10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 2.30 p.m. and read prayers.
– Some time ago I men tioned that a very large number of unemployed have been attracted to the northern part of South Australia, probably in anticipation of the early construction of the railway from Port Augusta to Red Hill. In order that employment may be found for these people, will the Minister for Works and Railways give consideration to the introduction of a bill during the present session to provide for the construction of the railway ?
– I note what the honorable member has said, and will bring his remarks under the notice of the Government.
– In view of the fact that venereal disease and chronic alcoholism are the most prolific causes of death and wasteful disease and propagate mental degeneracy, and that both these causes of national inefficiency might be eliminated by the frank dissemination of correct knowledge, will the Minister for Health bring under the attention of the Government the advisability of endowing lectureships in eugenics in each of the States ? Also with the object of safeguarding the race, will the Minister bring before the Public Health Conference at present sitting in Melbourne, the import ance of State legislation demanding certificates of mental and physical health from parties proposing to contract marriage, not as a bar to marriage, but in the interests of common decency, and for the welfare of the nation?
– The State Ministers for Health and myself have, during the past two days been considering the matters referred to. We recognize their importance, and their relation to the welfare and progress of the country, and I assure the honorable member that they will receive very careful attention. Later I shall inform the House of the decisions arrived at by this conference.
– Will the Treasurer say when the measure necessary to provide old-age and invalid pensions for naturalized Indians is likely to be introduced ?
– I hope to introduce the bill in the immediate future.
– Can the Minister for Trade and Customs take action to assist the large number of persons who have been thrown out of employment in the glass manufacturing industry as a result of the dumping of importations of foreign glass?
– I have some knowledge of the facts submitted by the honorable member. The Tariff Board recently investigated the matter, but has not so far arrived at a final conclusion. I believe that, amongst other reasons for what hasoccurred, the complaint is made that dumping istaking place from countries with a depreciated currency. If that is proved, I shall immediately submit the matter to the. Tariff Board for prompt action if necessary.
– In view of the Prime Minister’s statement in connexion with the report of Lieutenant-General Sir Harry Chauvel, wherein he pointed out the primary importance of the naval side of Australia’s defence, which would assure a high efficiency, will the Treasurer consider the advisability of placing on the Estimates a sufficient sum of money to enable the Government to carry out the boys’ training scheme at Osborne House which was recommended last year by the Public Works Committee?
– The financial proposals of the Government were carefully considered before being submitted to the House. It is impossible to accede to the honorable member’s request.
– I ask the Prime Minister when did it become the right of any military leader to dictate the policy of the Government?
– No military leader nor anyone else is in a position to dictate the policy of the Government.
– Does the right honorable gentleman not think that that is what has been done?
– It is the duty of the Inspector-General of the Military Forces to report annually concerning the defences of the country, and Sir Harry Chauvel was only carrying out that duty in bringing the facts as he sees them under the notice of the Government.
Main Roads Grant - Action of South
Australian and Western Australian Governments - Interpretation of Constitution
– In view of the fact that the New South Wales Government has not joined with the Governments of the other States in signing the agreement with the Commonwealth Government relating to the main roads grant, will the people of New South Wales, whilst being subjected to the proposed taxation on petrol, be prevented from participating in the expenditure of the moneys derived from this taxation for the construction of roads ?
– The New South Wales Government has not yet indicated its acceptance of the agreement which has been arrived at with the other States. I have no doubt that it will do so, but should it not take that action, the position of New South Wales will have to be considered.
– Will the AttorneyGeneral say whether a writ has been issued against the South Australian Go vernment to prevent it from collecting a tax upon petrol in accordance with an act passed by the South Australian Parliament last year? If so, what is the reason for that?
– Instruction has been given for the issue of such a writ, though I am not able to state definitely whether it has actually been issued and served. The object of the proposed proceedings is to ascertain whether it is within the constitutional power of a State to impose duties upon goods upon their consumption or introduction into the State, as under the Commonwealth Constitution this Parliament has exclusive power in the imposition of duties of Customs and excise.
– Is it intended to take similar action against the Western Australian Government in connexion with the imposition of the petrol tax, or will the action against the South Australian Government be regarded as a test case?
– My information is that the Western Australian statute has not been put into operation, and. therefore the question does not arise in Western Australia. If that information is inaccurate, I shall reconsider the matter. I wish to add to my reply to the honorable member for Grey (Mr.Lacey) that there is also involved in the form of the taxation imposed by South Australia a question arising out of section 92 of the Constitution, which provides for freedom of trade between the States of the Commonwealth. It is therefore important that the true constitutional position should be ascertained.
Attitude of South Australian Government.
– Has the AttorneyGeneral seen a report to the effect that the South Australian Government will test the constitutionality of the Commonwealth Government’s road construction policy? If so, what action will he take, in view of the opinion that he expressed in this House last session?
– My action will be to advise the Government to defend any proceedings that maybe taken in respect of legislation introduced by this Government.
– In the report of the Commonwealth Meteorologist (Mr. Hunt) appears the statement that, owing to the lack of sufficient meterological data thousands of pounds have been lost to Australia, and that these losses could be obviated. Will the Government take action to supply the data needed so that we may prevent the loss referred to?
– I shall bring the matter under the notice of the responsible Minister, and furnish the honorable member with a reply as soon as possible.
– I wish to direct attention to a letter published in the Argus this morning pointing out the disabilities suffered by married men on board some of our naval vessels, and setting out complaints that have been made, mainly in connexion with the Brisbane, which has been stationed for a month at Geelong, and which, I understand, after recoaling will return there. The wives of many of the men on board that vessel broke up their homes in Sydney to come to Melbourne, to be near their husbands. Will the Minister look into the matter to see whether the position cannot be alleviated in some way?
– I shall look into the matter.
“Argus” Report of Meeting.
– I desire to make a personal explanation. There appears in this morning’s Argus a report of a meeting alleged to have been held at Prahran last night, and alleged to have been addressed by the honorable member for Fawkner (Mr. Maxwell) and “Mr. Brennan, M.H.R.” The heading given to it is, “ Labour Member’s Socialistic Fears.” So far as I know, subject to correction by yourself, Mr. Speaker, I am the only “ Mr. Brennan, M.H.R.,” in Australia, and therefore the report definitely refers to me. I desire to say, however, that I know nothing of the meeting except what I have read in the newspaper.
I was not present at any such meeting, and did not engage in any controversy, friendly or otherwise, with the honorable member for Fawkner. I do not entertain, and I never have expressed, the views that are attributed to me in the newspaper report, and I resent very strongly the published statement, which is as stupid as it is inaccurate. I sincerely hope that the mistake will be publicly admitted in a conspicuous place in a subsequent edition.
construction of lakes.
– Is the Prime Minister aware that the Public Works Committee has reported against the construction of one of the proposed lakes at Canberra? If so, in view of the importance of this lake to the general scheme of beautification of Canberra, will the right honorable gentleman give this House an opportunity to discuss the matter before it is finally decided?
– I suggest that the honorable member, if he wishes to take action respecting a report of the Public Works Committee, should adopt the ordinary procedure open to him to follow.
Loans to British Dominions
asked the Prime Minister, upon notice-
– The British Government has concluded agreements with the Governments of Canada, New Zealand, and Rhodesia, having for their object the settlement of migrants in those dominions. In addition, a number of agreements have been concluded with voluntary bodies. Particulars of these arrangements are contained in the annual report of the Oversea Settlement Committee for 1925, a copy of which I now lay on the table of the House for the information of the honorable member.
asked the Minister for Trade and Customs, upon notice -
– As far as possible, the information will be obtained.
Majority Recommendation - Agricultural Instruction
asked the Prime Minister, upon notice -
What does the Government propose to do in regard to the following majority recommendation of the Western Australian Disabilities Royal Commission, viz.: - “That the Parliament of the Commonwealth, in accordance with section 91 of the Commonwealth Constitution, express by resolution its consent to the State of Western Australia granting any aid to, or bounty on, the production or export of goods during a period of 25 years: Provided that if the Interstate Commission, after public inquiry, is of opinion that any aid or bounty is operating unfairly and to the disadvantage of any State of the Commonwealth, the Commonwealth may, by resolution, withdraw wholly or in part the consent so expressed?
– This question concerns a matter of Government policy, and cannot be dealt with in reply to a question.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow: -
Demand by the Performing Rights Association.
asked the AttorneyGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
Trade and Commerce
asked the Prime Min ister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the. Treasurer, upon notice -
– The information is being obtained, and will be furnished to the honorable member tomorrow.
Dr. EUGENE HIRSCHFELD.
asked the Prime Minister, upon notice -
Whether he will make available on the table of the Library the official file concerning Dr. Eugene Hirschfeld.
– As many of the papers are of a confidential nature, it is not considered desirable to place the file on the table of the Library, but I shall be glad to afford the honorable member an opportunity of perusing it at the Prime Minister’s Department.
asked the Prime Minister, upon notice -
With reference to the Government’s proposal . to conduct a secret ballot of unionists preparatory to a strike, in the event of the majority of the unionists concerned declaring by vote against the strike, . what does the Government propose to do with the minority if they decline to work, and persist in striking; will they be imprisoned?
– This refers to a matter of policy, which cannot be dealt with in reply to a question.
– On the 9th July, the honorable member for Herbert (Dr. Nott) asked me to state the amount ‘ of money paid into the Treasury under the heading of excise duty, by the sugar industry, since the inception of the Commonwealth. I am now able to state that the amount is £6,611,114.
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -
No. 21 of 1926- Commonwealth Public Service Clerical Association; and others.
No. 22 of 1926- Australian Postal Electricians’ Union; and others.
No. 24 of 1926- Australian Telegraphists and Clerical Assistants’ Union.
No. 25 of 1926- Fourth Division Officers’ Association, Trade and Customs Department.
Migration - Report of the British Oversea Settlement Committee for year ended 31st December, 1925.
In Committee of Supply: Consideration resumed from 21st July (vide page 4449), 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.
– After the debate on the interesting subject of wireless, I propose to tune in on the budget, although I realize that that subject is almost played out. Speaking at this stage of the debate, one must necessarily refer to matters already dealt with and figures previously quoted; but I shall endeavournot to weary the committee more than is avoidable. I congratulate the Treasurer and the officers concerned upon the very early presentation of the budget. It is not remarkable that the greater portion of a budget debate should relate to matters of policy rather than of finance, because, after all, the details of finance are dealt with by the able advisers of the Government. In saying this, I do not desire to detract from the services of the Treasurer (Dr. Earle Page), who is filling his high post with remarkable success. Government finance is a great and intricate subject, and the Commonwealth is indebted to the former Secretary to the Treasury, Mr. Collins, who is about to take up a responsible position in London, and the other officers of the Treasury, for their able management of the public purse, although I am bound to say that the financing of the policy promulgated by this Government and supported by honorable members on this side is easy in comparison with what would be the responsibility of the officials if they had to finance the policy advocated by honorable members opposite. Relatively speaking, the path which the Treasury officers are required by this Government to tread is strewn with roses. I propose to justify my support of the Government and its financial programme. It is worthy of note that even the honorable member for Yarra (Mr. Scullin), whose analytical mind and powers of debate in regard to all questions, particularly finance, must be recognized, did not seriously criticize the financial proposals of the Government. The faults he found in the budget related almost entirely to policy. One of the brightest features of the Treasurer’s administrative record is the business-like way in which the national debt is being redeemed by means of the sinking fund. It must be particularly gratifying to the people of Australia to know that the dead weight of war debt has been reduced by no less a sum than £28,500,000 within the last four years.
A number of remarks have been heard during this debate concerning the press, but they have been made in a more or less jocular vein. With those honorable members who have spoken in rather a derogatory manner about our leading newspapers, I am not in accord. The press has as great traditions to live up to as Parliament itself. How long would democracy last if it were not for the freedom of the press? I think that all honorable members are glad of the publicity that they receive through the newspapers, and credit should be given where it is due. I recall some eloquent words of the honorable member for Fawkner (Mr. Maxwell), when, with humourous sarcasm, he described the triumphant march of honorable members to the Federal Capital, where, he said, we should be free from the dreadful influences of the Melbourne news papers. I hope that when this Parliament reaches Canberra, those newspapers will strive to live up to the highest ideals of the press.
One newspaper, in referring to the national debt as amounting to £458,443,637, on the 30th June last, remarked that, when figures of those dimensions were mentioned, a kind of coma came over honorable members, and they seemed to take no interest in them. I notice that this newspaper did not analyze the figures, and point out that no less than £83,408,859 of the total represented amounts borrowed on behalf of the States, and that the war debt alone amounted to £304,546,643. Nor did it draw attention to the reduction of the war debt in the last four years by £28,500,000. It is interesting to know that £11,149,549 of the interest on the war debt is payable in Australia, and £5,974,806 in London. Not any of the interest is payable in New York. Of interest on the total national debt, £15,107,162 is payable in our own country, £9,181,483 in London, and £770,575 in New York. The honorable member for Maribyrnong (Mr. Fenton) remarked that, although sinking funds have been provided, the Government has proceeded with further borrowing. I shall show that that is inevitable in regard to certain capital expenditure. We find that the loans raised during the past year totalled £19,609,565 : but there was a decrease of the war debt during the same period of £6,647,554, so that the net increase for the year was only £12,962,011. Of the latter sum, the larger proportion represents money borrowed on behalf of the Postal Department. One cannot exclude the Post Office from financial calculations of this nature, since the Government has wisely decided that it shall not be used as a taxing machine. It provides its own sinking fund of 1£ per cent., with which to extinguish its debts in 30 years. The surplus on the Post Office for the past year was £163,371.
– If the surplus were larger, the Post Office would become a taxing machine.
– That is so. I compliment the Postmaster-General (Mr. Gibson) upon his administration of that department. Increased facilities, particularly in telephonic communication, have been given in rural districts; but, notwithstanding the progressive policy of the Post Office, it is expected that the surplus next year will be in the neighbourhood of £146,000.
I shall refer in detail to the sum contributed from the consolidated revenue to the national debt sinking fund. This matter was mentioned by the honorable member for Yarra (Mr. Scullin), who remarked upon the provision by which half the profits of the Commonwealth Bank were allocated in that direction. The total sum paid into this account under the Surplus Revenue Act is £13,681,305, but the contributions by the Commonwealth Bank since that act has been in operation amount to only £418,325. From consolidated revenue, including postal revenue, about £7,338,079 was paid. There was also a contribution from surplus revenue to the amount of £4,915,755, so that the amount paid from current revenue to the national debt sinking fund was £2,423,324. During the present year this payment will be over £1,000,000.
I regret that New South Wales is not a member of the Australian Loan Council ; but it has been possible for the Commonwealth and the other States to act in cooperation and to correlate their financial affairs. The Treasurer must be given credit for encouraging, if not initiating, the council, which has been of advantage to this country in many ways. It has, for instance, made inquiries with a view to ascertaining the amount of money available for investment in government loans in this country. One of its greatest achievements was the flotation of the £67,000,000 conversion loan at 5 per cent, interest; and it has also raised loans at 5J per cent, for the States.
Much criticism has been levelled against the board .of directors of the Commonwealth Bank. The criticisms of the honorable member for Yarra (Mr. Scullin) and of the honorable member for Werriwa (Mr. .Lazzarini) demonstrate, not the failure, but the success, of the act that provided for the creation of the board. It was never expected by those who supported the act that it would increase the trading business of the bank. It was clearly stated that the bank would be a central bank to deal particularly with matters of exchange and currency. It is gratifying^ that when the bank was put to a test it was not found wanting, for it averted a financial crisis shortly after that legislation was passed. One of the most serious crises that have menaced this country was then imminent, and it was clear that unless, prompt action was taken the wool industry would suffer seriously. When we speak about our trade balance we should bear in mind that the greatest factor in our export trade is wool. It was estimated at that time that the wool clip was worth £140,000,000. The bank took charge of the situation, and made advances to the trading banks. The honorable member for Yarra stated that although full advantage was not taken of the- issue of notes, the private banks had the benefit of the credit extended to them by the Commonwealth Bank. It was intended that they should have that; the Commonwealth Bank functioned as a central bank . and staved off the threatened disaster. It would have been quite impracticable for the Commonwealth Bank to deal with, individual traders. If all the boards created by this Government were as successful as this board, they need not fear criticism. Persons in my electorate benefited considerably from the action then taken by the Commonwealth Bank. The crisis followed on a slump in the cattle trade; and graziers who had abandoned the raising of sheep, and gone into the cattle business, were able to gain full bentfit from their return to their former occupation. If this legislation had not been passed, there would have been serious suffering in one of our great pastoral industries. The right honorable member for Balaclava (Mr Watt) made an interjection about “vanishing surpluses,” when the honorable member for Yarra was speaking. I should like to direct attention to the way in which the surpluses have vanished. If surpluses had not been available, the Government would not have been able to reduce direct taxation as it has done. A sum of £4,915,755 was applied to the redemption of loans, £4,000,000 to . defence, £750,000 to the construction of main roads, £100,000 to the encouragement of science and industry, and £100,000 to prospecting for oil and precious metals. Of the surplus of £186,944 this year, £100,000 will be allocated to further prospecting for oil and precious metals, and £86,944 to the payment of pensions. Much has been said about our soaring Customs receipts; but Australia is not the only country in which Customs receipts soar. In the United States of America the increase of Customs revenue since 1921 has been at the rate of about 80 per cent. It is interesting to note the headings under which our main expenditure occurs. I have not heard any criticism of the Government’s expenditure by any one who is in accord with its policy. Honorable members opposite criticize the expenditure because they do not approve of the policy; but if one agrees with the policy, most of the expenditure can be justified. The expenditure from revenue on the Commonwealth railways and Commonwealth territories is £730,347; but blame for that expenditure cannot be laid at the door of this Government. Our territories are an obligation from which wo cannot escape, and our railways cannot be abandoned. One can understand criticism of these items of expenditure by those who have to carry the financial burden. The north-south railway is both criticized and commended, but under the agreement with the South Australian Government this Parliament had no alternative but to vote for its construction. If that is admitted, it is useless to criticize the financing of the project. There is a contribution of £2.500.000 for defence. That expenditure is incurred only in accordance with the defence policy of the Government, to which I think every one of its supporters has subscribed. We have an increasing repatriation expenditure, but I do not think that any honorable member would suggest that we should use the pruning knife in that department. I should like to pay a tribute to the excellent administration of the Repatriation Act by the present Minister for Defence (Sir Neville Howse), who has done a great deal to improve the lot of our afflicted soldiers and war widows. Formerly it appeared as though the Repatriation Commission, in what it considered to be the faithful discharge of its duty, endeavoured to find every possible excuse for not granting a pension; but since the present Minister has had control of the department the policy appears to have been to discover any reason for granting one. I do not think the committee desires the Government to deal in a niggardly way with those who served the nation well in its time of extremity. It is quite possible that our repatriation expenditure will be heavier next year than it is this. Our expenditure for old-age and invalid pensions has increased. This was inevitable if the pension was to retain its value, foi- the cost of living has increased. Mau i indigent persons in the community after contributing directly and indirectly to the revenue of this country for many years find themselves, in many cases through no fault of their own, in financial difficulties in their latter days, and it is only right that we should help them. Bounties have also involved the Government in a considerable expenditure; but as no bounty is payable except by the decision of Parliament, criticism in that respect should be confined more to the principle than to the amount of money Involved. The Government always has the most careful inquiry made into the condition of an industry before it introduces a proposal for the payment of a bounty to it; and it is proper that we should ensure that industries are carried on efficiently before we assist them in this way. Those who have taken action to assist in marketing their own produce have merited the assistance that the Government has given them. I am particularly interested in the dairying industry. Unquestionable the Dairy Export Control Act. passed by this Parliament, which has been supported by legislation in various States, has done a good deal to assist the industry; and dairy producers are now conducting their affairs more efficiently and placing a better article on the markets abroad.
– What about the petrol tax?
– I carry on a small dairy myself, and I think the petrol tax will add about 5s. a year to my expenses; but T shall have a little more to say on that matter presently. The Government acted wisely in allowing the dairy farmers freedom to espouse or reject’ the Paterson stabilization scheme, and the dairymen are bearing whatever financial obligations it imposes on them. It might be suggested that we could rereduce our expenditure in various government departments. I have already had something to say on the value and efficiency of the services rendered by. some of our prominent Government officials, and I think a good deal could be said to the credit of many public servants who are not in such responsible positions. The postal officials scattered throughout the length and breadth of the land are rendering splendid service to the community, and a cheese-paring policy in connexion with them would not meet with my approval. They should be well paid for their services. Economies in connexion with the various departments cannot be made to any appreciable extent without endangering their efficiency.
– What is the opinion of the honorable member in regard to allowance postmasters and postmistresses?
– I, like some other honorable members, have made representations to the Government to rectify anomalies in respect to these officers. The Postmaster-General (Mr. Gibson) has informed us that the allowance paid to some of them exceeds the revenue received through the office that they conduct. Altogether, when one carefully examines the position it is quite easy for him to discover where the so-called vanishing surpluses have gone. The notable reduction in income taxation since 1921-22 of 47 per cent, has been of great value to the people, but there is one matter which affects the imposition of company taxation on co-operative butter factories that I desire to bring under the notice of the Treasurer. Mr. H. F. Mason, a public accountant in Sydney, who has had many years’ experience in taxation matters, and besides being interested in primary production is an auditor for several butter factories, has done excellent work in ventilating this grievance. The practice has been to tax the balance of profit remaining at the end of the year’s operation in the profit and loss account of these co-operative butter companies. These companies are not operating primarily to make a profit on their trading ; their main purpose is to improve butter manufacturing methods and the standard of our butter, so that it will command a ready sale. In these circumstances, I submit that the balance remaining in their profit and loss account at the end of their trading year is not profit in the ordinary sense of the word ; it is simply an amount which they are holding for the suppliers of their cream. Some of the factories have overcome the difficulty by creating what is called a de ferred payment account, into which, at the end of the year, they tr.ansfer whatever amount stands in the profit and loss account. In this way they show practically no profit.’ But some of the companies do not do this. Not long ago the Treasurer introduced a bill which was designed to relieve companies in this position, but unfortunately it has not had that effect.
– That legislation was brought forward after a discussion between the Commissioner of Taxation and these co-operative companies.
– Were the cooperative butter companies represented ?
– I am glad to learn from the Treasurer that the dairy companies were represented. They certainly should have been able to look after their own case. I am putting the case asit has been presented to me. Under section 4 of the amending act passed last session, they were exempt from taxation on the amount distributed as dividends, but the section stipulates that 90 per cent, of the commodities acquired by and 90 per cent, of the commodities disposed of by a company shall be acquired by or sold to its own members. If that provision of the act were strictly interpreted no cooperative dairy company could secure any relief under it, as while 90 per cent, of its supplies are acquired from its members only a few pounds of butter are sold to them. I quote the following from what the Commissioner of Taxation had to say with regard to the taxation of butter companies : -
The factory is held by a special legal entity called a company, which in turn consists of the separate individual dairy farmers who, through the company, are manufacturing their butter, &c, under modern methods which result in greater individual profit to the members than they could have secured if they worked individually.
Many cooperative companies of the kind mentioned propose to distribute the whole of the income received to the suppliers, and to make levies on the suppliers for the purpose of creating an assets reserve fund to meet the cost of reconstruction of factories and the installation of the most modern plant and machinery whenever it becomes available. A levy of this kind would not form part of the income of the company and -would not be taxable to it under the act……
Some co-operative companies and societies formed for the treatment, manufacture, and selling of primary products, which distribute the whole of their surplus profits to members and suppliers, at all times have a small undistributed surplus of profit, because it is a most difficult matter to arrange business affairs in large companies so as to bring about an exact equalization of accounts and complete distribution of profit. It has been claimed that any surplus which exists ia an amount which justly belongs to the suppliers of the company. The surplus is insufficient to pay a bonus, and is absorbed in payments to suppliers during the succeeding months.
I trust that the Treasurer will go into this matter with a view to rectifying the anomalies which have been brought under his notice.
– I shall discuss the matter with the, Commissioner of Taxation.
– I wish now to refer to the Government’s proposal to abolish the per capita payments to the States. It occurred to mewhen the Attorney-General spoke on this subject the other night that he most effectively answered the objections to the Government’s proposal. He certainly made a convincing reply to the case presented for Victoria in the pamphlet issued by Sir Alexander Peacock. The framers of the Constitution could suggest no definite provision to deal with this matter, and only a temporary expedient was adopted. The right honorable member for Balaclava (Mr. Watt) has suggested an annual reduction of 2s. 6d. per head in the per capita payment to the States. But, in my view, that would not be as satisfactory as the straight-out proposal of the Government. Under the right honorable member’s proposal the position would still be left indefinite, and there would be a recurrence of the trouble with the States every year. So far as any moral right of the States to the per capita payment is concerned, I think the claim is sufficiently met by reference to the fact that the amount required to meet war expenditure, interest, repatriation, and old-age and invalid pensions exceeds at the present time the total revenue from customs and excise. We are not in this matter able to make comparisons in considering the case put up by the States, because the State authorities have so far supplied no figures. I consider that the Attorney-General made a strong point when he referred to the fact that taxation has been reduced in the fields of taxation which the Treasurer proposes to hand over to the State authorities. As the figures submitted by the Treasurer were prepared by the officers of his department, I have no doubt that they can be relied upon. The principle upon which the Treasurer depends, that those who spend money should have the responsibility of raising it, is sound, though it does not seem to be very palatable to the State authorities. They should submit figures in this matter before they can expect that any serious consideration will be given to their claim. The Treasurer’s proposal possesses the advantage that it will, in time, do away with duplication.
– Not entirely.
