House of Representatives
7 March 1929

11th Parliament · 1st Session



Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 2.30 p.m., and read prayers.

page 843

PUBLIC ACCOUNTS COMMITTEE

Mr. PROWSE presented the Fifth General Report of the Joint Committee of Public Accounts. .

Ordered to be printed.

page 843

PROCEDURE IN DIVISIONS

Personal Explanation

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

– I am obliged to make a personal explanation regarding the following paragraph published in the Daily Telegraph Pictorial of to-day : -

BRUCE’S REBUKE.

“Give Definite Ruling,” He Swaps. Speaker in Trouble.

Canberra, Wednesday.

A rebuke administered to the Speaker by Mr. Bruce was the outstanding feature of another lively hour in the House of Representatives to-day.

The Prime Minister seldom displays irritation, but he did so this afternoon. “ You might give a definite ruling,” he snapped at Sir Littleton Groom while the Speaker labored in his decision as to whether the (Country party) was in order in crossing’ the floor of the chamber after the tellers had been appointed in a division on the question that the Financial Agreement Bill should be treated as an urgent measure.

Mild Uproar.

After wild pandemonium, the Speaker ruled that Mr. Collins was on the move before the tellers were appointed, and he (the Speaker) did not realize that he wanted to cross over - in fact, he thought he was leaving the chamber - Mr. Collins could remain on the Opposition side.

It was then Mr. Bruce rapped out his “ You might give a definite ruling.”

The vote resulted: 38 ayes, 20 noes.

The explanation of the episode is that you, sir, were in doubt as to whether the honorable member for “Wakefield had moved from his place before or after the tellers had been appointed. You decided to give him the benefit of the doubt, but in order to avoid the possibility of difficulties arising in the future, I asked you to give a general ruling for the future guidance of honorable members. You then ruled that after the tellers had been appointed an honorable member might not change his place. I wish to remove any impression that I spoke discourteously to you, and I hope that no impression was left on your mind that I was endeavouring to rebuke you, as the newspaper suggests.

Mr SPEAKER:

– I have not seen the paragraph to which the right honorable gentleman has referred, but I assure him that I did not feel that he had been guilty of any discourtesy to the chair. It is fortunate, in one way, that this episode occurred yesterday. Immediately after the tellers had been appointed I noticed that the honorable member for Wakefield (Mr. Collins) had left his seat, and was, as I thought, about to leave the chamber. An intimation was given to me that he was merely crossing from the “ Ayes “ to the “ Noes “, and I assumed that the House would be willing to allow the honorable member, who is unfamiliar with parliamentary procedure, to record his vote as he intended. Rulings on this point have varied. In 1908 a definite ruling was given that even after the tellers had been appointed a member might be permitted to record his vote- as he desired; but subsequently it was realized, apparently according to a ruling in 1913, that after the presiding officer had divided the House by directing the “ Ayes “ to the right and the “ Noes “ to the left, and had appointed tellers, a member should not be allowed to change from one side of the chamber to the other. That, I think, is the procedure that I should adopt. After the “ Ayes “ have been directed to go to the right and the “Noes” to go to the left, a brief time might be allowed to enable honorable members to take sides before the tellers are appointed. After that has been done the place in which an honorable member is sitting must be taken to indicate how he intends to vote, and he will not be allowed to change his seat until the result of the division is announced. I understood the Prime Minister to ask yesterday for a general ruling, apart from a specific episode, so that honorable members might know the practice to be followed in future. Upon this point the Standing Orders are not definite, and we have not the practice of the House of Commons to guido us, but the procedure I have indicated is one which I think may be safely adopted.

page 844

TRANSPORT WORKERS BILL

Personal Explanation.

Mr BRENNAN:
BATMAN, VICTORIA

– I desire to make a personal explanation. In this morning’s Canberra Times appears the report of an interview alleged to have been given by the honorable member for Maranoa (Mr. Hunter) to a representative of that journal, in the course of which the following words occur : -

The - Country Party Whip (Mr. Hunter), seen with reference to the even vote on a subclause of the Waterside Transport Workers

Bill, said yesterday that no significance at all was attached to the vote by the Government. Mr. Thompson moved an amendment to the effect that a man who may have been convicted as an habitual pillager, could have hia licence restored within one week instead of six months as the bill provided.

The mover of the amendment, doubtless, is able to defend himself. I am not greatly concerned about him, but I, together with a number of other honorable members, supported the amendment. I realize that in this matter I can speak only for myself. The innuendo contained in the words I have quoted is that I favoured men convicted of repeated acts of pillaging on the wharfs having their licences restored after only one week’s cancellation.

Mr Latham:

– I rise to a point of order. I submit that a reflection on a party, or on a number of persons of whom an honorable member is one, is not a reflection upon an individual entitling him to make a personal explanation.

Mr SPEAKER (Hon Sir littleton Groom:
DARLING DOWNS, QUEENSLAND

– When there is a reflection upon a definite number of members of this House who are clearly indicated, and that reflection is regarded by one of these members as a misrepresentation of his actions in this House, he is entitled to make a personal explanation to show in what way he has been misrepresented.

Mr BRENNAN:

– The misrepresentation applies to me personally as one who supported the amendment. I submit” that the newspaper report is a gross misrepresentation, in that it implies that the object of the amendment which I supported was to restore licences to persons repeatedly convicted of theft.

Mr SPEAKER:

– The honorable member must not, under cover of a personal explanation, discuss the amendment itself.

Mr BRENNAN:

– If permitted to do so, I shall show my obvious intention in supporting the amendment. I submit that I am entitled to do that.

Mr SPEAKER:

– -The honorable member is not in order in giving reasons for voting for or against the amendment, or in discussing the provisions of a measure previously dealt with. He is entitled to deal with the misrepresentation of which he complains as applying to himself,

Mr BRENNAN:

– I accept unequivocally your direction, - sir, on that point. If the honorable member for Maranoa (Mr. Hunter) has been correctly reported in the press - and that is a matter between him and the newspaper - he has represented me as declaring that I meant a certain thing when I supported the amendment. If the honorable member has not been misrepresented in the press, then the newspaper has so misrepresented my action.

Mr Stewart:

– And the action of every other honorable member who supported the amendment.

Mr BRENNAN:

– I speak for myself. I submit that I have been misrepresented, as my intention in supporting the amendment was to protect workmen from unreasonable demands and against monstrous penalties.

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– I rise to make a personal explanation following on the statement of the honorable member for Batman (Mr. Brennan) regarding the report in the Canberra Times alleged to be. an interview given by the Country party Whip (Mr. Hunter) in relation to an amendment to the Transport Workers Bill which I moved in committee this week. The report states that the object of my amendment was to restore licences to persons convicted of pillaging after a period of one week had elapsed. Honorable members know that I moved no such amendment. If the statement attributed to the honorable member for Maranoa (Mr. Hunter) in the press was made by him, I can only say that it was a deliberate falsehood.

Mr SPEAKER:

– Order! I ask the honorable member to withdraw the charge that another honorable member was guilty of a deliberate falsehood.

Mr THOMPSON:

– I paid, Mr. Speaker, that if the honorable member did make the statement attributed to him in the press, it was a deliberate falsehood ; but I doubt whether the statement appearing in the Canberra Times was actually made by the honorable member. My object in moving the amendment was to reduce the minimum period for which a licence should be cancelled from six months to one week. I made no reference to pillaging in my speech or to the character of the persons whose licences were cancelled.

