10th Parliament · 1st Session
Mr.Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m., and read prayers.
– In view of the danger of slipping on the polished floor of King’s Hall, will you, Mr. Speaker, grant permission to the staff, permanent and non-permanent, to wear rubber soled shoes?
– I shalllook into the matter and let the honorable member have an answer.
– I ask the Prime Minister whether it is a fact that the Australian submarines Otway and Oxley are held up at. Malta owing to certain defects which have been discovered since the vessels left England? What is the nature of such defects? What time will be required to repair them? What will be the approximate cost of the repairs to the Commonwealth, and who will be held responsible for the expense?
– The two vessels mentioned by the honorable member have been held up at Malta owing to certain defects which were discovered during the voyage from Great Britain. I have no definite information as to the nature of the defects, but I understand that they are in the columns supporting the engines. I cannot say what time will be occupied in repairing the . vessels, but it is anticipated that the work can he carried out at the dockyard at Malta. It . is impossible to state even approximately the additional cost that will be involved, but I have no doubt that the responsibility for it will fall upon the contractors, and that the Commonwealth will not he involved in any extra expense.
– As a con siderable time has passed since the Prime Minister made any general statement to the House on foreign, affairs, will he, before the House adjourns over Easter, make such a statement, giving some official information with regard to recent differences of opinion between certain Central and Eastern European nations, the present position in China, and the Tangier question?
– I shall give consideration to the honorable member’s suggestion, and if an opportunity presents itself I shall make a statement to the House.
– Early in the session the Postmaster-General informed the House that increased allowances would be paid to those in charge of unofficial post offices. Will the honorable gentleman ascertain if the increase has been paid in South Australia? If it has not, will he see that it is paid?
– The increase is being paid and is retrospective for twelve months.
– A statement recently appeared in the Queensland press that the Premier of that State had decided to start work on the Queensland section of the Kyogle to South Brisbane Railway in order to give employment to about 300 men. Will the Prime Minister suggest to the Premier of New South Wales the resumption of construction work on the section of the railway in that State, thus assisting to absorb hundreds of the unemployed?
Mr.BRUCE.- The loan expenditure of the Commonwealth and the States is governed by the amount of money which the Loan Council decides can be economically raised in any year. The work now being undertaken in Queensland in connexion . with the Kyogle to South BrisbaneRailway is being financed from moneys which the Premier of Queensland is able to make available for that purpose from the amount of loan funds allocated to his State. The work is being undertaken with the concurrence of the Commonwealth and the State of New South Wales. It is for the Premier of New South Wales to determine how he shall dispose of the money that is available for his State from the funds raised by the Loan Council this year.
– When does the AttorneyGeneral propose to introduce a bill to amend the Workmen’s Compensation Act in accordance with the promise he made last year?
– An. amending bill has been drafted, and will be introduced at the earliest opportunity.
– Will the AttorneyGeneral at the same- time consider the need for amending the Seamen’s Compensation Act, which is hopelessly out of date?
– Consideration will be given to that matter.
– Has the- Minister for
Home and Territories seen the statement published in to-day’s newspapers that certain lessees of building blocks in Canberra are forfeiting their leases? What reasons, if any, have been given for this action ?
– I have seen the statement. If the honorable member will place his question upon the noticepaper, I shall obtain for him. the information he desires.
asked the Minister for Markets, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Markets, upon notice -
When it is intended to take the poll to decide whether the Pearl-shell-Overseas Marketing Act 1927 shall bo brought into operation?
Mr.PETERSON.- It was considered advisable to postpone the taking of the poll for the reason, that advice was received that contracts had been completed for the purchase from the pearlers of practically the whole of the 1928 output of shell. It is felt that the expense, trouble, and labour entailed in the taking of a poll are not at present justified if arrangements have already been made by pearlers for the sale of their product for a definite period of years. It is proposed to further consider the whole position after the organizations ofpearlers have been consulted with regard to the’ arrangements actually made for the sale of the output of pearlshell, of this and future years.
asked the Minister for
Works andRailways, upon notice -
– The answers to the honorable member’s questions are as follow : -
Assuming funds were available for all applications on hand, the commission could not complete them during the present year, for the following reasons: -
Apart from the question of availability of funds, the commission must watch closely the labour and material market. One result which follows from placing more work on the market than it can conveniently carry out is an immediate rise in the cost in consequence of the increased demand.
asked the Minister for
Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow: - 1.. The tabulation of these particulars would involve considerable expenditure of time and labour. The information is available in my department, and I shall be pleased to allow the honorable member free access to it.
Statement of Prime Minister of South Africa
asked the Prime Minister, upon notice -
Whether the published statement attributed to the -Prime Minister of South Africa that - “ Every dominion, in the event of Britain being at war, had the right to remain neutral and have its neutrality recognized, by belligerents. Similarly, if a dominion declared war it would not necessarily involve Britain,” is a correct interpretation of the statement on inter-Imperial relationships issued by the last Imperial Conference, and, if so, does the Prime Minister subscribe to this new doctrine?
– In view of the importance of the issue raised in the alleged statement of the Prime Minister of South Africa, I am not prepared to make any comment upon it without authentic information as to any such statement having been made, and without seeing the context in which the alleged words were used. The report of the Imperial conference, on inter-ImperialRelations, in dealing with foreign policy, states that “ the governing consideration underlying all discussions of this problem must be that neither Great Britain nor the dominions could be committed to the acceptance of active obligations except vsith the definite assent of their own Governments.” The report also states that the instrument of the British Commonwealth of Nations is free co-operation, and that “ every dominion is now, and must always remain, the sole judge of the nature and extent of its co-operation.” It is also stated that any Government of the Empire must “before taking any step which might involve the other Governments in any active obligations, obtain their definite assent.” The report further contains provisions for consultation before action is taken in the sphere of foreign policy. The report is based upon the principle of the unity of the Commonwealth of British Nations under the Crown, and that when His Majesty the King is at war all parts of the Empire are involved, although it would be for the Parliament of each self-governing part of the Empire to determine what, if any, active participation it should undertake.
asked the Minister for
Trade and Customs, upon notice -
– The desired information is not available from Commonwealth sources, but inquiries are being made to ascertain whether the information asked for is obtainable from the State authorities.
Lay-out of City.
asked the Minister for Home and Territories,’ upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Prime Minister, upon notice -
Whether he will inform the House what steps he has taken to prevent the exploitation of Australian importers and exporters by foreign and British ship-owners in the event of the Commonwealth Shipping Line beingdisposed of?
– The conditions of tender for the purchase of the Australian Commonwealth Shipping Line provided that- tenders should include an undertaking to enter into an agreement and provide satisfactory guarantee or security to conduct with the existing fleet and/or other vessels of at least equal size, speed and class, and with at least equal accommodation for passengers . and refrigerated and other cargo for a period of not less than ten years, a minimum service equivalent to that provided by the Line between Australia and Great Britain at present, viz., at least eighteen round voyages per annum. It was further provided that preference would be given to offers containing proposals for safeguarding the interests of Australian exporters and importers in regard to freight rates.
German Developmental Project
asked the Prime Minister, upon notice -
– The replies to the honorable member’s questions are as follow : -
-Recently the honorable member forReid (Mr. Coleman) asked the following questions, upon notice -
I am now in a position to supply the following information : -
Kerbing and Guttering Charges
– On Thursday last, in reply to a question without notice asked by the honorable member for Herbert (Dr. Nott), I promised to make a statement on the subject of the charges imposed upon lessees in Canberra in respect of kerbing and guttering. I now ask for leave to do so. (Leave granted.) Exception to these charges has been taken by a. number of lessees, on the ground that an official announcement was made at the first auction sale of leases at Canberra, on the 12th December, 1924, to the effect that the cost of kerbing and guttering had been included in the upset prices placed on the land offered at that sale. The question was officially raised in a communication recently addressed to my department, and signed by nine lessees. It contained the following statement: -
We, the undersigned, beg to draw the Minister’s attention to the official announcement made by Colonel J. H. T. Goodwin from the rostrum on the date of the sale of the first leases, 12th December, 1924. In answer to a question by one of the prospective purchasers, an announcement was made that the roads, footpaths and kerbing and guttering would be carried out by the Government, without cost to the purchaser, as the cost of such had been taken into account when fixing the reserve values of the respective blocks.
Honorable members will observe (1) that the announcement is said to have been made by Colonel Goodwin; and (2) that it is further said to have been intimated that the cost, not only of kerbing and guttering, but also of footpaths, had been taken into account when fixing the reserve values . or upset prices, and that that work would be carried out by the Government. I may explain that the inclusion in the upset prices of the cost of roadmaking is not in dispute, and that I do not propose to make any mention of that matter, except by way of incidental reference. When I received the communication from which I have quoted, I determined to sift the whole matter as thoroughly as possible in order to satisfy myself as to the. facts. I am now in possession of a report by the Chief Commissioner of the Federal Capital Commission, and also of a number of statutory declarations and statements by persons in a position to furnish evidence of what took place at the sale. The Commission itself had nothing whatever to do with the sale, as it did not enter upon its statutory duties until the 1st January, 1925. Honorable members, I feel sure, will agree with me that the evidence to which the greatest weight should be attached is that which is’ obtainable from the accredited representatives of the Government at the sale, namely, the auctioneer, Mr. Crammond, who conducted the sale, and the administrative representative of the Government, Colonel Goodwin. On the 7th March, 1928, Mr. Crammond wrote to the Chief Commissioner as follows: -
Referring to your telephone conversation with me this afternoon, any statements in my opening remarks at the sale of the Canberra leaseholds, held on 12th December, 1924. should be recorded, and be amongst your records, as there was a shorthand writer taking notes, a proof of which transcript was sent to me prior to its being published. I certainly said that roads would be formed to the undeveloped portions of the subdivisions sold, but the question of kerbing and guttering was never mentioned.
For Richardson & Wrench. Ltd. (Sgd. ) C. H. Crammond
On the following day, Mr. Crammond sent a telegram to the Chief Commissioner in these terms -
Referring to conversation per ‘phone and my letter to you yesterday’s date. Have searched all records in connexion with sale, including transcript of my remarks as reported in Sydney Morning Herald, 13th December, 1924, which confirms my statement that no reference was made to kerbing and guttering. I had no idea of Commission’s intention, and had no instructions.
Mr. Crammond’s ‘ statement that the subject of kerbing and guttering was not mentioned at the sale is definite and unequivocal, and is entitled to respect, because of his having taken the precaution of refreshing his memory by a search of his records of what occurred, including the transcript of his remarks for publication in the press. In corroboration of Mr. Crammond’s version of the matter, I have received, through the Chief Commissioner -
I, John Thomas Hill Goodwin, of Braddon, in the Territory for the Seat of Government, grassier, do solemnly and sincerely declare -
That I was present at the auction sale of leases in the Territory for the Seat of Government, held at Canberra on the 12th day of December, 1924.
That in my capacity of Surveyor-General of the Commonwealth, and Director of Lands, and administrative representative of the Commonwealth Government at Canberra, I gave the auctioneer authority to announce, in reply to a question asked by a person attending the sale, that the upset prices placed on the lands of which leases were being offered for sale at the auction included the cost of the kerbing and guttering of the footpaths adjoining the said lands, and that the auctioneer made an announcement accordingly.
That, to the best of my knowledge and belief, the basis of my valuations was fully explained to the then Minister for Home and Territories, before the upset prices were approved by the Commonwealth Government.
When discussing the terms of the declaration with the secretary of my department, Colonel Goodwin stated1 expressly that the announcement said to have been. made upon his authority did not intimate that the cost of footpaths had been included in the upset prices, and he thus narrowed the issue to one of whether there was an announcement by the auctioneer respecting the cost of kerbing and guttering. Unlike Mr. Crammond, however, Colonel Goodwin does not appear to have taken steps to refresh his memory of the events of the sale before making his declaration, as I shall proceed to show. Colonel Goodwin’s declaration was referred to the Chief Commissioner, who, very properly, ordered a thorough examination to be made of the files which had been under the control of Colonel Goodwin, when SurveyorGeneral, prior to the sale, and also of the commission’s files subsequent to the sale. Whilst this examination has failed to disclose any trace of the calculations made by Colonel Goodwin when fixing the upset prices, or any explanation of his figures, it has revealed some highly important evidence as to what was in Colonel Goodwin’s mind, immediately after the sale, on the question of charging lessees with portion of the cost of kerbing and ‘ guttering. On the 28th March, 1925, a memorandum in the following terms was sent to Colonel Goodwin and other officers of the commission -
Will you please note that at its last meeting the commission resolved that lessees be required to pay half-cost of the formation of roads and footpaths, including kerbing and guttering, in front of properties leased by them.
This does not include the cost of any plantation or parking, the whole cost of which will be borne by the commission. (Signed) C. S. Daley. 28/3/25. Acting Secretary.
The inclusion of the references to roads, I am informed, was due to an error on the part of an officer when noting the resolution of the Commission. This memorandum evoked a reply from Colonel Goodwin, dated 30th March, 1925, which reads as follows: -
With reference to your memorandum of the 28th inst., advising me that the Commission resolved that lessees be required to pay half-cost of the formation of roads and footpaths, including kerbing and guttering in front of properties leased by them, I desire to inform you that in making valuations it was considered that the formation of roads, into a state similar to National-avenue, would not be a charge against the lessee, otherwise the valuations would have been lower.
The matter of forming a footpath and kerbing and guttering is quite another matter ; but under the circumstances I do not think that the cost of bringing the road into a state similar to National-avenue should be a charge against the lessee. In fact, purchasers were given to understand at the sale that there would be no charge for road formation.
When Colonel Goodwin wrote this report, barely three months had elapsed since the date of the sale, and the facts should have been fresh in his memory. Nevertheless, the report shows that, at that time, it was very definitely and clearly fixed in his mind that there was a distinction between roads - certain expenses in connexion with which were to be borne by the Government - and kerbing and gutter– ing, which he described as “ quite another matter.” If, just three months earlier, he had caused an official announcement to be made that kerbing and guttering costs would not be charged against lessees, it is inconceivable that he should have remained silent on the point, and allowed a different view to prevail. The only reasonable conclusion to which 1 can come is that he did not cause such an announcement to be made, and that the declaration made by him three and a quarter years after the sale indicates that his present recollection of what occurred is seriously at fault. Nine other declarations have been submitted in support of the statement that an official assurance of immunity from kerbing and guttering charges was given at the sale. Two of these were made by one person, namely, Mr. John Deans, company director, of Canberra. In the first of these, Mr. Deans declares as follows : -
I, John Deans, of Canberra, in the Territory for the Seat of Government, company director, do solemnly mid sincerely declare: -
That I was present at the auction sale of leases in the Territory for the Seat of Government held at Canberra on the 12th day of December, 1924.
That I was standing close to Joseph Daniels, who asked a question during the sale of the Eastlake residential blocks. The question was asked in the following manner: -
The auctioneer was describing the large frontages, and Daniels said, “What about the kerbing and guttering?” The auctioneer turned towards Colonel Goodwin, who was also standing on the rostrum, and Colonel Goodwin stated that the reserve values of the land included the cost of roads, footpaths, kerbs and gutters, and these would be carried out without cost to the purchaser.
That I have purchased a large number of residential blocks at each subsequent sale, and that no question was raised at these sales, nor any statement made in variance with the statement made at the first sale of leases on the 12th day of December, 1924.
As this declaration specifically named the person whose question was alleged to have called forth the official announcement which is said to have been made, I inquired why there had been no supporting declaration by that person. The reply T received was that it was not possible to produce such a declaration, as, unfortunately, Mr. Daniels had died about eighteen months ago. Mr. Deans’ second declaration is in the following terms: -
I, John Deans, of Canberra, in the Territory for the Seat of Government, company director, do solemnly and sincerely declare -
That I am one of a number of persons responsible for organizing a petition to the Minister for Home and Territories in reference to a statement made at the first sale of leases on the 12th day of December, 1924.
That on the Oth day of March I interviewed William George Woodger, one of the auctioneers at the sale, who authorized me to advise Sir John Butters that he was prepared to make a statement to the following effect: -
His recollection of the happening at the sale in connexion with the development of the frontages to the allotments, i.e., the footways, roadways, &c, was. that, probably in reply to a question, it was im- plied that purchasers would not be put to any expense in that connexion.
In consequence of this authority, I telephoned Sir John Butters on the morning of Wednesday, the 7th instant, to the above effect.
Upon receiving this declaration, I asked the Federal Capital Commission to endeavour to obtain an independent declaration from Mi1. Woodger himself. Mr. Woodger subsequently made a declaration in the following words : -
I, William George Woodger, of Canberra, agent, do solemnly and sincerely declare -
That I am a member of the’ firm of Woodgers and Calthorpe, of Canberra and Queanbeyan, auctioneers and estate agents.