– It certainly will do away ‘with it to a very great extent. The honorable member for Darwin (Mr. Bell) raised some difficulties in connexion with the matter, and specially referred to the difficulties which he considers likely to arise from the practice in the Central Office of aggregating incomes derived from more than one State, but I think it will be found that the difficulties suggested by the honorable member can be overcome. When the honorable member for Yarra (Mr’. Scullin) was dealing with this subject, he gave us the cheerful news that when the party to which he belongs comes into office, it will re-impose the land tax. The land tax is really misnamed. It was introduced in 1910 with the avowed object of bursting up large estates. In this connexion, I direct attention to the fact that the interference of the Federal authorities in matters that should be left to the State authorities, which has in this debate been complained of, is not new. Settlement on the land is essentially a State matter, and the legislation imposing the Federal land tax represented a distinct interference with that concern of the State authorities. The tax did not result in the breaking up of large estates to anything like the extent that was anticipated by those who introduced it. Fifty per cent, of the revenue derived from the land tax throughout the Commonwealth is collected upon city and town properties, the owners of which are in a position to pass on the tax. In their case, the tax is really an income tax.
– It is a tax on capital.
– It is a tax on capital, but the owners of the properties taxed in cities and towns are in a position to pass the tax on.
– In Victoria, very much more than half the revenue derived from the land tax is collected on city and town properties.
– I have said that the tax did not result in the bursting up of large estates to the extent that was anticipated. In dealing with the land tax, the honorable member for Gwydir .(Mr. Abbott) some time ago referred to the case of a man who had an interest in land of the capital value of £25,000, but from which in adverse seasons he received no income. In such a case, no income tax is imposed for the year in which no income is earned, but the land tax is imposed even though the owner of the land may have made no income from it, and will be obliged to pay the tax with borrowed money. It is not very cheerful to learn from the honorable member for Yarra that the infamous land tax will be re-imposed when the Labour party gets into power.
I wish to say a word or two on the subject of the main roads grant. It is unnecessary for me to say where I stand in relation to the policy of the Government to make grants for road development. I am already definitely committed to support it. When the first payment was made to the States to assist in road development, I gave it my support. The Prime Minister had announced, as part of’ the policy of the Government, its intention to make a grant to the States for road development to the extent of £20,000,000 over a period of ten years. I supported that proposal from every platform from which I addressed my constituents. I ‘am heartily in accord with the policy.
– Did the honorable member suggest how the money is to be obtained?
– I understood that it would be paid from revenue derived from customs duties; but I was not, when dealing with the subject during the elections, in a position to say whether additional taxation would be necessary for the purpose. The construction of roads for the traffic of the Commonwealth should certainly be regarded as a duty of the national Parliament. Up to the present, no difficulties have arisen in the administration of previous grants made for this purpose by the Commonwealth. The responsibility of the Federal authorities has so far been to see that the money is allocated according to the provisions of the act, and the administration of the grant has been left to the States. I do not anticipate that any difficulty will arise in the carrying out of the new scheme proposed for main road development. The advent of the motor car has entirely revolutionized traffic, and the State authorities are not financially in a position to meet the present situation. I believe that no one in country districts cares very much about the proposed petrol tax. I admit that it will be difficult to impose the tax equitably. The primary producers always contribute indirectly to certain industries, although they really receive no benefit from them. There is certainly some inequity about the proposed petrol tax, because a considerable portion of it will fall upon, people living in municipalities, which will receive little benefit from the expenditure on main roads. I am in sympathy with the statement made by the honorable member for Henty (Mr. Gullett), that the tax will be unjust to those municipalities and towns having a population of 5,000 and over; but there should, be no difficulty in adjusting this in the administration as between the Commonwealth and the States.
– A separate vote could be given for city areas.
– I admit that an anomaly exists, and when the matter comes up for discussion I shall give the honorable member’s suggestion due consideration.
– Does the honorable member think that it is the function of the Commonwealth Government to raise revenue through taxation and to hand it to the States?
– This Government is imposing taxation to carry out a specific policy, and the State instrumentalities are to be used to give effect to it. This is not a new matter. The land tax was imposed really to break up large estates and to enable more settlers to be placed on the land. There may, of course, be some overlapping between the Commonwealth and the States; but they could without difficulty make satisfactory arrangements between themselves. We, are one people, with one destiny. The increased cost of petrol represents but a small expense even to the man on the land. Of course, he does not like to put his hand into his pocket more than he can help, and perhaps he grumbles as much as the next man about taxation in general; but I do not think that he will cavil at the tax when he knows that for an extra expenditure of a few shillings in the purchase of petrol he will save himself pounds and pounds in his expenditure on motor tires and other requirements because of the provision of better roads. I have endeavoured to give my reasons for supporting the policy of the Government as outlined in the budget. I am prepared to support the Government’s platform, and I shall have no qualms when I face the electors during the forthcoming referendum campaign.
.- No one would accuse the honorable member for Robertson (Mr. Gardner) of trying to mislead the committee; but I object to his statement that the honorable member for Yarra (Mr. Scullin) offered no real criticism of the budget. I would remind him that the honorable member for Yarra summed up the whole of his criticism in the concluding sentence of his speech -
My final word on this budget is that it discloses that in the four years that the present Treasurer has been in office direct and indirect taxation has increased, expenditure from both revenue and loans has increased, foreign imports have flooded the country, and notwithstanding that we have had some wonderfully bountiful seasons, the national debt has continued to increase.
The honorable member for Robertson must have been absent from the Chamber when that speech was delivered.
I wish now to refer to our debt to the British Government, This is a matter of great importance. An effort should be made by the Commonwealth Government to secure a reduction of the interest rate on that debt which originally amounted, in round figures, tc £92,500,000. A funding agreement was entered into with the British Government in 1921, under which we agreed to pay 6 per cent, on our original indebtedness, the interest on the loan being 5 per cent., and the repayment of theprincipal, 1 per cent. Our annual payment under- that funding agreement is, according to the budget, £5,548,000. Since 1921, the debt has been reduced to £86,000,000. The total amount that we have paid to the British Government since the agreement was made is, approximately, £25,000,000, of which £5,000,000 represents repayment, and £20,000,000 interest. But the British Government has given considerably better terms to Italy, and is at present negotiating a similar agreement with France. As every one knows, Britain has funded her debt with the United States at the interest rate of 3 per cent. I fail to see why this country should be committed to an agreement which compares unfavorably with those extended to foreigners. In view of the sacrifice that this young country made during tha war - nearly 60,000 of our dead lie beneath the fields of Europe to-day - and the heavy burden of debt that we are carrying to-day, we are at least entitled to the consideration extended by the United States to Great Britain, or by Great Britain to Italy. Our debt of £92,000,000 was incurred to maintain and equip our troops overseas, and we could not have a stronger claim for a reduction of interest on that debt than that it was incurred in serving the British Empire. The Right Honorable Philip Snowden, speaking in the House of Commons, said -
There was a total indebtedness to this coun try (Great Britain) of about £2,100,000,000, and that all that had been received up to tm present was a first instalment of £2,000,000 of the Italian debt.
We and the other dominions, apart from Italy, are the only nations that are attempting to redeem our indebtedness to Great Britain. Mr. Snowden continued -
The Italian debt amounted to about £600,000,000. There was no provision in Hie agreement concluded with the Italian Government for the payment of a single penny of interest. Italy was to pay, upon the average, for the next 62 years, £4,000,000 a year, or altogether about £250,000,000. The cost of that to Great Britain, funded upon the terms of the American debt, was £1,500,000,000. The difference between those two figures was the burden which, for the next 62 years, would rest upon the shoulders of the taxpayers of this country.
Italy’s debt amounts to £600,000,000. The British Government has, in effect, written down Italy’s debt to a value of £75,000,000, under the terms of the agreement. Now is the time for this Government to approach the Imperial Government, or to raise the question at the Imperial Conference, to obtain for Australia the same terms as were extended by the United States to Great Britain, or by Great Britain to Italy. If wo had paid no interest on our debt, it would by now have been reduced by about 25 per cent., and had the interest rate been only 3 per cent.,. it would have been reduced materially. That matter is of sufficient importance to require the Treasurer to make a statement to the committee concerning it. I know that there may be difficulties in the way of approaching the British Government for a reduction in the interest rate, since five years ago we agreed upon the terms under which the debt was to be repaid, but conditions have changed since then. Great Britain has seen fit to give better terms to other nations, and we therefore have a strong claim for consideration.. Members of the British House of Commons and Englishmen who visit out shores from time to time have said that Australia receives immense benefits from the Motherland. In this instance Great Britain has driven a hard bargain, and we should protest against it. The amount that we are paying her in interest on our debt to her would contribute materially towards the development of Australia and the determination of many of the problems that confront us.
Recently in Stead’s Review appeared an interesting article written by a prominent banking authority. Referring to the Commonwealth Bank, it stated that during the war that bank had handled the flotation of our loans, paid all commissions and advertising, and the total expenditure incurred did not exceed 5s. 9d. per cent.; but that under the management of a new board, from which so much was expected by the Government, the expense of floating loans has greatly increased, and an underwriting commission of £300,000 has been paid for the first time for the flotation of loans for this Government. Such a statement calls for some reply from the Government.
In the forefront of the Government’s policy at the last election was the expenditure of £20,000,000 for housing. What is the reason for the delay in commencing this scheme? It is dismissed in the budget-speech with the statement that negotiations with the Commonwealth Bank are proceeding. I earnestly trust that the Government will co-operate with the State Governments in this matter. Confusion and chaos will result if, while the six State Governments have housing schemes, the Commonwealth embarks upon one of its own, and the War Service Homes Commission continues to “ provide homes for ex-soldier applicants. Why not try to co-ordinate all these schemes and reduce building and overhead costs to a minimum by the creation of a joint Commonwealth and State housing authority ? Why the Commonwealth Government should depend upon the Commonwealth Bank to arrange for advances is beyond my understanding. I do not desire to criticize the Commonwealth Bank management in this regard to-day, but the excessive costs, faulty construction, and other troubles and difficulties that arose in the early history of the War Service Homes Commission were due chiefly to the fact 1 that the bank was financing the scheme. The Kirkpatrick scandal and other questionable features of the Commonwealth Bank’s association with the housing of returned soldiers are still fresh in our memories. The Government would be wise to utilize the existing machinery of the War Service Homes Commission, which, after many initial mistakes, has gained wide experience and is working efficiently; in New South Wales, at any rate. In connexion with any housing scheme, the most urgent requirement is not the making of advances to intending builders, but the giving of expert and disinterested advice to applicants. There is more roguery in connexion with the buying of land and houses than with anything else, with the possible exception of insurance. Thousands of workers who go to banks and land agents for financial assistance to acquire homes know nothing of mortgages, and are not able to calculate the burdens they will have to carry for possibly 20 or 30 years. The result is that they enter into contracts which, if sickness or unemployment overtakes them, they are not able to fulfil, and they get into financial difficulties. A government housing department should be established to advise persons who desire to acquire homes, and protect them from unscrupulous land and estate agents.
In regard to the Government’s main road policy, the honorable member for Robertson (Mr. Gardner) and others have laid the flattering unction to their soul that the Attorney-General (Mr. Latham) disposed of the excellent case put up by the right honorable member for Balaclava (Mr. Watt). I have carefully read the Attorney-General’s speech, and I do not agree that he answered conclusively the arguments of the right honorable member, who said that the main roads proposals of the Government were an invasion of a sphere of activity specifically reserved by the Constitution to the States. In support of that statement he quoted the words of the AttorneyGeneral two years ago.
– The Attorney-General contradicted the right honorable member’s statement.
– Not to my satisfaction. He endeavoured to dismiss the point raised by the right honorable member for Balaclava by saying that the grant for the construction of main roads was a form of financial assistance to the States. The Constitution makes provision for the Commonwealth Parliament to grant assistance to the States, but not assistance trammelled by conditions, such as a stipulation that the money shall be spent only in the manner specified by the Commonwealth Government.
– In what way does the present main roads policy of the Government differ from the proposal that the Attorney-General condemned two ‘years ago?
– There is no essential difference between the two. Although I do not presume to put my opinion against that of the AttorneyGeneral, my interpretation of the provision in the Constitution relating to the giving of financial assistance to the States is that if the framers of the Constitution had intended this Parliament to embark on a policy of roads construction, they would have included that activity amongst the enumerated powers.
– Cannot anything be done by agreement with the States?
– In this instance there is no possibility of agreement between the Commonwealth and State Governments. In fact we have been told to-day that the Attorney-General is issuing a writ against the South Australian Government because it wants to build and provide for the roads in the way that it suits them best. This action will open up a very interesting constitutional question, and no doubt in due course the High Court will declare just how far the Commonwealth may invade a State sphere.
– The main roads proposal will not be proceeded with unless the States agree to it.
– That has not been settled. We have a definite ‘assurance from the States that they are opposed to the increased duty on petrol.
– But the duty is now being collected.
– Yes. The Constitution certainly provides that the Commonwealth may assist the States in the construction of railways, and I contend that if it were intended that we should assist the States in regard to the construction of roads, the Constitution would say so. If instead of antagonizing the States and causing confusion by meddling with roads, the Government proceeded with its policy for the unification of railway gauges, its proceedings would at least have complete constitutional justification. The Government is proposing an invasion of a State sphere of legislative and financial activity that the Constitution never contemplated, and its action is strongly resented by the States. Many of the powers vested in the Commonwealth by the Constitution no government has ever attempted to exercise. If the present Government desires an outlet for its surplus legislative energies, it might exercise its constitutional right to unify the laws relating to insurance and weights and measures, and in various other directions contemplated by the Constitution.
I read with alarm the serious and sensational statement made by the Minister for Health (Sir Neville Howse) at a conference of State Ministers for Health and medical officers held in Melbourne yesterday, when he drew attention to the lack of proper facilities for grappling with diseases which constitute a great menace to the future of this nation. His speech amounted to an indictment of the Government of which he is a member. In the financial proposals of the Ministry only £200,000 is set aside for health, and the Treasurer’s budget speech dismissed the subject with the following paragraph : -
The recommendations of the Royal Commission on Health, which reported during the last financial year, have been taken earnestly into consideration by the Government. It will not be practicable immediately to bring into operation the extensive programme included in the recommendations, but the Government has made provision to give effect to these recommendations so far as is possible.
A conference between the Commonwealth and State Ministers of Health is being held during the present month to agree on the best methods to this end.
– And the Treasurer, also, is a doctor.
– Yes, ,and has on many occasions referred to the menace of disease.
I again complain of the policy of the Government in regard to old-age and invalid pensions. At the present time, of the pension of £1 a week, 10s. 6d. is paid to institutions for the maintenance of their pensioner inmates, and 4s. is given to each inmate. The remaining 5s. 6d. is retained by the Commonwealth. I trust that the Commonwealth will pay this 5s. 6d., which it is wrongfully withholding, to either the inmate or the institution. Either course would probaby produce greater comfort for the unfortunate invalid and aged people who are forced to seek sanctuary in these establishments.
On many previous occasions I have referred to the Spahlinger treatment of tuberculosis. Some days ago the Minister for Health admitted, in reply to a question I asked, that Dr. McKenzie Sinclair had returned from Geneva convinced of the efficacy of this serum for the treatment of tuberculosis, and was presenting a report thereon to the New South Wales Government. The Minister also said that he was awaiting the result of the investigations being conducted by the British Government. I again appeal to the Government to re-open negotiations with Mr. Spahlinger with a view to making this treatment available to the unfortunate sufferers from tuberculosis in our midst. I had an opportunity recently of talking to Mr. W. P. Walsh, who went to Geneva in January last. He saw Spahlinger, and submitted to him a number of questions, to which he received the following reply: -
Institut Bacteriotherapique, Carouge-Geneve. Telephone Stand 62-65. Adresse Telegraphique Serum-Geneve, Hotel de l’Hermitage, Nice. 10th February, 1926.
Dear Mr. Walsh, I apologize for not having answered your questions at once. Since you left, I have been 1 again and quite unable to attend to my correspondence. You ask me:
Whether I am satisfied that I can cure consumption in any stage.
This is not a question for me to answer, as I should not express an opinion on my own work. It is for independent medical men who have used my sera and vaccines to answer to this question. - The most competent of these are Doctor Stéphani, of Montana; Doctor Trechsel, of Geneva; Doctor Leonard Williams, in London; Doctor James Watts, of Southport; and so many others, whose names I can give you if you wish to study reports which have not yet been published. . You have received a pamphlet called, “Evidence con,cerning the Spahlinger Treatment.” It was edited by a group of English philanthropists, among them Sir Arthur Stanley, chairman of the British Bed Cross Society. If you read this pamphlet carefully, you will be able to form an opinion regarding the efficacy of my sera and vaccines.
You wonder why I do not sell my treatment to any government?
I am quite prepared to sell my vaccines for cattle, but I do not wish to commercialize or to sell my treatment for human beings. I should have published all details concerning my method long ago, had I not feared that it would have enabled commercial concerns to prepare sera and vaccines claimed to have been made according to my formulae (although this would not have been the case), and put a large quantity of useless preparations on the market, thence discrediting my work, and thus depriving sufferers of tuberculosis from its benefits.
There is no reason why I should not sell my bovine vaccine, which would be of a great economic value to the purchasers, and supply me with the necessary funds to carry on my work on human tuberculosis.
Why do I not treat test cases?
When I first started to treat patients in 1912, I was faithfully promised that, if these cases would recover, I would get all financial assistance I needed). ,: These (patients have recovered; but, in spite of it, I have had to spend my own fortune to go on with the work. In 1913, when I started to work in London hospitals, I was told that if only 50 per cent, of the cases under treatment would get well, I would have the world at my feet. Not only did these patients get well in 1913-14, but the majority of them are well and alive to-day. Yet my struggles are not over.
I have taken one after another test ‘ cases, but no official help has materialized. At present, I am in a difficult situation to take test cases, as I only dispose of partial sera and vaccines. Is it fair to form an opinion on a treatment when only one-third of it is available? Yet, with my partial sera and vaccines, I have saved many sufferers, but I do not think I am justified in making an official test with partial treatment. There, would be no necessity for preparing complete treatment if the partial one was just as effective.
You ask me whether I had not returned unconditional grants made to me?
I have not.
You have probably in mind my agreement with the British Bed Cross Society. Let me explain that, before I entered into an agreement with that society, I told the chairman and its other representatives how much funds were required to carry on the work. In the British Bed CrOss Society’s agreement, I was offered £30,000 on condition that I would supply every year 120,000 doses of sera and vaccines. As the £30,000 was not enough to pay off my liabilities, get rid of the mortgages on my institute, and manufacture the number of doses of sera and vaccines required by the Red Cross Society, a clause was added, on my request, to the agreement, stating that I was at liberty to cancel it within a period of twelve months, provided I returned the funds I had received. As, during those twelve months, I could not get the balance of the money which would have enabled me to work unhampered and carry out the terms of the agreement, there waa nothing else to he done but to return the funds, which I did. I shall send you a photograph of the original agreement as soon as I get back to Geneva, and you can then draw your own conclusions.
My intention is to reproduce complete serum and vaccine and make official tests in every country. Owing to years of struggle, disappointments, and financial difficulties, my health is not what it used to be, I am sorry to say.
I wish I were not everlastingly bothered with correspondence, official questions, and letters to answer, as it takes so much valuable time to deal with these things. 1 am not in a position to keep an expensive staff, and must, therefore, devote all my time to my technical work. You will agree with me that it should not Be wasted in correspondence.
If anybody would give me a free donation, I would only be too glad to accept it. I have spent all my family’s fortune, worked day and night, given the best years of my life and my health to those who suffer from tuberculosis; and, surely, I am entitled in return to get sufficient help to carry on my work in the interest of all sufferers.
I wish you a very pleasant journey home, and thank you once more for the effort you are making to help my work in the interest of those who suffer from tuberculosis.
With kindest regards,
I hope that the Minister for Health will deal at a later stage with the various statements contained in that letter. I trust that in view of the great number of sufferers from tuberculosis in Australia, of whom 3,000 die every year, some part of the efforts at scientific research will consist of a further investigation of Mr. Spahlinger’s method of treatment in Switzerland.
– The Government could establish Mr. Spahlinger in Australia.
– Yes. The final appeal in the letter is . pathetic. The writer’s integrity and honour are made patent by his refusal to sell his treatment, or to use any money that has been lent to him other than in accordance with the conditions under which it was provided. He has proved his bona fides to my satisfaction, and to that of thousands of others, not only in Australia, but also in other parts of the world. Time will not permit me at the present stage to discuss other phases of this subject, but I hope to make further observations upon it when the Estimates are being discussed.
.- The Treasurer (Dr. Earle Page) has been widely congratulated upon the record he has established in bringing down the budget so soon after the close of the financial year. I am sure that the honorable gentleman would gladly concede a generous share of the credit for this to his officials throughout the Commonwealth, whose extraordinary efficiency has enabled him to present the budget so early as the 8th July. The Minister shares with the first Treasurer of the Commonwealth, the late Sir George Turner, another record. Both have- delivered four financial statements. Sir George Turner presented the first four budgets of the Commonwealth Parliament, and the present Treasurer has presented the last four. Just as continuity of policy is essential in dealing with national problems such as defence and migration, so is a prolonged term of office’ helpful to a Treasurer who looks ahead and having visualized the financial requirements of the Commonwealth, does not hesitate to bring in legislation to meet them. I think that the present Treasurer can claim that he has adopted a far-sighted policy in that respect. I have had the temerity to suggest to my own constituents that the life of the National Parliament should be five or six years, instead of three, an opinion shared, I think, by many others who cannot be considered . personally interested. A Parliament that lasts only three years cannot accomplish as much good work as one elected for a longer period. As a rule, little is done by a Parliament in its first and third years, most of its legislation being passed iu -the second session. That statement must be somewhat modified in its application to the work of the present Parliament, because to judge by the progress we have already made, we shall, at the end of our three-year period, have a considerable record of good legislation to our credit.
The Treasurer pointed out in his budget that the five-year programme announced in the budget of 1924 to improve the army and navy, and the air services, and to enlarge the organization of a munitions supply, was being actively pursued. He added that the building of the two 10,000- ton cruisers, two submarines, and a seaplane carrier was proceeding, and that the Government had agreed to make a payment to New South Wales of £135,000 as a subsidy towards the cost of a floating dock at Newcastle on the understanding that it would be capable of accommodating the new cruisers. He further stated that during the past financial year a satisfactory advance had been made with the developmental services, including the enlistment of personnel for the cruisers and submarines, the extension of oil fuel facilities, the training of the Royal Australian naval reserves, and the purchase of munitions, artillery, equipment, &c. He pointed out that there had been substantial progress in the- building of munition factories and in air force buildings at Point Cook, Laverton, and Richmond, and that additional personnel would be provided during 1926-27 for the manning of the submarines. There are in Australia, as in most parts of the world, a few persons who believe that we should not spend any money on national defence, but should rely more or less upon chance.
– I do not think those persons are connected with political life.
– Perhaps not; but there are a few of them, even in Australia. There are also those who go to the other extreme, and urge the spending of far more money than it is possible for us to dream of spending. The great majority of the people, however, believe that it is the first duty of a national government to see that adequate provision is made for the defence of the country, if, unfortunately, we should ever be called upon to defend it. In making that provision, of course, due regard must be had to our financial capacity and our man-power. It is recognized that such a defence policy is necessary as a precautionary measure - a form of national insurance, and that on no account must it be allowed to lapse. These are the views of the citizens who to-day are, perhaps, more or less concerned about this matter, after having read the last report of the InspectorGeneral of the Commonwealth Military Forces, Sir Harry Chauvel. The subject of defence should not be treated in this or any other Parliament as a party one. That Australians are a peace-loving people cannot be denied. We wish to be always on friendly terms with neighbouring nations, and to carry on the development of this country unmolested. We are not influenced by the ancient hatreds and fears which for centuries past have disturbed the peace of Europe, and which even to-day make it difficult for some of the older nations to feel that their security is assured. Although in a time of great emergency Australians have shown their readiness to leave their callings in city and country, and were prepared to fight in foreign lands for a cause they considered just, they are essentially a. peaceloving people; no other nation has a greater desire to be left alone to work out its own destiny. We must recognize, however, that the best way of securing a lasting peace is to place the country in a position to defend itself. The League of Nations is the hope of the world, but while there remain outside that League countries which represent one-fourth of the population of the globe, it will be severely handicapped in its beneficent work. Unproductive expenditure, such as that on defence, is always begrudged. But as we expend large sums of money to protect ourselves against ill-doers - for instance, we maintain prisons and provide police forces, light our streets, and buy locks and keys - we should recognize that it is necessary to take precautionary measures against a possible enemy from overseas. The Prime Minister, in a statement the other day, removed the impression from the minds of some people that the report of the Inspector-General of Military Forces referred to the Commonwealth’s general defence undertakings. It refers, of course, to military expenditure only. I should like to quote briefly from the introductory and general remarks in the report, in which Lieutenant-General Chauvel states -
Before considering the various aspects of the policy of the Military Board during the past year, I desire once more to offer a brief review of the military situation of Australia which has led to the adoption of that policy.
In my report submitted on 31st May, 1924, I referred to the effects upon the defence of Australia brought about by the reduction of -the British Navy to a one-power standard. I wish again to draw attention to the fact that the dependence of Great Britain upon open sea communications, which is the primary factor in determining the location of the fleet in peace and its employment in war, may render it impossible for the navy to operate effectively in the Pacific for some time after the outbreak of war.
Although, therefore, it is true that the defence of this country is ensured primarily by the British Fleet, so long as there remains a possibility that the fleet maybe retained in war in European waters, the forces of Australia must continue to ‘be regarded as the ultimate means of defence and the primary means of obtaining that local security which alone will enable the -British Fleet to concentrate its maximum strength at the decisive point, wherever it may he, unhampered by the concurrent necessity of providing for the immediate local defence of Australia.
In my report, above quoted, I defined in the following terms the policy which, following upon the agreements reached at the Washington Conference, and, in view of the existing financial stringency, had been adopted by the Military Board: -
To maintain the divisional organization in nucleus form within the limits prescribed by parliamentary votes; to produce and train the leaders (officers and noncommissioned officers) ; to inculcate the elements of discipline in the annual quotas of trainees who comprise the nucleus, and to lay the foundation for more advanced training.
