10th Parliament · 1st Session
Mr.Speaker (Hon. Sir Littleton E. Groom) took the chair at 11 a.m., and read prayers.
– Is the Prime Minister aware of the fact that the Public Service Arbitrator recently increased the limit of salary on which child endowment should be paid from £500 to £600, and that the Federal taxation officers receiving in excess of £500 who were transferred under agreement to the State Taxation offices have been requested to refund the child endowment received by them 1 Will the right honorable gentleman explain why the rights of these officers have not been preserved ?
– I am aware of the decision of the Public Service Arbitrator, but I cannot answer the latter partof the honorable member’s question. If he will place it on the notice-paper I shall endeavour to obtain a reply to it.
– The British Government, acting on the advice of its veterinary officers, has prohibited the importation of fresh meats from Europe on account of the danger of introducing into Great Britain foot and mouth disease: Similar action has been taken by the United States of America in regard to fresh meat from the Argentine. It is stated that ships plying from Great Britain to Australia carry for their own use Argentine meat - in the case of one line of vessels sufficient to feed the passengers on both inward and outward voyages. Will the Minister for Markets and Migration make careful inquiries into this statement with a view to having the practice stopped, and so minimize the possibility of foot and mouth disease being introduced into this country?
– I shall have the matter thoroughly investigated.
– In to-day’s newspapers appears a report that the Housewives Association is opposed to thePaterson butter scheme on the ground that Aus tralians have to pay for butter 3d. a lb.’ more than is paid by the consumers overseas, and yet have to accept an inferior article. Will the Minister for Markets and Migration take steps to ensure that Australian purchasers are able to get high-class butter?
– Although this matter is not controlled by my department, I assure the honorable member that the Australian consumers have at alltimes first call on the choicest butter produced in the Commonwealth.
– As the vintage is now in full swing throughout Australia, will the Prime Minister indicate when the Government’s proposals in regard tothe continuation of the export bountyon wine will be announced?
– I understand from the Minister for Trade and Customs that the report of the Tariff Board upon the wine export bounty was received by him within the last few days. The matter will be considered by the Government at the earliest convenient date, and the Government’s intentions announced.
Victorian Itinerary - Canberra Ceremony - Victoria Cross Winners
– I ask the Prime Minister whether the Government has decided to cancel one of the functions arranged to be held in Melbourne in connexion with the visit of the Duke and Duchess of York so that the Royal party may have a better opportunity to visit some of the country districts of Victoria ?
– I have no announcement to make regarding any alteration to the itinerary of His Royal Highness.
– Is the Prime Minister aware that much indignation has been expressed by members of the New South Wales Parliament in.connexion with the invitations to attend the ceremony at Canberra ? Will the right honorable gentleman intervene,if necessary, to ensure that proper means of conveyance and adequate accommodation at Canberra are provided for the members of the New South Wales Legislature ?
– I am sorry if the members of the New South Wales Parliament ‘ feel that proper consideration has not been extended to them by the Commonwealth. Government. Most difficult problems of transport and accommodation have to be overcome. The arrangements for the transport and accommodation of the maximum number of official guests are now being completed, and I hope that when the details are announced, those who feel that they are entitled to attend the ceremony will be satisfied that the Government is doing all that is possible in the circumstances.
– Would it be possible for the Government to arrange for the attendance at Canberra during the Royal visit of all Victoria Cross winners in Australia? In view of the fact that these men offered their lives for their country, and gained the highest award that the King can bestow for personal valour, it would be appropriate that the Royal visitors should have the opportunity to meet them. The returned soldiers are of the opinion that this should be done?
– The honorable member’s suggestion will receive consideration.
– Has the Minister for Markets and Migration received any official report regarding the condition of the recent shipment of chilled beef from Australia to Great Britain by the s.s. Port Hardy ? If so, will he make the report available to honorable members ?
– I have not seen any official report on the subject, but if one should be presented I shall be pleased to make it available to the honorable member.
– Has the Minister for Trade and Customs arrived at a decision in regard to an increase of the duty on black-grown rice imported from Java and elsewhere? The Mumimbidgee rice-growers believe that large shipments have come to hand, as no offer has been made for the purchase of the local crop, and the growers are unable to finance the harvest owing to the uncertainty of the future. They would like to know alao the price at which the imported article is to be brought into Australia?
– As I intimated to the honorable member for Riverina (Mr.
Killen.) yesterday, the subject of protecting the rice industry is being considered by the Government in connexion with a report recently received from the Tariff Board. I shall endeavour to supply next week the information for which the honorable member has asked.
– Having regard to the fact that the Tariff Board’s inquiry into the tobacco industry closed in August last, will the House be afforded an opportunity to discuss the report during this session?
– It is not customary for announcements of government policy to be made in reply to a question. If the tobacco industry is to thrive, the growers must produce the sort of leaf that Australian smokers demand. I have personal knowledge that there is an accumulation of the black leaf sufficient to last for three years, and there is no demand for that article.
– Is the Minister for Trade and Customs prepared to make an announcement with regard to an increase in the import duty on butter?
– I stated three days ago that, in accordance with the law, this matter has been referred to the Tariff Board for investigation and report.
– In view of the disastrous effects of periodical droughts, particularly in the diminution of flocks and herds, will the Prime Minister consider the advisability of asking the Development and Migration Commission to inquire thoroughly into the possibility of a systematic conservation of fodder?
– Droughts, and resultant losses of stock and crops, have been already considered by the commission. During his recent visit to Great Britain mechanical transport, including six- wheeled vehicles, and otherinn ovations, was extensively investigated by Mr. Gepp, and obviously the conservation of fodder is another subject which must be considered in the sameconnexion.
Duties on Aircraft.
asked the Minister for Trade and Customs, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Minister for
Trade and Customs, upon notice -
What amounts have been paid in the form of bounties to various industries during the last ten years?
– The information is being obtained.
asked the Minister for Markets and Migration, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
Will he obtain the following information: -
From previous owners of the Dorrigo -
The actual weight and disposal in the ship of all ballast of any kind whatsoever carried on board the Dorrigo?
Their reason or reasons for carrying ballast at all?
Information, supported by previous masters of the Dorrigo, as to the behaviour of that ship without ballast of any kind when -
in light trim;
loaded without deckload; and
loaded with full deckload?
From previous owners, officials and records of dockyards, masters, and marine surveyors through whose hands the Dorrigo passed -
What additions to the superstructure above the main deck were made with regard to the Dorrigo between the dates of her being built and lost; and
Height above the main deck, weight, and wind surface of any such added superstructure?
From the Naval Architect -
As one of the inferences which may be drawn from his report on the stability of the Dorrigo is that the main body of water that was responsible for the ultimate capsizing did not enter the ship until she had taken a list of 15 degrees; is he able to form and express any opinion, from data so far in his possession, as to -
What caused the Dorrigo to take so heavy a list in the first place; and
Whether or not the heeling factors which operated up to the15-degree list would not become increasingly capsizing factors after that angle was reached and passed?
– This information will be supplied if possible.
Construction of Roads inWestern Australia - South Australian Programme.
asked the Minister for Works and Railways, upon notice -
Roads Grant, the State Government of Western Australia despatched over 400 men to work by day labour on such roads in the electorates of Albany, Murray, and Nelson, just prior to the closing date for the electoral rolls to be used at the ensuing election for the Legislative Assembly of Western Australia?
– The replies to the honorable member’s questions are as follow: -
asked the Minister for Works and Railways, upon notice -
Did he make or suggest any alteration to the roads programme drawn up and presented to him by the South Australian Government ?
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s question’s are: -
asked the Minister for
Trade and Customs, upon notice -
Whether, in view of the sale of the whole of the Queensland cotton crop to Australian manufacturers, he will indicate the cotton manufacturing developments expected in the near future, so that the cotton growers and others may feel that a greatly increased production of raw cotton will meet an increasing and larger market within the Commonwealth?
– As well as large additions to present established factories it has recently come to my knowledge that several large cotton spinners from overseas have decided to establish branch works within the Commonwealth. One, in particular, proposes to establish a unit - the first of eight - which, when completed, will mean the manufacture of probably 1,000,000 yards of cotton goods per week, all of which are now imported. The development taking place in the local industry, plus the development expected in new and additional manufacturing avenues, should, in my opinion, give a larger and ever-increasing market for raw cotton grown in the Commonwealth.
Public Servants and Holiday Allowances
asked the Prime Minister, upon notice -
– This information is being obtained.
The following paper was presented: -
Motion (by Mr. Paterson) agreed to -
That he have leave to bring in a bill for an act to amend the Dried Fruits Export Charges Act 1924.
Bill presented by Mr. Paterson, and read a first time.
Motion (by Mr. Paterson) agreed to -
That he have leave to bring in a bill for an act to amend the Export Guarantee Act 1924-1925.
Bill presented by Mr. Paterson, and read a first time.
Debate resumed from 3rd March (vide page 110), on motion by Dr.Earle page -
That the bill be now read a, second time.
Upon which Mr. Charlton had moved by way of amendment -
That all the words after the word “ That “ be omitted with a view to insert in lieu thereof the following words: - “, in view of the State Governments’ heavy financial responsibilities the bill be withdrawn.”
.- If Ministers are anxious for the reasonable discussion of the measure now before the House, it seems to me that itwould have been wise for them to endeavour to answer the forcible arguments that were advanced here yesterday in opposition to it. The honorable member for Yarra (Mr. Scullin), the Leader of the Opposition (Mr. Charlton), the honorable member for Perth (Mr. Maun), and other speakers stated their case rationally, and used forcible arguments against the bill. To this case, so far, there has been no reply. Possibly the Government, being sure of its numbers, is determined to bludgeon the bill through, however weak its case and however strong the arguments against its proposals.
– In Queensland we know. nothing of bludgeoning!