That I was present at the auction sale of leases held at Canberra on the 12th December, 1924.
That I have no recollection of a statement being made from the rostrum that thecost of kerbing and guttering, (in these actual words) to the frontages of the leases would be- borne by the Government.
That I recollect that a statement wasmade that the cost of roadways would be borne by the Government.
That an impression was formed in my mind that the purchasers of the blocks would, not be put to any expense in development, other than- in- actually developing, the areas-, purchased, but whether this impression1 was the result of a question and reply during th& sale or not I am unable to- say:
It will be seen that Mr. Woodger, who should be distinguished from his brother, Mr. T. E. Woodger, recollects a statement regarding roadways, but does not recollect a statement regarding kerbing and guttering. An impression was formed in his mind that developmental costs would not be a charge against lessees, but he is unable to say how it arose. The remaining declarations are by : -
Of these, the only really definite declarations are those, of Mr. T. E. Woodger and Mr. Calthorpe. Honorable members are now in possession of the whole of the evidence. I have beenable to procure in regard to the matter. I have given very careful consideration to all aspects of the question, and I have conferred with my colleague, the Attorney-General, who has summed up his examination of the position as follows: -
The result is that, in my opinion, the weight of evidence is emphatically against the claim that persons were induced to bid for leases at the first sale by any representation made by any person to the effect that the cost of kerbing and guttering was included in the reserve prices, or that in any way it would be borne by the Government. I would also add that it is open to any purchaser to take proceedings to establish what he considers to be his rights if he thinks proper to do so.
With this view, I am in complete agreement, and I do not propose, therefore, to take any steps to interfere with the action of the Federal Capital Commission in debiting the purchasers of leases with a proportion of the cost of kerbing and guttering.
The following paper was presented: -
Motion (by Dr. Earle Page) proposed
That he have leave to bring in a bill for an act to amend the Commonwealth Housing Act 1927.
.- The Treasurer should give honorable members some indication of the nature of the amendments it is proposed to make. It will be remembered that just prior to Christmas some extraordinary happenings occurred in connexion with the Commonwealth Housing Bill which was then under consideration. When the measure was being debated in this chamber .we were told that it was essential that a separate board should be set up to administer it; but when it was before another place it was said that there was no need for a separate board, and the provisions designed to set up such a board were deleted. When the bill came back to us we were assured that there was no need for the proposed separate board. What is the position now ? Is it suggested- >that a separate board shall be set up, or what is the nature of the proposed amendments? So far as we know the act has been inoperative. At any rate, I had not heard of a single house being built under its provisions. In all the circumstances the Treasurer is hardly justified in calmly asking at this stage for leave to introduce a bill to amend the act. I rarely offer objection to a motion for leave to introduce legislation, but I think we are entitled to some explanation on this occasion. For the Treasurer to act as he has done in this case is to my mind to show something bordering on contempt for the House. We ought to be told whether these proposed amendments are urgent. We are within a fortnight of the Easter adjournment and have some important matters on the notice-paper for our consideration. We should not therefore be asked to spend our time in discussing matters of minor importance. The Government promised during the last election campaign that it would make provision for the people to build or buy houses ; but so far nothing has been done. I trust the Treasurer will give us some explanation of the position.
– It is not usual on a motion for leave to introduce a bill to give an explanation of the measure; but as the Leader of the Opposition has asked for it I am quite prepared to give it. Since the passing of the Housing Act last year, the Commonwealth Savings Bank has been in negotiation with the authorities in charge of the various State housing schemes, and these have asked that certain minor amendments shall be made to our measure to give it greater elasticity and to make it possible for them to alter their schemes in such a way as will make practicable the satisfactory administra-. tion of the various measures, lt is for this reason that this bill is being introduced.
Question resolved in the affirmative.
– I move -
That, in acordance with ‘ the provisions of the Commonwealth Public Works Committee Act 1913-1921, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report thereon, viz. - The Australian War Memorial, Canberra.
It is not customary when introducing a motion of this nature to describe the proposal at any length, but the contemplated work, which is being referred to the Public Works Committee for investigation and report, is of such importance that I believe that honorable members will be glad to have whatever information I can give them in connexion with it. The Australian War Memorial was established by an Act of Parliament passed’ in 1925, and consists of our collection of war relics, and the building in which they will be preserved. The relics include practically the whole of the documentary records of the Australian Imperial Forces, together with the pictures, photographs, models and souvenirs in which the story of the Australians, who took part in the great war, is enshrined. The gathering together of these relics began at the front early in 1917, and the building up of the collection has been assisted, in a wholehearted way, by all the troops, who have endeavoured to make it a fitting memorial to their fallen comrades. Since the termination of the war, the Governments of Great Britain, the sister Dominions and the Allies have made valuable gifts to the memorial. In addition, many soldiers, and wives, parents, and others who lost dear ones at the front have also, as a tribute to their beloved dead, presented to the memorial records and relics which were most precious to them. The written records in the memorial will include a complete history of every unit, and also of every man who served in the forces. These personal records will show the period of service and rank, and the wounds, promotions, and decorations, if any, of every person who enlisted. The memorial is unique, in that it constitutes not a general museum portraying, much less glorifying, war, but one conceived, founded, and, from first to last, established by Australia’s soldiers and sailors, in honour of their fallen comrades. Part of the collection has been displayed in Melbourne, where, in the course of two years, it was visited by 800,000 persons. It was afterwards removed to Sydney, where more than 1,250,000 people have inspected it. Upon the advice of the Federal Capital Advisory Committee and the Australian War Memorial Committee, the Government allotted a site for the Memorial on the lower slopes of Mount Ainslie, facing Parliament House, and authorized the holding of an architectural competition for designs for a suitable building for it, to cost £250,000. The competition , closed in 1926. The Australian adjudicators were the president of the Federal Council of the Australian Institutes of Architects, the Professor of Architecture at the University, Sydney, and the Commonwealth DirectorGeneral of Works. After viewing the designs submitted, the Australian adjudicators were forced to the conclusion that none of them sufficiently complied with the conditions of .the competition to justify their being submitted to the. adjudicator in London, whose duty it was to make the final selection. The adjudicators, the War Memorial Board, and the Federal Capital Commission then proposed to the Government that two of the architects who had taken part in the competition should be invited to collaborate in preparing a fresh design. One of them had submitted the least costly design, and the other had submitted the design which most appealed to the. adjudicators. The proposal was approved by the Government, and after several months’ study of the problem these two architects, Messrs. Crust and Sodersteen, of Sydney, recently submitted sketch plans which met the requirements of the Government both as regards artistic suitability and cost. The Government, therefore, feels justified in referring the plans to the Public Works Committee for investigation. The design is so arranged that, immediately within the entrance, a magnificent vista unfolds itself of the garden court rising in tiers up to the memorial’s crowning feature - the Hall of Memory - which will be a finely proportioned and dignified structure. The garden Court is flanked on either side by arcaded cloisters, in which will be inscribed the names of the dead. The garden court containing ornamental trees, flowers, and shrubs, will provide a suitable setting for the Australian Roll of Honour. “ Surrounding the court are the galleries containing the memorial collection.
– Will the memorial be in stone?
– The description indicates that it is. It is estimated that the Roll of Honour will include nearly 80,000 names. In determining who should be included, the War Memorial Board has followed the very liberal interpretation, given by Parliament in the Repatriation Act to the term “a member of the Forces,” and has also decided to include the names of Australians who died as a result of enemy action while serving in the Mercantile Marine. The board will also consider any other individual cases which may come to its notice. The names will be classified alphabetically under the towns or districts in Australia to which- the sailor or soldier belonged, and will be recorded without any addition whatsoever, in order to mark the equal sacrifice made by every Australian who gave his life for his country.
I lay the plans and specifications on the table of the House for reference to the Public Works Committee.
.- I do not intend to oppose the motion, as I do not think that very much will come out of it. I do not know whether the intentions of the Ministry are honorable; but it is proposed that, some time in the very distant future, a war memorial shall be constructed in Canberra. If the considerable amount of money necessary is available for such a purpose, it could be used with infinitely greater benefit if spent on those of our returned soldiers who are alive. I have received quite a number of letters from returned’ soldiers declaring emphatically that their writers are unable to obtain a home, either through the Repatriation Department or the Commonwealth Savings Bank. They declare that those bodies have failed to fulfil hundreds of applications. It would be better to use in providing suitable homes for our returned soldiers and their families, and in relieving those who are now out of work, the money now proposed to be expended. Many thousands of returned soldiers are out of work, and public works are being closed down, thus narrowing the scope of employment. I am a member of the Publie Works Committee, and I know that many works recommended by that committee, and approved of by the Ministry as being of an urgent nature, have been indefinitely postponed. A recent debate in this chamber disclosed that many returned men suffering from tuberculosis are dying from starvation, and that others are not receiving a fair deal. It will not give those men much satisfaction to know that the Government proposes to build a war memorial in Canberra at some future date. Most of them will be dead before the memorial is begun, lt will take a long time for the Government to make the necessary preliminary inquiries, and, if the work progresses in a similar manner to many other projects undertaken by this Government on the recommendation of the Public Works Committee, it will be many years before the taxpayers of Australia will be called upon to provide the necessary funds. I urge the Minister to deal with the necessitous cases at present existing in Australia, which are a continuing stigma on our good name, and an admission of complete failure to honour the many promises made to our men prior to and after enlistment. Returned men are receiving half and three-quarter pensions, and are expected to earn sufficient to make good the difference. If the Government will not employ those men it cannot expect the private employer to do so. While such distressing cases exist it is futile to contemplate the building of a war memorial. In every capital city and in every town of Australia, hospitals are overcrowded and unable to cope with the sick. Many of those unable to receive attention are returned soldiers or their dependants, and no better memorial could be erected to the memory of our men than adequate up-to-date hospital accommodation throughout Australia. Awful tragedies were enacted at the Great War, where human life was treated almost with contempt. Its lesson should be, not to expend further money to maim and kill people, but to utilize the discoveries of science. to alleviate the sufferings of our f fellow men. I would gladly subscribe to any memorial which would tend to alleviate suffering and prolong life. That would be infinitely nobler than constructing a building of brick and mortar in Canberra, which could be viewed by comparatively few, and which could accomplish no utilitarian purpose.
– The Minister has intimated that 60,000 names have already been received for registration on the roll of honour. Is it the intention of the Government to record on the proposed memorial the names of those who have died since the war as the result of war service?
– The names of all those who died either during or subsequent to the war, and whose death was due to war service, will be inscribed on the Roll of Honour.
Question resolved in the affirmative.
Debate resumed from 16th March (vide page 3935) on motion by Mr. Bruce -
That the bill be now read a second time.
Upon which Mr. Charlton had moved by way of amendment -
That all the words after the word “That” be omitted with a view to insert iri lieu thereof the following words : - “ the bill, involving as it does an alteration of the Constitution, be postponed until Parliament has had an opportunity to discuss a comprehensive scheme of constitutional reform, including the evidence .taken before the royal commission now sitting and its proposals when made.”
.- The history of the financial relations between the Commonwealth and the States, and the long drawn-out negotiations that preceded Federation, has been very exhaustively debated in this chamber, and I do not propose to add to it except by reminding honorable members that those relations found final expression in the Braddon section of the Constitution. That provision had a life of ten years, and provided that three-quarters of the customs and excise revenue should be returned to the States. Later, provision was made by this Parliament for a per capita payment of 25s. to the States for ten years or for such period as Parliament otherwise determines. The per capita payment continued until last year, when the financial partnership between the Commonwealth and States was terminated by its withdrawal in what I believed to be an abrupt, unfair, and unfriendly manner. I voted against the proposal for the withdrawal of the per capita payments. Now we have a completely new set of proposals submitted to us for approval. They have not been discussed previously outside the conferences, at which the representatives of the Commonwealth and the States came to the agreement which’ is embodied in this bill. To the definite financial partnership thus entered into there is no alternative before this House or the country; we have before us the terms of an actual agreement between the Commonwealth and the States to govern their future relations for a period of 58 years, and we must deal with them on their merits. On the previous occasion I fought for a different arrangement, the ‘maintenance of the 25s. per capita payments, but because I cannot get that, I am going to reject everything else that is put before me. That would not be a logical attitude for any honorable member to adopt. We have to decide what is the best arrangement obtainable in the light of existing circumstances. I suppose I have not been the least vociferous of those who, in the chamber and in the country, have inveighed against the alarming growth of the public debt, and in so far as this agreement is, I believe, an honest attempt to arrest that unhealthy growth and provide machinery for the control, and I hope, drastic curtailment of future borrowing, I wholeheartedly support it. It is, perhaps, worth while to remind honorable members that the previous proposals made by the Government were the discontinuance of the per capita payments, and the complete evacuation by the Commonwealth of the whole field of land taxation, amusement taxation, and probate duties, and the surrendering of 40 per cent, of the field of income taxation. Those proposals did not find favour with the country, the press, or the House, and I believe that the Government was helped materially by the op=position to them in framing its new proposals. In saying that, I do not deny to the Prime Minister and his colleagues credit for the much more statesmanlike view of the financial relationship of Commonwealth and States that is represented by this agreement, which provides for the taking over, consolidation and extinction of the State debts by the Commonwealth. The federal authority becomes sponsor for the whole of Australia’s debt, and the States enter into an agreement with the Commonwealth . for its liquidation. A sinking fund of 7s. 6d. per cent. - 2s. 6d. to be paid by the Commonwealth and 5s. by the States - is to be established, and it will extinguish the existing State debts in 58 years. Future borrowings, are to be managed and controlled by the Australian Loan Council, which will be representative of the Commonwealth and the States, and ‘will determine the annual loan programme. There is to be established “ a loan redemption fund of 10s. per cent. for all future borrowing, to which the Commonwealth is to subscribe 5s. and the States 53. In addition, the Commonwealth is to pay to the States annually for 58 years £7,584,912. That sum is not to be paid into the general revenues of the States to be spent by them as they think fit, but is to be applied by tb.f Commonwealth on their behalf to the payment of the States’ annual interest bill. Australia has at last evolved machinery for the liquidation of its existing debts, and for the control of all future borrowing. As the Commonwealth has a sinking fund in connexion with its own loans, and has assumed an obligation of 10s. per cent, in regard to its loan redemption fund, the Australian and overseas creditors will have a definite assurance of the automatic liquidation of all existing debts in 58 years, and the amortisation of new debts by regular contributions in 53 years. That, however, is not a sufficient assurance to the Australian people that the borrowing mania is not to continue, and I regret that the agreement does not include a provision that the interest and sinking fund payments on new borrowings in any year shall not exceed the contributions in respect of interest ana sinking fund for that particular year. Such a provision would afford relief to those of us who view with alarm the rate at which the public debt is increasing. In 1914 the Commonwealth had practically no debt; it owed £19.182,000, which represented transferred properties, and temporary borrowings from some of its own funds. On the 30th June, 1927, the Commonwealth debt was £366,611,000, of which £139,474,000 is redeemable in Australia and £227,137,000 is redeemable overseas, or an increase of £347,429,000 since 1914.. The aggregate debt of the States on the 30th June, 1914, was £320,255,000, and by the 30th June last it had increased to £677,121,000, of which £303,510,000 is redeemable in Australia and £373,611,000 is redeemable overseas. This accounts for an increase in State debts of £356,866,000 since 1914. The total debt of the Commonwealth and the States on the 30th June last was £1,062,914,000, the aggregate increase since 1914 having been £704,295,000. Of course, the- Commonwealth debt was swollen suddenly and abnormally by war expenditure; but, although the States had no such extraordinary obligations to meet, their debts more than doubled in thirteen years, whilst the average rate of interest increased from £3 12s. 6d. on 30th June, 1914, to £4 18s. 2d. on 30th June, 1927’. The average Commonwealth rate of interest on the 30th June last was £5 2s. lid. per cent. If those figures are not sufficient to alarm Australians and their creditors overseas, I do not know what will arouse them to a sense of our dangerous drift. I do not desire to depreciate the credit of Australia; but we shall not enhance it by hiding- our heads in the sand and persuading ourselves that all is right and comfortable. The Prime Minister very ably championed Australian credit when it was attacked in London; but even he could not compare with pride the net quotations for Australian, New Zealand, and South African stock on the London market. On the 29th February last Commonwealth 5 per cent, stock, maturing in 1945-75, was quoted at £98 15s. ; New Zealand 5 per cent, stock, maturing in 1946, at £101 15s. and South African stock, maturing in 1945-75, at £102. This difference, varying from £3 per centum in favour of New Zealand and £3 5s. in South- Africa, is equivalent to 3s. per cent, per annum in the effective rate of interest payable by the respective governments. A fair comparison is that of Commonwealth and New Zealand loans floated at approximately the same time. On the 24th April, 1927, the Commonwealth borrowed £11,700,000 at 5 per cent., and the loan was floated at £98. New Zealand borrowed £6,000,000 on the 3rd May following at 5 per cent., and the loan realized £99 10s. No Australian can find cause for pride or satisfaction in such figures.
