those engaged in secondary and primary industries to contribute heavily to the profits of those institutions. I venture to say that two-thirds of those profits have been drawn from the primary producers, and that to-day there are tens of thousands of those producers in the hands of the banks. At least seven-tenths of the men on the land who are hit by a drought are obliged to approach the private banks for assistance. Let me take the story of a man with a farm worth £5,000, of which he has the fee-simple.
– If the honorable member had his way, no man would hold land in fee-simple.
– Under a leasehold system the banks would not get a grip on the farmers.
– Under a leasehold system a drought would force a man off his holding, because he would have nothing on which to borrow.
– The man who holds the fee-simple of a farm which is worth £5,00.0 goes into the sanctum of the manager of the local branch of a private bank in fear and trembling, and asks for an overdraft of £1,000. If he obtains the accommodation he requires, he delivers to the bank £5,000 worth of securities, but in return the bank gives him nothing but some figures in a book. The farmer does not take from the bank the currency he might get by borrowing from a private individual. He gets a fictitious currency created by means of a cheque book, and for that he has to pay interest at the rate of 8 per cent. The conclusion of the story of this farmer’s difficulty is seen in the figures I have given showing the enormous profits made by the associated banks. These institutions are the biggest parasites in the community. When they give overdrafts they give nothing but figures in books.
– They give money to the borrowers.
– They do not.
– The borrowers can use the money.
– They cannot. In 1.924, when the associated banks had not more than £20,000,000 of legal currency, they expanded credit to the extent of £197,000,000. In those circumstances it is rubbish to say that the borrowers could have got money from them.
– But the borrower’s credit is good.
– The borrower himself provides the credit. The bank merely produces some figures in a book, and manufactures a fictitious currency by means of a cheque book.
– It is a convenient system.
– It would be if tha nation controlled it, and secured the profits. The credit given by a national bank would be legal currency, because the nation would be exercising its prerogative to issue currency. Our Government should not have parted with this prerogative, leaving it to the private banks to issue 90 per cent, of our currency.
– Does the Labour party propose to wipe out the associated banks ?
– Yes; if it were in power to-day those banks would have disappeared. Honorable members will recollect that when war broke out the financial advisors of the Fisher Government advised that not more than £4,000,000 could.be borrowed in Australia without endangering the whole commercial fabric of the community, and that when the Labour Government issued the “ Fisher flimsies,” as they were called, its action was described as frenzied finance. Yet Australia subsequently raised over £200,000,000 by internal loans, and, if necessary, double that amount could have been raised.
Now I come to the £15,000,000 in notes issued to the associated banks against securities in London. In his budget speech, dealing with this subject, the Treasurer said -
The action of the bank in the crisis of 1924 has sometimes been criticized by those who have not realized the gravity or the complexity nf the situation. They appear to think that the Commonwealth Bank itself could have dealt directly with the producers, instead of promising assistance to the other banks. Such a course was impracticable. To give one reason only, it may be pointed out that, to prevent inflation which might have been permanent, with the consequent lessening of the purchasing power of money, it was necessary that the advances be repaid within a definite short period. This repayment could not have been depended upon in the case of individual advances to producers, but the banks could be so depended upon.
The Treasurer’s statement is humbug, and would not convince a school boy. If the Commonwealth Bank issued credit to the associated banks on which they operated to finance the producers, it is obvious that the banks could not meet their obligations as borrowers until the producers had met their obligations to them. The Commonwealth Bank could have financed the producers directly, had it not been prevented from doing so by the strangulation policy pursued by the present Government, as a result of which the bank has not as many branches throughout Australia as it should have. In a further statement the Treasurer spilled the whole can of beans, and for his naive admissions he should be sacked from the Treasury. He said -
The banks did not avail themselves of their full rights under the arrangement. Actually they borrowed sums which at no time exceeded £2,800,000. They paid interest to the Commonwealth Bank at the Bank of England rate of the day, and they repaid all the advances within a few months.
Although the associated banks never drew more than £2,800,000 from the Commonwealth Bank they extended their credits on that basis to £15,000,000. In effect, the Commonwealth Bank was functioning in the interests of the associated banks, and against the interests of the nation, particularly the primary producers. They paid interest only from day to day, but from the unfortunate individuals to whom they gave credit they exacted interest for three, six, or twelve months, or for any other arbitrary’ terms they chose to fix. Instead of the Commonwealth Bank being utilized by a Country party Treasurer to finance the producers, it gave to private banks the right to draw £15,000,000 against water-logged securities in London, and to pay interest from day to day on a maximum of £2,800,000. The Treasurer knew that that would be the result of the arrangement he made. In moving the second reading of the Commonwealth Bank Bill in 1924, he said, referring to the Commonwealth Notes Board -
The board was convinced that the banks had built credits on the right to get notes just as freely as they would have done if the notes actually had been in their possession.
Even at that early period, when he was forcing the Commonwealth Bank to do something which the Notes Board was disinclined to do, he knew that the private banks would expand their credit upon a very small basis of actual borrowing. A little later in the same speech, dealing with the issue of £10,000,000 in notes to the associated banks against securities in London, he said -
The result would be, not merely that £10,000,000 had been added to the local currency, but cheque money manufactured by the banks would further add to the means of payment in Australia. . . . We shall be taking only a moderate view of the possibilities if we suppose that the means of payment in Australia were added to by £20,000,000 or £25,000,000.
In those words the Treasurer admitted that cheque pounds are currency. Ten million pounds would grow to £30,000,000 or £40,000,000, but interest would be paid on only such portion of the £10^000,000 as might be required to meet any emergency rush on currency. Primarily the object of this financial arrangement was to finance the primary producers, and facilitate- the marketing of their products overseas, but the primary producers paid heavily for the service they received. If the Commonwealth Bank had been functioning in the interests of the nation, to tide it over a difficult period, and had charged, as it should have done, only bare costs for its services, at least £10,000,000 would have been saved to the primary producers. I come now to the most serious aspect of thi3 business. Here is the evidence of the underground engineering by the associated banks and private financiers. In each of his four budgets, the Treasurer has referred to deflation and the need for reverting to the gold standard. Deflation is as old as banking and the British national debt itself, for it started in 1694, when the Bank of England was founded concurrently with the establishment of the British national debt. These things always go together - foreign wars, a national debt, and private banks, and they have enslaved most of the nations of the world. The proposal to revert to a gold standard is used as the spieler uses a thimble to cover the pea ; it is, at best, mere cant and humbug. The gold standard is based on the free circulation of gold, and the old law that payment of amounts exceeding £2 may be demanded in gold, amounts under £2 in silver, and amounts under1s. in copper. Notes are issued against a reserve of gold, and the holder of the notes is supposed to be able to demand gold for them. Upon that basis, the Banking Act was erected, and every banking crisis has been due to the failure of the gold standard. It is impossible to have a gold standard together with a paper currency which is legal tender; the two things are incompatible. If paper currency is legal tender, the holder of the notes cannot demand gold for them. A lot of publicity was given recently to the proposal to reestablish the gold standard by importing gold from America. The absurdity of that talk is proved by the following extract from the Argus of the 8th July last : -
SYDNEY, Wednesday. - The steamer Sierra left for San Francisco to-day with £1,000,000 in gold, being the third shipment of Australian gold to be sent to America recently. The steamer Makura lifted £1,000,000 worth on 22nd May, and a similar amount was shipped by the steamer Ventura on 16th June.
The shipments have been made through theCommonwealth Bank. Gold has been accumulating in the Commonwealth Bank for some time, and last year the private banks imported gold to the amount of £10,000,000. Theyhave since found that a large portion of the metal was not actually needed for reserve purposes, and have deposited it with the Commonwealth Bank. That institution, acting on. the principle that large holdings of gold were uneconomic, has exported £3,000,000, and has also transferred over £4,000,000 from the banking department to the note issue department.
We were told that, in order to restore the gold standard, gold must be imported from America, but as soon as we had obtained£10,000,000 worth from that source, there was a glut of it, and we are now shipping it back to America. If we return to a gold standard, the position, according to the figures published in the Year-Book for 1925, would be - Savings Bank deposits, £176,871,477; Commonwealth notes, . £56,890,225 ; bank deposits at call, £106,378,836; fixed deposits at six or twelve months, £133,273,020; making a total of £463,413,558. Against that total there is in Australia £43,914,733 in gold, or barely ten sovereigns for every £100 claim against gold. This expedient of returning to the gold standard was used after the Napoleonic wars, after the civil war in America, and after every war in every country, to double the national debt and increase the power of the private banks and financiers.
– That is the point; By deflation and the reversion to the gold standard, the value of bonds is increased. If a bond of a face value of £100 would keep a man for six months in 1918, and the same bond would keep him for twelve months in 1924, its value had doubled. That is the process that occurred after the Napoleonic wars and after the civil war of America, when the United States of America repudiated its greenbacks. At one time £100 on paper was worth only £60 in gold. This policy of deflation and reverting to the gold standard is a danger to the country. We hear much talk of restoring the free export of gold, but the mere lifting of the ban on exports does not mean the restoration of the currency to a gold basis. Gold is not exported as currency, but as bullion; it is exported like any other metal or commodity. I challenge the Treasurer, or any personwho regards himself as afinancial expert, to say where, in national finance, safety ends and inflation begins. With finance and currency controlled as they are at present, no one can say how much currency is needed per head of the population. To state it in another way, no one can say when a country has ceased to be financially safe and when it is suffering from inflation of currency. It may be said that the fluctuation of prices is an indication. Admittedly it is ; but it is impossible to draw a clear line of demarcation between safe finance and inflation. ‘Since the establishment of private banks, and the evolution of the cheque system, no government has controlled currency. Ninty-five per .cent, of the currency is represented by cheque pounds, .which, when judged by all known currency laws, are spurious and base. But there has been no inflation in the issue of Commonwealth notes. Let me now come back to more orthodox tests, for, up to the present, I have been enunciating doctrines that some honorable members may regard as unorthodox. We have been told that huge inflation has taken place. We may judge whether that is so by the only law by which it can be judged, namely, the substance at the back of the note issue in comparison with the prices of commodities. If we take 100 as the index figure of the cost of living in 1914, we find that the figure for 1920, which was the peak year after the war, was 295. In 1914, the Commonwealth notes were backed by 42.90 per cent., and in 1920 by 41.54 per cent., of gold, a difference of only 1.36 per cent. Can the Treasurer contend that a difference of 1.36 per cent, in the gold backing of Australian notes, between the years 1914 and 1920, accounted for the increase in prices indicated by the figures 100 and 295? But, when we consider the inflation of manufactured cheque pounds, we see where the cause lies. In 1914, the associated banks held legal currency to the amount of £21,341,026, and they manufactured cheque pounds to the face value of £115,507,210. In 1920, they held £20,704,097 of legal currency, and they manufactured cheque pounds to the face value of £160,693,541. Obviously, the Commonwealth note was not responsible for the inflation in the year when inflation and high prices were most marked; but the associated banks, with £750,000 less of legal currency increased credit expansion by £45,186,331. Inflation to-day, as in the past, is brought about by the manipulation of manufactured cheque pounds by the associated banks, which receive all . the profits. The clearing house returns also provide an indication of how the associated banks have inflated the currency. In .1914, the clearing house returns, for the capital cities, were £807,695,000, when the legal currency was £21,000,000; but, in 1920, the clearing house returns were £1,896,860,000, an increase of £1,089,165.000 over the year 1914. Those are the figures that indicate the enormous increase in the paper instruments of credit created by the associ ated banks - credits which are exchanged for the commodities of life, and enter into the transactions of trade and commerce. There was an enormous increase of £45,000.000 in the cheque pounds, and an increase of £1,089,000,000 in the clearinghouse exchanges of the nation; but, behind the banks, there was only £20,000,000 of legal currency. In the days of despots, the issuing “of legal currency was the prerogative of the Crown, but as the despot has been dethroned, and democracy has taken his place, that prerogative has passed to the government; We know what happened when monarchs held the prerogative. We know what’ happened under the Bourbons of France, and Henry VIII. and James II. of England. There were business failures, unemployment, starvation, and suicide; and all those things are threatened by the wholesale usurpation by private banking institutions of the instruments of credit. The figures I have quoted show a species of jugglery that should make the world’s greatest fakir turn green with envy.