– That isso; but the honorable member will apparently soonhave some experience of it here. The Prime Minister gave the impression that he regarded as contumacious the attitude of the States towards the proposal to terminate the per capita payments; but it seems to me that the Government itself is acting contumaciously. There is undoubtedly great opposition to the measure, both here and in the columns of the press,, and there is also a general objection to it among the public. The controversy, so far as the press is concerned, has been largely lifted above party politics, and if the discussion here has been influenced by party politics, that is largely the fault of the Government. If the Government has as little regard for the opinions of the people’s representatatives here assembled - and it has shown little so far - as it has for those of the State Governments, we shall get short shrift. I listened with interest to the speech of the Prime Minister. He argued that the States have neither constitutional, legal, nor moral right to the per capita payments ; but surely that is an open question. It is true that the States have no constitutional right to it, because the constitutional right to a refund of revenue terminated, I suppose, when the Braddon provision ceased to operate; but the States undoubtedly have a legal right to the payments, and that is a right which will continue to exist until this Parliament repeals the Surplus Revenue Act. The Prime Minister has denied that the States have any moral right to the per capita payments. He has taken up the stand that the State Premiers at the conference last year acted with obstinacy by declining the discussion of alternatives, and claiming the continuance of the per capita payments on the ground of their moral right to them. What constitutes a moral right in a matter of this kind ? Surely the States have a just claim for the continuance of the payments, and a “ just claim “ should constitute a moral right. If the States have a claim to a share of the Customs revenue, or a claim upon the Commonwealth for a share of the Consolidated Revenue - if the Treasurer prefers it that way - surely that claim constitutes a moral right. If the States have neither constiutional, legal, nor moral right, why are they being paid anything at all ? The fact- is that the Commonwealth has no right at present to terminnate the per capita payments to the States. I admit that this Parliament has the power to terminate the payments, but it has no moral right to place the States in a serious financial embarrassment. The Prime Minister assumed that the agreement relating to the per capita payments came to an end in 1920. That is a very curious delusion. The agreement which was entered into in 1910, and accepted by all parties at that time, was to continue for ten years, and thereafter until altered by the Federal Parliament. Until it has been so altered it has the same force and effect as it has had ever since the agreement was entered into in 1910. The Commonwealth Government has no moral right to terminate the per capita payments until it can show that it has the consent of the States, or has obtained a clear mandate on the subject from the people. It is obvious that the Government has not the consent of the States, because the States have strenuously resisted the proposal, and it is clear that the Commonwealth has no clear mandate from the people to terminate the -per capita payments. One honorable member yesterday raised the question of a, mandate, and if I heard the Treasurer aright, he claimed a mandate because the matter had been referred to in the Prime Minister’s policy speech delivered just prior to the last general election. I have not the full text of that speech, but I believe that practically the full text of it was printed in. the Sydney Horning Herald the day after the speech was delivered. I have also referred to’ other newspapers that printed ii generous summary of the speech, and as .the phraseology is the same in all the accounts, it looks as if an epitome of the Speech was handed to the press, and published with the authority of the Prime Minister or some one acting for him. The following extract from the Sydney Morning Herald is the only reference by the Prime Minister to the Government’s proposals in this regard : -
The Government is giving careful consideration to the question raised as a result of the investigations of the Western Australian Royal Commission, and proposes in the near future to invite the States to attend a conference for the purpose of reconsidering the financial relations between the Commonwealth and the States, and dealing with the disabilities suffered by certain States, with a view to laying down a basis for our national development in which the Commonwealth and the States will- cooperate. At this conference an opportunity will be afforded to consider all questions affecting the relations of the Commonwealth and the States, including the question of new States.
Surely the Federal Treasurer does not regard that meagre reference as sufficient to claim a mandate for the present proposal. That statement was certainly not a sufficient invitation to the people to express an opinion upon this important subject. Indeed, there was no real reference in the Prime Minister’s policy speech to the subject that the House is now debating. The Government has no excuse for regarding the simple statement I have read as a justification for introducing the bill, nor can it say that the question was a live one at the time of, or prior to, the general election. The matter had been discussed at conferences of State Premiers and other Ministers with Commonwealth Ministers prior to 1925, .and the Commonwealth Government also placed its proposals be fore such a conference in 1923. If it intended to persist in its proposals to terminate the per capita payments, it should have been honest enough to make a straightout declaration on the subject in the policy speech. -Then, if returned, it would have had better justification for its claim to have a mandate from the people upon it. The Government has no right to end arbitrarily the per capita payments. Failing the consent of the States, the Commonwealth should certainly abandon the proposal until *it obtains a mandate from the people, or better grounds than it now has for proceeding with the bill. It may be true that it will be difficult to obtain the consent of the States, which are so vitally concerned, and circumstances may require the Government .to act without the consent of the State Governments; but the Government ought to obtain more authority than it hits at present before proceeding - with -a measure of this kind. The Treasurer, when introducing the bill last year, said the time had arrived when we ought to depart from the “vicious principle” underlying a system whereby one government collects revenue that another government expends. Why should the principle be more vicious to-day than at any other time during the last 26 years in which the system has been followed. At the constitutional convention held prior to federation the allowance to the States was fully discussed; and although much argument took place, no one then suggested that payments to the States involved a vicious principle. No one considered it vitally - wrong that the States should share in some of the revenues that they had wholly possessed before federation; it has been left to the present Treasurer to discover that there is a vicious principle in it. If the principle is vicious, one would expect evil results from it. How are evil results shown ? For 26 years some share of the Commonwealth revenues has been returned to the States without any evil consequences either to the Commonwealth or to the States. The. system has certainly been beneficial to the State revenues. The payments have enabled. the State Governments to stabilize their finances, and to carry their heavy burdens. It is strange, if there is_ a vicious principle, that it was not discovered in 1910, when the Commonwealth had the opportunity to terminate the system, and it is strange, also, that it was not discovered in 1919, when the right honorable member for Balaclava (Mr. Watt), who was then Treasurer and Acting Prime Minister, brought the subject before a conference of State Premiers and Treasurers. I had the honour of attending that conference’, at which proposals were submitted for gradually decreasing the payments until they had been reduced to 10s. per capita. The Acting Prime Minister urged the change, and discussed it frankly with the Premiers and State Treasurers. He based his claim for a change, not on the grounds now put forward by the Treasurer - he did not allude to a vicious principle - but on the exigencies of Commonwealth finance, and the necessity for the Commonwealth having control of more revenues to meet heavy war and post-war obligations. There was an implication that in the future the Commonwealth would be carrying very heavy repatriation obligations, necessitating heavy expenditure connected with the return and settlement of ex-soldiers. The State Premiers opposed the proposal, and voiced a. contrary opinion as to the probable increase in the obligations of the Commonwealth; and they have been proved right in that. The Commonwealth has been able to meet all its obligations, and yet to continue the per capita payments to the States. The Prime Minister is very much concerned about the lack of cordiality between the States and the Commonwealth, and the absence, which is obvious to every one, of the spirit of cooperation, which he desires to see in the community. The present Government - and I say it with all due respect - is largely responsible for the antagonism which undoubtedly exists between the Commonwealth and the- States. A less generous spirit is displayed towards the States by the present Government than has been shown by previous Commonwealth Governments. I wish, to explain how the antagonism has been created. The Prime Minister convened a conference of State Premiers and Treasurers, who met in Melbourne in 1923, and he placed before them proposals for the termination of the per capita payments, and did it in a way that was not calculated to promote friendly discussion. I do not say that he wilfully sought to destroy the friendship between the States and the Commonwealth - I suppose that nothing was farther from his mind - but he circulated an agenda paper six weeks before the conference, and, without giving the State Premiers and Treasurers an opportunity to discuss the proposals, conducted a campaign throughout the country to circulate his views, thus arousing the hostility of the States before their representatives had assembled in Melbourne. The resentment of the State representatives was nol due to the fact that the Premiers belonged to a political party opposed to the Prime Minister, for a majority of them were Nationalists. I do not wish to think or say what’ some honorable members are thinking and saying - that in obstinately pursuing his course with this bill the Treasurer alone is culpable. I do not regard him as the sole culprit; but he is very harsh and unsympathetic towards the States, and must carry his share of the responsibility for their feeling of antagonism. The Prime Minister, however, is equally to blame. Some persons may assume that we have these proposals now under consideration because of the Treasurer’s obstinacy. At the interstate conference in 1923, the Prime Minister took a. leading part in advocating these proposals, and made a clear and, from his point of view, no doubt able, speech ; but it was a dogmatic speech, and allowed of practically no consideration by the Premiers. He said, in effect, “ There are the proposals. The per capita payments mu’st cease, and we will vacate portion of the income tax field. You have to accept these proposals or leave them - there is no alternative.” Sir William McPherson, who represented Victoria, protested at the manner in which the proposals had been brought forward, and he was followed in a similar strain by Mr. Oakes, Acting Premier of New South Wales. The Prime Minister then replied, “ What is the use of continuing the discussion? If you wish to continue it, I must stay here and listen to your speeches, but you must accept the proposals.” That is the effect of what he said, although he spoke more politely. We had to argue with ‘the right honor- ablegentleman before we could pursue the debate. The Treasurer, in introducing the measure now before the House, was guilty of a gross inaccuracy in a reference to that conference. As an additional reason for submitting the measure, ho said that the Premiers, in 1923, had voluntarily agreed to terminate the per capita payments. It is true that they brought forward an alternative proposal to the Prime Minister’s scheme, and included in it the cessation of the per capita payments, and the retirement of the Commonwealth completely from the income tax field. That, however, was not a voluntary agreement in the sense implied by the Treasurer. It was the kind of voluntary agreement that a man might make who had a pistol held to his head. The Commonwealth Government proposed to retire from a portion of the income tax field, and to retain the right to. tax persons receiving incomes of over £2,000 a year. The figure’s placed before the conference by the Commonwealth were proved ultimately to be wholly inaccurate.