To procure (if possible, within a fixed time) the requirements of the army in arms, armament, equipment, ammunition, and other necessary stores.
These aims remain unchanged. They cannot and are not expected to result in the production of an army capable from the moment of mobilization of undertaking active operations. They are designed rather to retain an organization which will permit the army to be mobilized, to provide for its equipment, and to ensure that, at a time of crisis, there shall be available, in sufficient numbers and with sufficient training, leaders capable of completing the training of the army on scientific lines, and of leading it in war upon sound and uniform principles, provided that time is available in which to complete the training of the rank and file.
The fact that time is necessary, after the outbreak of war, in which to complete the training of the army, is a considerable risk in itself. The adoption of . a policy which would eliminate this risk is not possible, on account of the limitations imposed by the present restricted financial votes.
It will be readily realized that, as a result of the late war, and of the considerable development which has taken place since the war, the armament and equipment of an army have undergone marked increases, whilst war experience and constant improvements in design have led to more scientific methods in their employment. In consequence, the organization of an army has become more complex, and its training wider and more varied. The co-operation of aircraft, the employment of artillery, the speed, radius of action, and power of tanks, and the armament of infantry, have all undergone marked development. These, together with an ever-increasing employment of mechanical means of transportation, are extending the scope of military training to an almost unprecedented degree,, and are making ever more difficult in war the tasks of commanders, staffs, and regimental leaders.
It is apparent that these developments have increased the cost of military preparation very considerably. A comparison of the amounts expended on military preparation before and since the war is, therefore, relevant. The amounts are inclusive of all military expenditure other than war expenditure -
When the decrease in the purchasing power of the pound sterling is taken into consideration, in conjunction with the increased cost of military preparation which hasbeen mentioned, it will be realized that to place the Australian Army in a reasonable state of preparedness is not possible with the funds now available.
He also points out that the nucleus organization requires expansion, and that the arrangements for training leaders are inadequate. The only other portion of the report which I wish to quote is the following remarks on coast defences: -
Owing to the change in the naval situation and the increased range of naval guns since the late war, the armament of our forts has given cause for grave anxiety, and the War Office was asked for the advice of the Com-‘ mittee of Imperial Defence regarding their re-armament. The recommendations of the Committee of Imperial Defence were received on the l1th December, 1925. The approximate cost of carrying out these recommendations has ‘been estimated by the Military Board, and a programme . submitted covering a certain period. If this programme is approved, it will be quite impossible to provide for any portion of it out of the normal allocation made to the Military Forces from the Defence vote.
As we are frankly depending on the British Navy for protection from invasion, it is considered that the provision of secure bases to enable its ships to operate in our waters is of sufficient importance to warrant special financial provision being made.
It is recommended that this course be adopted, and the work commenced without delay.
The policy referred to by LieutenantGeneral Chauvel is intended to retain an organization which will permit the army to be mobilized, to provide for its equipment, and to ensure that at a time of crisis there shall be available in sufficient numbers, and with sufficient training, leaders capable of completing the training of the army on scientific lines, and of leading it in war upon sound and uniform principles, provided that time is available in which to complete the training of rank and file. He states quite definitely that to place the Australian army in a reasonable state of preparedness is not possible with the funds now available. He refers to the shortage in permanent personnel, and points out that this is one of the main obstacles in the way of the training of leaders. With regard to the provision of equipment, he points out that although a. commencement has been made with the munitions programme approved by the Government, it will be many years before the requirements of the army are met. It is pointed out that the increases necessary, to which attention has been drawn, are not designed to augment the scale of war preparation beyond the policy adopted during the past three years. They are necessary increases in expenditure if we are to conserve our power to mobilize, equip, and train an army of two cavalry divisions and five infantry divisions effectively. The Prime Minister referred to the Government’s policy of defence generally, particularly to naval expenditure; but he did not answer the Inspector-General’s statement that the necessary funds had not been made available to carry out the definite policy laid down in 1924-25 as regards military expenditure. I appeal to the Government to inform this House and the country whether provision can be made in the direction indicated by Sir Harry Chauvel.
Defence and migration are subjects that are indissolubly linked with each other. Six million people cannot undertake the defence of a continent with a coast-line of 12,000 miles, and the Minister stated the other day that to attempt it would cost £50,000,000 a year for ten years at least. The developmental commission shortly to be appointed, will, I hope, recognize the wisdom of encouraging industries which, in time of war, can be used for war purposes. We should do all we can to manufacture in this country engines for aeroplanes and other forms of mechanical transport. It is astonishing that hardly any tools are made in this country. I doubt whether there is a saw, chisel, or hammer used in the Commonwealth that is manufactured here. There are two important facts that we must not overlook in connexion with defence. The first is that we are dependent upon a citizen force army. In the great test of the war our citizen forces proved worthy, and I doubt whether there could be any greater tribute to their worth than the success of the Australian Imperial Force. The same encouragement is not given to the citizen forces to-day as was given to them before the war, and while expenditure continues to be curtailed, I am afraid our citizen forces must lag. Under existing conditions young men are not encouraged to serve their country in that force. We depend for our defence todav, as in the past, primarily upon the British Navy, and there is no denying that in the event of trouble it might be some time before that Navy could come to our assistance. A country without coastal defences, without an army, and without any organization for the rapid mobilization of an army, is a very tempting lure to an enemy. I again appeal to the Government to treat this report, as I have no doubt it must, with the seriousness it deserves. Having had the privilege of knowing Lieut. -General Chauvel for many years, I can say that he would not make such a report without having good ground for it. It is worthy of the consideration, not only of the Government and Parliament, but also of the people of this country.
I should like to refer also to the problem of repatriation. Each budget speech makes shorter reference to the’ work of repatriation, thus indicating that the problem is gradually becoming a smaller one. In my opinion, it has now reached a most difficult stage, by reason of so many of the cases that remain to be dealt with being of a difficult nature. The Treasurer, in his budget speech, stated -
The cost of war pensions is still increasing owing to the birth of children to pensioners and to liberalizing the conditions under which pensions are granted. No immediate reduction in the numbers applying for medical attention is anticipated. Certain factors, such as increased age, progress of disease, and complications of war disabilities with the ordinary diseases of civil life are likely to cause the numbers to be maintained throughout the ensuing financial year.
The conditions under which pensions are granted have been made more liberal. One of the most difficult problems we have to deal with concerns the aggravation of pre-enlistment disability. I have spoken upon this matter on numerous occasions in this chamber, and have pointed out that, in this particular kind of war pensions, Canada is more generous than Australia ; but I am hopeful, though not at all certain, that the recent instruction issued by the Minister regarding the interpretation of the vital words “material degree,” contained in the 1921 amending act, will meet the cases I have in mind. A comparison of the pensions payable throughout the Empire discloses that the provisions of the Australian Soldiers’ Repatriation Act are indeed liberal. Only one of the various countries engaged in the great war has in any sense improved on them, and that is Italy. I understand that the Repatriation Act passed by the Italian Parliament places the onus on the Government of proving that an ex-soldier has not suffered through his war service, whereas in our case the onus is on the soldier to prove that he has so suffered. In that way, perhaps, it may be said that the Italian Government treats its men more liberally than the Australian Government; but, when one takes into account the amount of pension actually payable, the position of the1 Australian soldier is far superior to that of the ex-service men of any other country. Other factors which contribute to the betterment of war-disabled soldiers in the Commonwealth are, that pensions are payable in respect of their wives when they marry after their discharge, and also in respect of their children born subsequent to their discharge. I think these conditions apply only to Australia. In certain cases of dependants, where the circumstances justify, living allowances are granted, in addition to the war pension. At the 30th June. .1926, 252,609 pensions were in force in Australia, and our annual liability was £7,217,704. According to the latest figures available, 6,435 soldiers’ widows are receiving pensions. I feel that these widows should be guaranteed a minimum pension of £2 2s. per week. The Minister for Defence recently informed the House that -
The Government has decided that widows who wore being paid a pension of £1 3s. 6d. per week, or, if they had dependents, £2 2s., shall be sure of an income of not less than £2 2s. Thus, under the act, a soldier’s widow receives a minimum of £1 3s. 6d. per week, and the Repatriation Commission has discretionary power to increase the rate up to £2 2s. per week where the widow has dependent children or where her circumstances are such that, in the opinion of the commission, an increase from £1 3s. 6d. is justified. In all cases where the widow . has a dependent child or children, the practice has been, and is, to grant the £2 2s. maximum, exclusive of the pension of the child or children. It is found in some cases that when the child reaches the age of sixteen years, and, therefore, automatically loses his or her pension, some hardship is thrown on the widow. The whole question has been thoroughly considered, and it has been decided that war widows without dependent children shall receive as pensions either the £1 3s. 6d. per week minimum provided under the act, or such larger amount as will, together with the widow’s other income, if any, ensure to her a total income of £2 2s. per week Consideration has also been given to soldiers’ widows who, by re-marriage, have forfeited their pension, which, under the present regulation, continues for only two years after re-marriage. Some of the widows have married a second, and even a third time, and the Government has decided that a soldier’s widow whose pension has been cancelled because of her re-marriage may receive a living allowance if she is without adequate means of support after the death of her second, or subsequent husband.
It is my opinion that these widows should receive a minimum pension of £2 2s. per week, and I trust that the Minister will again give this matter his sympathetic consideration. Because a soldier’s widow is thrifty, and does her best to augment her income by going out to work, she should not be liable to have her pension reduced. I think she should be placed in the same position as a soldier, whose pension is payable irrespective of whether he is in receipt of an income of £1,000, £2,000, or even more a year. If the Government would accede to this request it would act graciously and generously towards these widows. Up to the 31st March, 1926, the Commonwealth had spent . £161,132,865 in making provision for its soldiers -
The Soldiers’ Children Education Scheme is a praiseworthy’ part of our repatriation activities. Under it assistance is granted to the children of deceased and totally and permanently incapacitated soldiers from the age of thirteen years to complete an apprenticeship in trades or for training for professional careers. The allowances are of a liberal character, ranging from £26 to £78 per annum, if the beneficiary is living at home; and from £52 to £130 per annum if the beneficiary is away from home. These amounts are in addition to any ‘ pension that may be payable. These children are thus afforded the opportunity to obtain competence to follow skilled trades and technical or professional careers, and without it many of them would drift into blind-alley employment, which would eventually re-act to the detriment, not only of the children, but also of the community. The number of applications that have already been approved under this scheme is 6,260 ; the expenditure to the 31st March this year was £416,318; and the estimated total expenditure involved is approximately £1,250,000. I am sorry to say that the scheme does not include the children of blinded soldiers, and I should like the Minister to explain why they are ineligible to participate in its benefits? Seeing that for pension benefits, the blinded ex-soldier is placed in the same category as the totally and permanently incapacitated ex-soldier, I think it only reasonable that there should he no differentiation against his children so far as the soldiers’ children educationscheme is concerned. I ask the Government to give earnest consideration to this point.
Under the arrangement between the Commonwealth and the State Governments, the Commonwealth has found money for the States to purchase land for individual soldiers, or to carry out public works to open up land for soldier settlement; in addition, the Commonwealth has advanced up to £625 per settler as working capital for stock, implements, improvements, &c. The total number of service men settled under this arrangement is 34,995; and the expenditure to the 31st March totalled £35,001,941. The Repatriation Department has also assisted soldier land-settlers to the extent of £640,444, for sustenance while they were waiting for land, and for a return from their land; and it has paid the fares, removal expenses, &c, of the men and their families to their place of settlement. Of the amount of £1,411,373, due as quarterly instalments at the 30th June, 1926, in respect of soldiers’ instalments, exclusive of land settlement, the amount of £1,264,454 was paid by the due date, leaving £146,919, or 10.40 per cent, arrears. In my opinion that is highly creditable to our ex-soldiers, and indicates that they are just as ready to meet their obligations is peace time as they were in war time.
The only other matter that I wish to deal with at present has regard to subefficient ex-soldiers. I have been informed that there are about 1,000 ex-soldiers who have not been able to re-establish themselves in civil life owing to subefficiency, which can be attributed to war service. If this is so, I would strongly urge that the Repatriation Commission be directed to make a special effort to help these unfortunate men. In France, Belgium, Germany, the United States of America and some other countries, various schemes have been devised to meet such cases, and I feel that something should be done in this direction by the Commonwealth. I appeal earnestly to the Government to make a special effort to cope with the matter, for in some senses these are the saddest cases of- all, as the men, having lost their efficiency, get very little sympathy from the public.
As I understand that we shall have an opportunity to discuss the proposed Commonwealth and State financial adjustments, -and also the Government’s road policy .when legislation is introduced to give effect to them, I shall not detain the committee any further at present.
– The items that I wish to deal with refer specially to the Northern Territory. I find that an amount of £53,000- is provided for “construction of buildings and roads, engineering services, and water boring “ in North Australia; and an amount of £30,500 is provided for similar undertakings in Central Australia. It is gratifying to me that so much has been earmarked for developmental work of this character. .There can be no question but that the construction of roads and the provision of water conservation schemes are absolutely necessary before we can hope to settle our empty spaces. An amount of £3,000 is provided for “ construction and filling of petrol tank “ in North Australia, and, of course, it must be apparent to honorable members that the provision of a satisfactory petrol supply is a necessary corollary to the roads policy. When the construction of the oil tank at Darwin was first proposed, I understood that it was the intention of the Government to make petrol supplies available to settlers in the Territory at a reasonable cost; hut I was sorry to learn from the statement made a few days ago by the. Minister for Works and Railways (Mr. Hill), that that point had not been definitely decided. The provision of petrol tanks is just as necessary in Central Australia as it is in North Australia, and I suggest to the Government that it should use Port- Augusta as a base for supplying Central Australia with bulk petrol. There are sufficient public bodies in North Australia to ensure that any public money available for expenditure there will be spent economically. The North Australia Commission will shortly be appointed, but already North Australia has aland board, a Government resident, a public works department, and other public departments with staffs adequate to carry out the necessary road and water schemes there. Shipping is also available to facilitate the transport of material, and there is a railway for its inland transport, extending over a length of 200 miles. In respect of these facilities, the northern part of the Territory is in a much better position than the south. New legislation has. been passed, cutting off the north of the Territory above the 20th parallel of south latitude, and I point out that for the central Australian half of the Territory, no organization whatever has been provided to administer the expenditure of the proposed vote of £30,500. I am complaining, not that the northern part of the Territory has been , provided with the necessary organization, but that none has been provided for central Australia. Altogether, too much dependence is there placed upon a police sergeant, who has to carry out his work with native labour, which is more or less, useless. In view of the fact that this police sergeant has many duties to perform, and superintends an area of over 250,000 square miles, it is not too much to claim that his exclusively police duties ara sufficient to occupy the whole of his time. The policy of development for central Australia -should be placed in the hands of a competent board. I agree that provision for transport and water is fundamental to the development of the Northern Territory, and 1 trust that no time will be lost in giving effect, in a practical manner, to the policy proposed. Water is urgently required on the stock routes. We have been told from time to time that ‘there are wells 40 or 50 miles apart on the stock routes, and some people seem to think that that is all that is necessary for travelling stock. If only one mob of cattle were travelling, the water supply available might be sufficient; but when eight or ten mobs are being travelled, as was the case recently, the cattle may have to go for weeks without a drink.
The future development of the Northern Territory must depend to a very great extent on the progress made by the pastoral and mining industries, and every proposal in the interests of those industries should be favorably considered by the Government. I make the statement without any personal feeling that Ministers in charge of the Northern Territory in the past have not been sufficiently conversant with its conditions. I trust that the new Minister for Home and Territories (Senator Glasgow), whose duty it will be to frame a policy for the development of the Territory, will personally visit it, not on a- flying trip through the country, but in such a way as to enable him to see the country from all angles, to meet the people, and learn their requirements. If he does that, he will be in a position to understand references to the Territory made in this Parliament. In view of the fact that a fair sum of money is available, it should -be one of the first duties of the Government to assist settlers in the Territory to conserve water on their runs. This might be done without loss to the Commonwealth, because if the cost of obtaining water is spread over a number of years, the settlers will be quite prepared to repay money expended for this purpose. There are vast areas in the Territory still unoccupied, and if the Government were to put down bores in those areas, a great portion of the country would be placed under stock in a comparatively short time. Under existing conditions, it is asking too much of the pioneer to blaze a track and also provide the water supplies necessary before it is possible to stock the country. I suggest that the Government should dognet 100,000 square miles of country, subdivide the area, and provide water supplies for the subdivided blocks. If that course were followed, there would be more settlement in the Territory in five years than there is to-day. The honorable member for Wakefield (Mr. Foster) has told the House on numberless occasions that Central Australia practically regulates the meat markets of a considerable portion of Australia. If the country can do that, in its present undeveloped state, I suggest that with sympathetic treatment, apart from the development of mining, its pastoral possibilities are unlimited. The Government should try to overcome existing difficulties, not in the course of many years to come, but during the next few years. At present, there is only one boring plant in North Australia. A territory of over 500,000 square miles cannot expect to make much progress with only one boring plant. If the policy of providing water and roads is to be successful, it is necessary that means to carry out such a policy should be provided. The Government has the money, and it is a question only of calling for tenders, when the proprietors of a number of boring plants will be prepared to carry out contracts to provide necessary supplies of water. In the estimates for the ensuing year, I notice that provision is made for subsidies to shipping amounting to £18,300. There is £5,500 for Burns Philp, £11,000 for coastal shipping confined exclusively to the Northern Territory, and £1,800 for the Western Australian Government. The cost of freight from Melbourne, Sydney, or Brisbane to Darwin under existing conditions is £3 per ton by weight or measurement. Those who have any dealings in general merchandise will be prepared to agree that the cost of transportation of goods to the Northern Territory will average from £4 to £4 5s. a ton. This is significant in view of the recent press statements as to the revision of oversea freights. It is possible now to ship commodities from Australia to Great Britain at a cost of £3 5s. a ton, as against £3 a ton to Darwin, a distance of about 12,000 miles less. If goods can be shipped from Australia to Great Britain at £3 5s. a ton, it is not unreasonable to assume that they could be shipped from Melbourne, Sydney, or Brisbane to Darwin at very much less than the present freight charged. The present, passenger rates from Melbourne, Sydney, or Brisbane are - Firstclass, single, £25 ; and second-class, single, £16. Freights have a very serious bearing on the development of the Northern Territory, and the Government should take advantage of the shipping offers which have been made to it in the past, which, no doubt, would be madé again if tenders were called for a service to Darwin. I should like to read a tender that was submitted to the department, the rejection of which calls for some explanation in view of the professed desire of the Government to carry out a developmental policy for the Northern Territory. The tender is as follows: - 30th September, 1924.
The Secretary, Department of Home and Territories, Spring-street, Melbourne, Victoria.
In response to the advertisement appearing in the Melbourne Argus, dated 12th July, 1924, calling for tenders for a regular steamship service between southern States and the Northern Territory, I beg to make the following offer: -
Steamer.- To be of about 2,000 tons gross register, about 1,200 tons net register, capable of maintaining a speed of 12 knots, fitted with passenger accommodation for at least 30 first class and 35 second class passengers; fitted with wireless and insulated space for the carriage of meat, fruit, and other perishable cargo; passenger accommodation to be up to date, and, where possible, in first class cabins, not more than two passengers to be berthed in each cabin; all cabins, as far as possible, to be above the main deck.
Ports of Call. - Melbourne, Sydney, Brisbane, Townsville (or the option of one other Queensland port), Thursday Island (at contractor’s option, Merauke or other port or ports), Darwin. The department to have the option of ordering the steamer to call at the mouth of the McArthur River on four trips in . each year, once only per trip, and with the further right to the department of extending the voyage to a convenient place in the Victoria . River twice per annum.
Duration of Yoyage. - Minimum of eight complete round voyages to be performed every twelve months. (Amended to twelve voyages per annum.)
Maximum rates of freight and passage money to be as follows: -
I have been informed that the special rates would be as low as £1 per ton -
The present shipping freight is approximately £9 per ton to McArthur River and Victoria River, but, under this tender, it would be £3 15s., which represents a substantial reduction. The tender provided for an annual subsidy of £22,000 per annum to be paid by the department to the contractor. The present subsidy is £18,300 for an indifferent service. The ruling freights are 100 per cent, higher than this offer, which represents an increased subsidy of only £3,700 for a shipping service which, in addition, would cater for the whole of the coastal trade of the north. Goods would be shipped direct from the south to the northern ports, instead of being landed at Darwin and transhipped, in some cases, 400 or 500 miles back over the route of the steamer. We should consider the difference of £3,700 in the light more of a subsidy to primary producers than of. a subsidy to the shipping company. Only by bringing about a reduction in fares and freights, shall we be able to settle people in the territory at a reasonable cost. Reduced freights would be a great factor in developing the mining industry, apart altogether from the agricultural and pastoral industries. It would make possible the shipping of crude ore from the northern ports, and the beneficial result would more than justify the additional expenditure of £3,700. As only £400 is provided on the Estimates for mining, we may reasonably ask that the additional cost of £3,700 be considered as subsidy to the mining industry. The tender continues -
Should the amount of freight and passenger fares earned from all sources in any one year amount to more than the annual subsidy, then it shall be agreed that such excess, after deduction of stevedoring and other usual charges, shall be divided equally between the department and the contractor.
Advantage of proposed service. - It has been, proved beyond all argument that two of the greatest drawbacks to the development of the. Northern Territory are its isolation and this high cost of living engendered by such isolation. The proposed service is an earnest endeavour to overcome these drawbacks by the maintenance of an efficient steamship service, at reasonable rates of freight and passage money. The main industry of the territory, that of cattle-raising, is almost at a standstill, owing to the difficulty of disposing of those cattle which are unfit for shipping alive, but which would be a source of profit to their owners if they could be treated and the product shipped at reasonable rates. In the event of this service being inaugurated Messrs. Vesteys have agreed to open their works, as far as the boiling down department is concerned. It is also probable that shipments of frozen meat to the southern States would be regularly made in the insulated space provided. Such fruits as . pineapples, of which large quantities can be grown in the territory, would also be shipped. Special inducements, by cheap freights, would be offered to growers and shippers of cotton, peanuts, and producers of mineral ores. The reasonable rates of freight quoted, should materially reduce the cost of living in the territory, and this alone should promote development and settlement.
In climatic conditions similar to those experienced in the Northern Territory, especially in the coastal districts, it is almost a necessity that at least women and children should be able to visit the southern and cooler States certainly every two or three years. It is expected that the very reasonable fares quoted in connexion with the service, will afford facilities in this direction. It is also certain that a tourist trade will be built up which will allow of the advantages of the territory being brought prominently before the investing public.
Alternatively I beg to make the following offer : -
Steamer - As above.
Ports of call - As above.
Duration of voyage - Asabove.
Maximum rates of freight and passage money to be as follows: -
Special fares, combined with hotel accommodation at Pine Creek, and/or Darwin, to be arranged in conjunction . with the Commonwealth railways to secure a tourist traffic.
His Majesty’s mails to be carried free.
Cargo for McArthur and Victoria Rivers to be carried at an increase of 40s. per ton on the above rates, . plus cost of landing cargo, if any.
Annual subsidy to be paid by the department to the contractors Eleven thousand pounds (£11,000) per annum.
The advantages of the above alternative lie in the fact that it provides for low rates from Darwin to the south, thus enabling Northern Territory products to find markets which, at the present time, are difficult, if not impossible. It also provides for regular communication with the McArthur and Victoria Rivers.
While this alternative proposal does not entail the expenditure necessary under proposal No. 1, it should be pointed out that the advantages offered with regard to the reduction in the cost of living in the territory, and the cheaper passenger fares, which mean so much to the resident in the territory, are not secured.