– “What is the reason for the difference?
– I believe the reason to be that we have increased our public debt at too fast a rate, and one effect has been to cause inflation within Australia and to set up false economic standards. It is a well-known economic fact that, when money is plentiful, values rise to absorb it. Both the Commonwealth and the States have made available too much loan money. The worst supervised expenditure is that of borrowed money, especially money borrowed by one governing authority and handed to another governing authority to be expended. The proposal to seek from this House the ratification of the agreement made with the States is a step in the right direction so far as the public debt of Australia is concerned. The agreement in turn promises the States that the Commonwealth will apply to the . people for constitutional power to enter into such an arrangement. I believe the figures quoted by the Leader of the Opposition and supplied to him by Mr. Wickens on the basis of the financial requirements of the Commonwealth and
States to be correct. They show clearly that for at least eighteen years the States will under the agreement receive greater benefits than they would, have received under the per capita grant. I therefore urge the States and the people of Australia to accept the agreement. If it is found at the end of eighteen or twenty years that the agreement is not satisfactory to the States they can then approach the Commonwealth with a view to substituting a better arrangement. The fact that this agreement is for 58 years does not prevent the contracting parties from varying, modifying, or even rescinding it; definite provision is made in the agreement for such alteration by mutual consent. To-day the Commonwealth has no power to make this agreement with the States. If the House accepts the proposals, the obligation will be placed upon the Government of bringing down legislation to this chamber to enable it to submit the agreement to the people for ratification. The Commonwealth asks that it shall be given power to make this agreement, which contains a clause enabling the contracting parties to vary it, or to rescind it. The best constitutional authorities to-day believe that that power does not now reside in the Commonwealth. This Parliament unquestionably had power to withdraw the per capita payments, and to substitute an alternative scheme; but it has not the power to enter into this agreement, which involves the control of future States’ borrowing and the creation of an Australian Loan Council to manage it and is of course a great experiment in responsible government. I know of no other instance in which parties with selfgoverning rights have agreed to surrender them to a central loan authority. It is a great experiment and one which we shall watch carefully ; but in so far as it will arrest the alarming rate of increase in the national debt I support it, and hope that it will have the effect that its sponsors claim for it. There are many . aspects of this agreement, and if I find that at the end of twenty years the States are, by a process of financial strangulation, having their powers weakened, I shall join with those who seek to protect them.
– One State will be able to block any alteration in the agreement.
– I am aware that no variation of the agreement can be made except with the mutual consent of the parties. I am not a unificationist. I believe Australia to be the least fitted country in the world for unification. At the beginning, the* founders of federation estimated that a revenue of £300,000 would suffice for Commonwealth needs. To-day the Federal expenditure has grown to £75,000,000. It is therefore evident that we can overload the central authority to the detriment of the development of the country. The maintenance of the financial standing of the self-governing States is essential to the preservation of federation, and I should be the last to vote for anything on the lines of unification. To those who still claim to fight for the per capita paymentsI say, “ How are you going to restore that system, seeing that it has gone?”,. The Commonwealth is financial mistress of her revenue, subject, of course, to her moral obligation - and that is unquestionable - to do a just and fair thing by the States in accordance with the spirit in which federation took place. To those who still claim to fight for the per capita payments I say, “ By what process are we to restore them?” If the agreement is defeated, what will be the position? We shall have nothing. The States are in agreement respecting the Government’s proposals. I shall not say that I believe that the State Premiers and Treasurers put up the best fight possible against the abolition of the per capita payments ?
– Does the honorable member think that the State representatives accepted the agreement willingly?
– Yes; like the man who surrenders at the point of the revolver, the States’ financial provision had been taken from them by the withdrawal of the per capita payments.. Still, I have no right to question their motives or their capacity. They accepted the Government’s proposal evidently as the best arrangement obtainable, and to those who propose- to fight against the agreement I say, “What- is your next step?” How can we put the States in a better financial position than they would be in under this agreement? That aspect concerns every member of this House.
– Is the honorable member taking up the position that it is of no use to discuss this agreement since there is no alternative but to accept it?
– “We have the right to discuss any subject that is brought before this House. The honorable’ member for Wimmera (Mr. Stewart) when speaking during this debate raised the same point, but I contend that by discussing the agreement we may be able to create a public conscience. For my views I am responsible only to my constituents. There are two phases of this agreement. One is the action of the Government - for which I wholeheartedly commend it - in dealing with the public debt of Australia, for the first time in our history, since the days of Crown colonies and the granting of the right of self-government. This is the first time that we have had legislation introduced into this chamber to consolidate and deal with Australia’s public debt. That action has been welcomed by British commentators, lt is certainly a step in the right direction, and should meet with the unanimous approval of the people of Australia. The Commonwealth has another obligation to the States. Although we have lived through 27 years of federation, this is the first time we have f faced that obligation. The Commonwealth proposes to take over State debts to the- value of £11,000,000 to fulfil its obligations with regard to transferred properties, and to increase the interest rate from 3£ per cent, to 5 per cent. That is only just to the States, since they have been paying a much higher rate of interest than 3i per cent. The arrangement to take over, consolidate, and extinguish State debts is a step in the right direction, and it transcends any other financial consideration at the present time. It will greatly increase the financial credit of the nation, and is only doing justice to the States, which showed a fine spirit in meeting the difficulties of federation at the early stages. I believe that over the whole period of the agreement the benefits to the States from the annual payment will not be equal to what they would have received in per capita payments; but I foresee the same opportunity after, say, eighteen or twenty years for the States to approach the Commonwealth as exists to-day. The Commonwealth withdrew the per capita payments and then consulted the States about its financial relations with them. The termination of that agreement was abrupt, unjust, and unfriendly. The Commonwealth certainly had the right to terminate it, and nobody can deny that this Government has made a splendid agreement with the States for the liquidation of Australia’s indebtedness and for the future borrowing policy. When the Government withdrew the per capita payments it was left with a free hand to negotiate with the States. The Prime Minister promised to do the fair thing by the States. I am one of those who did not favour the withdrawal of the per capita payments, but in so far as the past and future obligations of Australia are concerned, an agreement has now been entered into such as was contemplated by the founders of the Constitution, and I shall advise the people of Australia to accept it. When the referendum is being taken I shall tell my constituents that I believe the agreement to be in the interests of Australia, and that they should accept it. I take that stand because the figures supplied by Mr. Wickens show that for eighteen years benefits will accrue to the States in excess of those which would have accrued under the per capita payments. If at the end of eighteen years the financial position of the States has been weakened, they can approach the Commonwealth with a view to bringing about an alteration of the agreement. If the Commonwealth Government hesitates to assist the States, the weight of public opinion will certainly be against it. Preferring the substance to the shadow, I shall support the bill, reserving to myself the right to work for any variation of the agreement, should it prove to be not in the best interests of the States. In all the circumstances, I commend the measure to the House.
.- When the previous proposal was before this House I strongly opposed it, and I am not certain that the present bill should be accepted. The finances for supplying the services of both the Commonwealth
Financial [REPRESENTATIVES. Agreement Bill and the States are provided by the same taxpayers, and any financial rearrangement that might jeopardize the interests of either the States or the Commonwealth would react on the one people. Most of the public services are controlled by the States; but, under this agreement, and more particularly under the previous proposal, the States would become practically the vassals of the Commonwealth. 1 do not think that that was the intention of the framers of the Constitution. It is clear that, for a certain period, the agreement will operate distinctly to the advantage of the States. The present Government- cannot be charged with selfishness in that respect : for the benefits to the States will outlive this Government; but it would be almost impossible to lay down’ a plan for 58 years, and say definitely that it would prove an equitable financial arrangement throughout that period. This is a peak period in Commonwealth finance; we are now deriving more revenue from the people than ever before. On the other hand, if the fiscal beliefs of the majority in this Parliament are realized, the revenue through the customs will tremendously diminish in the future. If we make pledges to the States on the basis of the present customs revenue, the Commonwealth itself may get into difficulties, and find it necessary to’ impose additional taxation on the people. Suppose the imports of this country ceased, where would then be our custom’s revenue. By what means, in such a case, would the money promised to the States be provided ? I pay no heed to the statement that it is not good for one authority to collect money for another to spend. Even when the present agreement is put into operation, that process will continue. The taxes are contributed by the whole of the people, and no matterwhether the money is spent by the federal authorities or by the States, both are responsible to the people for the manner’ of its expenditure. Should the agreement prove to be unsatisfactory, it will remain for this Parliament to make it workable and equitable ; otherwise a Parliament will come into, being, by the will of the people, that will do so. I was considerably influenced by the remarks of the Attorney-General (Mr. Latham), who declared that the States would still have the deciding voice in this matter. Ultimately the people would determine it at the referendum. I feel greater responsibility in regard to this bill than to any other that I have had to consider. The State Premiers have all agreed to the proposal embodied in the measure, and in most cases have submitted it to their respective Parliaments. I propose to place my views impartially before the electors in my constituency when the referendum i3 taken. The amendment submitted by the Opposition is most reasonable, and I should be glad if the Government could accept it. If wo referred this 58 years’ contract to the people directly, this Parliament would be absolved from pledging posterity on a most uncertain matter.
– It is most difficult, in the light of the facts, to understand the reason for the amendment moved by the Leader of the Opposition, because, as the honorable member for Wannon (Mr. Rodgers) pointed out, a most difficult position would result if it were carried. The House would find itself in an absurd situation. Honorable members will recollect that the States Grants Act passed last year provided for an agreement between the States and the Commonwealth to supersede the payments being provided under that act. That agreement has been made, and it is much more advantageous to the States in its terms than was the per capita arrangement that it superseded. Every State Government gets certain definite relief to its budget as the result of that agreement, and each State Government has based its budget for the present year upon that extra relief. Take the State of Victoria. The Premier, Mr. Hogan, pointed out that, in his State, the relief would amount to some £553,000 as the result of the operation of the agreement during the current year. Consequently, having practically instructed the Commonwealth Government to make an agreement with the States for the purpose of superseding the States Grants Act, and the whole of the budget arrangements of the States having been based upon that agreement, if we, as a parliament, in the ninth month of the financial year, should attempt to cut away that relief, it would place all concerned in a very difficult position. For what purpose are we asked to submit the matter to the Commonwealth Constitution Commission ?
– That is not the suggestion.
– “We are asked to wait for a report from that commission. If we had such a report, it is evident that no action could be taken upon it during the present financial year. Such a report could not affect the position during the two financial years for which the present agreement provides.
– But this proposal involves an amendment of the Constitution.
– A bill to give effect to that will be brought down subsequently. The agreement provides that in order to obtain, immediately, some of the advantages that would result from united action, several of its proposals shall be temporarily adopted. We are now adopting foi’ two years certain portions of the agreement, which will give us the advantage of united action. We are in the unique position of having the opportunity to try out a constitutional amendment before it has been submitted to the people for their approval.
– It is most convenient to be able to do that.
– Yes. It is a unique experience. The effect of the motion which is being moved by the Leader of the Opposition would be to defeat this object, and to interfere with* the budgets of every State Government in the Commonwealth. All honorable members stated that it was desirable to obtain agreement between the States on this question, but now that we have at last obtained that agreement, some of them ask us to undo the whole of our work, and to await the report of the Constitutional Commission before deciding upon any action. This agreement will be effective only for two years, and it will provide an opportunity of proving whether it really is all that it has been claimed to be. We have at last taken a definite step, one which has stimulated the imagination of the whole financial world, in what we are doing with our public debt. Because of the character of this motion, the debate on this bill has not been, of the same high standard as that which took place when this subject was being discussed in the House two years ago on the States Grants Bill. Criticism has not, for the most part, been directed towards the working of the machinery necessary to secure coordination between the different borrowing authorities in the Commonwealth and common management of our debt service - the most important question and the most difficult problem the financial authorities in Australia have ever faced. With one or two exceptions, notably the honorable member for Tarra (Mr. Scullin), and the honorable member for Wannon (Mr. Rodgers), honorable members have dealt only cursorily with that aspect of the matter, and have contented themselves with discussing the circumstances leading up to the framing of this agreement and the ‘ effects on Commonwealth and State governmental finance. The Commonwealth and State governments are the agents of the people of Australia, and though important as agents their interests are subsidiary to the paramount interest of the people as a whole. It is from the point of view of the people of Australia that we should study this problem, and endeavour to arrive at the best solution of it. That is what the Government has done, as was indicated by the Prime Minister in his second-reading speech. The question that has now been raised is a much bigger one than the mere substitution of something for the per capita payment : it is a plan of debt redemption and debt management. The matter of granting assistance to the State is grouped with this proposal, but is not essentially a part of it. There are many reasons why this scheme must be regarded as of immense importance to the people of Australia. In the first place it removes for a period of at least 58 years a prolific cause of friction between the Commonwealth and State governments, it ensures financial cooperation, between them on a mutually satisfactory basis, and it will pave the way towards co-operation in matters other than those specifically covered by the agreement; it establishes a Sinking Fund for the existing and new debts of the States; it provides for the common management of borrowing, and eliminates competition between governmental borrowing agencies; finally it provides a plan for the enhancement of the national credit of Australia, and enables the control of borrowing and credit to be retained in Australia instead of being at the whim of outside people, as it was when we were fighting for money in a suicidal way amongst ourselves. These proposals are not in any sense new. They merely translate into practical terms the dreams both of prefederation and post-federation statesmen. In every discussion on finance from the early days of federation down to the present time, the subject uppermost in the minds of all was the determination of the financial relations between the Commonwealth and the States, together with the better management of the public debt. In proof of this.it is only necessary to read the speeches of such men as Sir Henry Parkes, Sir Samuel Griffiths, and Sir George Turner. Mr. Kidston, who was at that time Premier of Queensland, pointed out in 1904 that the provision of the “ financial security of the States, the transfer of the State debts to the Commonwealth, and common management of borrowing was necessary to the consummation of federation. This is exactly what the agreement proposes to bring about. The honorable member for Yarra said that he had been for many years enamoured of such a project as this. There is no doubt that Mr. Fisher recognized the importance of such a scheme, and Mr. “Watt, speaking to this House on the States Grants Bill a few months ago, said -
It would be futile to provide a sinking fund unless definite control was exercised over the whole of the national borrowing, both Federal and; State. There I join issue with the honorable member for Henty (Mr. Gullett). If the section of our Constitution which relates to the transfer of debts were real instead of being merely a fiction, the Commonwealth could assume control of State debts. If, as they fell due, a loan council, constituted by the authority of the Commonwealth, assumed control of all loans as they fell due and was responsible for their conversion, and gradually established either interminable or terminable Commonwealth consols, no individual State could approach the London market for money unless it was prepared to pay ruinous rates of interest for it. There would be an automatic refusal of loan money to the States once the Commonwealth had assumed control….. If the Commonwealth boldly put forward such a proposal at a Constitutional session and later at a referendum, it would have the support of the best thought in this country, oven in defiance of State authorities, because the more intelligent people in Australia are becoming alarmed at the tremendous borrowing that is being indulged in, and the mountain of debt that is piling up until it threatens to obscure the sky.
In this agreement we have a proposal brought down, not in defiance of the State authorities, but with their full concurrence. Nevertheless, we .are asked to wait for something more to be done. Already four State Parliaments have ratified the agreement, and six State Premiers have signed it. This agreement has been arrived at after many conferences. The subject was discussed every two or three years at conferences held during the’ first period of federation - that prior to the war. In 1914, immediately before the war, at a conference of Commonwealth and State Ministers, Sir John Forrest brought forward a definite proposal to take over the public debts of the States. He said that -
The Commonwealth should take over the public debts of the States. The net profits arising from all conversions, renewals or consolidation would be credited to the State concerned, and the annual payment of the State reduced accordingly from time to time. tt was not proposed to interfere in any way with the borrowing powers of the States. The Commonwealth would raise loans for the States if desired, provided it was satisfied that proper provision had been made for the interest and sinking fund on the loan.
The taking over would not relieve the States of any obligation to pay the principal or interest of the debts taken over, but it was believed that Commonwealth management would result in large economies. The States would be responsible for the payment of both interest and principal to the Commonwealth.