I do not wish to approach the subject of the rural bank in a party spirit; but I regret, with other honorable members on this side, that the Government has not done more to make that bank something of which this Parliament can feel proud. Australia cannot indefinitely develop its primary industries and neglect its secondary industries;, both must be developed concurrently. The bank should have been used, as the Treasurer said it would be used, to assist both secondary and primary industries. All countries that have elected to rely mainly on rural and pastoral development have remained as serf nations to the more highly developed industrial nations. It is possible to go too far in promoting rural development. We can produce too many primary products for our markets 12,000 miles away. Side by side with the development of primary production we should distribute the population more widely over the country by establishing secondary industries in country centres. We should also develop our mineral deposits, particularly coal and iron. Very few country towns in Australia can boast of a factory. To bring 10,000 more migrants to develop the rural industries of this country will overload those industries. A country must develop in two ways - it must rest on a basis of scientific primary production, and it must possess large secondary industries engaged in mass production. The Rural Bank of New South Wales, hamstrung as it is by the amending Commonwealth Bank Act, introduced by Sir Joseph Cook in 1920, is doing more than the so-called Rural Bank of the Commonwealth for the primary producers. The Treasurer has told us that rural credits would bring about decentralization ; the factory would be taken to the primary producer, and rural centres would become hives of industry by the waving of his fairy wand. But, alas ! All we see is this puny rural bank, which is left to starve, because the food on which it should thrive is eaten by the private banks. Although it was said that, in establishing the Commonwealth Bank, the Labour party was embarking upon a policy of frenzied finance, and that the issue of Fisher’s “ flimsies “ would bring about financial chaos and ruin, the bank to-day is an institution of which the Labour party is proud. It will, however, never be the success itsfounders intended whilst it is used only as a hireling of the associated banks, in whose interests it is now functioning instead of operating on behalf of the nation. We shall always be confronted with pressing problems and financial stringency while we have to submit to budgets such as this and we have a government which depends upon Customs and excise revenue to enable it to carry out its policy. There is nothing in the budget worthy of commendation, and the successful development of our primary and secondary industries and the financial stability of the Commonwealth cannot be assured until the Labour party is in control of the Treasury.
.- I should like to add my meed of praise to the Treasurer (Dr. Earle Page) for having introduced the budget in record time, and to congratulate the Government upon the extent to which our war and national debts have been reduced.
I should like to deal at length with the proposed abolition of the per capita payments to the States, the referendum proposals and the imposition of additional Customs duties in order to provide sufficient funds for the construction and maintenance of main roads; but as we shall have an opportunity to consider those subjects later, I shall occupy the limited time at my disposal in referring to the Government’s proposals in connexion with the payment of a bounty on seed cotton. It will be seen, from the Treasurer’s budget speech, that the Government propose to pay a bounty of11/2d. per lb. on raw seed cotton, although, after an exhaustive examination, the Tariff Board recommended a bounty of 2d. per lb. For the information of honorable members, I propose to submit some particulars concerning the development and possibilities of the cotton industry, which has recently been developed in Queensland, and to a limited extent in New South Wales. Following upon the shortage of cotton during the war, and realizing the urgent need for the Empire to be self-supporting in this and other essential commodities, a search was made by the cotton spinning interests of Great Britain to ascertain the most suitable country within the. Empire in which superior, long-stapled cotton could be produced. After an exhaustive investigation, the sub-tropical areas and forest lands of Queensland were considered to be the most suitable for the establishment of the long-stapled cotton industry, and in that State the industry has been developed. The BritishAustralian Cotton Association which was then formed has spent a considerable sum of money in erecting ginneries and in developing the industry in Queensland and in the northern part of New South Wales. For some years the Commonwealth and the governments of the cottonproducing States entered into an arrangement under which the price of seed cotton was guaranteed, based on a system of grading, under which the industry has been established, particularly in Queensland, where about 95 per cent. of Australiangrown cotton is produced. In order to give honorable members some idea of the extent to which the seed cotton production in Australia has increased I quote the following figures : -
It is estimated that this season there will be between 7,000 and 8,000 growers engaged in supplying ginneries with cotton, whilst the area cultivated will be approximately 40,000 acres. Seed cotton production is of particular importance to Australia, because it provides for further development in sub-tropical areas which are as yet very sparsely populated. The cotton plant has great drought-resisting capacity once the seed has germinated and the young plants have become established. Many mixed’ farmers whose maize and other crops have been ruined by drought have been saved from financial disaster by the small returns derived from their cotton area, which has withstood the drought. Poultry and pig farmers also supplement their incomes by growing small areas of cotton. There will be no danger for many years of overproduction of seed cotton of the superior staple and grade now grown in Australia, which is in marked contrast to the position in relation to crops of certain hard and soft fruits. Cotton probably enters more largely into articles required for human needs than any other commodity. Over £13,000,000 worth of cotton goods are imported annually, and if the seed cotton, cotton yarn, and cotton textile manufacture industries could be effectively established in Australia, a very large proportion of the £13,000,000 worth of goods imported could be made in Australia, thus giving employment to approximately 20,000 workmen, representing sustenance for, say, 80,000 persons. The significance of this industry may be gauged from the following facts. In the matter of defence, cotton is necessary for the manufacture of cordite, without which no rifle can bc fired or big gun discharged. It enters into the manufacture of motor tyres to a greater extent even than rubber, and for either peace or war motor transport it is indispensable. Cotton covers the widest field in the textile industry, as it is used in the manufacture of the coarsest cotton canvas and of the finest muslin. It forms the basis of the artificial-silk industry. It is the raw material of the knitted ‘underwear and hosiery industry. It is used in the woollen manufactories. Its byproducts are used by the margarine and soap makers. It provides the dairyman and poulterer with a valuable stock food. To the papermaker it will supply a high-class pulp. Bedding manufacturers, the upholsterers, and motor-car body builders use the waddings made from cotton waste and the lower grades. There is scarcely an industry, and certainly not a home” into which cotton in some form or other is not used. From- Chemistry and Industry, of the United States of America, I quote the following statement to illustrate the importance of this new industry :- .
If I were asked “What won the war”? I would unhesitatingly answer, “ The cotton plant.” Let us consider for a moment some of the things the cotton plant contributed. The four outstanding things required by a soldier in any war are food, clothing, housing and ammunition. Second only in importance to the nitrogenous foods for soldiers are the fats that they must have. Most of the lard consumed by our armies, was compound lord, made from cotton-seed oil.’ Much of the butter they ate was oleomargarine, of which cotton-seed oil was the principal component. The dairy products and meat which they consumed came from cattle largely fed with cotton-seed meal and hulls. Much of the clothing of our soldiers was made of cotton. Their hats were made of felt, a product of cotton linters. The buttons on their uniforms, when not metal, were celluloid, also a product of cotton linters. The artificial leather used in their equipment was made from cotton linters, and the real leather came from cattle which were fed on cottonseed meal and hulls. The tents which covered our soldiers were made of cotton, the mattresses upon which they slept were stuffed with cotton, and their bedclothes were either made from cotton or from wool of sheep which were fed to a large extent on cotton-seed meal. The basis of ammunition, or explosives, was cellulose and glycerides, one coming from cotton linters and the other from cotton oil. This was such an important factor during the World War that the War Department took over all the cotton-seed oil mills and operated themunder licence. Can you find one single source that contributed so much to the welfare of our soldiers as the cotton plant ? It may not have won the war, but we certainly could not have won without it. The cotton seed produces four main products : the linters, meal, hulls, and oil. A résumé of the history of the cottonseed products industry will show that withina space of half a century the chemist has developed from this little insignificant seed sixteen principal commercial products and hundreds of minor ones.
To-day there’ are hundreds of millions of dollars invested in plants using the cotton seed as a raw material, and this is the second largest manufacturing industry in the southernStates. It is not, however, confined to the southern States, for most of the large refineries producing the finished products are located in the big cities of the east and middle west. Hundreds of chemists have made this little cotton seed their life study, and it is entirely through the science of chemistry that the industry has been developed. .
With your permission, Mr. Chairman, I propose to hand in for inclusion in Hansard a list of the principal products made from cotton seed.
The CHAIRMAN (Mr. Bayley).If the honorable member wishes the list included in Hansard it must be read.
– Is the list contained in the Tariff Board’s report?
– Yes. It reads-
By-products of cotton seed to the value of over £100,000,000 are produced in the United States of America annually.
For a considerable time general dissatisfaction has been. expressed by growers concerning the reduction of the guaranteed price from 5d. to 41/2d. a lb., the effect of which was to reduce the production last season from 18,000,000 lb. to 11,500,000 lb. The Government decided last year to assist the industry by means of a bounty, and it submitted the matter of the amount of the bounty, and the conditions under which it was to be paid, to the Tariff Board, which, after making a careful investigation, extending over a long period, furnished the following recommendation
– The honorable member did not like my reading the Tariff Board’s recommendation.
– The honorable member is at liberty to do as he likes in that matter ; but I object to his entering into a compact with me and then departing from it. The recommendation of the board was as follows: -
After a careful review of all the evidence tendered at the public inquiries and as the result of exhaustive independent investigations made, the Tariff Board makes the following recommendations: -
That a bounty be granted in respect of seed-cotton grown in Australia.
Thatthe bounty be for a period of ten years from the date of coming into operation of the Bounty Act.
That during the first six years the bounty be at the rate of 2d. per lb. on all seed-cotton other than such seed as would, under the present system of grading as carried out by the Australian ginneries for the purpose of payment for seed, be graded into grades “D” or “XXX.”
That during the last years the bounty be on a gradually diminishing scale, and thatthe rates for the respective years be as under: - 7th year - l3/4d. per lb. 8th year - l1/2d.perlb. 9th year - l1/4d. per lb. 10th year -1d. per lb.
Provided that if the world’s parity for cotton should becomeso high and /or the costs of production of seed-cotton in Australia should have so decreased as not to warrant payment of bounty at the rates specified for the 7th, 8th, 9th, or 10th years the rate to be paid shall be that found to be necessary in the light of the world parity for cotton and/or the costs of production of seed-cotton in Australia existing at the time. [Quorum formed.] I thank the honorable member for Hindmarsh, who called for a quorum, particularly since there were only two honorable members of his party in the chamber at the time. Having carefully perused the Tariff’s Board report, I have no hesi tation in saying that at least during the limited time that I have been a member of this Parliament, no more comprehensive report on any industry has been presented by it. But the Minister refused to accept its recommendation. I do not find fault with him on that account, since he has a right to his own opinion on the matter ; but I strongly object to the grounds on which he based his contention that a bounty of l1/2d. a lb. was adequate. His contention that a bounty of 11/2d. a lb. on cotton yarn, where 50 per cent. of the yarn used in the manufacture of fabrics was made from cotton grown in Australia or Papua, would increase the demand for, and therefore the price of, seed cotton, thus making the bounty of11/2d. equivalent to that of 2d. a lb. recommended by the Tariff Board, and sufficient to ensure the early permanent development of this new primary industry cannot be sustained.
– I do not think that I said quite that.
– That was the effect of the Minister’s statement. He said that the bounty on yarn would enhance the value of the commodity of the primary producer to a sufficient extent to make the bounty of l1/2d. a lb. equivalent to that recommended by the Tariff Board.
– I think that I made a statement to the effect that a bounty on cotton yarn, with a provision that a certain percentage of Australian cotton must be used before the bounty was payable, would further help the cotton-growers in Queensland.