The present service does not supply those ports at all. That tender was rejected, although it showed a considerable reduction in the freights and fares. But, subsequent to that, a tender- for a service from Melbourne to Darwin, at the same time carrying on the coastal trade of the Northern Territory, was rejected, and a contract let to the same tenderer for a service in Territory waters alone, at the price for which he was prepared to carry on the service between Melbourne and Darwin. Surely the reasoning of the Government is beyond the comprehension of man. This matter vitally affects the development of the Territory. I have shown that the present high rates of freight could be considerably reduced if the Government were in any way anxious to settle people in the Territory. In the Estimates, under the heading “Lands and- Surveys Department - Encouragement of primary production,” an amount of £4,000 is provided. As that sum does not appear elsewhere in the Estimates, we ‘ must take it for granted that it applies to the whole of the Northern Territory, and not to North Australia or Central Australia. Every form of production comes under the heading of primary production, with the exception of mining, for which there is provision in the Estimates. Primary production includes the pastoral industry, in connexion with which, under certain conditions, £680 can be granted to intending settlers. But how that grant can be made under the expenditure provided for in the Estimates is a conundrum to me. Primary production includes agriculture, mixed farming, saw-milling, paint production, and fisheries, including pearlshell fishing, trepanging, and drying and canning of fish. One is entitled to ask the Government whether it is serious in its endeavour to develop primary production in the Northern Territory when only £4,000 is placed on the Estimates for that purpose. How much closer settlement could be effected for that expenditure ? Honorable members have said that it takes £3,000 to place one settler on the land under repatriation and other schemes, and yet only £4,000 is provided for the settlement of 500,000 square miles of territory. The honorable member for Rivarina (Mr. Killen) recently stated that the Barkly Tableland was highly suitable for closer settlement, and that that country could carry 10,000,000 sheep. If that were brought about, the problem of developing the Northern Territory would be more or less solved; but. how would it be possible to place 10,000,000 sheep on the Barkly Tableland when the expenditure is limited to £4,000? The Territory and its development are being sacrificed on the altar of ignorance. The honorable member for Riverina said that about 20,000 acres of that country would comprise a decent holding for a settler, and I agree with him. When the Northern Territory Land Bill was before the House, I endeavoured to impress upon honorable members the fact that the holdings should be 20,000 acres, but my appeal fell on deaf ears. The honorable member for Riverina also said that the Barkly Tableland should be resumed for sheep-raising purposes. I fail to see how resumption can take place under the existing land laws of the Territory. I know that existing legislation provides for resumption of land for agricultural purposes; but several times during the debate I was told that there could be no resumption for pastoral purposes. I may bo told that the act makes provision for the resumption of land, and that, therefore, the tableland, which the honorable member for Riverina (Mr. Killen) declared to be capable of carrying 10,000,000 sheep, can be made available for closer settlement. But my view, as a layman, is that no lessee in the Northern Territory need, under existing legislation, surrender any of his land until the completion of his lease 42 years hence. It is true that one-fourth of the area of the lease will be resumable in 1935, and a further one-fourth may be resumed in 1945, but the lessee may, by giving two years’ notice of his intention so to do, elect to sub-divide an area equal to that which the Minister would be entitled to resume. In other words, when resumption is due in 1935, the lessee may, by merely, giving notice of his intention to sub-divide one-fourth of his area, escape compulsory resumption, and transfer the land to a dummy. That ruse cannot be defeated, because the difficulty of distinguishing between the dummy and the genuine settler is well recognized. Although the Barkly Tableland is very suitable for sheep-raising, the ignorance of honorable members of this Chamber, and their refusal to take notice of those who understand local conditions, has caused the land to be locked up for the next 42. years. I moved an amendment that the consideration of the Northern Territory Land Bill should be deferred pending a visit to the Territory by practical men, who would gain first-hand knowledge, of its conditions, and impart their knowledge to Parliament. Had the bill been deferred until practical men like the honorable member for Riverina had visited the Territory, it would have been amended in many respects, and the Barkly Tableland would have been the starting point of a policy for the settlement and development of Northern Australia. Unfortunately, for the next 42 years the land now held in leases cannot be resumed and sub-divided for sheep grazing, except at almost prohibitive cost.
Two industries that offer great prospects for the development of the Northern Territory are pastoral and mining. I have perused the estimates carefully in order to ascertain the Government’s idea of the mining possibilities of the Territory, and I am astounded to find that only the paltry sum of £400 has been provided under the ironical heading “Development of mining industry, including loans to prospectors and others.” The sinking and timbering of a prospecting shaft would cost at least £6 per foot, so that the allocation of this sum on a £1 for £1 basis,, would enable a total depth of 133 1/3ft. tobe sunk. How much will that do to develop the mining industry? Whence the loans to prospectors are to come I do not know. The placing of such a ridiculous amount on the estimates proves that the Government was not soundly advised in this regard. The gross ignorance of successive governments regarding the requirements of the country has been reflected in the budget and estimates from year to year, and, because of that, the Territory remains- in its present undeveloped state. Last year- £1,000 was provided for the development of the mining industry and loans to prospectors, and I criticized that amount as quite inadequate. In reducing it this year to £400, the Government has reached the dizzy limit of absurdity. Ohe party of prospectors would absorb the whole amount,
The Minister may reply that a sum of £15,000 is provided under another vote to encourage the production of precious metals. All metals are more or less precious, hut, whereas a gold mine capable ‘ of employing 40 or 50 hands might be assisted from that vote, a silver lead mine, or other base metal proposition, capable of employing 1,000 hands, would not be eligible for assistance. The mining history of Australia teaches us that the largest and most permanent mining communities have been founded upon the winning and treatment of base metals. If £15,000 were made available for the encouragement of mining generally in Northern Australia, it might to some extent retrieve the Government’s absurdity in placing £400 on the Estimates for that purpose. Recently a geologist for Northern Australia was appointed, and before the Estimates were drawn up the Government should have sought the advice of the expert on the job. Had that been done, the amount provided for the mining industry would have been much larger. In any case, there is no justification for any reduction of the vote this year, because the reports of Dr. Jensen, who is one of the ablest geologists in Australia, should encourage any government to pursue a vigorous policy for the development of mining.
For “ Stock and Brands, also Government Stations, wages, and general expenses,” an amount of £1,850 is provided under the heading of “ Administrative Staff - Contingencies,” and a further amount of £1,890 under the heading of “ Administrative Staff - Salaries,” making a total of £3,740. That amount covers the whole of the activities of a department that is conditioning one of the largest industries of the Northern Territory, and the bulk of it represents the wages of the administrative staff. Very little money will be available for the purchase of new . stock, or the ‘ improvement ‘ of the herds already on the Government stations. The sum of £400 is provided for a stock inspector, in addition to the chief inspector of stock. I have known for many years that this officer is not required in the Department, and that his departmental chief has persistently asked that he be retrenched, on the ground that he is incompetent and does not fulfil the conditions of his appointment. Although those facts are known to the Government, and the officer has been away from the department for a considerable time and his services are not needed, the Estimates again include provision for his salary. His incompetence must be reflected in the general work of the department. I have said that in the past one of the chief qualifications for appointments to the service in the Northern Territory seemed to be lack of knowledge of the duties to be performed. Because this officer is the pet of somebody in authority, the Territory is to continue to be saddled with the responsibility of paying to him a salary for services that he does not render. Successful pastoralism necessitates scientific breeding, but that policy has never been attempted on the Government cattle stations, which were established to supply stud cattle to the settlers. The Government has sent to the Territory a few stud bulls of very indifferent type from Northern and Central Queensland. These crossed with “ bush “ or “ scrub “ cattle are supposed to improve the quality of stock in the Northern Territory, and even their progeny ai-e availed of by the settlers. The station could be made selfsuppporting. I have” received numerous letters asking for assistance along the lines I have indicated. The question may be asked why the -settlers themselves do not obtain the necessary stock. The answer is that owing to such diseases as “ red water,” due to tick and other causes, it is necessary for stud animals to be acclimatized before they are of much value. Those enterprising settlers who have paid high prices for such cattle have had them die on their hands. It is necessary to breed cattle that will be immune from the diseases prevalent in the Territory, and. the Government, rather than individual settlers, should bear the initial cost. No serious attempt has been made to achieve the alleged objective.’ If we deduct £600 for stockmen’s wages, and- £500 for food, leaving out of consideration tools and saddlery, which are essential on a cattle station, the vote roughly represents about £700. That sum would not buy a useful stud ram or bull, to say nothing of improving the breed of hundreds of thousands of stock. The Chief Veterinary Officer and Chief Stock Inspector is kept at a salary of a little over £700 per annum, although he has rendered valuable service for ten years under almost unimaginable conditions. He has to ride thousands of miles in all kinds of weather, and he has given general satisfaction to the pastoral industry. Yet, year after year, while others receive their annual increments, he has been kept at the same small salary. According to the Melbourne Age, of the 16th July last, applications are invited from persons in the Victorian Public Service qualified for the position of Chief Veterinary Inspector and Chief Inspector of Stock in the Department of Agriculture, and the salary offered is £800 per annum. It is stated that applicants must possess a university degree in veterinary science, or its equivalent, and administrative experience in government veterinary work. All those qualifications are held by the Chief Veterinary Officer in the Northern Territory, and although a commencing salary of £800 is offered in the southern States, this experienced officer in the Northern Territory is, for some paltry reason, still in receipt of a little over £700 a year. If the Home and Territories Department were administered by a man who could appreciate a good servant, he would remove this anomaly, and see that justice was done. I also notice that the salary of £350 is provided for the manager of the Government Cattle Station. This officer is second to none as a cattle man, and he is persistently kept on the £350 mark, while other officers, who are rendering less valuable service in the department, are receiving from £400 to £500 a year. Repeated requests for an increase in his salary have been unheeded. He thought that he would rise in the service because of his ability ; but, unfortunately, ability is often wasted in government departments in the Northern Territory. Officers with ability are frequently overlooked, and those without it receive all the favours.
For ‘ the purpose of showing how some of the officers are treated, I shall refer again to the education vote. The head teacher and supervisor, of schools, Darwin, is to receive £566 per annum, the head mistress £375, the teacher at Darwin £450, the teacher at Pine Creek £300, and the teacher at Alice Springs £210. I suggest that the payment of only £210 a year to the latter teacher is obviously an oversight; but year after year no increase has been provided. All visitors to Alice Springs applaud the work of this teacher. Her duties demand her attention more or less for 24 hours a day. In the morning she has to instruct the white children, and in the afternoon she supervises the education of the halfcastes. She is in charge of what is termed “ the bungalow,” which is a “shack”’ where the half-castes are herded. Although she is paid about £100 per annum less than the next lowest paid teacher, her duties are far more onerous than those of the others. Even now it is not “too late to do justice to her.
The sum of £13,000 is provided under “Works and buildings” for “repairs, maintenance, fittings and furniture “ in North Australia, and £5,000 in Central Australia. It will be necessary to erect administrative buildings in Central Australia, and a house for the Government Resident; but I do not imagine that any elaborate buildings can be provided in that isolated spot out of the comparatively trifling sum of £5,000. I draw attention’ to the accommodation provided for the police in some of the outposts of the Territory, where they are domiciled in bough sheds, similar to those in which the aborigines live. How can the police be expected to maintain the dignity of the force under such conditions?
For some time I have impressed upon the committee the necessity for having a government surveyor in the Territory. For many years, no such officer has been provided. The absence of a surveyor where a policy of closer settlement is to be put into operation is the height of absurdity. I do not know the qualifications of the members of the Land Board ; but if there happens to be a surveyor connected with that body, he has not been employed in that capacity and is not available for the purpose. It seems to me that we are likely to have confusion worse confounded if a commission charged with the duties of administering North Australia is permitted to function while a land board exists for a similar purpose. Although we were informed that the Land Board would be absorbed by the commission, I notice that the Estimates still provide for its maintenance. The Government should tackle the problem of the settlement of the Northern Territory on scientific lines. It should place the work in the hands of experts, and should tell them to lose no time in proceeding with it. It should not repeat the farce of the land board, which had been appointed for eighteen months before the regulations to allow it to function were framed. If the same lackadaisical methods are followed with the
North Australian Commission, it may be two years before that body functions.
I wish again to direct the attention of honorable members to the need for bush doctors in the north of Australia. It is true that, through the agency of the Inland Mission, hospitals have been established in different parts of the Territory, but it is also true that, although those hospitals are doing humane work, and rendering valuable service to the settlers, they are not equipped, and those who administer them have not the scientific knowledge to handle all cases that arise. There are two doctors in Darwin within half a mile of each other, and not another one in over 500,000 square miles of territory. The health of the community should be the first consideration of every government. If this Government wishes to induce men to take their wives and children from the congested city areas to the Northern Territory, it should at least provide for their medical wants. If a serious case is brought to one of the existing hospitals, no one on the staff is competent to diagnose it or to perform an operation. The patients frequently have to be conveyed hundreds of miles before receiving proper attention. The appointment of even two doctors for the Northern Territory could not be regarded as an extravagance. That doctors are available is obvious from the reports in the daily press of the number of medical graduates.
It is necessary for me again to emphasize the unsatisfactory conditions existing in the leper station near Darwin. The unfortunate lepers are not given, even a fighting chance of recovery. They are thrown on an island infested with mosquitoes and sand-flies, and are left to treat themselves. If the Minister is conversant with the conditions there he must know that when they take it into their heads to leave the island, they can do so. Recently a number of them left, and some of them have not yet returned. I discussed this question with the Anglican Bishop of Carpentaria, who has been interesting himself in the work. The societies under the direction of the Bishop have refused to allow a girl of eleven years of age to be sent to the lazaret, because of the lack of supervision there. I know that certain persons have offered, at a nominal expense to the Government, to banish themselves on the island for the purpose of attending on the unfortunate lepers. It is stated that the lepers are receiving treatment. Certainly, medicines are supplied, but as the attendants are halfcastes and lepers, the treatment prescribed is rarely administered. The sexes are not segregated. In those conditions, who can blame the Bishop for refusing to send a girl eleven years of age there ? The result of the dispute was that the Government had to give way, and allow the mission to retain the girl under certain conditions as to isolation. The mission still has charge of her, and of others who are suffering similarly. While such inhumane conditions exist in a Commonwealth institution, it is nowonder that humane persons feel compelled to defy the Government. Surely the condition of these lepers should elicit the sympathy of the Government, which should take advantage of the offer made by certain missionaries to give their services so that the sufferers may receive reasonable treatment. I understand that leprosy is curable if proper medicines and treatment are administered. But cures cannot be effected in the way now followed, and it is not fair to send girls of ten or twelve years of age to an island where they would have to mix with adult half-caste males. To have a visit of inspection once a month is not sufficient, and is not fair to the patients. I hope that the Minister will insist upon humane conditions being provided, and ifhe does that he will gain the admiration of all fair-minded people in the north. An impartial investigation by him would reveal the fact that the treatment which the lepers are supposed to be receiving is not being administered.
.- One of the most important items in the budget is the proposal to abolish the par capita grants. The effect of that will not be felt during this financial year, because the budget provides for making payments equal to the per capita payments. No honorable member can justly accuse me, if he has read my speeches, of being a “ State righter.” I have always said, and my conviction to-day is even stronger than it was, that the State Parliaments occupy too high, and this Parliament too low, a status. But nothing but a drastic amendment of the Constitution can alter that state of affairs. My objection to the proposal is that the Government, by a sand-bagging method, is trying to bring the State authorities to their knees. It should act constitutionally. The proposal has created consternation in the States, and the State Governments are in a quandary as to their future.
– The Prime Minister and the Treasurer met the representatives of the States in conference.
– That is true. They intimated that they would abolish the per capita payments, and that they would vacate certain ‘fields of taxation in favour of the States but it must be remembered that not one of the State Premiers, either National or Labour, accepted the proposal. The Prime Minister and the Treasurer adopted a standanddeliver attitude. They said, in effect, “ There are our proposals. You may take them or leave them,” and they clearly indicated that they would not retract from that position. I wish to read a comment on the proposal by the editor of the Australian Industrial and Mining Standard. That journal strongly supported the Ministry at the last election, and was most vitriolic in its attacks on the Labour party. The editor brought all his literary abilities to bear to defame the Labour party and to enchance the reputation of the Ministry. Yet about a week after the delivery of the budget by the Treasurer, a leading’ article appeared in that journal containing these statements -
Having foolishly undertaken a coercive supervision of State finances, Mr. Bruce and his colleages have been compelled to provide a revenue for 1926-27 sufficient to cover all contingencies arising from possible ‘errors in calculation in order to demonstrate the efficiency of their policy to the States without involving the Commonwealth in loss. The Treasurer, therefore, has carefully exaggerated expenditure and elaborately underestimated, revenue with the intent of simultaneously cultivating the opinion that the revenue from Customs and excise is still insufficient to meet the commitments of the Commonwealth without recourse to the aid of direct taxation, and of creating the belief that further continuation of the per capita payments to the States from Customs revenue would be unjust to the prosperous Commonwealth rather than to the needy States, whose position will be enormously improved by the Commonwealth’s partial vacation of the field of direct taxation.
In short, the budget has been very skilfully doctored to present the best possible case for the Commonwealth and the worst possible case for the States - in re the question of the per capita payments. And the accounts have been so treated as to render very difficult and con fusing any lay attempt to compare the Commonwealth’s revenue and expenditure from year to year.
Apart from this specialized and deliberate medication of the accounts for home consumption, Dr. Page’s budget for 1926-27 is a document that will not enhance the reputation of the Commonwealth abroad.
That was written by Mr. Ambrose Pratt, formerly one of the principal writers on the Age newspaper, but now editor of the Industrial Australian and Mining Standard. I am not an advocate of State rights, like honorable members opposite; and I shall be one of the first, at the right, time and in the right way, to assist in putting the States in what I consider is their proper position in Australia. But the Government is practically sand-bagging the States. It has most of them in its power already. I believe that some of them have agreed only under duress to accept the largesse that, from time to time, it has handed out to them from its abundant surpluses. Honorable members will undoubtedly reduce the status of the States by supporting the Government’s proposals. I can understand the honorable member for Riverina (Mr. Killen) being distinctly in favour of the abolition of the Federal land tax.
– He will still have to pay as much tax; but will pay it through the State Taxation Department.
– It is very doubtful whether any of the States have power to impose a land tax ; and even if they have, it is doubtful whether they would exercise it. The Legislative Councils in five of the States would resist such a proposal with all their force. Queensland alone would have a free hand in this matter, for she only has abolished her Upper House.
– And she abolished it in spite of the people’s decision, by referendum, that it should be retained.
-“ Abolition of the Legislative Council “ is a plank in the platform of the Labour party in every State; and notwithstanding that adverse referendums may have been carried on the question at some time in the past, I submit that a State Government which has abolished its Legislative Council and afterwards won ‘ victory at the polls is justified. Two State electionshave been held in Queensland since the abolition of the Legislative Council there, and the Labour party has been victorious on each occasion. Members of Legislative Councils are either nominated by the Government of the day, or elected on a restricted franchise; and .the honorable member for Riverina knows very well that there is very little hope of a land tax being imposed by any State Parliament where there is a Legislative Council.
– Does not the honorable member believe that the State Upper Houses will be obliged to agree to the imposition of sufficient taxation to carry on the government of the country ?
– That may be so; but the Upper Houses have their own ideas of how taxation should be imposed. We have had experience of their methods in the past, and it has satisfied us that they would never impose such a tax as the Federal graduated land tax. No doubt the Treasurers of the State Labour Governments will be placed in a serious difficulty by reason of this move by the Treasurer, and will have difficulty in securing sufficient revenue to meet their expenses.
– That is not so.
– The honorable member for Barker (Mr. M. Cameron) knows very well that in his own State the Legislative Council is dominated by one gentleman who used to be a member of this Chamber, and if he and two or three of his colleagues intimate that they disagree with legislation that comes before them, that is the end of it. Everybody knows that governments which impose new taxation are unpopular, and if the Commonwealth Government ceases the per capita payments, the State Labour Governments, in particular, will have to impose new’ taxation, and that will render them unpopular. One State Minister, in conversation with me on this matter lately, said, “ We will throw the blame for any new taxation that is necessary on the shoulders of the Federal Government,” but I replied, “ My dear fellow, it is of no use for you to talk like that. If you impose new- taxation, you will be blamed for it.” I have no desire to be unfair, but in my opinion the principal motive of the Government in introducing these financial proposals is to bring the State Labour Governments into disfavour by involving them in’ serious financial difficulties.
– That is absolutely wrong. These proposals were indicated in 1923.
– That is my opinion, at any rate; and I am not a State- righter. If I . had my way, I would divide Australia into provinces tomorrow, and set up the national parliament as the supreme authority. I would provide for single-house parliaments for the provinces, and give the people a better form of home rule than they have now. Incidentally, that would effect a measure of decentralization that will never be possible under the present arrangement. The time is fast approaching when we shall have to subdivide Australia, and set up local authorities to administer local affairs. I would make the constituency of the honorable member for Riverina one province. I would overlook all artificial State boundaries, and would bridge the river Murray so that that portion of Victoria, which has community of interest with the Riverina would be part of that province. I would not deal with the new State question in the patchwork fashion proposed by some honorable members opposite. If Canada can carry on satisfactorily with one national parliament, and single-house provincial parliaments, Australia need not fear to adopt such a policy. If there were, say, fifteen or twenty provinces, each with its own capital, the population would not gravitate to the present State capitals as it has done in recent years.
Mjr. Killen. - Unification would prevent decentralization.
– I deny that dividing Australia into provinces in the way that I suggest is unification. Such a policy would have far better results than can possibly follow merely robbing the States of the per capita grant.
Sitting suspended from 6.29 to 8 p.m.
– The Treasurer was inclined to be a little boastful about the amount by which the. war debt has been reduced during the past four years. He said that he had succeeded in reducing it by £28,000,000; but, after making that announcement, with which every one must be pleased, he intimated that the year’s increase in our gross debt amounted to £27,000,000. It will be seen that, if we pay off the national debt at the rate “of £7,000,000 per annum, but at the same time increase the national liability by £27,000,000, our total indebtedness will mount up in an alarming fashion. The honorable gentleman tried to minimize the public debt as far as possible by reducing it to what he called a net sum. He fixed the ‘total indebtedness of Australia, State and Federal, at £1,000,000,000. Honorable members are aware that the same set of taxpayers have to pay interest bills for Commonwealth and State loans; but I remind them that the same set of taxpayers have also to meet the interest bill for moneys borrowed by municipal authorities, metropolitan boards, water boards and other local authorities.
– How many of the works for which those moneys have been borrowed are revenue-producing?
– I admit that some are revenue-producing, but we need to recognize that it is upon the total gross indebtedness of the country that interest has to be paid by the people. If we take the gross debt at £1,000,000,000, the interest bill on that amount must be at least £50,000,000 per annum. There is no burden that presses more heavily upon the people of Australia than the interest which has to be paid upon our public debts. It amounts to about £8 per head of the population. A family of five is called upon to bear a burden of £40 per annum to meet our interest bill alone. At the commencement of the war the right honorable member for Balaclava (Mr. Watt), who then sat on this side of the house, was one of the financial authorities who told the then Treasurer (Mr. Fisher) that it was impossible to raise the money to meet war expenses in Australia, and that, any attempt to do so would bring about stagnation in the industries and businesses of the country. It was then proposed to borrow £4,000,000 or £5,000,000; but before the war was finished we had borrowed ‘ nearly £400,000,000. Anything that can be done should be done to reduce the big family burden for interest in Australia. I am, of course, in favour of the sinking fund for loan redemption that has been established. If honorable members will examine the figures, they will find that the two institutions in this country that are the biggest contributors to the loan redemption fund are the note issue, the profits from which go into the fund, and the Commonwealth Bank, half the profits from which are paid into the fund. These institutions were established by the Labour party. When the note issue was taken over by the Commonwealth, it was arranged that the earnings from it should form the nucleus of a redemption fund for the extinction of the national debt. I do not blame the present Treasurer for laying the flattering unction to his soul that he has done something to reduce the national debt of Australia; but it might be as well to inform him that Commonwealth loans were redeemed before he entered this Parliament. When the present High Commissioner (Sir Joseph Cook) was Treasurer of the Commonwealth, a loan for about £7,500,000 was falling due, and he was distressed to know how he was to meet the obligation. Those who were associated with the establishment of the note issue fund assured him that he had no need to trouble himself, as already there was money in that fund by which he could liquidate the debt. He immediately turned to the fund which had accumulated from the note issue, which then stood at about £7,750,000, and with it he wiped off the books of the Commonwealth for ever the loan of £7,500,000 that fell due at that time. That was one of the first efforts of a practical character to pay off some part of the national debt. That would not have been possible but for the establishment by the Labour party of the Commonwealth note issue and the Commonwealth Bank. An examination of the budget figures will disclose the fact that these two contributors to the debt redemption fund contribute between them something like £1,250,000 or £1,500,000 per annum. Notwithstanding the foreboding of a number of those who at the time opposed the Labour party, the taking over of the note issue has been responsible for other benefits that have accrued to the Commonwealth. This will be seen by a reference to the budgetpapers, and to the bulletins issued by Mr. Wickens, dealing with Commonwealth, State and municipal finances, splendid publications containing a vast amount of useful information issued from the Statistician’s Office. When the Commonwealth took over the notes issue, the then Treasurer (Mr. Fisher) intimated to the States that he had money to lend from the profits accruing from the note issue, and within a few months after the note issue was taken over by the Commonwealth, the Federal Treasurer had lent £27,000,000 to the States, which was spent on railway construction, road construction, and the carrying out of schemes for water conservation. It is possible to present a budget clearly setting out the financial position, or to present it in such a way as to throw dust in the eyes of the Parliament and the country. Reference has been made during the debate to a Federal Treasurer who presented four budgets to this Parliament. The present Treasurer has now equalled that record. The first Treasurer referred to was Sir George Turner, who, although a solicitor in private life, showed that he could present a financial statement . which every one could understand. The four first budgets presented to this Parliament were prepared by him, and were much more easily understood than the budget under consideration to-day. There is nothing more needed in the Commonwealth than the plain presentation of financial facts, because we are assured that “ government is finance.” We should be made au fait with every financial transaction in which the Commonwealth is engaged. I do not know whether it was the Treasurer’s object to save the cost of printing, but we have been supplied by the honorable gentleman with only about six folio sheets giving figures connected with the budget. Probably the honorable gentleman has assumed that honorable members would find all the figures they required in the Quarterly Summary of Australian Statistics issued from the Statistician’s Office. I have before me Bulletin No. 103, March, 1926, of these statistics, and it contains some figures which I wish to place on record in Hansard. It is a pity that the- bulk of the taxpayers will probably have no opportunity of perusing this bulletin, because it gives a clearer statement of the finances of the States and the Commonwealth than is contained in the budget. I quote for general information the following table of particulars of loans and advances by the Commonwealth Government to the Governments of the States as at 1st December, 1925 :-
Under recent legislation the management of the Commonwealth Bank and the control of the note issue have been handed over to a board, and I should like to learn from the Treasurer whether that board participates in the profits earned bythe Australian note issue. According to the current estimates these profits have been reduced to £900,000, whereas for many years past they have not been less than £1,200,000. I should like to know whether the difference, which amounts to £300,000, is being handled by the Commonwealth Bank Board. The table I have read proves conclusively, as 1 stated in my opening remarks, that the State Governments are now, from a finance point of view, practically in the hollow of the hand of the Commonwealth : and I believe that it is the desire of our present Ministers, by means of the per capita grant and other propositions, to bring them to their knees. To my mind the only honorable, fair and constitutional - way of putting the States in their rightful positions from a national point of view, is to amend the Constitution, and, until that is done, I think we should allow the present financial arrangements to continue. So longas the State Governments are allowed to carry out most important functions, not transferred under the Constitution to the Commonwealth, no endeavour should be made to cripple them financially. I think I have already successfully indicated that even if the Commonwealth gives to the States the right to re-impose the income tax, the land tax, and the probate duties now collected by the Commonwealth, the result will be to leave the States at least £2,000,000 short of what they are now getting through the per capita payments, because their Upper Houses will not pass the legislation required to impose the necessary taxation. I have no desire to be unduly critical of the Treasurer’s budget, but I repeat that the figures given by the Commonwealth Statistician show the financial position ofthe States much more clearly.
