10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the Chair at 3 p.m., and read prayers.
Wharfage at Rabaul.
Mr. MACKAY, as Chairman, brought up the report of the Public Works Committee, together with minutes of evidence, regarding the proposed selection of a site and erection of a wharf at Rabaul, New Guinea.
Ordered to be printed.
Threatened Cessation of Work
– I ask the Minister representing the Minister for Home and Territories whether it is a fact that a cessation of work has been threatened by men at Canberra, owing to the fact that certain contractors working for the Commission are not observing the provisions of an award applicable to the Northern Territory; if so, will the Minister take early action to remedy the grievance?
– A newspaper report to the effect that there wasdanger of the cessation of work at Canberra was brought under my notice. On inquiry I found that no official intimation concerning the matter has been received,but the circumstances of the case are such that I do not think there should be any difficulty about asettlement. An ordinance was passed in the Territory to enable any unionist employed under an award to sue in any court having jurisdiction in the Territory if the award were not observed by a contractor. There was a case in which an infringement of an award was alleged and an action was brought at Queanbey an. For some reason which it is difficult to follow thecourt found against the unionists, apparently on the ground that the ordinance was invalid. Steps have been taken for the issue of a further ordinance. This has been approved by the Minister, and is now under consideration in the Attorney-General’s Department. When it has been promulgated there will be no difficulty in dealing with the matter which appears to have been the cause of the trouble referred to by the Leader of the Opposition (Mr. Charlton).
– I wish to make a personal explanation. A scurrilous article which. I feel, reflects on my honour as a member of this House appeared in the Labour Daily of Friday last, in connexion with the pair which I gave to the honorable member for Hume (Mr. Parker Moloney) on the previous day. This is the article to which I take exception -
The matter of pairs troubled the Government Mr. Killen, who had paired with an absent
Labour member, was recalled hurriedly to the House, and on his return demanded that his pair be broken. Party pressure had been brought to bear upon him to commit the greatest breach of honour in the parliamentary code. All day Mr. Killen sat gloomily in the House, and, when the division was called, refused to move out of the chamber. The Labour Whip, Mr. Fenton, drew attention to the breach, and eventually opinion became so strong that he walked out of the House.
The facta are these: - On Sunday I received an urgent message from Sydney informing me that my brother-in-law ha-I died. I had to leave that night to attend the funeral on the following day. I came to the House to arrange about a pair, and the first man I met was the Leader of the Opposition (Mr. Charlton). Mr. Hunter, the National Party Whip, was not in the building at the time. I told Mr. Charlton the position, and he very kindly offered to assist rae to secure a pair. I subsequently saw one or two other honorable members, and told them my difficulty, and later I saw Mr. Hunter, who said there would be no difficulty, in the circumstances, in obtaining a pair for me. I left that night by train, and returned to Melbourne on “Wednesday. I saw Mr. Hunter on my return, and said to him, “Does my pair stand?” He replied, “ That is all off. The pair was arranged for to cover only the period until you returned.” I thought no more about the matter, but the following day Mr. Parker Moloney came to mc when I was sitting in my seat in the House. He said he was a sick man, and asked me if I would give him a pair. I said, “ I am quite willing to do so provided our Whip (Mr. Hunter) is agreeable. You will have to consult him first.” Mr. Hunter came into the chamber a few minutes later, and when I asked him about the matter, he said he would get Mr. Parker Moloney a pair with somebody else. T looked upon the matter then as finished, so far as I was concerned, and did not think any more about it. I promised Mr. Parker Moloney that I would see him, and tell him what I proposed to do, or that Mr. Hunter would see him. Mr. Hunter said he would arrange the matter. I went to look for Mr. Parker Moloney later, but could not find him in the House. When the division was called, I, of course, assumed that a pair for Mr. Parker Moloney had been arranged with somebody else. When the division bells began to ring, naturally I did not attempt to leave the chamber, because I did not consider that I was paired with any one. Mr. Penton, the Opposition Whip, then came to Mr. Hunter, and said that arrangements had been made, or ought to have been made, to pair Mr . Parker Moloney with somebody on this side. Mr. Hunter immediately consulted Mr. Marr, and then came up to me just before the bells stopped ringing, and asked me if I would give a pair to Mr. Parker Moloney. I immediately got up from my seat, and was able to leave the chamber just before the bells stopped ringing. I immediately left the chamber, though I was under no obligation to do so. I have quoted what this scurrilous newspaper has made out of the incident. I contend that the paragraph I have quoted is a scandalous and libellous statement which no decent reporter would write, and no decent newspaper would print. I take strong exception to it, and I intend to put the matter into the hands of my lawyers with a view to taking action against the newspaper.
– I wish to make a personal explanation relating to the matter referred to by the honorable member for Riverina (Mr. Killen). I think the proprietors of the newspaper to which the honorable member has referred will be fair enough to admit that they have published a misstatement of the facts, because in the paragraph quoted, the facts have been misstated. Without going over the whole ground, I went to Mr. Hunter one day last week and asked him to give me a pair, and he was kind enough to say that lie would see that a pair was obtained for me. The pair was given, as the honorable member for Riverina has said. Nothing definite, apparently, was done, and there was some misunderstanding regarding pairs last week. I did not speak of the matter at all, but I should like to say that 1 never have refused, and never will refuse, a pair tu a sick man. My experience has been such as to prevent me from ever doing anything of the kind. In this case, Mr. Killen did the fair thing, when spoken to on the matter by the party Whip. He left his seat and went out of the chamber to give me a pair.
– “Without any hesitation.
– Yes, the honorable member did so without any hesitation. I regarded his action as a great kindness to me. I still so regard it, and am sorry that it has been misrepresented in the newspaper paragraph quoted. I feel sure that the proprietors of the newspaper will, in the circumstances, be prepared to apologize for the mistake which has been made.
– In this morning’s press appears a statement that the Dairy Produce Control Board of New Zealand has met with such violent opposition from the selling firms in Great Britain that the returns to the producers in the Dominion has been adversely affected to the extent of over £1,000,000. I should like to know from the Minister for Markets and Migration what is the attitude of these firms to our Dairy Produce Export Control Board, and whether our butter producers are being similarly penalized. I should also like to know what proportion of Australian butter already exported remains unsold ?
– 1 have seen the article to which the honorable member has referred. It would be improper for me to comment on criticism levelled at a board operating on behalf of a sister dominion, though, perhaps, I might remark that the article contained only the plaintiff’s case, and possibly an equally good case might be made out for the defendant. As to our own Control Board, any reference which has been made to its operations and to its policy in London, has been rather commendatory than otherwise, and I assure the honorable member that the stocks of Australian butter now held in London are comparatively small.
– With regard to the suggestion I made on 4th August, 1926, as reported on page 4S72 of Hansard for 1926, that the question of reciprocity between the various dominions with respect to widows’, old-age, and invalid pensions, might be discussed at the Imperial Conference, can the Prime Minister say whether any action in that direction was taken at the last conference?
– The last -Imperial Conference discussed a proposal to establish a basis of reciprocity in regard to the matters mentioned by the honorable member, but found it quite impossible to arrive at an arrangement that would give satisfactory results.
– Has the attention of the Prime Minister been drawn to a paragraph in the press attributing to a certain individual the statement that the white slave traffic was in operation in North America and other countries, including Australia ; and if there is no truth in the assertion, will the right honorable gentleman take early steps to refute it?
– My attention was drawn to the statement in the press, and I am having inquiries made into it.
– I am informed that the first-year Naval Cadets at Jervis Bay are not to form part of the guard of honour to the Duke and Duchess of York at Canberra, and that only the secondyear students are to be permitted to attend. I should like to know if that is the case, and if so, why the first-year cadets have been excluded ?
– It is intended that all the cadets at the Royal Military College at Duntroon and the Royal Naval College at Jervis Bay shall take part in the celebrations at Canberra, because the Government recognizes the important effect the historic occasion is likely to have on the students at the two colleges.
Remissions of Duty
– As it is the bad practice of State Governments, State Railway Departments, other State instrumentalities, and municipal councils to import machinery for road-making which is dutiable and could be manufactured in Aus- tralia, I should like to know from the Minister for Trade and Customs if it is a fact that his department allows certain remissions of duty on such machinery, and if he will give instructions that in future these departments and instrumentalities must pay the full duty if they import dutiable machinery ?
– I am unaware that public bodies throughout Australia do not pay the full Customs duties when the articles imported are capable of being commercially manufactured in Australia. Every request for a remission of duty, before being granted, is fully inquired into by the Tariff Board, the department, and, finally, the Minister, and if allowed is gazetted. It was only last Saturday that I found that there had been a very satisfactory development in the Australian manufacture of road rollers, road-making machinery, and road engines, especially since the last tariff was imposed-, and, so far as I know, there are no concessions or remissions of duty on machinery of this class. Upon another class of machinery, such as steam engines, of any horse-power, that is satisfactorily made in Australia, no concessions are given. In regard to internal combustion engines, or, rather, kerosene and petroldriven engines, the line of demarcation is at present 50 horse-power. All applications for remission of duty on such engines of over 50 horse-power are usually granted, but all applications for remission of duty on engines of this type of less than 50 horse-power are refused. However, on Saturday, I also learned that larger engines of this class are now in process of manufacture in Australia, and that application was to be made to me to raise the line of demarcation to 75 horse-powei. If these larger engines are being commercially and satisfactorily manufactured in Australia, I shall have no hesitation in acceeding to that request. A further class of machinery for which applications are frequently made under the concessional items, is electrical equipment. It is the most difficult class to adjudicate upon, but the department absolutely refuses any concession on this class of machinery where the articles can be commercially made in Australia, and when the application is on the balance, our leaning is to the side of the Australian manufacturer.
– I ask the Prime Minister if it is a fact that the Government proposes to appoint a select committee to inquire into the Commonwealth Constitution ?
– The question of revising the Commonwealth Constitution is now under consideration by the Government, and, in the course of a few days, I hope to be in a position to make a statement regarding it.
– Can the AttorneyGeneral tell me whether it is proposel to deal with the judicial administration of the Federal Capital by ordinance or by enabling legislation ?
– There are no definite proposals afoot for dealing with the matter referred to by the honorable member, but consideration is being given to the advisability of so amending the Judiciary Act as to make it possible to provide, at once, for certain needed modifications now affecting Canberra. It has not yet been determined how much will be left to be done by ordinance and how much will be done by direct legislation; but it is very probable that the exigencies of the case will require the use of ordinances to a certain extent.
Allegations Against Officials
asked the Minister re presenting the Minister for Home and Territories, upon notice -
– Inquiry is being made of the Federal Capital Commission in regard to this matter, and, as soon as a reply thereto is to hand, the information desired by the honorable member will be made available. °
asked the Minister representing the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are -
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are -
– On the 4th March, the honorable member for Indi (Mr. Cook), asked me the following questions upon notice: -
I am now in a position to furnish the following information : -
This information relates only to employees under the Commonwealth Public Service Act. A considerable amount of work would be entailed in compiling the figures in regard to employees under other acts; but if the information is specially desired in regard to these, I will have it compiled and furnished a.3 early as possible.
Primary and Secondary Products - Inspection
– On the 2nd March, the honorable member for Swan (Mr. Gregory) asked the following questions: -
I am now able to furnish the honorable member with the following information : -
The following return, preparedby the Commonwealth Bureau of Census and Statistics, dated the 23rd February, 1927, showing the value of the principal articles of Australian produce exported from the Commonwealth during the years 1923-24, 1924-25, 1925-26, arranged in general classes according to industries, very largely gives the information sought.
– On the 9 th March, the honorable member for Indi (Mr. Cook) asked the following questions : -
I am now able to furnish the following information for the year 1925-26: -
– I promised to investi gate the replacement of concrete manholes, to which the honorable member for Adelaide (Mr. Yates) referred on the 2nd of March. The facts are that, during the past twelve months, it has been found necessary to enlarge 22 manholes. They varied from approximately3 ft. 6 in. x 3 feet to 4 feet x 3 feet, and the new manholes which have been built are of three sizes - 6 feet x 4 feet, 6 feet x 6 feet, and 7 feet x 6 feet. The original manholes were constructed about 1911, and since that time very considerable telephone developments have taken place. It has been necessary to provide cables much beyond the capacity of those contemplated fifteen years ago. It would have been impracticable to develop the system without reconstructing the manholes in question.
The following papers were presented : -
Transport in Australia - Report (Volume I.) by Sir George Buchanan on Transport in Australia, with special reference to Port and Harbour Facilities.
Ordered to be printed.
Commonwealth Bank Act - Commonwealth Bank of Australia, - Aggregate Balancesheet at 31st December, 1926, and Statement of the Liabilities and Assets of the Note Issue Department at 31st December, 1926; together with the Auditor-General’s Reports thereon.
Public Service Act - Public Service RegulationsStatutory Rules 1926, No. 212.
New Guinea Act - Ordinances of 1927 -
No.6 - Native Administration.
No. 7 - Superannuation.
No.8 - Judiciary.
In committee (Consideration resumed from 11th March, vide page 335) :
Clause 2 -
Sections four, five, six, and seven of the Surplus Revenue Act 1910 are repealed as from the thirtieth day of June, One thousand nine hundred and twenty-six.
The clause having been already amended by the omission of the word “ twenty-six,” Mr. Gregory had moved, by way of further amendment -
That the word” “ twenty-nine “ be inserted in place of the word omitted.
.- The honorable member for Swan (Mr. Gregory) has moved to postpone the operation of the measure until June, 1929; but it seems to me that if, as the honorable member has stated, there is now no necessity for the bill, then the time taken in the preceding debate has been entirely wasted. This legislation has been delayed too long. The right honorable member for Balaclava (Mr. Watt) pointed out that the State Premiers were very much more alive in 1910, when he was one of them, because, when the Braddon section of the Constitution was about to expire, they were able to place alternative proposals before the Commonwealth Government. Does any honorable member think for one moment that if the Surplus Revenue Act of 1910 had expired in 1920, the State Premiers would not have been equally anxious to proffer alternative suggestions ? We know the position only too well, so why should we listen to this special plea for delay? I am glad that the amendment has given me an opportunity to speak, because the silence of honorable members supporting the Government has been taken by the Opposition to mean that we do not agree with the principle of the bill, but are merely voting with the party out of loyalty to the Government. Loyalty we all commend, even if it be mistaken at tunes; but my opinion is that the bill should have been passed years ago. The per capita payment is made, not out of Customs revenue, but out of Consolidated Revenue, because for some time past the Customs revenue has not been sufficient to meet Commonwealth expenditure. Even when I was a member of the Parliament of New South Wales I held the opinion that the per capita payment should be discontinued. During the weekend I took the opportunity of . reading debates that took place many years ago on this subject. A few extracts from a speech made by the right honorable member for North Sydney (Mr. Hughes) in 1909 should, I think, do more to show the urgency for passing this measure than probably anything that I could put before the committee. At that time Mr. Deakin, the Prime Minister, proposed that the Constitution should be altered to embody in it the per capita payment for all time. In reply, the right honorable member for North Sydney spoke for two hours, and the whole of his speech was an able castigation of the Government for introducing such a proposal. He said -
After ten years of a burden, which, as time went on, became almost intolerable, does any one think the Commonwealth is justified in neglecting an opportunity to come into its heritage? Are we justified in approving an agreement which, in all essentials, binds the Commonwealth for all time in fetters not less intolerable and vexatious than those of the Braddon section itself? Comparing the Braddon section with the proposed agreement, it has to bc said that the former, unwise, illogical, and unscientific as it was, at any rate was agreed to by men who, in some sense of “the word, were admittedly placed in a difficult position. I do not believe that the position was really difficult; but the consummation of federation depended on assent by the smaller States, which did not regard their financial position as assured without some such proviso. The section was introduced into the Constitution without any clear conception of its effects; but, after nine years’ experience, can any one say that, if it were submitted to the people, they would reaffirm it? Never! Yet, after nine years’ experience, the Prime Minister calmly asks the House to make permanent a provision which, in all essentials, so far as principle is concerned, is not less obnoxious or less harmful to the interests of true national government in this country.
The attitude which the right honorable member adopted at that time was perfectly consistent with his attitude in 1919.
– What party did he belong to at that time?
– To the Opposition. Another extract reads -
I am not a unificationist at all; I never was. But, at the same time, I never have been, and never shall be, a supporter of that cause which, under the guise of State rights, is deliberately intended to put back the hands of the clock of reform. The people of this country are determined that the wealthier classes shall pay their fair share of taxation; and wriggle about as that party may, first to one side and then to the other, Federalists at one moment and State righters at another, the people - who, the Prime Minister said the other evening, are the same people, whether acting as electors of the States or of the Commonwealth - have awakened, and no effort of the honorable member, or of any other like him, can pull enough wool in front of their eyes to blind them to the true facta of the case.