Mr SCULLIN:
YARRA, VICTORIA

– The point raised by the honorable member for Batman (Mr. Brennan) is more a matter of privilege than one for a personal explanation. I think that honorable members are entitled to raise a question of privilege when the statement appears in the press that they voted to allow pillagers to have their licences renewed after one week’s cancellation.

Mr SPEAKER:

– Honorable members, if they intend to raise a question of privilege, must conclude with a motion. Where a newspaper is involved, a special procedure is laid down in the Standing Orders.

page 845

QUESTION

PARLIAMENT HOUSE COOLINGPLANT

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I desire to address a question to you, Mr. Speaker. When was the cooling plant of this chamber tested; what was the result of such test; was it made in summer or winter, or in both seasons, and if so, was it made under working conditions?

Mr SPEAKER:

– The honorable member was good enough to give me notice of his intention to ask this question. A report which has been received shows that the plant was tested at the end of March, 1927, and the result was considered satisfactory for average Canberra temperatures. The test was made in the autumn when Parliament was not sitting, but running tests are made fortnightly during each session to check the efficiency of the plant.

page 845

QUESTION

LINSEED ANDFLAX CULTIVATION

Mr CULLEY:
DENISON, TASMANIA

– Can the Minister inform the House whether the report of the Tariff Board on linseed and flax cultivation has been received, and if so, when it will be made available to honorable members ?

Mr GULLETT:
Minister for Trade and Customs · HENTY, VICTORIA · NAT

– The report has been received, and is now under consideration.

page 845

QUESTION

CENTRAL AUSTRALIA

Lost Policeman

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– -Has the Minister seen a statement appearing in a section of the Melbourne press regarding a lost policeman, and if so, has he any information to give the House about the matter?

Mr ABBOTT:
Minister of Home Affairs · GWYDIR, NEW SOUTH WALES · CP

– The honorable member for the Northern Territory (Mr. Nelson) asked a question on this subject yesterday. The following additional advice came to hand this morning by telegraph from the Government Resident in Central Australia: -

On the 17th December two settlers were sworn in to assist Constable Johnson in the search for the murderer of Henty. On the 26th January, the party returned to Barrow Creek as the tracks of the murderer had been lost and the horses had knocked up. On the 15th February, the services of the special constables were dispensed with and Constable Murray was sent from Alice Springs to take up the search with the assistance of Constable Johnson. Constable Murray advised that he expected to be absent some weeks. Murray is well acquainted with the country. Owing to the entire absence of communication, I have not heard from the party since its departure from Barrow Creek, but no anxiety is felt here.

page 846

QUESTION

AMALGAMATED WIRELESS LTD. LITIGATION

Mr FENTON:
MARIBYRNONG, VICTORIA

– I draw the attention of the Attorney-General to the following paragraph in the agreement between the Government and Amalgamated Wireless (Australasia) Limited -

  1. – 1. The company agrees to prosecute as expeditiously as possible to judgment the actions which have already been instituted by it in Australia for infringement of patent rights which actions it is agreed are for infringement of patent rights substantially important in connexion with wireless broadcasting..
  2. The company agrees that, unless within twelve months from the commencement of this agreement, judgment in its favour (otherwise than by consent) is given by the court of final resort upon the issues raised prior to the date of this agreement by the pleadings in one or more of the actions referred to in sub-clause (1) of this clause, it will, within the aforesaid period of twelve months commence an action or actions in New Zealand for infringement of the New Zealand equivalents of the Australian patents………

Can the Attorney-General inform me whether these cases have been settled in Australia and whether the company has satisfied the Government in respect to the matter ?

Mr LATHAM:
NAT

– One action was decided in Sydney against the company, and another in Melbourne in favour of it, and this result was sufficient to fulfil the conditions in the agreement. Although it is no longer necessary for the company to proceed with the proposed

New Zealand action, I received information some time ago that it intended to do so. I have no definite information on the point.

page 846

OBJECTIONABLE LETTER

Personal Explanation

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I desire to make a personal explanation. Several articles appeared in yesterday’s metropolitan newspapers dealing with a certain matter to which I wish to refer. I quote the following article from the Sun News Pictorial -

page 846

CHALLENGE TO FIGHT

Labour Member Gets Insulting Letter. Another Named

Canberra, Tuesday. - “ The dishonorable member for West Sydney, “ is the commencement of a letter received by Mr. Beasley (Labour, New South Wales), purporting to have been written by another member of the House of Representatives, Mr. Roland Green (Country party, New South Wales).

In the letter, Mr. Beasley is challenged to a fight, and reference is made to razors. The signature is not Mr. Green’s, and the writing is believed to be that of another Labour member. Mr. Green was greatly annoyed to-day when the letter was shown to. him. The letter, apparently, was sent as a joke, but a number of members take a serious view of the incident, which is likely to be mentioned in the House. During a debate last week, Mr. Green and Mr. Beasley had sharp interchanges. Mr. Green lost a leg in the war.

The matter was first brought under my notice by the honorable member for Hunter (Mr. James), and I thought he was joking; but on his assurance that he was not, I asked the honorable member for West Sydney (Mr. Beasley) whether he had actually received a letter purporting to be signed by myself. He replied that he had. I showed him my signature, and asked him if the signature on the letter was like if. He said it was not then, and kindly showed me the letter. The general statements in the article which I have read are correct, but I regard the whole matter as so serious, that I feel obliged to direct attention to it. If honorable members are to be subjected to crude and ponderous practical jokes of this kind, if this is a joke, or to weird emanations from unbalanced minds, such as this may be, it appears to me that the honour and dignity of Parliament, as well as that of honorable members, will be impugned. I am glad to say that the honorable member for West Sydney has assured me that he is perfectly satisfied that the letter was not written by me, but by some other person who thought it would be a joke. I have no means of’ ascertaining who wrote the letter, and I wash my hands of the whole business.^ I would not in any circumstances whatever write such a letter.

page 847

QUESTION

COTTON INDUSTRY

Mr J FRANCIS:
MORETON, QUEENSLAND · NAT; UAP from 1931; LP from 1944

– Has the Minister for Trade and Customs yet received the second portion of the report on the cotton industry? If so, is he able to inform us whether legislation will be introduced this session to grant relief to this industry? I had the privilege last year of introducing to the Prime Minister a deputation of persons interested in the industry, and he expressed to it the hope that the report would reach him before the end of the year, and that the matter would be dealt with early this year.

Mr GULLETT:
NAT

– The report has been received, but all that I am able to say at present is that it is under consideration.

page 847

TRANSPORT WORKERS BILL

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– I direct the attention of the Prime Minister to the following paragraph in an article in to-day’s Sydney Daily Guardian, respecting the Transport Workers Bill : -

This bill is anathema to all the trades unions in Australia. Since it is so fiercely resented by ha.lf our adult population, as something hatefully obnoxious to their free citizenship in daily life, a national government should not insist on driving the measure through Parliament by sheer force of party discipline.

Seeing that it is a fact that half our adult population resents the iniquitous provisions of this bill, will the Prime Minister at even this late hour withdraw the measure ?

Mr BRUCE:
NAT

– The bill has been passed through this House. I do not propose to take any action in the direction suggested.

page 847

QUESTION

ROYAL COMMISSION ON THE CONSTITUTION

Mr THOMPSON:

– Has the Prime Minister yet received word from the Chairman of the Royal Commission on Constitutional Amendments as to whether its report is in process of completion, and if not, will he make inquiries of Professor Peden to ascertain the cause of the delay in completing that work?