A sinking fund of per cent, would be established under the control of the Chief Justice of the High Court, President of the Senate, and Speaker of the House of Representatives as trustees for the time being.
That conference dealt with these proposals similar to those in this agreement, and generally approved of them; but submitted the matter to a conference of the Commonwealth and State Treasurers for further consideration. That conference, held on the 13th of March, 1914, went into the matter very fully, and resolved that -
No scheme of debt transfer would be satisfactory which did not cover the operations connected with both the redemption of existing loans and new flotations; at present no definite conclusion as to the best method of dealing with” the transfer of control over future flotations could be formulated, the divergent views of the States being incapable of immediate reconciliation.
The conference, therefore, recommended the matter to the consideration of the Federal and State Governments, with a view to further conference.
Wow, for the first time in the history of Australia, we have been able to reconcile the divergent views of the States which, in 1914, were incapable of arriving at an agreement. Notwithstanding that, the Leader of the Opposition says that we should delay still further so that this golden opportunity may be lost. When this Government came into office in 1923, it set itself to bring about the establishment of a sinking fund, the co-ordination of borrowing, the formation of a Loan Council, and the improvement of the financial relations between the Commonwealth and States. In 1923 it was able to create a sinking fund foi- all Commonwealth debts and future State debts, and, in 1924, it brought into being a Loan Council on a voluntary basis. It brought about certain other forms of co-operation, such as the amalgamation of the. taxcollecting authorities.
– Parliament did that.
– It was the Government that did it, as an executive act. The present proposals for doing that which various governments have sought a means of effecting during the whole 28 years of federation, will be tried out for two years, and then put to the people for their ratification. The close co-operation between the States and the Commonwealth Governments has been achieved as a result of the working of the Loan Council, which has made it possible to reconcile the views of the State Treasurers, which, in 1914, were incapable of reconciliation. The enhancement -of national credit, and the necessity for doing something which will enable the burden of debt to bc reduced, are among the most important things which this Parliament can consider. Our debt amounts, at the present time, to £1,040,000,000. Our annual interest bill is £53,000,000 a year, which is practically three-quarters of our total revenue from taxation. If our credit were as good as that of New Zealand and it were possible to convert all our debts, we should be able to save 3s. per cent, in our interest, which would effect a saving of £1,500,000 a year in interest alone on existing debts. If we go on borrowing at the same rate as at present, and are able to effect the saving of which I have spoken, we should be able, at the end of 58 years, to save no less a sum than £3,500,000 a year. No one can doubt the wisdom of devising a scheme for the better management of our public debt. That is borne out by a comparison with Canada, which occupies a so much better position than ourselves on the American market. In spite of what has been said in this House by certain honorable members, the credit of the Commonwealth at the present time is better than that of the various States. The honorable member for Perth tried to show that our credit was worse than that of the States generally, because the average interest on Commonwealth debts . was greater than that paid by his State, but he omitted to point out that many of the State loans were floated prior to the war, at a very low rate of interest. State loans to the following amounts were floated at 4J per cent, or less -
A sum .of no less than £210,400,000 at 4£ per cent, or less is thus included in the State total. Included in the Commonwealth Debts are the following amounts at 4J per cent, or less -
It. will be seen therefore that the States have eleven times the amount of money at 4£ per cent, or less included in their debts that the Commonwealth has. But the real test is the market, rates for comparable stocks. On the 27th of February, 1928, comparable stocks of the Commonwealth and States were selling in London at the following figures : -
The Commonwealth within the last fortnight raised loans for New South Wales, Victoria, and Queensland and itself at better rates than those at which the stocks of some of those States were being quoted on the money market. We have always to take a little less than the market rates when we float new loans, and on that day we were able to float a combined loan at £9S for 5 per cent, stock, although the market rate for similar Queensland stock was £97 12s. 3d., and for similar New South Wales stock £97 9s. 2d.
The efforts which the Government made last year to place Commonwealth and State financial relations on a satisfactory basis were favorably commented upon throughout the financial world. As an illustration of that let me quote some newspaper comments. The London Economist said on the 25th June, 1927 -
In recent years Australia laid itself open to criticism on the grounds of over-borrowing. If Mr. Bruce’s scheme leads to the strengthening of the Federal Loan Council and to the adoption of a more conservative financial policy he will have performed a useful service for Austraiian credit.
The Statist of the same date referred toMr. Bruce’s eminently constructive proposals for the centralization of State finances - and added that the agreement marked a progressive step of great importance in Australia’s financial evolution. The Investors Chronicle mentioned -
The firmness of the price of Australian State issues, which is due to the progress made at the conference between Mr. Bruce and the State Premiers in Melbourne.
The London Times, speaking of the proposed arrangement, observed: - “
These factors should undoubtedly lead to the strengthening of the credit of the individual State governments, and so stimulate the development of those portions of the continent which are most in need of capital resources. . . . The proposals are characteristically statesmanlike and courageous, and seem calculated to make a substantial contribution both politically and financially to the strength of the Commonwealth.
The London Financial News of the 2nd June, 1927, made the following comments -
It is apparent that the proposal just submitted at the Premiers’ Conference at Melbourne is a stand for the principle of federation. It would seem, also, to bc recognized that whatever the political liberties of confederated States may be within their own borders, there is only one proper standard to be observed in the money markets. By thus assuming responsibility for State debts and for future loan operations, Australia has undoubtedly improved its credit standing .in what are likely to be its two principal banking centres in the future - London and New York.
The Wall Street Journal, of New York, said -
From now on, always assuming that the referendum approves of the amendment of the Constitution, Australia should reap some of the benefits that come from concerted as opposed to isolated action. She will be able to mobilize the. good points of each of her States and of her Commonwealth, in the aid of a.ny one - an addition to her financial troops that should make a big difference to her credit.
The London Daily Telegraph of the 18th June, 1927, made these remarks -
It is difficult on this side to estimate the chances of success of the scheme; but there is no gainsaying their bold character, and if anything like these proposals could be carried into effect the result, so far as the credit of Australia in London is concerned, would undoubtedly be beneficial.
The London Financial Times of the 18th June, 1927, stated -
There is no doubt that the scheme will ensure for the States better terms in the money market, and enhance credit and greater security for borrower.
The London Daily Chronicle of the 17th June, 1927, observed -
Reform is certainly needed. Existing absence of co-ordination in Australian borrowing is dangerous both to the Australian taxpayer and the British investor.
I have quoted those comments for the reason that they were made by recognized authorities outside of Australia. They are unbiased, and because of that deserve very close attention. In the light of such opinions we ought not hastily to condemn this scheme.
It is highly desirable in the interests of Australia that we should do everything in our power to enhance our credit. An examination of financial returns made last . month indicated that comparable
Australian stocks were considerably less favored on the market than New Zealand and South African stocks. New Zealand, which covers an area of only about onethird that of New South Wales, had its stock quoted on the London market at £3 per cent, better than ours, and South Africa, which is not as large as Queensland, had its stock quoted at £3 5s. per cent, better than comparable Australian stocks. It cannot be denied that in circumstances such as these, New Zealand and South Africa are both in a better position than Australia to undertake developmental work. If we could obtain money at the same rates as those dominions obtain theirs, we should be able to undertake considerably more public work than is possible at present and not add to our interest bill. It is desirable therefore that we should take every step that we can to place Australia in this favourable position. The first step towards that goal is the elimination of competition between the various borrowing authorities in Australia. That is provided for in this agreement. We must, if we are to make any progress, coordinate our borrowing and general financial arrangements. It has been demonstrated that this can be done through the Loan Council, notwithstanding that it has been under the disadvantage for two years out of the four in which it has been operating of having New South Wales as an outside competitor. This has forced us to pay higher interest rates.
We shall also help to improve our financial position by setting up properly safeguarded sinking funds as provided for in the agreement. The only satisfactory way of doing so is to make provision for it in the Constitution. It is true that, even a constitutional amendment such as that which is now suggested could be altered if the States and Commonwealth Governments were unanimous; but all the Governments in Australia would hardly be likely to flout public opinion by altering it without ascertaining by a referendum the mind of the people.
It should not be overlooked that any economy that we can effect in our public finances will be reflected in private and commercial financial circles, for the rate of interest charged for money borrowed privately is largely governed by the rate at which Government securities are available. It is recognized that Government securities are the best investment open to the community. It is for this reason. that other than public borrowers always have to pay something more for the money they secure than the Government pays for the money it obtains. If Government rates are high private rates arp invariably higher. This adds to the cost of production and handicaps us in our competition with other countries. On the other hand, if we can reduce our interest rates, our whole financial structure will benefit. We may expect, therefor-1., that if the people approve of this proposed alteration of the Constitution, the benefit of the new arrangement will be felt throughout the Commonwealth.
It is true that there are difficulties in the way of giving full effect to this agreement. The members of the Loan Council would be very glad if this Parliament would give its attention to them. One of the greatest obstacles in formulating this plan was the question of restricting the sovereignty of the Commonwealth and the States. It was felt for a long time that to bring into operation any scheme for the joint management of public borrowing would necessarily restrict the sovereign rights of the States. It was upon that rock that all negotiation hitherto entered’ upon had foundered. This is the first time that any possible satisfactory solution of the difficulties associated with this matter has been reached, and I submit that only the Operations and experience of the Loan Council have made possible the. discovery of this solution. I wish to point out, however, that even if the sovereign rights of the States are in a measure limited by the provisions of this agreement,’ so . are those of the Commonwealth. It is unavoidable that there should be a certain amount of restriction on all the parties to an agreement of this description, but restriction falls upon the Commonwealth equally with the States. The parties which have been represented on the voluntary Loan Council hitherto have found that the restrictions are not nearly so serious as some people thought that they would be, and that the mutual compromise which has so far resulted from its activities has not had the irksome effect which it was alleged that it would have. In fact, the parties are so satisfied with their experience over the last four years that they are quite willing to make the Loan Council a permanent body.
It has been suggested that the Commonwealth Government would dominate the Loan Council and the States, but this is not a fact. It is true that under this agreement the Commonwealth will have two votes, and a casting vote if there is an equal number of votes on each side; but it would be necessary for at least two States to vote with the Commonwealth in order to ensure that its view should prevail. It is quite reasonable that if the Commonwealth and, say, New South Wales and Victoria, in which States the greater proportion of our population resides, should agree on any financial plans that are submitted their views should be seriously considered. If the States are unanimously opposed to any Commonwealth proposal, or if even five of them are against it, the Commonwealth will be defeated. I submit, therefore, that the possibility of the view of the States being overridden by that of the Commonwealth is negligible. Only those who have had actual experience of the work of the Loan Council can realize that the problems that come before it. are discussed from the point of view of mutual help, and that there is no attempt by one party or State to obtain an advantage at the expense of another.
In times of difficult finance the Loan Council never ultimately determines the amount that shall be borrowed. That depends in the last analysis upon the state of the money market. If money is scarce and! the rate of interest high, then it is apparent that the council must borrow lightly and not heavily. More than this, however, the allocation of the borrowed money is not left to the arbitrary decision of the council. Under the provisions of this agreement, the money available will be divided on a definite basis. Assuming’ that insufficient money is obtainable to meet the requirements of all the parties, and that the council is not able to reach a unanimous decision as to the allocation of its funds, it is provided that the Commonwealth shall be granted one-fifth of the total and each State an amount to be determined on the basis of its borrowing during the preceding five years. This is definitely fixed in the agreement. No pressure can be exerted, therefore, to oblige one State to take a position unfavorable to it in comparison with the other States. It must be quite clear that if a particular State has large public works in hand for which it has been borrowing -heavily over a period of years, it cannot be expected at a moment’s notice to abandon its programme. To do so would probably cause a heavy loss on the amount already expended, and also serious unemployment. I suggest, therefore, that the automatic arrangement set out in the agreement is reasonable, safe and satisfactory. The restrictions which are imposed upon the parties to the agreement are no greater than those which common decency and ordinary practice make necessary. The procedure of the Loan Council is rendered automatic in those cases where there is any chance of a State being dominated. The money market imposes just as rigid restrictions as any that will operate under the Loan Council. That is, in essence,, the position that the Government wishes discussed. The Government wishes to see if there are any loopholes in the proposed arrangement that need closing up. It invites suggestions which would make it easier for the Loan Council to operate in its management. of State: debts and borrowing. Instead of that, the criticism of the Leader of the Opposition (Mr. Charlton) is merely directed against the time when this agreement should be brought into effect. I shall examine the credentials presented by the honorable member. It cannot be claimed that, in his attitude towards the agreement he represents any of the great parties of the Commonwealth, because behind the agreement are ranged the men of all parties in executive governmental positions throughout the Commonwealth. Four Labour Premiers and two non-Labour Premiers admit that this is not a party matter, and state that they stand behind the pro’posals because they believe that they are for the benefit of Australia at large. The Leader of the Opposition cannot claim that he is the representative of the States, because the State leaders declare that they are in favour of the scheme. Mr. McCormack, the Premier of Queensland, said on the 14th December last -
There are many advantages in the agreement. Sooner or later, Australia had to face the question of the control of borrowing, and this is a very fine step in that direction. As mentioned in the constitution, sooner- or later the Commonwealth would have had to consider the taking over of the States debts, and that is accomplished under the agreement. Sinking fund payments are provided for, in which the Commonwealth and States will participate. The gains to the Commonwealth as a whole wall be the more effective control of borrowing; the more effective and searching investigations of the borrowing programmes of the different States and of the Commonwealth itself; the regulation of borrowing on the market; no competition between the several constituent States of the Commonwealth on the overseas markets; a definite rate of interest; and definite sinking fund payments on all loans floated by the States or the Commonwealth. The agreement should stabilize our credit on the overseas market. This competition between the States was a bad tiling for the borrower, though a good thing for the lender. During the last few months the 3Jew South Wales Government have been selling bonds over the counter at 5 $ per cent. It is very difficult for any other State to get money at 5 per cent, when one State is giving oi per cent. To a limited extent, the Loan Council has removed many of those disabilities; . and that council, when constituted legally and operating under the Constitution of the Commonwealth, should be able to do much to help Australia to control her borrowing, and improve her credit abroad.
Mr. Butler, the Premier of South Australia, said -
The establishment of a Loan Council, in principle, is the best thing that ever happened to Australia.
– We all believe that.
– Then why. seek to delay matters? The Commonwealth Government has given a lead to the State Premiers in conference, and they support the suggested agreement.
An Honorable Member. - How many States have ratified the agreement ?
– Already four State Parliaments have ratified it. Mr. Hogan, -the Premier of Victoria, said -
The States’ position under the agreement will be better than that under the per ‘Capita payments system. … As the per capita payment ‘has been abolished by the act passed by the Commonwealth last March, the proposed alternative, which is embodied in the present agreement, is one which I commend to members of this House. I am satisfied that under this agreement, the Commonwealth has no desire to involve the States in any financial difficulty, or to embarrass them in any way, but is prepared to treat them with absolute equity.
Those quotations indicate that the States appreciate that they will receive a substantial advantage under the agreement. The Leader of the Opposition very clearly stated his position. At page 3625, of Hansard for the 7th March, he is reported as saying that the Government is giving too much away. The honorable member indicated that certain sums were necessary for social schemes which he enumerated, and he said that if this agreement was carried out the Commonwealth would not be able to proceed with those schemes. He said that this would save State expenditure. That expenditure was merely contemplated expenditure, and would be made only if certain schemes which the honorable member had in miaul were brought into being. The Leader of the Opposition is prepared to approve of the scheme if, first of all, there is a remodelling of the Constitution, practically amounting to unification. He declared that this agreement will prevent unification. There is a great deal in that contention. Opinions received from London and New York claim that this agreement establishes the principle of federation. Several honorable members on this side, however, opposed the agreement because they feared that it will bring about unification. It cannot do both things. It .really is one of the means whereby tie federal union will be made complete. The Commonwealth attitude is, first of all, to honour .the agreement arrived at in conference between the Commonwealth and the States. If we waited for the report of the Constitutional Commission before proceeding with the agreement, the delay would disorganize every State budget throughout the Commonwealth. Conferences have been held between the Federal and State governments which were practically replicas of the meetings of the finance committee of the Federal Convention, and the legal and financial officers of the States and Commonwealth have, for the first time since’ the matter was mooted in the early discussions on federation, been able to determine upon the definite and satisfactory basis contained in the agreement.