The right honorable gentleman the other day said that the discontinuance of the per capita payment would place an additional burden on the shoulders of people living on the bread line. In 1909, and also in 1919, his views were to the contrary. At that time he contended that under the per capita principle the wealthy people escaped a burden which was unjustly placed on those least able to bear it. It has been said that this measure seeks to deprive the States of their rights. I maintain that a great many of the difficulties of this country have been brought about by too much centralization, and I believe that, if unification as advocated by honorable members opposite were introduced, the present position would be accentuated. Speaking of State rights, the right honorable member for North Sydney said -
What State right is threatened by any action of this Parliament? Do we propose to deprive any man of his liberty, or to take a penny from his pockets? No. The Prime Minister himself exposed the fallacy of the assertion that State rights are in danger when he said that all taxation comes out of the one pocket. The only question is whether the taxpayer will pay his money to Peter or to Paul.
That is exactly the position to-day. Taxation must come out of one pocket, and the question is whether it should be paid to the Commonwealth to be handed over to the States, or direct to the States. The opponents of this bill have been guilty of gross exaggeration. The right honorable member also said -
I am merely following the example, good or bad, set by the Prime Minister. I am en- deavouring to show that the question of State rights, about which we have heard so much, gave rise to the Conference and to the agreement now sought to be forced upon us. 1 am showing at the same time that the Constitution provides for the Senate as the guardian of the rights of the States.
We are here to express our opinions, and to give effect to the vote taken last Thursday. We ought to be able, as representatives of the people, to decide this question for them. It has been suggested that it should be decided by a referendum. Fortunately our Constitution does not include provision for the initiative and recall, of which the honorable member for Melbourne (Dr. Maloney) is a staunch advocate. Until the millenium to which he looks forward arrives, we should decide questions like this on their merits.
– As the honorable member holds such strong views on this subject, may I inquire whether he discussed it with his constituents at the last election ?
– Most decidedly I did.
– Where ?
– I spoke of it at so many places that it would be easier for me to say where I did not speak of it.
– When I went about supporting the honorable member I did not hear a whisper of it.
– The right honorable member referred to placing the matter before the people by a referendum -
As for putting this question to the people by referendum, I ask the Prime Minister if he will give the people the opportunity to deal by referendum with other questions? Ishe prepared to ask them, not to only accept or reject this agreement, but whether they will accept 25s. or £1 a head, or allow the Commonwealth to take control of the whole of the debts.
That quotation shows that the proposal, which is one of the alternatives to be placed before the conference which the Prime Minister will call after the passing of this bill, is not new. The Prime Minister and the Treasurer (Dr. Earle Page) are in the responsible positions occupied in 1919 by the right honorable member for North Sydney (Mr. Hughes), and the right honorable member for Balaclava (Mr. Watt). The Prime Minister and the Treasurer declare to-day, as those t wo right honorable members declared in 1919, that the per capita payments must cease; but when the opposition of the States was encountered, the two right honorable members had not sufficient backbone to persist in their proposals. Any unbiased person listening to the speech of the Attorney-General (Mr. Latham) would admit that the policy of the Government was advocated by the right honorable member for North Sydney, and the right honorable member for Balaclava when they were in office in 1919 ; but there have been few unbiased persons listening to this debate. Most honorable members have entered this Chamber prejudiced. I have seen honorable members united who have been political enemies for many years. It was assumed that nothing would heal the breach between such members as the right honorable member for North Sydney, the right honorable member for Balaclava, the honorable member for Fawkner (Mr. Maxwell), the honorable member for Swan (Mr. Gregory), and the honorable member for Wimmera (Mr. (Stewart). It would be difficult to find men with more varying views, and yet they consulted one another on this question in quite a brotherly spirit, which gladdened the hearts of the older members who for years have regretted the antagonism that existed.
– The honorable member must confine his remarks to the amendment before the Chair.
– That rapprochement having taken place, I am quite sure that the minor disputes between the Commonwealth and the States will be satisfactorily settled. There is one grave reason why this bill should be passed. The right honorable member for North Sydney has said that honorable members opposite would have no hesitation, if they came into power, in rescinding legislation that they thought fit to rescind; but in the speech that I have quoted, the right honorable member pointed out how unusual it was for Parliaments to do that, and he directed attention to legislation which Parliament had power to amend, but in regard to which that power had not been exercised. It is our bounden duty to pass this bill, and to see that permanent provision is made for financing the States, so that any government that comes into office in the future will be placed in the invidious position, if it wishes to alter the law, of having to repeal legislation. No matter how anxious it may be to create a precedent no government is willing to change legislation unless it has the voice of the people behind it. The honorable member for Swan desires to delay the passage of the measure, so that time may come to his assistance and prevent it from becoming law. After the conference proposed by the Prime Minister has been held, any agreement arrived at will have to be ratified by this Parliament, and then, if necessary, it will be as simple a matter to reverse this decision as it would be to give effect to any agreement arrived at. I hope that the Committee will have - the courage to pass the bill, for I feel sure that, if it does, the people will endorse its action in the near future.
– I do not know that I should have spoken at this stage had not the honorable member for Macquarie (Mr. Manning) been good enough to remind the Committee of a speech made by me in 1909. I had entirely forgotten it; but it is patent that then, as now, I took the sane and proper course. Let me recall to honorable members the political situation of 1909. The Labour party!, of which I was then a member, objected to the insertion in the Constitution of the per capita agreement which had been made between representatives of the States and the Commonwealth.
– The right honorable member also objected to the amount.
– The honorable member did not quote anything to that effect. When the Labour party went to the country about seven or eight months later, we said to the people, “ We accept this agreement and will enshrine it in a statute; but it should not be put into the Constitution.” I took the same stand in this Chamber the other night. When we went to the country in 1910 the people adopted the view expressed in the speech that the honorable member has quoted. They rejected the proposal to embody the agreement in the Constitution; but they accepted the agreement itself, and enshrined it in a statute. My friend and leader, Mr.
Fisher, was returned to office, and the Labour party gave effect to the decision. No objection could be taken to that. The honorable member remarked that I was against the per capita payment, and that I was not what is called a State rights man. I never have been that. As I said last week, I have led, until the last one, every referendum fight to give the Commonwealth extended powers; but Ilansard or any other official record would be searched in vain for evidence that I have ever sought to sandbag the States or to force them to their knees. That is the whole difference between my attitude and that of the present Government. We are a long way from 1909 ; but in 1922, when the Prime Minister (Mr. Bruce) was Treasurer in my Government, he said, speaking at Brisbane -
He supported the claim of the States for a continuance of the per capita payments, and Foresaw what has since become one of the principal arguments used by all of them - the difficulty of getting, by additional local taxation, an amount sufficient to compensate for the loss of the revenue received from the Commonwealth.
According to the Brisbane Daily Mail the Prime Minister further said -
The payment to the States amounted to £7,022,500. As matters were in Australia, this could not be done away with. Possibly, the future held a different form of government in store for Australia. Certainly we had many Governments, to the point of being over-governed; but, until there came some changes in the basis of government in the Australian States, the payment must be continued.
His attitude to the subject then was very different from, what it is now. Mine, however, has remained in essentials the same as it was in 1909. “We cannot go into the circumstances that finally resulted in the policy speech of 1922 ; but the right honorable gentleman did not put into it his Brisbane statement. One thing is very clear. The Prime Minister was in favour of the per capita payments in 1922 ; he is against them to day. Therefore I do not think that the honorable member for Macquaire has scored very heavily by his quotation. I come to the other point made by him. He has, in effect, chided me for keeping company with disreputable persons, and has expressed astonishment and regret that the right honorable member for Balaclava (Mr. Watt), the honorable member for Wimmera (Mr. Stewart), and others have come together and that I am with them. He would have us believe that there is something grossly improper in this association. Let him look at the Ministers now sitting at the table, and recall what the Treasurer said of the Prime Minister, when that gentleman was my Treasurer, and what the Prime Minister said of the Treasurer and of all his associates in 1922. The Prime Minister said that their mentality was such as could be expressed only by a minus quantity. Yet this Saul that caine to curse has been converted; he has become the close associate, the bosom friend, of the gentleman whose mentality he described as non-existent. Let us now deal with the arguments themselves. Even supposing that the right honorable gentleman did say, in 1922, That he thought that the per capita payments should be continued, we ave not so much concerned with what he said in 1922, but with his attitude in 1927. I say frankly, with no double meaning attaching to my words, that every man should be perfectly free to change his opinions. In 1909 I was in opposition to the Government then in office. At that time the Opposition was smarting under what it conceived to be an injustice, in that it had been put out of office in circumstances that were not calculated to make its members particularly polite to those, on the other side of the chamber. As a member of the Opposition, I hope that I never failed in my duty to oppose, and if, in those circumstances, I had spoken in favour of the abolition, or retention, of the per capita payments, what has that to-do with the present situation? The fact remains that when I had the power to do that which the right honorable gentleman now proposes to do, I did not exercise it. That is the point.
– Even though the right honorable member thought it should havebeen exercised.
– That which I regarded as wrong is now considered a virtue. According to the honorable member for New England (Mr. Thompson’), the present Government is the only government with the courage to take this matter in hand. In his eyes, assassination is not only a fine art, as de Quincey once said, hut it is become the chief of virtues. To stick a dagger under the fifth rib is an act deserving the laurel crown. At no time have I said that the per capita system was sacrosanct, or that a change was not desirable. But I have always held, and say now, that the federal pact involves a distribution of powers, and predicates an equality of opportunity, limited by, or in proportion to, those powers, to raise sufficient revenue to exercise the functions allotted to each authority. It is for this reason that I condemn the Government in forcing its proposals upon the States. With two deplorable exceptions - I refer to the speeches of the honorable members for Oxley (Mr. Bayley) and Wentworth (Mr. Marks) - this debate has been conducted on a very high level. To the remarks of the honorable member for Macquarie (Mr. Manning), I take no exception. I realize that, as a public man, I must be prepared to stand up to what I have said ; but personalities are entirely uncalled for in this chamber. That the measure before us is of considerable importance, the Government’s determination to persist with it, in the face of the opposition which has been expressed, is evidence. It is unfortunate that in a matter of such importance honorable members who venture to ‘ express their opinions lay themselves open to vulgar personalities and the charges which have been levelled at them. I shall, however, pass from that aspect of the question and deal with what, after all, is the only point worthy of consideration. The Prime Minister, on Friday, when dealing with the arguments adduced by the right honorable member for Balaclava (Mr. Watt), said that the Government had received a mandate to abolish the per capita payments. The issue turns on whether this contention is supported by the facts. In my opinion, the Government has no mandate from the people to do this thing. The honorable member for Macquarie and I are members of the same party; we were elected on the one platform. The honorable member for Fawkner (Mr. Maxwell) has told us something about one of the planks of that platform. If there has been desertion from the party, I am not the deserter. Although much may be said, and said with force, against the methods adopted by the Labour party, yet the violation of the platform of that party would be regarded by the rank and file of that party as deserving. of severe censure. An honorable member who votes for the platform on which he is elected will again receive the support of the electors, whatever the members or his party inside Parliament might say and do. We on this side claim to be free men ; indeed, we make some parade of our freedom ; but, if, as the honorable member for Macquarie says, we are bound to follow the Prime Minister in whatever he does, even to the extent of opposing the party platform, where is our freedom? In that case, we are in no way better - nay, we are worse - than those honorable gentlemen opposite whom we castigate as with scorpions, because they sacrifice all things to solidarity. The Prime Minister’s argument that he received a mandate from the electors on this issue was not convincing. He received no such mandate. When asked to submit this question to a referendum, or to postpone the operation of this legislation in the’ direction indicated by the honorable member for Swan (Mr. Gregory), he replied that if it were submitted to the people as an issue at the next election they would reject it. For what reason would they reject that which the right honorable gentleman says they definitely directed him to do? The right honorable gentleman said that the people had accepted the Government’s proposal. Indeed, he went further, and said that they directed him to do what is now proposed. A direction is a mandate. If the people directed him to take the action now proposed, what would prevent them from endorsing it when it was submitted to them again? But it is no exaggeration to say that only one issue confronted the electors at the last election. The State of parties in this House is a reflex of the people’s opinion regarding that issue. Honorable members know my attitude towards Labour questions. But when I was asked to stand for or against the principle which I have upheld all my life, namely, the attainment of reforms by constitutional methods, I chose to adhere to that principle rather than enroll myself under the banner of those who would destroy the State. Like tens of thousands of others there was only one course open to me. Even had there been other issues, they would have been nothing to me in the face of the one great issue then confronting us. The Government received no mandate in connexion with the per capita payments. The phraseology of that portion of the Prime Minister’s policy speech which referred to them was vague. It is true that he expressed the opinion that a change was desirable, and that the financial relations of the Commonwealth and the States should be reviewed. To that part of the speech I take no exception. Indeed, I agree with him and have said so many times during the last seventeen years. But we are confronted with a very different position. It is not whether the financial relations of the States and Commonwealth should be reviewed, but whether the States should be forced to accept these proposals. When Parliament assembled, and the policy of the Government was enunciated, there was, as the honorable member for Fawkner has reminded us, not one jot or tittle, not a line or a hint, that a measure such as that now before us would be introduced. The proposal, I suggest, emanated from the honorable the Treasurer (Dr. Earle Page). In saying that, I do not censure him, for if he believed that his proposal is right, he was justified in bringing it forward. But he must accept the responsibility for it. It was not in the Governor-General’s Speech. It was not an issue before the people at the last election. It was not set out even in a form which invited an expression of opinion by the people, and, therefore, they did not express an opinion upon it. As I observed a few evenings ago, when speaking in the second-reading debate, although I have always refrained from forcing the States to give up the per capita payments against their will, I have never considered them to be sacrosanct. I have never denied that other financial methods might be employed. But I have always considered that the payments were made in this form by agreement. I have certainly always refrained, even when. I had the power, from compelling the States to accept some other form of payment. The attitude I adopted I still adhere to. I venture to say that whatever happens to this bill, the people outside, even if they hold that the Prime Minister was right, will consider that those honorable members of Parliament were also right who honestly voted against the bill in accordance with their view of the principles of federation and democracy. The Prime Minister asserts that he has a mandate from the people on this subject. There is a most effective and final answer to this claim. As everybody knows, when the right honorable gentleman went to the country in 1925 he had arrayed on his side the members of the Victorian Government. They fought tooth and nail for him and his policy. But I ask the right honorable gentleman, as I ask other honorable members of this Parliament, do they think it credible that Mr. Allan, the Premier of this State, and Sir Alexander Peacock, its Treasurer, or any other member of the State Parliament who supported the Prime Minister, would have stood behind the Commonwealth Government at that time had they believed that one of tine issues to be submitted to the people, which the Government would use its majority to enforce, was the abolition of the per capita payments? It is utterly incredible that any of them would have assisted in cutting their own financial throats. No one would believe it for a moment. For the reason that the right honorable gentleman has no mandate from the people to introduce this proposal, I intend to support the amendment of the honorable member for Swan.
– I remind honorable members that both the clause and the amendment before them have relation only to the date upon which the measure should operate.