Mr BRUCE:
NAT

– I have no information respecting the preparation of the report, but I shall ascertain from the chairman of the commission when it is likely to be received. I am afraid that I cannot couch my inquiry in the way suggested by the honorable member, and ask why there has been delay in completing the report, because we have to remember that this is probably the most complicated and difficult subject that has ever been tackled by any body of men in Australia. We should need much more evidence before we could say that there had been undue delay in presenting the report.

page 847

QUESTION

COAL MINING INDUSTRY

Government’s Proposals

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Will the Prime Minister allow the coal mine workers to select a thoroughly competent accountant to examine the books of the coal-owners, the private railways, and the shipping companies which are engaged in the transport of coal, and place no restriction whatever upon the scope of the inquiry in respect of coal production and distribution costs?

Mr BRUCE:
NAT

– I have received a communication from the representatives of all the unions working in the coal mining industry, putting forward the suggestion that they should be permitted to appoint any accountant selected by them to examine the books of the coal-owners, and also to investigate the shipping and distribution costs. When replying to that letter I pointed out that that was not the proposal which was considered by the conference, and was to be submitted to the committee representing all the unions. That proposal was that an accountant should be selected by the representatives of the men from a panel of three firms of chartered accountants nominated by the president of the Institute of Chartered Accountants. I also pointed out that the offer of an inquiry was only to investigate and verify the position set out by the Premier of New South Wales and upon which he based his offer, and in particular to ascertain whether it was a fact that the profits of the owners were 2s. or less a ton. Yesterday I had a conversation by telephone with Mr. Davies, the secretary of the Miners Federation, who said that they were then sitting in conference. He asked me whether the Government would be prepared to agree to their nominating any accountant they thought fit to carry out the investigation. I replied that it was essential that the firm of chartered accountants who made the investigation should carry the confidence of the whole of the people, and consequently I could not agree to any firm of chartered accountants being nominated; that it was essential that the selection should be made from the firms nominated by the head of the chartered accountants profession in Australia. I also told Mr. Davies that I knew that to be the opinion of the Premier of New South Wales, but I said that if the choice from three firms was too limited, this Government, and also the Government of New South Wales, would be quite prepared to increase the number to six or even more so as to offer a larger selection to the representatives of the men.

Mr James:

– Does not the Prime Minister consider that we are capable of selecting an accountant?

Mr SPEAKER:

– Order !

Mr James:

– There is no order about it. The Government is starving the women and children of this country and I for one am not going to stand idly by while that is being done.

Mr SPEAKER:

– The honorable member must obey the order of the Chair.

Mr WEST:
EAST SYDNEY, NEW SOUTH WALES

– I wish to bring under the notice of the Prime Minister the following press paragraph -

Replying to a deputation from the Victorian Chamber of Mines to-day, the Premier, Sir William McPherson, said that in his opinion any move to export coal under the federal bounty from one State to another, would be unconstitutional. He said that he did not propose to make any premature move. If the coal bounty scheme looked like coming to anything, Victoria would act to protect the Victorian mining industry.

I ask the Prime Minister whether the proposals of Mr. Bavin and himself in regard to the coal miners would, if given effect, be unconstitutional and invalid, and if so, should they not now be withdrawn and some other course pursued?

Mr BRUCE:

– I can assure the honorable member that the fullest legal opinion has already been obtained, on this question, and, should the preliminary conditions be fulfilled, and effect be given to the proposals which embody a payment of ls. a ton on export and interstate coal, the scheme will be carried out in such a way as to obviate any constitutional difficulty.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– In view of the seriousness of the position in the coalmining industry, and the fact that people are starving in the coal districts, will the Prime Minister allow an inquiry to be made into the shipping and railway costs? These are practically inseparable from coal costs; because it is difficult to ascertain what costs are chargeable to the colliery and what are chargeable to shipping and railway transport?

Mr BRUCE:

– There are two inquiries in contemplation. One is an inquiry into the figures upon which the proposals for a reduction in the price of coal were based, to ascertain whether the profits of the owners exceed 2s. a ton. To arrive at those profits the difference between the cost of producing coal and its selling price is taken. Into that question neither watered capital nor the ramification of the coal industry enters, but in the full investigation of the royal commission, questions respecting watered capital, over-capitalization, the ramifications of the shipping and distributing companies, and every factor in the coal mining industry can be inquired into, but that inquiry will take a long time and will not solve the immediate problem. Our present difficulty is in relation not to the general inquiry but to the immediate investigation of the figures which have been put forward, to ascertain whether the coal-owners’ profits do or do not exceed 2s. a ton, and “in the event of the profits being less than 2s. a ton, the miners can agree to the proposals submitted by the Premier of New South Wales.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– In view of the f actthat the Prime Minister readily accepted the figures submitted by the mine-owners in the early stages of the dispute, why should any restriction be imposed upon the investigator so long as he is competent to perform the duties with which he is entrusted?

Mr BRUCE:

– So far as the investigation itself is concerned, there is no restriction. The firm of accountants chosen can investigate the whole of the figures that are now available, and also obtain any further information which they think necessary to enable them to decide whether the profits that are being made amount to 2s. a ton or more. The honorable member probably regards as a restriction the nomination of the accountants by the President of the Institute of Chartered Accountants. That procedure is essential to ensure that the firm appointed shall command the confidence of the whole of the people of Australia.

page 849

QUESTION

ADMINISTRATION OF NORFOLK ISLAND

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– Is it a fact that General Elliott has been appointed as Administrator of Norfolk Island; if so, who is this gentleman, and for what term is the appointment ?

Mr BRUCE:
NAT

– No appointment as Administrator of Norfolk Island has been made.

page 849

QUESTION

FEDERAL CAPITAL COMMISSION

Questions in Parliament : Personal Explanation - Treatment of the Press.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I desire to make a personal explanation. The instance to which I shall refer appears to me to be almost an infringement of the privileges of honorable members of this House. In to-day’s issue of the Canberra Times appears the following paragraph relating to a meeting of the Federal Capital Commission : -

Dr. Watson. ; In many cases the Commission cannot supply the goods. What does the ?80,000 worth of stock represent. Concrete, isn’t it?

Sir John Butters. ; Certainly not. I saw the question you caused to be asked in the House.

Dr. Watson (indignantly). ; I resent that. I have never had a question asked in the House since I became Third Commissioner.

Sir John Butters. ; It’s rather a coincidence that you should ask this question immediately after it has been asked in the House.

I asked the question referred to, and it was answered yesterday. The question was “What is the value of the Stores Department of the Federal Capital Commission ?” and the answer was “ ?88,541.” During the last month I have seen Dr. Watson only once, but that was only a casual meeting, and he did not prompt me to ask the question to which I have referred. It would appear that the Chief Commissioner does not think that honorable members read the reports of the Committee of Public Accounts. One of those reports commented on the large amount of stores held by the Commission. No reference was made to that comment by the Chief Commissioner; he evidently wished to ignore it. I resent his suggestion, which is not only unjust, but also so false that I was prompted to ask the question.

Mr Scullin:

– What authority had he for making the statement?

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– No authority whatever. This approaches perilously near to a question of privilege, and that may be the development if he continues to attack members in the discharge of their public duties. I consider that the present suggestion is the emanation of a megalomaniac mind.

Mr SPEAKER:

– I suggest to honorable members that in any references they may make to public servants it is advisable, if possible, not to indulge in personal remarks.