Within thenext two and a half years
State and Federal loans amounting to £184,000,000 must be redeemed. The States’ share of this indebtedness is £83,000,000, and I think I amsafe in saying that a very large proportion of this amount was borrowed many years ago at low rates of interest, probably as low as 31/2 per cent. There is not the slightest hope of obtaining money for the redemption of those loans at less than 5 or 51/2 per cent. This will impose a heavier burden on the people, who already have a heavy enough interest burden to carry.
– It is ever growing.
– Yes. The Treasurer boasts of having reduced the war debt by £28,000,000, yet the aggregate debt of the Commonwealth has- increased by £27,000,000
Mr.West. - Our last conversion loan costs the country £700,000 a year.
– Yes; it is not merely the increased rate of interest that has to be taken into consideration ; conversion costs are also a big item. The honorable member for Reid (Mr. Coleman) has pointed out that under the board system of managing the Commonwealth Bank, the cost of floating loans is far greater than it was in the days when Sir Denison Miller was governor of the bank. During the war that gentleman floated loans which, if they had been borrowed through the ordinary channels, would have cost Australia £7,000,000 more than they did. There is no doubt that Australia has difficulties ahead in regard to the redemption of these huge loans. I hope that the Treasurer will be able to give us a brighter picture than he has given. I have no desire to detract from his efforts or those of any man who is trying to do good for the Commonwealth, but it would have been more worthy of the honorable gentleman if, instead of remaining silent on the point, in each of his financial statements, he had given credit to the Labour party, which laid the foundation of the Australian note issue and the Commonwealth Bank, which have proved to be the largest contributors to our debt redemption fund. I should like to know how Australia will stand in regard to borrowing, because I am rather apprehensive on the point. There was considerable criticism when Mr. Theodore, then Premier of Queensland, borrowed money in New York. When he attempted to borrow in London, the door was shut in his face. What happened on that occasion makes me feel certain that there is little hope of getting the State Legislative Councils to impose a land tax.
Why were the doors of the British moneylenders closed in the face of Mr. Theodore?
– Because of his breach of faith.
– No. Mr. Theodore was told by the British money-lenders that, if he would amend the State land laws, they would lend him money; but, to his credit, he said that he would not go back on the policy he had presented to the electors of Queensland. When he found that he could borrow no money in London, he went to New York, and, through the kindly help of Sir Denison Miller, the Governor of the Commonwealth Bank, obtained what he required. About eighteen months ago, when the Commonwealth needed £20,000,000, our financial advisers in London said that the British money-lenders could not advance more than £5,000,000, and our Treasurer had to go to New York to obtain the balance of £15,000,000. He was not blamed for doing so, but Mr. Theodore was termed a disloyalist for going’ outside the Empire for money. I understand that the financial houses of Nivison, in London, and. Morgan, in New York, united to underwrite the £20,000,000 loan for the Commonwealth. To me that is rather an ominous sign, indicating the possibility of a combination between the money-lenders of the United States and Great Britain to fix the rate of interest Australia will have to pay for any money it borrows abroad. I hope that my fears in this respect are ungrounded; but, when I find two financial houses, previously in competition with one another in making loans, now united, it seems to me that Australian borrowers abroad will in future be compelled to pay higher rates of interest.
I do not know that any honorable member would seriously oppose the establishment of munition factories in Australia. Every one who has studied the defence of Australia realizes that wo must have, not so much . cruisers for naval defence, as properly equipped munition factories, public and private. I am sure that if any honorable members wish to inspect the cordite factory at Maribyrnong, which is really Australia’s arsenal, the Minister for Defence (Sir Neville Howse) will be only too pleased to arrange for the experts there to show them over the works, which are an eye-opener to all who see them. The policy of the Labour party is to pay for defence works out of revenue. Although a considerable proportion of our defence bill is being met out of revenue, yet the expenditure on munition factories is being met out of loan money, and this year a sum of £600,000 will be paid out of loan for works in connexion with munition factories. I have no objection to expending loan moneys for reproductive works, such as the post office, but I strongly object to what may be termed insurance premiums being met out of revenue, and not ort of loan. The expenditure on defence may be regarded as an insurance premium. Our present system reminds me of a man borrowing money to meet his insurance payments. To-day, for defence works, we are paying £600,000 out of loan, but a few years ago the expenditure was £3,000,000 or £4,000,000. During the war money had to be obtained by hook or by crook, but in peace time there is no need to establish the defence of a country by borrowing money.
– Does the honorable member advocate paying for permanent defence works out of revenue ?
– Yes. I regard all expenditure on defence as an insurance premium. We have for several years enjoyed surpluses running into millions of pounds, and there is really no need for the Treasurer to borrow money for defence works. It is bad management, and the principle is iniquitous. This year the Minister for Trade and Customs (Mr. Pratten) anticipates that the Customs revenue will be greater than it was last year, and yet the Government continues to borrow money for unproductive works. The Labour regime of 1910-13 left this country several splendid legacies, such as the Commonwealth Bank, the Note Issue, and a sound defence policy. All defence works were then paid for out of revenue. The cruisers Sydney, Melbourne, and Brisbane . were paid for out of revenue. The Labour Government of that day set a fine example to succeeding governments.
– The war debt was not in existence then.
– The war debt is an additional argument against borrowing money for defence works.
– Special revenue was raised to meet the war debt.
– That is so. In 1910 there was no Federal income tax, amusement tax, or probate tax. The revenue raised from the Federal income tax alone has amounted to nearly £100,000,000.
– The old-age pension was 12s. 6d. in 1910.
– The .Labour party was responsible for the introduction of the old-age pension. Even prior to the war, I tried to warn people against amassing a huge interest bill. We have no guarantee from this Government that it will restrict its borrowing policy. So long as we borrow money from overseas, so long will this country be flooded with imports. But what is the use of a protective tariff when we borrow money abroad, and it conies to us in the shape of goods? Our imports from Germany are greater than ever, and our imports from America are steadily growing. I suppose that Australia has borrowed about £15,000,000 from the United States of America, and as a result our imports from that country are to-day three or four times as great as they were three years ago. Even apart from oil and motor vehicles, our imports from America will soon be as great as our imports from Great Britain.
The safeguarding of our national health is very important. We may have good roads, a protective tariff, efficient railways, and a sound financial position, but if the health of our community is in a bad state this country must deteriorate. I doubt whether the cancer figures submitted by the Minister for Health (Sir Neville Howse) to the Health Conference yesterday were quite accurate, but he was perfectly justified in sounding a note of warning. I do not know whether the press misconstrued his remarks, but, according to the newspaper reports, the Minister gave the impression that Australia was an exceptionally unhealthy place. That is not so. New Zealand is the only country that has better health statistics than ours. The prevention of disease is more necessary than th<* making of good roads. Health is the greatest asset that any community possesses. Our early pioneers, taking their lives in their hands, set out in wooden boats to cross uncharted seas, and to carve out their destinies in Australia. As descendants of such magnificent stock we should never be content until our health statistics are second to none. Through our criminal negligence in health matters we have allowed disease to strike down human beings who should be leading vigorous lives to-day. J favour preventive rather than curative medicine. We are told by experts that 95 per cent, of our school children have defective teeth. I know that in some cases the defects are slight, and can be remedied by prompt attention. By giving such attention we shall confer a great benefit upon the rising generation, and help to build up in a few years’ time the most efficient nation in the world. I would willingly support the expenditure of £2,000,000 or £2,500,000 to enable efficient dental service to be rendered to our Australian children, particularly those whose parents cannot afford to pay for proper attention. I trust that the health conference now sitting in Melbourne will not merely pass pious resolutions, but that the State Governments, in conjunction with the Commonwealth, will do everything in their power to improve the health of the community. I commend the Melbourne newspapers for the splendid articles which have recently appeared on this subject, and I trust that the agitation which has commenced will continue, and that further endeavour will be made to educate the people in the interest of the nation.
Both parties in this Chamber agree that greater activity should be displayed in connexion with the construction and maintenance of our main roads. Good roads are not only essential to the comfort of travellers, but they materially assist development and are of great advantage from the defence view-point. Although further attention should be given to the construction of new roads in country districts, the time has arrived when financial assistance should also be rendered to some of the municipalities in the metropolitan area, the roads in which are in a very bad state of repair. The Mount Alexander-road leading to Bendigo, the Ballarat-road, through Footscray, and the Geelong-road all pass through the electorate of Maribyrnong. Fully 95 per cent, of the traffic passing over the roads in the municipalities of Essendon and Footscray is through traffic, and an unnecessarily heavy financial burden is, therefore, placed upon them. If £20,000,000 is advanced during the next few years for the construction of main roads, the Government should also provide a few millions for the construction of roads in the metropolitan areas. For instance, the Point Nepeanroad is in a splendid condition for 50 miles beyond the. Moorabbin railway gates, but on the city side its condition is deplorable. A united effort should be made to induce the Prime Minister to put a sum aside during the next financial year to enable some of our main thoroughfares within the metropolitan areas to be placed in a better condition. I do not suggest that the amount proposed to be spent on country roads should be reduced, but that an additional amount should be provided for the purpose I have mentioned. I regret that sufficient time has not been allowed to enable many of the Government’s financial proposals to be fully discussed. The day is not far distant when the financial position of the Commonwealth must be so discussed. The budget statement is not so clear as it ought to be. I trust that future financial statements will be submitted in such a form that they can be readily understood by every taxpayer, and that an effort will be made to prevent Australia from plunging into financial disaster.
.- I have listened with a great deal of interest to the criticisms levelled against the budget statement of the Treasurer (Dr. Earle Page). Most of the comment has been in relation to only one or two subjects, and, in that respect, the debate has differed from previous budget discussions. The honorable member for Yarra (Mr. Scullin) dealt with the financial proposals of the Government in a businesslike way. He discussed the revenue, expenditure, and taxation from his party’s view-point, as it was his duty to do. He also said that the budget-papers were not complete, as certain figures were not available; but, having regard to its early introduction, it was practically impossible to submit all the figures. Others can be discussed when the Auditor-General’s report is available. When the financial proposals of the Government are submitted early in the financial year, honorable members obtain early information concerning them. In this instance, the Treasurer has established a record.
In 1910, the budget was presented by Mr. Fisher .on the 1st August; in 1911, it was presented on the 7th September ;- in 1912, on the 26th October, and in 1914, on the 3rd December. Mr. Higgs, who was Commonwealth Treasurer in 1915, did not present his budget until the following year. When the right honorable member for Balaclava (Mr. Watt) was in control of the Treasury, the budget statement was presented on the 26th September, and, in the following year, it was made on the 8th October. Some objection has been raised to the early presentation of the budget, but when a member of the Public Accounts Committee, which conducts investigations into departmental expenditure, I gathered that it was impossible to carry on certain departmental activities continuously when money was not available until the Estimates had been passed. In some instances, six months of the financial year elapsed before departments could actually get to work.
The daily newspapers gave great prominence to the remarks of the honorable member for Yarra (Mr. Scullin), which was only right, as ho was speaking on behalf of practically one half of the electors of the Commonwealth, and the party of which he is a member. According to one newspaper, “ The present group of Ministers have no genius for the job.” I have for many years read the newspaper in which that statement appeared, and I cannot remember it having ever’ said anything complimentary concerning the Labour Government, which held office some time ago, or of the succeeding government led by the right honorable member for North Sydney (Mr. Hughes). It has been the policy of that newspaper to severely .criticize every government which has held office. It is evident that this critic desires a change of government; but as it certainly does not desire to put the Labour party in office, one wonders what alternative it has in mind. The same journal says that this Government has shown itself utterly incompetent and wasteful, and one may profitably examine the statistics in order to see whereon the accusation is founded. The facts, says this newspaper, are food for thought. So they are, but it is not the thought to which that journal gives expression. As all of the criticism directed against the budget by honorable members opposite was founded upon the speech of the honorable member for Yarra, I propose to deal briefly with the points of his attack. He said that taxation is continually increasing, and thai, an extra burden of £40,000,000 had been imposed upon the people during the last four years. It is alarming to think that we have exacted from the people increased taxation averaging £10,000,000’ per annum over that period. ‘ People wonder where this sort of thing will end. If they will inquire as to its origin, they may get a fair indication of the true position. A new feature of the financial discussions of to-day is the division of taxation into direct and indirect. In earlier years taxation always meant money taken directly from the pockets of the people; Customs duties were not included. Now people speak of taxation, but meaning both direct and indirect taxation ; the criticism of this budget has been in relation to the growth of indirect taxation. The total taxation has increased during the last four years from £49,885,017 to £54,373,007, but if we analyze the amount we find that direct taxation, which four years ago was £17,012,889, was only £15,174,124 last year. Indirect taxation, however, has Increased from £32,S72,129 to £39,192,883. It will be seen, therefore, that the whole of the increase in taxation has been in the indirect form of Customs and excise. The lowering of the income tax rate, and the raising of the exemption to £300 accounted for 47 per cent, per head of the total reduction of direct taxation. The receipts from this source decreased from £12,904,518 to £10,858,045. During the four years the production of the continent has been increasing at the rate cf 6 per cent, per annum, due to an increase of the population by nearly 500,000, and improved methods of working. It is fair to assume that if the rates had not been lowered, the amount of income tax raised would have been considerably higher. The revenue from the estate duty has increased from £1,172,935 to £1,411,337. When a rich man dies, the Commonwealth is entitled to take a share of his estate, and the collections from that source have advanced by nearly £300,000. During the same period land tax receipts increased by £500,000. largely owing to the collection of arrears. The total taxa tion,- direct and indirect, has advanced from £8 17s. Id. to £8 19s. lid. per head. Indirect taxation has increased from £5 16s. 8d. to £6 6s. 7d. ; whereas direct taxation has decreased from £3 0s. 5d. to £2 10s. 7d. Over the whole period the total increase has been only 2s. lOd. per head of the population, or 8£d. per head per annum, which is much less than the increase in general taxation levied during the same period by any State Parliament. We must remember also that costs of all kinds have increased. It costs more for a Government, as it does for a private individual, to live, but in spite of the increased wages awarded by Arbitration Courts, the greater burden of interest, and the increase of the old-age pensions by £2,800,000 per annum, or 9s. 5d. per head of the total population, the “total increase of Commonwealth taxation, direct and indirect, has been only 8-Jd. per capita per annum. That is a truly remarkable result. Our critics tell us that the remission of income tax has failed to win appreciation, yet I have never met any man who was not grateful for a reduction of his income taxation by 47 per cent., tor for his escape from taxation by the increase of the general exemption to £300. Any person who fails to appreciate what the Treasurer has done in the remission of taxation is such an oddity that he should be put in a glass case. It is said that the average citizen objects to the Federal authority raising any income taxation at all. If the whole of the income tax were abolished the taxpayer would probably consider ‘that he was getting only fair play. When the Treasurer first announced his proposal to evacuate the field of direct taxation, the Age and other newspapers received the intimation with acclamation. They probably thought that the tax would be entirely abolished, but when they found later that the States would be expected to reimpose it, they became violently opposed to the Government’s proposal. Apparently the idea of the critics was that if the Commonwealth remained in this field of taxation the Government could be made willy nilly to repeal an impost that produces an annual return of £.11,000,000 per annum. But can any honorable member indicate Commonwealth expenditure amounting to £11,000,000 per annum that can be discontinued while the .per capita payments to the States persist? The critics of the Government suggest that the Commonwealth can, without any embarrassment, surrender income amounting to £11,000,000, and still make the per capita payments to the States. “We know that the statement that the decrease of direct taxation is not appreciated by the public is untrue. Not only the people who pay the tax, but the whole community, is benefited by the reduction, because a bigger amount is available for investment in industry. For the large increase in Customs and excise revenue two very opposite remedies are suggested - (1) to decrease the duties, and (2) to increase them. It is practically certain that, if we decrease the duties, we shall not bring about a reduction of the Customs revenue. Such a course will produce a greater volume of imports, and not only will the amount of duties levied at the lower rate equal the present collections, but the community will have to submit to the imposition of further taxation to meet the considerable unemployment that inevitably will result. Unemployment will mean an economic loss which must be met ‘by extra taxation. Therefore, a reduction of duties is no remedy for the state of affairs to which objection is taken. We are told, on the other hand, that if duties are increased the Customs revenue will decrease. Experience has shown that theory to be a fallacy. When the Massy Greene tariff was imposed in 1921 we were assured that there would be a decrease of imports, and consequently a decrease in Customs duties. That prediction has been disproved. It seems that, no matter to what extent the duties are increased, the volume of imports will not diminish, and it may actually increase. This is a problem that urgently demands inquiry. Some fiscalists say that the cure for excessive imports is to increase the duties to the point of prohibition. If that were done, the Commonwealth would get little or no Customs revenue, and the community would have to pay through the nose by the inevitable increase in the cost of all commodities, and it is certain that the first class to feel the pinch would be the country producers, who could not pass on the additional, charges. There is no getting away from it. We are told, also, that there has been an increase in revenue of £7,000,000 in four years. Let us examine the position. The figures quoted by the honorable member for Yarra were correct. They were taken from figures supplied by the Treasury. I wish, however, to still further subdivide them, since they include the whole of the revenue relating to business undertakings and the Territories which are met by the expenditure on them. Before doing so, however, let me say that the Treasurer deserves every credit for the manner in which the budget has been presented. I am a public accountant, as most honorable members know, and, it is my business to deal with finance, but in spite of my training I have found it almost impossible to follow accounts presented by most Treasurers. During the last few years, however, the Commonwealth finances have been presented in a form that can be understood. The practice adopted by the Treasurer of separating what he calls business undertakings and Territories from the ordinary departmental services is to be commended. The business- undertakings refer, of course, to such public services as the railways, the post office, and so on. They could be run by private individuals. Consequently, they should be expected to produce revenue. The honorable member for Yarra took the total figures, including those relating to the post office, the railways, and Territories, and so on. The proper way to examine the position is to eliminate the receipts and expenditures of all such business undertakings, because there must necessarily be corresponding credits for all expenditure which these business undertakings incur. We find that in the year 1922-23 the revenue, exclusive of business undertakings, was £53,737,000, and in 1925-26 it was £58,996,000, an increase, not of £7,S30,000, but of £5,258,858. Where did the increases occur? We find that Customs and. excise accounted for £6,316,000, land tax for £503,000, estate duties for £239,000, and other sources for £772,000, making a total of £7,830,000. The increase practically was due to the tariff. The decrease in revenue from taxation, notably income tax, was £2,572,000, malting the net total increase £5,258,000. The honorable member for Yarra stated that expenditure had increased. If we deduct expenditure on account of business undertakings, &c, we find that the ordinary expenditure to meet statutory war obligations and that on departments amounted in 1922-23 to £45,758,069, and in 1925-26 to £52,384,247, an increase, not of £9,000,000, as stated by the honorable member for “Yarra, but of £6,626,000. He was correct in stating that the total increase was £9,000,000, but his figures included business undertakings and the Territories, and, as I have shown, excluding business undertakings and the Territories, the increase has been £6,626,000. The post office made a profit of £160,371, but the railways lost £547,467, and there was a deficit on account of the Territories of £343,000, making the total deficit, on account of these undertakings, £730,347. If we closed up our railways and undertook no responsibility in regard to the Territories, the expenditure would be less, but no one would consider such a proposal for a moment. Let us dissect this expenditure, excluding business undertakings, and see how the matter stands. The Treasurer has divided his accounts under votes . for departments, special appropriations, defence, war and repatriation. Under the first heading, which includes the departments of the Parliament, the Prime Minister, the Treasury, AttorneyGeneral, Home and . Territories, Trade and Customs, Works and Railways, Health, Markets and Migration, &c, there has been a decrease in expenditure from £2,952,000 in 1921-22 to £2,874,462 in 1925-26, a reduction of £78,012. Stated in other terms, the cost of running the departments in 1921-22 was 10s. 9d. a head, and in 1925-26 it was down to 9s. 6d. a head. Certainly that is an achievement. Next year, with a nonduplication of the Taxation Department, and the bringing into force of the new financial proposals, there will probably be a further saving of £100,000, which should bring the cost of running the government departments down to 9s. 2d. a head. This is the more satisfactory in view of the fact that there has been an increase in population of nearly 500,000, that arbitration awards have considerably increased salaries, and that all costs have risen. Let us now examine the position under the second heading, namely, special appropriations. Ex penditure under this heading rose from £7,620,851 in 1922-23 to £11,207,176 in 1925-26, an increase of £3,586,325. Of what did it consist ? Payments on account of old-age pensions represent an increase of £2,828,000. Would any one suggest that that vote should be cut down ? Expenditure on account of the Council of Scientific Research and Industry is responsible for £250,000. Again no one can suggest a reduction. The expenditure on prospecting for oil and precious minerals was £100,000. No one would care to reduce that amount. The wine bounty accounts for £242,000. Perhaps some honorable members would like to take a little off that. Under the heading “ Iron-steel products bounty,” including such articles as wire netting, galvanized iron, the ‘ expenditure was £195,000. All these items represent a total of £3,716,000. Defence expenditure has increased from £3,409,000 in 1922-23 to £7,353,000 in 1925-26, an increase of £3,944,000. Probably the Leader of the Opposition (Mr. Charlton) and his party would like to reduce that amount. One newspaper of late has been indulging in a good deal of criticism concerning what it terms the wasteful extravagance of Commonwealth departments, but in the very issue in which that complaint was made it complained that the Defence Department was being starved. It is hardly likely that any one will cavil at the increase in defence expenditure. War and repatriation services show a decrease of nearly £1,000,000, although payments on account .of war pensions have increased, so nothing further need be said on that point. In addition, £1,000,000 was paid into debt redemption. Thus, of the total increase in expenditure of £6,600,000 during the last four years, special appropriations, including those for old-age pensions, bounties and scientific research, which no one would interfere with, have accounted for £3,500,000; £1,000,000 has been earmarked for the extinction of the national debt, and nearly £4,000,000 represents an increase of naval and military defence. At the same time there has been a decrease in the ordinary departmental expenditure and under war and repatriation.
It will be interesting to refer to previous surpluses. When the honorable member for Yarra (Mr. Scullin) was speaking, the honorable member for Balaclava (Mr. Watt) interjected, “ The old surpluses have largely disappeared.” Th? honorable member for Yarra was then pointing out how this huge expenditure had been incurred, and the interjection seemed to imply that the surpluses had been wasted. If we look into the matter we shall see that a surplus of £6,408,424 waa carried over into the year 1922-23 - the year in which the present Government assumed office. There have been surpluses since then, but that is the only w old “ surplus, and I shall refer only to the years ended the 30th June, 1924 and 1925. In the former year there was set aside out of the surplus moneys £2,500,000 for naval defence construction, and £4,915,755 for debt redemption, which was more than the entire old surplus; and yet we have this statement that the ‘ ‘ old surpluses have largely disappeared.” In the following year, 1924-25, £988,140 was set aside as a special defence provision to cover a developmental programme, £500,000 for assistance to primary producers, and a further sum of- £1,500,000 for debt redemption. The total of those items for the two years was £10,403,895, made up as follows: - Debt redemption, £6,415,755; defence, £3,488,140; assistance to primary producers, £500,000. Yet we were informed that the old surplus of £6,000,000 had disappeared ! If any honorable member has an objection to the way in which that money was set aside, I should like to hear it. In addition, there was paid in those two years for bounties on meat, wine, canned fruit, iron products, &c, the sum of £682,989, and in invalid and old-age pensions an extra sum per annum of £2,688,754, or a grand total in the two years of £13,072,649. How then could it be wondered at that the old surpluses have disappeared ? I have not taken into account further sums of £1,750,000 for roads, and £250,000 for wire netting, which bring to over £15,000,000 the total surplus moneys set aside. Probably there are some persons in the community who would say that this amount, seeing that it represented a surplus of revenue, should have been returned to the taxpayers. That course could have been followed; but I do not think that many people would contend that that should have been done instead of using it for debt redemption, and the other ways in which it was used.
The honorable member for Yarra stated that the national debt had increased by £3,500,000. The Treasurer’s figures, however, showed a” decrease in the debt of £160,629 ; but since the population has increased by 481,855, the total net debt, which the honorable member for Yarra took, has decreased by £4 19s. 6d. per head since 1922. But we find that the unproductive war debt, for which we have no assets, has decreased by £8 3s. 9d. per head, or by £28,000,000 during that period. It was suggested that little benefit was derived from paying a huge sum off the war debt, when we immediately increased our total debt by incurring fresh “obligations. It is true that wo are paying off one debt and incurring another of practically the same amount; but after paying £28,000,000 off the war debt, which went up in smoke,, we now have a new debt of practically the same amount that is represented by assets, and that will be paid off by means of a sinking fund. There is a vast difference between having a debt for which we have no assets and one that is represented by tangible assets. The total net debt at the end of 1922 was £339,002,000, and at the 30th June, 1926, it amounted to £338,841.476. There has been an increase in the State debts, and also iu the debts incurred by the Commonwealth; but one notices that the net debt is practically the same. We have paid off £28,000,000 of war debt, and of the loan expenditure in this fouryear period no less than £16,000,000 was spent in connexion with the post office. Does any honorable member object to that? Certainly no country representative will find fault with it. Other loan items in respect of tha same period are £1,724,000 for railways, £810,000 for the Murray Waters Scheme, and £219,000 for the Commonwealth Oil Refineries Limited, making a total of a little over £19,000,000. Looking at the statement of the total debt, we note that in the year 1922 there were other sums repayable to the Treasury, such as unexpended loan moneys in hand and sinking fund balances, amounting to £25,000,000. The loan balances on the 30th June, 1926, exceeded the loan balances on the 30th June, 1922, by £3,595,000. The gross debt at the end of June, 1926, includes the recent £6,000,000, in which there were ‘out-, standing instalments amounting to £5,569,000, making a total cash in hand &nd in sight of, roughly, £10,000,000. If we add that ‘ £10,000,000 to the £19,000,000 spent on the post office and on other works, we get a difference in the debt of, roughly, £28,000,000. Would any honorable member representing a country constituency advocate a reduction of any of this expenditure on postal and telephonic services or the other works to which I have referred? I am sure he would not.