– I support the amendment. Every argument that was used against this measure during the second-reading debate may be used with equal force in. support of the amendment. In some form or other payments from Commonwealth revenue have been made to the States for the last 27 years.. Although time has not made these, payments sacred, it has placed upon the Government the responsibility of putting forward solid .reasons for making a change, and the obligation of obtaining the sanction of the people to a change. The honorable member for Macquarie (Mr. Manning) who spoke earlier this afternoon gave the main reason why the amendment should be carried. He said, “ No Government has the right to make any change without having the voice of die people behind it.” The amendment is designed to give the people an opportunity to express their view, for the Government certainly has not the voice of the people behind it. Not one honorable member who has opposed this Bill has declared that in no circumstances should there be any interference with these payments; nor has any honorable member argued that there is no constitutional power to make a change. It is certain, however, that not a single supporter of the Government has given a reason why a change should be made at this juncture. If the issue is to be narrowed down to what is a fair thing as between the Commonwealth and the State instrumentalities, surely the time when the Commonwealth Treasury is overflowing and when every State is showing % deficit, is not the time. One cannot do better than accept as an axiom the statement of the Prime Minister himself, in 1923, that, “ “Until a change is made in the basis of government, the per capita. payments should continue.” The Prime Minister stated on Friday that the only object of the amendment is to delay the enforcement of this measure, and added that there was no advantage in delay. I claim that there are many advantages in it. If this Government went to the country, advocated this change in the financial relationship of the Commonwealth and the States, , an.a was returned with a majority, it could truthfully claim that it had a mandate from the people, and it could proceed with its scheme. If, on the other hand - and this is the probable eventuality - the Government were not returned, but another Government came into power which desired to continue the par capita payments, nothing would have been done to disturb the present basis. But, if another Government were returned after this plan had been put into operation, and it desired to restore the per capita payments, it would be obliged once more to disturb the financial basis of the States. On this aspect of the matter we have substantial reason for advocating the amendment. To put it briefly, we ought to ask the people to express their opinion on the proposal, and, in the meantime, we should not disturb the existing arrangements. On Friday afternoon, the Prime Minister gave what he considered to be a number of reasons for negativing the amendment. He said that if a Government went to the country on this matter, it must he the sole issue, otherwise it could not he claimed that a mandate had been obtained from the people. He said the issue should not be smothered, by others. That was a strange argument for the right honorable gentleman to advance. Surely, if a Government goes to the country on a policy which contains a score of items and gains the approval of the people, it is entitled to consider that it has a mandate upon which to proceed. . But the Prime Minister says that unless you make the issue single and distinct, it cannot be claimed that a mandate has been given. “Well, for the present, I am prepared to accept the right honorable gentleman’s declaration that unless only one point is at issue, no mandate is given. On that argument, the right honorable gentleman surely cannot claim that the withdrawal of the per capita payment was at issue at the last Federal election ! I have in my possession reams of printed matter that was issued by the Nationalist party and the Country party prior to the last election, and I also have scores of articles published in the press, which was supporting’ the Government. They put only one issue before the people at that time, and that was, “ Law and Order versus Mob Rule.” 1 did not see a single cartoon which showed the Prime Minister jumping upon the per cri /rita payments, but 1 saw cartoons showing a certain other gentleman jumping upon the Union Jack. I saw no cartoons which, showed the Treasurer dipping his hands into the State Treasuries and talcing £7,000,000 from them. Nothing that was published or displayed upon the hoardings, on behalf of the Government, indicated that the abolition of the -per capita payments was a part of the Government’s policy. The only pronouncement that was even distantly connected with that subject, waa the few oft-quoted words from the policy speech. The Prime Minister did not suggest that any alteration would bo made in the present financial relations between the Commonwealth and the States without the consent of the States. He claims to hav© received a mandate from the people on this subject; but any reference to it was only in whispers, which were hardly discernible in subsequent speeches, and were drowned by the roar demanding the maintenance of law and order which re-echoed throughout the length and breadth of the country. The right honorable gentleman also said that, if this question were put to the people as a vital issue, it would be the means of promoting discord between the Commonwealth and the States; but he has informed us that the question had already been put to the people. There was no evidence of discord on this subject at the last general election, though there was in relation to another matter. The rushing of this measure through Parliament, without the sanction of the people, will cause more discord than some persons ‘ imagine. If the Government can say that it has put this proposition to the people and has received their sanction, discord will not arise; nor will it if the people refuse to give the Government a mandate, because it will then have to stay its hand. The Prime Minister stated that this issue was placed before the people, and that no subject was discussed more than it.
– He did not say that !
– I listened to the right honorable gentleman very attentively, and, if my memory serves me aright, two newspaper reports - the only reports »fc present available - attribute these words to him. I leave it to honorable members to say whether the statement is correct or not. On the face of it, the answer is apparent.
– It is a gross exaggeration.
– To say that it is a gross exaggeration of the position is to use mild language. In endeavouring to prove that this question was placed before the people, the right honorable gentleman quoted from his speech these phrases: “The system was wrong,” and “he would ask the States to meet us.” The only declaration of any proposed action by the Prime Minister was the statement that he would invite the States to meet the Commonwealth.
– To consider the whole question.
– Yes. Any subsequent action was to be the result of an agreement with the States. No other interpretation could bc placed on the right honorable gentleman’s utterance, and I challenge any supporter of the Govern- ment to show that there was a definite declaration that, in spite of the wishes of the States, the per capita payment would be withdrawn. The honorable member for Macquarie (Mr. Manning) was asked by the honorable member for Fawkner (Mr. Maxwell) to quote one speech in which such a statement was made, and he said that he had made many, but at the moment he could not mention one. If such a declaration were made in many speeches, surely he could recall one. In answer to an interjection by an honorable member opposite, the Prime Minister said that the Government had decided to take this course. The Government’s action in this instance is contrary to the policy of the Prime Minister’s own party and tha declaration of the organization of which he is a member. Honorable members in this Parliament, pledged as they are to their respective policies, are elected on the understanding that the existing financial arrangements ‘between the Commonwealth and the States will not be interfered with. The Prime Minister’s answer to such assertions is that Parliament gave its decision on Thursday night. I submit that Parliament did not decide this question, but that it was settled in the party room upstairs when the whip was cracked. That admission has been made and repeated by members who usually support the Government. The right honorable member for North Sydney (Mr. Hughes) said to-day that the supporters of the Government claim greater freedom for the members of their party than do the members of the Labour party. That statement is not correct. We have always claimed greater freedom than honorable members opposite. The members of the Labour party are not bound by anything that is not contained in the platform which they have signed, and on other questions they cannot be bound by caucus. Honorable members opposite, however, can be bound by a decision of the party, and when the whips are cracked they have to obey. The right honorable member for Balaclava (Mi-. Watt) said that the Government proposed to operate on the patient without administering an anaesthetic. With that contention I disagree, as an anaesthetic has been administered, not to the States, but to honorable members upstairs, which has had the effect of rendering them insensible to their obligations to the country and to their pledges to their organizations. If we are to believe a large number of honorable members opposite, the whip was cracked, and instead of this important issue being decided by Parliament, it has been settled in caucus. I say now to the Prime Minister that this whip-cracking should cease, the colts should be released from the caucus corral and given their freedom in the open country. If the present system is continued, no principle will be violated. As the Commonwealth has an overflowing treasury, and the State finances are in an impoverished state, it is unjust even to suggest a discontinuance of the per capita payment. The Government should submit this matter to the people and settle it in a clear atmosphere, in order to ascertain the wishes of those whose interests we are sent here to protect.
.- It will be readily admitted that every State objects to this measure. It is said that the objection is political, inasmuch as the Parliaments of the States will have the unpleasant work of collecting the whole of the direct taxation that is levied. If it were the sole objection, I should not regard the opposition of the States very seriously, because it might be sunnier for direct taxation to be levied and collected by one authority. It can be said, with equal truth, that the Federal Government is not desirous of undertaking that unpleasant duty, and that it wishes to raise the whole of its revenue indirectly. When people are hit bv indirect taxation it is very difficult for them to see the hand that strikes the blow. On the contrary, it is easy to discover the authority that imposes direct taxation. The proposal of the Government will place the States in a disadvantageous position. The State and Federal Parliaments are elected by the same persons, and the people are entitled to be consulted on this matter. It has been made abundantly clear that the electors have not had a sufficient opportunity to consider it. If the Parliament were composed of men who had advocated the measure in the electorates, I should admit that the Government had a mandate, given “with a full understanding of what the change implied. Only about 15 per cent, of the citizens of the States will be called upon to maintain State instrumentalities by direct taxation, and that will continue to be the case unless the taxable area is enlarged beyond what has been fixed by the Governments of both the States and the Commonwealth. The right honorable member for Balaclava (“Mr. Watt) has said that l-25th of the taxpayers of the Commonwealth provide 24-25ths of the direct taxation that is raised. That will be the only source of revenue which the States will have. They arc being impoverished by the amount that is being taken from the community to finance the Commonwealth, and they will find it more and more difficult to increase their taxing capacity. Their revenues will be subject to the fluctuations caused by bad seasons, low prices, and other calamitous circumstances. lt cannot be said that the Commonwealth is affected _ in that way in levying direct taxation, because it can strike an average which, over a number of years, works out fairly evenly. Such a source of revenue is too precarious for the financing of State instrumentalities. The proposal of the Government reminds me of the task that Pharoah set the Egyptians when he asked them to make bricks without straw. The exactions of the Commonwealth by indirect means will increase the cost of production and make it more difficult for tho States to raise the revenue that they require. It has been estimated that every immigrant contributes £6 to the Commonwealth exchequer through the Customs Department, and in that way they indirectly tax 100 per cent, of the people. Surely the States, which bear the financial burden of settling those people, are entitled to a portion of that revenue ! I hope that the Government will realize the necessity for accepting the amendment, and thus allow the people to express an opinion upon the measure. If it does not, it will show itself afraid of the verdict of the people. The existing financial arrangements have continued for so long that the delay proposed is not unreasonable. The Prime Minister (Mr. Bruce) has expressed the wish that harmonious relations should exist between the States and the Commonwealth. The vote which was taken in this chamber on Friday showed that there was a tremendous cleavage between the representatives of the people, lt was not . a victory for the Government. The amendment ought to be accepted, and we should proceed with urgent matters that were more prominently placed before the people at the last election. The decision would then be left in the hands of the grand jury of the people.
– The direct assault of the Opposition having failed last week, honorable members who supported it have launched this flank attack, which, if it be successful, will emasculate the bill. I can understand honorable members of the Opposition seeking to do this; but they speak with their tongues in their cheek when they deprecate party voting, because the Labour party alone is voting solidly against the bill. I must confess, however, that it regards it as its duty to oppose, so, as the right honorable member for North Sydney (Mi-. Hughes) said, opposition from Labour members on this issue can. scarcely be counted against them. But I cannot understand the objections on the part of honorable members from Western Australia. It is difficult to know exactly what they want, because the history of the uniform per capita payments is so clear. The proposal has been before the people on two occasions. It was fully debated at the Federal Convention, and definitely rejected. The late Sir George Turner, who at that time was Premier and Treasurer of Victoria, tried repeatedly to have included in the Constitution Bill a clause providing that the surplus revenue of the Commonwealth should be returned to the States on a per capita basis; but it was ignominiously defeated. Section 94 of the Constitution leaves this matter entirely in the hands of the Commonwealth Parliament, providing that the surplus revenue shall be returned to the States in such a way that the Commonwealth Parliament deems fair. The return of surplus payments to the States on a population basis was rejected by the Federal Convention on the ground that it would be inequitable so long as there were differing stages of development in the various States. The late Sir George Reid, one of the delegates from New South Wales on the Convention, said -
I believe that it is self-evident, putting figures and tables aside, that in the operation of any tariff applied to the different colonies which might compose this Federation, for some time - the time doubtful, the fact certain - for some time the distribution per capita, which would be a distribution we would all at once adopt if we could, because it is so simple, would be unfair, . . . . it is pretty generally admitted, the extent of the unfairness being very much in dispute - we must admit that we have no solution which we can ask the people to adopt.
Later, he stated -
Every one admits that, in the case of Western Australia, a per capita distribution would work the grossest injustice to that colony.
The late Mr., afterwards Sir Winthrop, Hackett, representingWestern Australia, expressed his view in the following words : -
It is simply out of the question that we could join under any system which involves a per capita return, excepting, of course, for a limited experimental period.
The late Sir Frederick Holder, one of the delegates from South Australia, and practically every member who had an insight into the future, adopted the same attitude. Consequently, the distribution to the States of the surplus revenue of the Commonwealth on a per capita basis for all time was deliberately excluded. In 1909, the year prior to the expiration of the Braddon section of the Constitution, the representatives of the States agreed to the return of surplus revenue on a population basis; but when that proposal was submitted to the people for their acceptance as a permanent solution of the problem, it was deliberately rejected. Western Australia objected originally that a distribution of the surplus revenue on a population basis would not be fair, and that State requested, as a condition precedent to its acceptance of the 1909 agreement, that it should receive an additional amount of £250,000. The 1910 proposal having been definitely rejected, the Labour party declared that it had a mandate from the people. The late Mr. E. A. Roberts, at that time a prominent member of the party, said -
The country gave the party having a majority in this House absolute power to do as they please in this matter. Honorable members on this side might, if they so desired, have proposed to give much less to the States, and they could claim that they had the mandate of the people to do so. The people said that the party in power in the Federal Parliament should have the right to deal with the finances as they thought best in the interests of the Commonwealth.
That was the considered opinion of members of the Labour party. I can find no interjection in the course of the debate to contradict that view.
– Is the honorable the Treasurer’s statement relevant to the issue before the committee?
– It is relevantbecause this issue, as I have shown, was submitted to the people and was rejected by them. The right honorable member for Balaclava (Mr.Watt) and the right honorable member for North Sydney (Mr. Hughes) now advance certain reasons why it should be immediately placed before the people. This certainly is a strange attitude on the part of the right honorable member for Balaclava, because he ridiculed this attitude as regards the 1910 voting, and attributed the decision of the people to the decline in the fortunes of the Liberal party.
– I declared it was the fortune of war.
– I think the right honorable member said that the vote of the people was not so much an expression of opinion on the merits of the issue as an indication of the rising fortunes of the Labour party and the decline of the Liberal party.
– That is correct.
– Nevertheless, the right honorable member now urges that this proposal should be submitted in a general election to the people, in the hope that we can get a clear expression of opinion on it, while he argues that when put as a referendum proposal an expression was not given on its merits.
– Is this another second reading speech, and may we all cover the same ground?
– I am not covering any ground which I traversed before. I am dealing with the question whether this matter should be submitted again to the people of Australia. In 1919, the right honorable member for North Sydney (Mr. Hughes) at Prahran, in a pre-election speech, made a statement in regard to this matter in which he practically said that he was prepared to hold it up until a convention could be held. He met the State Premiers a few months later and told them that he intended to go on with the question and abolish the per capita payment, because they had not assisted him in the campaign. He told them -
You will have to adjust your finances on the assumption that the per capita payments will be reduced as set out by Mr. Watt.
The Prime Minister, at some length, and I also, at greater “length than the quotation made from my speech by the honorable member for Swan -would suggest, put the matter fairly fully, and it was also referred to in the policy speeches made to the country. In practically every speech made on behalf of the Government during the last few years there has appeared a definite declaration of opinion on this matter.
– Can the honorable gentleman point to any newspaper in which the matter is so referred to?
– Later on if it is considered necessary I can refer honorable members to my financial speech to show the definite way in which the matter has been dealt with.
– Was the policy declared by the honorable gentleman different from that declared by the Prime Minister ?
– No, but some points were amplified by me at Grafton in dealing with the position of the Country party. Before the election the right honorable member for North Sydney said definitely that he would not deal with the matter before a convention was held, and after the elections he said he would deal with it at once. The present Prime Minister said, in his election speech, that he would put an end to the per capita payments and he is endeavouring to do so at the present time. That is the difference between the right honorable gentlemen.
.- The Treasurer (Dr. Earle Page) seems to have been at great pains to prove that those who were responsible for drafting the Constitution had no intention of compelling governments of the Commonwealth to enter into an obligation to return surplus revenue on a per capita basis. On that reasoning he justifies the introduction of this bill. I do not know what that reasoning proves. It may be that it is suggested that there is no wisdom in 1927, unless somehow or other the decision come to is in keep ing with the views expressed at the Federal convention. In this very bill the Government perpetuates the principle of the distribution of surplus revenue by per capita payments to the States. This will be seen from clause 6 which provides that-
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.
– There will not be much revenue distributed under that provision.
– Whether the amount be great or small why perpetuate the farce in a clause of this measure which re-establishes a principle which the Treasurer contends was not recognized by the founders of the Constitution, and therefore should not be recognized today? The honorable gentleman went on to quote the views of earlier statesmen against the principle of per capita payment. Sir George Reid apparently questioned the wisdom of entering into any permanent arrangement to distribute Commonwealth surplus revenue to the States on a per capita basis. The Treasurer referred again to a speech made in 1909 by the right honorable member for North Sydney (Mr. Hughes). I do not know where these references carry us, because it has not been contended from this side or by opponents of the bill on the other side during the debate on the second reading, or so far in committee on the bill, that it is a principle which should be established for all time that the States are entitled to and should receive 25s. per capita from surplus revenues of the Commonwealth. That is not what we are contending for on this side. We are asking for a settlement of the question in a reasonable way between the Commonwealth and the States. We say that there are other interests to be considered as well as Commonwealth interests, and others whose opinions should be. given consideration as well as those of the Prime Minister and the Treasurer. These gentlemen seem to think that because they have made up their minds on the matter, are determined about it, stated their determination at the Premiers’ Conference in 1923, and again in 1926, and made some obscure references to the question in their policy speeches in 1925, they are now justified in going ahead with their proposal whatever the consequences may be, and however much evil may follow the passing of this measure. No one has said that we should never have a revision of the financial relations between the Commonwealth and the States. No one has contended that the question should not be considered at the present time, or that the time is not fast approaching when it should be considered and settled. The whole question is whether it should not be settled in agreement with the State governments, in a reasonable and rational way at a conference or a convention, or in some way in which the rights of both parties can be considered. I listened to the speech of the Prime Minister on the amendment, and I have read the remarks he made a few days ago at the 23rd anniversary meeting of the Australian Women’s National League. He said -
Various views, opinions and prejudices existed upon this subject, and the people were confused, and did not know right from wrong.
If the right honorable gentleman believes that, it is a very good reason why the amendment should be accepted and the settlement of the question deferred for at least a year or two. No one urges delay more than do honorable members on the other side in the matter of legislation upon any important question. They appear to desire that the consideration of a measure should be matured, and it is their general policy to urge delay in the settlement of important questions.