In addition to those conferences, a tremendous amount of other work has been done to make the agreement as comprehensive and satisfactory as possible. Some honorable members now ask that all that work should be thrown on the scrap-heap, merely to delay matters. It has been suggested that there has been a deviation from principle by this Government. ‘ Honorable members must recognize the very definite way in which the Commonwealth’ Government has acted, since on its formation it formulated definite schemes of Commonwealth and State financial co-operation. At the 1923 Premiers’ Conference it proposed to raise a sinking fund, both Commonwealth and State, but the’ States would not agree, contending that any sinking fund would have to operate on the future debts only, otherwise it would be too costly. The Commonwealth Government also suggested the formation of .a loan council, and has since collected sinking fund con.tributions for all the loans that it has raised for the States. If the honorable member for Perth (Mr. Mann) were here, he could tell honorable members that in 1926 I showed him figures which had been prepared months before, specifying the exact effect of the scheme for taking over the whole of the debts from each State. In a speech made by me at Benalla in 1926, also in one by the Prime Minister in Parliament last year, it was stated that we were examining every avenue, of settlement, including those dealing with sinking funds and the common management of borrowing. Nothing has been done to contravene these principles. The efforts of the Commonwealth Government have always been directed to bring about a satisfactory and comprehensive scheme, and that is what is embodied in the agreement now before the House. The proposed agreement gives very definite advantages to the States. The Leader of the Opposition quoted figures showing that for eighteen or twenty years the States would be better off under the new agreement than under the past system of uniform per capita payments. If that is so, this Government cannot be accused of doing something prejudicial to the interests of the States. If every scheme that has been brought forward were examined it would be seen that they would benefit various State budgets by at least from £50,000 to £100,000 annually.
– Where will the Commonwealth Government obtain the money ‘ to do all this?
– It is prepared to tax the people of Australia for this definite purpose of improving the credit of Australia. The Commonwealth Government has a definite scheme in mind, and is able to show how the money will be wisely used. This Government has always been prepared to raise money for the State governments provided that the spending of that money is a matter of mutual arrangement be-, tween the Commonwealth and State Governments. That was done in connexion, with the Roads Agreement many years ago. Mr. Andrew Fisher said that he was quite prepared to give sums - in one case amounting to £5,000,000 for all time, and in another to £7,500,000 - to the States provided that the money, was used for the payment of interest on debts. He merely asked that it should be definitely allocated. That is’ the only way in which we can exhibit a proper responsibility to our taxpayers and our constituents. Under the proposed scheme the States will have a definite financial advantage for eighteen to twenty years, and for no less than 58 years they will have security in connexion with their taxation proposals. In 1923, when the matter of the Commonwealth evacuating the field of taxation was being debated, Sir William McPherson, then Treasurer of Victoria, said that such a scheme would give his State an opportunity to arrange its taxation on a sound basis ; that for ten years the Commonwealth would go out of the field of income taxation, thereby enabling each State to deal with every branch of taxation, co-relate it, and so inaugurate an equitable system. This agreement will enable the States during the next 58 years to arrange their taxation upon definite, systematic, and comprehensive lines. At the end of that term the sinking fund to which the Commonwealth will contribute one-third, will have extinguished the present State debts, and the. States will be free of a liability which now amounts to approximately £23,000,000 per annum. The argument has been used. that- instead of this agreement the’ Commonwealth should have continued the per capita payments to the States. It is impossible to revert to the uniform per capita system because four of the six States have expressed themselves as definitely opposed to it.
– What does the honorable member mean by uniform?
– Payments at a uniform rate per head. On this subject, Mr. McCormack, Premier of Queensland, said -
A State with a large and an increasing population, because of the establishment of secondary industries in the favored centres of population, would receive increasing payments out of all proportion to those received by a primary producing State, and would to that extent give to the wealthier States the greater proportion of the customs revenue. That is the most vulnerable point in regard to the continuance of the per capita payments. No doubt that State would pay the revenue , because the customs revenue is collected from the people individually, who buy these goods in the markets of the States; but where a Commonwealth is founded for mutual protection to all the interests embraced within that Commonwealth, it would be a much wiser policy to adopt some system that would at least help the weaker States or the States that were not so favorably situated for the establishment of secondary industries. Consequently, we get to the point where we have to view this loss by the larger States from the broader or wider Australian point of view, and from that viewpoint the agreement has advantages over the present system.
Some two or three years ago, the Tasmanian Government prepared an official statement of the State’s disabilities, and in that document, as well as in the columns of the Tasmanian newspapers, the inequity of a uniform system of per capita payments was stressed.
– The per capita payments were never supposed to bear any relation to the necessities of any State.
– The per capita payments have been upon a uniform basis, and four of the six States have -‘pointed out that that is unjust. Tasmania suggested that the per capita payments could be continued only on a basis of 25s. for New South Wales and Victoria, 30s. for Queensland and South Australia, 40s. for Western
Australia, and 50s. for Tasmania. The Premier of South Australia said that the amount of £7,584,912 which the Commonwealth is to pay to the States each year, should be apportioned not on the per capita basis, but on the basis of the debt per head. In - this distribution it was decided to adhere to the old per capita basis, but to meet the claims of the smaller States, the excess amount of £900,000 which the Commonwealth is paying to the States is being distributed on the basis of the debt per head of the population, and it works out in this way: -
It will be seen how four of the States definitely benefit by an arrangement which departs from the uniform per capita basis. It is remarkable that in this House the representatives, ofthe States which will benefit more by the arrangement contained in this agreement than they would have done had the per capita payments continued, should be the most vociferous in their opposition to the bill. The honorable member for Perth (Mr. Mann) made some startling statements in opposition to the agreement, and, comparing its results with what he estimated the States would receive if the per capita payments continued, he said that in 58 years it would deprive the States of £383,000,000. Yet in June, 1926, the honorable member proposed an amendment to the States Grants Bill to provide that the total payments to the States should be on the basis equivalent to the per capita payment for that year and should not increase. That he said would be an honorable substitute for the per capita payments: Now an arrangement by which the States will receive £900,000 in excess of what he then Said was an honorable compensation is denounced by him, and he makes imputations against the capacity of the State Premiers who entered into this agreement. The clause, he sought to have incorporated in the States Grants Bill, read - 2a. - (1) The Commonwealth shall assume, as from the first day of July, One thousand nine hundred and twenty-six, liability for the then existing debt of each State to an extent determined in accordance with this section.
On the 14th March, 1927, the honorable member said -
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. lt 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.
At that time, the honorable1 member considered that a fixed payment, equivalent to the per capita payments for 1926, would be satisfactory compensation to the States. A few nights ago, he sought to show that this agreement would bring about a condition of affairs that would be intolerable to the States within the next 30 or 50 years. He was disingenuous in the comparison he made, because whilst he put. on one side of the ledger the whole df the per capita payments, assuming that they would continue at a uniform rate for the full 58 years, and increase with population and admitted that he was crediting on the other side of the account only a portion of the payments under this agreement, he
Dr. Earle Page. compared the whole with the part. He assumed that the per capita payments would continue at a uniform rate, and that population would uniformly increase, and he estimated the total amount that the States would have received in 58 years from this source. Against that he set only the annual fixed contribution of £7,584,912 by the Commonwealth towards the interest on State debts, multiplied it by 58, and subtracting the sum from the estimated total of the per capita payments, said that the States would lose £383,000,000. Of course, he said, “I have omitted the 2s. 6d. contribution by the Commonwealth to the sinking fund and the increased payments in connexion with transferred properties, amounting to £960,000 per annum, but that would be offset in the next five years by the increase in population.” But in estimating the total that would’ be paid under the per capita system he had already taken into account the increase in population, and he could not make the same factor do duty twice! An annual payment of £960,000 for 58 years would mean a total of £56,000,000 which may be deducted from the honorable member’s calculation of £383,000,000 to be lost by the States under this agreement. The honorable member said also that the 5s. per cent, per annum to be paid by the Commonwealth into the sinking fund for the redemption of future State debts, was a mere bagatelle, and that in any case the States would pay that amount because the Commonwealth would tax State stock. Then he accounted to me for unrighteousness the proposal that the Australian market should be left to the States exclusively. That was done with the full concurrence of the State Governments. As a matter of fact, ever since 1921 the Australian’ market for new money has been left to the States exclusively, and the Commonwealth has borrowed abroad, because it was evident that the Australian market could not supply the whole of the money required for the Commonwealth and the States. The honorable member for Perth asked what would be the effect of this arrangement on State stocks. The effect after the agreement will be exactly what it was before. The Commonwealth will continue to tax State stock. If the agreement is not ratified this stock will be taxed and the States will get no contribution from the Commonwealth; if the agreement is ratified the stock will be taxed, but the States will get from the Commonwealth a contribution of 5s. per cent, per annum. As a. responsible Minister, I do not wish to endorse the conjecture of the honorable member that Australia will continue to borrow for the next 58 years at the rate of £40,000,000 per annum, but if that did happen, no less than £169,000,000 would be contributed by the Commonwealth towards the debt redemption fund. Thus a great deal of the hypothetical £383,000,000 would be wiped out, aud unquestionably a great part of the balance would disappear through the saving that would be effected under this arrangement through the enhancement of Australian credit. The honorable member’s calculation is based on the fallacy that the per capita payments would be secure;- but during the last nine years they have been attacked four dr five times, they have been altered twice in the 28 years of federation, and four States are entirely opposed to their continuance on a uniform basis. Indeed, the honorable member for Perth admitted last year that it would be impossible to continue them for 58 years at a uniform rate. But even taking the honorable member’s fallacious premises, the loss to the States would not be nearly as great as he suggested. On the other hand, let us consider the savings that would be effected under this agreement. The London Daily Telegraph expressed the opinion when this agreement was made that before it had been in operation for many years the reduction in interest rates would mean a saving of at least f per centi on the total conversion operations of the Commonwealth and the States.
– That is the opinion of only one man..
– But it is a responsible opinion as to the benefits that will accrue from the agreement. Such a saving should undoubtedly be taken into account in any comparison of this scheme with the per capita system. The argument of the honorable member for Perth, however, was purely conjectural, because nobody can foretell the rate of Australian development or the extent to which we shall have to borrow. An arrangement such as is incorporated in this agreement was the desire of the founders of federation, and has often been attempted by the financial authorities of the Commonwealth and the States, but never previously reduced to practical form. What is the alternative to it? It is the abolition of all co-operation in borrowing,’ unrestricted competition between ths States, and an intolerable conflict between the various governmental agents of the people. If this agreement is operated for a year or two, and found to be effective, and is then rejected by the people, the temporary arrangement cannot be continued, because it would be impossible for the Loan Council to function satisfactorily if individual States were coming in and going out of the council. We have, already had experience of the State of New South Wales being at one time out of the council and at another time in it. Obviously, the Commonwealth cannot assume responsibility for- the debts of the States if there is to be no permanency in their adhesion to the Loan Council.
– If it proves to be a success none of the States will desire to go out.
– Distant fields always look green, and some State governments in subsequent years may desire to escape from this , arrangement, even though experience has shown it to be advantageous. I urge the House to reject the amendment moved by the Leader of the Opposition and to vote for the agreement as an instalment and a constructive proposal towards a definite plan to deal with debt redemption and debt service, and thus to permit of a general financial co-operation, which has never existed in Australia before, and which will enable our credit to be continually enhanced with benefit not only to governmental institutions, but- also to all sections of the Australian community.
Question. - That the words proposed to be omitted (Mr. Charltons amendment) stand part of the question - put. The House divided.
Majority … ..15
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to,
Clause 2 (Approval of agreement).
.- I ask the Prime Minister, now that we have reached the committee stage, to postpone the consideration of the clauses’ of the bill until to-morrow. Clause 2 provides for the approval of the agreement, and if it is passed, it will mean that the Schedule has been approved. During the debate, I have had little to say other than to express my approval of the agreement, and my disapproval of the abolition of per capita payments. The establishment ,of the Loan Council, the method of borrowing and the proposals under the agreement generally commend themelves wholly and solely to me, because if there is anything that as a public man I fear it is the extent to which the borrowing of the States and. even of the Commonwealth itself, may grow. There has been extravagance in administration and, in turn, extravagance on the part of the community, which must have a detrimental effect upon our future. I, therefore, welcome anything that .will tend to reduce the borrowing capacity of both the Commonwealth and States, and I think that the operations of the Loan Council will benefit Australia generally. Provision is made in the Schedule for interest payments on the public debts of the States.
The CHAIRMAN (Mr. Bailey).The honorable member will not be in order if he discusses the agreement in detail.
– I wish to point out that the passing of this clause means the approval of the agreement.
– The Schedule does not become the Schedule to the bill until agreed to by the committee, either in its original or in an amended form.
– I do not propose to discuss the agreement other than to point out that I have handed to the Clerk an amendment to be circulated among honorable members. That amendment provides for the continuation of the per capita payments to the States, and, with that exception, leaves the Agreement intact. I ask the Prime Minister to report progress with a view to allowing honorable members an opportunity to grasp the full import of the amendment.
– The clause that we are now considering approves the Schedule which embodies the agreement entered into with the States ; but if we pass it that will only mean that the Schedule in such form as the committee may agree to it, is approved. The passing of this clause would not prevent the agreement from being altered in any way that the honorable member may desire, provided that the committee supports him. He will be at liberty to move any amendment when the schedule is under discussion, although in fairness to him, I point out that as the agreement has been entered into by the Commonwealth with all the States, the Government must ask honorable members to pass it as it stands, or else reject it.
Mr.Rodgers. - It is the whole agreement or nothing.
– That is so.
.- The Prime Minister’s concluding remarks indicate that, if the clause were passed at this stage, it would be practically impossible to amend the agreement.
– We have an assurance that amendments will be considered.
– If the committee accepts the clause, which plainly states that “ the agreement (a copy of which is set forth in the schedule) is approved,” how could it subsequently be altered ? In the event of an amendment being made, the agreement would have to be returned to the States, because they have already accepted the present proposal. If we pass this clause now, we may as well accept the measure in globo. In order to protect the rights of honorable members who may desire to submit amendments to the schedule, the Prime Minister should postpone consideration of this clause.
– Although I am sure that the rights of honorable members would be fully preserved if the clause were agreed to at this juncture, because the schedule which it covers will be the schedule as passed by the committee, perhaps it would be better if the clause were postponed until the schedule has been dealt with.
Clause 3 to 5 agreed to.
Payment op Interest.
– I move -
That in Part III., clause 2, paragraph (6), the words, “ the following amounts in respect of each State as shown hereunder towards the interest payable by that State “ heomitted with a view to insert in- lieu thereof the words, “ an amount equal to 25s. per head of the population of each State towards the interest payable by that State, subject, however, that the amount so provided may be reduced on a population basis should the total amount so paid exceed one-fourth of the total revenue derived from Commonwealth customs and excise “.
The question raised by this amendment will be ‘ one of the most important addressed to candidates at the next election, and I shall take good care that the matter is kept well before the notice of the people, for the reasons that I adduced during the second, reading debate. I should have liked consideration of my amendment to be deferred until tomorrow, to give honorable members ample time to examine it. I commend the Prime Minister for the great change that has been made in. the Government’s proposals, which, with one exception, should be very acceptable to the States.
Sitting suspended from 6.12 to8 p.m.
– I withheld my explanation just before the adjournment in the hope that when the House resumed more honorable members might be present. I now call your attention, Mr. Chairman, to the state of the House, and ask for a quorum. [Quorum formed.’] I look upon this question as one of very great importance to the Commonwealth Government and to the States themselves, and one which I propose, if possible, to make very prominent in the near future. If the amendment which I have proposed is accepted the schedule will read as follows -
The Commonwealth will in each year during the period of 58 years commencing on the 1st July, 1927, provide by equal monthly instalments an amount equal to 25s. per head of the population of each State towards the interest payable by that State, subject, however, that the amount so provided may be reduced on a population basis should the total amount so paid exceed one-fourth of the total revenue derived from Commonwealth customs and excise.
My proposal is to the effect that the per capita payment of 25s. ‘ should be continued until such time as it will absorb one-quarter of the total revenue from customs and excise, and that the payment be reduced after that by such an, amount as will keep it down to one-quarter. Our customs and excise revenue at the present time amounts to £44,000,000. That would provide a sum of £11,000,000 for distribution at the rate of 25s. a head, and would be adequate for such a per capita payment until such time as the population of the States reached 8,800,000.
– That is assuming that the revenue from customs and excise remains at £44,000,000.