It was only because the States were able to point out the absurd inaccuracies in the Treasurer’s calculations that the Government was induced to drop the proposal for the time. A sum of about . £2,000,000, which it was estimated would go to the States, proved mythical, and it was further shown that what the Treasurer spoke of as a gain to the States in taxation opportunities would not be obtained, because the Commonwealth had already abolished certain opportunities by increasing the exemption. If the States had wished to raise the money that the Commonwealth suggested was being surrendered to them, they would have had to increase rates which the Commonwealth had reduced the previous year, to reduce the exemption to its original level of £150, and to increase the flat rate on certain incomes. That was put forward as a fair, and even generous, proposal, and it was stated that it would give to the States £50,000 more than they were receiving as per capita payments. When the inaccuracies were exposed, the Treasurer, dropped the proposal, for the time being, and yet he has stated that the Premiers voluntarily agreed to surrender the per capita payments, and to raise the money required by direct taxation.Was that a fair or true statement? In my opinion, it was a complete distortion of the fact. The Prime Minister wonders why the States are antagonistic to the Commonwealth at the present time. The spirit, which he deplores, prevails partly because the Commonwealth has been arrogant in matters of this kind, but not entirely for that reason. Latterly some Commonwealth Ministers - possibly my statement does not apply to all, but it certainly applies to some of them - have shown a disposition to claim sole credit for the benefits which have followed mutual agreements between the States and the Commonwealth. When there was an amalgamation of certain Commonwealth and State Taxation Departments, from which undoubtedly considerable benefits accrued to the taxpayer, the Commonwealth Treasurer did not hesitate to claim the full credit for it, although, as every one knows, the amalgamation could not have been achieved except by mutual arrangement. As a matter of fact, the arrangement made was such that the States are carrying the chief obligations and burdens. It does not tend to promote a good spirit between the Commonwealth and the States for the Commonwealth Treasurer to claim full credit in matters of this kind. Some little time ago an agreement was made between the Commonwealth Government and the Queensland Government to dispose of the sugar crop. Mutual obligations and duties were involved, and a considerable advantage accrued to a large number of people. The Commonwealth Government could not have made the arrangement without the co-operation of the Queensland Government, which freely gave effect to, not only the letter, but also the spirit, of the agreement. In that matter also the Commonwealth claimed the sole credit.
– What about the odium?
– I should say that the Commonwealth Ministers never fail to transfer to the State Governments any odium that may result from these arrangements. I know that the Prime Minister made a triumphal - and I hope happy - tour of Queensland before the last elections, and everywhere he claimed that the great prosperity of the sugar industry, the better conditions of the farmers, and the vista of prosperity which had opened before them was the result of his own prescience.
– The tour had a successful result.
– No doubt it was designed with that object. In the face of the adoption of tactics of this kind is it any wonder that there is an antagonistic spirit between the States and the Commonwealth? To take another familiar example - I have not heard a single member, of the Commonwealth Government allow any credit whatever to the States for entering into the migration and settlement agreement, but certain State authorities have had to bear the dissatisfaction and odium because of their ratification of the agreement, and; so far as I know, they have done so uncomplainingly. It is not fair that all the credit for these agreements should bo claimed by the Prime Minister, the Treasurer, and other members of the Commonwealth Government. I suppose that if this proposal is ratified, and the Commonwealth retires from certain fields of direct taxation, we shall have another grand tour by the Federal Treasurer, who will claim full credit for reducing taxation and relieving the general taxpayer of Commonwealth taxes, while the State Treasurers will be criticized for increasing the burden of taxation. Unquestionably that will bc the attitude of the Federal Treasurer. He paid a visit to Queensland a few weeks ago and addressed meetings at Brisbane and Gympie. In the course of his remarks he said that the only progress that had been made in main roads construction in country districts had been duc to the Commonwealth. That is not true. The Commonwealth, as a matter of fact, has constructed no national roads; all it has done is to make a few advances to the States - the Queensland Government willingly availed itself of the money offered to it and expended it with advantage to the country - but to say that the present Commonwealth Government is responsible for the only main roads that have been constructed in Australia is to say something which does not accord with fact. The Queensland Government had a Main Roads .Board, had carried out a general road survey of the State, had proclaimed a few main roads, had actually started the construction of a few hundred miles of roads, and had prepared estimates and completed plans for a few thousand miles of roads before the present Federal Treasurer assumed office, and certainly well before the Commonwealth Government had a main roads policy. The same thing could be said of Victoria, Now South Wales, and other States. It is the pettifogging desire of the Commonwealth Government to make political capital at the expense of the States in matters 6f this kind that has caused the resentment and antagonism that at present exists between the Commonwealth and the States) and prevents the friendly spirit of cooperation which the Prime Minister says that he desires. In the course of Kia speech on this matter on Wednesday the Prime Minister summed up his arguments in favour of the bill as follows: - First, that it would bring greater security to the States; secondly, that it would result in a more equitable distribution between the various States; thirdly, that a vital principle was involved. Finally, he said that the bill was a gesture of generosity towards the States. Taking these points in order, I cannot see that this measure will bring any greater security to the States. How are the States to be better assured of their revenues by means pf it than they are at present. The Prime Minister stated that certain fields of taxation would be evacuated in favour of the States ; but he can give no guarantee to the States that they will be allowed the sole occupancy of those fields of taxation. He cannot bind future Commonwealth Parliaments in this matter. In my opinion, the States will have less security under these proposals than they enjoy under the per capita arrangement, and nothing that the Government can say will afford them greater security. As to the equity of this new proposal as between the States, I cannot follow the Prime Minister’s reasoning at all. The per capita payments are made on a population basis, and the Prime Minister seems to think that it is inequitable that the States with the larger populations should receive the larger amounts of money. I suppose that is what the framers of this arrangement in 1910 intended. It is true that under the present arrangement, a State like Vic- toria may receive moire money than a State like Queensland , which has a smaller population, but proportionately larger obligations. How does this new proposal improve the position, It does not give Queensland any great advantage over Victoria. Whatever kind of direct taxation the States attempt to impose - whether it be income tax, land tax, entertainments tax or any other direct taxation - a State like Victoria will always have an advantage over States like Queensland and Western Australia. The Prime Minister will not cure the inequalities and injustices of the present arrangement by forcing the States to rely upon additional direct taxation upon their people, but will only make them a great deal worse. As to the vital principle involved, I must say that I cannot see that any serious effects have accrued to the States from the payment of the per capita grant. To put it in another way, the fact of the States sharing in Commonwealth revenues has not been detrimental to them. I know, of course, that the Federal Treasurer makes reckless statements about the extravagance of State Treasurers. But even if State Treasurers are extravagant, they still have a great deal to learn in that regard from the Federal Treasurer himself. In any case, it cannot truly he said that the extravagance of State Treasurers, if there be any, or their lack of control of public funds, arises from the per capita payments made to them by the Commonwealth. I have been unable to find any gesture of generosity in the Prime Minister’s speech. No doubt, the right honorable gentleman is actuated by a feeling of goodwill in this matter, but it is very unfortunate that he is unable to see it from the point of view of the States. The generosity is of the Rob Roy variety, that would knock a man down and rob him, and then confer with him as to the results. As a matter of fact, there is not a tittle of generosity in this proposal. Nor is there any spirit of good-will in the persistence of the Commonwealth Government iu pressing this matter. I am quite sure that the Prime Minister has not fully considered the effects of these proposals on State finances. All the States, with one exception, had a deficit last year. Certainly every State is in a difficult financial position.. The deficit in New South Wales was £1,250,000.
– Does the honorable member wonder at that?
– No, not when I remember how the State is strangled and starved by the Commonwealth. All the States are faced with deficits this year. That is not a happy position for the State Treasurers, who desire to balance their accounts. The financial position of the States is so difficult that some of the governments have been driven to the necessity of raising revenue from questionable sources. The New South Wales Government, for instance, enacted a newspaper tax which has been declared ultra vires.
– Only some of the State Treasurers have resorted to questionable methods.
– That is so. I do not think that that charge could be levelled against myself. I was Treasurer in Queensland for ten years, and I think every one must acknowledge the equity, justice, and scientific nature of the taxation we imposed in that State. It must be remembered that the States have a great many functions to perform. I suppose they have eight times as many functions - and as important ones - to carry on as the Commonwealth is carrying on at present. For instance, they are charged with the necessity of providing for education. In New South Wales the education vote is £4,500,000 annually, and it is increasing. The States are also charged with carrying on local government, the administration of justice, the police force, charities and hospitals, land settlement, agriculture, forestry, mining, railways, roads, harbours and rivers, and many social and industrial activities of a comprehensive character. This enormous range of functions places very heavy obligations upon the States, the cost of which cannot be accurately estimated year by year. The States always have a good deal more to do than they can manage. They recognize the necessity for progress, and are always trying to achieve social and industrial reforms. But they cannot succeed while they are hampered and starved by the Commonwealth. The result is that their people suffer. The citizens of the Commonwealth are also citizens of the States, and the Commonwealth is not justified in driving the States into adopting measures of direct taxation with which they are not in agreement. The Federal Treasurer seems to imagine that, if the Commonwealth evacuates certain avenues of taxation, the States can easily step in and impose an amount of taxation which will give them a quid pro quo; exact compensation for the amount lost through the cessation of the per capita payments. But the matter is not so easily arranged as that. In some States, at least, the Treasurers would have great difficulty in framing a budget which would effectively make up the deficiency. Take the entertainments tax, for instance. How many States are collecting it to-day? How many desire to collect it? Not many. The Commonwealth Government is collecting it, and possibly has found it a great inconvenience, and a cause of considerable hostility towards itself. Possibly very few of the States will want to impose an entertainments tax. How many States are imposing a land tax, except of an almost nominal character? Only one State has a progressive land tax. The Treasurer (Dr. Earle Page) wishes to compel every State to impose land taxation, and incur the hostility and antagonism, especially of rural dwellers, that would result from such an impost. He also wishes to force the States into the imposition of a swingeing income tax. Already very heavy income taxation is in operation in the States, and the majority of the State Treasurers are of opinion that the limit has been reached. It is true that, under this proposal, the Commonwealth will retire from a portion of the income taxation field, and that the majority of taxpayers will not, in the aggregate, pay a greater amount than they are now paying. But to obtain an amount equal to that which the Commonwealth forgoes, the States will have to impose a higher rate of tax than that which the Commonwealth now imposes.
– The higher rate will be paid by the smaller taxpayers.
– That is so. Wealthy people will benefit to a large extent from the adoption of this proposal. The idea of the Treasurer is that if the Commonwealth retired wholly from the field of income tax the States could collect the same amount of tax under their existing machinery, the aggregate income of individuals whose wealth was derived from more than one State being taxed under some form of Commonwealth machinery. I ask the Treasurer whether he believes that such taxation would be constitutional. If the Commonwealth were to retire entirely from the field of income taxation by the repeal of its laws relating to income tax, an aggregate income tax could no longer be collected under the. authority of the Commonwealth. What right would Victoria have to collect tax at a higher rate from a citizen who derived a certain amount of his income from an estate in New South Wales than that imposed on one whose income was obtained wholly in this State? It would not have any authority for so doing. Questions closely approximating in principle to this have been the subject of litigation on frequent occasions, and the decision has always gone against the State. Would New South Wales possess the right to charge one of its taxpayers an additional 6d. in the £1 because he derived portion of his income from Victoria or South Australia ? Such action, I contend, would be held to be ultra vires.