Another criticism heard was that the loans raised in the last four years Amounted to £50,000,000, and that the increase in imports during the same period had amounted in value to £55,000,000. We were informed that during this period, when factories were closing down, the excess of imports over exports was £33,500,000, and that we should have had an excess of exports to the extent of £32,000,000 to meet the interest bill. Therefore, it was said, we were “ actually £65,000,000 worse off.” At first glance that seems to be a very serious position. I admit that we are importing more than we are exporting; but, if we consider the significance of imports and exports, we shall be better able to understand the finances of the country. We have always been told - indeed, it is almost a copy-book maxim - that if a country imports, year after year, more than it exports the inevitable result is insolvency. I have never yet, however, seen a statement of the finances of Great Britain in which the exports had come within £100,000,000 of the imports. If Great Britain had been going to the bad at the rate of £100,000,000 a year, she would have become bankrupt long ago. The main reason for her excess of imports is that she is a lending nation, and her imports largely represent the payment of interest in the form of goods. Undoubtedly, the money borrowed abroad by the Commonwealth is received in the form of goods ; but, when we float loans overseas, prices there are not decreased to induce lis to buy. We should disabuse our minds of the idea that our exports should always exceed our imports. If that position could be created and maintained, we should reach the. stage that Great Britain arrived at half a century ago, and become a lending nation. We are not only sellers, but buyers of goods and also buyers of money. We must have fresh capital; but the fact that we borrow abroad does not necessarily mean that the ordinary volume of our imports will be increased. If our annual imports are of the value of, say, £100,000,000, and we float a loan of £50,000,000 abroad, the goods representing that loan will come out as part of our ordinary imports. Borrowing overseas, I repeat, docs not mean an excess of imports unless the country from which we borrow offers to let us have its goods, at a specially low rate as an inducement to us to borrow there, and that it does not do.
In one of the criticisms of the budget it was said that the financial proposals of the Government were really intended to enable the Commonwealth to rid itself of a certain degree of censure and bother, while it continued to enjoy as large a revenue as ever. I do not intend to deal with those proposals in detail, but I hope to show that those who make that criticism are incapable of understanding them. But, I ask, if the Commonwealth withdraws the per capita payments, and ceases to collect tax to pay them, how can it have as large an income as ever ? It is true that the Commonwealth would rid itself of the bother of the collection of the money on behalf of the States, but it would also be saved the expense of doing it. That is worth consideration. The cost is, roughly, over £150,000. That would be a real saving, since the taxpayers are the same, whether Commonwealth or State finance. is under consideration. If the per capita payments ceased, the States would then have to collect what they spent, and the critics . would have only one, and that the real, culprit to blame. In abusing two governments the Age newspaper and its financial friends evidently hoped that, if they could not get a concession from one, they might from another. The Age apparently thinks so much of the Commonwealth Government that it abuses, as to believe that if the taxation which it is proposed to hand over to the States were retained by the Commonwealth,, reductions, which the States could not be expected to make, might be made by the Federal Government. This is really a compliment to the Bruce-Page Government which the Age did not intend to pay. The Age went on to say that the Commonwealth had grown to enjoy being the nation’s allround almoner, and was going round bestowing favours on States, and areas, and interests, after the manner of some wealthy and benevolent rajah. What are these favours? They are really money for roads, wire netting, bounties, and special grants; and involve wireless and oil concessions.- All the expenditure was necessary, but it could not have been made by the States themselves without special taxation. If the Commonwealth had not granted money for these purposes, but had permitted the wealthy friends of the Age to obtain relief from taxation to something like the extent of its benefactions to the States, the Labour party and I would have objected strenuously. There was a need for all the assistance granted to the States by the Commonwealth, and the Labour party, having agreed to the granting of it, has sacrificed the right to criticize it. But, if we are to believe the Labour party, had it been in power, it would have spent much more than this Government has. It has to be remembered that the wireless and oil schemes were initiated, not by this Government, but* by a previous one. It is clear that the States had no means of their own to do what they have done with Commonwealth money. And, after all, it makes little difference to the taxpayer where the money comes from - the Commonwealth or the States - provided the benefits accrue. Seeing that every line of expenditure provided work for people, it is a moral certainty that the Labour party cannot logicaly object to it. Many arguments have been advanced against the financial proposals of the Government, but the only one that has any substance in it is that the States may not be able to operate in the fields of taxation that the Commonwealth is evacuating. This is argued particularly in connexion with the land tax. There may be something in that, for the Upper Houses in all the States but Queensland - which has none - may be inclined to resist it. I am not a Labour man, but I want to say that one of the best things that the Queensland Labour Government has yet done was the abolition of the Legislative Council there as it was then constituted. It was a nominee chamber, and, as such, was repugnant to our present-day ideas.
– The honorable member’s party strenuously opposed its abolition.
– It did not, for it was not in existence at the time.
– Did the honorable member advocate its abolition ?
– I did not; but I hope it will never be restored in its old form. If we must have an upper house, let lis have one elected on the same franchise as the lower house.
– That would bo nearly as bad.
– I think not. My point is that the only substantial objection that has been offered to the Government’s proposals is that the State Upper Houses may not agree to the imposition of sufficient additional taxation to recoup the State Treasurers for the loss of the per capita payments. But I think that the onus should be placed on them of rejecting the taxation bills sent on to them from the lower houses. If any State Government went to the country in Collsequence of the upper house rejecting a land tax bill, it would unquestionably win the support of the people. It would have behind it the argument that as the Commonwealth had evacuated this -field of taxation on the understanding that the State should enter it, the Legislative Council should not have resisted its doing so. In any case, the interests represented by the Legislative Councils would only be paying a similar amount of taxation as under the present regime. It is only some of the wealthy interests in the community that are actually opposing these proposals ; the ordinary man in the street has said nothing against them. There should be no difficulty in the way of the State Parliaments re-imposing the land tax, if they started at the £5,000 mark, and gradually increased the rate of tax in accordance with the provisions of the present Federal measure. I have another newspaper extract, which is so amusing that I feel that I must place it on record -
The Government’s financial proposals involve crushing increases in income tax to make up the amount of relief given to the payers of Federal land tax. There is no doubt the Commonwealth was not created to make roads. The Constitution gives it no power to do so. Dr. Page would rob the States of the revenue which goes to support roads, public works, education, and other services, and then distribute it to mendicant States as a dole, taking care, of course, that Victoria, which spends huge sums on roads, will be prejudiced by having to make large contributions to distant communities for these local purposes.
Seeing that only two States have had special grants from the Commonwealth, namely, Tasmania and Western Australia, I call the attention of representatives of those States to the term “ mendicant States.” In my opinion, a proportion of the large amount that is collected in the States with the largest population, should be spent to develop our outback areas. The Federal spirit demands that the comparatively well developed States shall help the undeveloped States to bear their burden. The Commonwealth must be considered as a whole, and not as different States; and moneys raised in Victoria and New South Wales may justifiably be spent to develop the outback areas of Queensland and Western Australia. Queensland is not a manufacturing State in any sense of the word. Like Western Australia, she is a primary producing State, and her people purchase all their manufactured products from the other States. If Victoria should complain that money raised here should not be spent in Queensland or Western Australia, the people of those States might ‘ just as reasonably say that the profit made by Victoria in selling her manufactured goods in those States should not be retained by her, but should be returned to them to assist in their development. I read in the press the other day of a man declaring that we had lost the Federal spirit; but his letter showed that he must have been looking in a mirror. It is in accordance with the true Federal spirit that the wealthy State should help to develop the poorer ones; and it would be totally at variance with it to set up the principle that money raised in certain localities must be spent in them. If that stand is to be adopted, how is the far north-west of Western Australia, or the Northern Territory, or the northern part of Queensland, where no money is raised, ever to be developed ? It is in the best interests of the settled areas to get these empty spaces populated as soon as possible, for they are the dan ger spots to Australia. Those who object to spending money in developing them do not know the meaning of the Federal spirit, and cannot claim to be federalists. They are what is known as State-righters, pure and simple.
– They are worse than that.
– That -is so. The only real criticism offered to the Government’s financial proposals centres round the proposed petrol tax, and the abolition of the per capita payments; but two or three side issues have been introduced into the debate. One of these touched the question of the taxation of Crown leaseholds. I thought that that matter had been settled once and for all; but during the last Federal election a dead set was made on it against supporters of the Government by the Labour party, and pamphlets were scattered throughout the length and breadth of Australia denouncing the Government’s action in this connexion. But the propaganda cut very little ice in Queensland, for the people there cannot understand how there can be a dispute over it. Practically all the land in Western Queensland is held under lease, and the leaseholders realize that the leases are subject to re-appraisement every seven years, and that in 28 years or 50 years they revert to the Crown. Any one who started .advocating the imposition of a tax on Crown leaseholds in Queensland would be laughed at, or else jumped on. The Federal land tax is not imposed on leaseholds unless a man holds a very large area, for which he is paying a very low rent. If a man held, say, 200,000 acres, and had to pay the tax on it, it could hardly be argued that he was a poor struggling farmer. The people who are taxed on their leaseholds are assumed to have got their land at much too low a rental. I am glad to say that in Queensland the leases have been granted at a rental that brings in sufficient revenue.
– The rent is a land tax in that case.
– That is so. As a matter of fact, lessees of cattle areas in Queensland have not made sufficient in the last five or six years to pay their rent. To-day the meat industry is in a parlous condition. The Labour Government of Queensland, realizing the condition of that industry, reduced the rents on cattle properties. It went further, and approached the Arbitration Court with a view to a reduction of wages in. that industry. The result is that to-day, on two adjoining properties, different wages arc sometimes paid. The cattleman may pay £2 10s. a week, as against £3 10s. a week paid by the owner of the adjoining sheep run. That was done by a Labour Government which understood the situation.
I desire to refer to the personal criticism which ia sometimes indulged in, not only in this Chamber, hut also on the public platform and elsewhere, particularly at election time. Personal criticism of members of opposing political parties is to be deplored. Personally, 1 have never indulged in it. If half of what I have heard regarding Mr. Bruce and Dr. Earle Page were true, I should not speak to them, but should turn my back cn them in the street. There is no objection to the policy of a political party or its administrative acts being criticized, so long as personalities are avoided. The present Government has been subjected to considerable criticism, but, so far as I am aware, none of it bias been because of its mistakes; all the criticism has been in connexion with something that the Government has done, and would do r.gain in similar circumstances. We must remember that the men on the’ treasury bench are human, and that governments, like individuals, sometimes make mistakes. I remind honorable members that attacks against others sometimes react on those who make them. People are frequently judged by the standard by which they judge others. I am pleased that in this new Parliament there has been less personal criticism of members of other parties than there was in the last Parliament. With the honorable member for Maribyrnong (Mr. Fenton), I agree that credit should be given where it is due, even if it be to those in opposite political camps. It would appear sometimes that the only persons who have a right to criticize are the members of the Opposition. Personal criticism, such as we have heard in this Chamber in the past all too frequently, is sickening to the general public, and particularly to those who sit in the galleries to listen to the debates. From where I sit I frequently hear the comments made by the persons sitting in the gallery behind me, and I can assure’ hon- orable members that they are making a mistake if they think that personal criticism of those on the opposite side of the House to them are appreciated by the audience in the gallery.
Before I entered this House I used to read Hansard carefully, although I can hardly understand now why I did so. When I read the speeches of honorable members, I used to picture them star. ding before the representatives of the people, who were hanging on their every word and listening intently to the pearls of wisdom which fell from their lips. When I was elected to this Chamber, instead of reading the speeches that were delivered, I listened to them. I found that some honorable members spoke at intervals of a day or two on a number of different subjects , and that they were capable of continuing on each occasion for an hour and 35 minutes. I felt that I was in the presence of supermen. For a while I could not understand it. Later, when travelling in various parts of the country, I’ came in contact with men who, although familiar with the speeches delivered in this Parliament, did not read them in Hansard. . In time, I learned that the honorable members who made those speeches had copies of the Hansard reports of such speeches circulated in pamphlet form throughout the country. Then I understood the reason for their speeches. In the back-blocks of Queensland I have seen copies of the reports of speeches made in this House. On the banks of the Warrego the speeches of the honorable member for Yarra (Mr. Scullin) and of the honorable member for Bourke (Mr.. Anstey) are read by the people, and find favour with them. I have met men who could repeat them almost word for word. This House comprises 76 members; if each occupied an hour and 35 minutes on every possible occasion, what would be the result? I hope that we shall not again have to listen in this Parliament to the kind of criticism which was indulged in during the last Parliament. A higher tone in the debates would be appreciated, not only by members of the opposite party,- but also by the people generally. Why should the Government of the day, no matter from what party it is drawn, be described as rogues and vagabonds by the Opposition, which, in turn, claims to have a monopoly of all the virtues. In the political sphere time works many changes. It is only a matter of time when the party .in opposition becomes the party in power, and we do not like to think that the party in power is composed of rogues and vagabonds, eve: though the members of the Opposition be all angels. I trust that when the legislation to which reference has been made iri the budget comes before us - particularly that dealing with roads and the per capita payments - honorable members will deal with it in the right spirit. If the people generally understood the Government’s proposals, they would realize that they are in the interests of the States, and will cause no unfair burden to be placed upon the people.
.- I can only liken the attitude of the honorable member for Maranoa (Mr. Hunter), in finding fault with those honorable members who at times have spoken for an hour and 35 minutes, to that of Satan reproving sin. He, himself, spoke for an hour and 20 minutes.
– Spread that over twelve months.
– I admit that the honorable member does not offend often ; but neither do I. Like the honorable member, I may tax the patience of persons sitting in the gallery, with the result that the few who have- remained to hear the conclusion of his speech will, perhaps, have disappeared before I have finished. It is strange to hear an honorable member criticizing the Opposition because it opposes the Government. I do not know how the -Government would get on without the Opposition. In all parliaments, it is the custom for the Opposition to criticize the party in power. It can, at least, be said for honorable members on this side that when they do find fault they honestly believe that there are good grounds for their attacks. Believing that, they would be failing in their duty if they did not endeavour to show wherein the Government had failed. The honorable member said that the speeches of the honorable member for Yarra (Mr. Scullin) are read on the banks of the Warrego. They are read equally at the port of Broome, and in other parts of the north-west. It is gratifying to members of this party to know that although they are unable to have their speeches broadcast by the press, as Government supporters are, they can have them read by the out-back workers, who are the people that really count.
The early delivery of the budget is an achievement of which the Treasurer is proud. In ordinary circumstances it is right for a Treasurer to present his budget so that members may discuss it early in the financial year, before the money has been spent; but when a budget is lacking in information, its early presentation is not of much advantage to any one. The Treasurer should have devoted two more weeks to its preparation, and then he might have been able to give us something of value. I am not ordinarily a querulous individual, but I frankly say that during the tenure of office of the present Treasurer, at least, bad budgeting has been the rule. If a Treasurer states that next year the Government will receive £40,000,000 from Customs and excise duties, and it actually receives £42,000,000, and if the same error is repeated for four or five consecutive years, the only possible conclusion is that the budgets are faulty. I cannot believe that the Treasurers of the past have miscalculated to that extent. To underestimate is merely a safe way to finance. If a Treasurer estimates to receive less than he knows he will receive, he is sure to have a surplus at the end of the financial year, and to secure the reputation of being a good Treasurer. We were told that for the year just closed a certain expenditure would be necessary, but the estimate was exceeded by £1,174,000;. and on the other hand the estimated revenue was exceeded by £3,422,000. The main item with which I am finding fault is that of Customs and excise receipts which, at the end of the year, showed an increase over the estimate of £1,988,000. I make bold to place my forecast for this year against that of the Treasurer, who, with the whole force of his department behind him, estimates that the Customs and excise receipts will be £40,500,000. But I estimate that the receipts from that source will be £41,500,000, or just £1,000,000 more than the Treasurer says he expects. I will take the opportunity this time next year of reminding the Treasurer that I am right and he is wrong. He does not, of course, think that
I am wrong. His forecast of £40,500,000 is so much moonshine, for he and his officers alike know that it will be greatly exceeded. He made a mistake of £2,000,000 last year, and I amletting him down lightly by telling him that he is underestimating to the extent of only £1,000,000 this year. It has been said that “ History is philosophy teaching by examples.” We can, to a certain extent, forecast the future on the experience of the past. During the period of nine years, from 1916-17 to 1925-26, the Customs and excise receipts increased from £15,500,000 to £39,000,000, or an average increase of £2,500,000 per annum. It is, therefore, safe to assume that the receipts for the present year will show a £2,500,000 increase over the receipts for the past year. The fact that “we have increased some of the Customs duties during the present session will further tend to increase Customs receipts.
There is no justification for the Treasurer’s proposal to withdraw the per capita grants. Our present Customs duties are undoubtedly a tax on the people. Neither my friend the honorable member for Maribyrnong (Mr. Fenton), who is probably as consistent a protectionist as any other honorable member, nor the honorable members for Yarra, (Mr. Scullin) and Hume (Mr. Parker Maloney), who are also ardent protectionists, would contend that a protective tariff is effective which provides a revenue which increases by £2,500,000 a year. That kind of tariff is just a burden on the people, although it undoubtedly suits a treasurer. It is impossible to impose taxes beyond a certain amount without withdrawing capital from industry. Revenue from the Customs is not only much larger than it used to be, but is also much larger per head of the population. The amount received from the Customs per head of the population in 1916-17, which was not a pre-war year, was £3 4s., and the estimated amount for this year will be £6 12s. 31/2d. per head, an increase of over 100 per cent, per head. That increase of £3 8s. is a very serious matter to the people of Australia, and is particularly serious to the States, because it means that the fund from which taxation can be drawn is being tapped to that extent by the Com monwealth, and that the States cannot impose taxation needed for developmental purposes. The Treasurer does not need this additional revenue, nor does he need to withdraw the per capita grants. It has been flamboyantly shouted from the house-tops that he has a surplus of £2,786,000. He took the unusual course of paying £2,500,000 of an anticipated surplus last year into a trust fund for air services, investigations into scientific and industrial matters, naval construction, and the like. The honorable member for Maranoa dealt with the budget seriatim, and asked on almost each item, “Are honorable members prepared to cut this down?” He thus endeavoured to obtain a suggestion from this side what specific item should be reduced. We can find a parity of reasoning in the case of a man who suddenly has his salary raised. A man who is receiving a salary of £5 or £6 a week, and then enters this Parliament and finds himself in affluent cimcumstances with a salary of £1,000 a year, would probably say he was unable to reduce his expenditure below £1,000 a year. If he were asked to do it, he would say, “ I do not know where I can cut down my expenditure. I take my wife to the theatre once in a while; I must give a certain amount of money to needy people in my constituency, and it is necessary for me to dress betterthan I did formerly, and I have other unavoidable expenses.” But that is a poor argument. When large sums of money are given into the care of the Treasurer, who, before he was Treasurer, said that his predecessor in office was extravagant, we might have expected economical administration, but he spends with a prodigal hand. Further, it is easier to spend other people’s money than one’s own, and that explains the intention of the Treasurer to filch from the States the small amount of revenue they at present receive from the Commonwealth. On behalf of the States, I emphatically protest against that proposal. On page 10 of the budget papers there is a remarkable statement of surpluses, and deficiencies since the year 1907-08. It discloses, naked and unashamed, the manner in which different sources of revenue have been wrested from the States. Commonwealth Treasurers should graduate in- a position of responsibility in a State Government, so that they would understand the financial difficulties that confront the States. Let us see how the Federation has acted towards the States. The note at the head of the statement to which I have referred reads -
Until the curl of 1906-7, the whole balance of the Consolidated Revenue fund was paid to the States. In 1907-08, the whole of the balance was paid to the States after the provision of £193,621 had been made for expenditure in the following year under trust fund, invalid and old-age pensions account.
I realize that the Federation is now in a position vastly different from what it was in during that period. Those humane impulses on the part of this Parliament - the granting of old-age and invalid pensions and the maternity allowance - led to a considerable increase in the expenditure of the Commonwealth. The estimated expenditure under those two heads for the present financial year is £9,675,000. The note goes on to state-
From 1908-09, and until the abolition of the bookkeeping provisions of the Constitution in 1910-11, the States received only threefourths of the net Customs and excise revenue, and the balance of the Consolidated Revenue fund was transferred to trust fund, invalid and old-age pensions, and naval defence (construction of fleet) accounts to provide for expenditure in subsequent years.
That paragraph throws an illuminating sidelight on naval construction. In those days, the expenditure on naval construction was defrayed out of revenue account. To-day, unfortunately, it is defrayed out of loan account. These financial chickens must ultimately come home to roost, and, possibly, future Treasurers may be forced to make further inroads upon the moneys that the States now receive to meet a situation caused by the financing of this Government. The note proceeds -
From 1910-11 until the end of 1925-26, the States received 25s. per head of population per annum, and the balance of the Consolidated Revenue fund was. transferred to trust fund, invalid and old-age pensions, and war pensions accounts. In this financial year it is proposed to discontinue the per capita payments to the States.
It will thus be seen that in the period from 1906-07 successive Treasurers, instead of instituting economy and giving the States an opportunity to carry out necessary services, have gradually taken from them different sources of revenue. Where is the need for the withdrawing of the per capita payments? In 1917-18, the receipts from the Customs amounted to only £13,200,000. I have purposely chosen that year, because it was subsequent to the war. In the present financial year, it is estimated that the receipts will amount to £40,500,000, an increase of over 300 per cent. A wise man named Solomon once wrote a number of proverbs, that have been preserved and are on record. Speaking of people who in his day occupied a position analogous to that of our Treasurer, he likened them to the daughters of the horse leech, whose one cry was, “ Give, give.” This proposal will have a disastrous effect upon the Federal sentiment. We should increase rather than withdraw the per capita payments. In 1917-18 every man and woman in Australia was taxed through the Customs to the extent of £2 13s. 7d. per annum. To-day that tax amounts to £6 12s. 3 id. In the former year, when the Treasurer had made to the States the per capita payment of 25s., he still had in his possession an amount of £1 8s. 7d. per head. To-day the amount which he retains is £5 7s. 3£d. per head. Under those circumstances I cannot understand his proposal to deprive the States of the per capita payments. The States have important duties to perform. Without wishing to decry this Parliament, I contend that their functions more closely touch the people than do ours. Connected with their lands administration is the question of rural credits. They are not “ fake” rural credits, such as those that are controlled by the Commonwealth Bank. I have not been able to find in Western Australia a farmer who has received one shilling from the rural credits branch of the Commonwealth Bank. The Industries Assistance Board in Western Australia has at times removed people from a condition of absolute poverty. In 1910, which was a bad season, the mcn on the land in that State were practically starving. They had run up accounts with the grocers that they could not hope to wipe off for years. The State stepped in, and took over the liability, which in a number of instances amounted to scores of pounds. It provided the men with sustenance at the rate of 9s. or 10s. a day, advanced them seed wheat and superphosphates, paid for clearing, provided them with agricultural machinery, fencing, and bags in which to consign the wheat, assisted them to take off their crops, and trusted them in many other ways. I have in mind a district in the electorate of the honorable member for Swan (Mr. Gregory), in which primary producers who did not possess a shilling were living on boiled wheat. The assistance which they received from the State enabled them to again get on their feet, and to-day they are the wealthy owners of motor cars. The State also control the forests, from which very little revenue is derived. They have charge of the mining industry, and are frequently called upon to render it financial assistance. Their educational systems cost them large sums of money. Western Australia has for several years been in a serious financial position, but it possesses an educational system that is second to none in Australia. The State makes sure that the poor man’s child does not starve intellectually. All education is free, even as far as the university. It has a much better, system than that which obtains in Victoria, where teachers are given starvation salaries, and it is found necessary to replenish their ranks from overseas. Western Australia has dealt generously with her teachers. Children iu Victoria are taught by boys and girls of fifteen or sixteen years of age. That is not fair to either the scholars or their tutors. The system in this State is a travesty upon free education.
– But there are, nevertheless, a fine lot of teachers in this State.
– There are; but they are overburdened with work, and receive £1 a week less than do teachers in the financially embarrassed State of Western Australia. The States also have charge of the administration of justice, which is a spending department, and of ports and harbours, upon which there is a continual outlay. They also control charities and hospitals. Health is largely under the control of .the States, and also water conservation, road construction and railways.