– Yes. If the customs revenue fell to £40,000,000 we should then have £10,000,000 for distribution to the States, which would be sufficient to pay .25s. a head on a population of 8,000,000, while if it fell to £30,000,000 we should still be able to pay as much as is provided, for in the schedule of this bill. The Government has stated emphatically, from time to time, that it must get rid of the. per capita system; that such payments are improper and. unjust. At the time the States Grants Bill was before the House last year, the Government intimated quite clearly that it would have nothing more to do with the per capita system. Nevertheless, we find that the system of per capita payment has been incorporated in this agreement for a period of 58 years. The payments of the Commonwealth Government towards the liquidation of the State debts are to be made on a population basis. What, then, becomes of the Government’s objection to the per capita system? Another objection raised by the Treasurer was that it was improper and unfair for one authority to raise money for another authority to spend: Under this agreement, however, the Federal Government will raise money to pay interest, up to a certain amount, on the debts of the States. If the Commonwealth Government pays the interest on State debts, it is obvious that the State Governments will have a corresponding amount of money to spend as they think fit, which is essentially the same as if the Commonwealth had handed them that money to spend. Further examples are provided by the roads grant and the Housing Act, under which the States are to spend money provided by the Commonwealth. It is .clear then that the Federal Government has already departed in many directions from its avowed principle. A big effort is being made to increase migration, not for the purpose of further inflating the cities, but in order to put more people on the land. In Western Australia, in Queensland, and in South Australia an endeavour is being made to- put a large number of settlers on the land. Under the Group Settlement Scheme 10,000 people have already been brought to Western Australia. A scheme has been suggested for the co-operation of the State and Commonwealth. Government in opening up that huge area of wheat-growing land in Western Australia. This will cost money, and the interest on the money expended will have t» be found by the State Government. The Commonwealth Government has asked the States to bring people to the country to strengthen our defence, and to increase the production of wealth. The States are spending millions of pounds on developmental works for the absorption of immigrants, and the States will have to find the interest on that money.
– The States will have the assets that are created.
– The States will derive little benefit from those assets for a long time. The people whom we “ are putting on the land now will not pay any income tax for years. In the meantime, the State Government will have to build roads, erect schools, provide medical assistance, and contribute to charities. The State will have to provide everything without any prospect of a return for perhaps another twenty years. The Commonwealth Government, however, will benefit almost immediately from the arrival of the immigrants. High duties have been placed on practically everything they will use. There is a duty on rails, which must be.used to build developmental railways, and a tax has been placed on every bit of wire netting which will be used. It is difficult to get wire netting even from Great Britain without a dumping duty being placed on it. Every additional person coming into Australia tends to increase the revenue of the Federal Government. It should be possible, with proper administration, to increase the population of Australia to 15,000,000 or 20,000,000 people. ‘
– Does not the honorable member know that these matters were considered by the State representatives when this agreement was framed
– Does not the honorable member know that the Commonwealth Government brought in a bill repealing the per capita payments? After that the Prime Minister took a hand, and secured the agreement of the State representatives to the present proposals. These proposals are excellent, with one exception. In the future the States are not to get any portion whatever of the customs and excise revenue, no matter how that revenue may increase. Have honorable members made up their minds to accept that proposition? That is what we have to consider. When the Constitution was drawn up it was proposed that three-quarters of the customs revenue should be distributed in the form of per capita payments to the States. I om suggesting that one-fourth only should be so distributed. Does any honorable member contend that that is unfair, or that the States have no right to share in any of the customs revenues raised by the Commonwealth Government. In my .own State great developmental works arc being carried out in the south-west, and large numbers of people will eventually be settled there. We have a big area there, as big as the whole of Victoria. Much of it is poor country, it is true, but it will, nevertheless, carry .a large population. The State Government will, have to bear the cost of developing that country, and that being so, I contend that it is unfair that it should not participate in the revenue which it is helping to provide for the- Federal Government. This is a splendid agreement from many points of view, particularly in connexion with borrowing and the provision of sinking funds, but I cannot agree to the abolition of the per capita payment. The action of the Federal Government might be justifiable if it had been able to show that its revenue was not sufficient to continue this payment, but it was not able to do so. The year before the Treasurer took office the revenue of the Commonwealth was £62,000,000.
The CHAIRMAN” (Mr. Bayley).The honorable member is discussing the general principles of the bill.
– I am discussing whether the States should receive any share of the customs revenue, and I am within my rights in pointing out that the Commonwealth cannot make the excuse that it was compelled for financial reasons to abandon the per capita payment system. The federal revenue was £62,000,000 for the year before the Treasurer assumed office. It was £64,000,000 in the following year, and it has grown steadily, until last year it was £7S,000,000. What justification is there, then, for saying that the Federal Government cannot afford to give, the States the money which it gave them in the past? The Government nas retained the per capita system, inasmuch as it proposes to pay a certain proportion of the interest on the State debts on a population basis. We are going to tell the States that no matter how they develop their resources, and how the Commonwealth customs and excise revenue may increase in consequence of that development they will not receive any more money from us. We must recognize that an injury to the States is an injury to the Commonwealth. The States have very large commitments, but this agreement does not take them into account. If my amendment were accepted, the agreement would be much more elastic ‘ and therefore much more effective. TheStates would know, under the scheme which I am suggesting, that they would have to cut their garment according to their cloth.
– Why should the States be liable, to a diminution in their revenue from the Commonwealth, because a freetrade government might reduce the tariff?
– If we had a freetrade government they would suffer no diminution. When one compares the payments which the States received in 1918, with those which they are now receiving it is apparent that they are not being fairly treated. I contend that the States should be paid from Commonwealth customs and excise revenue an amount in proportion to the increase in their population. It may be said th.** if this alteration is made in the agreement the whole scheme will collapse, but I disagree with that view. Every State Premier would gladly call his Parliament together to ratify an alteration oi this description.
– I question that.
– The beneficial result of such an alteration would be enormous.
– Has the honorable member estimated what the population would, be before the payment would fall below 25s. per head.
– Taking the customs and excise revenue’ at £45,000,000 the States would receive 25s. per head until our population had reached 8,800,000. I do not think the customs revenue is likely to fall below £40,000,000. Let me make it quite clear that this is the only alteration that I suggest in the agreement.
.- I am not likely to forget the fight of the honor- able member for Swan (Mr. Gregory) some little .time ago for the view which he represents. We all honour him for his persistence in maintaining his own point of view. Prior to the dinner adjournment, the honorable member intimated that there was a “ catch “ in his amendment. . I have been waiting for him to disclose it, but he has not done so; consequently we must look for it ourselves. Prior to doing so I wish to draw atten- tion to one or two .defects in the honorable member’s argument. He said that the States had heavy commitments, the full effect of which no one could foresee. That is perfectly true. But the gentlemen who participated iri the conferences which led to the formulation of this agreement were not ignorant of those commitments. In fact, they were equipped with all .the knowledge needed to estimate them, so far as it was within human power to do so. It appears to me that after considering all the facts of the case they came to the conclusion it was better to have a definite rather than an indefinite income, to enable them to meet their commitments. It is impossible for us, or any one else, to estimate the variations that may occur .in our customs and excise revenue, or in our population - though we all believe that this will increase - or in the distribution of the population over the various States. No doubt the experts who considered this agreement took all these matters into consideration.
– -The trouble was that we had spiked their guns.
– We ‘ may argue on this matter until doomsday,- and still differ in opinion upon it. One hundred years hence the historians may conclude that, had the view of the honorable member for Swan been accepted, it would have been, for the welfare of the nation; but, on the other hand, they may determine that the country would have gone to the dogs had the honorable member’s advice been acted on. We do not know. All that we can do is to determine the matter in the light of the best information that is available to us. I believe that this agreement has been formulated after the most careful consideration of all the pros and cons. I come now to the “ catch “ which the honorable member mentioned. It is simply this: that if we accept the amendment we shall reintroduce the basic subject which has been the cause of all the disagreement during the years which have passed. This agreement was drafted during my absence from the Commonwealth. It is possible that if I had remained here some remark of .mine might have changed the whole course of events. The point is that I was not here, and this is the course that events have taken. I may say this, though : that one of the things that drove me away was that I had a continual headache from listening to such arguments as have been submitted to us this evening, and I do not want to have my health impaired by a repetition of them. This matter has been considered by the most qualified men in the country, and we may take it that the agreement is the best possible reconciliation of their varied views; consequently I trust that we shall accept it.
.- The honorable member for Swan (Mr. Gregory) desires to kill the agreement; if that is not his intention, he has overlooked the real effect of his amendment. I cannot agree with his contention that his scheme will be beneficial to the States, either immediately or ultimately. It may happen that our revenue from customs and excise will fall. .
– Surely it will never fall below £30,000,000 !
– It is quite conceivable that it may. The view of the Labour party is that an effective protectionist policy reduces the customs revenue. Under the present proposal the
States will at least know bow much they may expect to receive from the Commonwealth. But under the. proposal of the honorable member they will always be in the dark. A more serious objection to the amendment is that if it is accepted, the whole agreement will go by the board, for it is provided in part 1, clause 1, that-
This agreement shall have no force or effect and shall not ho binding on any party unless and until it is approved by the Parliaments of the Commonwealth and of the States.
The agreement can only become effective if the parliaments of the Commonwealth and all the States ratify it. No provision is made for any of the parties concerned to alter it. The parliaments must either accept it or reject it.
– Surely this Parliament can amend it if it desires to do so?
– This Parliament may reject it or accept it; but I submit that it has no power to amend it. If this Parliament amends the agreement, it is thereby destroyed, and a new agreement must be made.
– I agree that if it were amended it would have to be returned to the State parliaments for their ratification.
– The honorable member should have taken the opportunity to place some provision in the bill itself to enable the agreement to be referred back to its authors in the event of any alteration being made in it. That purpose would not be accomplished by attempting to modify the agreement by the proposed amendment of the schedule. An amendment would accomplish the destruction of the old agreement, but I cannot support that, nor do I think that many other honorable members are prepared to do so.
– I do not propose to traverse the ground already covered by the honorable members for Barton (Mr. Ley) and Dalley (Mr. Theodore). The facts are as they were stated by those honorable members. I point out to the honorable member forSwan (Mr. Gregory), who moved this amendment, that the inevitable result of its acceptance, apart from the problem of its practicability would be that the sinking fund provided by the agreement would have to be removed from the bill. The Leader of the Opposition (Mr. Charlton) has already shown the burden that the present agreement will place upon the Commonwealth. Now the honorable member for Swan desires to superimpose an additional burden. It is quite evident that it could not be borne. The State Premiers admit that they are benefiting to the extent of £960,000 more than under the per capita scheme. If the proposed additional burden were added the Commonwealth Government would be unable to carry on the sinking fund payments. The operations of the Loan Council would not then be as successful, nor would Australian credit be as satisfactory, as would be the case if the sinking fund were maintained. Because of that, and because it would emasculate the proposed agreement, I urge the honorable member for Swan not to press his amendment.
.- I urge the honorable member for Swan to withdraw the catch, and his amendment. The catch is the apparent restoration of the opportunity to honorable members to vote on the merits or demerits of the 25s. per capita scheme. That scheme cannot be restored without destroying the whole of the proposed agreement.- The honorable member cannot put us back where we were. The ship which he loves so well, and which I also favoured, is sunk. The Prime Minister and the Treasurer are to be congratulated upon entering into the conference with the States from such a. vantage ground. The per capita payments had been withdrawn, and some other scheme had to be substituted. The honorable member for Swan cannot re- place the ship that has gone, and honorable members will not be caught, as the 25s. per capita arrangement cannot again be voted for without involving the destruction of this agreement.
.- I do not agree with the statements made by the honorable members for Dalley (Mr. Theodore) and Wannon (Mr. Rodgers). If we adopt the attitude that because this is an agreement entered into and approved by a number of States we have to accept it, where does responsible government come in?
– The agreement has to be accepted or rejected.
– The honorable member would have us believe that the ship has sunk. If we refuse to endorse this agreement it does not necessarily follow that the ship has sunk. It merely means that further conferences between State and Federal representatives would have to be held to review the position. The States are still in the same state of duress that they were in when they entered into this agreement. Apparently honorable members have short memories. This Parliament repealed the Surplus Revenue Act and forced the States to come to some decision. I give the States credit for having outwitted the Commonwealth and they now have an exceedingly good- agreement. Although I opposed the agreement, I approved of the provision for the Loan Council, which went a long way to overcome my objections. -I also oppose this amendment, because it would give the States even better terms than they now have under the agreement. I realize, as must other honorable members, that the Commonwealth Government must in the future take over considerable obligations from the States. The tendency is to clothe this Parliament with greater and greater powers. As those powers are given to the Commonwealth they reduce the responsibilities of the States, and it would be illogical and unsound to allow the States to draw more money after being relieved of many of their obligations. Such a position would necessitate the imposition of heavy taxation by the Commonwealth Government. Until the population of Australia reaches 8,800,000, which .will be in twenty years with our present increase rate of 130,000-per annum, there will be very little difference between the effect of the agreement and that of the proposed agreement. After that the States would benefit considerably. Under the agreement as it stands the States will benefit to the extent of £1,822,000 at the end of fifteen years, but at the end of twenty years the Commonwealth will benefit to the extent pf £1,87S,000. The acceptance of this amendment would extend favorable conditions to the States for an additional five years. The agreement is a good one for the
States, and does not need improving. The Commonwealth would find it difficult to raise the necessary money if the amendment were accepted. As custodians of the interests of the people we have to look ahead, and it is only because of that that I offered any opposition to the agreement. I admit that the honorable member for Swan has a perfect right to move his amendment, which should be carried if approved. Honorable members should not endeavour to make it appear that the agreement is a settled thing.
– Nobody says that.
– That is what has been suggested.
– In practice the agreement can only be rejected or accepted.
– If it is rejected, further conferences will be necessary in order to draw up a new agreement. That would not necessarily have to be done within a given time. This agreement may be carried on for two years before it is submitted to the people for ratification by a referendum; but there is nothing to prevent the Government extending the present payments for an additional term. If this ‘amendment were included in the agreement submitted to the people that agreement would be rejected. In 1910 the people were asked to approve of a payment of 25s. per head being incorporated in the Constitution, and they decided against it. They would record a similar decision if this amendment were carried and submitted to them in the agreement.
.- I was particularly interested in the opinion of the honorable member for Barton (Mr. Ley), who urged the House to accept the agreement merely because it was endorsed by the States. The honorable’ member appears to have acquired quite suddenly a profound respect for the opinion of the States. A year ago, when the States chanced to be hostile to the schemes of this Government, the. honorable member condemned them, and treated them almost with contempt. To-day, when they chance to support the schemes of the Government, the honorable member contends that we should bow to the wishes of the States. I cannot support the amendment moved by the honorable member for Swan (Mr. Gregory), because of his proposed limitation of the extent to which the States may participate in the customs and excise revenue, to 25 per cent, of the whole. Had that limitation not been embodied in the amendment, I should support it. It may be remembered that I strongly favour a substantial reduction of revenue duties, and that I am also very sympathetic towards a reduction of excise. I look forward to seeing the customs and excise duties substantially less than at present. If that hope is realized, the States will be in an even worse position, than they are in to-day. I appeal to the honorable member for Swan not to be depressed about the future. “We have been told that the States will be better off for fifteen or twenty years under this agreement. I look upon the whole agreement, as purely of a temporary nature; otherwise, I should not have supported the second reading. I do not, for one moment, anticipate that it will last for 58 years. The original provision for paying the States three-quarters of the customs revenue lasted for only ten years after federation, while the per capita payments operated for eighteen years. It seems logical, therefore, to assume that this agreement will stand’ only until the people, in their own generation, decide to alter it. I know of nothing more absurd than that this House should attempt solemnly “to legislate for ‘58 years ahead in the supremely important realm of finance. If I thought that’ the agreement would last for that term I should not view it as favorably as I now do. It is merely a good temporary arrangement.
The Treasurer referred again to the effect this agreement would have in enhancing the credit of the Commonwealth. I strongly deprecate these highly-coloured assurances as to the effect which the agreement will have upon the credit of the Commonwealth, in either reducing the interest rates or improving our credit abroad. It is a pity that that aspect of the agreement has been so greatly exaggerated. More important than the machinery by which we borrow and repay money, is the use to which we put it, and we shall be judged by the world not by our sinking funds and ar rangements for borrowing, but by the purposes to which we devote money when it is lent to us. That our credit in the world stands relatively low in comparison yith that of other British Dominions is not because of the absence of sinking funds or of inefficient borrowing machinery, but because of the rate of our expenditure in recent years and the extent to which the money has been employed upon unprofitable works.