– Who would so hold it?
– The High Court of Australia.
– Surely not! The States have the power to levy whatever taxation they please.
– The constitutional authority to do what I have mentioned is not possessed by the State. On one occasion, in Queensland, we sought to bring about equity between various classes of taxpayers, by requiring those who had large incomes to state the total amount of income, even though portion of it were from an exempt source, and by assessing the taxable portion at a rate commensurate with the gross sum.
– That is an entirely different matter.
– That law was held to be ultra vires. To my mind, the principle which it involved is similar to that in this matter. That it can be suggested that, because a taxpayer in, say, Victoria, derives a portion of his income from another State, it is competent for this State to charge him a higher rate than is charged in the case of a taxpayer whose income is derived solely from this State, is beyond my comprehension. I should be very much surprised if the courts allowed that to be done. It may be suggested that Commonwealth machinery could be utilized, and, if necessary, Commonwealth authority enforced. That, of course, would be one way of overcoming the difficulty; indeed, it would be the only way. Then, however, we should still have Commonwealth machinery operating, and the Commonwealth would not have retired from the taxation field. Duplication of staffs would continue. What advantage would accrue? If the Commonwealth enforces these proposals the result will be, not that the States will entirely recoup themselves by direct taxation, but that, they will be driven to the imposition of indirect taxation by increasing railway freights and fares. The majority of the State Treasurers have already been driven to the adoption of that unjust method of supplementing their revenue. It is a class tax of the worst possible character. The country dweller, the primary producer, will be compelled to make up the deficiency caused by the action of the Commonwealth Government, and that will be intolerable. In his policy speech at the commencement of the last Federal election campaign, the Prime Minister suggested that the time was opportune for the holding of a constitutional conference or session to consider the revision of the Australian Constitution. Those who have given any thought to the matter will admit that it is necessary to consider the remodelling of the Australian Constitution. I do not know whether it still is the intention of the Commonwealth Government to hold a special session primarily for the purpose of considering the alterations that ought to be made in the Commonwealth Constitution to remedy the defects which the experience of the last 26 years has shown to exist in it. If the Government intends to honour that promise surely it is reasonable to suggest that this matter should be held over until the conference has been convened. No great harm would be done if the matter were postponed for a year or two. If the Government is seriously of the intention to remodel the Constitution to correct defects and effect a better balance of power between the States and the Commonwealth, it should agree to postpone until it does so the consideration of financial adjustments between the two authorities. It would then be possible to ascertain the financial adjustment that would he rendered necessary by the conferring of additional powers upon the Commonwealth, and the relieving of the States of responsibility. If the Commonwealth assumed more onerous duties and responsibilities than those with which it is now charged, there might be some justification for a proposal such as this.
– What responsibilities are now shouldered by the Commonwealth ?
– Defence is a very heavy responsibility, hut it is discharged in a most negligent fashion by this Government. Posts and telegraphs, I as-‘ same, practically finance themselves. There are responsibilities in relation to quarantine and a few other matters. But measure those against the comprehensive functions that are the concern of the States! Any endeavour to belittle what the States are doing, or to ignore the responsibilities which they have to shoulder does not tend to promote a greater degree of harmony between the Commonwealth and the States. Whatever may bc the political character of the government for the time being in any State, its functions and its responsibility to the people are unchanged, and the Commonwealth should pay due regard to the heavy obligations that have to be carried. If the prestige of the Commonwealth is to be enhanced, it will have to acquire additional powers, and those powers must be taken from the States. Personally, I believe that the time has arrived for that to be done. When it is, there will be a greater justification than now exists for the re-adjustment of the financial relations of the Commonwealth and the States. Not one of the six States will agree voluntarily to this proposal. I suggest to the Prime Minister that he should not.in his present somewhat obdurate fashion, pursue the policy of forcing upon the States something that they do not desire, compelling them to resort to the impostion of heavy indirect taxation which will have the effect of crippling their activities and arresting their progress, without conferring any commensurate advantage upon .the Commonwealth. The only advantage to the Commonwealth will be that which the Treasurer will obtain by being able to claim that he has retired from the field -of direct taxation, and has relieved the Commonwealth taxpayers of about £8,000,000. The reality of the position, however, will be that he has compelled State Treasurers to extract that sum from the pockets of those who are less able to contribute it than are the present contributors to Commonwealth taxation.
.- Whatever opinions we may hold upon this matter, I think it will be conceded that justification for the Government’s proceeding with the proposal is furnished by the important and interesting speeches that have been delivered upon it. Before dealing intimately with the measure, I should like to refer to a few of the speeches that have been made. Because of the gross distortion of the policy-speech delivered by the Prime Minister in the last election, I intend to quote the remarks which the right honorable gentleman made on that occasion. The Prime Minister, at Dandenong, referred to the financial relations between the Commonwealth and the States in the following terms : -
We ave approaching the completion of the first quarter of a century of Federation, and it is essential that we should now consider whether that great historic instrument, the Constitution, meets the needs of to-day in the light of the developments which have taken place. The ideal which the framers of the Constitution had before them was to weld Australia into one great nation, while preserving to the States their rights of selfgovernment. The question of Commonwealth and State finance was dealt willi by the Slates surrendering to the Commonwealth sources of revenue far in excess of the requirements of Che Commonwealth. Of this revenue, for the first ten years three-quarters was handed back to tho States, and since the expiration of that period a. per capita grant of 25s. has been made by the Commonwealth to the States. The whole basis of these arrangements, however, was destroyed by the war. The financing of Australia’s great effort in that struggle was undertaken by the Commonwealth, and to-day the Commonwealth is carrying an annual burden of nearly £30.000,000 to meet Uie obligations incurred at that period. In addition, the Commonwealth has undertaken to provide for old-age pensions and invalidity, ns well as the maternity bonus. These obligations to-day amount to over fS,000,000. The result of these fundamental changes is that the Commonwealth to-day is raising revenues in order to provide the per capita payments to the States. This is contrary ti> the basic principle- of national finance - that every Government shall have the responsibility of raiding the revenue which it is expending.
The development of Australia as a nation, and the necessity of dealing with many great questions on a national basis, such as that of road transport, to which I have already referred, also renders necessary a re-examination of the financial relations between the Commonwealth and the States.
If, as the honorable member for Dalley (Mr. Theodore) has conceded, the Government has a mandate, and that mandate embraces its financial policy, there is little logic in the criticism which that honorable member made of the Prime Minister’s speech. I venture to suggest, and I think it will be conceded that the honorable member for Dalley, in his attempt to clear that hurdle, barked his shins, and arrived at false conclusions. I shall return later to the remarks of the honorable member, but I wish now to refer to what was said by the Prime Minister. It will, I think, be generally conceded that in dealing with this question the light honorable gentleman was frank and candid. He proved conclusively that in taking the action proposed under this bill the Commonwealth Parliament will be absolutely within its rights. I shall sheet home the truth of that statement by quoting from the remarks made by the honorable member for Dalley when he took part in the Premier’s Conference to which he referred this morning. The Prime Minister proved that the State authorities have no claim, moral, legal, or constitutional to the continuance of the per capita payments. The constitutionality of the matter has been dealt with by previous speakers, and their remarks do not require reiteration. When those who framed it were building up the Constitution they had to concede that the probable revenue from. Customs and excise duties would for a time be more than ample to meet the requirements of the Federal Government as an organized unit of administration. From, the inception of the Commonwealth in 1901 until 1910 no alteration was made in the method of obtaining revenue for the purposes of government. In 1910, for reasons best known to the government in power atthe time, a land tax was introduced in this Parliament, and that represented the’ first incursion by the Commonwealth into’ the field of direct taxation. The position then created continued until the Commonwealth Government was faced- with the wider national responsibilities engendered by the war. To meet its increased obligations the Commonwealth Government was forced to invade further the field of taxation previously left to the State authorities. It is unnecessary to go into the figures at great length, and it will bc sufficient to remind honorable members that in 1921-22 the revenue of the Commonwealth from all sources amounted to £22,048,483, whilst its commitments and responsibilities required the expenditure of £31,337,164. It is obvious from these figures that the revenue from Customs and excise duties was more than completely absorbed by the expenditure, and the field of direct taxation had to be invaded to supply the Commonwealth Government with the necessary sinews of war. It is idle in the circumstances to claim that in that year or in subsequent years there was any surplus revenue derived by the Commonwealth from Customs and excise taxation. There has been no surplus for some time from that source of revenue, and the position to-day is as open as a book. The Prime Minister, in his efforts to bring about what might be called a spirit of esprit de corps between the Commonwealth and the various States, has attempted over a period of years to bring about a satisfactory solution of the financial problem by calling various conferences with the State Governments. Different attitudes have been adopted by the governments of different States, but the fact remains that almost without exception the conferences and projected conferences were abortive. To-day the Commonwealth Government holds out the olive branch in many directions to bring about the happy desideratum which has been the aspiration of the Prime Minister since he took office. The introduction of the bill under consideration has, we are told, engendered a spirit of animosity towards the Commonwealth; but this is due to the fact that people have refrained from giving careful study to the questions involved. I was not greatly surprised at the amazing attitude adopted by the honorable member for Perth (Mr. Mann) in dealing with this question. He directed a pip-squeak barrage, particularly against the Treasurer (Dr. Earle Page), and with one eye on the roof and the other on his constituency, was compelled to descend to suggestions of ulterior motives.
– According to the honorable member, the honorable member for Perth has a very wide vision.
– The honorable member’s vision is wide, but it is not acute or perceptive. He was compelled to descend to sarcastic references, and after bringing to his aid fables and bed-time stories for children, went to the Bible to buttress his argument. He borrowed from the verses about the “ Walrus and the Carpenter,” in Alice Through The Looking Glass. The honorable member suffers from an exaggerated asseveration of ingrowing importance, and it would be well for him to bear in mind the fable of the frog, who tried to be a bull, and burst. As the honorable member delved into ecclesiastic literature to buttress his arguments, let me suggest that when he next refers to the Good Book he will leave Esau and Jacob, and as a matter for personal application will refresh his knowledge of the fate of Judas Iscariot.
– Order ! I ask the honorable member to withdraw that statement.