The honorable member for Batman (Mr. Brennan) has said the State Governments are the bread and butter governments of the people. What services has the Commonwealth under its jurisdiction? It has defence, which is a neces sary service if administered in a new spirit. There is great danger of needless expense in the Defence Department. The Labour party contends that one way to promote quarrels among nations is to expend enormous sums of money on military display. A large expenditure on defence is unnecessary at a time when the whole of Europe is on its knees. Every country has its own business to attend to, and the nations in the Pacific are closely watched from other quarters. Now is the time to give effect to the new spirit of defence. I honestly believe that the expenditure of £4,000,000 on defence was unnecessary.It is very easy to invoke on the part of other nations a feeling of fear and mistrust, the genesis of all naval construction. We were told that the last war was to end war. Honorable members, however, will see from Whittaker how the expenditure on the navies of the world has increased since the war. There are more men under arms in Europe to-day than there were before the war. Under those circumstances, all the Locarno conferences in the world will never kindle a spirit of trust in the hearts of mankind. If I went about with a dagger in my hand, my neighbour, to protect his life, would think it necessary to do the same. The expansion of the army of Great Britain has withdrawn labour from industry. In a young country like Australia we should spend our money on means of transport and production. We have done magnificently in regard to migration, and we want every possible shilling for the development of this country. Now is the time to curtail expenditure on defence, because we may have no opportunity to do so in ten years’ time. It was my hope that the Labour party would be returned to power at the last election, so that it could show the world that we were not startled by the cry that a reduction of armaments would cause nations to fly at each other’s throats. The Labour party, in providing for the defence of Australia, would carry out the recommendation of Mr. Gepp, and build up our factories and industries so that in emergency we could turn them into munitions and armament works. The Air Force is an important arm of defence. The Labour party if returned to power would have established an effective means of defence with aircraft and submarines at a tithe of the cost of constructing the two cruisers. Another Federal service which is revenueproducing is the post office. The invalid and old-age pensions and the maternity allowance cost the Commonwealth £9,000,000 a year. The Customs tariff, instead of preventing foreign manufactured goods from coming here, is being used to bleed Australia white. It is taxing the people to the extent of £40,500,000 to bring about an increase of the manufactures of this country.
The administration of lighthouses by the Commonwealth has been a failure, and I am not surprised at that, because lighthouses are of necessity widespread. Any government must fail in its efforts to control services situated at a long distance from the seat of administration. A service is most effective when administered on the spot. We have wonderful examples of the failure of long-distance administration in respect of the Northern Territory. The administration from Melbourne of the lighthouses on the north-west coast of Western Australia is an absolute farce, and there has been no real effort made to improve the lighting of that coast. If the administration of the lighthouses and the expenditure on them had been left to the States, they could have agreed on some uniform system, and given a far better service as far as the ports and harbours of Australia are concerned. Honorable members may accuse me of being a States-righter, but that does not deter mc. The position of Western Australia is different from that of other States; because it is far removed from the seat of the Federal Government.
Recently a royal commission on the finances of Western Australia visited that State, and made some important recommendations that, unfortunately, have been entirely ignored by the Government. The commission was composed of independent experts, who decided that there was reason for the dissatisfaction existing in Western Australia. One member of the commission even went so far as to state -
In my opinion, Western Australia should never have entered the Federation; but, having done so. there is, I feel convinced, only one complete and satisfactory remedy for her present disabilities, namely, secession. If that event occurred, all other recommendations in this report would become unnecessary. As, however, it cannot be taken for granted that secession will take place, I have joined in recommendations having the object of relieving (at least to some extent) the present financial disabilities of the State of Western Australia.
I have quoted that statement because the cry of secession on the part of Western Australia has frequently .been ridiculed by honorable members in this House.
Certain medical services, which are non-paying, are undertaken by the Commonwealth Government, lt is doing excellent work, particularly iu connexion with the serum laboratories. I hoped that the Minister for Health (Sir Neville Howse), in view of the gravity of the position in the north-west of Western Australia would have established a laboratory at Broome to deal with tropical diseases.
– The indications are that a laboratory will soon be established there.
– I am pleased to hear that. The honorable member for Maranoa (Mr. Hunter), when speaking on the budget, challenged the Labourparty to suggest improvements in it. In my opinion, there are three directions in which savings could have been effected. In the first place, we could have effected a saving last year of £4,000,000 in respect of defence. Secondly, a considerable profit could have been made by extending the functions of the Commonwealth Bank, which up to the present have been “ cabin’d, cribb’d, confin’d.” Instead of making a profit of £1,380,000 last year on the note issue and the minting of silver, and £480,000 in connexion with the operations of the bank itself, that institution, if it had been allowed to function as originally intended by its founders, would be making a profit sufficient to meet the invalid and old-age pensions and maternity allowance.
There is a clear cleavage between the National party and the Labour party. The National party represents vested interests. The Country party is said to represent the primary producers, but what is the true position? We know that the legislation passed in this House has been actuated by the great National Union, and for that reason an ex-Minister to-day declared himself through the press to be outside the ranks of the Country party. I congratulate him on. his bold step. Land taxation, amounting to more than £2,000,000, that rightly belongs to the people, is being practically thrown away. The Commonwealth Government intends to hand over the field of land tax to the States, because it knows that they cannot reimpose that tax, since vested interests are represented in the Legislative Councils of the States. Like Shylock, who, as time went on, increased his usury, the Treasurer dallies with the States only to drive a keener bargain. On the 19th May, this Government proposed to hand the whole field of taxation to the States, but the proposals of the 4th June reserve to the Commonwealth 60 per cent, of the income tax. The Treasurer said that, the authority that expends the money should have the responsibility of raising it, and to demonstrate his consistency he proposes to raise money by a duty on petrol, and hand it over to the States for expenditure on main roads. He is offering to relinquish certain forms of direct taxation which, the people insist, shall be curtailed, and in return for that apparent concession is grabbing the whole of the Customs and excise revenue which, for several years, has been increasing at the rate of £2,500,000 per annum. I wish the honorable gentleman had the responsibility of the Treasurer of Western’ Australia. He says that the States cannot ignore the vital effect of the Avalon the finances of the Commonwealth. What has been the effect of the war upon the finances? In the year 1925-26 Commonwealth expenditure on war and repatriation services was £29,168,000, whilst the receipts from Customs and special taxes imposed during the war, excluding the land tax, were £51,000,000. ‘Thus he has a balance of £22,000,000 of revenue in excess of special war expenditure, and that balance is equal to the total revenue of the Commonwealth from all sources m 1914-15.
– How do the old-age pensions of to-day compare with those in 1914-15?
– That liability has vastly increased, but the total amount paid for old-age and invalid pensions is only £9,000,000, whereas the Customs receipts have increased during the last four years by £10,000,000. The honorable gentleman’s scheme for the adjustment of the financial relations of the Commonwealth and the States is based on the supposition that the latter will increase their taxation to an amount equivalent to the capitation grant. Surely he does not believe that they can do that. In Western Australia the income tax rises to 4s. 7d. in the £1, which is higher than in any other State of the Commonwealth. The pastoralists, who, when they are doing well, are relatively better off than doctors, lawyers, publicans and other men with fairly good incomes, find that it is not profitable to invest money in Western Australia because of the high income taxation. Thus the State is hit in two ways. In addition, the protectionist policy injures its primary industries. I recognize that the small community in Western Australia cannot hope to change a fiscal policy which is benefiting considerably the large numbers of people living on the eastern and southern seaboards; but we say that as the tariff is indirectly injuring our industries and directly benefiting the industries of the eastern States, they should make some special allowance to us. All that the Federal Treasurer proposes to do is to discontinue the per capita payment of 25s. per annum, and leaving tha State no opportunity to reduce its accumulated deficit of over £6,000,000, or to finance its developmental requirements. Having been for some years in the State Parliament, I know that an increase of the land tax is the very last legislation towhich the Legislative Council would give its sanction.
I fear that the proposals which the Treasurer has put forward will dislocate business. At different periods- in its history Australia has experienced financial crises, although, fortunately during the war it was immune from any troubles of that kind. Even America, although it has enjoyed a wonderful run of luck, and is probably more prosperoustoday than at any period of its history, had several financial crashes during theyears 1914 to 1918. To-day the farmers in the middle States are in a very precarious position, whereasthose of Australia, thanks to good. seasons and high prices, are doing remarkably well. I am not a calamitymonger, but I honestly fear that, if the Treasurer insists upon his financial proposal, he will precipitate a panic. I therefore hope that he will not proceed with this scheme.
In regard to the duty on petrol, the Government promised on the hustings that it would give £20,000,000 to the States for the construction of main roads. The Commonwealth was to be a fairy god-mother, distributing largesse to the States, and that promise had a considerable influence on the general election. Subsequently, the Treasurer met the State Ministers for Works in solemn conclave, and put before them his proposals for making £20,000,000 available for expenditure on main roads. These gentlemen usually experience so much difficulty in getting even 20,000,000 pence for expenditure in their States that they were quite enamoured of the honorable gentleman’s proposal. They are now finding that there was a brick in the hat, for the Commonwealth proposes to extract money from tho pockets of the people before handing it back as largesse. In effect, the Treasurer says to the States, “ We know your people are taxed up to the hilt, but we must go ahead with our splendid main roads policy. So they must find £15,000,000 of the £20,000,000 that we promised, and the State Parliaments must tax them for the other £15,000,000 which they have to provide.” In other words, the people of the States will pay £30,000,000 of the £35,000,000 that is to- be made available. The Treasurer’s attitude reminds one of the story of the monkey, who, having four nuts to share with two friends, said to them, “ There are two for you two, and two for me, too. That is fair.” The Treasurer has not even been as fair to the States as the monkey was to his companions, and honorable members can understand with what mixed feelings the State Ministers now regard the gold brick which he sold to them. The Government’s main roads proposals will not be acceptable to the people of Western Australia. It is impossible to build any but very rough roads in the vast and sparsely-populated hinterland of that State. This scheme may suit Tasmania and Victoria, which are compact and comparatively highlydeveloped States; they have a prospect of being ultimately grid-ironed with fine arterial roads. But the back country of Western Australia, New South Wales, and Queensland will not derive one pennyworth of benefit from the Commonwealth grant for which the users of motor tractors in those areas are to be taxed. The greater portion of the previous Commonwealth roads grant to Western Australia was expended in the comparatively closely settled electorate of Forrest. I do not complain of that, because I recognize that good roads are necessary for the cartage of wheat, but the vast extent of country out-back, which is eminently suitable for the use of motor tractors, will have to do without high-class main roads, even if £50,000,000 be raised by the petrol tax in Western Australia alone. This portion of the Government’s policy will hang like the Old Man of the Sea about the necks of the toilers who are developing the remote portions of Australia. There is already a State tax of 3d. per gallon on petrol used by vehicles engaged in road transport; but the Government, recognizing the peculiar conditions of the north-west, has exempted it from the tax. The Commonwealth Treasurer does not propose to do that, and the already over-taxed and impoverished community in Western Australia is spending its money freely in sending to me, and other representatives of that State, telegrams of protest against the petrol tax. Doubtless, every representative of a country constituency is inundated with similar correspondence from his electorate. The Treasurer, after selling to State Ministers a gold brick, gave them some gratuitous advice. Knowing that they will not be able to raise an extra £15,000,000 of revenue after he has taxed their people for the £15,000,000 that he promised to give to the States, he told them that they may raise their contribution by lo.an, if necessary. It is not sound finance to raise money for roads by way of loan. The proposal has met with a hostile reception in all parts of the Commonwealth. I am prepared to accept grants for roads, wire netting, or any other purpose, because Western Australia is a needy State. If the Treasurer, instead of proposing to withdraw the per capita grants, examined the actual financial position of States like Western Australia, he would realize that instead of taking money away from them, the whole of the financial arrangements between the Commonwealth and the States should be re-adjusted to facilitate development. If this Parliament makes it impossible for the States to raise revenue, progress will be retarded.
Once again I draw attention to the unfortunate position of the gold mining industry in Western Australia. The Prime Minister (Mr. Bruce) stated in Sydney that the secondary industries should be protected by means of the tariff and the primary industries by way of bonuses; but I point out that relatively little assistance has been given to Western Australia, although the gold-mining industry, particularly, is worthy of consideration. I have pointed out on numerous occasions that during the war the industry lost a sum variously estimated at between £1,500,000 and £3,000,000, because gold at pre-war prices was placed at the disposal of the Empire, to enable the war to be successfully prosecuted. The industry now asks for a bonus of £1 an ounce. There is £9,000,000 locked up on the eastern goldfields of Western Australia. The mining property there is valued at £1,950,000, and there is rateable property to the value of £1,000,000 in Kalgoorlie and Boulder alone. The State Government has invested £9,000,000 on the gold-fields in waterworks, roads, buildings and railways. If the Commonwealth is not prepared to grant a gold bonus, it should at least appoint a special commission to deal with the matter. The chairman of the royal commission that inquired into the disa’bilities of Western Australia under federation recommended the granting of a gold bonus for ten years. I admit that’ two members of the commission contended that the mine-owners should first develop the fields without government assistance; but if a man in rags asked me for a shilling with which to purchase a meal, it would be inhuman of me to tell him that I would comply with his request on the condition that he presented himself to me in a 10-guinea suit. Only a few weeks ago, another of the mines closed, and 360 more men were thrown out of work. The only way out of the’ maze is to grant a gold bonus.- At Ararat the Prime Minister announced that he proposed to refer the request for a gold bonus to the Board of Trade in Western Australia. I have frequently asked that the report of that board should be presented to Parliament; but I have been told that it is being considered by the Government. I know as well as the Prime Minister -does that the board recommended that an expert commission should be appointed to inquire into the conditions of the goldmining industry. The Prime Minister is evidently unwilling to allow that recommendation to be made public. Since the Government is willing to assist other industries, both primary and secondary, it has no excuse for refusing the help that Western Australia sorely needs.
Mr. STEWART (Wimmera) [13.251. - Since the hour is late, I should like to secure the adjournment of the debate.
– The Government intends to finish- the debate on the first item.
– Is it proposed to take a vote to-night?
– Yes, if a vote is required.
– I shall deal first with the proposed withdrawal of the f.er capita payments, and then- refer to the roads policy outlined in the budget. . The latter proposal means that special Customs taxation will be superimposed upon the already huge sum that is now collected. I was a member of the Ministry when the roads policy was introduced in, I think, 1923. It was very different from the present proposal, so far as the method of raising the money was concerned. The idea at that time was merely to make a grant of surplus revenue to assist the States in building roads. The present proposal is a radical departure in that, while the money is to be allocated on a somewhat similar basis, the Government intends to impose a specific tax for raising it. I understand that the ‘.’Government is now in the position of having to fulfil promises made at the last elections Discussion has taken place as to what this promise really was. When on the hustings I favoured a goods roads policy, and agreed to the proposal to spend £20,000,000 in that direction, provided extra taxation was not imposed upon motorists, who were already highly taxed.
I said that if the money required was to be set aside from the already large sum ‘ - collected from them, I was prepared to support the proposal. The Prime Minister, in his policy speech at Dandenong on the 5th October, said -
The Ministry proposes to make available to the States a’ sum of £20,000,000 spread over a period of ten years, such amount to be provided out of the revenue derived by the Commonwealth from taxation to be collected from motor users through the Customs Department.
That quotation, perhaps, may justify the Prime Minister in claiming that he clearly stated that taxation was to be collected from motor users through the Customs Department ; but in discussing this question we must take into consideration the contention, which has been put forward ‘for a number of years, that the money received from motorists should be allocated specifically for road construction and maintenance. The National Roads Association has passed several resolutions on’ that subject, and deputations representing that and similar bodies have waited upon Ministers. I am not sure that I did not receive one of those deputations myself when I was a Minister. The agitation was wide-spread. “When the Prime Minister stated that the Government proposed to provide this sum of £20, b00. 000 bv taxation collected from motor users, the public generally understood that it would adopt the policy that had been so long advocated by the National Roads Association. I have not heard of the Prime Minister, or anyother Minister, saying that additional imposts would be placed upon motorists through the Customs. If any Minister did make that1 statement, I should be glad to hear of it.
– I heard the Treasurer say it.
– I accept the Minister’s word for that; but I have not heard it stated. In the sphere in which I move the interpretation placed upon the Prime “Minister’s statement was that which I have_ given”. It is, perhaps, as well to consider the history of motor taxation. When motor cars first came into use they were regarded as a luxury, and any person who owned one as fair game for taxation. A motor car was the hall-mark- of plutocracy, and it was considered that the owner of one was squandering money, and could afford to pay heavy taxation. But times have changed. The motor car is no longer, a luxury, it is necessary, particularly in the out-back parts of Australia. I live in a remote part of this State, and I know, just as do other honorable members who have lived in the out-back, that nothing has done more than the motor car to make country life attractive. The days of the horse and gig, or buggy, with a hurricane lamp tied underneath, and no shelter from the rain on a wet night, have almost gone; though we still sometimes see, unfortunate people in that kind of conveyance, and are thus brought to realize what a difference the motor car has made to life in the country. Three hundred thousand motor, users in the Commonwealth are very much concerned about this proposed tax, and in addition a large number of persons desire to own motor cars, and are eagerly looking forward to the day when they can buy one. For them this tax places that day farther forward, What is the object of the impost ? The Ministry speaks on that matter with two voices. The Prime Minister, in reply to a deputation the other day, as reported in the press, said -
The new duties were in no sense related to the protectionist policy. They were purely revenue duties for a specific purpose.
The Minister for Trade . and Customs (Mr. Pratten) is reported in the Are/us of Wednesday, the 14th July, to have said, in the course of a vigorous defence of the new duties -
The total production of motor spirit in the Commonwealth was only 10 per cent, of the amount consumed. It was urgently necessary that there should be greater production. The new duty would assist in that direction.
Among other things he also said -
In the first place, keen competition between the British and American motor-car manufacturers would prevent any increase in the cost of machines.
He asks us to believe that an increased duty of . 2^ per cent, on all motor chassis will not increase the price of motor cars to that extent. I do not agree with him. In speaking of motor fuel, he said -
The petrol duty would supply another incentive for the provision of motor fuels within the Commonwealth. Australia was so dependent on outside sources for- this commodity that some encouragement was very necessary. He believed that they would lead to increased prospecting for oil within Australian territory.
He tells motor car users that if they wish to escape the tax they can do so by using Australian spirit and Australian tires. Yet the honorable gentleman must know that the total production of motor spirit in Australia is only 10,000,009 gallons, whereas the consumption is 115,000,000 gallons. Therefore, every motorist cannot escape taxation by using Australian motor spirit.
– Could not the supply of Australian motor spirit be increased ?
– It could not be increased sufficiently to enable every motorist to escape this tax; but if it could, what would become of the roads policy ? The whole thing is ludicrous. Placing the most generous interpretation possible on the motives’ of the Government, it is obvious that this tax has a dual purpose; it will raise some revenue, and it Will be another instalment of the high protection policy so ardently advocated by the Minister for Trade and Customs. Its object is to appease the growing pains that he referred to in one of his speeches not long ago, and to fulfill the promise that he made to certain Australian manufacturers who complained that they did not receive “consideration,” as they were pleased to term it, when tha last tariff schedule was framed. He told them that new schedules would be submitted from time to time. In short, I hold the opinion that, in the guise of a roads policy, the Ministry has given us another instalment of excessive protection, which seems to be the policy of the Government. I do not wish, at this stage, to argue the old, well worn question of the merits and demerits of high and low duties; but I want to say that, rightly or wrongly, the primary producers generally - I do not say all of them, but j say, with confidence, ‘ a majority of them - have decided that Customs duties have reached a stage at which some one ought to call a halt. Let me state the fiscal resolutions and some of the fiscal policy of the Victorian Farmers Union. 1 quote from a document presented to the right honorable the Prime Minister on the 20th July, 1925, and signed by Mr. H. V. Pickering, chief president of the Vic torian Farmers Union; Mr. E. Reseigh, vice-president of the union, and Mr. E. E. Roberts, general secretary of the union; and also on behalf of the Town and Country Union.
– Who finances the Town and Country Union?
– I am not on this occasion an apologist for the Town and Country Union. I leave that organization out of the question, and speak only for the Victorian Farmers Union, which was responsible for this document. It is a formidable document, and I shall not attempt to read all of it. It contains this statement -
On the 13th March, 1925, 350 delegates from the various branches of the Victorian Farmers Union met in Melbourne, and unanimously carried the following : -
That this conference considers the Australian Commonwealth tariff unnecessarily high, and that its incidence is hurtful to the great primary-producing interests, and also to the welfare and progress of the Australian community as a whole, and this conference further considers that a percentage reduction should be made annually on all tariff items dealing with the staple necessities of primary and secondary industries.
Then follow many reasons in support of the resolution. Let me read a. specific reference to motor taxation -
Licence fees paid by motor vehicles contribute to the fund out of which roads are built and maintained, but we restrict the efficacy of these roads, and limit their cenvenience by levying heavy taxation upon these vehicles, and upon the lubricating oil and fuel they use.
Transport, the handmail to settlement and production thus becomes more, instead of less, costly. On one hand the necessity for markets, population and transport is proclaimed, and simultaneously a high Customs tariff is imposed, which hinders or defeats attainment of these conditions.
The document also says -
The high tariff, rather than ministering to increased prosperity, progress, and sound industrial development, has hindered greater progress and better development, and, in addition, exposes our people to the effects., of a disastrous reaction.
Because of alleged “ insufficiency “ of present duties, high tariff advocates are asking higher or more duties. We submit the remedy is the reduction of existing duties.
There are several pages of similar sentiment. The fiscal plank of the’ Australian Federal Farmers’ Organization also provides for the reduction of duties upon the staple necessaries of primary production, and the free admission of tools of trade when .they come from within the British Empire. Nobody knows better than I and certain members of the Cabinet that that is the settled fiscal policy of the Victorian Farmers Union. They and I were nurtured in that organization. Certain figures have been quoted regarding Customs taxation. Let me give those that relate to the net Customs and excise receipts for the period commencing with 1921-22. They are as follow: -
The estimate of the Treasurer (Dr. Earle Page) for this financial year is over £40,000,000; and ever since he has been the Treasurer his estimates have been on the low side. That is a most serious position. That colossal sum is to be taken out of the pockets of 6,000,000 people in a period of twelve months, and amongst those 6,000,000 are the infants, the aged, and the infirm, who add nothing to the wealth of the country.
– In what way would we make good the loss of revenue? Would the honorable member favour an increase in the land tax?
– The amusement tax, which was removed by the present Government, could be re-imposed, and the income tax could be restored to its former level. Those loudly proclaimed remissions of direct taxation were actually not remissions at all, because in their place has been imposed additional Customs taxation, which is the most obnoxious of all forms of taxation, and the most-unfair to the- primary producers of Australia. The result is seen in the position tha-t is occupied to-day by many of the primary industries. The honorable member for Kalgoorlie (Mr. A. Green) on several occasions this evening used thi? term “ mendicants.” Some of our primary industries are to-day compelled to adopt the role of mendicants. The growers of fruits to be canned or dried, the applegrowers, the doradilla grape-growers, and the dairy farmers have been forced into an economically impossible position by the high cost of production, which has been largely due to the tariff, that has! brought in its train Arbitration Court awards that have granted to employees higher wages and shorter working hours. The honorable member for Wakefield (Mr. Foster), and other honorable members, including myself, have on many occasions introduced to the Government primary producer mendicants. It has been argued by honorable members of the Opposition that our troubles have been due to rising land values. That is not so. In some portions of the Commonwealth land values have risen, but in others they have fallen. In Mildura, land is cheaper to-day than it was five or ten years ago. Only yesterday Mr. Mclvor, the chairman of the Closer Settlement Board in Victoria, who has had the experience of settling upon the land thousands of returned soldiers, told a conference of returned soldiers that land values in the dairying districts had fallen. He invited them to make application for a re-valuation of their blocks, and said that such a request would receive favorable consideration. Many returned soldiers were compelled to buy fencing wire, galvanized iron, and other requirements at inflated values, and they are now compelled to pay, not only the principal sum borrowed, but also the interest which in the meantime has accumulated. All these matters have a bearing upon the proposed tax. A while ago I referred to the fiscal creed of the Victorian Farmers Union. I shall now deal with the fiscal creed of a portion of the Nationalist party. That party speaks with two voices. I quote the agreement which was entered into prior to the last election by the Primary Producers’ Association and the United party - which is synonymous with the Nationalist party - in Western Australia. It reads -
That, as the present high tariff is inimical to the best interests of Western Australia, the full strength of the two associations shall be devoted to securing a substantial reduction in the existing tariff.
That, as a reduction can only be secured through our parliamentary representatives, neither shall give its endorsement to any candidate not in agreement with this policy.
That, subject to the above-mentioned conditions of policy being accepted as the basis of an appeal to the electors, the Primary Producers Association is willing to co-operate with the United party of Western Australia in running a joint team, consisting of two representatives of the United party and one representative of the Country party, for the forthcoming Senate elections. The team so selected shall receive the endorsement and support of both associations, and no other candidate shall be nominated, endorsed, or supported by either association.
A member of the present Cabinet, the Leader of the Government in another place, accepted those conditions, advocated them, and won his seat under them. How far the Government was aware of . that I am unable to say. But one of two things stand out clearly: Either the Prime Minister and the other members of the Cabinet acquiesced in the agreement and accepted it, or the Vice-President of the Executive Council, without the consent or knowledge of his Cabinet colleagues, entered into an arrangement that embodied a vital principle. The tariff issue, the world over, has always been regarded as a big political question. Even in Australia, in spite of the claim that it has been settled, it still vitally affects our political affairs, because we obtain nearly two-thirds of our total revenue from the tariff. Yet we have the spectacle of a party appealing to the people under the flag of high protection in the eastern States, and under the flag of a low tariff in the western States. I do not know of any previous successful party that was guilty of such an action. Quite apart from -the political morality of the arrangement, those who entered into it should endeavour to carry out their pledges. If on the hustings the members of the Victorian Partners’ Union in this State advocate lower duties, they should regard it as a duty to stand up to those principles when returned, to Parliament. Before leaving this subject, I shall .touch upon another very important aspect of it. As the position of those who are engaged in primary industries becomes more pre-‘ carious, finance is curtailed. An outstanding illustration of that fact is afforded by the position of the driedfruits industry. The associated banks, so I am informed by those engaged in the industry, refused to make advances on horticultural properties because of the precarious condition of the industry. As a result, this
Government had to come to the rescue of the producers. But in spite of the Government’s loudly-proclaimed policy of rendering equal assistance to secondary and primary industries, an advance, and not a bounty, was given to the producers. This industry is one of the few primary industries that is governed by arbitration court awards in respect of hours and conditions of labour. The irony of it all was that when this Government was assisting the producers who were absolutely down and out - and the Government at the time did save that industry from disaster - the Arbitration Court increased the wages of the workers in the industry and the unfortunate producers had to pay the extra impost out of the money advanced to them. The Government is now insisting upon the repayment of the advances unless the powers can prove abject poverty. The excessive duties have accentuated the evil of centralization. It is an anomaly that in this, one of the greatest primary producing countries in the world, centralization is present to an .extent unequalled elsewhere.