.- I congratulate the honorable member for Swan as a distinguished representative, of the ancient order of diehards upon his praiseworthy endeavour to have the whole principle of the bill, which has been already accepted by the carrying of the second reading, altered by an amendment which, judged by the modesty of the mover, seems perfectly innocuous, but is in fact absolutely destructive. The position of the committee is rather curious. “We are asked at this stage to adopt in globo an agreement between the Commonwealth and7 the States, covering twelve pages of closely printed matter, and we are told that if we alter one line or letter of it we shall do something fatal to the whole structure. In practice, that is true, and it arises from the fact that the Commonwealth Parliament comes into the negotiations at the tail end. “We should have come into them at the beginnning. This agreement when drawn by the Government should have been submitted to this Parliament and here discussed in detail, and it should not be brought to us as a completed instrument with an intimation that we must accept it or reject it as it stands. The points of view of’ the honorable member for Dalley and the Leader of the Opposition are reconcilable. The honorable member for Dalley says rightly that this agreement has been accepted by tha States and is brought before us as a schedule to the bill, and if we interfere with the schedule in any detail we might as well not have agreed to the second reading. The Leader of the Opposition, on the other hand, says that this Parliament is in the curious position of being told that it must accept this agreement in toto, because if we attempt to amend it, all the work that preceded our .deliberations here will fall to the ground. I think the whole discussion on this schedule is irregular. The proper place for it was on clause 2. It was there that we should have decided to accept or reject the agreement. The question now before the committee is merely “ That the schedule be the schedule to the bill and we should not be discussing the details or merits of the agreement. A curious way of dealing with matters is developing in this Parliament; with increasing frequency short bills with very long appendices are presented to us, and when we have dealt with the introductory clauses, we are helpless in regard to the kernels of the measures, which are contained in the appendices. My “main purpose in rising is to protest against this Parliament being consulted last in connexion with the various deliberations leading up to the agreement, and against our being., asked to accept such a document in globo. The Government drafted the agreement; some have been unkind enough to say that it was “submitted to the States with a polite intimation that if they did not accept it voluntarily it would be forcibly fed to them. “Whether or not that be true, we are the last to be consulted in regard to it. On the general question, I look forward to the time when the Commonwealth will come into its own, and those who now boast loudly, or urge patriotically, that Australia is in fact a nation among a commonwealth’ of nations, will recognize that we cannot have undivided nationhood unless somewhere there is a final responsibility, and there cannot be ultimate responsibility in a nation which has- not final control of its finances. I hopefully anticipate the time when the present more or less petty State jealousies and contentions will disappear. They die hard, because people, no matter what their political colour, are reluctant to surrender power, and the power of the purse is the most potent in the relationships of human beings. The States are loth to give up the power they have in regard to local government; so they retain their local sovereignty and the batch of imported Governors and all the trappings that go to make up the panoply of State government.
– Order! The honorable member is going too far.
– Curiously enough I, too, was thinking the same. For the reasons I have mentioned I cannot support the amendment moved by the persistent and amiable honorable member for Swan.
– I thank the Leader of the Opposition for his clear statement of my point of view. Feeling as I do I was fully justified in submitting this amendment. I am sorry if the honorable member for Barton (Mr. Ley) has contracted a headache over it; it is pitiful that any honorable member should be asked to study in detail an agreement of this character. The honorable member for Wannon (Mr. Rodgers) suggested that I should withdraw the amendment because the ship has been sunk. It has not been sunk, although an attempt has been made to scuttle it. When the Premiers met the Federal Treasurer their guns had been already spiked, and they had no option but to accept this agreement. My object in proposing the amendment is that it may focus the attention of the people upon the extraordinary action of the Federal Parliament during the last two years in legislating upon so important an issue without consulting the electors. I have little hope that the amendment will be carried, but it may gain circulation amongst the people, and they will realize the justice of my contention that a small share of any increase in the customs and excise revenues should go to the States, which are doing their part to build up the prosperity of Australia. I remember one honorable member boasting that he had told the people in his constituency that he was prepared to accept the promise of the Prime Minister in regard to the future of his State. Finance is government, and when we undermine the finances of a State we undermine the authority that controls it. I hope this amendment will have some little influence at the next election, and that when the” new Parliament assembles we shall find that the ship of State Rights is not lost entirely, as . the honorable member for Wannon believes, but that it will be salved, and an undertaking, which was one of the vital conditions upon which the States federated, will be honoured.
– I support the amendment moved by. the honorable member for Swan (Mr. Gregory) ; but at the same time I regret that, in doing so, I find myself in disagreement with some of the members of my own party. The honorable member for Batman (Mr. Brennan) has said that he is looking forward to the time when the petty State jealousies that at present persist, will be removed. In other words, he desires the whittling away of the sovereign rights of the States in order to increase the powers of the Commonwealth. One lesson thatwe have learnt from history is that countries cannot be governed from a distance. Had Great Britain, during the reign of George III., granted selfgovernment to the American colonies, the great nation of America might still be apart of the British Empire. Nothing has been so disastrous to Australia as the attempt to govern the Northern Territory, first from Melbourne, and now from Canberra. Yet we are today trying to control, from the Seat of Commonwealth Government, the development of such far-flung States as Western Australia and Queensland. The withdrawal of the per capita payments from the States must certainly bring about financial chaos, not only to them, but also to the federation. If this Government persists in trying to filch’ powers from the States, irrespective of the great work of land settlement that they are doing, we shall soon find ourselves in a fool’s paradise, because the people of Australia, refusing to tolerate any interference with the powers of the States, will reject the referendum by a vast majority.
The Treasurer has referred to the burden that the Commonwealth would have to bear if the amendment were carried, because it would ensure to the States a par capita payment of 25s. for the next fifteen years. It would not be longer than that period. Our population at present increases at the rate of 130,000 per annum; but as it increases, so our birth-rate increases. In fifteen years’ time, at least, the States would probably be in financial difficulties, but the Commonwealth finances would not be affected, because provision is made in the amendment that not more than one-quarter of the customs revenue shall be received by the States. That proposal is very different from the position that existed when the people of Australia voted for federation. At that time one-quarter of the customs revenue was to be given to the Commonwealth, and three-quarters to the States. The policy of filching money from States, which perform the most important function of developing the country, certainly does not commend itself to me. and it is very doubtful whether it will commend itself to the people of Australia.
Question - That the words proposed to be omitted stand part of the schedule (Mr. Gregory’s amendment) - put. The committee divided.
Majority . . . . 35
Question so resolved in the affirmative.
Schedule agreed to.
Postponed clause 2 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Motion (by Mr. Bruce) proposed -
That the House do now adjourn.
.- I take this opportunity of drawing attention to the position that has arisen at Walsh Island dockyard, which, of course, is under State control. I do not intend to go into the merits of the dispute that has been in progress there in regard to the bonus system; but I am concerned at the fact that this week all employees, with the exception of about 50 out of 2,000, are being paid off, thus adding materially to the number of unemployed in New South Wales. The matter in dispute was dealt with in the Commonwealth Arbitration Court by Judge Beeby, who decided that the bonus system should not be introduced. In fixing the conditions in regard to employment, he provided for day wages. The point that I wish to emphasize is that, without reference to the court, the State Government has decided to dispense with the services of its employees. In my opinion this is purely a lock-out. The law that the employees are expected to obey should also be observed by the employers. The fact that a State Government has refused to obey the court’s award makes its conduct more reprehensible than a similar act of a private employer. The State Government has certainly set a bad example. It should have gone to the court for a variation of the award, instead of changing the conditions operating at the Island . and throwing a large number of men into a state of idleness. The Commonwealth Government is spending about £150,000 towards the cost of constructing a floating dock there, and I think that some representation might be made to the State Government from this Parliament. Action such as this only serves to foment industrial trouble. The law provides that claims must be brought before the court. The men were working under an award, and, because they refused to accept altered conditions that were forced upon them by the State Government, they were accused of striking, when in reality they were locked out. We cannot expect industrial peace if either party, at its own sweet will, breaks its agreement and declines to apply to the court for an alteration of an award. In addition to the large number of men who have been thrown out of work, many other persons are indirectly affected, and the result will be greatly to swell the ranks of the unemployed. At a time when there is general depression throughout Australia, every effort should be made to keep men in employment. We should try to induce the State Government to have the matter again referred to the court, whose decision should bc obeyed.
– But the men will not always do that.
– I am dealing with a specific case. When employees refuse to work under conditions that are disagreeable to them, they are generally accused of participating in a strike; but it is most difficult to prove a lock-out on the part of the employer. The present trouble at Walsh Island is clearly due to a lockout, and the Commonwealth should at least know whether it is possible for the dispute to be referred to the Arbitration Court.
Perhaps more public interest is now focussed on the Abrahams case, concerning which the honorable member for Batman (Mr. Brennan) has given notice of a motion, than on any other matter engaging our attention at the present time. It cannot be justly claimed that this case is sui judice, although the AttorneyGeneral (Mr. Latham) stated recently that according to the court it was so. According to the Minister, the case might remain sui judice for all time. Notice of the motion has been given with the concurrence of the Opposition, and I suggest to the Prime Minister that the setting apart of a day, say to-morrow, for its full consideration is warranted.
.- I should like the Prime Minister to give an outline of the intentions of the Government with regard to work at the Cockatoo Island dock-‘ yard. The present position there is very uncertain. A large number of men, who constitute a highly trained staff, depend upon the activities of that establishment for employment. Work has been very slack at the Island lately, and the outlook is not promising. One important undertaking that has been carried on there for some months past is now nearing competition: I refer to the construction of the equipment for the seaplane carrier, Albatross. This work, it is expected, will be completed about August next, and a considerable portion of the personnel will then be dismissed unless other employment is provided. Naturally the men are apprehensive as to the future. About 900 men are engaged at the Island at the present time; although, when the shipyards were fully staffed, as many as 4,000 men were employed. Has the Government arrived at any decision in the matter, or is it contemplating the adoption of a policy regarding the future of the Island? The tendency seems to be to allow work to be diverted from it. That is having a deplorable effect. The yards are well equipped with modern appliances and plant suitable for carrying out extensive naval and ship construction and repair work. If it is likely that further vessels will be built for the Australian Navy, as much of this work as possible should be done at Cockatoo Island, and it should be put in hand as early as possible in order to provide continuity of employment for the highly trained personnel there. This personnel includes engineers, boilermakers, and artisans. It would be unfortunate if that skilled staff had to be dispersed, since it would not be easy to get it together again should the need for it arise. An unfortunate decision by the High Court regarding a contract for certain plant required by the Sydney City Council for the Bunnerong power station a year or so ago, prevented work being done at the Island that would have ensured activity there for a period of three or four, or even more, years, and would, no doubt, have enabled the authorities to maintain continuity of employment. Possibly, had that contract been given to the dockyard, the management could have expedited the work at periods and could have slackened off the contract work when employment at the dockyard was active on other orders. Unhappily, however, that contract was let overseas. So far as practicable, the Government ought to devise a policy of active, employment for the equipment and staff at the dockyard. I believe that that would be a sound policy, economically and industrially. From the point of view of defence, too, it would be wise to maintain the Island at full efficiency and capacity.
.- I wish to support the remarks of the honorable member for Dalley (Mr. Theodore). I am very pleased that he raised the matter of the skilled staff at Cockatoo Island. I would go so far as to say that when we have spent £7,500,000 on new ships such as cruisers, submarines, and a seaplane carrier, even if we cannot find enough work to keep the men employed all the time, the staff should be kept intact. Years ago we sent men Home to learn this class of work. Subsequently they were allowed to drift away into private employment, and now we cannot get them back. There are other skilled men employed at Cockatoo Island now; and are we to lose them in the same way? This is a matter to which the Government should give serious consideration.
This morning the honorable member for Lang (Sir Elliot Johnson) asked the Minister representing the Minister for Defence a question regarding the . training of men for the Navy. As a member of the executive committee of the Navy League in New South Wales I intended to bring that matter up this morning, or possibly to move the adjournment of the House in order that it might be discussed. However, as the honorable member for Lang has raised the question, and as it will, I understand, be on the notice-paper tomorrow, I have no desire to anticipate the Minister’s reply. The Navy Leagues of Australia have written recently to the Prime Minister raising the subject of the age at which recruits join the Navy. The practice for centuries past has been for recruits to join at the age of fifteen or sixteen years. The idea is to catch them young, so that they may imbibe the traditions of the Navy, and have instilled into them the ideas that are necessary to make efficient sailors. Some time ago the Public Works Committee of this Parliament went into the matter, and suggested that Geelong should be chosen as the place where naval men should be trained. The Government declared that it had not sufficient money, and that it would not go on with the proposal. It then disposed of the Tingira, in which hundreds of the best naval men had been trained, and, at the same time, raised the age of enlistment to nineteen. It is impossible to train Australians at the age of nineteen, because they are men by that time. This matter is causing a good deal of concern among Navy League men in Australia, and among naval men generally. I ask the Prime Minister to consider seriously the request put before him by the Navy Leagues of Australia that there should be sufficient money placed upon the next Estimates to enable us to revert to the system of commencing naval training at the age of fifteen or sixteen years.
– I desire to endorse the remarks of the honorable member for Dalley, and to make an appeal on behalf of the experienced and technical staff at present employed at Cockatoo Island, together with the army of skilled workmen now engaged there. Any action which the Government may take, particularly in regard to employment, will now be belated. Nevertheless, it has a duty to the men at Cockatoo Island, and particularly to those men who have spent the greater part of their lives in the shipbuilding industry. The Commonwealth Government, and also the Government of New South Wales prior to the taking over of the dock in 1913, spent many thousands of pounds in despatching Australian workmen overseas to gain experience in the building of warships and submarines. Later, owing to the shortage of work at the dockyard, the services of these highly trained and experienced men were lost to the Commonwealth. They were absorbed by various firms, and brilliant young men with great careers before them were snapped up by engineering firms in different parts of the country. Now, instead of their services being at the disposal of the Commonwealth, they are mostly employed in private ship-repairing works. The plant at Cockatoo Island is valued at £400.000, and that is one reason why it should be retained, and continuity of employment provided. It is the most up-to-date in the Southern Hemisphere, and we have the men with the necessary experience to use it. Unfortunately, the Governmentthrough its action in placing an order for two cruisers and submarines overseas, hasrobbed Australian workmen of a great deal of employment. Had they been built in Australia, over £3,000,000 would have been spent in labour alone. We should strive to keep whatever ‘work Ave can for our own Australian workmen. The dockyard at Cockatoo Island1 has the necessary facilities for building ships, for docking them, and for carrying out major repairs. I suggest to the Prime Minister that the Government may perhaps see its way to authorize such expenditure on next year’s estimates as will provide for the conversion of the naval collier Biloela into an oil carrier. That would provide a good deal of employment. We have heard a lot of “ squeakers “ talking about the cost of doing work at Cockatoo Island. I can speak Avith experience of this, and I can say that work done there with Australian labour and Australian materials will compare more than favorably Avith work done overseas. Let me remind honorable members that the two submarines recently built overseas have developed trouble on the way out. The honorable member for Wentworth a few years ago raised the question of the ability of Australian dockyards to build submarines, and the Prime Minister stated that Ave had not a dockyard in Australia capable of turning out these vessels. We have the facilities here for doing the work, but, unfortunately, Ave have men in control of our navy office who are more English in their outlook than Australian. It is time we had in control men with a stronger Australian sentiment. We pride ourselves on the excellence of the soldiers whom we sent to the Avar, and upon the manner in which they were equipped; yet we are told that Ave do not possess either the men or the plant necessary to construct submarines. That is, the attitude of an anti-Australian. I have a great admiration for those who were responsible for the construction of the Brisbane, the Adelaide, and other ships built in Australian dockyards. The work was’ better than that turned out on tlie other side of the world. As the result of this policy of constructing ships locally, we attracted to our shores hundreds of men specially trained in Belfast, on the Clyde, and in other shipbuilding yards. We have a duty to those men, arid the Government should do something on their behalf before it is too late. The honorable member for Franklin has complained regarding the delay in the construction of ships, and regarding the cost of the work. Let me remind the honorable ‘ member that circumstances in the past have not favored local construction. We have been obliged to send overseas for material, and have been at the mercy of conditions prevailing in the Old Country. A few months ago there was trouble in the coal mines in England, and the output of the steel works there was interfered with. The contractor for the Commonwealth Government for plate and angle iron was a firm engaged in ship construction work overseas, and if there was any shortage of material it would see that it filled its own requirements before troubling about ours. The Government should keep the staff at Cockatoo Island together so that the men might be available at a time of national emergency. There are many ways in which they can be kept employed, and their services retained for Australia. Ten months ago the Joint Committee of Public Accounts presented to this Parliament a report dealing with the Commonwealth Government Line of Steamers, and touching also upon the activities ‘ of the Cockatoo Dockyard. The committee made a recommendation that the whole of the work of government departments should be undertaken by the Cockatoo Island Dockyard. The Customs Department, Lighthouse and Navigation Department, Works and Railways, and other government departments have much work to do from time to time which could, and should, be undertaken by our own dockyard. I trust that the Prime Minister, in his reply, will indicate what hope he can hold out to these men, some of whom have been in the employ of the dockyard for many years. There are also men occupying managerial positions - men who enjoy a high reputation in shipbuilding circles. They have been taken away from their own spheres of activity, and it is our duty to provide them with remunerative employment. Unfor tunately, Cockatoo Island dockyard has had a rather chequered career. It has been under the control of the State Government, then of the Commonwealth Government, and has been, at different times, under the control of various Commonwealth departments. Owing to this diversity of control, many of the old employees have technically lost their right to long-service leave. The Public Accounts Committee urge that they should receive the sympathetic attention of the Government. I hope that the Prime Minister will intimate that the Government is prepared to do the right thing by them. There are cases in which men have completed nineteen years’ service. If the yard had continued under the old management, instead of having been handed over to the Commonwealth Shipping Board, those men would have been entitled to six months’ leave ; but now the Government refuses to recognize its obligation to them. In conclusion, let me say that the high cost of shipbuilding at Cockatoo Island in the past has been due to a number of causes which.cannot be laid at the door of the Australian workman nor of the management of the yard. We have at Cockatoo Island an excellent establishment under efficient management, with a fine body of workmen who should be kept in employment.