– I withdraw it. I do not wish to criticize statements made by other previous speakers, but I should like to refer to the remarks of the honorable member for Yarra (Mr. Scullin), whose speeches are always worthy of consideration, and are heard with the deepest attention by the House. The honorable member said that this measure is, in essence, an attempt on the part of the Government to pass legislation which practically amounts to a violation of the principles which it has itself enunciated in connexion with the main roads grants. He was able, by the trick of the logician, to convey that impression. But if we analyse the honorable member’s argument closely we shall find that it was much like the contention that, because the white man eats rice and the Chinaman eats rice, then the white man is a Chinaman. In the main roads grants we have action taken as the result of mutual agreements with the State authorities. The honorable member for Yarra described them as stand-and-deliver agreements, but they’ were no such thing. They were voluntary agreements for the
– The honorable member referred to all the States.
– Queensland was more particularly mentioned, and certainly no one should be in a better position than the honorable member for Dalley to discuss, from one point of view at least, the finances of that State. I have here a copy of the report of the conference between Commonwealth and State Ministers held in Melbourne in May and June of 1923. That was a conference called by the Prime Minister in an endeavour to find an effective solution of the financial difficulty, but it was unfortunately not productive of much result. At that conference, as he intimated to-day, the honorable member for Dalley was present as a representative of Queensland, and was responsible for remarks that conflict in an extraordinary way with the attitude he at present adopts. At page 9 of the report it will be found that the honorable member said -
We could discuss the matter all day, but if the Prime Minister stands by his principle thathe cannot accept the proposition that the Commonwealth should retire entirely from the field of income taxation, we are only wasting time. . . Without doubt, the Commonwealth Customs revenue is an expansive source of revenue. It is bound to increase as the Commonwealth develops, and its population increases.
Only the day before yesterday a statement made by the honorable member appeared in the press to the effect that he hoped and anticipated that by reason of the imposition of a 100 per cent. effective tariff this country would become entirely self-supporting. With such a tariff the revenue heanticipates, instead of increasing continually would disappear. I think it was the Leader of the Opposition (Mr. Charlton) who, when addressing himself to this bill, said he
The Commonwealth may then bc able to afford to retire entirely from the field of income taxation, or, possibly, from the whole field of direct taxation, assuming, of course, that, in the meantime, they do not shoulder further obligations involving expenditure. If it be urged that the Commonwealth Government mayha ve to extend its operations in directions which will mean increased expenditure, that is an argument to which we shall have to listen. Personally, I believe that the Commonwealth will have to takeon fresh functions which will involve greater expenditure than the Government is now committed to. In that event they must tap resources of revenue which the States now claim as their sole right. I think the Commonwealth Government ought to consider the question of adopting the suggestion of the States that they should retire from the field of income taxation and enter into an agreement with the States for them to recoup or partially recoup the Commonwealth for the loss of revenue from that source.
– Who said that?
– Incredible though it may be, those remarks were uttered by the honorable member for Dalley ! The honorable member said casually to-day that certain proposals were made by the States to the Commonwealth at the abortive conference in 1923. The State representatives, aided and abetted by the honorable member for Dalley, proposed that -
– That proposal was made under duress.
– The honorable member for Dalley, being a man of common sense, was not obliged as Premier to throw up 136 States [REPRESENTATIVES.] Grants Bill. his hands and cry “ Kamerad.” He has always been held up to our admiration as the strong man of Queensland. Was he so weak that he surrendered abjectly when, as the honorable member suggests, a pistol was held to his head? Eventually the following proposals of the conference were accepted in principle by four States : -
For a period, of five vears from the 1st July, 1923-
The Commonwealth shall not levy any income tax on any incomes except those of companies.
The income tax levied by the Commonwealth on the income of companies shall not exceed 2s.6d. in the£1.
No interest shall be paid by the Commonwealth to the States on properties transferred to the Commonwealth under section S4 of the Constitution.
No . payment shall be made by the Commonwealth to the States under the Surplus Revenue Act 1910.
The Commonwealth shall make payments to the States upon the following basis: -
There shall be calculated with regard to each State -
The amount of the payments made to the States under the Surplus Revenue Act 1910.
The interest on properties transferred from the States.
The amount of tax on the incomes of companies collected by the States.
There shall also be calculated with regard to each State -
The amount of tax on the incomes of companies collected by the States in excess of an average of ls. 3d. in the £1.
The amount of Commonwealth income tax collections in the State other than taxes on the incomes of companies.
Where, in regard to any State, the total of the amounts calculated under paragraph (b) docs not exceed the total of the amounts calculated under paragraph (a) by £100,000, the Commonwealth shall pay to the States the sum necessary to produce an excess of £100,000.
The following resolution was handed to the Prime Minister by the State Treasurers: - “ The States are unanimous in expressing their appreciation of the altered proposals now submitted by the Prime Minister in respect to the field of income taxation, and, in view of the far-reaching effects of the proposals, suggest that the further consideration of those proposals be postponed until Saturday, 9th June, 1923, to enable each State to give full consideration thereto.”
The conference re-assembled in Melbourne on 9th June, the , Commonwealth, New South Wales, Victoria, ‘South Australia, and Western
Australia being represented. The Prime Minister said a definite reply had been received from only one State, namely, Queensland, which had telegraphed stating that it agreed to the Commonwealth’s proposals subject to an adjustment of the figures. At the conference Victoria, South Australia, and Western Australia accepted the proposal in principle. New South Wales dissented; Tasmania was not represented.
During the whole of the proceedings there was no assertion by the States of a moral, legal, or constitutional right to a continuance of the per capita payments. It is true that the Commonwealth and States were not able to arrive at a working solution of the problems which they were considering, but we find that the Treasurer of Queensland, now the honorable member for Dalley, patted the Commonwealth Ministers on the back for the generosity of their proposals and their desire to bring about more harmonious financial relationships between the Commonwealth and the States. He also predicted a continual expansion of the Customs revenue, notwithstanding the development of our industries. To-day he flatly contradicted his former statements. That is not unusual for him, and, viewing his actions dispassionately, one must admit that he is consistent only in his inconsistency. He has advanced no effective arguments against the Government’s proposals. The bill will, I believe, lead to a conference of Federal and State representatives in the near future, at which an amicable readjustment and stabilization of financial relations can be reached. I have much pleasure in supporting the bill, and commend it to the House.
. -The criticism by the honorable member for Herbert (Dr. Nott) of the hon- honorable member for Dalley (Mr. Theodore) suggested to my mind a fly trying to irritate an elephant. Ido not think that the elephant is likely to be much disturbed. The honorable member for Dalley may have acted in 1923 as his critic has stated, but there is no reason why a man should not change his opinions. Only a fool never alters his views. Of course, the honorable member for Herbert spoke to-day only for the purpose of gibing at a political opponent, and he displayed himself ina rather ungracious light. I shall never be found advocating State rights to the detriment of the rights of the Commonwealth, but I am opposed to this bill because no more inopportune time could have been chosen for its introduction. At no time in the history of Australia have the finances of the States been more dislocated than they are at present.
– Because there are five Labour Governments in office.
– Labour Governments had an hereditas damnosa from their Nationalist predecessors. For instance, whan the Ryan Government assumed office in Queensland, the railway employees were receiving a miserable pittance, and the increase of their pay by that Government meant an increased expenditure of £1,000,000 per annum. Both as a Federal representative and as a candidate for the State Parliament, I have always contended that the powers of the Commonwealth Parliament must increase, and those of State Parliaments decrease. Every broadminded Australian must recognise that fact. One of the gems of wisdom which fell from the honorable member for Dalley to-day was his statement that the problem with which this bill deals should be deferred to the constitutional session which the Prime Minister promised in his last policy speech at Dandenong. When the Government’s referendum proposals were before this House, many of us recommended that any proposed amendments of the Constitution should be postponed until after a special session to consider the constitutional amendments generally. If that course were followed and equitable proposals for a readjustment of the financial relations of State and Commonwealth were advanced, the people would be ready to grant to the Commonwealth increased powers.
– Would the honorable member be prepared to fix in the Constitution the financial relations of the Commonwealth and the States?
– No. If greater powers are conferred upou the Commonwealth Parliament, and the State Parliaments are relieved of considerable responsibility and expense, a corresponding readjustment of finances must follow. But we should not attempt to define in the Constitution what revenues shall be reserved to the Commonwealth and the States respectively. The honorable member for
Dalley quite correctly predicted, in 1923, that the Customs revenue would increase. It has increased each year to such an extent that the Treasurer annually has underestimated his revenue by millions of pounds. No true protectionist can approve of that state of affairs. If by means of an effective protectionist tariff the Customs and excise revenue were to diminish by £5,000,000, would the Commonwealth Parliamentbind itself not to re-enter the field of direct taxation ? Certainly not. In such an event, with its present obligations, it must of necessity re-enter the area which the Govern ment is now offering to vacate. If the Prime Minister gave the States anything in the nature of a promise regarding the foundations upon which the financial relations between the Commonwealth and the States should restfor the future, the arrangement could never be more than a precarious one. This Parliament cannot bind future Parliaments. When the Labour party went to the electors in 1910 one of the pledges given was that if returned to power it would repeal the Naval Loan Act, and that measure was subsequently repealed by the Labour Government. Many other instances could be given, both in the State and Federal spheres, of the inability of one Parliament to tie. the hands of any future Parliament. We do not know what the circumstances of the States or the Commonwealth may be ten years hence, and it would be misleading to promise the States that the financial relations would be placed on a more solid foundation than those on which they now rest. If the Commonwealth abandoned a portion of the field of direct taxation, many large taxpayers with interstate interests would evade the payment of sortie of the tax they are now contributing. A taxpayer’s income might amount to £60,000, distributed equally among three States, but if the Commonwealth taxed him on the whole cf his income he would pay a larger sum than if he were merely taxed on £20,000 in each of the States in which it was earned. I do not agree that the Commonwealth should entirely evacuate the field of direct taxation, because if there were a sudden or even gradual decline in Customs revenue it would be necessary to impose fresh direct taxation.
– There are other methods of helping the States.
– Of course. We have granted the States suras for road construction, and there are also great Commonwealth schemes for housing, child endowment, and national insurance. If we enter upon these social reforms money will have to be found for them, and if we continue the system of invalid and old-age pensions any slight drop in Customs and excise revenue would make it necessary for the Commonwealth to re-enter the field of taxation now proposed to be evacuated. I cannot see any justification for the contention that the per capita payments should be abolished. Are the people of Queensland behind the honorable member for Lilley (Mr. Mackay)?