– Consider how this proposal has been altered since it was introduced last year.
– We should consider the modification of this proposal adopted by the Government, and the further modification which was suggested, as I gathered from the Treasurer’s speech in reply to the secondreading debate. He hinted that there might be further modifications proposed at the conference to be held in June, following the passing of this bill.
– I said that the Government is prepared to discuss any mutually satisfactory arrangement with the States.
– No arrangement mutually satisfactory to the Commonwealth and. the States may be possible if this bill becomes law before the conference is held. The discussion of the subject will undoubtedly be greatly restricted in its scope if this bill is passed before the conference is held. Under the measure the per capita payments will cease on a specific date, and the conference will have no power to consider that matter. The only thing it will be able to discuss, apparently, will be the area of direct taxation to which the State Governments may resort to make up the revenue they now receive from the per capita payments.
– If the payments were continued, the conference could discuss a. substitute arrangement.
– I have heard it suggested that the State Governments are at fault, because they have brought forward no alternative proposal. I ask, what alternative proposal could be expected from the State Governments except such as might relate to the amount of the per capita payment. With all deference to the extended knowledge of the subject possessed by the right honorable member for Balaclava (Mr. Watt), and his wide experience in dealing with it, I submit that any alternative proposing an alteration in the method of payment should be looked for from the Commonwealth. It is right to call, a conference and inform the Premiers as to what, in the opinion of the Commonwealth Government, they ought to do, but it is not” reasonable that the Government should say to the State Premiers, “You have, for 27 years, been enjoying per capita payments from Commonwealth surplus revenue, and we now ask you to submit some alternative proposal.”
– That is what took place in 1910.
– The position was different in 1910. In that year, the operation of the Braddon section of the Constitution was coming to an end, and every one knew that an alternative scheme would have to be submitted then.
– It was recognized then that the Commonwealth must have more money.
– That is so, and it -was then necessary for the State Governments to formulate a concrete scheme, but I submit that the situation to-day i3 quite different. At the present time, with the States, it is all a question of the amount of revenue to be received, and. we cannot blame the State Governments because they have not formulated some concrete alternative proposal. That is, necessarily, in the circumstances, the duty of the Commonwealth Government. I find no fault with the Treasurer for suggesting that the Commonwealth Government should evacuate the field of direct taxation and the States should give up the per capita payments, but to ram. the proposal down the throats of the State Governments is a different matter altogether. They should be fully consulted, and may eventually have to accept some proposal made by the Commonwealth Government; but why pursue the Government proposal in this hasty manner, in the face of such bitter opposition by the State Governments, and by a vast number of the people in all of the States? Followers of the Government who are supporting the bill have tried to convince us that there is a body of opinion in the States in favour of the Government proposal. I venture to say that they are. wrong. It would be very difficult to find any opinion expressed in the press or at public meetings in favour of the proposal. Irrespective of party prejudice the overwhelming opinion expressed by ministerial and opposition members of the State Parliaments and by the metropolitan press throughout Australia is against the proposal.
– Do those remarks apply also to the Federal Aid Roads Act?
– They may or may not, but they certainly do apply to the measure now under consideration. A real fear has been expressed concerning the position of the finances of the States if this bill is passed. I do not believe that these views have been ‘given expression in order to embarrass the Government or to take a political advantage of the Prime Minister or the Treasurer. I do not think that that is the spirit actuating the tremendous body of opposition to the measure throughout the country. It is a very live issue in South Australia,
Queensland, and, in fact, in all the smaller States. If one could ascertain the real reason actuating the Treasurer in persisting in his determined and dogged fashion with this measure it would be very interesting and possibly very illuminating. I confess that I do not know what the real reason is. I read the honorable gentleman’s speech in introducing the bill and have listened to all the speeches he has made upon it since. It seems to me that he is shifting his ground. In his speech in reply to the second reading debate he indicated, as I mentioned just now, that possibly there would be further modifications of the Government’s proposal. He suggested that further modification might be submitted at the conference with the State Premiers in June and then pleaded that in the meantime the House should pass this measure. I think that would be a mistake. In his speech on the second reading of the bill the Prime Minister indicated the alterations which are now about to be made in it. They are intended to provide that, for another twelve months, the per capita payments should continue on the same basis as in. the past, in order to give further time for the discussion of the question with the State Governments. I object to the bill even in the modified form now proposed, because if it becomes law it will be operative whatever the decision of the conference may be. The principle will have been established and it cannot afterwards be altered by the conference. I cannot help adverting to a statement made by the Treasurer when discussing this measure in June of 1926. What the honorable gentleman said was quoted by the honorable member for Capricornia (Mr. Forde) and his remarks are very significant in view of his persistence and determination to have this bill passed. He said -
The principle underlying the notion of the Government in connexion with the abolition of the per capita payment was that the people would know whom to blame lor the effects of taxation and its incidence.
If that is the underlying principle of the Government’s action - and, according to the Treasurer it is - it is surely an unworthy one. That the Commonwealth should endeavour to thrust on the States the entire responsibility and blame at- tachable to governments by the people for direct taxation; that it should thrust upon them the necessity for resorting .to direct taxation so that the Commonwealth may pursue the easier course of levying indirect taxation through Customs revenue, , thus not coming into conflict with the People or their representatives in the matter of direct taxation, is certainly unworthy.
– In the press there is more criticism of indirect taxation than of direct taxation.
– I heard the Treasurer make that assertion the other night, but I do not think he is correct. There may be a good deal of criticism of the Customs tariff, there may be detailed criticism in regard to the application of protective duties, but I deny that a ministry is more criticized for its indirect taxation than it is for its direct taxation. It is obvious that a government which levies income tax, land tax, entertainments’ tax and succession duties, brings criticism upon itself. Every time a taxpayer receives an assessment notice, the direct taxation which is imposed upon him comes under his attention; and if there should happen to be an increase in his assessment, his resentment is roused against the Government that has brought it about. In a word, direct taxation always brings criticism of the Government; and when it happens to be severe or unjust, naturally the criticism of the Government that imposes it is overwhelming. It is a splendid thing for a Treasurer who considers only his position as Treasurer when he can shuffle out of the responsibility of direct taxation and resort to indirect taxation for the whole of his revenue. At any rate, we have the statement of our Treasurer as to the principle underlying the action of the Government in submitting this legislation, and if that is the real actuating motive of the Government, there are ten thousand reasons why the bill should be delayed as long as possible. I support the amendment moved by the honorable member for Swan (Mr. Gregory). I hope that the bill will not become effective or operative until an agreement has been arrived at with the States, or until after an appeal to the people.
.- As the debate progresses the reasons for delaying the operation of this bill are becoming overwhelming. I have no desire to traverse a lot of the ground which has already been covered on the second reading and again to-day, but I wish to throw a few arguments into special relief. To begin with, this is the most extraordinary legislation that has come before the Commonwealth Parliament during my short experience as a member of this House, inasmuch as I do not remember any other measure being introduced, machinery or otherwise, except on the ground that its introduction was to meet some public demand, whereas no such excuse has been offered for this bill. The Government has been unable to point to any express desire for legislation of this kind. It has emanated solely from a wish on the part of Cabinet for a rearrangement of the financial relationship between the Commonwealth and the States. It has not been asserted during the course of the debate by those who have tried to justify the passage nf the bill that there is a public feeling outside for it.
– Nor has there been ‘anything to show that there is a public feeling against it.
– I am afraid that the honorable member must have been sitting here with closed ears, because many honorable members, who have as much right as he has to speak and interpret the feeling of the people outside have said, again and again, that there is a very widespread, strong, and determined opposition to the bill.
– Among politicians.
– Among the people outside, and that feeling has been voiced on their behalf by honorable members here, and has found universal and widespread expression in the press of Australia from one end of the continent to the other.
– The honorable member for Indi decries politicians; but it is politicians who seek to make the change.
– We will not deal with that. Except for one or two speeches, the debate on this bill has been conducted on a very high plane. It has been an education to take part in it. There has been very little intrusion, of personalities. I am glad to note this, because I think it advisable to avoid personalities in every possible way. The question as to what demand lias arisen for a bill of this sort centres largely in the nature of the alleged mandate to the Government. The principal reason for urging delay is the fact that we claim that we are not justified in taking a step of such importance without a reference to the people. If one wanted additional proof of the fact that there has not been any public expression of opinion upon the need for this legislation it is found in the small majority by which the second reading was passed. The House is perfectly justified in passing a bill by a majority of one, and it is entitled to proceed with this bill, even with the small majority recorded on Thursday night. But is it expedient or advisable to do so when the House is so divided in’ itself, and when there have been such extraordinary ruptures of party organizations? Honorable members have not recorded their votes against the Government on this matter in any light spirit, as has been suggested, or for personal reasons. It is absurd to suggest that those who have found it necessary for the time being - not permanently, I hope - to sever’ their connexion with others with whom they have been working for years, and to run the risk of the misrepresentation that has been, and will be, levelled at them, have been actuated by foolish personal ambition and are devoid of any sense of responsibility to their electors. The fact is that they have taken the step of opposing the bill only after the most weighty and serious deliberation; and it only serves to show how strongly divided are the opinions of honorable members on this issue. I have not the slightest doubt that if the party restrictions were removed the bill would have no chance of going through. Some of the gibes we have heard from the Ministerial side about deserters betray really the bitterness of heart of those who feel that they are not acting according to their .consciences in supporting the bill. They can justly level no reproach at those who took their courage in their hands and opposed the bill. All the evidence goes to show that there has been no public demand for this legislation, and the fact that the House is so divided in regard to it is further proof of my assertion that there is considerable public opposition to the bill. In the circumstances, I maintain that when those who are advocating its passage and
Ifr. Mann. those who are opposed to it are so equal, the matter should be arbitrated upon by the people, who alone have the right to give the final decision. Every one knows that there was no mandate given to tEe Government on this issue at the last election. The Leader of the Opposition (Mr. Charlton) had thrown down a definite challenge to the Prime Minister (Mr. Bruce) daring him to go to the country to try the constitutional issue, and the Prime Minister had taken up the challenge, with the result that within a few days the House was dissolved, and honorable members were precipitated into a general election at which the sole issue was the constitutional question that had given rise to it. Some of those honorable members who have tried to make out that the people gave a mandate for this legislation could be seen exulting at the fact that the election had been so easy to fight, because there was only one issue at stake.
– The honorable member was on the platform when Senator Pearce read his speech?
– Of course.
– Did he say anything about the proposal to abolish the per capita payment?
– No. I remember the official declaration by Senator Pearce, on behalf of the Government, at the opening of the campaign in Western Australia. It contained an allusion to the desirability of a readjustment of the financial relationship between the Commonwealth and the States at conferences, and to a desire to co-operate with the States and place their relationship to the Commonwealth on a more satisfactory basis, but it made no mention of a determination on the part of the Government to do away with the per capita payment.
– I suppose that there was not a single question asked about the proposal.
– No ; it was never thought of. The Prime Minister says that it would be foolish to postpone this bill and submit it to the people at an election because it would be confused with other issues. I think it was the right honorable member for North Sydney (Mr. Hughes) who said that, if the Prime Minister had a mandate for this bill at the last election, he need have no fear in submitting it again, to the people. I should like to add to that assurance. If it is true that there has been factious opposition to the bill in this House, and that its passage has been obstructed by foolish, selfish, ambitious men who have not the interests of the country at heart, and have presumed to speak on behalf of the people without a right to do so, what would happen if the Prime Minister cared to submit the measure once more to electors who, he says, have already given him a mandate upon it? Surely they “would be only the more willing to say “Yes; we agreed to this at the last election, but on this occasion we shall show those men who are putting themselves between you and our will what we think of them.” Therefore, the right honorable gentleman has no reason to fear a re-submission to the people at the next election. But he and the Treasurer are afraid to accept the challenge to refer the matter to the arbitrament of the people. The existing arrangement is a matter of agreement between the representatives of the Commonwealth and the representatives of the States - each speaking within their own domain on behalf of the people. That agreement should last until another has been substituted for it. The ruthless use of the power of this Parliament to terminate the agreement arbitrarily is suggestive of the flouting of “ a scrap of paper “ at a memorable crisis in history. The agreement with the States may be only “ a scrap of paper,” but it should be held sacred by both parties. The only reason advanced in favour of the proposed change, in addition to that quoted by the honorable member for Dalley (Mr. Theodore), is that it is based upon a vicious principle. But the Government proposes to continue that vicious principle. We have been told frequently that if the per capita payments are discontinued, the Government will be able to make payments, perhaps in more generous proportions, to the States that need them. If, after the present system is terminated, the Government continues to raise money from the States in order to pay it back to them for expenditure by them, what becomes of the much-vaunted abandonment of this vicious principle? The Government is appealing to this committee to honour a principle, and yet is asking us to sup port men who will be so unprincipled as to ignore their own principle. This aspect was emphasized by the honorable member for Darwin (Mr. Bell), whose convictions were strong enough to force him back from Tasmania to record a’ vote against the second reading of the bill. He pointed out that under the arrangement suggested by the present Government, Commonwealth and State finances would become more inextricably mixed than they are now. Yet we- are told that the object of this scheme is to remove that confusion. A new element was brought into the consideration of this subject by the speech delivered by the Prime Minister at a public meeting on Thursday last. The suggestion, amounting almost to a threat, that the Prime Minister might resign has been publicly urged as a reason why this bill should be passed. The right honorable gentleman referred to the danger of breaking up the Nationalist party. For the sake of that party, it is desirable that the bill should not come into force yet, so that greater time may be available for the further consideration of its bearing upon the party and Nationalist policy. The allegation has been made in the course of discussion in this chamber that I have been guilty of betrayal. The committee, with that innate fairness which always characterizes it, dealt with the suggestion effectively at the time it was made; but, presumably the reference was to my withdrawal last year from meetings of the Nationalist party. The honorable member who made that accusation knows as well as I do that the reason for my withdrawal from the party was that I insisted upon maintaining the principles laid down in the Nationalist programme, and desired to be free to advocate and support them. If there has been any betrayal at all, it has been by those who consider that their public pledges as members of the Nationalist party are outweighed by their allegiance to an individual. The charge of betrayal levelled against me was very foolish, because the programmes of the organizations supporting both Ministerial and Opposition parties, provide that the per capita payments shall continue until another agreement has been made between the Commonwealth and the States. The mau who may be deemed to have betrayed his party is not the one who adheres to the programme upon which he was elected, but he who, in this chamber, votes against his convictions.
– I have permitted the honorable member great latitude, but I remind him that he is not discussing the amendment.
– I am endeavouring to show that in order to keep the Nationalist organization in existence, it is necessary that the operation of this proposed law shall be deferred until the members of the organizations throughout the Commonwealth have expressed their opinion of it. The Nationalist party is not the Cabinet, or even a majority of members of this committee; it is those organizations throughout the Commonwealth, which send representatives to conferences at which a programme is deliberately drawn up as the policy to which a Nationalist Ministry is to give administrative and legislative expression. As that programme is now being violated, it is right that the operation of the bill should be deferred, and I am pointing out that it is the clear duty of Nationalist members to vote for delay, so that those electors and organizations which sent them to this chamber may express their opinions. The Treasurer (Dr. Earle Page) stated that when the conference is held with the States, discussion will be perfectly free, except in regard to the per capita payments. The attitude of the Commonwealth Government to the States suggests, to my mind, a man standing on a wharf, arguing with another who is in the water and supported by a life-belt. The man on the wharf says to the other, “ Throw away the life- belt and I will jump in to save you.” But the man with the belt says, “ I cannot swim, and if I throw away the belt, I must sink.” “ Well,” says the mau om the wharf, “ if you have not sufficient confidence in my willingness and ability to save you, and will not throw away the belt, I shall have nothing to do with you.” The Government is inviting the States to enter into a conference and to commence bargaining, but stipulates that before they confer they must throw away their one source of strength, the one thing that they can offset against any proposals made by the Common wealth. The scheme of the Treasurer has undergone changes from time to time, and only within the last few days has the transfer of State debts to the Commonwealth been discussed as a possible alternative to the continuance of the per capita payments. I have said repeatedly that if the Government will propose the taking over of the State debts, I shall be completely satisfied. I believe that other members would feel the same. The Treasurer says that that is amongst the alternatives that the conference may discuss, but, so far as the per cap’ita payments are concerned, the Government is absolutely determined that the representatives of the States shall enter the ring with their hands tied behind their backs. That is not sporting. The only way in which the Government can proceed with this measure and yet retain the confidence of the people is by abandoning the present stand-and-deliver attitude. The Prime Minister said in his speech on Thursday, “ Surely you will trust me. You know I will not harm the States.”
– “Don’t let me down.”