– The inference was that the Government substantially approved of the recommendation of the board, as the same result would be achieved, because of the increased demand for the primary product, and also because of the development in the secondary industry. I have had an opportunity of discussing this aspect of the subject with expert accountants, and they assure me that there is no prospect of the pious hope of the Minister being realized, at any rate, within the first three years of the operation of the bounty. At a later stage I propose to ask the Minister to provide a bounty of 2d. a lb. on seed cotton for the first three years. With the experience gained at the end of that period, it could then be determined whether the industry would be in a sufficiently strong position to carry on with a reduced bounty. The Government has given considerable help to the woollen industry, and as the result of generous tariff assistance, many new mills have been established, affording increased employment. I am at a loss to know _ why a similar measure of assistance is not being given to the cotton industry. If an adequate bounty is provided for the first three years this industry will prosper; but if it is forced to attempt to subsist on the present bounty there is no prospect of its success. It seems to me that, if the bounty is to be less than 2d. a lb. during the first few years, the inevitable result will be that less cotton will be produced and the industry will gradually pass out of existence. This will mean that the expenditure of, possibly, over £500,000 by way of bounty will be wasted, and those engaged in the industry ruined. The net return to the grower on the present world’s parity for cotton lint would be about 2d., exclusive of the bounty. Supposing the lint market recovers so as to return seed cotton-growers 2$d., the bounty of l$d. would increase the grower’s return to 4d. a lb., which is £d. less than the guaranteed price he received, during last season. The Tariff Board based its recommendation on the fact that the Liverpool parity at that time was slightly over lOd. a lb. To-day the price has fallen to between 8d. and 8¼d. a lb., which proves that the claim for a bounty of 2d. a lb., which was recommended by the board, is now more than ever justified. The strongest possible argument can be advanced for fixing, the bounty at at least 2d. a lb in the early and difficult years of the industry. Obviously the Ministry is satisfied that the industry is important enough to deserve encouragement; but it is necessary; if it is to be successful, to promote increased production in both the primary and secondary cotton industries. The Government is wise in combining two aspects of cotton production by giving a bounty on seed cotton and cotton yarn; but a further step is necessary, namely, a scientific scale of duties will even be required on all imported cotton apparel and fabrics, if the industry is to be permanently established, and Australia’s interests properly conserved. To-day the ginneries are working only at 25 per cent, of their full capacity. If the production were substantially increased, the overhead charges would be proportionately reduced. If it granted an adequate bounty in the initial stages, the Government could possibly reduce it after three or four years without crippling the industry.
– That is not the usual procedure in other industries, so far as the Customs tariff is concerned.
– I do not desire the cotton industry to be bolstered up indefinitely by a bounty. Those engaged in it would expect that after it had become firmly established, the bounty would be reduced, and they would naturally make provision to carry on their operations without Government assistance.
– How do they propose to do that?
– Both in primary and secondary industries, increased efficiency comes with experience. It should be remembered that the last five years of the cotton industry have been almost entirely experimental and devoted to testing Australian conditions and the best types of cotton. It may be said that the industry is only now in a position to really proceed on well-defined lines. Last season was the first in which a full supply of Durango seed - the best type for Australian conditions thus far discovered - could be made available to growers. It may well be asked what other industry has achieved, or could be reasonably expected to achieve, success and efficiency in so short a time as the cotton industry has had, especially in such unfavorable conditions, viz., the falling in world’s prices which have obtained. It has also to be remembered that an entirely new primary industry has to adjust itself to strange conditions of climate and soil, and that a much longer period is necessary to achieve sound results in such a primary industry than would be necessary in any secondary industry. There can be no doubt as the quality of the cotton produced in Australia. According to a press cable from London last week, Colonel Evans, late Director of Cotton Culture in Queensland, has borne testimony to that fact, which is also supported by the uniformly high premiums brought by Australian lint in Liverpool, as compared with American lint. Regarding the bounty on cotton yarn, it is proposed that 50 per cent. of the lint used shall be of Australian or Papuan origin. I believe that when the local industry is firmly established, it may be able to supply 75 per cent. of the requirements for yarn by means of a lint of the right staple grade and textile strength. I urge, therefore, that the provisions of the measure be made sufficiently elastic to allow of that alteration. I notice that the Minister stated, in effect, that the desired bounty of 2d. a lb. on seed cotton was equal to 50 per cent. of the cost of production in Australia. He suggested that that was, therefore, excessive. But what do we find is the position in regard to other primary industries ? The Australian production cost of jam is 61/2d. per lb., and the tariff 3d. per lb., equal to 46 per cent. Canned fruits cost 9s. a dozen tins. The tariff is 8s. 6d. a dozen tins, or 94 per cent. Raisins cost 31/2d. a lb. to produce. The tariff of 3d. per lb. is equivalent to 85 per cent. of the cost. In the case of dried fruits, which cost 4d. per lb. to produce, the tariff, being 4d. per lb. also, represents 100 per cent. The duty on hops is £112 a ton, which is approximately 100 per cent. of the Australian cost of production. The duty considered necessary to protect many of our secondary industries is frequently more than 50 per cent. Why should the same percentage of protection be excessive in the case of cotton?
– Have not the cottongrowers made strong representations for a bounty of 2d. per lb. ?
– Yes. Every Queensland member has been nearly snowed under with communications from anxious growers on this question. There is no prospect of the industry succeeding unless a bounty of at least 2d. per lb. is granted. I am firmly of theopinion that if this industry is encouraged in its early stages, it will, in time, do for Australia what wool has done in the past. But if the Government is not prepared to grant greater assistance now, it will not develop. In September last, Parliament agreed to the duty on sewing cottons and threads being 25 per cent. British, and 35 per cent. general. As a result, the British
Thread Mills Limited, of Leicester, England, has floated a company in Australia, and is now asking for an additional capital of £150,000 to enable it to manufacture in the Commonwealth the whole of Australia’s cotton and cotton thread requirements, valued at £750,000 per annum. If similar duties were imposed on other classes of cotton goods, additional factories would be established in Australia, with the result that the Australian seed cotton industry would be so assisted as to make it possible for the bounty of 2d. per lb. to be reduced, or even discontinued. Seeing that the Tariff Board based its recommendation on a world’s parity of10d. per lb., and that the price of seed cotton to-day is only 8d. per lb., I cannot understand the Minister’s unwillingness to grant a bounty of 2d. per lb. If, for a period of three years a bounty of 2d. per lb. on seed cotton were granted, this new industry would be permanently established in Australia. The position could then be reviewed. On the other hand, to strangle the industry almost at its birth, would mean not only the loss of the money paid by way of bounty, but also the ruin of the industry and those engaged in it. I urge the Government to agree to a bounty of 2d. per lb. for three years, after which, possibly, it could be gradually reduced to l1/2d. per lb., or less. That would establish the industry in Australia, and at the same time assist in the development of this great country.
.- No financial statement ever presented to this House has been subjected to such adverse criticism and scathing condemnation as has that presented by the ‘ Treasurer recently. Instead of support, there is an almost universal feeling of contempt both for the Treasurer and his budget. No political party is prepared to champion the Treasurer’s proposals. Reliable financial authorities have stated that, in their opinion, the budget has been ‘ ‘ doctored ‘ ‘ to present the case for the Commonwealth in the best light, and that for the States in the worst light possible. The Treasurer’s attitude towards the States is surprising. He does not treat them fairly. The Government’s policy, if carried out, will mean serious loss to the States. The statement that it is intended to surrender certain forms of taxation to the States is illusory. At the Premiers’ Conference it was stated that the Commonwealth intended to vacate certain fields of taxation. In this connexion the taxation of the incomes of individuals was specifically mentioned. The Treasurer’s proposals, which included the discontinuance of the per capita payments, were based on the assessments for 1924-25;. The State Treasurers challenged his figures; they also contended that the basis of the proposals was unsound.
– That was not so. Actual figures were submitted, but the State Treasurers asked for figures for the current year. As they were not available it was necessary to submit estimates.
– If the Treasurer did not intend to mislead the State Treasurers, he does himself an injustice by not qualifying the figures he then submitted to them.
– I am referring to the 1923 conference.
– My remarks had reference to the conference held a few months ago.
– The figures supplied to that conference were obtained from (he Taxation Departments of the States, and they were supplemented by figures supplied by the Commonwealth central office. They were all based on actual assessments.
– If the Treasurer was aware of certain facts to which I shall refer later, he has something for which to answer, otherwise the Commonwealth taxation officials must be held responsible. [Quorum, formed.] Before presenting those figures to the Premiers’ Conference the Treasurer should have satisfied himself that, if not exact, they were, at least, not misleading. They certainly did not provide a proper basis for negotiation. From the point of view of income tax, the year 1924-25 was abnormal, because, owing to the co-ordination of the State and Federal taxation authorities, a large sum was brought forward from the previous year.
– That applied to collections only, not to assessments.
– No matter how the Treasurer attempts to explain the figures for that year, they were not a fair basis.
– They were exceeded in the succeeding year, at all events.
– So far as South Australia was concerned, it was found that between £300,000 and £400,000 of the estimated income belonged to the previous year.
– That is not so.
– My authority is the Premier and Treasurer of South Australia.
– And my authority is the taxation commissioner for South Australia.
– I have made a very definite statement. The Treasurer should be prepared to give a straightforward answer, and make the necessary inquiries to test the accuracy of my statements.
– The Prime Minister asked the Premier of South Australia to allow his taxation officer to remain in Melbourne after the conference to go into the figures which had been presented to the conference, but Mr. Gunn refused.
– The figures relating to taxation in respect of companies were also misleading. They were based on the receipts for 1924-25, and, therefore, were not a fair basis, because in that year no allowance was made for depreciation, or for stock and plant. Surely it is obvious that revenue from this source is steadily diminishing.
– The revenue for the following year from taxation of companies exceeded that of 1924-25 by 6.7 per cent.
– That statement is only an assumption on the part of the Treasurer.
– It has practically all been collected.
– It will be interesting to have the summary of these figures from the Treasurer when they have been finalized. My argument is based on figures supplied, not by some irresponsible person, but by the State Treasurer, who should be able to speak with authority.
– Surely the people who collect the money - in this case the Commonwealth taxation officials - are the highest authority?
– I doubt if the Treasurer did himself justice at the conference. His figures were misleading. The State Premiers were quite justified in objecting to the proposals of the Commonwealth Government. A few days after the conference alternative proposals were submitted by the Government, not to the Premiers of the several States, but to this House. Ordinary courtesy demanded the submission of those proposals to the Premiers for review before they were presented to this House as a definite portion of the Government’s policy.
– After the State Premiers had refused to discuss them?
– The Premiers did discuss the Government’s proposals.
– The Government’s alternative scheme was not submitted to this House until three weeks after the conference.
– The State Premiers definitely objected to the Government’s proposals, and after the alternative scheme had been submitted to this House the representatives of the several States again met in conference to consider the position.
– They claimed that they had a moral right to the per capita payments.
– And I think they made out a strong case. It was not fair to expect them to deal with proposals based on misleading figures?
– Why did not they accept our invitation to discuss the figures ?
– The Treasurer has no right to take the State Premiersto task on that account, because when the representatives of the States met in Melbourne for a second conference, the Prime Minister refused to meet them to discuss the alternative proposal, which in the meantime had been submitted to this House. Since the proposed adjustment of the financial relations of the States and the Commonwealth will vitally affect State finances, the Prime Minister should have met the Premiers to discuss the merits of the scheme with them.
– He was prepared to do that at the first conference, but they refused to discuss the proposals.
– The Prime Minister, in refusing to meet the Premiers, acted hastily. Naturally, they resentedhis high-handed action. I believe I amright in saying that in adopting this methodto re-adjust Commonwealth andState finances the Government has been influenced by the knowledge that there an Labour Governments in five of the States
– That is not so. We submitted a similar scheme three year ago.
– The present proposals are not calculated to compensate the State Governments for. the loss of revenue due to the cessation of per capita payments.
– They will receive £1,500,000 more than is paid to them at present.
– That is not so. In South Australia - I have no doubt that the same position exists in Victoria - it would be impossible for the State Labour Government to pass through the Legislative Council the land tax legislation necessary to compensate for the loss of the per capita payments.
– The Minister knows that.
– Of course he does. This policy is only an indirect method of relieving certain interests of their obligations in regard to taxation. The Government is endeavouring to make the people believe that if the Commonwealth vacates this field of taxation the States will be able to make good the loss of revenue by the introduction of legislation ; but as I have shown, they will be unable to induce the Legislative Councils to pass it.
– Queensland has the only Parliament that could pass that class of legislation.
– That is nonsense.
– As the Upper Houses are constituted in South Australia, Western Australia, and Victoria, it will be impossible to pass land tax legislation that will return to the States sufficient revenue to make good the loss of the per capita payments. The right honorable member for Balaclava (Mr. Watt) the other night furnished convincing proof of that. He told us that when he was Premier of Victoria he endeavoured to get the Legislative Council of that State to accept a proposal on similar lines. The Government’s proposal isnot on an equitable basis, and will not bear inspection. There is no reason why the Government should act hastily. We have been told that there will be a special session at Canberra next year to consider certain amendments of the Constitution. As the financial relationship of the Commonwealth and the States is of vital importance to the States, and as it raises constitutional issues, the whole subject could very well be postponed for consideration at the proposed special session.