– The newspapers and the taxpayers’ associations certainly are not.
– I believe that the electors in the honorable member’s own constituency would vote against him on this matter. If the proposals of the Government were submitted to the people they would be overwhelmingly defeated.
– Just as practically every other proposal submitted by referendum has been defeated.
– Not merely on that account. I have discussed the subject with men who have no sympathy with my political aspirations, and they strongly denounce the Government’s proposal, declaring that they will take every opportunity to defeat it. Both branches of the State Parliaments are against the Federal Government, the various political parties are opposed to it, and if there were joint sittings of the twoHouses in each State Parliament, the vote would be the same. Were 1 to regard the subject merely from the point of view of party advantage, I should say to the Government, “Go ahead with your proposals, and bludgeon your supporters, meek and mild as they are, into assisting you. I have abundant confidence as to the result.” The Labour party has pledged itself to continue the per capita payments until the Constitution has been amended in such a way that the States will be relieved of certain financial responsibilities now borne by them. That plank was inserted in the platform of my party some years ago. Since all political parties are opposed to the measure, I fail to understand the attitude of Ministers, unless they are fond of the peculiar exercise of bumping their heads against a stone wall. The Labour party is not taking a political advantage.
– The advantage is thrown at Labour.
– We anticipated something of this nature, and we provided against it.
– Yes. Tory newspapers, such as the Sydney Morning Herald, the Melbourne Argus, the Adelaide Register, and the West Australian are takingpractically the same stand as the Labour party and the rank and file of every other political party in Australia. I particularly mention the rank and file, because parliamentarians are at variance with their parties. When the decision on this bill is made, certain honorable members will be found voting in diametrical opposition to the opinions of the electors who sent them here. The honorable member for Lilley is already in doubt about his electors supporting him.
– Does the honorable member say that this is a people’s question, and that they understand it?
– Yes. Some of the shrewdest men in various walks of life have already expressed their opinion, and they are asking why the Federal Government is trying to bludgeon the States into a certain financial position.
Sitting suspended from 1 to 2.15 p.m.
-Since the luncheon adjournment I. have been able to strengthen my conviction that the Government’s proposal to discontinue the per capita payments to the States has met with the general criticism of the Australian press. While we must admit that the press does not always fairly represent public opinion, yet we cannot gainsay that never before has it been more united in accurately interpreting the spirit and feeling of the people of Australia than in regard to this measure. I make bold to say that no representative in this Parliament would dare to advocate the Government proposals in his constituency. The Herald, in its last night’s issue, published an article commenting on the Prime Minister’s speech. The following extract certainly sets out’ the true position : -
But even the most apathetic community must he stirred to amazement by the arrogance of Mr. Bruce’s latest proposal. The bill shall f;o through, he says, and then Commonwealth Ministers will be graciously pleased to meet State Premiers and Treasurers in conference to discuss any suggestions that may be made for a re-adjustment of financial relations. There is a saving spice of humour in the situation, but the need of the States is not entertainment so much as the hard cash necessary for the development of their resources. If by any chance the conference be held, it is easy to imagine a rash Premier suggesting a restoration of the per capita payments. “Tut, tut!” the Prime Minister and Dr. Page may be heard interjecting in duet, “that matter is not open for discussion.”
Is it any wonder that even a Tory journal like the Melbourne Argus is prepared to head its article on the Prime Minister’s statement - “ A conference about nothing “ ?
– Did the honorable member read the Age yesterday?
– Yes, and the article in that newspaper could be interpreted in two ways.
– Did it not approve of the Prime Minister’s speech ?
Mr.FENTON. - It did, and it did not. It agreed with the statement of the Prime Minister regarding the necessity of discontinuing the per capita payments, but it also stated that before the Prime Minister or the Treasurer had the audacity to make a proposition of that kind they should cut adrift from direct taxation. There was in that article a certain amount of stinging criticism and a certain amount of commendation.
– It was 50-50.
– The heading to the article published in the Argus - “ A conference about nothing “ - puts the position in a nut-shell. What will be the use of holding a conference if the State representatives are not to be allowed to discuss the withdrawal of the per capita payments ? The interstate Labour conference which was held four years ago placed a plank on the political platform of the Labour party, to which every member must subscribe, to the effect that before the per capita payments to the States are discontinued there must be an amendment of the Constitution to enable the Commonwealth to take over some of the responsibilities of the States.
– What State responsibilities does the honorable member suggest should be taken over by the Commonwealth ?
– At present I am more concerned with the Commonwealth Parliament taking over responsibilities other than financial adjustments, although I admit that any far-reaching amendment of the Constitution must of necessity provide for a financial re-arrangement between the Commonwealth and the States.
I venture to say that if there were an election to-morrow, any candidate who advocated in his constituency the discontinuance of the per capita payments to the States would be defeated at the poll. Why is the Commonwealth Government taking up a position in antagonism to the States? I disagree entirely with the views of “ States-righters.” In my opinion, the States have too much power in comparison with the Commonwealth already, and I should be glad to engage in a campaign to-morrow to secure an amendment of the Constitution to give this Parliament greater power. We should then be in a position to make a more equitable financial readjustment of the relations between the Commonwealth and States, because we should have taken over certain responsibilities now vested in the States.
– What is the honorable member’s straight-out attitude towards the bill ?
– I am opposed to it, lock, stock, and barrel, and I hope the honorable member for Wakefield is.
– I shall tell the honorable member where I stand before the close of the debate.
– I fail to understand why Ministers, many of whom have had a certain amount of experience, should persist with this measure, because it seems to me that they are getting ready to commit political suicide.
– Then why shed tears over them?
– Any tears which I may shed over them in connexion with this matter, will be crocodile tears, but, because I have the interests of the people at heart, 1 am doing my best to prevent Ministers from going headlong over the cliff to destruction. I am sure that you, Mr. Speaker, as one of the oldest members of the House, will agree with me when I say that never before has there been such pronounced unanimity of opinion in opposition to a bill as there is in connexion with this measure. I feel that there is a telepathic message from you to me as the medium cordially endorsing what I am saying on this subject. If all the State Parliaments were convened to consider this issue, there would be but one opinion expressed.
– They jettisoned unificacation, but they will not pledge themselves for ever.
– I am afraid that the honorable member for Wakefield is dealing in riddles. I repeat that if all the States Houses were brought together to consider this proposal to abolish the State grants, there would be unanimous opposition to it.
– But for different reasons.
– Perhaps the honorable member is right. But there would be no doubt about the opposition to the withdrawal of the per capita payments. Four years ago the Labour party anticipated that the present position would one day arise, and saw the need for some drastic and comprehensive amendment of the Federal Constitution in relation to the per capita payments. This is a plank of our platform, which we are all pledged to support. The general clamour outside an.d the remarkable unanimity of opinion in the press of Australia, would be ample justification for our opposition to the measure, even if it were not contrary to a plank of our platform. Many honorable members supporting the Government must know that if they vote for the bill they will be acting contrary to the wishes of their constituents.
– I think the Government is going to drop the bill.
– It is difficult to say what is going to happen, because one cannot get behind the inscrutable smile of the Treasurer, he smiles despite the danger that threatens him. From newspaper reports of party meetings, it is evident that the Treasurer had a very bacl time when he put this issue before his colleagues in the caucus room of the Country party. Why should there be a certain combination to give a majority for the bill? It is well known that certain of the Nationalist Ministers had to modify their views in the caucus room of their party, and it is obvious that those who vote for the measure will do so in opposition to the opinion of the majority of the people of Australia. Another paragraph from the article that appears in the Herald reads -
Without a real basis for discussion, the calling of such a conference is a pure farce, which throws into a high light the Prime Minister’s intolerable assumption that he can override the wishes of the majority of the people of the States.
That brief extract expresses in a few words what I have been trying to say this afternoon. The article goes on to state -
Justice, as understood by the sponsors ofthe per capita grab, is not the justice which was promised the States on federation. The Jedburgh justice administered to moss-troopers after a merry foray on the border put them to death and then solemnly tried their case. Has Mr. Bruce been born a few centuries too late? He would abolish the per capita payments when they are most needed by the States, and then preside over a conference which would insist upon trying the case.
There is also a cartoon in the same newspaper which I should like to have included in the Hansard if that were possible.
– The honorable member is quoting more fully from a newspaper article than is usually allowed.
– I regret that you take that view, Mr. Speaker, because I feel sure that honorable members who have listened to me will agree that I have been quoting from the newspaper referred to mainly for the purpose of strengthening my argument. This cartoon hits off the present situation, and portrays the Prime Minister - I do not suggest that it is a good picture of the right honorable gentleman - before a guillotine, or what is intended to be a guillotine, with the whole of the State Premiers ranged in a circle, and giving heed to what he is saying. On the guillotine blade are the words, “ De capita” and judging from the expression on the faces of the Premiers, they understand only too well what is about to happen to them. The Prime Minister is depicted as saying -
Submit, gentlemen, and afterwards I shall have a niue friendly talk about your case.
The footnote to the cartoon refers to Mr. Bruce as “ the friendly exocutioner,”and states -
Mr. Bruce proposes to abolish the allimportant per capita payments to the States, and after that is done, to call a conference between the States and the Commonwealth toconsider re-adjustments of the financial relations between the two!
The honorable member for Herbert (Dr. Nott) referred this morning to the conference of State Ministers in 1922 to consider the financial relations of the Commonwealth and States, and quoted from speeches made by the honorable member for Dalley (Mr. Theodore), who attended that conference in his capacity as Premier of Queensland. I am afraid that the honorable member for Herbert did not have time to read the full report of Mr. Theodore’s speech, because he contented himself with quoting a few paragraphs without regard to the context.
– What was the “ scrap “ like between the honorable member for Dalley and the honorable member for Herbert ?