– His speech did suggest the plea he made to the electors before the last referendum, but appeals of that sort have not much effect. If he is really desirous that the people shall continue to trust him, I remind him of an old saying that “He who would make friends must first show himself friendly.” Let the Prime Minister make the first friendly gesture, the first step towards good understanding and agreement with the States. Let him say that he will make no conditions; but will practice what he professes, because an ounce of practice is worth a ton of precept. The opposition to the measure is really after all an expression of opinion by the people of Australia generally. The Prime Minister and Treasurer should therefore acknowledge that the wisest, best, and safest course, not only for them, the Cabinet, and the party behind it, but also for the people of this country, is to postpone the bill. We should realize that the States have a definite part to play in this business, that they will not consent to being subsidiary factors in any arrangement that may be made, and that any discussion with them should be fair, square, and above board, and one in which, as I have said previously, they will not find the cards stacked against them. On these grounds this committee should decide the question here and now. Honorable members who have been in th is chamber much longer than I have, say that this debate has been the most strenuous in their experience. That is because the per capita principle is one of the biggest questions that we have had to face. Vital issues are connected with it, and the people are deeply concerned. It would be a great mistake, therefore, to decide it by a mere majority of three or four votes. It is a wise maxim which says : “When numbers are balanced, delay for further consi deration.” There is no urgency in this matter. There has been no evidence of chaos or confusion of accounts, nor of disability suffered by either the Commonwealth or the States under the present arrangement. It is rather the reverse. Yet we are now asked to decide this most important issue. We should hesitate before accepting that responsibility, and refer the question back to the people who elected us. Assistance to the States is the most vital principle underlying the establishment of federation. It is certainly one of the most fundamental and important strands in the Federal fabric. If this bill is passed, I shall regret very much its effect upon Western Australia. I am certain that this sort of legislation will give a great fillip to the secessionist movement in Western Australia.
– I thought that the tariff was responsible for the secession movement.
– I should be sorry to be responsible’ for the thoughts of the honorable member. I regret that anything should be done to foster a spirit of unrest and discontent, which, in the body politic, like fever in the blood of the physical body, gives rise only to disorders and disease. I sincerely hope that the committee will agree to the amendment moved by the honorable member for Swan. It is not unfriendly or hostile, being dictated rather by a desire to influence the Government to do what is best for itself, its party and the country generally.
.- During the week-end I had further opportunity to take the pulse of public feeling against this measure. Never before in all my political experience have I known an important and momentous question like this put before Parliament in so drastic a manner. In all earnestness, I beseech honorable members, in view of our obligations to the people of this country, who should be parties to any financial arrangement made in this chamber, not to rush this bill through in a severely party spirit. We should have a free and open debate, keeping in mind the good of the country. If the bill is forced through this Chamber, we must put our reliance on another place, which was established under the Constitution to protect especially the interests of the States in this Parliament. We cannot cripple one party to the federation without crippling the whole of the Commonwealth. This afternoon the Treasurer (Dr. Earle Page) quoted Sir George Reid; but honorable members know that Sir George Reid can be quoted in two or three ways and on two or three occasions.
– Some honorable members of this chamber can be similarly quoted.
– I should like the honorable member to talk to his farmer constituents who sent him here for a specific purpose. The crippling effect of this bill will be felt more by the farmers than by any other section of the community.
– The honorable member is speaking for the Collins-street farmers.
– Not at all, I am speaking for those in the rural districts. [Quorum, formed.] The attitude of Sir George Re id was misrepresented by the Treasurer.
– I quoted his exact words.
– The Treasurer did not give the full context of the speech. I shall give the exact words of Sir George Reid, and also chapter and date, so that honorable members may read them for themselves.
– I quoted from the Convention debate.
– I know what Sir George Reid said at the Convention. In 1909, in a letter written to the Premier of Victoria, he said -
I am more responsible than any man for the termination of the Braddon clause. But I never wished to allow the States less than a fair share of Customs and excise revenue, which is the only way in which the States can receive revenue from the masses of their inhabitants. The object of this letter is to make that sure for all time.
I ask the Treasurer, in view of that statement, whether he has properly represented the attitude of Sir George Reid.
– I said that, at the convention, Sir George Reid was opposed to uniform per capita payments.
– What is the inference from that ? I want to pin the Treasurer down to his irresponsible statements.
– A very small pin will do.
– I wish to call the attention of the people of the Commonwealth to the misleading statements of the Treasurer respecting the attitude of Sir George Reid towards the per capita payments. Actually, that great statesman’s utterance increases ten-fold the necessity for postponing the bill. We must remember that the people, most of all, are interested in this momentous question. If the Government forces this measure through and gives effect to it, the Liberal party will be placed under a cloud of suspicion the equal of which I have not seen during my 35 years of political experience. Sir George Reid continued : -
I do not wish to introduce any views of my own, except to state that there are one or two main points in which I think the States should be considered, viz. : -
They should have a fair share of the Commonwealth revenue.
That share should be on a per capita basis.
The Treasurer, by picking out sentences in a speech, has deliberately misrepresented the attitude of Sir George Reid.
– He evidently had changed his mind.
– What is the honorable member aiming at ?
– I have no aim but to serve the public of Australia, and I have never been other than a servant of the nation. Sir George Reid also said -
It should increase automatically with the growth of the revenue and population, or at least with the population growth.
In the convention, at which the late Lord Forrest, then Sir John Forrest, represented one of the sparsely populated States, that great man urged the per capita principle on the ground that the first duty of the Commonwealth Parliament was to preserve the solvency of the States. If the States are not solvent, there is little possibility of progress and prosperity. He contended that we were one people, and that we could not cripple the States without crippling the Commonwealth, or cripple the Commonwealth without crippling the States; and he said that the distribution of Customs revenue, on the principle at first introduced, would be impracticable. If honorable members will consider it for a moment, they will see that it is impracticable. Sir George Reid’s final statement was -
Why should the States, with their great and expensive public works to carry on, be put in the position of being at the mercy of the Federal Parliament? The Federal Parliament could cripple the States, and bring about endless confusion and irritation, and bitter quarrels. If there is one thing which will keep Federal and State Governments revolving peacefully, usefully, and harmoniously, it is the rigid definition of their appointed courses, in writing, so that nothing may be left to chance interpretation.
I want that to sink into the mind of every honorable member, because we are all representatives of the people of Australia, and I realize that my first responsibility is to them. Another prominent figure in those days was Mr. Dugald Thomson. A more esteemed man, or one of better character, never sat in this chamber. He was chairman of the Chamber of Commerce for many years, and the members of that organization wanted to keep him for ever, and allowed him to go out of office only on condition that his advice and assistance would always be available. If members of this House ever loved a man because of his goodness and power, they loved Mr. Dugald Thomson. He was an upright man, without bias, and he said -
When subsequently the period of the operation of the Braddon section was limited, it was expressly declared to the people of Australia from platform after platform, and specially acknowledged by the member who had most to do with the alteration, that it was recognized that the State Governments should continue to receive a fair share of the Commonwealth revenue from Customs and Excise. … It was claimed that the Federal Parliament would never fail to do justice to the taxpayers of Australia in view of the fact that they were also the taxpayers of the States. . . . Squeeze the States into submission by starving the services of the State! It is not only strangling the States, but it is strangling the people who have the right to have the appeal made to them.
This is the first government that has ever put forward such a proposal, and decided to pass it by hook or by crook, which is about the closest thing possible to the betrayal - that is not too strong a word, I am sorry to say - of the people. That was not the intention of the giants whose portraits are hung in the Queen’s Hall, and who gave us our Constitution. An old friend of many honorable members, Mr. Bruce Smith, after speaking on similar lines, concluded by saying -
Some honorable members have talked of a payment for ten years as if it were to be the final provision of the Commonwealth. It is nothing of the kind.
The great Mr. Deakin said -
As I understand the position, we all admit that, in federating the services, the States must not bo deprived of that gain which they have been deriving from them in the past - upon which their past budgets have been built, and on which their future budgets must also be built - unless their whole financial systems are to be dislocated.
– He did not know what the position would be to-day.
– The position to-day makes the argument ten times stronger. If measures like this are persisted in, it will bring this country to the point of financial disaster. Most of the concern in building up the Constitution was to provide for Tasmania and Western Australia. Each of the representatives of Western Australia opposes this bill; but what will the Tasmanian representatives do?
– The extracts read by the honorable member are a mine of wonderful information to new members.
– I understand that they will be placed in the hands of every representative of South Australia in another place. I am thankful that they were sent to me. To be in a position to quote the stalwarts of the past accurately is a delight to me. This is one of the most serious questions I have, had to deal with in my political life. Does the Government to which I have given staunch allegiance, whenever allegiance could be given, intend to persist in forcing me into a false position? I never thought we should have a Government that would do such a thing. Mr. Deakin further said -
Vor many of us the present per capita proposal has one great crowning merit, in that it should remove all hesitation on the part of the most timorous States in grappling with the question of immigration, as it ought to have been grappled with long ago. The one argument which above all others commends the per capita system to me, and many other honorable members, is that it will vitalize the immigration policy of Australia, and should make it a reality in every State.
What has the Government, which favours immigration, to say to that. I remind the Government - not for personal considerations - that not one member of the Cabinet has had experience of political life in the States. If men of eminence and experience in previous Cabinets treated the country and members with caution and respect, what authority has this Government for forcing its immature notions upon honorable members and the nation?
– Does the honorable member think that a Commonwealth Minister should serve an apprenticeship in a State administration?
– In the interests of Australia, a large proportion of them should. I remind honorable members of the responsibilities of the States as against those of the Commonwealth, both in the present and in the future. The right honorable member emphasized that in direct and definite statements. He contended that if the responsibilities of the States and the Commonwealth were compared, they would be as eight to one. My desire to conserve the financial interests of the States is not the result of a new-born enthusiasm on my part. I have had it since the first meeting of the Federal Convention. I hope that in the periodic financial adjustments to be made, there will be less need in future than there has been in the past for appeals from the necessitous States. Such requests provide a wide opening for political log-rolling. Let us be fair, and trust the people. There is no occasion for haste. I cannot conceive of any Parliament resisting such a reasonable suggestion as that contained in the amendment. There are many breadandbutter matters - important financial problems - that have been awaiting solution for years. Every now and then Parliament is adjourned to enable somebody to visit Great Britain. We ought to have a Parliament that can take care of itself, and deal thoroughly with the matters claiming its attention. Until we have that we shall not. enjoy, and shall not deserve, the confidence of the people.
.- Reference has been made in the debate to the difficulty of taxing through the States on the aggregation principle. But there is another difficulty that will confront the States if the Government’s proposals are carried into effect. Speaking from memory, over £360,000,000 is invested in Commonwealth loans, and, so far as I understand, the interest received for that money is exempt from State taxation. If there should be a withdrawal by the Commonwealth from the field of income taxation, or even if there should be only an abatement of income taxation, many persons having money invested in Commonwealth loans would be tax-free. Therefore, it is idle for -the Treasurer to refer lightly to substantial benefits proposed to be bestowed upon the State Governments.
– I have allowed honorable members great latitude. Most of them have been carried away by the heat of the debate; but the honorable member, in cold ‘blood, has begun by departing from the amendment before the committee.
– The Treasurer dealt extensively with reasons why the amendment should be defeated, and he suggested that the States would not suffer through the withdrawal of the per capita payment. Surely I am entitled to answer that argument by pointing out that for one important reason alone the position of the States would be of exceptional difficulty. I advance that as an argument why the amendment by the honorable member for Swan should be carried. This would delay the withdrawal of the per capita payment, and enable the complex financial problems which confront us to be exhaustively considered by the Treasurers of the States and the Treasurer of the Commonwealth. From 1901 until August, 1909, no fewer than eleven financial conferences were held, and it is admitted that the situation is hedged about with great difficulties. The attempt to pass this bill hastily cannot be justified. As I have already pointed out, if the Government’s financial policy were carried into effect, the holders of £360,000,000 invested in Commonwealth loans would bc relieved of income tax.
– That matter was fully discussed at the 1923 conference.
– The Treasurer has not shown how he proposes to overcome the difficulty.
– We are not now dealing with solutions; they will come later.
– We should not be asked to leap into the dark without knowing what the ultimate solution is to be. We are entitled to a concrete proposal such as was made by the honorable member for Dalley (Mr. Theodore). He stated that one of the great difficulties of the States at previous conferences of State and Federal Treasurers had been the absence of a concrete policy on the part of the Commonwealth. All that the States have experienced - as the honorable member for Perth (Mr. Mann) remarked - has been a policy of “stand and deliver.” Failing the carrying of the amendment, I hope that further consideration of the measure will be secured by the appointment of a select committee. The Government’s majority has been reduced from 29 to 6, and but for the unavoidable absence of one or two members it would have been reduced to four. That fact alone is sufficient to justify the postponement of the operation of the bill. To me it is incomprehensible that many Government supporters, who have omitted to explain their attitude, should still maintain silence. The Treasurer, during his speech, said that the States had no right to the surplus revenues of the Commonwealth. That statement was absolutely incorrect.
– I did not say that. I remarked that there was no surplus revenue of the Commonwealth.
– I understood the Treasurer to say that the States had no right to it; that the only right they had was to payment on any basis which the Parliament might deem fair. I remind the Minister of the views of Sir Harrison Moore, a recognized constitutional authority whose opinions are impartial, and whose work, so far as constitutional practice is concerned, is a classic, not only in Australia, but also in other parts of the world. Referring to section 94 he states - “The Constitution thus confers on the States a definite legal right to the- ‘ balance ‘ of revenue over expenditure.” He also quotes the judgment of Chief Justice Griffith in the
Slate of Tasmania versus Commonwealth and State of Victoria - 1., Commonwealth Law Reports, 329-340 - in which case the late Chief Justice said that the States had “ an absolute vested right “ to the surplus revenue of the Commonwealth.
– Will the honorable member connect his remarks with the amendment?
– I am replying to the argument adduced by the Treasurer.
– I think that I made the matter clear in reply to a point raised by the honorable member for Dalley last Friday.
– The Minister said that section 94 showed that the States had no legal right to the surplus revenue.
– The honorable member has either misquoted me, or is under a misapprehension as to what I said.
– I think not. In the course of his speech the Treasurer also referred to the different motives that actuated the delegates to the Federal Convention in deciding upon the limitation of the operation of section 87, the socalled “Braddon blot.” Let me further quote Sir Harrison Moore: -
The first financial problem which lay before the framers of the Constitution was how to secure to the colonies - Victoria, South Australia, Tasmania, and Western Australia - which had depended largely upon Customs and excise, such a return of revenue from those sources as would enable them to provide for their needs without dislocating their finances and requiring a resort to new methods of taxation. The second problem was how to find a fair and acceptable basis of distribution among the several States. The difficulty was increased by the fact that New South Wales had already come largely to depend on direct taxation, and was concerned to secure to the Federal Parliament a free hand in determining economic policy.
The action of Sir George Reid in delaying his ultimate agreement to section 87 was due to a desire that the Commonwealth should refrain from adopting a fiscal policy for the protection of its industries. Various text-books which set out to interpret the Constitution, deal specifically with the Braddon section and the other sections affecting the financial relations of the Commonwealth and the States, which are the most important and involved sections in the Constitution. Sir Harrison Moore pointed out that, in limiting the. operation of the Braddon section, the idea was to leave the ultimate adjustment with the Commonwealth Parliament. It was thought that a period of ten years would be sufficient to determine the future fiscal policy of the Commonwealth, the revenue which might be expected from Customs and excise, and the expenses of administration, so that an equitable adjustment could be made. It was not intended that the per capita payments should cease at the expiration of that period. The Treasurer’s reasoning is entirely erroneous. I trust that those honorable members who supported the second reading of the bill will see the wisdom of now supporting the amendment moved by the honorable member for Swan.
– I wholeheartedly support the amendment moved by the honorable member for Swan (Mr. Gregory). Were it not that some members of the Ministry have an inflated sense of their importance and of the functions of the Commonwealth as compared with those of the States, they would not try to rush this proposal through, thus making it extremely difficult to obtain a harmonious solution of the financial difficulties of the Commonwealth and the States. [Quorum formed.] Were honorable members on the other side free and unfettered, they would vote for the amendment, which provides that the altered arrangement shall not come into operation until the people of Australia have had an opportunity of saying whether they are in favour of it. The election was fought on a spurious issue, referred to in the propaganda published in support of the Government candidate as “ Constitutional Government versus mob rule.” It is true that the Prime Minister’s policy speech contained a reference to the per capita payments, in that he stated that there should be a conference to review the financial position of the Commonwealth and the States, because it was not considered right that one authority should impose taxes and collect revenue to be handed over to another authority for spending; but no definite statement that the per capita payments would be abolished was made to the electors. No Government which stands for democratic rule would endeavour to force its will on the States in the face of their unanimous opposition to it. If the amendment is agreed to, the Government will be in a better position to confer with the States than if the bill is passed in its present form. I remind honorable members that, in reference to this matter, Sir William McPherson, who for many years was the Treasurer of Victoria, said recently -
If both chambers betray the people and the States, they will have to face the gravest dangers. Our social services may have to be curtailed. And direct taxation, so injurious to trade, commerce, and industrial development, will remain at the present high level.