– Does the honorable member suggest that the State Premiers should attend on that occasion?
– I think that’ the Premiers of the several States should be at the Seat of Government whilst the constitutional session is being held, so that they may be consulted concerning proposals to be considered.
– They, also, represent the people.
– Exactly. It would be of advantage if a committee representing all parties in. this House conferred with the Premiers of the various States upon those issues that are so vital to the States. If we extended this courtesy to the .States, and if they were given a reasonable opportunity to consider taxation proposals to compensate them for revenue which they will lose owing to the withdrawal of the per capita payments, in all probability good ‘ would result. No hint of the Government’s pro>posal . was given to the people at the recent elections, ‘ and it was unworthy of Ministers to suddenly submit a scheme for the adjustment of the’ financial relations between the Commonwealth and the States which is calculated to -create chaos and confusion in the realm’s of - State finance. One of the most far-reaching and vita] proposals that could’ be submitted’ for- the adjustment of Commonwealth and State financial relations has been introduced in the first ses.sion of a new Parliament, and the State Governments and Parliaments which are «o deeply concerned have been given no reasonable opportunity to review it. In view-.’of ‘the unreliable . figures submitted to them by the’ Treasurer, the State Premiers have every justification for their t50m plaint that they have not “been fairly treated ;by’ the Commonwealth Government. I . hope that wiser counsels will prevail-. ‘ The Government should realize that ‘it’ is its duty to deal fairly by the State ‘Governments. The Commonwealth and State Governments represent the same citizens, and as the future prosperity and progress of the States is closely linked with those of the Commonwealth, the Government would do well to review or postpone the operation of its proposal for the abolition of the per capita payments to the States. The Government can find no excuse for the proposed exercise of a supreme power in this matter other than the contention that it is unreasonable that any authority should enjoy the expenditure of funds which it does not itself raise. That is the one ground upon which the Treasurer might attempt to justify his action. But if the honorable gentleman puts that forward as his chief reason for a re-adjustment of the financial relations between the Commonwealth and the States, his insincerity . requires no further proof than the statement of the fact that at the present moment the Government proposes by the imposition of special taxation to raise moneys which it intends to hand over to the State Governments for road construction, which is essentially a duty, ‘not of the Commonwealth, but of the State Governments. A more substantial reason than any which have so far been advanced is necessary to justify a proposal which has caused serious concern to the State Governments as to the sources from which revenue to carry out their undertakings is to be derived. The State authorities should be left to work out the destinies of their respective States in their own way. They should not be expected to come as mendicants to the Federal authority for financial assistance. The Government’s proposal must have the effect of- lowering the financial standing of the States abroad, and in this respect it must be regarded as invidious and unfair.
– The London Financial Times says that what the Government proposes will improve the credit of all governments in Australia.
– That has yet to be proved, and the weight of facts and argument does not support that contention.
Sitting suspended from 6.28 to 8 p.m.
– In South’ Australia we have in operation a system of road construction which is acceptable to all shadesof political opinion, but the Commonwealth, by entering into that realm has interfered with and disturbed the whole system, with the result that the people of South Australia are not masters in their own house. However, we shall have another opportunity to express our views on that subject, when I hope to give Very clear reasons why the Government should not. pursue the course it is taking.
To my mind the Commonwealth Government is setting a very -unworthy example, inasmuch as it is not prepared to live according to the law of the States- in which its agencies are operating. The policy of the South Australian Government has been seriously interfered with because a Commonwealth agency has declined to pay to the South Australian treasury revenue collected by it, but rightly due to the State. The Commonwealth has no more right than has a private individual to collect taxation under the law of a State and not pay it over to the State Treasury. The State Government could obtain redress against a private individual in a court of law. but the Commonwealth Government is apparently immune in that regard. Ithas no right to take advantage of its position to deprive a State of revenue which is justly due to it.
It must be somewhat disturbing to honorable members to note that for the current year the Treasurer estimates that the Customs revenue will amount to £40,500,000, an increase of £1,301,117. Less than twelve months ago we revised the tariff in the belief that it would give added protection to our industries,’ and not with the idea of producing extra revenue.
– That was the effect produced by the 1921-22 tariff.
– Whether it was the effect of the 1921-22 tariff or of the later tariff I do not care; it is a policy we cannot afford to countenance. One can only conclude that Australian industries ku al. be suffering while we are borrowing so much abroad and having our markets flooded with imported goods.
Another matter which is causing some anxiety is the’ intention of the Commonwealth Government to get out of certain fields of direct taxation which were entered with the idea of helping to pay for our war obligations. Until we have fully met our obligations in regard to the war I do not think we are justified in doing so. The State Legislative Councils are’ not likely to impose those forms of direct taxation which were designed by the Commonwealth to fall mainly on the wealthy classes of the community. The effect will be that instead of the wealthy paying their just due to help to meet our war obligations, the greater portion of the burden will” fall on the shoulders of the poor. We laid it down definitely during the war that the Commonwealth’s direct taxation should take a certain form, and I certainly resent a proposal which can only have the effect of relieving the wealthy of their rightful obligation to take a fair share of the burden of the cost of the war, and transfer it by means of Customs taxation to the shoulders of those who can least afford to pay it.
The honorable member for EdenMonaro (Mr. Perkins) has reiterated the statement - which I am afraid from the number of times it has been said here is likely to become the accepted truth - that honorable members of the Labour party had little or no hand in the introduction of invalid and old-age pensions. As a matter of fact, as I shall show, it was really responsible for, or at least the compelling force behind, the introduction of those pensions. The honorable member has succeeded Sir Austin Chapman, who at all times posed as the great friend of the invalid and old-age pensioners, and is endeavouring to make others believe that the mantle of his predecessor, as. champion of the cause of the pensioners, has fallen upon his shoulders. To disprove the honorable- member’s statement, I wish to place on record a few facts. On the 19th March, 1908, Mr. Andrew Fisher, who was then Leader of the Labour party which was really responsible for keeping in power the Government of the day, moved the following motion in the House : -
That all the -words after the word “ That “ be left out with a view to insert in lieu thereof the words “ whereas the electors have thrice returned a large majority of members of the Commonwealth Parliament pledged to provide a Federal system of old-age pensions, and whereas the State Parliaments of Queensland, South Australia, Western Australia, and Tasmania have made no provision for the payment of old-age pensions, this House is of opinion that the passing of a measure to give effect to the expressed will of the people is an urgent public duty.”
On the 10th June, 1908, less than three months afterwards, the GovernorGeneral assented to the Invalid and Old-age Pensions Bill. From Henry Gyles Turner’s The First Decade of the Commonwedith of Australia, page 164, I quote the following:
In the other House, the Labour members chafed under the prolonged delays of the Ministry in dealing with a matter which in Governors’ speeches and on public platforms they had declared’ to be of prime importance. Failing to coerce the Government into action, they ‘took the matter into their own hands, doubtless foreseeing that success in dealing with it would be a trump card in their next electoral programme. On the 19th March, 1908, Mr. Fisher, who had succeeded to the leadership of the .Labour party, moved a resolution to the effect that, the electors having thrice returned a large majority of members pledged to provide a Federal system of oldage pensions, the House was of opinion thai the passing of a measure to give effect to the expressed will of the people was an urgent public duty. The speech in which he supported his motion was temperate and telling, albeit he said some severe things about the attitude of the States towards the subject. When he was called upon by interjections to say how the money was to be provided, he wisely replied that if he formulated a scheme he would be accused of dictating to the Government. His contention was that such a measure had been demanded by the people on grounds of common humanity, had been promised by the Ministry, and should not be neglected another day. The Prime Minister was suave and approving.
He fully recognized the purpose of the motion. Further, in reference to the bill itself, I find on page 168 of the same book -
In both chambers it received the solid support of the Labour party, as might have been expected from Mr. Fisher’s frank declaration, “ as far as the Labour party is concerned the first bite out of the Surplus Revenue Bill will be the fund to provide old-age pensions.”
Under the original bill of 1908, the invalid pensions were not to come into operation until a date to be proclaimed; but the Labour party compelled the Government to proclaim those provisions immediately and finance them from the Surplus Revenue Act. Even those who supported the government of the day were prepared to give to the Labour party due credit for what it had done to establish old-age and invalid pensions. Senator Mulcahy was, in most respects, a bitter opponent of the Labour party and the reforms it advocated, but he had sufficient sense of fairness to say on the 3rd June, 1908-
After a certain meeting of a certain party-
Referring, of course, to the Labour caucus meeting- it was made known that the Government would be allowed to remain in office for the time being provided that what was required of them was done. I am prepared to give the Labour party every credit in the matter, and I assert that, i” a scheme for the establishment of old-age pensions is approved this session, the whole credit for it will be due to the Labour party, and not to the Government.
Until the meeting, to which I referred, took place, there was no idea that this bill would become law this session.
Having regard to that frank declaration, ] hope that ministerial supporters will not, in future, endeavour to rob the Labour party of the kudos that rightly belongs to it for the introduction of this humanitarian legislation, and its subsequent liberalization.
I turn now to a matter that caused some heat in this committee last week, and was responsible for a display of bitterness on the part of the Treasurer and the Attorney-General. The ebullition of temper, when endeavouring to protect the Government against the very effective” attack made by the honorable member for Yarra (Mr. Scullin) in regard to the non -collection of land tax on Crown leaseholds, reflected little credit upon them. The Treasurer said that he thought the matter was dead and buried; no. doubt the wish was father to the thought. He said an old ghost had been resurrected ; but I warn him that, so long as he remains in public life, his maladministration of the Land Tax Act will continue to be a skeleton in his political cupboard. He will not be allowed to forget his action in allowing certain wealthy pastoralists to escape their obligations to the Commonwealth. The allegations made by the honorable member for Yarra have not been answered by Ministers; indeed, the Government cannot answer them. It referred the matter to a royal commission, and the Prime Minister declared that the terms of reference were as wide as possible. I shall prove to the committee that that statement was not correct, and that the terms of reference upon which Judge Edwards conducted his inquiry did not fairly represent the charges made by the honorable member for Yarra. His speech was wilfully distorted, certain portions of it were torn from their context, and it was impossible for the royal commissioner to give judgment upon the charges actually made by the honorable member against the Government. Those charges were -
Those were not the charges into which the royal commissioner was asked to inquire. It is unique for a government accused of wrong-doing to draw up the charge against itself and select the judge to preside over the trial. If the same privilege were afforded to every accused person there would be no convictions for any wrong-doing, no matter how glaring it might be. The Government now unctuously flaunts the report of the royal commissioner as a complete exoneration of Ministers and the departmental officers of the charge of neglect of public duty.
– I have always understood honorable members opposite to claim that no departmental officers were accused, and that the charge was against the Government only.
– The honorable member for Yarra made definite charges against the Treasurer. Inevitably, the name of the commissioner of taxation was introduced; but the charge was against the ministerial head of the department, who must always be held responsible for the doings of his subordinates. Judge Edwards ruled that, under the terms ofthe agreement, he could not inquire into the reasons why land taxes owing on Crown leases had not been collected, although they represented 75 per cent. of the total land taxes shown in the budget as outstanding. The amount of land tax outstanding was £2,114,914, of which 75 per cent. was due in respect of Crown leases. The honorable member for Yarra charged the Government with having failed to collect those arrears, and he demanded to know the reason for the omission; but the commissioner declared himself so limited by the terms of reference that he could not investigate that most important phase of the subject. Had he been given a free hand the Government would not have come out of the inquiry with a clean re cord. It would have been been convicted of an improper patronage of certain wealthy interests. He also held that he could not inquire into the statements in the speech other than those contained in the passages selected for him by the Government. The judge was asked to give a decision on a number of extracts from the speech, and that is all he did. Extract No. 4 submitted to the judge reads -
For several years the administration of the taxation office has been unsatisfactory to the people. It has been carried on in defiance of the law under which the taxes are raised; in fact, the Commissioner and his officers and the Treasurer, who is the ministerial head of the department, are annually breaking the law of the country.