Mr ANSTEY:
BOURKE, VICTORIA

– On Monday last the Federal Capital Commission met, and was presided over by His Majesty, Sir John Butters. I use that term with due deference; because whether bird-like I view him from above or wormlike from below, I am struck by the majesty of his deportment. I understand that he informed members of the press that the Commission would meet again at 10.30 a.m. on Tuesday. They attended at that hour, but after they had been allowed to cool their heels outside the place of meeting for some time, they were informed that there had been a postponement until 11.30 a.m. on Wednesday. When that hour arrived the meeting did not commence; but at noon they were told that it would take place at 2.30 p.m. Only one pressman then attended, and Sir John Butters protested against the indignity that had been placed upon him by those who had absented themselves. I understand, also, that the Chief Commissioner demands of pressmen that they should all pay to him the deference that is paid to local governing bodies. I ask the Minister for Home Affairs whether he will see that pressmen are compelled to remove their shoes before they enter the sacred portals of the Commission, and will demand that they pay to the Chief Commissioner greater deference than is paid to any other local governing body in Australia?

Question not answered.

page 850

QUESTION

IMPORTATION OF MOTOR CARS AND ACCESSORIES

Mr SCULLIN:

asked the Minister for Trade and Customs, upon notice -

  1. What was the number and value of motor chassis imported into Australia during the years 1926-27 and 1927-28?
  2. What was the value of motor accessories imported into Australia for the years . 1 926-27 and 1927-28?
  3. What was the number and value of motor engines not attached to chassis imported into the Commonwealth during the years 1926-27 and 1927-28?
  4. Are fitments attached to motor engines, such as magnetos, carburettors, and spark plugs, considered to be integral parts of the engine and charged duty at the rate applicable to the engine, or are such parts assessed at the rate chargeable to motor accessories?
  5. What difference, if any, is there in the duty applying to engines and to accessories?
  6. What was the number and value of motor tires imported into Australia during the years 1926-27 and 1927-28, (a) attached to chassis; and (b) unattached to chassis?
  7. What was the number and value of magnetos imported into Australia during the years 1926-27 and 1927-28, (a) attached to engines; and (b) unattached to engines?
  8. What was the number and value of car burettors imported into Australia during the years 1926-27 and 1927-28, (a) attached to engines; and (b) unattached to engines?
  9. What was the total value of spark plugs imported into Australia during the years 1926-27 and 1927-28?
Mr GULLETT:
NAT

– The information is being obtained as far as possible.

page 850

DEVELOPMENT AND MIGRATION COMMISSION

Investigation Officers

Mr.CURTIN asked the Prime Minister, upon notice -

  1. How many investigation officers are now engaged under the direction of the Development and Migration Commission?
  2. What are the salary and allowances paid to each investigating officer, and what are the qualifications each has for the work he is engaged on? 3. (a) What inquiry is each investigating officer occupied with at the present time; (b) when did each inquiry commence; and (c) when is it expected that each inquiry will conclude ?
Mr BRUCE:
NAT

– The information is being obtained.

” PATTERSON’S CURSE.”

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Minister for Home Affairs, upon notice -

  1. Is it a fact that the plant known in the Albury district as “ Patterson’s Curse “ has been proved by analysis, &c, to be a good food for stock?
  2. If so, will he obtain and publish the result of the analysis?
  3. If it is a good forage plant for stock, in view of its great beauty and its strong growth, will he have it introduced and planted in the Federal Capital Territory in order to improve the poorer areas of land?
Mr ABBOTT:
CP

– The answers to the honorable member’s questions are as follow: -

  1. I am not aware of the fact that the plant known as “ Patterson’s Curse “ has been proved to be a good food for stock.
  2. I shall cause inquiries to be made in regard to the matter.
  3. The question of the introduction of the plant into the Federal Capital Territory will be considered in the light of the result of such inquiries.

page 850

QUESTION

NORTH AUSTRALIA COMMISSION

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

asked the Minister for Home Affairs, upon notice -

With reference to the question by the honorable member for the Northern Territory on the 6th instant, and the Minister’s reply thereto, will the Minister now state -

In respect of what part of the recommendations of the North Australia Commission has the Government taken action to give effect to such recommendations ?

What is the nature of such recommendations and what is the estimated cost involved in giving effect to same?

Which recommendations are being fur ther investigated, and on what grounds ?

Mr ABBOTT:
CP

– The answers to the honorable member’s questions are as follow: - 1 and 2. The honorable member’s attention is invited to the summary of recommendations of the North Australia Commission contained in paragraph 12 of the commission’s initial report on its scheme for development of North Australia presented to. Parliament on the 29th March, 1928. It is not possible to give estimates of costs of all the undertakings recommended, as many of them, such as roads, stock routes, water supplies, &c., are being carried out as opportunity offers and money is available in accordance with estimates submitted by the commission from time to time and appropriated by Parliament.

  1. Certain recommendations in respect of railways, telegraph lines, and ports and harbours are being further examined with a view to securing the fullest information as to probable costs, &c., before submitting for parliamentary consideration as required by the law any proposals which the Government may favorably consider.

page 851

QUESTION

BANANAS

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

In view of the many serious allegations in the press regarding the inferior grade of bananas supplied to the public and the high prices demanded for them, will he refer the question to the Tariff Board, under section 15 of the Tariff Board Act, for inquiry as to the expediency of removing or reducing the duty on bananas?

Mr GULLETT:
NAT

– The Tariff Board has many important inquiries in hand, and at the present stage I see no sufficient occasion to refer to the hoard the question of the duty on bananas.

page 851

QUESTION

MIGRATION

Queensland Arrivals - Finns

Mr MARTENS:
HERBERT, QUEENSLAND

asked the Prime Mini ster, upon notice -

What number of assisted immigrants (nominated and otherwise) have arrived in Queensland each year since the recent Migration Agreement with great Britain came into operation?

Mr BRUCE:
NAT

– Since the 8th April, 1925, the date on which the £34,000,000 agreement between the British and Commonwealth Governments became operative, the following assisted migrants have arrived in Queensland: -

Mr MARTENS:

asked the Minister for Home Affairs, upon notice -

  1. How many Finns were nominated to enter Australia during the last twelve months ?
  2. How many (giving particulars as to adult males and females, also children) have arrived in each State as aresult?
Mr ABBOTT:
CP

– The replies to the honorable member’s questions are as follow : -

  1. and 2. None, but during the year1928, the following Finns arrived and were admitted to the respective States on compliance with the usual immigration requirements asto landing money. &c: -

page 851

QUESTION

CANBERRA

Hotels

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

asked the Minister for Home Affairs, upon notice -

  1. What was the original building cost of each of the hotels and boarding houses at Canberra ?
  2. What was the cost of the furnishings of each building?
  3. Which of these buildings were erected (a) by day labour, and (b) by contract?
  4. What was the total loss to 31st December, 1928, incurred in the conduct of these establishments ?
Mr ABBOTT:
CP

– The information is being obtained and will be conveyed to the honorable member as soon as possible.

page 851

QUESTION

QUEENSLAND ROAD CONTRACTS

Mr MARTENS:

asked the Minister for Works and Railways, upon notice -

  1. Has his attention been drawn to a statement in the press that “by submitting ridiculously low tenders a number of unnaturalized Finns threaten to gain a monopoly of roadmaking on the tablelands of Northern Queensland”?
  2. Is it obligatory on the Main Roads Board to submit tenders for road-making to the Minister for approval or otherwise?
  3. Is it a fact that at present the Federal Government lays it down that tenders must be called and that the lowest tender is to be accepted?
  4. If so, will he take immediate steps to see that this work is given to Australians and not to unnaturalized foreigners, who cut the rates so that a council or contractor paying wages under an award cannot compete with them?
Mr GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