Sir William McPherson is competent to speak on this matter; he knows the effect upon the finances of the States of the proposal of the Treasurer.
Sit ting suspended from 6.30 to8 p.m.
– I emphasise that the Government has no mandate from the country to abolish the per capita payments, for no direct reference to the subject was made in the Prime Minister’s policy speech. It is usual at the opening of the session for the Government to outline in the Governor-General’s speech the important matters that it intends to submit to Parliament; but it did not indicate, even when that speech was delivered, that it intended to introduce this proposal. Will any one say that this is not an important question ? In my opinion, it transcends in importance anything that has been submitted to Parliament since the election. It is a matter which surely demanded very careful and lengthy consideration, but evidently it had not been seriously considered up to the time the Governor-General’s speech was delivered. This appears to me to be merely a pet scheme of the present Treasurer (Dr. Earle Page), who probably desires it to overshadow the new States scheme and some others of his which have never been brought to fruition. In these circumstances, there is every reason why we should agree to the amendment. Our opponents opposite tell us that they represent the taxpayers of Australia. Recently I received a communication from the Taxpayers’ Association of Queensland, which indicates to me that honorable members opposite are not voicing the views of the taxpayers.Any one who cared to run down the list of names printed on the letter-paper of this association would discover that there is not a single Labour supporter among them. At any rate none of them is actively associated with Labour. The letter points out that on the 11th June last year the association resolved that, although it was against the principle of dual taxation, it was of the opinion that the per capita payments should be gradually reduced in proportion to the degree in which the Federal Government evacuated the field of direct taxation. Since that time, however, the members of ibis association have given careful consideration to this matter, and the letter which I have just received from them is in the following terms: -
In consequence of further information since published, and in view of the fact that comparatively recently the Prime Minister himself, when he was Federal Treasurer, expressed the opinion that the capitation grant to the States could not be done away with, but must bo continued until there came some change in the basis of government in the Australian States, and as no such change has taken place, the council of the Taxpayers’ Association of Queensland, in order to avoid any ambiguity in the above-mentioned resolution, now states that it is of the opinion that the capitation grant to the States should be continued.
These are the sentiments of those who assisted to return the present Government to office. The Prime Minister has gone back on a definite promise that he made to these people in Brisbane in 1922 that the per capita payments would not be abolished unless some fundamental change was made in the basis of government in Australia. The right honorable gentleman’s speech on that occasion was reported in the Courier, the Telegraph, and the Daily Mail, which are published in Brisbane. The letter goes on to say -
This council is further of opinion, in view of the continued buoyancy of the Customs revenue, that the Federal Government should steadily reduce its direct taxation as circumstances permit, without transferring any portion of it to the States. This council is also of the opinion that, if the capitation grant in future be limited to the present amount paid to each State, then the saving thereby accruing to the Commonwealth shall be used by the Federal Government annually, as far as may be necessary, for the establishment and maintenance of a sinking fund which shall wipe out at the end of about 50 or 00 years all the States’ debts existing at the time such sinkingfund is inaugurated.
In conclusion, the association states that these views have been formulated only after some months of careful consideration. In Queensland, at least, thereis a great body of public opinion, not confined to any one party, which is totally opposed to the abolition of these payments. The matter has been considered by them from a non-party standpoint. One of my grievances is that the Government has not allowed its supporters to consider the matter from a non-party attitude; if it had done so, there would be an overwhelming majority against the Government’s proposal. But some honorable members opposite seem to be tied hand and foot. Had they been free men, they would certainly have voted against the bill, which, if it should become operative, must have the effect of utterly dislocating the finances of the States and, at the same time, of involving the State taxpayers in heavy additional taxation which they can ill afford to meet. The Treasurer (Dr. Earle Page), in a speech that he delivered in Sydney last year, stated clearly that he wished to focus public attention upon the direct taxation authorities - which means the States - so that the people would know, in the future, who were to blame for the heavy taxation which they were obliged to pay. The Prime Minister (Mr. Bruce), in the speeches that he has delivered in this Chamber in the last few days, has told us that he desires to assist the States to meet and overcome their financial difficulties. The two declarations cannot be reconciled, and it is hard to know where the Government really stands. It is true that the motion for the second reading of this bill was carried, but it was by such a narrow majority, in comparison with the large following that the Government has, that it was a moral defeat It does not say much for the Government that it had to threaten its followers with expulsion from the party if they failed to respond to the Whip’s appeal. In spite of the pressure that was applied, however, twelve men refused to vote in favour of a principle to which they were strongly opposed. On this aspect of the matter, the apt remarks of Sir Alexander Peacock, an ex-Premier, a prominent Victorian Nationalist, and Treasurer in the Victorian Government, are worth quoting They were as follows : -
There aru sonic victories that are worse than defeats. If I were in the position of Mr. Bruce, and I saw the calibre of the members who are going to vote against the bill because of the strong and conscientious objections they hold on a momentous issue, I would hesitate to proceed. I would rather be wrong with mon of the status of those who are about to vote with the Noes “ than be right with the lesser lights who are standing by the Government.
Sir Alexander Peacock is a gentleman of great discernment and long experience, who knows what he is talking about. We have heard a good deal from some honorable members opposite about a mandate which the Government is supposed to have received on this subject; but, in fact, it has no mandate. Apart from that, it is worth noting that not one honorable member who has spoken in this strain has told us what the Nationalist party platform has to say on per capita payments.
– They are silent on that.
– That is so. The Nationalist platform states that these payments shall be maintained. That is a good reason why honorable members opposite should support the amendment. Still another good reason is that the Federal Treasurer (Dr. Earle Page) has a greater revenue to-day than ever before. In 1922, when the Prime Minister said that the per capita payments would not be abolished, the Treasurer received in income taxation £16,790,682. In 1926, he received £10,858,045, and relinquished entertainments tax to the extent of £215,366. His income in those two respects therefore showed a reduction, between the two periods, of £6,158,003. Against that however, he had the following increases: Land tax, £237,883; estate duties, £419,969; Customs and excise duties, £11,931,000 : giving a total of £12,558,S52. It will thus be seen that in. spite of the Treasurer’s voluntary reduction in taxation, he was really better off, in 1926, by £6,430,S49, and that does not take into consideration the surplus of £3,000,000 which he had in hand on 1st July, 1925, and his excess of revenue over expenditure - about £2,250,000 - in 1925-26. From the point of view of Commonwealth finances, it cannot be argued that the per capita payments should be abolished. As I have said, this is merely a pet scheme by a self-styled strong man who is prepared to rush in and wreck the whole financial fabric of the country merely to satisfy his own persona] ambitions. The Government should have attempted the solution of many problems of great national concern before it even thought of this one. Seeing that we are nearly half way through the life of the present Parliament, I submit that there is every reason why we should postpone further consideration ofthis subject until after the next election. The Government policy involves such issues as national insurance, child endowment, development and production, improved marketing schemes, and improved rivers and harbour facilities, but not one of these has even been dealt with or brought to fruition. That makes all the less justifiable the pushing forward of this proposal. The Treasurer should not seek to embarrass the States, but should give them an opportunity to meet and discuss this matter without prejudice. He is making it impossible for them effectively to carry on the multifarious services for which they are responsible.
– State Treasurers have met the Commonwealth Treasurer on many occasions but they do not wish to do. so again.
– No, he has been too dogmatic and too arrogant, and his attitude towards State Ministers has been responsible for engendering a feeling of antagonism and bitterness between the Commonwealth and the States which will have a very detrimental effect upon the good government of this country. There must be harmonious relations between the Commonwealth and the States if Australia is to be efficiently governed. The Treasurer has evidently forgotten that the States carry on very important functions, otherwise he would not have submitted such proposals. The Prime Minister and the Treasurer are engendering bitterness, mistrust, and antagonism, and it will not be long before they realize the mistake that has been made as the chickens will soon be coming home to roost. Instead of being able to heap upon the States the odium of increasing direct taxation, which must inevitably be imposed, the Treasurer will find that the taxpayers, many of whom have supported him, will rightly blame him and relegate him to political obscurity.
.- I rise to support the amendment. On a bill of such supreme and far-reaching importance as this the people should be given an opportunity to definitely state their opinion. The Government had no mandate to bring this measure before the House and to push it through. With due respect to the Prime Minister (Mr. Bruce) and those who have quoted the policy speech which he delivered at Dandenong at the opening of the last election campaign, I submit that there is nothing in that speech which justifies the Government in claiming that the people of Australia have been consulted, and are behind it in this proposal. The right honorable gentleman, who is so candid, explicit, and facile of expression, should have placed it before the electors in unmistakable language. He should have put it to the people in these words, “ The Government proposes, with or without the assent of the States, to abolish the per capita payments.” Nothing short of such a declaration would justify the Government in “ punching “ on with the bill.
– “ Bullocking “ it through.
– Yes. I contend, further, that the Government cannot have two distinct mandates. It cannot have received a mandate for the bill as originally introduced and another for the bill as amended, because they embody entirely distinct proposals. I am a new member of this Parliament, but I have been associated with it since, as a young man, I occupied a seat in the press gallery. In my 27 years experience I have never known a bill to be so drastically amended as this, and still fathered by the same Government. While on that point may I say a word or two concerning the charges which have been levelled against the twelve honorable members on this side of the Chamber who have dared to oppose the bill. They have been charged with treachery and desertion of their leaders, and even the word “ gentlemen “ has been imported into the discussion.
– What did the honorable member say of those who supported the bill?
– The honorable member will have an opportunity later, if he so desires, to express his opinions. If those honorable members on the Government side of the House who have opposed this bill, desire ample justification for their attitude, it is to be found in the amendments which the Government itself has introduced. Why has the Government drastically amended its original proposals? Why is the bill, as now submitted, entirely different from what was first proposed? Clearly it is because of the opposition which certain honorable members offered to the original measure. Did the Government voluntarily emasculate the original bill? No. When it was. first introduced, we were told that it was to be “ the bill, the whole bill, and nothing but the bill.” So sure was the Government of the support it would receive in this House and in the country, that an attempt was then made to suspend the Standing Orders in order that it might be hurriedly rushed through.
– Then; yes.
– The Prime Minister then went to Great Britain, and during his absence the Treasurer paraded the country insisting that the bill as it was then framed would be forced through Parliament. He suggested that it would actually “ canter “ through the House, and would l>e supported by an overwhelming majority. Later, the Prime Minister returned, and proposed to the States that a royal commission should be appointed in order to ascertain whether or not the Commonwealth’s estimate of the revenue which would be received from the “ moth-eaten “ taxation that it proposed to hand over to the States was correct. In making that proposal, the right honorable gentleman stated that the bill would go through the House as it then stood; but he and his colleague, the Treasurer, then awakened, apparently, to the fact that there was an overwhelming force of public opinion in this country against it, and an entirely different proposal was submitted.
– We have never been told whether the Prime Minister had the Treasurer’s consent to do that.
– I regard the Treasurer as the author of the original bill.
– I do not think it is original.
– The first measure dealing with this subject-
The CHAIRMAN (Mr. Bayley).Order ! The question before the Chair is the amendment submitted by the honorable member for Swan (Mr. Gregory).
– I rise to order. I submit, sir, that you allowed the Treasurer to discuss the bill in second-reading form on this amendment. Later, you directed attention to the fact that, in your opinion, the honorable member for Reid (Mr. Coleman) was exceeding the limits of f air debate; but I submit that if the Treasurer, in discussing the amendment, is permitted to cover the whole ground, the same consideration should be extended to the honorable member for Henty.
– Order !. I admit that the Treasurer appeared at times to depart from the question immediately before the Chair, but the points that he raised were made in an endeavour to give reasons why the bill should come into operation before 1929, as proposed in the amendment. Had the Chair been of the opinion that the Treasurer had transgressed, he would have been called to order. The honorable member for Henty has now been asked to confine his remarks more closely to the question before the Chair.
– I bow, sir, to your ruling. I am endeavouring to show that the Government is ignominiously giving way on the bill; that it has thrown overboard practically 90 per cent, of the original measure; and that I am still hopeful that it will abandon the remaining 10 per cent. In the original measure, it was proposed to discontinue the per capita payments without compensating the States in any way ; but to give the States the right to collect certain direct taxation which the Commonwealth at present raises. In the first place, the States were not to receive any compensation, but it is now proposed to hand over to them £8,000,000 a year, provided the Commonwealth can dictate to the States the maimer in which it shall be spent. In other words, the Treasurer, who for some time has assumed the role of an absolute dictator to the States, now appears in the guise of a pawnbroker, and says to the States, “You can have this money provided you pawn your autonomous rights with me as security.” I do not propose to labour that aspect of the question; but, in view of all that has been said, and the aspersions that have been cast upon the twelve honorablemembers on this side who voted, against the second reading of the bill, I venture, on their behalf, and on behalf of honorable members opposite, to take credit for our attitude from the outset. In consequence of our opposition to the proposal during the last six or seven months, there is every prospect that, if the Government proceeds with it, the States will be £8,000,000 better off than they would have been under the original bill. I should like to congratulate the Treasurer upon his extraordinary personal triumph in carrying this bill beyond the secondreading stage. I credit him with the initiation of this proposal.
– He has subjugated the Prime Minister.
– I am not suggesting that the Prime Minister is not behind the bill; but we know what was the attitude adopted by the right honorable gentleman in 1922. Any impartial reader of the speeches that have been delivered by the Treasurer since he has been in the Commonwealth Parliament must conclude that the honorable gentleman is a straightout, wholehogger unificationist. Their perusal has given me an insight I did not formerly possess into the ability, the capacity, and tlie purpose of the honorable gentleman. Ever since he entered this Parliament he has sought to destroy the sovereignty of the States. Why that should be, in view of his professed desire to have further States created, I cannot imagine.
The CHAIRMAN (Mr. Bayley).Order! The honorable member is not discussing the amendment.
– I desire the postponement of this measure, and its submission to the people at the next election, in order that they may have brought before them prominently the question of direct and indirect taxation. I am surprised that neither the Treasurer nor any supporter of the bill has during the debate discussed principles of such importance as those relating to direct and indirect taxation, or whether it is possible for the States to aggregate incomes in the event of the Commonwealth being inclined to vacate the field of direct taxation. I should particularly like to hear the views of the Treasurer regarding the evils of indirect taxation. If the Commonwealth fails to arrive at an agreement with the States it will be necessary to vacate the field of direct taxation with the exception of 60 per cent, of the income tax. What is the opinion of the Treasurer in relation to the extraordinary economic position that will then be created? Speaking on the tariff in this chamber on the 7th April, 1921, the honorable gentleman, then a private member, said -
Pitt, something like 150 years ago, pointed out that by means of indirect taxation it was possible to tax the coat off a man’s back without his being conscious of it. And that is what is happening under this tariff.
The Customs revenue, which in that year so alarmed the honorable gentleman, amounted to £17,000,000. During this financial year it will amount to more than double that sum. In the course of the same speech the honorable gentleman said -
I hope to give irrefutable proof that it is practically impossible, by means of a tariff alone, such as this, to establish rural industries.
I draw the particular attention of the committee to what follows : -
All that we oan do under present conditions of constitution and size of States by means of such tariffs, is to continually increase the population of the big capital cities, where the living conditions are rapidly becoming worse and worse; where the health of the children is deteriorating, and where their chance of becoming physically strong is becoming less and less, while at the same time people are fleeing from the country districts as from a land of desolation. The power to overcome that undesirable state of affairs is largely in the hands of the Federal Government itself.
The manner in which the honorable gentleman has grappled with the problem since he has assumed office as Treasurer has been to double the receipts from indirect taxation. As I view the matter, the Government by this proposal is making war upon the States. In a political sense this is the worst of all wars; it is a politico-civil war. Although the federation has been in existence for 27 years, the affections of the people still lie rather with the States than with the Commonwealth. That fact should exercise a strong influence upon honorable members in the consideration of any legislation that might be construed by the people as an attack upon the sovereign rights of the States. In Tasmania and Western Australia, the preference of the people for the State Parliaments is strongly apparent; It will take a much longer period than 27 years for the people of great political entities like the States of New South W ales and Victoria to surrender their sovereignty and cling with greater affection to the Commonwealth than to the State Governments and Parliaments. If I were asked why the Australian people continue to adhere more closely to local than to national government, I should say the reason lies deep down. Upon what does the genius of Anglo-Saxon government the world over rest ?