The following words, which are important if the charge is to be preserved in its proper setting, were omitted from the extract submitted to the commissioner: -
Section 9 of the Land Tax Act provides that an annual report shall he made by the Commissioner of Taxation. Parliament realized that, in handing over to a department the right to collect taxation, it was delegating a great power, and it deliberately enacted that the Commissioner should annually let Parliament know what he was doing, and how he was doing it. But there has been no report from the Taxation Department for the last three years, and there was only one report in the preceding three years; in other words, one report has been submitted to Parliament in six years.
That was the charge made by the honorable member for Yarra, whose speech was ruthlessly emasculated. Words were torn from their context so that an unfaithful representation of the case was placed before the commissioner, and the same procedure was followed in making the other extracts. The judge evidently knew his duties well; he was well schooled, for he appeared to be quite anxious not to trespass where the Government did not desire him to trespass.
– Although the honorable member is free to abuse the Government, he has no ground for abusing the royal commissioner.
– I shall give chapter and verse for all I say.
– The honorable member’s suggestions are most improper.
– On the 30th October, 1924, the judge said, “ I suppose that my function is to do what I am told.” And who told him ? This Government told him in the terms of the reference.
It is quite obvious that the judge realized that he must not exceed the terms of the reference, and those terms were not complete. Here is an extract from the report of the proceedings -
Mr. Cussen. ; I agree with you. I had it in my head that the matter was a large part of Mr. Scullin’s speech and, yesterday afternoon, I thought very strongly that you were interpreting your commission too narrowly. I have now considered the question calmly, and I must say that I think you were prefectly correct, and that the inquiry must be limited in the way you suggest.
The Judge. - I am very glad to hear you say that. Of course, I do not wish to prevent any inquiries being made.
Mr. Cussen. ; I know that; but I thought yesterday that the point was within the scope of your inquiry.
The Judge. - I notice that not even the whole speech is set out on the hack of the commission.
The judge realized how restricted were the terms of. reference, and he commented on the fact that the whole of the speech of the honorable member for Yarra was not supplied to him.
– I do not know whether the honorable member suggests that the judge was instructed by the Government how to carry out his duties, but that is certainly implied by the honorable member’s remarks. It is a quite improper suggestion.
– I think I have made myself quite clear. I said that the judge was bound by the terms of reference, and that he said he had to do what he was told. That means, of course, that he had to do what he was told in the terms of reference by the Government. If the right honorable the Prime Minister can find anything sinister in that, he is at liberty to do so; but he is misinterpreting my words.
– I shall not interrupt the honorable member provided he does not suggest that the judge did anything improper.
– I am charging not the judge, but the Government, with acting improperly.
– The honorable member would not be in order in reflectingon the judge.
– I do not wish to do anything disorderly, or to bring myself within the range of the power you wield. I am justified in what I have said by the fact that the Chairman did not challenge my right to say it. I am, therefore, completely exonerated. Mr. Ewing was in the box on the 29th October, 1924, and the following cross-examination took place : -
Mr. Cussen. ; I want to put in a part of a file. I want you to put before the commission the history and the documents’ which brought about the postponement of the Dunumbrel case, and the cessation of the collection of the tax on Crown leaseholds.
Mr. Ewing. ; This is a Treasury file.
Mr. Cussen was proceeding to examine Mr. Ewing on extracts from the report to the Treasury which showed that he (Mr. Ewing) was strongly in favour of going on with the test case (Dunumbrel), and also showed the present Government’s actions regarding the holding up of leasehold taxation, but, intervening, the judge asked -
The Judge. -To which question that I have to answer is this relevant?
The judge was distinctly under the impression that, in the reference to him concerning the charges made by the honorable member for Yarra, there was nothing about the non-collection of leasehold taxes. One of the main charges of the honorable member for Yarra was that certain reports were not submitted to this House, and that they should have been submitted in accordance with the provisions of the Land Tax Act. On that point the minutes of evidence contain the following : -
Mr. McFarlane (Counsel to assist the Commission). ; I tender a copy of the recent report of the Hardships Board under section 66 of the Land Tax Act, and I ask for a ruling as to whether it comes within the scope of the commission ?
Mr. Cussen (Counsel for Mr. Scullin). ; We say that it does come within the scope of the commission.
The Judge. - Under what question does it come ?
Mr. Cussen. ; It comes under the heading of the defiance of the laws of Parliament.
The Judge. - I understand that the report has been laid on the table of Parliament.
Mr. Cussen. ; After considerable delay.
The . Judge. - The point is that the questions limit my jurisdiction.
Mr. Cussen. ; The people who drew up the commission emasculated the charges for political purposes. That is the real position.
The Judge. - Supposing that to be so; how does it affect my position as Commissioner? I am not going to answer questions outside the scope of the commission.
Any wrongdoing is by the Government, which, to cover up its own faults, faked and emasculated the charges of the honorable member for Yarra, and did not give the commission a reasonable opportunity to review the allegations; of the honorable member. Regarding the reports not submitted to Parliament, the judge said -
I do not think that I would need to answer that question, because I would say that it would be answered in Parliament. According to the Hansard report, the Treasurer said, “You are quite right- it has not been done, and I am sorry; but we have no explanation to give.”
The honorable the Treasurer the other night twitted the Labour party with neglecting, when it was in office, to submit the reports in due time to this House. When the right honorable member for Balaclava (Mr. Watt) was speaking, the Treasurer said, “ But did you not have tosubmit reports for certain Labour Governments ? “ Every report on this subject received by a Labour Government was submitted by that Government to this House in accordance with the terms of the act.
– The report for 1914-15 was presented in August, 1917.
– The Treasurer will have to give some more convincing proof of that than his own word of mouth. When a Labour Government administered the affairs of the country these reports were presented every year. They were tabled in 1912, 1913, 1914, and 1915. There was no report in 1916, which was the year in which the split occurred in the Labour party ; but reports were furnished in 1917 and 1918, and then no report was submitted until 1921.
– The report for 1914-15 was not presented until March, 1917.
– It is quite evident that I am touching a vital spot, but the facts are against the Treasurer, who, if he refreshes his memory, will find that he cannot substantiate his statement. The table which I intend to quote will prove that the statements of the honorable member for Yarra were correct, but that owing to the clever and deceptive manner in which the Government restricted the terms of reference they could not be fully inquired into. The commissioner was asked to report whether “ it was owing exclusively,” but as the word “ exclusively “ was not used by the honorable member for Yarra, the commissioner was able to submit a report which was favorable to the Government, but which, unfortunately, does not deal with the accusations against the Treasurer.
– Surely the commissioner’s report states the facts.
– According to the terms of reference, which were not based upon the charges of the honorable member for Yarra. I challenge the Treasurer to say that they were.
– The commissioner’s statement on that point is set out in full.
– A departmental return placed before the royal commission gave the following information : -
Statement of outstanding land tax at 30th June, 1924, divided into various groups according to the amount of tax owing: -
Taxpayers who owed £10,000 and more -
No. of persons, 28; freehold tax, £85,073; Crown leasehold tax, £1,084,577. Total owing, £1,169,550.
Taxpayers who owed £5,000 and more but less than £10,000 -
No. of persons, 27; freehold tax, £41,924; Crown leasehold tax, £149,772. Total owing, £191,696.
Taxpayers who owed £1,000 and more but less than £5,000 -
No. of persons, 183; freehold tax, £115,358; Crown leasehold tax, £278,118. Total owing, £393,476.
Taxpayers who owed £100 and more but less than £1,000 -
No. of persons, 741; freehold tax, £101,125; Crown leasehold tax, £137,552. Total owing, £238,077.
Taxpayers who owed less than £100 -
No. of persons, 3,767 ; freehold tax, £39,190; Crown leasehold tax, £25,193. Total owing, £64,383.
The first group of 28 taxpayers owe 56 per cent. of the total amount outstanding. The last group of 3,767 owe only 3 per cent. of the total amount. It is needless, therefore, to ask if any discrimination was shown on this phase of the question, which was also wilfully distorted by the Government in its terms of reference. The evidence of departmental officers, and extracts from files read to the commission by these witnesses proved conclusively that discrimination had been shown in the treatment of different taxpayers For example, contrast the rigorous manner in which the law was enforced against Mr. James Browne, of Werribee, with the leniency shown to Sir Sidney Kidman. For six years Browne failed to lodge his land-tax returns, and was fined each year. His fines aggregated £134, in addition to penalties imposed for the payment. His tax did not average more than £12 per annum. Kidman failed to lodge land-tax returns for seven years, and was not prosecuted until the scandal was exposed in August, 1924, when he was then prosecuted for one year, and fined £10. Browne was fined in the same year by the same magistrate £40, but in his case the department pressed for a heavy penalty. When Browne’s returns were not in by the due date each year, he was sent a reminder, then a final notice, which was followed shortly after by a summons. How differently Kidman was treated was revealed by tie correspondence and departmental minutes on the land-tax file. Repeated requests were made for the lodgment of returns. There were “ final demands,” appeals, threats, more “ final demands,” more threats and appeals, and so on, for seven years. For the information of the committee I may state that from the year 1922, when this Government came into office, until the 6th September, 1923, the records taken from Sir Sidney Kidman’s file disclose the following: - 31st March, 1922. - Departmental Minute - “No returns have been lodged since that for 1916-17.” 31st March, 1922. - “Taxpayer’s agent, John Jolly, has on several occasions promised to furnish returns, but has not done so.” 1917-18, 1918-19, 1919-20, 1920-21, and ‘ 1921-22 returns. 13th May, 1922. - Departmental Minute - “ 1921-22 returns not yet furnished. Reminder sent. Seven days allowed.” 13th Juno, 1922. - Departmental Minute - “ What action should be taken to obta”in return, please?” 19th June, 1922. - “Have final demands sent.” 0th July, 1922. - Final demand sent to Jolly as agent for Kidman. 1st August, 1922. - “ Is there any reason why taxpayer should not be prosecuted for consistent failure to furnish returns 1917-18 et seq.” 4th August, 1922. - Deputy Commissioner reports to Commissioner and advises proceedings to be taken. 7th August, 1922. - Commissioner wrote to Kidman. 10th February, 1923. - Deputy Commissioner asks Commissioner for a reply to letter of 4th August, 1922. 10th February, 1923. - Departmental Minute - “The Commissioner is writing to Sir Sidney Kidman direct, threatening proceedings.” 2nd March, 1923. - Commissioner writes to Kidman and says that as returns not lodged no alternative but to prosecute. 19th March, 1923. - Commissioner instructs Deputy Commissioner to take action.
Returns wanted for 1917-18 to 1922-23. 16th April, 1923. - Deputy Commissioner instructs Deputy Commissioner, Adelaide, to prosecute for 1922-23, and says can only prosecute for this year as twelve months having elapsed in respect of other years prosecution is barred. 28th August, 1923. - Departmental Minute - Assistant Commissioner has made certain arrangements with Kidman. Wire Adelaide to please hold up all action.” 4th September, 1923. - Deputy Commissioner, Adelaide - “ I requested Mr. Ford, who is a responsible employee in Sir Sidney Kidman’s Adelaide office, to interview me. … He emphasized that Mr. Jolly had a difficult task, in that until last three years Sir Sidney Kidman kept no systematic records. A list of his land and other securities did not exist, and it would be a tremendous task to locate all his various interests.” 6th September, 1923. - Deputy Commissioner reports to Commissioner, and quotes the above reasons for delay. The memorandum goes on - “ Mr. Jolly advances these arguments as reasons for delay. . . . The onus, is on taxpayer to incur the necessary expense for professional assistance to enable him to comply with the law as is insisted on with other taxpayers. Reviewing the whole, situation, it is patent that the requisitions of the department have been ignored. … In my opinion, the adoption of a laissez faire policy resulting in continued failure of taxpayer to supply necessary information and returns required amounts to defiance of the department.”
Defiance by Sir Sidney Kidman! Notwithstanding that, the Commissioner of Taxation stated in a report that he had interviewed Sir Sidney Kidman, and had the distinct impression that that gentleman had no desire to defy the department. Time will not permit me to place all the facts on record, but on the 22nd August, 1924, three days after the charges had been made by the honorable member for Yarra, final action was taken against Sir Sidney Kidman, who was then prosecuted. It is clear that the charges made by the honorable member have been proved up to the hilt. It is also clear that by manipulating the terms of reference to the judge, whose only desire was to do what was right, the Government prevented him from reviewing the whole of the charges. The Government is now using the Commissioner’s report in an endeavour to clear its record, which is as black as the ace of spades. In an impartial court the action of the Government would not bear investigation. The Ministry stands condemned on the charges levelled against it by the honorable member for Yarra, when they are considered in conjunction with the matters contained in the supporting documents that were made available to him, but were not included in the terms of reference. I leave the public to judge between the honorable member and the Treasurer. Every fair-minded citizen will recognize that the honorable member has rendered a great public service in revealing the misdeeds of the Government in trying to protect wealthy land-owners from taxation and ruthlessly prosecuting small taxpayers.