– I think the honorable member for Dalley went out and had a rest while the honorable member for Herbert was speaking, but I regarded the attack as an attempt by a fly to tickle an elephant. Apart altogether from the bill introduced by the Government, and the amendment moved by the Leader of the Opposition, I am bound by the terms of the Labour platform to oppose a measure of this character. Our platform definitely favours the retention of the per capita payments to the States. A number of honorable members on the Government side have already said that the Leader of the Opposition has moved the amendment in order to gain political kudos and support for his party outside. I remind them that this question has been on the Labour party’s programme for four years, and that in opposing the bill we are merely giving effect to our own platform. Even if a Labour Government brought in a bill of this character, I should seriously oppose it. We are merely doing our duty and acting fairly to the people of the States. I believe in a drastic amendment of the Constitution to give greater powers to this Parliament.I am in favour of diminishing the power of the State Parliaments, and making them merely provincial legislatures; but there is a proper time and place for doing that. When the constitutional session is held at Canberra all these subjects can be discussed. Before the referendum was held last year members on this side advised the Government to defer the question until the holding of the constitutional session, when a solution can be found and submitted properly to the people.
.- I have not had the advantage of attending the constitutional conventions, so I havehad, perforce, to refer to the records and legislation of the period. The Constitution was originally framed upon the basis that there should be no contribution to the States, and ultimately the “ Braddon blot “ was introduced so that the States might be relieved of the embarrassment that would result from the loss of their Customs revenue. It was intended to be a temporary, and not a permanent, provision. Section 87 of the Constitution provides -
During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, of the net revenue of the Commonwealth from duties of Customs and of excise not more than one-fourth shall he applied annually by the Commonwealth towards its expenditure.
The balance shall, in accordance with this Constitution,be paid to the several States, or applied towards the payment of interest on debts of the several States taken over by the Commonwealth.
In 1908 - there had been no great war then - it was enacted in section 3 of the Surplus Revenue Act that -
The provision made by section ninety-three of the Constitution in relation to the crediting of revenue, the debiting of expenditure, and the payment of balances to the several States,. shall continue until the commencement of this act and no longer.
In 1909 further provision was made, and again by Act No. 8 of 1910. Section 3 of that act provides -
From and after the thirty-first day of December, One thousand nine hundred and tcn, section eighty-seven of the Constitution shall cease to have effect, so far as it affects the power of the Commonwealth to apply any portion of the net revenue of Customs and excise towards its expenditure, and so far as it affects the payment of any balance by the Commonwealth to the several States, or the application of such balance towards the payment of interest on the debts of the several States taken over by the Commonwealth.
Section 4 of the act provides -
The Commonwealth shall, during the period of ten years beginning on the first day of July., One thousand nine hundred and ten, and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments, of apply to the payment of interest on debts of the State taken over by the Commonwealth, an annual sum amounting to Twenty-five shillings per head of the number of the people of the State.
Obviously, those were intended as temporary provisions, so that the States should not be embarrassed. It must be remembered that the people who elect the members of the State houses are the same as those who elect the representatives to this House; and although honorable members opposite have spoken as if the State Parliaments directly represent the people, and the Commonwealth Parliament represents some abstract thing that is not the people, it must be obvious to any one, on reflection, that we represent the people precisely to the same extent as the State Parliaments, although both exercise different functions. Our jurisdiction is derived from the people in exactly the same measure as the jurisdiction of the State Parliaments. I shall not argue whether there is a legal or moral obgliga- tion on the Commonwealth to make the per capita payments. I am looking at the legislation providing for it as a provision which, it was contemplated, would, or should, at some time in the future come to anend. Viewed from that stand-point, the question is, What is the position of the States to-day? I do not purpose to discuss whether the prodigal extravagance of the States has given them a bigger burden of debt than they can carry, and I do not say that they are already taxed up to the limit. Those things are beside the point, and if the State Parliaments have done them, they have presumably acted with the consent of the people. What will be the effect upon the States of the legislation we are considering? What will be the position of the States at the hands of this or any subsequent Commonwealth Parliament? lt seems that it is within the power of. any Commonwealth Government, at any time, without paying any compensation, to declare that the time has come to deprive the States of this revenue, and that whether the States receive anything in return is immaterial. Whether any Parliament would do that is another matter. Measures are passed through Parliament by the Government of the day.
– Not by the government, but by the Parliament.
– In using the word” government,” I referred to the legislative effectiveness of the Government in Parliament. It would appear that the States are entirely dependent on the will of Parliament in this matter. If we do not place them in a more satisfactory position, a parliament may come into existence in the future that will have less regard for their interests than 1 am satisfied this Government has. This
Government has manifested, and will continue to manifest, goodwill to the States. Although some of us may disapprove of the steps that are being taken, we should at least accept that aa a basis of common agreement.
– The States do not accept that.
– I do not believe that to. be a fact.
– The representatives in the State Parliaments do not accept it.
– The persons elected to the State Parliaments say one thing, and those elected to the Federal Parliament say another, and each claims to express the will of the people. I cannot accept the view that representatives in the State Parliaments more truly represent the people of Australia than we do in this Parliament. If we accept the allegations made from time to time about the way State electoral rolls are compiled, this Parliament more truly represents the will of the people than do the State Houses. In some, at least, of ‘the States the Opposition represents a majority of the electors, while the Government represents only a minority. A per capita system of payment to the States is not equitable, nor calculated to secure the best interests of Australia. For these reasons I support the bill, although I hope that it will be amended to some extent in committee. It unfortunately happens that the States that are largest in population are smallest in area. The cardinal questions which require solving to secure the development of Australia are, among others, communication and transport. With a very limited population scattered over a wide area, the provision of communication and transport is expensive and difficult. That is peculiarly felt in Queensland and Western Australia. The population of New South Wales is approximately 7½ persons per square mile; of Victoria, 19¼ persons per square mile; of Queensland,11/8 persons per square mile; of South Australia, 1½ persons per square mile; of Western Australia, 1 person per 22/3 square miles; and of Tasmania, 8 persons per square mile. A per capita adjustment, however accepted and approved, is not acceptable to me, because the States with the larger areas and the smaller populations require the greatest assistance, not merely because of lack of population, but by reason of the far greater mileages and expenses thus involved. The only way in which, as far as I can see, they can obtain it, is by the abolition of the per capita payments, and the substitution of some other method of adjusting their finances. It has been said that this measure is not agreeable to the people generally. 1 do not believe that to be a fact. It stands to reason that the State Treasurers will oppose the taking away of this money; nothing is more natural or more human than that. They have not to take the responsibility or incur the odium of collecting the money; they need it, it is paid into their revenue, they are glad to have it, and they spend it. It is also quite clear that most of the newspapers, and many large financial institutions, wre saying that this will be the end of the Commonwealth of Australia, and will bring untold disasters in its train. But that does not suggest to me that the people at large will suffer. It suggests rather that the persons who have large incomes, and pay heavy taxation in the States because of those large incomes, are afraid that under a new system of further State taxation they will pay more income tax. Small people whom it is most necessary to benefit will not be hurt. There is no serious objection by the people at large, but there is an objection by the person whom my honorable friends opposite glibly refer x,o as “ the fat man.” He is squealing loudly. He controls a number of newspapers, which are giving vent to his squeals, but that is not evidence to me that the people are objecting. The principle of per capita payments is not sound. It is not in the best interests of the people, and, sooner or later, must be abolished. It might just as well be abolished now as later. In studying the history of the financial negotiations between the Commonwealth and the States during recent years, it will be noted that this subject has been discussed since 1923, and that conferences more or less ineffective have been held. A commencement has, however, to be made, and I believe it is the general opinion of honorable members that the States should and shall be fairly treated. It does not follow, however, that if the per capita payments are withdrawn the States will not receive at least an equiva- lent or something which may, perhaps, place them in a better financial position than they are in to-day. When the per capita payments to the States were first agreed to the Commonwealth Government was not faced with the responsibility of meeting war expenditure, or the cost of invalid and old-age pensions, the maternity allowance, and other commitments, which have been of great benefit to the people. In providing for these the Commonwealth Government relieved the State authorities of serious financial responsibilities. As I contend that our war expenditure should be met by direct taxation, I trust that the Government will not altogether vacate the field of direct taxation, and that the relief to be afforded to the States in lieu of the per capita payments will be by taking over a portion of the States debts, and the interest thereon. If that were done, a. proper sinking fund could be provided, and the States relieved of their financial responsibility in that respect. If the States are given an amount equivalent to that which they are at present receiving in the form of per capita payments, they will not be in any way embarrassed, and will be receiving assistance in a form which cannot very well be altered by subsequent Parliaments. The proposal is now to abolish the per capita payments, and then to convene a conference of Commonwealth and State Ministers, at which the whole question can be discussed, and recommendations made and submitted to this Parliament for approval. It will then be competent for this Parliament to say whether’ the States have received a fair deal, and it will be entirely in our hands to see that they are fairly and even generously treated. When the per capita payments were first made the Customs revenue was much smaller than it is to-day. If, as they claim, honorable members opposite believe in erecting such a high tariff wall against foreign goods that it will be impossible for such importations to enter Australia, how can they expect the per capita payments to come out of Customs revenue? They are very inconsistent.
– Is not the honorable member in favour of additional protection to industries.
– A protective policy, to be really effective, should not protect inefficiency and shirking on the part of the workers or of the employers. I believe in efficiency, not only on the part of the workers, but also on the part of employers.
– Is the honorable member referring to the sugar industry?
– There is not the slightest doubt that Victoria derives as much benefit from the sugar industry as does Queensland. When the per capita payments were first introduced, the Commonwealth Government was not faced with the financial commitments confronting it to-day. The war expenditure from 1922-23 to date has been: -
In those years very large sums were also paid to meet the cost of invalid and oldage pensions and the maternity allowance. I do not propose to give details of the figures, but for last year our expenditure in this connexion amounted to £38,988,000, whereas in the same period the total Customs receipts, apart from excise, were £27,840,000.
– Why apart from excise?
– Because I have not the figures; but the amount was, I think, about £10,000,000.
– The excise receipts represent a very large sum.
– This year I think the receipts from Customs and excise will amount to approximately £44,000,000.
– That may be so.
– In 1910, when the per capita payments commenced, the receipts from Customs and excise were about £12,000,000.
– When the measure is in committee I trust it will be amended, particularly by the modification of clause 6, which provides -
In addition to any payments made under the last three preceding sections, the Treasurer shall pay to the several States, in proportion to the number of their people, any surplus revenue in his hands at the close of each financial year.
This should be modified, because it is, in a sense, a perpetuation of what I regard as the inequitable per capita system and would continue the practice of starving those States whose smaller populations are unable to develop their much larger areas. In coming to a proper determination, I trust that not only the population of the States, but also the areas of the States, will be a factor.
said that the members of this Parliament were elected by those who return members to the State Parliaments. If there is any doubt as to which authority should decide, the people should be consulted. I commend that argument to the honorable member for Kennedy, who also said that there are Governments at present in power in the States which represent minorities.