– I submit that T am giving reasons why this amendment should be carried. I am endeavouring to show that the postponement of the coming into operation of the bill will be to the interests of, not only this Government, but also the Commonwealth Parliament. The genius of government by the British the world over has its roots in local government. Britain, on a memorable occasion, had one grim lesson, which it learned well, when it sought to interfere violently with the supreme independence and sovereignty of local government within the British Empire. There has been no necessity to teach that lesson a second time. This Empire only stands together, and endures, and is the marvel of the world, because of the complete local autonomy that is enjoyed in every portion of it. That rule applies, or it should, to a federation such as ours, in which the States have retained their sovereign powers. The clay when this Parliament fails to recognize the complete sovereignty of the States, which was granted to them when federation was established, and seeks by corruption, as is attempted under this bill, to deprive them of their sovereign powers, it will be up against a fundamental instinct of our race : the infinite respect that is held for local government wherever it exists. This forcing of the States to surrender their powers is a tragic step 1o take, and will prove fatal to honorable members of the Nationalist party when they go before the electors. I go further, and say that it will have harmful effects upon the development of a national spirit. Frequent mention has been made of a proposed special Federal session to discuss constitutional amendments. What a farce it is for the Government to suggest that the people be asked to approve of an amendment of the Constitution by constitutional means, after it has given such a demonstration of brute force as that of which it bao been guilty in this instance! I have said, and I say again, that if this bill is forced through Parliament, and the States decline to barter away their sovereign rights for so many pieces of silver, the amendment of the Constitution which is so urgently desired by those who have the interests of this country at heart will be put back a decade.
.- I desire to make a few- valedictory observations upon the bill. I have been greatly moved by the speech just delivered by the honorable member for Henty (Mr. Gullett), by its eloquence on the one hand, and by its skilful irrelevance on the other. I have listened to the debate for several days past, but, in order to be clearly within the Standing Orders, I shall refer specifically only to what has been said to-day. I have been struck by the wealth of argument against the passage of this bill by honorable gentlemen usually found supporting the Government. The Prime Minister (Mr Bruce), in committee paid a tribute to those distinguished gentlemen. I think he said that they were all skilful - I am sure he said they were all old - parliamentarians; ripe in wisdom, strong in political strategy and ability, and full of historical knowledge. We all recognize that in every Parliament there are men who fill the public eye more than others who, with equal honour, discharge their lesser part. I ask myself how it is that all these outstanding parliamentarians upon the Government side - those practised debaters, those men who have been associated with the political history of the Commonwealth since its inception, as well as those who have distinguished themselves in, or in association with, the convention before the constitutional instrument was fabricated at all - are opposed to the bill. And I am sure, Mr. Chairman, that you, with your intimate knowledge of the personnel of this Parliament, would be the very first to admit that those members not in the Cabinet but supporting the Government–
The CHAIRMAN (Mr. Bayley).Order ! The honorable member’s remarks would be in order if he directed them, not to those “ supporting the Government,” but to honorable members “ supporting the amendment” before the Chair.
-I realize that my observations would not be of such a suspicious character if I adopted your advice, sir, and directed them to the amendment before the Chair.
– The honorable member was not sufficiently ambiguous.
– I am sorry, Mr. Chairman, that the conscientious discharge of your public duties led you to interrupt’ me at the very moment I was about to make a point in which, I think, you would entirely agree : that outside the Cabinet and apart from those opposing the amendment, there is not a single parliamentarian of outstanding experience. The Treasurer, this afternoon, in support of the clause, Used a very pointed argument which, I think, operates much more strongly against it. He recalled those days when, prior to federation, men like the late Sir Frederick Holder, of South Australia, declined to make what afterwards was termed the Braddon clause a permanent part of the Constitution.
– They declined to have the per capita provision inserted in the Constitution.
– As the Treasurer has just observed, they declined to have inserted in the Constitution the provision for per capita payments.
Mr. Watt. ; They preferred a proportion of the Customs and excise revenue.
– It matters very little. The point I wish to make is that the gentlemen whose names have been mentioned in the debate were expressing a sentiment that was very strongly felt by the representatives of the several States. That was that, in handing over the Customs and excise revenue to the custody of the Parliament about to be created, the States were divesting themselves of their lives, in that they were giving up the means whereby they were to live. Naturally, in the circumstances, they acted with the utmost caution. From that day to this the States have never once finally lost their grip of their financial resources by agreeing to hand them over to the Commonwealth. The subject has never, . in our constitutional history, been a settled question. It is the only one that has not been so. What was it that eventually led to the acceptance of the Constitution? With infinite difficulty, after the Constitution Bill had been rejected, I will not say by a majority but by less than the required majority in New South Wales, the battle-cry, the appeal made from a thousand platforms, which eventually won even that recalcitrant State to the support of federation, was, “ Trust the Commonwealth Parliament.” If that appeal had not been harkened to and believed in by the people, federation would never have been put in constitutional form upon the statutebook. If that is so, as unquestionably it is, as a matter of history, should we not ask ourselves now what would have been the attitude of the framers of the Constitution, and of the electors to whom the appeal to trust the Commonwealth was made, if they had been gifted with sufficient prevision to be able to read history 27 years hence? What would have been their attitude had they known that 27 years later the Commonwealth would be declaring that, through its written instrument, it had acquired not only a constitutional, but also a moral right to take this issue entirely out of the hands of the States willy-nilly and dispose of the Customsrevenue, the means whereby the States were to live, without consulting them at all? We have been told, in the debate on- this bill, that the people are to bo consulted. I say that the manner in which that promise has been made is a greater -affront than if this Government had deliberately declared that the States were not to be consulted at all.
– It is an insult.
– I agree with theright honorable member for Balaclava. It is an insult. Elsewhere I represented the position as being that of the Prime Minister, in slippers by a comfortable fireside, expressing his willingness to discuss with the States the tenancy of . the apartment of which he was the occupant on the clear understanding that during the wintry nights he was to remain by the fireside whilst they sat upon the steps outside. That, I think, is a fair representation of the terms upon which this proposed conference is to take place. The other night the Treasurer told us that the conference would explore all avenues of settlement after the bill had been passed. “ W e invite the State Premiers,” he says, “ to come to us to make any suggestions that occur to them. We will harken to them all after this bill has been passed, and we will explore every avenue to- arrive at a fair settlement of this vexed question.” It was put to the Treasurer the other night, and I put it to him to-night before the measure passes, that since the abolition of the per capita payments is the most important subject of all in connexion with this bill, will it be one of the subjects for debate at the conference ?
– –Wot a hit of it.
– I have never had an answer to that question. I agree that the Treasurer cannot very well answer it for the reason that if it is one of the subjects to be discussed at the conference, to follow the passage of this bill, then there is no justification for the bill itself;, and if it is not to be discussed at the conference, then the Prime Minister and the Trearurer ure utterly disingenuous in. declaring that they wish to have a free and frank discussion with the rep i esentatives of the States upon this issue. Apparently they are determined to proceed to the conference with the dice loaded in their favour; or if I may use another illustration, they are determined not to engage in a tug-of-war with the Premiers unless they have a substantial length of rope on their side in the struggle. Remembering the slogan, “ Trust the Commonwealth Parliament “ ; remembering the infinite delicacy and difficulty of the subject, and remembering also what I have already said of some honorable members, somewhat facetiously I am afraid, and, ‘perhaps, a little offensively, but not intentionally so, because it is not an offence to certain members to say that if they vote with the Government on this issue, they are not giving effect to their individual opinions - is there one member of this Chamber who honestly believes that if this had come before us as a non-party measure it would have been carried? I have heard one member after another on the Government side of the House declare that others in the Ministerial corner had not played the game in failing to support the Prime Minister. We are told that they failed in their allegiance, and let the Prime Minister down. It is not argued that their action is wrong in principle, but that it is wrong on personal grounds. If the measure had been thrown into the arena of debate, and had been decided entirely on its merits, is there one member who can honestly say that it would have been carried? Even those honorable gentlemen who voted for the second reading would hardly have the hardihood to say that if the measure had been discussed in a free atmosphere it would have been carried. With our knowledge of the views of the States, and with the knowledge that the adoption of this scheme is going to be a very serious impediment in the way of much-needed constitutional reform, we should hesitate to place this measure on the statute-book. lt was a reason of that kind which compelled the honorable member for Wakefield (Mr. Poster) this afternoon to speak so feelingly on the matter, he being one of those who have been associated with the growth of the Commonwealth since its inception. Men like the honorable member feel that constitutional reform will be made more difficult, and bitterness, devastating to the prospects of constitutional reform, will be created between the Commonwealth and the States. When all is said and done, there are still in this parliament some wholehearted Australians. I remind the Government that when last year they appealed to us for constitutional reform the Leader and members of the party on this side, believing that the proposals then made were in large measure along lines they had previously advocated, and were nonparty in character, stood by the Prime Minister on those proposals, and took the risk of incurring a good deal of odium in other quarters for what they did. We took that stand because we believed in what was proposed, and considered that an Australian policy should be followed. It is but a poor reward we are given now when the Government proposes to carry this measure through against the obvious wishes of the House, and of the country, thus creating unnecessary bitterness without doing an ounce of useful service to any section of the people.
– I have listened with closeattention to practically the whole discussion on this bill. Speaking generally, one has to admit that the debatehas been of a very high standard, but I say with regret that there have been instances in which the spirit of f airplay has been lacking. Unfortunately, some of those who have had the temerity to support the Government, remained silent, owing very largely to the fact that so much of the time of the House has been occupied by those opposing the measure. The pages of Hansard, if referred to, will prove the correctness of that statement.
– They will not prove that that was the reason for the silence of some honorable members.
– I have listened tonight to certain statements made respecting the attitude of those supporting the Government. A good deal of feeling was shown by some honorable members in their denunciation of honorable members on this side for submitting to what they have termed “party discipline” and the “party Whip.”I take it that every member of the committee is aware that Whips are appointed by all political parties, and their duties are known.
– I rise to a point of order. Has what the honorable member is saying anything to do with the amendment?
The’ CHAIRMAN (Mr. Bayley).The right honorable member previously rose toa point of order, and argued with the Chair.
– I did not argue with the Chair.
– The right honorable member placed his view before the Chair that a certain honorable member should be allowed to continue his remarks even though he was making a second-reading speech. I ask the honorable member for Corio to confine his remarks more closely to the amendment. The honorable member has so far been replying to some statements made during the discussion upon the amendment.
– No, on the second reading.
– The honorable member said he was referring to statements made during the present debate. I presume he will later connect his remarks with the amendment.
– I am replying to certain statements made during the debate on the bill in committee.
– Who made them?
– I can refer to the honorable member for Capricornia (Mr. Forde) for one, and there were others who made similar statements. I was saying that honorable members know the duties of a Whip, and do not take exception to them. I speak quite frankly to-night, and say that I have not been approached by the Government Whip with regard to my vote on this measure, or by any member of the Government. Rut I have been approached by the Whip of the new party, the honorable member for Henty (Mr. Gullett). I was approached by him, and my attention drawn to the platform of the National Federation, to which I, with other honorable members, am supposed to subscribe.
– I rise to a point of order. Is the honorable member insinuating that I endeavoured to influence his vote on the question in any shape or form ?
– There is no point or order.
– The honorable member for Henty came to me deliberately, in the party room, with the National party platform in his hand.
– I pointed it out to the honorable member. It was really an act of kindness on my part.
– I am not saying that the honorable member had no right to do what he did. 1 do not say that the party Whip would have had no right to approach me, but that it is a fact that I was not approached by him. I make the statement deliberately. I voted as I did upon the measure, purely of my own volition, and with a full sense of responsibility for my vote. Some reference has also been made during the discussion to the violation of party pledges. As honorable members are aware, I am a member of the Victorian section of the
National Federation. The honorable member for Fawkner (Mr. Maxwell) made a reference to certain platform pledges. I propose to read a section of the report of the last conference of the National Federation. The conference was held on 21st, 22nd, and 23rd of September, 1926, or subsequent to the last Federal elections. I quote from page 12 of the report of the conference, some motions that were discussed at it -
Per Capita Payments.
When those motions came before the conference, Senator Pearce and the Hon. F. W. Eggleston, who were present, were invited to address the gathering. The report from which I am quoting goes on to say -
At the invitation of the conference, Senator the Eight Hon. G. F. Pearce and the Hon. P. W. Eggleston delivered addresses, explaining the views of the Federal and State Governments respectively, after which the above motions were debated.
The Wendouree branch amended its motion (a) to read, “ That this conference proposes that the per capita payments should not be discontinued “ - Rejected.
Motion (fc) and (c) were withdrawn, and the report proceeds -
A further amendment was then moved - “ That in the opinion of this conference there should be full consultation between Federal and State Governments before any action is taken with respect to the existing per capita payments.”
– That motion was carried.
– It was. I have read the whole of that part of the report, halving no desire to misrepresent the case in any way. What I wish to say now is that, in view of the experience of previous conferences with the States, the Prime Minister has recognized that any further conference to discuss this matter under existing conditions would be abortive.
– So he abandoned the platform and left all his supporters in the lurch.
– I repeat that the conference was held in September, 1926.
– In any case, that is not materia], because we went to the country when the original plank was in the platform, and it is upon that we were elected.
– In my opinion, the Prime Minister has done the only thing he could possibly do to bring about a settlement of this question. The honorable member for Batman (Mr. Brennan) said, a few nights ago, that the Commonwealth and the States would go into conference with the dice loaded iti favour of the Commonwealth. But I think the boot is on the other foot. If this bill is not passed, the States will go into conference with the Commonwealth having within their grasp an absolute certainty, knowing that they will still retain the per capita payments even if the conference should prove abortive. Several honorable members have said that the Government has no mandate for the introduction of this legislation, but has there never been legislation introduced, even measures of great importance, without a previous mandate?
– That is not the question. The Prime Minister says that, in bringing in this bill, he is carrying out a policy enunciated in his policy speech.
– Honorable members may recollect that a very important bill was passed in this House -without very much opposition, except for that offered by the honorable member for Fawkner, and a few others, and the Government of the day certainly had no mandate for its introduction. I refer to what is known as the “ salary grab.” There was no mandate from the people for the introduction of that bill, yet, to-day, there seems to be a demand that there should be a definite pronouncement by the people before the bill which is now before us is even discussed. *
– Does the honorable member suggest that there was a mandate for bringing in this bill?
– The Prime Minister made very direct reference to it in his policy speech.
– But does the honorable member contend that it amounted to a mandate?
– In view of all the circumstances, I think the Prime Minister has a perfectly legitimate right to bring down this proposal, and I shall stand by him.
– As I have already made a secondreading speech, it is not my intention to make another, particularly as honorable members in committee have already fully traversed and retraversed the whole of the ground; but one or two points have been raised today, which, as a member of the much abused Country party, I feel it my duty to answer. We have heard a great deal of wailing from the honorable’ member for Swan (Mr. Gregory), and the honorable member for Forrest (Mr. Prowse), both of whom belong to the party with which I am associated. The burden of their plaint is that this measure should be deferred until after the next general election. As a matter of fact, the debate seems to have degenerated into an undignified squeal on the part of the malcontents, who are endeavouring to defeat the bill, and on the part of the Labour party, who have been greatly encouraged in their opposition by the defections from this side of the chamber. I would remind the two honorable members, who seem to be opposed to the views of their fellow Country party members on almost every important issue, that if they want a mandate on this question, they will get it at the next general election. I cannot understand why they are so very much concerned about not having had it fifteen months ago. They have only to wait another eighteen months or so to get a fresh mandate. It is a deadly insult to the intelligence and courage of honorable members supporting the Government to hold us up as whipped curs, who are obliged to follow at the heels of our leaders, and to say that we have no minds or courage of our own, that we have not studied the bill, and that we are simply flogged into action by the party Whip.
– The honorable member has described the position much better than we have done.
– We ought at least to be given credit for having as much intelligence, if not as much experience, as’ some honorable members who are opposing the bill, and credit, also, for having the courage to vote for it despite the awful prospect, which, according to some opponents of the bill, will confront us in placing this matter before the people. The right honorable member for North Sydney (Mr. Hughes) was good enough to say that most of those who supported the bill would be severely punished - he did not indicate in what way - but I think it says a good deal for our faith in the bill that we are prepared to risk our seats in supporting it. The Government is not waiting until immediately after an election to pass an important bill of this kind, giving the people two- or three years in which to forget it. It is submitting its proposal at a time when the States will have twelve months in which to set their houses in order, after which only a few months will remain before we must go to the people to answer for our sins, if sins we have committed, and meet the awful fate said to be hanging over us. I think we ought to be given credit for taking the risk.
– Our personal fate is unimportant; it is the fate of the country that is important.