– I feel some diffidence in speaking on such an important subject as the budget; but since we have had many illuminating criticisms upon it by honorable members opposite, I venture to offer a few comments. It is apparent that should the political millennium arrive, and honorable members opposite come into power, there will be no lack of aspirants for the office of Treasurer, since quite a number of them claim to be capable df dealing with public finance. I regret that the honorable member for Hindmarsh (Mr. Makin) spoilt his speech by hinting that the learned judge who presided over the inquiry into the charges made by the honorable member for Yarra (Mr. Scullin) was to a certain extent biased in his decisions because of the terms of reference to the royal commissioner. We had some heavy salvoes from the honorable member for Werriwa (Mir. Lazzarini), and between the volleys I was able to gather from him the interesting information that a bank overdraft is simply a number of figures in a book, and the overdraft does not materialize! I regret to say that that has not been my experience. If one borrows money from a bank by way of an overdraft granted on approved securities, and after, for instance, buying a number of sheep, makes payment by cheque, one finds that the person to whom the cheque is paid is able to cash it, and so turn the overdraft into concrete figures. In common with the honorable member for EdenMonaro (Mr. Perkins), I pay tribute to the honorable member for Yarra for his excellent speech. I shall not go so far as that honorable member did, and say to him, “ Come over here;” but if in the whirligig of politics the honorable member should come into office, he will certainly discharge his duties as a Minister with ability, dignity, and moderation. There has been a great deal of “ blowing off of steam “ in this so-called budget debate. Although nearly three days have been devoted to it, not one-third of that time has been spent in actual criticism of the budget itself. Honorable members have wandered far and wide, and the Opposition apparently, not finding much in the budget to criticize, have resurrected the ghost of the so-called land tax scandal. When the last election campaign was in progress, I was considerably concerned to find that Gunnedah, a town in my electorate, had been placarded with notices stating that the honorable member for Yarra (Mr. J. H. Scullin) would address the electors on the land tax “ scandal,” and concluding with the invitation, “Come and hear Australia’s finest speaker show up the corrupt mismanagement of the Bruce-Page Government.”
– I had a good meeting there.
– I certainly agree that the honorable member is a brilliant speaker; but the fact remains that the result of the speech he delivered did not avert the defeat of the then sitting member for Gwydir at the poll. The honorable member for Yarra and the honorable member for Hume (Mr. Parker Moloney) both got away very rapidly from the subject of the budget and dealt with a matter that gave greater scope for their histrionic talent - the land tax - but the replies by the Treasurer (Dr. Earle Page) and the AttorneyGeneral (Mr. Latham) effectively and finally disposed of their arguments.
Honorable members opposite levelled a good deal of criticism at the budget proposals; but I sometimes think that much of it is prompted by newspaper criticism, which, we have to remember, is generally destructive. I cannot quite join with the honorable member for Eden-Monaro in his respect for the press, and perhaps I may be applauded by honorable members opposite for making that statement. It seems to me that we are liable to over-estimate the importance of press criticism. Timid persons, and those who do not think for themselves, are often influenced by opinions expressed by newspapers; but, after all, a newspaper is merely a number of sheets of paper on which is printed news, advertisements, and opinions. Most of the opinions are paid for, and they often reflect the opinion of only one person. I am reminded of a remark by Napoleon, who, when annoyed by the criticism of the Paris Monitor, exclaimed, “ An editor! What is he? A dirty man with a pen in a back office.” I admit that we have advanced much since Napoleon’s time; but having read the Melbourne press for the last few weeks, during which the Government has made considerable progress with its programme of legislation, I realize how well Victoria and the Commonwealth generally would . be managed by a triumvirate of the editors of the Argus , the Age, and the Melbourne Herald. The conservative leanings of the metropolitan dailies of this State is well evidenced by their failure to take off the extra halfpenny charged for newspapers shortly after the outbreak of war, although the proprietors of the Sydney dailies removed it years ago. If one looks at the leading article page of yesterday’s Age - to which I suppose every politician turns with interest - one will find three leaders. In the first it is said that the Prime Minister is hot much good ; . in the second that the Federal and State Governments also are not much good; and in the third that the city and municipal councils are of no account. I cannot help thinking that when the Age got up that morning and set out for its office it could not say, with Browning -
God’s in his heaven -
All’s right with the world!
I imagine rather that it exclaimed, with Hamlet -
The time is out of joint - O cursed spite!
That ever I was born to set it right!
If the present Government is unsatisfactory, what is the alternative? It is so long since a Labour Government has been in power in the Commonwealth Parliament that it seems to be almost a legend from Grimm’s fairy tales. All we can do, therefore, if we confine ourselves to the Federal arena, is to judge Labour Governments by what they did many years ago.
– But the honorable member is afraid to do that!
– Not at all. We can best judge them, however, by their recent actions in New South Wales and Queensland, where Labour legislation furnishes a succession of instances of extravagance and class legislation.
It seems to me that the principal criticism of the budget offered so far is that the Treasurer has dared to have a surplus. I admit that, taking the present regime of State Labour Governments, surpluses are old-fashioned; but, in my opinion, they are not to be despised. In my private business I ardently look forward to having one every year, and I commend the Treasurer who is able to place his Government in that happy position. There is a good deal in the budget that calls for commendation. . Despite the charges of extravagance, the expenditure over a period of years shows that there has been very little increase in the actual cost of departments. Considering the fact that population has increased by nearly 500,000, the figures in that respect are creditable. The surplus is principally confined to the Customs revenue. It is impossible, of course, to forecast this revenue twelve months ahead, because one does not .know what may happen in that time.
-It is impossible to say how much will be borrowed by the State Governments.
– Exactly; particularly in that State which is not associated with the Loan Council, and which borrows right and left whenever it gets a chance. It is hard to say, therefore, what the imports will be. I take it that if the Treasurer erred on the conservative side, and did not show a surplus, there would be just as loud a howl as there is over the present surplus.
Country people realize that the present Government may be trusted to protect their interests, and they are heartily behind it in its proposals. It is said that, owing to the surplus, taxation should be reduced; but one asks where the reduction is to be begun. The Customs revenue is absorbed in reducing the war debt, in old-age pensions, defence, repatriation, and in other directions. I cannot place my finger on the spot where reduction should be commenced. Another criticism is that the Government is paying off the war debt too quickly. This is a new point of view, particularly regarding war liabilities. When one examines the figures, and notes what is to be done with the surplus, one realizes that the budget calls for commendation. There is £1,000,000 for naval construction, £250,000 for the air service, a similar sum for the Council of Scientific and Industrial Research, and £1,000,000 for war debt reduction. There are further payments of £100,000 for assistance to prospectors, and £186,944 for invalid and old-age pensions and national insurance. While I oppose a high tariff, I am quite prepared to waive my fiscal views so far as expenditure on defence and development is concerned. There is a cry for reduced taxation; but were certain fields of taxation to be vacated by the Commonwealth, they would immediately be entered by the State Governments, lt is much better that this money should be applied by the Commonwealth Government to some good purpose than that it should be frittered away by State Governments in extravagant socialistic enterprises. The honorable member for Hume (Mr. Parker Moloney) referred to the speech which I made some time ago, and by the exercise of that wonderful ingenuity which he possesses, so twisted my remarks as to make it appear that I had attacked the present Government. While I admit that a high tariff is harmful to the primary producers, the main responsibility ‘in connexion with land settlement devolves upon the States. That the kind of government in power in the States affects the primary producers is shown by the fact that, so far as Victoria, New . South Wales and Queensland are concerned, the only State to go ahead with closer settlement is Victoria, which has an anti-Labour government. The solution of this problem is in the hands of the party to which the honorable member for Hume belongs. It will be solved by the workers doing a fair day’s work, thus decreasing production costs, and making high tariffs unnecessary.
– That is an insult to the workers.
– The workers should not be misled by specious promises which, if given effect to, bring sorrow and disillusionment, and cause great expense. When we see class legislation introduced such as the Workmen’s Compensation Act recently passed by the New South Wales Government, ostensibly in the interests of the worker, but which has resulted in hundreds of workers being thrown out of employment, we naturally ask where that class of legislation is to end. That primary production in. Australia has not developed to a greater extent is not the fault of the Common wealth Government. It is due to unsympathetic administration by the State Governments, whose duty it is to pass sound and helpful legislation, and thus to develop the country and increase the prosperity of its people. I know of no instance in which a Labour government has treated land-owners sympathetically, or has referred to them as other than parasites and land-grabbers, a section of the people from’ whom taxation may be squeezed.
– .What about Queensland?
– I can find nothing bad enough to say about Queensland.
– A Labour government was returned with a considerable majority at the last election*.
– The means by which it gets its majority has not yet been ascertained. It certainly does not obtain it by the will of the majority of the people of that; State. The honorable member for Hume, in quoting from a minority report of a section of the Victorian Farmers’ Union, stated that they spoke in condemnation of the present composite Government. That the primary producers of New South Wales are whole-heartedly behind the Government the honorable member may yet find out to his cost. The primary producers of Australia believe that this Government is interested in their welfare, and they will continue to support it.
In my opinion, the Government’s proposals in relation to the per capita payments are sound. It is only fair that each government should raise the money which it spends. By that means a check is imposed on extravagance. While it would be impertinent of me, as a young member of this House to criticise the excellent speech delivered the other night by the right honorable member for Balaclava (Mr. Watt), I consider that his arguments against the abolition of the per capita payments were not so convincing as those of the Attorney-General to the opposite effect. The honorary member for Balaclava said that the question of moral right should not be considered. It is. common knowledge that the Premier of New South Wales, Mr.
Lang, intends to contest a Federal constituency at the next election, and that one honorable member now occupying a seat in this House has been marked for slaughter. Should Mr. Lang be elected to this House, and a change of Government occur; and, moreover, should he by reason of his dynamic force become Prime Minister of the Commonwealth, he would have no concern for the moral rights of the States in relation to per capita payments. The Government is to be commended for its attempt to put the Federal and State finances on a sound basis.
I am pleased at the sudden concern for the primary producers which the oil companies of Melbourne and Sydney have recently evinced in connexion with the increased duties on petrol and motor tires. I hope that their interest is the dawn of a better day for the primary producers. Let us consider the effect of the increased duty on petrol in the case of a man owning a motor car which will travel twenty miles to a gallon of petrol. The extra cost for petrol, because of the increased duties, would be £4 for 10,000 miles. Would it not be worth while to pay that additional amount in order to ensure good roads? The increased duty on motor tires does not affect me because, I do not use other than locally-made tires. Reference has been made to the petrol used in connection with tractors, but I point out that kerosene is the fuel usually used in those machines. The case of the primary producer using stationary engines has also been referred to. I have a stationary petrol engine which, in the shearing season, consumes two gallons of petrol a day. For a period of twenty days, that represents 40 gallons of petrol, the extra cost of which, in consequence of the increased duty, would be 6s.8d. That was the fee which we . paid to lawyers in the good old days, before they raised it to 10s. 6d. . The additional cost of petrol under these new duties cannot be compared with the advantage which good roads would confer upon motor users. Good roads mean a lessening of freight charges, and a reduction of wear and tear; the blessings would outweigh the extra cost. The various shires of New South Wales find it exceedingly difficult to maintain their roads in anything like a decent state of repair. It takes all their funds to keep the main roads fit for traffic. In the district represented by the honorable member for New England (Mr. Thompson), there is a stretch of road betweenUralla and Armidale. At one time it was practically a speedway. The Gostwyck shire to-day spends about five times as much on that road as previously; but, nevertheless, it is only a succession of ruts. During the last election campaign the honorable member for New England, when travelling along it to address the electors, was thrown against the hood of the motor car in which he was travelling, and received a mark which he carries to this day. Landowners in New South Wales pay 21/2d. in the £1 on the unimproved value of their land. Should they want anything done to their roads they are called upon to make further contributions, because the shires have no money for the purpose.