– The replies to the honorable member’s questions are as follow : -

  1. No.
  2. No; see answer to No. 3. 3 The Federal Aid Roads Agreement, clause 9 (4) provides that the method of execution of works covered by the agreement shall be by contract, unless the State Minister certifies that execution by day labour would be more economical and/or expeditious, in which event the Federal Minister may authorize construction by that method. Plans, specifications and estimates in. respect to all works authorized are submitted to the Federal Minister. The question of the acceptance or otherwise of any tender received up to the amount authorized is a matter coming under the control of the State authorities.
  3. This is a matter coming entirely under the control of the State, the constructing authority, the attention of which is being drawn to the representations of the honorable member.

page 852

QUESTION

PUBLIC SERVICE

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Minister for Home Affairs, upon notice -

  1. Is it a fact that some of the Melbourne homes of the public servants who were transferred to Canberra have realized considerably more money than paid by the Government?
  2. If so, has such surplus been paid to the previous owners; if not, why not?
Mr ABBOTT:
CP

– The replies to the honorable member’s questions are as follow : -

  1. Some of the Melbourne homes of public servants realized more money than was paid by the Government for such homes. On the other hand, a number of the houses were sold for less than the prices paid by the Government. The report of the chairman of the Board of Valuators indicates that, in connexion with the sales of homes of officers transferred in the first and second waves, the properties were disposed of for practically the same sum as the Government paid for them.
  2. The surplus has not been paid to the previous owners. The arrangement for the purchase of homes of officers transferred to Canberra provides that any profit or loss made by the Commonwealth on the re-sale thereof shall be retained or borne by the Commonwealth as the case may be.

page 852

QUESTION

LONE PINE MEMORIAL

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. With regard to the pilgrimage to the battlefields and war graves, which is due to leave Australia early in June, is it intended that a representative of the Government shall accompany the pilgrimage ?
  2. Will the Government avail itself of the opportunity to have the Lone Pine memorial unveiled during the visit to Gallipoli?
  3. If so, will the Government consider sending, say, two representative returned soldiers from each State, to be chosen by the Returned Sailors and Soldiers Imperial League of Australia in each State?
Mr BRUCE:
NAT

– The answers to the honorable member’s questions are as follow : -

  1. Whilst the Commonwealth Government is assisting in every possible way in regard to the provision of travelling facilities for the persons participating in the pilgrimage, it does not propose to send a representative to accompany the party.
  2. As the memorial in question was completed over two years ago, it is not considered that an unveiling ceremony would be appropriate at this late stage.
  3. See answers to Nos. 1 and 2.

page 852

QUESTION

AUSTRALIAN COMMERCIAL AGENT IN PARIS

Mr BEASLEY:

asked the Prime Minister, upon notice -

  1. What amount is paid per annum to the Australian Commercial Agent in Paris for personal services, and does such amount represent salary for full-time services?
  2. Is he in the exclusive employment of the Commonwealth ?
Mr BRUCE:
NAT

– The answers to the honorable member’s questions are as follow : -

  1. Salary, £350 per annum, with an allowance at therate of 25s. per day, and a further allowance at the rate of £75 per annum to cover the use of his private motor car on official business, and other expenses incurred in connexion with the discharge of the duties of his office. 2.Yes.

page 852

QUESTION

PENNANT HILLS WIRELESS STATION

Mr BOWDEN:
PARRAMATTA, NEW SOUTH WALES

asked the PostmasterGeneral, upon notice -

  1. Who are the present occupiers of the Pennant Hills wireless station, and what is the nature of the tenancy?
  2. Is the electric current used at the Pennant Hills wireless station generated at the station, or obtained from outside sources ; if the latter, from whom is the current obtained and under what terms and conditions?
Mr GIBSON:
CP

– The answers to the honorable member’s questions are as follow : -

  1. Amalgamated Wireless (Australasia) Limited, the station property, which was formerly owned by the Commonwealth, having been transferred to that company under agreement with the Commonwealth.
  2. The electric current used at Pennant Hills is supplied by the New South Wales Railway Department, under special agreement, which was originally entered into in 1918 between the New South Wales Railway Commissioners and the Commonwealth. On the transfer of the radio service to the Amalgamated

Wireless in 1922, the company took over the obligations of the Commonwealth under the agreement.

page 853

QUESTION

OVERSEAS SHIPPING

Mr.CURTIN asked the Prime

Minister, upon notice -

Who are the persons who it has been decided shall constitute the committee to consult with the delegation of overseas shipping companies ?

What industries and States do they represent?

Has provision been made that rival exporting interests in different States, e.g., (a) Wyndham Meat Works, Western Australia, and the meat companies in Queensland, shall be afforded an opportunity to present their claims for efficient services; and similarly (b) apple exporters in Western Australia and Tasmania?

Will the Commonwealth Government incur expenditure in connexion with the consultations ?

Mr BRUCE:
NAT

– The answers to the honorable member’s questions are as follow : - 1 and 2. The persons who have been invited to serve on the committee, the interests they represent, and the States in which they reside, are as follow: -

Mr. F. H. Tout (wool), New South Wales.

Mr. T. M. Daskein (wool), Victoria.

The Hon. W. C. Angliss, M.L.C. (mutton and lamb), Victoria.

The Hon. A. K. Trethowan, M.L.C. (wheat), New South Wales.

Mr. T. P. Plunkett (dairy produce), Queensland.

Mr. A. F. Bell (processed fruit), Victoria.

Mr. B. J. Pearsall, M.H.A. (fresh fruit), Tasmania.

Mr. L. S. Barnett (importing), New South Wales.

Mr. Howard Berry (importing), Victoria. It is expected that arrangements for the appointment to the committee of a representative of the beef industry in Australia, which are in progress, will be completed shortly.

It is not considered practicable, at the moment, to enlarge the representation already decided upon; but if the proceedings of the conference show this to be desirable, I shall do what I can to arrange accordingly.

I am not at present in a position to indicate whether, and, if so, to what extent, expenditure will be incurred by the Commonwealth Government in connexion with the consultation.

page 853

PEARLING INDUSTRY

Useofindentured Labour

Mr NELSON:

asked the Minister for

Home Affairs, upon notice -

  1. Are there any acts or ordinances in North Australia relating to the pearling industry and indentured labour?
  2. Is he aware of the increased activities in the pearling industry of North Australia, and that many boats are now on their way there to engage in that industry?
  3. If no acts or ordinances exist covering this industry, will the Minister immediately frame an ordinance on the lines of the existing law of Western Australia?
Mr ABBOTT:
CP

– The replies to the honorable member’s questions are as follow : -

  1. The introduction of indentured labour for the purpose of working in the pearling industry in North Australia is regulated by the Commonwealth Immigration Act. The Commonwealth Pearl Shell Export Charges Act 1927 also applies to the Territory. The conditions under which persons and vessels may engage in the pearling industry in North Australia are regulated by the Fisheries Ordinance 1911-1924, and the regulations thereunder.
  2. Yes.
  3. See answer to No. 1.

page 853

QUESTION

FEDERAL CAPITAL COMMISSION

Housing Contracts

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

asked the Prime Minister, upon notice -

  1. Whether it is a fact that the report of the inquiry of an officer of the AuditorGeneral’s Department into the housing contracts of the Federal Capital Commission was made available over a week ago to the responsible Minister?
  2. In view of the fact that this inquiry was held on the recommendation of a joint parliamentary committee, will the Prime Minister see that the report of the officer of the Auditor-General’s Department is made available to Parliament without further delay?
Mr BRUCE:
NAT