Sitting suspended from 12 midnight to 12.J/.5 a.m. (Friday). (Friday, 23 July
– Australia has also to maintain a valuable export trade, and the Treasurer stated in Sydney recently that primary products represent 96 per cent, of the total exports, and manufactured goods only 4 per cent. He also said that in our export trade we should aim at establishing a better balance between primary products and manufactured, goods. Upon that the Countryman unkindly commented that a man who spoke of exporting manufactured goods under the present’ conditions in Australia was Like a dog baying the moon. I do not think that criticism is far wrong, for, whilst the Treasurer may have been merely indicating an ideal to be aimed at, he spoke’ of something which is impossible under present economic and industrial conditions. I have already proved, by the quotation of definite resolutions, that at least one section of the organized farmers is opposed to the fiscal policy of the Ministry. That section considers that the Customs duties are too high, and should be progressively reduced, instead of which, if we are to judge by results, they are, with the exception of a few small items in the last schedule, progressively increasing. Whatever the motive may be for introducing the duty on petrol, it will be an additional impost upon the community.
I turn now to the per capita proposals of the Government. It is said that the object of the Ministry is to separate State and Federal finances, and prevent overlapping in the collection of taxes, and that the basic principle underlying the scheme is that the authority that spends the money should collect it. In theory that principle is sound, and one must admire the consistency with which the Treasurer is striving to give effect to something which he believes to be right and in the interests of the country. But the honorable member for Kalgoorlie (Mr. A. Green) and other honorable members have pointed out that simultaneously with the proposal to discontinue the per capita grants to the States, in the face of their united and strenuous opposition, the Treasurer has put forward a roads policy which violates the very principle he has enunciated. I agree that that policy at least savours of a violation of the principle that the spender should be. the collector. I understand that South Australia imposes a petrol tax of 3d. per gallon. The Commonwealth proposes to collect, through the Customs House, 2d. per gallon on petrol. This will force the State to reduce its tax to Id. The Commonwealth Government, which so loudly proclaims the iniquity of one authority collecting money and handing it over to another authority to spend, proposes to collect 2d. per gallon on petrol used in South Australia, and to hand - back the money to the State to expend upon main roads.
– ‘There is a vital difference, because in this instance the Commonwealth will decide how the money shall, be spent, whereas the States can spend the per capita grants as they choose.
– I recognize that difference; nevertheless, the Treasurer’s proposal does savour of a. violation of the principle he laid down, because the States, which do not raise the money, will spend it, albeit by arrangement with the Commonwealth.
– Is the South Australian petrol tax constitutional?
– The honorable member should not be so unkind as to put legal posers to me at this hour of the morning. Let us consider the farreaching character of the Government’s proposals. Five of the States are controlled by Labour Governments, and all of them are violently opposed to the Commonwealth scheme, whilst the antiLabour Government in Victoria is resisting it even more resolutely than the others. This unanimity on the part of the State .Governments shows that the opposition to the discontinuance of the per capita payment is without party significance. In considering this matter we must remember that whilst there are two sets of governments, State and Federal, there is but one set of taxpayers. AVe must bear in mind also that the obligations of the States include land settlement, water supply, irrigation, railways and other forms of the transport in which tens of millions of pounds have been invested, education - which intimately and vitally affects the everyday life of the community - police, and hospitals. It is not necessary for me to enlarge upon the responsibilities of the States, which, to a much greater extent than Federal activities, reach right into the homes of the people. I do not think that the Treasurer would deliberately rig his figures in order to deceive the States, and therefore I accept his statement that if they agree to the arrangement the Commonwealth has proposed, they will be advantaged financially. But I remind tha committee that it is easier for one Government to evacuate any field of taxation than it is for six governments to enter it. In the States of Western Australia, South Australia, and Tasmania, Labour Governments control the lower chambers of the legislature, and antiLabour parties control the upper chambers. It is quite conceivable, and the prediction has been repeatedly made during the course of this discussion, that some of the upper houses will view very critically any suggestions that may emanate from the lower house for the collection of the taxation that the Commonwealth is relinquishing. What will happen if, as the result of this rearrangement of taxation machinery, the States have difficulty in adjusting their finances and cannot collect sufficient money to balance their ledgers ? Chaos will be almost inevitable, and in the event of financial stringency arising, the first expedient to which the State Governments will resort will be the retrenchment of some of those essential services to which I have referred.
– That might be a good thing.
– In some respects, perhaps, but certainly not in respect of education, water supply, and land settlement. Only a few days ago, when a deputation asked the Treasurer of Victoria (Sir Alexander Peacock) for an increased grant for the Melbourne University,he replied that in view of the uncertain financial outlook) - referring, of course, to the Commonwealth Government’s proposal - the request could not be entertained.
– A good excuse.
– The honorable member may place any interpretation he likes upon it. The fact is that that would almost inevitably be the policy of State politicians; they would throw the blame upon the Commonwealth Parliament. This Government can pledge itself only to a certain course of action, but it cannot say that future Commonwealth Ministries will not re-enter the field of direct taxation. Thehonorable member for Yarra (Mr. Scullin) has already stated that if the Labour party was returned to power it would re-impose the land tax.
The Government has been accused of aiming at unification. I am not one of those who hold up their hands in horror at such a thought. I consider that the time has come when there should be a careful review of the whole of the relations between the Commonwealth and the States. For instance, I do not think that the present State boundaries should be regarded as permanent. A large body of public opinion is in favour of new States. There is also a large and,
I think, growing opinion in favour of the abolition of the State Governments, and the institution of forms of provincial government under powers delegated by the Commonwealth Parliament. It is contended that the present cry that State rights should be preserved largely comes from the capital cities. The suggestion is that Victoria, for instance, should be divided into three or four provinces, Melbourne to govern itself, and the purely rural centres to have full local government. It is contended that the whole trend of the present Federal Ministry’s activities is towards the absorption of the powers of the States, and I must say that there is some., justification for that argument. Consider for a moment the Government’s road policy. AlthoughIdo not condemn it, it means that the Commonwealth Government is assuming responsibility in a field that formerly belonged to the States.
– The Government simply proposes to provide money for roads.
– It proposes also to dictate terms, by saying where the roads shall be built, how wide they shall be, and of what materials they shall be constructed. Prior to the building of the war-service homes, housing was exclusively a State responsibility. When the Commonwealth’s £20,000,000 housing scheme is launched, nearly every State will have three distinct housing undertakings. The war-service homes were not successful under Commonwealth control, and they have been largely handed over to the States. Government schemes for the erection of workers’ homes have been put into operation in nearlyeveryState, and now a most ambitious proposal is put forward by the Commonwealth Government. The proposed grant for agriculture shows that the Commonwealth is enteringspheres formerly regarded as exclusively belonging to the States. Unification may be theobject of the Government, but I do not think that it is. If it were, it would be well for the Government to say so, instead of attempting to bring it about in an indirect manner.
– It is not the deliberate object of the Government, but that is the direction in which the Government is going.
– Certainly that is the effect of its policy. We shall undoubtedly have to review the Federal Constitution with respect to State responsibilities and State boundaries. Would it not be wise, in view of the proposed constitutional session at Canberra next year, to continue the per capita payments to the States until ^then ?
– Those payments have nothing to do with the’ Constitution.
– I am well aware of that ; but the Government’s decision has created hostility on the part of the States, an’d it would be well riot to put it into effect immediately, since the whole of the financial relations of the Commonwealth and the States must be considered at the constitutional session. The matter is not so urgent, and the Government would be well advised to postpone a decision on it until then. The Government is going at a gallop. It almost bewilders some of its supporters. It is dividing many of them on the referendum issue, and is antagonizing every State with the per capita proposals. Both sides in the Victorian Parliament, bitterly partisan as they are, united this week in urging the Government not to proceed with this proposal. That will have, a great influence on public opinion in this State. The Treasurer’s persistence has certainly brought this question into the realm of practical politics, and has given the States something to think about ; and if the proposal were discussed in this Parliament before being adopted, it would have a better chance of being accepted by the States. The Government’s roads policy, and the per capita payments, will come before this Chamber again on separate bills, and I shall then repeat some of the views I have expressed this morning, and shall add other views that I ha,ve not the desire to state at this hour.
– The honorable member for Wimmera (Mr. Stewart) must be commended for many of the sound points he has made. I do not agree with all of his arguments and deductions, but he has certainly had the frankness to deal with some of the principal economic burdens that are weighing heavily upon the shoulders of the great rural population of Australia. I propose to deal with some of those economic factors from another angle. The nightmare of the producing interests of Australia is the apparent impossibility of escaping from unsound economic conditions. I regret to say that I see no bold adventure on the part of the Treasurer to break away from the unsound conditions of the past, no ray of hope for an alteration. I can bring the Treasurer face to face with vivid instances. I should not have risen this morning but that I felt a pressing duty to bring under his notice, before this item was passed, the deplorable condition of nearly 30,000 of our best citizens, the ex soldiei-3 of this country. I do not say that all the ex-soldiers are in such a condition; but, since I last spoke on this subject fresh facts have come to my knowledge, and have convinced me that thousands of these young men are in a position of hopelessness. I exclude those in the great wheat-growing belts, for wheat is to-day the sheet-anchor of Australian finance. The subject cannot be left where it is. It was our national obligation to raise the army for the Avar and afterwards to repatriate the soldiers, and
Ave cannot pass the obligation on to the States by merely providing the money and leaving the men to fail hopelessly or drift away. I do not discuss this matter from any other stand-point than the economic one. The Treasurer and the Commonwealth must face the situation sooner or later. Victoria is a’ splendid wool-producing State, but, since the fall in the price of WOOl from an average of £33 a bale to £17 a bale, many of the men settled in this State can barely raise sufficient money to meet interest and sinking fund, payments of 6 per cent. The gross yield from some of the areas is barely equal to the annual payments required of the settlers. I do not point this out to the Treasurer in a Carping spirit, and ‘ I hope he will not interpret my remarks in that way. There is an accumulated debt for instalments of, roughly, £4,000,000, which these men owe. That represents the earnings applied to the cost of living for them during the years when they could not make their payments to the State. I am not charging this Government with dereliction of duty; I am merely urging the Treasurer, who is handling the finances of the nation, to go to the relief of these men, or to re-arrange the economic conditions. What I deplore more than anything else is that I can see nothing on the political horizon that gives a margin of hope to these men, except the remote possibilty of another boom in the prices of primary products.
I shall not make an analysis at this hour of the morning of the general finances of the country. But I say to the Treasurer that his vaunted prosperity is a false prosperity; it is based upon a levy through the Customs of £40,000,000 on the people’s requirements. I am not referring particularly to the incidence of the Customs tariff; but I remind the honorable member for Wimmera, who points to protection as the sole cause of our troubles, that the causes are much wider and deeper than he assumes, and that an adjustment of the tariff will not provide a complete remedy. The cause of this unsoundness, and of the failure of the nation to return to normal economic conditions, is that the Government is engaged in a prodigal expenditure of loan money. In addition to spending a revenue of, roughly, £76,000,000 it intends to spend Commonwealth loans amounting to £12,000,000; and at least another £35,000,000 will be raised for the States to spend, all in the present year. Obviously, Australia is living above its means. We are pledging posterity. We have to-day a public debt of £900,000,000. Of that amount £500,000,000 is approximately State debts, for which we may say that there are some corresponding assets. The Commonwealth debt is, roughly, £400,000,000. I am glad to know that the debt has been reduced by £28,000,000 by payments from many sources, but not entirely from revenue, as some persons may have been led to believe.
– The unsound economic conditions existed before the present Treasurer took office.
– So they did; but some one must face the situation. The following table shows how the reductions in loan indebtedness have been made during the oast three years: -
The War Service Homes repayments were merely the return of borrowed money paid by the ex-soldiers into the sinking fund. Those are commendable reductions. On the other hand, however, the prospective loan programme for this year will involve an expenditure of £47,000,000, and, on that sum, high rates of interest will be charged. I say to the honorable member for Wimmera (Mr. Stewart) that we must look beyond the tariff to ascertain the cause of the trouble that faces the man on the land.
– I said that the tariff was a factor.
– I admit that it is a factor. Butit is also a policy from which the man on the land is deriving benefits. It cannot be denied that many of our primary producers are unable to place their produce on the markets of the world and obtain a profit from them. Millions of pounds have been invested in cattle stations, meat works, and other institutions that are connected with the great meat industryyet that industry is almost on its knees. Export beef shows practically no profit at present world prices. The price of mutton has dropped to half what it was formerly. I believe that in the coming export season it will be about 2d. or 21/2d a lb., f.o.b. Australia. The price of lamb also has fallen considerably.
– The honorable member is a pessimist. Surely he does not contend that the price of mutton will be 2d. a lb. in the spring!
– If . I were a betting man, I would wager that the f.o.b. price of mutton in the coming export season will be not more than 2½d. per lb. In London recently some mutton was sold at that figure c.i.f. An improvement in the position cannot be effected until we make up our minds to cease borrowing, especially overseas, except for the conversion of loans and our most pressing needs. I know that such a policy would cause trouble, but it is better to grapple with the problem now than to wait until it has been multiplied many fold. Honorable members of the Opposition have on several occasions said that the adoption of a policy of borrowing overseas whilst you are endeavouring to build up your own industries, results in your having upon your shelves the_ goods of your rivals, thus doing a detriment to your own products. The Treasurer (Dr. Earle Page) cannot escape the logic of that argument. A certain amount of borrowed money may be used for bookkeeping purposes between the Commonwealth and the British lending authorities, but in the main the argument is perfectly sound.
The TEMPORARY .^CHAIRMAN (Mr. Mann). - Order! I draw the attention of honorable members to the fact that the reading of newspapers in the Chamber is contrary to the Standing Orders. I should not have noticed the incident had not the noise been so great as to disturb both the Chair and the honorable member who is addressing it.
– A great deal of what was said by the honorable member for Wimmera is pertinent to the present position. If the primary producers of Australia are forced to come cap in hand for bounties, we have almost reached the stage when the rural industries of the nation will be on crutches. I object to being regarded as a pessimist when I refer to the existence of what I believe to be a growing danger. It is about time that the Commonwealth refrained from overstepping Federal boundaries, and invading the provinces of the States. Our obligations are sufficient to occupy the whole of our attention. Duality of control is always bad. The States should be allowed to handle their own affairs until the nation determines that greater power shall be exercised by the Commonwealth Parliament. All the star items in the Government’s programme are dependent for their consummation upon the goodwill pf the States, yet it is proposed to pick a first class quarrel with the States. Without their active co-operation and the use of the whole of their machinery, every one of those items, would remain a dead letter. I implore the Treasurer to obtain first-hand knowledge of the actual conditions under which our former splendid soldiers are struggling with adversity in many of the rural industries. It is jointly the obligation of the Commonwealth and the States to endeavour to put matters right. The Commonwealth cannot allow the position to remain as it is without dishonour to itself and the neglect of a national responsibility.
– The credit of the Commonwealth demands that reply be made to one or two of the criticisms that have .been offered by certain honorable members. The main points of the debate have been the resurrection of the taxation of Crown leasehold controversy - which the” Attorney-General and myself completely disposed of - the agreement for the erection of beam wireless stations - which the Prime Minister (Mr. Bruce) and the Postmaster-General (Mr. Gibson) effectively disposed of yesterday- - the general state of the finances, with which the honorable member for Maranoa (Mr. Hunter) dealt very fully and carefully to-night, the position of the national debt, the abolition of the per capita payments, the roads policy of the Government, and the difficulties with which the honorable member for Wannon (Mr: Rodgers) a few moments ago said the returned soldiers were faced.
The Commonwealth is fully alive to its responsibilities towards the returned soldier settlers, and it has already taken steps to -afford them a certain measure of relief. In my budget last year I, on behalf of the Commonwealth, offered to the States the sum of £5,000,000 to enable them to give a substantial measure of relief to the returned soldiers. Unfortunately for the returned soldiers, some of the States were rather slow in signing the agreement that it was necessary they should sign before the money could be made available. The final payment was made only within the last couple of weeks.
– Did the States not object to the terms of the agreement?
– Difficulty may have been caused in some States by the suggestions of the Commonwealth regarding the manner in which the money should be utilized, but I do not know whether that was the reason for the delay which occurred in the signing of the agreement. In anticipation of this Parliament’s approval, the Government made provision for the States to be relieved in the last interest payment that they had to make. Any person who has studied the marketing and bounty proposals that have been brought forward during the last few years by the present Government must recognize that in those directions also substantial relief has been afforded.
– The remission of £5,000,000 was made by the Commonwealth to the Sitates, not directly to the soldiers ?
– We have not now any direct connexion with the soldiers; any action that we take must be through the agency of the States.
– Is the Commonwealth insisting that the soldiers shall have the benefit of the remission ?
– The money has been made available for general relief, and it is for the States themselves to apportion that relief among the soldiers. The original arrangements, with regard to land settlement especially, were made in 1917 and 1918. It was then definitely decided by agreement between the Commonwealth and the States that the Governments of the States should deal directly with the returned soldiers. It is too late now to endeavour to bring about an alteration of the arrangement. That relief of £5,000,000 is part of a’ total of £10,000,000 granted by the Commonwealth Government.
The Government is endeavouring to get to the root of the economic troubles that were referred to by the honorable member for Wimmera. Although it is the fashion to designate certain of our actions as an invasion of State rights, I point out to the committee that the establishment’, of a full measure of industrial peace in Australia would be one of the best means possible for bringing about sound economic conditions. The proposals of the Government in regard to housing and national insurance are designed to that end, and must help to improve the whole economic fabric. In addition, the improvement of the roads as a result of the policy of the Government will undoubtedly decrease the cost of production in Australia, and permit both the primary and the secondary producers to compete more successfully in the markets of the world. Although it may be. said that certain measures proposed by the Commonwealth Government could be carried out by the States, yet the fact remains that the States have not carried them out. If Australia is to be in a position of national efficiency to compete with other countries, in both our home and overseas markets, we must fall into line with them. Both in the United States of America and Canada, action similar to that proposed by this Government has been taken with regard to roads. The United States of America is a federation similar to the Commonwealth, and this year its Government is expending the sum of 670,000,000 dollars on roads in the form of subventions to the States. That Government recognizes that good roads tend to decrease production costs. The honorable member for Wimmera (Mr. Stewart) said that the Government’s roads policy was a contradiction of its policy in respect of the per capita payments. There is a fundamental difference between the two propositions. The roads policy has been arrived at in agreement with the States and the Commonwealth will exercise control in respect of the method of expenditure; but the Commonwealth Government has no control of the expenditure of the per capita payments to the States.
I wish to make known to the committee the exact position respecting our national debt. The honorable member for Yarra tried to make out that the position was much worse than it really is. The gross debt of the Commonwealth on the 30th June,’ 1922, was £416,071,000, and on the 30th’ June, 1926, £458,444,000, the increase being £42,373,000. The debt incurred for the States was during that period increased by £32,178,000, so that the total increase in the gross debt for all Commonwealth purposes was £10,195,000.
The loan expenditure for the four years, among other items, includes -
All those works will be reproductive. The net debt of the Commonwealth is really the true basis upon which to assess the position of this country. From the 30th June, 1922, to the 30th June, 1926, the decrease in the net debt of the Commonwealth was £160,000. Mr. Scullin stated that the bulk of the sinking fund moneys had been taken from profits of the Commonwealth Bank and the note issue. These have contributed to the extent of only £4,008,000. The contributions from revenue amounted to £7,338,079, and an additional sum of £8,437,000 of revenue was used for debt redemption, but was not paid into the sinking fund. The contribution to the debt redemption has been of inestimable value in helping to reduce the rate of interest, and has assisted considerably to establish the credit of Australia overseas. I venture to say that our actions in this respect saved the Commonwealth on its last conversion loan of £67,000,000 at least per cent in the rate of interest, which means £335.000 saved in interest.. The additional ‘contribution of £8,437,000 from revenue for debt redemption, but not made through the sinking fund, included a payment to the British Government of £3,522,000 and a payment of £4,915,000 from surplus revenue in connexion with the 1923 loan. From the 30th June, 1922, to the 30th June, 1926, an amount of approximately £20,000,000 has been contributed for debt redemption.
There has been a great deal of misconception regarding oversea borrowing. It may be said that we are borrowing too much in Australia, and perhaps too much abroad. I have always had definite views on this matter, and I have tried to carry them into effect. Australia cannot progress, however, without a certain amount of oversea borrowing. The savings of the people of Australia are not yet sufficient to enable us to carry out a policy of development as rapidly as we could wish. If we relied entirely upon the people’s savings for the development of this country it would progress slowly. It is much preferable to quicken the prosperity of Australia by resorting to oversea borrowing. Had settlers to rely entirely on the returns from their land, the development of their holdings would be slow; but by using outside capital, they are able to bring the holdings more quickly to a full state of development. That has happened in America. The following statment, dealing with the international trade balance of tha United States of America, was made by Mr. Broderick, who was Commercial Secretary to the British Embassy in 1924: -
Authorities treat of the history of the international trade balance of the United States from 1820 to 1896, in four main periods. During the first period, from 1820 to 1837, foreign capital flowed into the country, causing an annual excess of imports over exports amounting, on an average, to $11,000,000. The interest payable on that capital brought about a small excess of exports over imports (annual average, $3,000,000) during the second period from 1838 to 1850. Then followed the period from 1850 to 1874, during which the population of the country was rapidly increasing, the resources of t?ie Middle West were .being developed, and the country opened up by railway construction, requiring large amounts of foreign capital whose influx, checked for a while by the Civil War, but again stimulated by the process of readjustment succeeding that war, and by the sale of United States Government bonds abroad, again created an excess of imports over exports averaging over $60,000,000 la year. During the ensuing period, from 1874 to 1890, the rate of foreign investments in American enterprise again slackened, and, although the physical volume of imports grew largely, the volume of exports underwent still greater increase, which helped the country to meet maturing external loans and to pay interest charges on American’ industrial and other securities in foreign hands. In the years I8S9 and 1890, and again in 1893, when special circumstances existed, there was a small excess of imports over exports, but in each of the remaining years of the period the total value of the exports exceeded that of the imports by an average of more than $100,000,000.
If Australia makes normal progress, we shall probably show during the present century a similar use, and similar ebb and flow of foreign capital to that shown by America. I disagree with the honorable member for Yarra that the principle of bringing immigrants here by the expenditure of borrowed money is wrong. We cannot use to advantage money that we borrow abroad unless we bring more people to this country to help to develop it. So long as we bring immigrants here in proportion to the amount of money that we borrow overseas, we shall not do harm but good, to the community. I disagree entirely with the view that oversea borrowing necessarily means unemployment in this country. It frequently means more employment by the stimulus that it gives to development.
– The Treasurer is overlooking the high cost of money, and the unsound economic position. If things were normal, I should agree with him.
– That position has to be considered as well. “We are borrowing money from Great Britain and America at rates of interest nearly as favorable as they were before the war. We have been able to attain that position by the effective use of our sinking fund, thus giving the general impression abroad that the Commonwealth is attempting not merely to develop this country, but also to repay its unproductive debt at the earliest possible moment. That has enormously improved our credit throughout the world.
The honorable member for Wimmera (Mr. Stewart) is opposed to the per capita proposals of the Government, but he was a member of the Government of 1923 that introduced a similar scheme.
– That scheme was not forced down the throats of the States as in this case.
– That was the policy of the Government of the day, and I have not heard that the honorable member for Wimmera disagreed with it. The principle is the same, but he objects to the present scheme, even although it is not to operate for a year. It is suggested that the main objection to the proposal is the difficulty of passing legislation by the State Governments to recoup them for the loss of the per capita payments. Th;;re is a general consensus of opinion amongst members of State Parliaments, as well as cf the Federal Parliament, that the day of the present system of capitation payments has rone Fet instance, Sir William McPherson suggested that there should be an annual reduction of ls. a year until the payments ceased. Mr. Bavin, the Leader of the Opposition in New South AVal.es, suggested a reduction of ls. 3d. a year. The right honorable member for Balaclava (Mr. Watt), seven years ago suggested a reduction of 2s. 6d. a year, without any Commonwealth concessions, but he now surrounds that proposal with certain conditions. It would be much more difficult for the States to replace ls. 3d. or 2s. 6d. every year than to deal with the replacement of the whole amount once for all. Under the proposed -gradual abolition it would be impossible for them to deal comprehensively with the recasting of their system of taxation; they would be forced to deal with it piecemeal. There would be an annual fight in the State legislatures to pass their proposals. It would be much better to deal with the whole matter on a comprehensive basis at the beginning. The honorable member for Wimmera suggested that we should bring the proposals into force next year, but what virtue is there in next year as against this year? The honorable member for Richmond (Mr. R. Green) pointed out that this was not a constitutional matter, and I agree with him. The honorable member for Perth (Mr. Mann) suggested that we should link with the per capita proposals the transfer of State debts. At present it is impossible without constitutional alterations, for the Commonwealth to control State borrowing, and unless some binding agreement on that score is arrived at, how could’ we deal satisfactorily with the transfer of State debts? Would any one SUK gest that we should take over State debts unconditionally, and allow the States to borrow money as they thought fit, irrespective of the Commonwealth? Under present conditions, therefore, it is impossible for this Government to take over State debts on a satisfactory basis.
Item agreed to.
Bill returned from the Senate, with requests.
House adjourned at 2.2 a.m. (Friday).
Cite as: Australia, House of Representatives, Debates, 22 July 1926, viewed 22 October 2017, <http://historichansard.net/hofreps/1926/19260722_reps_10_114/>.