– Many of them will get nothing under this scheme.
– The Government’s proposals will mean, not only better main roads, but also better subsidiary roads. I take strong exception to an advertisement that appeared in some of our newspapers recently under the auspices of the Town and CountryUnion. In it electors were advised to telegraph to their Federal members, and to watch how they voted in connexion with these duties. That is political blackmail. If honorable members cannot be trusted to vote as they think right, but have to be watched, as that advertisement suggests, the sooner we do away with Parliaments the better. Once members yield to coercion their usefulness has gone.
– Who comprises the Town and Country Union ?
– I do not know. The Government has been castigated on the score that it has been going too fast. Generally the cry is that governments do not proceed quickly enough. No Government which unswervingly carries out its policy will ever be universally popular, because, by so doing, some section of the community will be affected. I say, however, to the present Government, “Go on as you are going. The people of Australia are behind you and the weaklings and sluggards who now attack you, will yet join in the general chorus of acclamation.”
.- My remarks will he confined chiefly to the financial proposals of the Government as outlined- in the States Grants Bill. I agree with previous speakers that, because of the Government’s proposal to alter substantially the financial relations between the Commonwealth and’ the States, this budget is one of the most important that has been brought down since the inauguration of federation. I regret that the proposed financial grants to Tasmania and Western Australia are included in the proposal of the Treasurer to discontinue the per capita payments, and are related to the Government’s intention to relinquish certain fields of direct taxation. I would have preferred to see those proposals dealt with separately, so that no honorable member would run the risk of being misunderstood if he opposed the States Grants Bill. I am perfectly sure, nevertheless, that the Treasurer has combined them in order to clarify the position, and make clear the real effect upon the States of the withdrawal of the per capita payments.. The Treasurer has definitely stated that the proposals to assist Tasmania and Western Australia by. special grants have really nothing to do with the withdrawal of per capita payments, so that, even if the States Grants Bill is defeated, there is no reason to suppose that the scheme to assist the two States mentioned, by special grants, will not be proceeded with. At the outset, I should like to commend the Treasurer and the Government. The Minister’s sympathetic treatment of Tasmania is in marked contrast with the treatment extended to it by former Treasurers. The proposal to assist Tasmania by a special grant of £375,000 meets with the approval of the people of that State. Possibly it is not as much as we thought we were entitled to, and not as much as the State Premier expected, but I know that he has expressed his satisfaction with the proposal.
While on this subject, I should like to allude to a remark made the other night by the right honorable member for Balaclava (Mr. Watt). It will be remembered - by honorable members who were present that the right honorable gentleman said that, if the States had the power, they would not impose land taxation that would be comparable with the Federal land tax which the Commonwealth is proposing to surrender. To that remark I interjected, “ They certainly would not.” I notice in the Hansard report that the word “not” is. omitted, and I am not sure if the right honorable gentleman understood what I said. In any case, I submit that there was no justification whatever for his retort, “ The voice of the sluggard State speaks truly for that State.” I said, “Why sluggard?” and the right honorable gentleman, continuing, said, “ If ever a statue is built to Tasmania, it will have its hand extended for a tip.’’ The right honorable gentleman must have known that the remark would be offensive to every representative of Tasmania. I am sure, also, that such a gratuitous insult to one of the States of the Commonwealth is resented by every other honorable member.
– Hear, hear!
– Tasmania has a population of only about 200,000 people. Apart altogether from the fact that it is a small State, there was no justification for such an insult being levelled at Tasmania, suggesting that it is not standing up to its responsibilities.
– I think the right honorable gentleman was speaking in a jocular vein when he replied to the honorable member’s interjection.
– I think not, and it ill becomes the representative of one of the two States that have benefited most from federation to speak slightingly of a small State like Tasmania, which, for a longtime, has been bearing a heavier burden of taxation per head than any other State of the Commonwealth. Development in Tasmania is more difficult than in the other States. Nearly the whole of the agricultural areas of Tasmania at one time carried dense forests which had to be cut down and cleared before the land could be brought under cultivation. This work was done, not by sluggards, but by stout-hearted pioneers. The same hardships had to be surmounted in the development of the mining industry on the west coast. Contrast the difficulties encountered by our pioneers with the work of developing the agricultural areas in the mainland States. With the exception probably of Gippsland, in Victoria, the work on the mainland has been comparatively easy. It has been possible to utilize up-to-date machinery and bring the land into production much more easily than in Tasmania. The development of our agricultural and mining industries has not been the work of sluggards, as the right honorable member for Balaclava suggested.
– I think the honorable member is taking him too seriously.
– I do not think I am, because we all know that his speeches are well considered and widely read. Probably no other public man in Australia enjoys a better reputation as an orator than the right honorable member for Balaclava. We have done a great work in the development of our mining and agricultural resources in Tasmania. And we have done a great work also in the establishment of the electrolytic zinc industry. Sir Nicholas Lockyer, who was appointed by the Commonwealth Government to inquire into the disabilities suffered by Tasmania as the result of federation, made special reference to the establishment of the electrolytic zinc works. He added that, because of the national character of the industry, the State was justified in contracting to sell to the company electric power at less than the cost of production. It may also be of interest to honorable members to know that we have spent nearly £6,000,000 on roads in Tasmania. With our heavy rainfall is is essential that we should have macadamized or metalled roads. Necessarily this expenditure has proved a great burden upon our taxpayers, but it had to be faced, to ensure the development of our natural resources. No less than £3,300,000 has been expended on the great hydro-electric scheme of Tasmania, which could never have been carried out if the people of the State were sluggards. Referring again to the right honorable gentleman’s remark that, if a statue were erected to represent Tasmania, the figure would need to be holding out a hand for a tip, I suggest that, if in the matter of tips, other Treasurers of the Commonwealth were to follow the example set by the right honorable member for Balaclava, when he was Treasurer, Tasmania would not be encouraged to keep the palm of her hand uppermost for very long. It ill becomes a representative of one of the metropolitan electorates of Victoria to speak disparagingly of the little State of Tasmania. Victoria has derived more benefit from federation than has any other State of the Commonwealth. The bulk of the trade of the north of Tasmania is enjoyed by Melbourne. I should have thought that that would lead the people of Melbourne to sympathize with the people of Tasmania. I am certain that such a sympathy exists, and that the views expressed by the right honorable member are not approved by the overwhelming majority of the people of this very fine city. The reason that Tasmania has for a considerable time found it necessary to claim special assistance from the Commonwealth is that she has not benefited to any degree from the expenditure of Commonwealth money. I have always based her claim to special consideration on that ground. I invite honorable members to consider the expenditure of Commonwealth money on the River Murray water scheme, the unification of railway gauges, the east and west railway and Canberra, and the expenditure of Commonwealth funds in Melbourne as the Seat of Government; and it will be admitted that all the States, with the exception of Tasmania, have largely benefited from Commonwealth expenditure. Victoria and New South Wales have been specially fortunate in this regard.
In confirmation of my statement that very little Commonwealth money has been spent in Tasmania, I have only to direct attention to the fact that the Public Works Committee, whose duty it is to inquire into every proposal involving the expenditure of Commonwealth money in excess of £25,000, visited Tasmania for the first time about two months ago, and then only to inquire into the proposed erection of an automatic telephone exchange at Hobart. It should be borne in mind in this connexion, also, that the taxpayers of Tasmania have to find their share of all moneys paid into the Commonwealth Treasury. They have been overburdened with taxation in recent years. I again commend the Treasurer for his sympathetic consideration of the peculiar position of Tasmania, and I should like to say a word of commendation, also, of Sir Nicholas Lockyer, who, as a royal commissioner, recently inquired into Tasmania’s special disabilities. It is evident, from his report, not only that he carefully considered the question submitted to him and the evidence placed before him, but that he is a man of farseeing vision. The recommendations in his report compel one to realize that he understands the peculiar position of Tasmania very much better than it has been understood by any other person who has reported upon it. I do not blame the Government for failing to adopt Sir Nicholas Lockyer’s report. The Premier and Treasurer of Tasmania has said that he does not consider the report satisfactory, because of certain conditions to the financial assistance recommended, which he considers could not be accepted by the State. Nevertheless, Sir Nicholas Lockyer’s report might well have formed the basis of negotiations with the Commonwealth Treasurer. Many of his recommendations might have been embraced in proposals to assist Tasmania, and they would be distinctly beneficial to the people of that State.
With regard to the proposal to withdraw the per capita payments from the States, I claim that to give effect to it would, to a certain extent, nullify the benefit conferred upon Tasmania by the special grant which is to be made. That is contended by the Treasurer of Tasmania, and to a great extent I concur in the views that gentleman has expressed. Under this proposal it will not be possible for the Tasmanian Government to reduce State taxation to the extent to which it might have been reduced if the special grant were made and the per capita payment was continued. I know there is a difference of opinion as to the advisability of the proposed withdrawal of the per capita payments. I am not going to say that the proposal has no merits, but one of my difficulties, as a representative of Tasmania, is that I am unable to estimate what really will be the effect of the proposal upon the finances of Tasmania, because there is a great discrepancy between the figures given by the Commonwealth Treasurer and those submitted by the Treasurer of the State, and there appears to be no means of ascertaining which set of figures is correct.
– No State figures were given. We asked the State taxation authorities to discuss the matter with us, and they would not do so..
– The Treasurer says no figures were given, but I refer him to the speech he made in introducing the States Grants Bill. In that speech he supplied some columns of figures, explaining the fields of taxation to be relinquished by the Commonwealth, giving the amounts to be collected by the States from those fields of taxation, and the amount of the per capita payment which will be withdrawn from each State. The figures given for Tasmania as the amounts which the State authorities will, under the Treasurer’s proposal, be able to collect, are: Land tax, £46,279; estate duties tax, £26,022; entertainments tax, £6,000; 40 per cent. of income tax on individuals, £80,629; 40 per cent. of income tax on companies, £28,078 ; total taxation surrendered, £187,008. It will be seen that the Treasurer proposes that the Commonwealth shall still exploit the field of income tax to the extent of 60 per cent. I do not quite know what the Treasurer meant when he said that no figures have been given.
– Those are Commonwealth figures. I said that the State Treasurers had not given us any figures. We asked them to confer with our taxation officers, and they refused to do so.
– That, I understand, was after the Treasurer had given his figures to the House. It may be that what the honorable gentleman says is correct in that the States have not supplied him with their figures; but they certainly have been given to members representative of the respective States. But whilst the honorable gentleman estimates at £80,629 the amount to be collected by Tasmania in the exploitation of 40 per cent. of the field of income tax on individuals, to be left to the State, the Treasurer of the State says that the amount which will be collected from that source will not be more that half that sum. My difficulty is to know whose figures are correct. I cannot absolutely trust either set of figures. I am not going to say that the figures suggested by the State Treasurer of Tasmania are correct, but I am perfectly certain that those supplied by the Commonwealth Treasurer are incorrect. If we take into consideration the collection of income tax by the central office on the system of the aggregation of incomes, it is evident that the Commonwealth Treasurer’s figures cannot be right, because they are based upon a population basis. No one will contend that it is possible to divide the figure representing the amount estimated to be collected by the number of taxpayers in the States, and so arrive at an exact estimate of the revenue to be obtained from the portion of this field of taxation from which it is proposed the Commonwealth shall withdraw. But it is clear that the discrepancy between the figures of the Commonwealth and State Treasurers should not amount to nearly 50 per cent.
– All the State Treasurers claim that they will be short, but the Commonwealth which collects the total amount ought to be in a better position to make an estimate.
– The Treasurer of Tasmania estimates the revenue from this field of taxation at from £38,000 to £40,000, and the Commonwealth Treasurer estimates it at £80,000. There are also discrepancies in the estimates of revenue from the other fields of taxation referred to in the Treasurer’s proposal. It is evident to me that there must be a discrepancy arising from the system of collection at the central office on the aggregation of incomes for the purpose of the tax. I have read very carefully the debates of the conference between the Commonwealth and State Premiers, and I find that the Prime Minister (Mr. Bruce) said that the States could collect income taxation on the same basis as that upon which the Commonwealth has collected the tax in the past. With all due deference to the right honorable gentleman, and whilst I do not pose as a constitutional lawyer, or claim to question the constitutionality of what is proposed, I do not think it is possible for a State Treasurer to collect income tax upon an income earned in another State.