– In Queensland, where the Government is representing only a minority of the people.
– The honorable member for Kennedy also referred to the expenditure incurred by the Commonwealth Government in meeting its commitments in connexion with old-age pensions ; but he should remember that Victoria was paying a similar pension a long time before the Federal Government undertook the responsibilitiy on behalf of the whole Commonwealth. The honorable member also referred to the inefficiency of workers, but that is mere “ piffle.” In this connexion, I may say that, in visiting one of the finest factories in Victoria - that of General Motors Limited - whichis built on the latest American plans - I was informed by the manager that the workers under his control were equal to those found in any part of the world. Mr. Britain, who controls a large factory in Flinders-lane, and who has had experience in Switzerland, United States, and in Great Britain, says Australian workers are better than those in any of the countries I have named. At the inception of federation, we were frequently told that we should dispense with the six State Governments and Governors, but up to the present that objective has not been achieved. A commencement has, however, been made in Queensland, where the fossilized second chamber has been dispensed with, and it is gratifying to know that New South Wales is also making an effort in the same direction. The Parliament in that State is also considering a Child Endowment Bill in order to ensure the welfare of the Child, the future unit of the State, which has rights of which it should not be deprived. The honorable member for Kennedy also referred to protection, but it cannot be said that we have an effective protection policy when we send hundreds of thousands of bales of greasy wool abroad to be manufactured into the finished product, and allow those who handle the wool to retain the valuable grease extracted, and then return it in the form of lanoline. If a man wants imported tweed that is not made in Australia, he should be compelled to pay such a heavy duty on it that our Customs revenue would be materially increased. In my opinion, only two nations in the world - Japan and America - have a scientific protective policy. If honorable members care to read Kelly’s Tariffs of the World, they will discover how the wisdom of the East has profited by the wisdom of the West. Japanprotects her tobacco- workers by a 355 per cent. duty. Australian cigars are equal to those made in any part of the world, but we protect our workers only by about 12s. 6d. per 1,000. If our cigar-makers enjoyed the same measure of protection as Japan affords to her tobacco-workers, the duty would be £17 15s. per 1,000 on ls. cigars. As soon as we compile a proper tariff schedule, our Customs revenue will disappear. A real protectionist does not want anything admitted into his country that can be manufactured there, though he is prepared to admit free any thing that cannot be manufactured there. The time must come when the whole of the Commonwealth revenue will need to be raised by direct taxation. I maintain that the present Government is unwisely using the slogan “ Abolish direct taxation.” It has been said that the States have no legal or moral claims to the per capita payments. I disagree ‘with that. There is certainly a moral claim, else why should a Commonwealth Government hold out the sum of £7,734,000, as set out in the schedule of the bill, as a bait? The States have a right to the per capita payments, and their right has been increased in consequence of our non-compliance with the real spirit that promoted federation. The per capita payment of 25s. per head has a humourous side to it. I understand that the Tasmanian population is always counted at holiday times; but the Commonwealth authorities recognizing the difficulties of the island State, have closed their eyes to this little subterfuge. The attitude of the Labour party on this question is quite definite. It is governed by the first and seventh planks of our general platform. Plank No. 1 reads -
Complete Australian self-government as a British community. No imperial federation. Administration on advice of Australian Ministers only, subject to the control of the Commonwealth Parliament. All legislation, except such as appears inconsistent with imperial treaty obligations, to be assented to on the advice of Australian Ministers only. No further imperial honours to be granted in any circumstances to Australian citizens. The Commonwealth Constitution to be amended to provide -
Plank No. 7 reads-
Until the Constitution is amended in accordance with plank 1 of the general platform, the per capita payments to the States to be continued without diminution.
I would point out to honorable members that the Labour party’s platform is set out as clearly and definitely as the Ten Commandments, and is based upon the highest considerations of the welfare of humanity.
– Does the honorable member propose to connect his remarks with the bill before the House?
– I do, Sir. The honorable member for Kennedy (Mr. G. Francis) said that there were honorable members in all the Parliaments of the Commonwealth who disagree on this important question. In those circumstances, I offer the suggestion that the Government should defer consideration of this bill until the next election, and that it should hold a referendum on the next general election day to ascertain the wishes of the people on the matter. In all my experience, I have never before seen practically the entire daily press united in opposition to a Commonwealth legislative proposal. Are we to assume that all these newspapers arc barking up the wrong tree? I believe the Government would be well advised to consult the people before it forces an issue on this matter. No harm whatever would be caused by delaying the decision. The chief obligation that the Government has to meet is its war indebtedness, and that could quite easily bo met by adopting the system of unimproved land values taxation, and the Government could still comply with its per capita obligation to the States. The Treasurer has been very unwise in introducing this bill. No effort has been made to reply to the logical arguments which the Leader of the Opposition (Mr. Charlton), the honorable member for Dalley (Mr. Theodore), and tlie honorable member for Maribyrnong (Mr. Fenton), have advanced against the measure, except in a dilettante fashion, by the honorable member for Kennedy (Mr. G. Francis), and the honorable member for Herbert (Dr. Nott). No Minister has yet replied, and that is rather unusual. Possibly we may take it as an evidence of the weakness of the Government’s case. May I offer a sporting suggestion to the Government? Let them take a referendum of the electors in any capital city of the Commonwealth that they choose, and see how the people there regard this proposal. If an adverse decision were given, the matter could be allowed to lapse until the next election.
Because of his action in imposing a levy of 3d. per lb. on butter the Minister for Markets and Migration (Mr. Paterson) has gained popularity in his own constituency. But what is the view of householders throughout Australia? The States have had no chance to express thenviews of that scheme. The honorable member for Kennedy (Mr. G. Francis) said that while State and Federal members differed regarding the per capita payments, it was difficult to determine who was right. Does he not consider that the people should be allowed to judge? To- refer the matter to the people by means of a referendum would save the Government from an awkward position. In conversation with a friend the other day I told him that it was my intention to vote against this bill. He then asked me whether I was of the opinion that the per capita payments should continue indefinitely. To that I replied in the negative, for, as I told him, the Labour party believes that there should be one taxing authority for the whole Commonwealth, and that no longer should we tolerate six State Governors and 0111 Governor-General, and in each of the States a Chief Justice and a Supreme Court. In parting, he said that h© had not known that members of the Labour party had so much common sense. The speeches already delivered in support of the bill indicate misgivings on the part of Government supporters. The desire of the honorable member for Kennedy (Mi-. G. Francis) for an amendment shows that he, at least, was not enamoured of the measure. The Prime Minister must know that Australia cannot have a truly protective tariff and increasing revenue from the Customs House. Australia already grows- more wheat and wool than she can consume, and when our secondary industries have been properly developed, it will no longer be necessary for Australian citizens to wear imported clothing. When that time arrives there will be employment for our people, markets for our primary products, together with decreased Customs revenue. I am reminded of the old proverb associated with the gift of the wooden horse at the Siege of Troy, “ Beware of the Greeks even when bringing gifts.” The proposed gift of £7,700^000 to the States is in the nature of charity. It is no wonder that it is regarded with scorn. The States ask not for charity, but for their rights. If the Government is not satisfied from reading the leading articles in the newspapers regarding public opinion in this matter, it should submit the question to the people by means of a referendum, and allow them to decide.
.- I am no new convert to the proposal for the abolition of uniform grants on a population basis. I believe not only in their abolition, but also in the substitution of a better and more statesmanlike system of finance between the Commonwealth and the States. In one of the first speeches which I had the privilege of making in this chamber, in 1923, I dealt with the per capita payments and the absurdity of collecting direct taxation with one hand and paying it back to the States with the other. At that time I said that the system involved unnecessary duplication, and was indefensible. My views have not changed since that time. Certainly the. position has improved since 1923, so far as duplication is concerned, because in the interval the Commonwealth and State Treasurers have come to an arrangement by which the States collect the Federal income tax. That has resulted in a saving of approximately £200,000 per annum to the Commonwealth. Nevertheless the tangle still remains; we impose income tax, the States collect it for us, and we, in turn, hand it back to them. That is a burlesque rather than an example of common-sense finance. It has been said that the per capita payments are made from surplus revenue. Can it seriously be contended that revenue is surplus if, in order to obtain it, the Government is compelled to go outside its ordinary province and invade what was regarded as the State field of taxation. Payments to the States from surplus revenue were fixed at a time when it was not known that the Commonwealth would have to bear the heavy burden of war, making indirect taxation insufficient: when they were fixed it was thought that the Customs revenue would always exceed the needs of the Commonwealth for the ordinary purposes of government. The position to-day is that the Commonwealth not only requires the
Customs revenue, but must also dig deeply into the revenue received by direct taxation. Certain newspapers and critics of the Government’s policy talk glibly about the Commonwealth’s abundant Customs revenue, and of the supposed embarrassment of the Government because its revenue is greater than its requirements. They suggest that the direct taxation which was imposed during the war period in order to meet the obligations of the war should no longer be continued, seeing that the war has now been over for more than eight years. But what is the true position? It may surprise many people to learn that the war burden carried by the Commonwealth is heavier to-day than at any time during the war. I ask Jeave to continue my remarks.
Leave granted; debate adjourned.
Customs Tariff : Duty on Barbed Wire.
Motion (by Mr. Bruce) proposed -
That the House do now adjourn.
.- Just before this House adjourned in August of last year a tariff schedule was laid upon the table proposing some very important increases in duty, but more particularly the most extraordinary duty of £9 a ton on barbed wire entering Australia. Would it be possible, before the next adjournment a few weeks hence, for an opportunity to be provided for the discussion of that schedule?
[3.47J. - The honorable member’s representation will be fully considered by the Government. It is a little difficult to state exactly what time will be available for the consideration of this matter, as a number of measures, including that which is now before this Chamber, will have to be passed before the House rises. The date of that rising is dependent to a great extent upon the period that will be required for the removal, so as to enable the formal opening of Parliament at Canberra to be performed by His Royal’ Highness the Duke of York on the 9th of May next.
Question resolved in the affirmative.
House adjourned at 3.48 p.m.
Cite as: Australia, House of Representatives, Debates, 4 March 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19270304_reps_10_115/>.