– The replies to the honorable member’s questions are as follow : -

  1. Yes.
  2. The question of making the report available will be considered when the further investigations which are about to be made have been completed.

page 853

QUESTION

DIVISIONAL RETURNING OFFICERS

Overtime

Mr LONG:
LANG, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. Is it a fact that there is a general feeling of discontent amongst divisional returning officers, respecting excessive hours of overtime without pay, which they are called upon to work during election periods?
  2. If it is a fact, what steps does he intend to take to deal with this apparent injustice to those public servants?
  3. Will he take steps to ascertain if it is a fact that the divisional returning officer for the Division of Lang was compelled to work 215 hours overtime between the 9th October and 5th December, 1928, without recompense, whilst his clerks received 4s. 3d. per hour for the same period?
Mr BRUCE:
NAT

– The replies to the honorable member’s questions are as follow : -

  1. I am unable to say whether there is a general feeling of discontent amongst divisional returning officers in regard to this matter, but representations have been made at various times for payment to them in respect of overtime worked during election periods.
  2. It has not been established that any injustice has been done to these officers, as I am advised that, in fixing their rates of salary, due consideration was given to the responsibilities of their positions and the duty they are at times required to perform after ordinary official hours.
  3. I am informed that the records of the Electoral Office show that the divisional returning officer in question worked a total number of 188 hours in overtime during the period mentioned, and that his clerk worked 92$ hours during the same period.

page 854

QUESTION

EXPORTATION OF STUD SHEEP

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

asked the Minister for Trade and Customs, upon notice -

With a view to safeguarding the interests of Australia and maintaining her position as a wool-growing country, will the Minister take steps to prohibit the exportation of stud sheep from the Commonwealth?

Mr GULLETT:
NAT

– This matter has on several occasions received careful consideration, but it is not considered necessary to prohibit exportation.

page 854

SOUTH AUSTRALIA DISABILITIES COMMISSION

page 854

QUESTION

REPORT

Mr LACEY:
GREY, SOUTH AUSTRALIA

asked the Prime Minister, upon notice -

  1. Whether the commission appointed to inquire into the financial disabilities of South Australia has concluded the taking of evidence?
  2. If so, when was the last evidence taken?
  3. Has he made representation to the commission to finalize its report?
  4. Will he defer proceeding with the Financial Agreement Validation Bill until such report is received?
Mr BRUCE:
NAT

– The replies to the honorable member’s questions are as follow : -

  1. Yes.
  2. I am unable to say, but the information is being obtained.
  3. I have asked the commission to let the Government have the report as soon as possible, and the commission has informed me that the report is being finalized.
  4. I am not prepared to ask the House to defer consideration of the Financial Agreement Validation Bill until after the report of the commission is received. In any case, the report can have uo bearing on the bill, as it will deal only with special financial assistance sought by the State under section 96 of the Constitution, whereas the bill does not in any way deal with the grant of financial assistance under that section.

page 854

QUESTION

LEASE AT LA PEROUSE

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

asked the Minister representing the Minister for Defence, upon notice -

Whether he will lay on the table of the House all communications and offers from the New South Wales Golf Club for the leasing of 168 acres of defence lands at La Perouse, Sydney, and in addition the consolidated agreement entered into between the Commonwealth and the New South Wales Golf Club?

Mr MARR:
Honorary Minister · PARKES, NEW SOUTH WALES · NAT

– As this matter also concerns the Works Department, inquiries will be made of that department, and a reply will be furnished to the honorable member as early as possible.

page 854

QUESTION

HUME RESERVOIR

Mr JONES:
INDI, VICTORIA

asked the Minister for Works and Railways, upon notice -

In view of the suggestion put forward by the British Economic Mission, to finish _ off the Hume Dam temporarily to a lesser height than that agreed upon at a conference of Commonwealth and State Ministers which met at Canberra on the 27th and 28th February, 1928, and in order to allay the great anxiety at present felt by residents in areas affected or likely to be affected, will he indicate the intention of the Government as regards the completion of the dam to the 2,000,000 acre feet capacity?

Mr GIBSON:
CP

– The question as to whether the construction of the Hume Dam will be continued until completion to the height required for a storage of 2,000,000 acre feet capacity, will be the subject of further consideration by the four contracting governments, following upon the receipt of a report from the Murray River Advisory Committee, which is undertaking an investigation into the matter of the economical use to which the water made available can be put.

page 855

QUESTION

REPATRIATION

War Pensions’ Appeal Board

Mr COLEMAN:
REID, NEW SOUTH WALES

asked the Minister in charge of Repatriation, upon notice -

  1. Has his attention been directed to the severe criticism by the honorable member for North Sydney of the administration of repatriation, and also the reforms suggested by the honorable member?
  2. If so, or in any case, will the Minister introduce an amendment to the Australian Soldiers Repatriation Act to provide that the onus of proving that a disability is not due to war service shall be borne by the Repatriation Department?
  3. Have the returned soldier organizations been fully consulted in regard to the constitution of the proposed War Pensions Appeal Board; if so, will their suggestions be accepted by the Government?
  4. In view of the dissatisfaction expressed with the present method of deciding appeals, will the Government introduce, at the earliest opportunity, the necessary legislation to create an Appeals Board?
Sir NEVILLE HOWSE:
Minister for Health · CALARE, NEW SOUTH WALES · NAT

– The answers to the honorable member’s questions are as follow: -

  1. I have seen in the press a report of a speech alleged to have been made by the right honorable member for North Sydney, containing a criticism of the administration of the Repatriation Department, which is quite unwarranted. 2, 3 and 4. A bill for the purpose of constituting the War Pensions Appeal Board will be introduced into Parliament in the near future, and upon consideration of that measure, the points raised by the honorable member in these questions can be fully dealt with.

page 855

QUESTION

CO-OPERATIVE ORGANIZATIONS

Mr JAMES:

asked the Prime Minister, upon notice -

  1. In view of his statement in reply to a question by the honorable member for Hunter,’ that the Government is favorable to the cooperative movement in Australia, will he explain why Australian co-operative organizations are prevented from having business relations with co-operative organizations in other countries, with which they are affiliated, owing to the exclusion from Australia of the Russian co-operative journal Centrojus ?
  2. If the exclusion of the journal named is based on the allegation that it advocates the overthrow of established government by force, or in any way comes within the scope of proclamations or regulations upon which the censorship is based, will he explain in what way the said journal offends or has offended?
Mr BRUCE:
NAT

– The answers to the honorable member’s questions are as follow : -

  1. I am not aware that the exclusion of the Russian journal Gentrojus prevents Australian co-operative organizations from having business relations with co-operative organizations in other countries.
  2. The Attorney-General’s Department has advised that the publication tails within the proclamation of the 16th June, 1921, prohibiting the importation of certain classes of literature.

page 855

QUESTION

TOBACCO CULTURE

Customs and Excise Duties

Mr GULLETT:
NAT

– On the 6th March, the honorable member for Indi (Mr. Jones) asked the following questions, upon notice: -

What was the quantity of tobacco leaf (a) grown in Australia in 1927-28, and (b) imported into Australia in 1927-28?

What was the quantity on which excise was collected in 1927-28, of (a) tobacco, (b) cigars, and (c) cigarettes?

What was the amount paid to revenue in customs and excise on tobacco, cigars and cigarettes in 1927-28?