– I desire to bring under the notice of the Minister representing the Minister for Trade and Customs, a matter of urgentimportance which demands immediate action. During the recent debate on the censure motion the Minister for Trade and Customs informed me that only 65 petrol pumps had been imported into Australia during the past seven months. I have just received a letter from the secretary of the Chamber of Manufacturers, of New South Wales, which states, inter alia -
I understand, on excellent authority, orders for over 500 pumps representing a capital outlay of £30,000, have already been placed for American and other foreign makes. As a matter of fact, we believe that an instalment of these is on the water at the present time. This is a setback to Australian manufacturers, particularly as there are at least twelve competing firms needing the work, and in a position to supply the whole of our Australian requirements in these lines.
The reasons for these importations, amongst other reasons is, I am informed that the Atlantic Union Oil Corporation is about to commence extensive business operations in Australia. Seeing that we have more than a dozen companies manufacturing petrol pumps, in Australia there is no justification for these importations. About two months ago I introduced a deputation to the Minister for Trade and Customs at which speakers pointed out that not less than £500,000 worth of petrol pumps would be required in Australia in the next few years. It was asked that the Tariff Board should be requested to make immediate inquiries into the matter with the object of recommending the imposition of a specific duty on petrol pumps. The secretary to the Chamber of Manufacturers of New South “Wales refers to this in his letter to me. He writes -
So far as we know no reference has been made to the Tariff Board, and therefore that body has not been able to institute the very brief inquiries necessary to establish these facts to their satisfaction.
The delay is a serious and an irksome one, particularly when one bears in mind the alarming increase in unemployment in New South Wales, in particular, at the present time. This chamber has been invited by the Government of New South Wales to participate in a conference to deal with unemployment problems. So far as we can see, it devolves into a question of finding more work for established industries. I know of several cases where the possibility of placing work with Australian manufacturers is on the balance at the present time. Here is a case where prompt action on the part of the Government can divert to Australian manufacturers, a line that must mean a worth-while instalment, and to that extent a reduction in the amount of unemployment.
In view of the large amount of unemployment in Australia and also of the large importations that are occurring, I submit that every possible step, should be taken to protect the interests of the Australian manufacturers and workmen, and to stimulate the Australian petrol pump manufacturing industry. Seeing that petrol pumps are in the nature of a luxury importation and that the American oil interests are already niching millions of pounds per annum from the Australian people, the Government should take some drastic step to deal with the situation.
19.491. - The general report of the Parliamentary Standing Committee on Public Works for 1927 contains certain reflections on the Federal Capital Commission, in “consequence of which I have had inquiry made into the matters complained of. Paragraph 13 of the report states that -
Certain works carried out at Canberra have been estimated at so small an amount under the statutory £25,000 as to warrant the impression that the Federal Capital Commission is purposely endeavouring to avoid investigation of its projects by the committee.
And quotes the cost of certain hotels in support of this view. The committee contends that the total cost at which a project stands as a debit in the books of the ‘ Commission, when absolutely finalized, is the completed cost within the meaning of section 15 (1) of the Commonwealth Public Works Committee Act. In fairness to the Federal Capital Commission, I wish to state that, about two years ago, the Commission raised this issue, and that, after considering the representations made, the then Minister acquiesced in the view that the Commission should base its estimates, for the purpose of Public Works Committee references, on the net cost of a project, exclusive of interest charges during construction, architectural fees and costs, and general administration costs. The object in view was to avoid differentiating between the Commission and the other constructing authorities of the Commonwealth which Parliament obviously had in mind when it passed the Public Works Committee Act, and which are not required to take into account such charges. These charges consist of the amount of the interest which the Commission has to pay, during the course of the construction of a building, on the loan moneys expended on it and overhead charges, which represent the cost of the services of the Commission and its executive officers clerical and accounting work, preparation of plans . and specifications, and supervision. The present rate for overhead charges is 8 per cent, on the actual cost of construction, except in cases where the Commission decides for any reason to make a special reduction. The Commission does not need to include these figures in. its estimates, but in preparing its various utility balance-sheets it has to operate on a strict accountancy basis and include both overhead and interest. Insistence upon the Commission including such charges in its estimates for the purpose of Public Works Committee references would have . the anomalous effect of requiring a Commission building estimated to cost a very little over £22,000 to be referred to the committee, whereas a building proposed to be constructed by, say, the Works and Railways Department at an estimated cost of £24,000, would not need to be so referred. In the case of each of the hotels mentioned by the committee, an expenditure of between £1,000 and £2,000 had to be incurred in respect of extras. It is, therefore, quite clear that there was an ample margin between the cost as estimated by the Commission and the statutory limit of £25,000, and I can find no support for the inference that the Commission, in these matters, deliberately evaded a reference to the committee. Paragraph 14 of the report, which relates to the cost of Government House, is, admittedly, in a different category from the other strictures of the committee, but an examination of the circumstances does not disclose any ground for ascribing to the Commission the intention of “ purposely evading “ its obligations. I ask honorable members to bear in mind that the Commission, upon its appointment, was faced with an enormous programme of work which had to be completed within a very limited .time. One of the most urgent works was the remodelling of Yarralumla House for use as the residence of the Governor-General The preliminary designs forwarded to the Commission involved an estimated cost, for the building alone, of considerably less than £25,000, and the work was accordingly put in hand without hesitation. Some months later, upon a change occurring in the Governor-Generalship, a review of the situation showed that, through no fault of the Commission, the actual requirements had’ been insufficiently considered in the first instance, and that it would be necessary to provide offices and certain other outbuildings, separate and distinct from the main building. Soon after this extended scheme had been developed and a commencement made therewith, the decision to invite Their Royal Highnesses the Duke and Duchess of York to visit Canberra for the purposes of the Parliamentary opening ceremonies was reached, and this necessitated a still further review, which made it clear that additional accommodation would be needed. At the time, the Commission was definitely under the impression that individual buildings, although forming part of an aggregate, could rightly be regarded as individual works, and it was not until after all of the work was well in hand that the general question of Public Works Committee references was raised in connexion with cottage contracts. I am assured by the Commission that it had not the slightest intention of flouting the committee, and that it very much regrets any action on its part that may not have been in strict conformity with the letter and spirit of the act. As I think I have sufficiently indicated, the whole organization of the Commission was working at extraordinarily high pressure in an endeavour to have all arrangements m readiness for the transfer of the Seat of Government to Canberra, and it had become involved in a very much bigger programme for Government House than had ever been contemplated. Paragraph 15 of the report relates to the residence of the Prime Minister. So far as I understand the position, I am unable to see that the facts provide any justification for the censure which this paragraph seems to imply. The entire cost of the building,, including both overhead and interest, was less than £18,000, which is greatly below the statutory limit of £25,000. It is not the practice to include the cost of furnishings in estimates for Public Works Committee references, but, even with the furnishings added, the cost of the completed and furnished building, excluding overhead and interest, is below the statutory limit, and, with overhead and interest included, is only £287 above it.
.- As chairman of the Public Works Committee, I appreciate the courtesy of the Minister for Home and Territories in making available to me an advance copy of the statement he has just made. I should like to make it plain to him and to this House that the committee has no wish to harass the Minister in any way, or to belittle in any fashion the enormous task which confronts the Federal Capital Commission, which in many respects is being very capably handled. At the same time, the Public Works Committee feels that it is invested with the duty of keeping Parliament fully informed on all questions affecting public works which come within its scope. It is felt that in every case of contemplated expenditure on public works Parliament, which has to vote the money, should be fully informed of the total liability to which the country is being committed. In hisstatement, the Minister for Home and Territories said that the estimates submitted by the Federal- Capital Commission did not include interest during sourse of construction, architectural fees and costs, and general administration costs, and explained that a previous Minister had acquiesced in the commission’s view that these charges should not be included. Whether they should or not is therefore reduced to a matter of opinion,- but the committee considers that they should, so that it, and consequently the Parliament, might be fully informed of the total expenditure. The Commonwealth Public Works Committee Act provides that every proposed public work which comes within its scope should be first explained in the House by the Minister and that -
The explanation shall comprise an estimate of the cost of the work when completed . . together with the prescribed reports on the probable cost of construction and maintenance ….
As the Commission admittedly has to take cognizance of the total charge, the committee maintains that Parliament should be made aware of what the total cost is. If, as stated by the Minister, a work estimated by the commission to cost £22,000 is loaded with other charges, so that the actual sum expended will exceed the statutory £25,000, there is much more reason for the opinion of the committee that this House should be so informed. The fact that the Federal Capital Commission’s accounts are kept on a. commercial basis, and that that body is charged interest on all moneys advanced by the Commonwealth, places it in a somewhat different category from that of an ordinary Commonwealth department, but the view of the committee is that Parliament should be fully informed of the total expenditure on any proposed work. As to the contention that the - commission was “ definitely under the impression that individual buildings, although forming part of an aggregate, could rightly be regarded as individual works, as it was not until after all of the work was well in hand that the general question of Public Works Committee references was raised in connexion with the cottage contracts,”
I point out that the Commonwealth Public Works Committee Act, which was passed as long ago as 1913, makes it clear that- no public work of any kind whatsoever . . the estimated cost of which exceeds £25,000 and whether such work is a continuation, completion, repair, reconstruction, extension, or a new work, shall be, commenced unless sanctioned as in this section provided.
Various public departments have frequently acknowledged the help that they have received from investigations by the committee, and it is our desire that the Minister and the Federal Capital Commission should also realize that the committee is not anxious to indulge in captious criticism, but is ever ready to approach in a helpful spirit the consideration of all projects submitted to it.
– The Leader of the Opposition (Mr. Charlton) has called my attention to the trouble that has so unfortunately occurred at Walsh Island, and has resulted in the closing down of the dockyard there, and the throwing out of employment of a great number of men. Every honorable member must greatly deplore the situation that has thus arisen. I do not propose now to speculate as to the causes of that trouble, or as to who is at fault, nor do I propose to discuss generally the subject of strikes and lockouts, and endeavour to apportion blame . for what has occurred. The honorable member, in effect, put to me this question : Would the Government make representations to the Government of New South Wales as to a course of action which that Government is now pursuing? On reflection, he must recognize that it is extremely difficult for the Government of one sovereign State to make representations to that of another with regard to any course of conduct. Consequently, having regard to the relative positions of the governments and parliaments concerned, I do not feel that I should follow the course suggested by the Leader of the Opposition.
I assure the honorable member for Batman (Mr. Brennan) that I shall take steps to permit an early discussion of the motion of which notice was given by him this afternoon. The Leader of the Opposition has indicated that it concerns a matter of great public importance, and in that I agree with him. There is the further fact, that it is so worded as to suggest almost improper conduct on the part of the Government. It is, therefore, desirable that the matter with’ which it deals should be ventilated at the earliest possible moment, and I assure the House that an opportunity will be given for its discussion.
The future activities of the Cockatoo Island Dockyard were referred to by the honorable member for Dalley (Mr. Theodore), and his remarks were supported by the honorable members for Cook’ (Mr. C. Riley) and Wentworth (Mr. Marks). I assure honorable members generally that the Government shares the view that the activities of Cockatoo Island must continue, and that the trained and efficient staff which has been got together cannot be permitted to disperse. A few years ago the Commonwealth set about obtaining two modern 10,000-ton cruisers, two- ocean-going submarines, and an airplane carrier, and it is essential that we shall have in Australia facilities for docking and repairing our fleet. The Commonwealth must .see that this dockyard is kept going in order to maintain our sea defence. But there is a limit to the amount of construction work that can be done there. Honorable members opposite would not view very enthusiastically the prospect of the construction of naval vessels either in Australia .or elsewhere ; indeed, no one would desire that Australia should be forced to indulge in a great programme oi naval construction. As to ordinary mercantile work, I have received many deputations protesting against Cockatoo Island being used other than for naval and other’ government work; but I have always refused to acquiesce in that view. This Government stands definitely and firmly for the principle of private enterprise, but when, because of national exigencies, we have to conduct business enterprises, we certainly shall not do so at a loss if this can be avoided or at excessive cost. At the same time we took steps in 1923 to ensure that our competition would not be unfair. We insisted that in the estimates of cost the necessary provision should have to be made for income taxation and other charges, as with private enterprise, and that .the dockyard should compete with private enterprise only on equitable terms. Subsequently strong representations were made to me that the dockyard was not functioning on a fair and proper basis, in that excessive overhead charges were being debited against government work, so that outside work must be tendered for without making provision for the proper proportion of overhead costs. I asked the board to report whether that was the case, and it reported that it was not the case. My complainants were still not satisfied and, as I did not wish any misunderstanding to exist, I asked the Commonwealth AuditorGeneral to investigate the position and report. He reported that no such practice existed, but that a fair debit of overhead charges was being made against all contracts. The dockyard has, therefore,- continued its operations, being entitled to compete for outside work so long as the Government has to keep it going for purposes of defence and other public needs of the people of Australia. Last year, however, when the dockyard had obtained a certain contract its right to undertake the work was challenged, and the court declared that it could not take it. That work was consequently lost to the dockyard. There may be doubt as to the actual constitutional powers of the Commonwealth in this regard, but I do not propose to discuss that matter now.
The Government recognizes that the dockyard must be kept going. It also recognizes that if the skilled staff which has been built up is to be retained it is essential that there should be a continuity of work. In the past the Government has endeavoured to obtain all the work that could be done by the dockyard, and that policy will becontinued. ‘ I cannot hold out any hopes in regard to naval construction, that in the immediate future any large order will be placed with the dockyard. It was contemplated that the construction programme would extend over a period of five years, and that period does not expire until next year. To carry out that programme the Commonwealth Government went to the maximum of its financial resources, and of the burden that could legitimately be placed on the Australian people for defence at present. There is, therefore, no prospect of additional employment being granted in that direction in the immediate future.
The honorable member forCook (Mr. C. Riley) referred to a subject that has been fairly thoroughly thrashed out in this House, and on the platforms of the country, when he said that the order for the two cruisers recently placed in Great Britain should have been placed with the Cockatoo Island dockyard. I remind him that the decision both in this House and in the country went badly against him. I remind him, further, that because the two cruisers were not built in Australia it was possible for the Cockatoo Island dockyard to undertake the construction of the seaplane carrier. The Government wasable to effect a saving of £1,000,000 in the building of the two cruisers, so making it possible to build the seaplane carrier at Cockatoo Island.
The honorable member for Wentworth (Mr. Marks) advocated the acceptance of boys atan earlier age for training in the Navy. The Government is giving that matter every consideration. I have received strong, representations on the subject. The extension of age was due to financial circumstances, many of the important things connected with our naval programme having to be weighed against each other to determine where money could best be saved. On the advice of its naval officers the Government took the course embodied in the policy for this year. I assure the. honorable member that his representations will receive the fullest examination.
The honorable member for Reid. (Mr. Coleman) quoted a statement made by the Minister for Trade and Customs (Mr. Pratten) in the course of a motion moved by the Leader of the Opposition. I understand that the statement was that during a period of seven months only 60 to 70 petrol pumps had been imported into Australia. I have no knowledge of the circumstances, but have no doubt that the information given by the Minister was accurate. The honorable member now has some further information, and says that an order for 500 petrol pumps has been placed. I shall look into the matter, and bring his remarks under the notice of the officers of the Department of Trade and Customs with the object of ascertaining the exact position.
Question resolved in the affirmative.
House adjourned at 10.15 p.m.
Cite as: Australia, House of Representatives, Debates, 21 March 1928, viewed 22 October 2017, <http://historichansard.net/hofreps/1928/19280321_reps_10_118/>.