– I admit that the fate of an honorable member is unimportant compared with the fate of something; that affects the whole of the people; but when a majority of honorable members on the Government side is solidly in favour of the bill and is not deterred by the threats and taunts of those who oppose it, I think it deserves a little more credit than is usually given in such cases. We all have the greatest admiration for the right honorable member for North Sydney, despite the fact that his views are so often contrary to those of the Government. The other night we beard him explain that the per capita payments were the very lifeblood of the States, and that they were embodied in some kind of sacred agreement, to break which would involve the country in unforeseen terrors and dangers. Not long ago the right honorable gentleman held a very different opinion. At a conference with the Premiers of the States in 1920 he made the following statement: -
In all the circumstances, since the’ money comes out of the pocket of the taxpayer, whether in State or Commonwealth, I cannot see my way to say that the per capita payment shall continue. We shall hear all you have to say, hut the position we take up now is, in view of what has been said, and the attitude of the States in regard to the referendum, and in regard to the expenditure of public money, and ‘the offer by the Commonwealth to commit itself to an expenditure of very many millions - £4,800,000 for the railway gauge, and one-quarter of the increased expenditure on the Murray waters ‘scheme, or not less than £8,000,000 - that wo cannot continue the per capita payment.
Wo know that he has attempted to explain away that statement, but it does no harm to remind honorable members who so often change their views of the fact that they have made these changes, and to plead for a little wider discretion for others. If it is permissible for distinguished politicians like the right honorable member to make such drastic alterations in their attitude, it is surely permissible for those who are more consistent to claim any credit that is their due.
– What was the tariff revenue in 1920? It was £17,000,000 then as against £40,000,000 to-day.
– I should like to remind the honorable member . for Swan that his attitude towards the tariff is quite the opposite of that of the Labour party he is supporting to-day. It has been repeatedly asserted by honorable members of the Labour party that their policy is high protection, amounting even to the prohibition of importations. In reply to a question submitted by me the honorable member for Capricornia (Mr. Forde) said that if the Labour party was returned to power it would so increase the tariff as to make it sufficiently protective if not prohibitive in its incidence. The honorable members for Swan and Forrest are both low tariffists, if not free traders. They are, therefore, supporting the attitude of the Labour party on this occasion from an entirely different motive from that which actuates the Opposition. If honor able members opposite regard the bill as dangerous to their high protective or prohibitive tariff policy, there is every reason why the two honorable members I have named should support the bill. They claim that the States will be deprived of money they require for their railways and for education.Other members of the Country party know the needs of the States as well as these two honorable members, particularly in regard to the provision of facilities for education. We also know, that evan now the States cannot meet their railway requirements. Most of them have ceased to build developmental railways, despite the fact that they still retain the per capita payments, and enjoy, not only the privilege of borrowing as much as they like, but also inflated revenues.
– Does the honorable member claim .that the States have inflated revenues ?
– If the honorable member will study the figures he will see that the revenues of the States have enormously increased during the last fifteen years.
– And at the same time their liabilities have increased four or five times over.
– On the second reading I quoted figures to show that the increase in the expenditure of the States from revenue and loan funds was enormously out of proportion to the increase in population. The right honorable member for Balaclava (Mr. Watt) declared that, if this bill were agreed to, the State of Victoria would become bankrupt. According to the latest statistics available, Victoria is collecting in general revenue, exclusive of railway receipts, £6 ls. 7d. per head; South Australia, £7 12s. 10d.; Queeusland, £9 ls. 7d. ; Western Australia, £10 8s. lid. In direct taxation Victoria receives £2 18s. 2d.; ‘Western Australia, £3 9s. 7d.; South Australia, £4 53. Id.; and Queensland, £4 13s. 9d. In other words, Victoria’ collects in general revenue £3 per head less than Queensland, and £4 7s. 4d. less than Western Australia, and in direct taxation £1 15s. 7d. less than Queensland. If the State of Victoria taxed its people as heavily as does Queensland, it would have a surplus of £3,000,000, so that, even after the per capita payments are withdrawn, it will still be far removed from insolvency. The statement that the Government has not a mandate to proceed with this bill does not make a strong appeal to honorable members who are supporting the Ministry. The amendment is based upon the contention that the Government, not having a mandate, should go to the people to get one. Do honorable members believe that, if the discontinuance of the per capita payments were submitted to the people as a separate and distinct issue, they would give serious consideration to it ? We have heard a lot of the decision of the people upon the referendum in 1910, when the Labour party was returned with a majority in this chamber. Honorable members must realize that the financial issue played an insignificant part in that campaign. The real issue was Labour or anti-Labour.
Mr.Theodore. - The financial issue was distinct.
– Yes, but it played only a minor part in the election.
– The financial issue was the subject of a separate referendum.
– Yes, but the votes of the people were influenced by their attitude towards the rival parties in the field. And exactly the same thing would occur again if the amendment were agreed to and this issue were submitted to the people in 1928. The Labour party would not fight the election on that issue alone; it would not drop its child-endowment proposal and the many other features of its policy in order to get a clear-cut vote on the per capita payments alone. That would be merely one of many issues which would be obscured by the larger issue of Labour versus the Nationalist and Country parties. The division taken on the second reading of this bill showed that the forces which are supporting a bigger national future for the Commonwealth are quite secure in this chamber, and that there is in this Parliament a healthy trend, which I think will be reflected in the country, to make the Commonwealth not only supreme in the financial sphere, but sovereign throughout Australia in respect of all matters.
Question - That the words proposed to be inserted be so inserted (Mr. Gregory’s amendment) - put. The committee divided.
Majority . . . . 7
Question so resolved in the negative.
Amendment (by Dr. Earle Page) agreed to -
That the word “ twenty-seven “ be inserted.
Clause, as amended, agreed to.
Clause 3 - (Payment to the States).
– I invite the committee to negative this clause. Originally, provision was made in the schedule for compensating payments. The necessity for that provision has disappeared owing to the fact that payments equivalent to the per capita payments are to be made to the States next year.
Clause 4 -
In addition to the payments made under the last preceding section to the State of Western Australia, there shall be payable to that State, in equal monthly instalments, during the period of five years commencing on the first day of July, One thousand nine hundred and twentysix, the sum of Three hundred thousand pounds per annum.
Clause consequentially amended.
Br. EARLE PAGE (Cowper- Treasurer) ‘[9.44]. - I move -
That the following sub-clause be inserted: -
All sums paid to the State of Western Australia during the period from the first day of July, One thousand nine hundred and twenty-six, to the thirtieth day of June, One thousand nine hundred and twenty-seven, in pursuance of section five of the Surplus Revenue Act 1910, shall be deemed to have been payments made to that State in fulfilment of the obligations of the Commonwealth to that State under sub-section (1) of this section in respect of that period.
The object of the addition is to provide that instead of the payment to Western Australia continually being reduced each year, it will remain constant for five years.
.- Regarding this clause and the subsequent one affecting Tasmania, it is evident that the provision was placed in the bill for the purpose of inducing the members representing those two States to support the measure. When we consider that we already have two acts of Parliament providing for the grants to both those States, it is obvious that there was no necessity to include clauses 4 and 5 in the bill. In view of these two clauses honorable members representing Western Australia and Tasmania would hardly vote against the bill for fear of jeopardizing the grants. As we have two acts of Parliament covering those grants, they could easily have been left out of the bill and so allowed those honorable members to give an untrammelled vote without fear of penalizing their States. These clauses are designed to have a similar effect in another place, because they will restrict the votes of members who are elected to look after the interests of their States.
– In reply to the suggestion of the Leader of the Opposition (Mr. Charlton) that an attempt has been made by improper means to influence honorable members of this Parliament in casting their votes, I would remind the committee that the Government made it perfectly clear that it was prepared to make these grants to the States of Western Australia and Tasmania. It is equally clear that the Government included these provisions in the bill as part of the general scheme, without any desire to influence the vote of honorable members. It would not make the slightest difference to these grants even if the measure were not. carried. I think that both the States know that after inquiries were held respecting their financial disabilities I pledged my word to give them assistance; and even if this Government were not now in office we should undoubtedly take every step possible to carry out that pledge. I certainly think that it is quite improper to suggest that honorable members of this Parliament were influenced by the inclusion of this clause in exercising their vote on the bill.
.- I would point out to the committee that what the Prime Minister says is not correct. It was not perfectly clear - to use his own words - that these special grants to Western Australia and Tasmania were something entirely apart from this measure and this proposition. If honorable members will cast their minds back to the second-reading speech of the Treasurer (Dr. Earle Page) last year and to the schedule that he presented then to this Parliament, they will know that he declared that under the proposed arrangement for the withdrawal of the per capita payments the States would benefit to the extent of £1,500,000, and that that sum was made up by adding the special grants to Western Australia and Tasmania; so that the point taken by the Leader of the Opposition is a good one. The bait was held out to the . ‘States that they were to benefit under the proposed schedule and under the new arrangement to the extent of £1,500,000, whereas, as a matter of fact, special grants to Western Australia and Tasmania of something like £800,000 had already been agreed to by this House without one dissentient. . The Prime Minister’s statement is misleading, because it is contrary to the Treasurer’s remarks respecting the schedule. It is rather late in the day for the Prime Minister to tell us that the special grants were not included in the bill as an inducement to the States to accept the scheme that the Treasurer originally brought down.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 5, consequentially amended and agreed to.
Clause 6 -
In addition to any payments made under the last three preceding sections, the Treasurer shall pay to the several States, m proportion to the number of their people, any surplus revenue in his hands at the close of each financial year.
Clause consequentially amended.
.- The Treasurer was not very definite on the necessity for the continuance of this farce about handing over surplus revenues to the States. 1 take it that this clause is necessary on account of section 94 of the Constitution. That section provides for the distribution among the States of surplus revenues, but, to me, it does not appear to be mandatory. It seems to me to be optional upon the Commonwealth to hand over to the States certain surplus revenues. In any case, since 190’S, no surplus revenues have been handed over. The High Court in that year gave a ruling which endorses the action of the Commonwealth Treasurer in retaining surplus revenue under the device that is now resorted to. I am not making a plea that the surplus revenue should be handed to the States. That would be ridiculous. The original provision was impracticable. In fact, it has never been carried out, and the fact that the States have never prosecuted any claim they may, morally, have had against the Treasurer, shows that it is unworkable, and should be ended. I certainly object to the continuance of the farce. Here is a solemn obligation proposed to be re-enacted by the Federal Parliament, that certain surplus revenues shall, at the close of the financial year, be distributed amongst the States.
– -Surplus revenues that do not exist.
– There is no intention whatever, whether the surplus revenues at the end of certain years be real or technical, to hand them over to the States. There has recently been a succession of surpluses. Last year there was in the Commonwealth accounts a technical deficit, b t the Auditor-General showed it was really a surplus. In his report, which was presented to Parliament a few days ago, he says -
The Surplus Revenue Act of 1910 provides that any surplus revenue is to be distributed amongst the States. In practice, no surplus is shown in the Consolidated Revenue’ Fund at the end of the financial year, because any remaining credit is transferred to the trust fund under authority of appropriations made by Parliament. It is thus available for expenditure when required.
The Auditor-General criticizes this practice. He states that the disposition of these balances shows charges against the Consolidated Revenue, but does not disclose actual disbursements. We know that that is a fact. The Treasurer when he sees an apparent surplus takes the opportunity of using appropriations of Parliament to transfer to trust funds moneys which are not actually distributed, and which may not be required possibly for a year or two afterwards. This practice is adopted so that the transaction may be made in accordance with the Audit Act, and it effectively disposes of surpluses which could otherwise be claimed by the States under the Constitution. That has evidently been the reason for inserting this clause in the bill. I should like the Treasurer to say whether there has been any definite legal advice as to whether section 94 of the Constitution is mandatory.
– Section 94 of the Constitution is regarded by the Crown Law officers as being mandatory, and it is therefore essential that there should be in the statutes of the Commonwealth some definition regarding what shall be done with any surplus revenues, otherwise the States would be able to apply to the High Court for a declaration as to the manner in which those moneys should be distributed All honorable members will agree that the proper authority to decide the way in which surpluses should be distributed is the Commonwealth Par- liament. Accordingly, this clause has been inserted in the bill. In the Surplus Revenue Act of 1910, which deal with surplus revenues and the per capita payments, a similar provision with the exception of a slight alteration in the verbiage was made.
– Does the Crown Law Office regard this clause as a technical safeguard ?
– I have been reading this clause, in the light of the speeches of the Prime Minister and of the Treasurer. I am under the impression that a big mistake has been made in the drafting of the clause. On the second line of the clause after the word “ shall “ the important word “ not “ has been omitted. A certain gentleman at one time said that he could make a few slight alterations to the Ten Commandments by taking out all the “ nots.” I certainly think that a big alteration could be made to this clause by putting in the word “not.” I would not say that I should approve of such an alteration, but the Government having been so successful in its tactics, may very well bo able to draft the clause as it likes. I ask the Prime Minister to read the clause. He has said that the handing over of moneys by the Commonwealth to the States is a vicious principle, iniquitous and wrong, yet in this clause the Government is incorporating that principle. Then, again, the Prime Minister has said that it is inequitable to distribute moneys on a per capita basis. I maintain that these words “shall pay to the States in proportion to the number of their people “ sounds very much like a per capita payment.
– I suggest that after the words “ surplus revenue “ the words “ if any “ be inserted. Then the fiction would be revealed.
– The better amendment would be to put in brackets “We do not mean this.” I have listened for days to the expounding of this great “principle, and just as the committee has become impressed - I have not - with the idea that it is a vicious principle for the Commonwealth to collect money for the States to spend, we reach clause 6, which says that 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.” Notice that it says he “ shall “ do it.
– Are not the Government consistent?
– They are consistent only in their inconsistency. We have had as many variations in the performance by the Government as we expect at a theatrical variety show. In a friendly way, I suggest to the Treasurer that he has not had the clause correctly drafted. It suits me; but I doubt whether it suits the Government.
Amendment (by Dr. Earle Page) agreed to -
That the following sub-clause be added : - “(2.) For the purposes of this section, the number of the people of a State shall be deemed to be the number as ascertained according to the laws of the Commonwealth by the Commonwealth Statistician as at the thirty-first day of December in the financial year in respect of which a payment under this section is to be made to that State.”.
Clause, as amended, agreed to.
Clause 7 - (1.) The Treasurer may advance to any State, in anticipation of the collection of revenue by that State, such amounts as he thinks fit. (2.) Any advance made under this section may lie made free of interest, and shall be made on the condition that it shall be repaid not later than the thirtieth day of June in the financial year in which it is made.
– I ask the committee to negative the clause, with a view to the substitution of another. The schedule refers to amounts which correspond roughly to the per capita payments as well as we can determine them ahead. They are fixed amounts arbitrarily based on the increase of population in preceding years. It will be noticed that the proposed new clause commences, “ Subject to the terms of any agreement.” These payments are being made so as to permit the bringing into operation of any other scheme adopted at a conference with the States, subject to the approval of this Parliament.
– If the schedule is approved and clause 7 altered as proposed, will these be special appropriations until cancelled?
– For one year.
– Or subject to agreement.
Motion (by Dr. Earle Page) agreed to-
That the following new clause be inserted: - “ 7. Subject to the terms of any agreement made between the Commonwealth and all the States, and adopted by the Parliament, the Treasurer shall, during the financial year commencing on the first day of July, One thousand nine hundred and twenty-seven, make payments to each State, in equal monthly instalments, to the amount specified in the schedule, opposite to the name of that State.”
Clause 8 verbally amended, and agreed to.
Clause 9 agreed to.
.- When this bill was before the House last year I tabled a notice of amendment stipulating that if the per capita payments were abolished the States should be relieved of a proportionate amount of State debts. I intended to move it because it appeared to me that the connexion between the per capita grant and State debts has existed as a moral obligation on the Commonwealth since the passing of the Surplus Revenue Act of 1910. It seemed to me that the least this Parliament could do was to give what I regard as honorable compensation to the States for depriving them of the per capita grants. The majority of the committee has decided otherwise. In the circumstances, after the long debate that has taken place, and because of the view of the majority of the Government’s supporters, I feel that it would be only an infliction upon the committee for me to prolong what has already been a protracted debate. I still believe in this principle; but it is obviously useless for me to proceed with the amendment. I know when to give way before the pressure of superior forces, which are used without regard to the opinion of the public. Having entered that protest, I shall not move the amendment.
Schedule negatived, and (on motion by Dr. Earle Page) the following new schedule inserted -
Title agreed to.
Bill reported with amendments; report adopted.
Motion (by Dr. Earle Page)-
That the bill be now read a third time - put. The House divided.
Majority . . . . 9
Question so resolved in the affirmative.
Bill read a third time.
Communications with Tasmania.
– I move-
Thai the House do now adjourn. 1 take this opportunity of informing honorable members that the subject of communications between Tasmania and the main land of Australia, has been referred by the Government tothe Joint Committee of Public Accounts for consideration and report. Numerous representations have been made to the Government during the last few weeks by members of both branches of the legislature with regard to the necessity for a full inquiry into that matter, and I have communicated with the chairman of the committee, asking that the investigation be made.
Question resolved in the affirmative.
House adjourned at 10.18 p.m.
Cite as: Australia, House of Representatives, Debates, 14 March 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19270314_reps_10_115/>.