I am now able to furnish the honorable member with the following information : - 1. (a) The production figures for 1927-28 are not yet available. The quantity produced in 1926-27 was 10,878 cwt.; (6) 23,682,640 lb. 2. (a) 13,443,278 lb; (6) 384,427 lb.; (c) 5,325,607 lb.

  1. The net revenue was £5,924.760.

page 855

QUESTION

LITHGOW SMALL ARMS FACTORY

Mr MARR:
NAT

– Yesterday, the honorable member for Macquarie (Mr. Chifley) asked the following questions: -

  1. What was the cost of construction of the Lithgow Small Arms Factory?
  2. What percentage of the machinery installed there is now idle?
  3. Is the factory doing work other than the manufacture of small arms; if so, with what success?
  4. Will he take steps to utilize fully the machinery installed there by allowing the authorities in charge of the factory to tender for, or give quotations for, outside work?
  5. Will he consult with the PostmasterGeneral with the object of having telephone parts and fittings now imported made at the factory?

I am now in a position to inform the honorable member as follows: -

  1. The capital invested in the factory for buildings and plant is £460,000.
  2. Approximately 60 per cent, of the plant is not being used at any given time.
  3. Yes, subject to the limitations of the plant. There has been no complaint as to the quality of the work.
  4. The manager is authorized to accept orders from the public provided that the work cannot be done elsewhere in Australia. It is not the policy of the Government to tender for commercial work in competition with the public.
  5. The manufacture of telephone parts at the factory has already been examined exhaustively, and it is considered to be impracticable. There are in existence Australian factories better equipped for such work than the Small Arms Factory.

page 856

QUESTION

BANANAS

Mr GULLETT:
NAT

– On the 20th February, the honorable member for Lilley (Mr. Mackay) asked the following questions, upon notice: -

  1. Whether it is a fact that, at the request of the Queensland Committee of Direction and Fruit Marketing, the Government of Victoria imposed regulations providing a minimum grade standard for bananas entering that State!
  2. Is it a fact that the Governments of New South Wales and South Australia were asked by the same committee to gazette similar regulations ?
  3. Will he endeavour to corroborate the statement that out of 345,088 cases of bananas forwarded to Melbourne during the first eleven months of 1928, only 860 cases were for any reason condemned?

I am now able to furnish the honorable member with the following information : - 1 and 2. These are State matters, but from inquiries made I understand the answer to both questions is “Yes,” except that the regulations apply to bananas sold and not to bananas entering the State.

  1. It has not been found possible to corroborate these figures. The figures available in Victoria indicate that for the first eleven months of the year 1928, 329,137 cases of bananas were brought into Victoria, of which number 1,200 cases were rejected for various reasons.

page 856

TRANSPORT WORKERS BILL

page 856

PRIVILEGE

Mr BRENNAN:
Batman

.- I propose to make a few observations on a question of privilege, and I shall conclude with a motion. At an earlier hour in the day I made a personal explanation in this chamber, in the course of which I referred to a report published in the newspaper known as the Canberra Times, which circulates in the Federal Capital Territory and elsewhere. That report referred to certain observations made by the honorable member for Maranoa (Mr. Hunter), or said to have been made by him in the course of an interview with a representative of that journal. For the information of honorable members who were not present when I raised the matter earlier, I shall repeat the short passage to which the motion that I propose to submit will have reference. Under the heading, “ The Even Vote - Country Party Attitude - Resentment of Open Mind by Private Members “, the report states -

The Country Party Whip (Mr. Hunter), seen with reference to the even vote on a subclause of the Waterside Transport Workers Bill, said yesterday that no significance at all was attached to the vote by the Government. Mr. Thompson moved an amendment to the effect that a man who may have been convicted as an habitual pillager could have his licence restored within one week, instead of six months,’ as the bill provides.

I ventured to say, in the presence of the honorable member for Maranoa, that the innuendo contained in those words, was that those who supported the amendment of the honorable member for New England favoured the restoration of a man’s right to work on the wharf a week after he had been convicted of repeated acts of robbery. I further said that such a view was a complete travesty and misrepresentation of the object of the amendment and of the members of the Labour party who supported it. Speaking as I was, at that time, merely under the Standing Order which permitted me to make a personal explanation, I was limited by the rule which enabled me to protest if I, personally, felt myself wronged or misrepresented; but seeing that the honorable member for Maranoa has had an opportunity himself of making a personal explanation, and has thought fit to ignore the observations that I made earlier, I am taking the serious course . of submitting a motion under the heading of privilege, in the hope that at least it will have the effect of bringing the honorable gentleman to a sense of his duty to this House, and give him another opportunity of putting himself in the right, if he is able to do so. It is very natural, as

I understand is the case, that every honorable member who supported the amendment of the honorable member for New England feels indignant at the terms of this report. They all realize as I do that it is a complete travesty and misrepresentation. In regard to the debating in this House and out of it, I sincerely hope that none of us is too thinskinned. I myself have always been prepared to take hard knocks, and, I hope, give a few occasionally in return, within the limits of my power; but there is a stage beyond which, habitually, honorable members do not care to go. The quarrel on the other side of the chamber amongst members of the pact does not concern us here. Perhaps, only indirectly, it concerns the House generally, but surely it does intimately concern every member of this House when one member leaves the precincts of this chamber, where he has heard the views of members, catches the ear of the local newspaper, and - I do not say wilfully - obviously misrepresents on a vital matter the purpose of the mover of a motion on his own side of the chamber, and incidentally the purpose and outlook of every honorable member on this side of the House. I consider that such conduct calls for an answer, and I therefore move -

That, in the opinion of this House, the honorable member for Maranoa has been guilty of a breach of the privileges of the House in that he gravely misrepresented the tenor and purpose of an amendment moved by the honorable member for New England (Mr. Thompson) in connexion with the committee proceedings on the Transport Workers Bill, and in that he failed to apologize or explain his action when called upon to do so.

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

. - I .trust that the matter will not be pursued further. Any honorable member has the right to complain if he has been misrepresented, but if we were to have the time of the House occupied in considering questions of breaches of privilege on words of the character complained of, it would mean that every day in the week we should be discussing newspaper paragraphs as the result of statements made by members of one political party or another, who happened to be members of this House. Let me read the words complained of -

Mr. Thompson moved an amendment to the effect that a man who may “ave been convicted as an habitual pillager could have his licence restored within one week, instead of six months, as the bill provides.

Will any honorable member say that that was not the meaning of the amendment ?

Mr THEODORE:
DALLEY, NEW SOUTH WALES

– Does the right honorable gentleman say that that was its meaning?

Mr BRUCE:

– The paragraph said that a man who may have been convicted as an habitual pillager could have his licence restored within one week instead of six months, as the bill provided. The original provision was that a man convicted of pillaging could have his licence suspended by the licensing officer for not less than six months, nor more than twelve months. If, for the words “ six months,” we had agreed to substitute the words “one week,” the effect would have been that such a person could have been suspended for not less than one week or more than one year, according to the discretion of the licensing officer. The mere statement of what would have been possible had the amendment, been carried, does not impute that any honorable member desired such a thing to occur. Surely, if motions of privilege are to be raised, and honorable members are to feel that their honour is assailed every time an honorable member points out in a statement to the press the possible result of a proposed amendment, this House will be engaged in dealing with nothing else. I ask honorable members not to lose their sense of proportion, and to remember that, if they persist in this motion, they will make the House look ridiculous.