– That is not suggested. What is suggested is that the rate of tax upon an income earned in a State would be the rate applicable to the total income earned in Australia.
– Under the Commonwealth system the aggregate income of an individual, if derived from more than one State, fixes the rate at which his income is taxed, and it is obvious that that rate must be very much higher than that which an individual State could collect.
– I remind the honorable member that in Tasmania estates are aggregated for the purpose- of the probate duties.
– But I want to know how one State can insist on taxpayers in another State supplying the necessary information. Is there any law that will compel a resident of Queensland to supply information required by the Commissioner of Taxes in Victoria or Tasmania ?
– No; but the States can form a common pool of taxation information.
– That would mean ‘that the States would agree to supply one another with information, but it would be much simpler for the Commonwealth to do the work which it is now doing. I do not consider the proposition a practical one. It has not yet been attempted.
– Yes, it has been done in Tasmania in regard to probate information, and in Queensland in regard to income-tax information.
– As to probate, it is easy to obtain information regarding the value of estates of deceased persons, but not so easy in the case of the living. I know that it has not been done in Tasmania in regard to incometax information. The Commonwealth has made no attempt to collect income tax from individuals who reside in other portions of the Empire, but I should say that if it were practicable for the States to aggregate the income of individuals derived from various States, it would be just as easy for the Commonwealth to aggregate the income of individuals earned in different portions of the Empire. The State Premiers must be considered to be quite honest in their statements that they have no power to aggregate incomes earned in various States, and that they doubt the accuracy of the figures supplied by the Commonwealth Treasurer. I do not claim that the figures supplied by the Tasmanian Treasurer are correct, because I have no means of checking them, but it is obvious to me that, the Commonwealth Treasurer’s figures are incorrect, and I think I am justified in saying that I distrust any of the - figures supplied.
But I should think that there ought to be some means of ascertaining the value of the field of taxation relinquished by the Commonwealth to the States.
– If the State officers will not supply the Commonwealth with the necessary information, how can we give it?
– I do not say that the State Premiers are free from blame in this regard. The Treasurer tells us that they will not send their officials to enable him to obtain the necessary information, and that they have taken up the determined stand that they have a moral right to the per capita payment, and are not prepared to discuss the matter with the Commonwealth. In that respect I think they are wrong, but at the same time I think that the Commonwealth Treasurer is also wrong in insisting on his proposals, although they are so strenuously opposed by the whole of the States. I believe that some re-adjustment of the finances of the States and the Commonwealth is necessary, and that there should be some means of severing the two, so that one definite field may be left to the States and another to the Commonwealth At the same time I contend that no proposal can be acceptable to the people of the Commonwealth unless there is to some considerable extent an agreement between the Commonwealth and the States. It has been repeated by practically every one who has discussed this matter at the Premiers’ Conferences, that we are one people, and that the States and the Commonwealth represent one people. That is perfectly true, but a proposal which seriously affects the finances of a State will not be satisfactory to the people of that State unless there is complete agreement between the States and the Commonwealth. I think the State Premiers are entitled to insist that they should have a voice in this matter. The fact that the Commonwealth has, so far, failed in its efforts to get the States to arrive at some agreement is no reason why a further effort should not be made. There is no immediate hurry to carry out a proposal that will certainly disrupt the finances of the States for some time to come. The proposal to defer the operation of the new arrangement for twelve months is clearly a reliefto the States, butI cannot admit the claim of the Treasurer that a postponement for a year will prove the correctness of the figures he gave when introducing his proposals. It will do nothing of the sort, because until the States bring down their own taxation measures, and levy taxation on individuals or companies in the States there will be no means of ascertaining the value of the fields relinquished by the Commonwealth. The fact that the Commonwealth will continue to collect these taxes for another year will make no difference whatever, because it will continue to collect on precisely the same basis as before. Therefore, no further information can be gained in the twelve months. In other words, if we cannot get the information now we shall not be in any better position to do so a year hence.
– But it will give the States time to consider their own proposals.
– It will certainly do that, and the delay will not embarrass the State Treasurers as would the immediate operation of these proposals. Therefore, I am pleased that the matter is to be deferred for twelve months.
The Treasurer has said on more than one occasion that it is right that those who spend money should have the responsibility of collecting it. That statement sounds very well, and probably the average individual who does not think very deeply about such matters will applaud it, but there is no such virtue in the Government’s proposals. We are hot separating the two fields of taxation. The Commonwealth will still retain the right to tax incomes to the extent of 60 per cent. of the present basis. It will retain its right to levy direct taxation. We have also a proposal by the Government to collect money through our Customs in order to make roads. That proposal hardly bears out the assertion of the Treasurer that those who have the right to spend money should have the responsibility of collecting it, because he is now levying a special Customs tax to raise money for the States to spend on roads.
– But only on a scheme agreed upon by the States and the Commonwealth.
– The Commonwealth is not applying the principle that those who spend should collect. In various ways it is still remaining in spheres that rightly belong to the States, and the States only. There is not the least doubt that the financial trouble between the Commonwealth and the States is entirely due to the fact that the Commonwealth has entered a field which it was never entitled by right to enter. For instance, it has taken over the function of building railways, unifying railway gauges, making roads, and giving bounties for this, that, and the other thing. Admittedly these invasions were in response to a demand from certain quarters, but the Commonwealth should have resisted it. The Federal intrusion in. spheres which rightly belong to the States, and in which State administration would have been more economical, has been responsible for all the present conflict between Commonwealth and State in regard to financial matters.
– Surely war expenditure forced the Commonwealth to resort to direct taxation.
– It did, but that should have been a reason for keeping out of the other spheres I have mentioned. Every intrusion of the Commonwealth into spheres that were intended to be reserved for the States has meant duplication and extravagance, with the result that the taxpayers do not get twenty shillings worth of value for every pound expended.
– That is not so. The River Murray water scheme and the unification of railway gauges would never have been attempted but for Commonwealth contributions.
– I admit that the River Murray waters scheme could not have been handled as well by the three States concerned as it has been handled by the Commonwealth. But that one instance in which the Commonwealth interfered successfully is not a sufficient excuse for its entering upon a policy of road construction and unification of railway gauges, as well as a housing scheme. These departures from the legitimate course of Commonwealth activities have been responsible for a great increase in taxation. The Customs and excise revenue soars higher every year. In 1914 who could have anticipated that the collections through the Customs Department in the year 1926-27 would reach £40,000,000? The people have been looking forward to the time when the Commonwealth would abandon the field of direct taxation, and had not the Commonwealth exceeded its constitutional rights, and created big spending departments, often duplicating the work of the States, there would have been no necessity for Federal direct taxation .today. Had proper economy been exercised the Commonwealth, with a revenue of £40,000,000 from indirect taxation, would have been able to evacuate the field of direct taxation, and until the Commonwealth does permanently quit that field I am not prepared to support the Government proposal to withdraw the per capita payments. The Government; should have made further efforts to reach agreement with the States before resorting to the extreme step of withdrawing from them an income which they regard as one of the conditions of the Federal compact. The Constitution originally contemplated that the field of direct taxation should be left to the States. I do not agree that the per capita payments to the States should continue for all time, but I am convinced that unless some understanding can be reached between the Commonwealth and the State Treasurers the policy of this Government will not receive the support of the. public. Moreover, there is no guarantee that if the Commonwealth evacuates the field of direct taxation to-day it will not re-enter it in the near future. The Prime Minister suggested to the conference of Premiers that a general election might place in power in the Federal Parliament a party whose socialistic schemes would necessitate the expenditure of large sums of money, and if that happened Parliament could withdraw the per capita payments to the States, and continue to impose directtaxation also. The right honorable gentleman’s argument was not very convincing, because, even if the proposals which his Government has put forward are accepted there will be nothing to prevent this Parliament from again levying direct taxation on income and land. It will be very much easier for a parliament to reimpose direct taxation than to suddenly discontinue the per capita payments to the States. The honorable member for Yarra said, and other honorable members of his party endorsed the statement, that if the Labour party were returned to office in this Parliament it would immediately reimpose the land tax. I draw the attention of the Prime Minister to that statement, which indicates that the evacuation of that field of taxation as part of the compensation to the
States for the loss of the per capita payments may prove to he no compensation at all. There is no guarantee that the field of direct taxation will not be reentered at any time when the Commonwealth Government requires more money. I am satisfied that the withdrawal of the per capita payments will have the effect of increasing taxation in the State of which I share the representation, and the increased taxation will fall on many of those who are least able to bear it.
Although I had occasion to take the right honorable member for Balaclava (Mr. Watt) to task, I agree with some of the views he expressed and bo intimated by interjection when he said that the . States could not impose taxation to the same extent as the Commonwealth. Although I have not heard the views of the Premier of Tasmania on this subject, I know that he has no chance of passing through both Houses of the Tasmanian Parliament a bill to impose land taxation of the same weight as that imposed by the Commonwealth. It is, therefore, obvious that, to obtain the same amout of revenue, the State Parliament will have to impose taxation that will bear disproportionately on the poorer sections of the community. The Treasurer may say that that is the business of the States, and has nothing to do with him ; but surely the State Treasurers are entitled to take these questions into consideration. They know the effect it will have upon their revenue, but, unfortunately, the Commonwealth Treasurer has not that knowledge. When the States Grants Bill is before the House I shall probably have more to say on this subject, and if there is any chance of its being withdrawn or defeated, I shall advance every argument possible to that end. Although I take second place to no man in upholding the Commonwealth as distinct from the State point of view, as a representative of a small State like Tasmania, I am justified in emphasizing the effect of the proposal on that State.
It has been claimed that the Commonwealth is doing everything necessary to provide for defence; at any rate, the Treasurer said that we are doing all we oan afford to do. Possibly that is right, but the right honorable the Prime Minister (Mr. Bruce), and others on this side of the House, claim that when we are considering defence expenditure we should include amounts spent on roads and railways. I am surprised at that contention. Iron, steel, cotton, and many other things - in fact, almost everything produced in this country - would be essential to our existence if the Commonwealth was engaged in war and isolated from the rest of the world. The expenditure on roads has nothing to do with the amount of money that the Commonwealth is spending on defence or with what the InspectorGeneral Sir Harry Chauvel, has said regarding the need for more money. He is dealing with defence as administered by him and members of his staff, and when he says that the amount provided is inadequate to give Australia a chance of training and equipping her forces, it cannot be supposed that he has taken into consideration such questions as the NorthSouth railway and good roads. I suggest to some of the strategists of this House that there may be a difference of opinion as to whether good roads and unified railway gauges would be beneficial to us if we were defending this country against an invader. Strategists preparing plans for the invasion of Australia would be seriously concerned at the breaks of railway gauge, and, in so far as those breaks of gauge would be adverse to an invading army, they would be beneficial to those on the defensive. I doubt whether good roads are of benefit to a people defending themselves. The invader is always ready - he strikes his blow when he is prepared - but those on the defensive have no warning. Certainly Australia would need time to complete the organization, mobilization, and equipment of her forces. If the Commonwealth was invaded from the north, and the North-South railway had ‘ been completed, the first thing we would do would be to destroy that line. Honor-, able members, when searching for arguments to support schemes for building railways, unifying railway gauges, or constructing roads, are always ready to say, “ This is absolutely necessary from a defence point of view.” They think that such argument has special weight with honorable members, and so it would have if honorable members generally agreed with their point of view that railways and good roads would assist Australia in time of invasion. I entirely disagree, and I suggest that there is room for difference of opinion among military strategists that the unification of the railway gauges would assist Australia to ‘defend herself. It is the duty of every Government to make adequate preparation for the protection of the territory under’ its control, and, although I do not suggest that sufficient care has not been exercised by this Government, I emphasize the point that it cannot altogether disregard the opinions expressed by its expert advisers. The budget, which has been favorably commented upon by honorable members on this side of the Chamber, is, I think, on the whole, one of the best submitted to Parliament. It is gratifying to know that during recent years our national debt has been reduced, which is the first purpose to which surplus revenue should be put. I cannot, however, ‘ see any particular virtue in placing a portion of our surplus revenue to a redemption fund, if, at the same time, we are placing new loans on the market.
House adjourned at 10.34 p.m.
Cite as: Australia, House of Representatives, Debates, 20 July 1926, viewed 22 October 2017, <http://historichansard.net/hofreps/1926/19260720_reps_10_114/>.