Mr THEODORE:
Dalley

.- If the honorable member for Maranoa (Mr. Hunter) would explain his statement to the press, the discussion on this motion might be brought to a speedy termination. He may be capable of making a satisfactory explanation ; but his silence indicates his guilt. When this matter was first referred to by way of personal explanation, honorable members on this side of the House thought that the libel contained in the Canberra Times might have been due to a faulty report.

Dr Earle Page:

– It is not a libel.

Mr THEODORE:

– The Treasurer’s sense of affront is very keen when his own honour is attacked; hut very dull when the honour of others is at stake. During the long history of the House of Commons questions of privilege arising out of newspaper libels and slanderous references to members and their attitude to public business, have been raised on many occasions. Persons outside of Parliament, particularly newspaper editors and publishers, and even members of the House of Commons, have been proceeded against for breach of privilege, and reference to May shows that, in many of these cases, the principle involved was the same as that involved in this motion. % The Prime Minister attempted to gloss over the offence by “ saying that criticism of this kind is almost of daily occurrence. Possibly that is true, of criticism by irresponsible persons outside Parliament; but this legislature would be brought into public contempt if its members could, in the columns of the press, deliberately distort the truth regarding other honorable members, their attitude towards public business, and the purpose of amendments which they supported. If the House ignored an offence of that kind, it would lower its own dignity, undermine its authority, and bring parliamentary procedure into public contempt. The least we are entitled to expect from the honorable member for Maranoa is an explanation of his statement. I do not know whether the Prime Minister rose to offer some explanation and apology in behalf of the honorable member.

Dr Earle Page:

– The newspaper paragraph was a statement of fact

Mr THEODORE:

– The Prime Minister has said that because a certain class of offender might be liable to have his licence cancelled, the purpose of the amendment was to deal leniently with such persons.

Dr Earle Page:

– The honorable member is distorting the Prime Minister’s statement.

Mr THEODORE:

– The right honorable gentleman has argued that a person guilty of repeated acts of theft on the waterfront would be liable to have his licence suspended, and that, therefore, the amendment to reduce the period of sus pension was intended to allow leniency to be shown to persons of that character.

Dr Earle Page:

– Nothing of the sort. That is absolute misrepresentation.

Mr THEODORE:

– The. honorable member for Maranoa, who described the amendment as one of no significance, said that its effect was to enable a person convicted as an habitual pillager to have his licence restored within one week instead of six months.

Dr Earle Page:

– That is a statement of fact.

Mr THEODORE:

– The Treasurer is in the same category as the Whip of the party. He is lacking in conscience, and has no sense of his duty to other honorable members or to the House as a whole. The published description of the amendment was neither fair nor honest, and therefore, was a breach of the privileges of this House.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I hope the House will not accept the motion. There can be no surer way of bringing the House into contempt than by agreeing to motions of this character. Honorable members criticize each other’s politics, and often motives are imputed which are strongly resented; for example, Ministerial members are ‘quite accustomed to hear the charge made by honorable members opposite, that the object of the Transport Workers Bill is to break down trade unionism, although everybody knows that that statement is not true. Similarly, the nature and effect of the Arbitration Act and other legislation have been misrepresented by our opponents. Honorable members on this side of the House may be right or wrong in supporting a certain policy, but criticism of us does not justify a motion of privilege. Every day in the week it would be easy to find in the columns of the press some statement as to the effect of legislation which is unacceptable to some honorable members, and I suggest that it is impossible for the House to regard this motion seriously. Every honorable member will agree that if the amendment moved) by the honorable member for New England to the Transport Workers Bill had been accepted it would have been possible for a man who had -been delicensed for any cause, to have his licence restored after a week. The published statement merely called attention to the possible extreme incidence of the amendment, without suggesting that that was the intention of those honorable members who supported it. But in any case, the statement of the honorable member for Hunter can hardly be regarded as a breach of privilege. Were we to so regard it, many times every day important business would be delayed, as is happening today, by motions of this character.

Mr SCULLIN:
Yarra

.- The Prime Minister and the Attorney-General have endeavoured to show that the -matter complained of is paltry and the discussion of it a waste of time. Their sense of honour has become very much blunted in recent years if they think honorable members will accept, without a protest, the slanderous implication contained in the statement of the honorable member for Maranoa. The issue is not to be confused by the special pleading and legal technicalities employed by the AttorneyGeneral. The honorable gentleman would cut a very sorry figure if he attempted to convince a judge that no libel was contained in the words to which exception has been taken. Our concern is not with the technical truth of the statements so much as with the half truth which honorable members know is the greatest of lies. If a question of privilege were raised every time honorable members were misrepresented in the Country party’s bulletins, the House would be engaged in dealing with little else. The article in the Canberra Times is a tissue of misrepresentations of our political outlook ; but we are not raising a question of privilege on that account. When, however, the personal honour of honorable members is at stake, we have a right to defend it. If honorable members opposite are honest they will admit that the only implication in the newspaper article is that the object of the amendment moved by the honorable member for Hew England was to enable habitual pillagers to recover their licences within seven days. Those honorable members who are not prepared to protect their personal honour have little honour to protect.

Mr HUGHES:
North Sydney

– I agree with the Prime Minister and the Attorney-General, that if we are to discuss press criticisms of honorable members we shall have little time to do anything else. I have never sought the protection of Parliamentary privilege although I have been villainously assailed. My opponents usually, not having the courage to attach their names to their attacks, have taken the very- sensible precaution of fighting by deputy and acting through agents whose names are not disclosed. But in this case they have cast prudence to the winds ; we know who has made the attack, or rather who has lent his name to it; for the honorable member for Maranoa, if he has been guilty of anything, has been guilty only of acting for others. I was staggered at the villainous and deliberate misrepresentation of the meaning of the amendment of the honorable member for New England. I hold in my hand a copy of the Votes and Proceedings of this chamber. I ask honorable members to study it. If they do so, they cannot fail to’ draw the conclusion that the amendment was directed against the taking away of licences from persons for such offences as failing to comply with any lawful order or direction given in relation to his employment ; refusing to work in accordance with the terms of the current award of the court ; alone, or in company with others, exercising or attempting to exercise intimidation or violence in relation to, or using threatening or abusive language to, any waterside worker or officer under the act. These are clearly industrial and not criminal offences; but a man who steals is a thief. Whatever we are in this House, we are not supporters of thieves. This article is a most damnable and cowardly attack upon the honour of honorable members. Whatever our views may be on political subjects, we are here to uphold the interests of our country. I have been in close touch with the transport workers for more than twenty years, and nothing is more natural than that I should take their part in this chamber. Who could blame me for doing so ? But to say that on that account I am the associate of thieves, and that I want to protect the pillager by providing that the cancellation of his licence for a week is a sufficient penalty for deliberate thievery is outrageous. If I had my way, I should purge every trade union in this country of every thief and criminal in it. This contemptible libel suggests that unionists, as a body, are thieves. The ranks of the trade unionists, of course, do not contain more criminals than the ranks of any other profession or calling. I do not blame the honorable member for Maranoa for this attack. He is the party whip, and* as such has attached his name to the article ; but in justice to himself and his fellow members, he should rise in his place and express his regret that he has lent his name to such an insult and reflection upon the honour of his colleagues in this House.

Mr THOMPSON:
New England

– As one of the persons whose name has been associated with this remarkable statement, I cannot cast a silent vote on the motion.* With the viewpoint of honorable members opposite I am not concerned. If they feel that their honour has been impugned, it is open for them to take any legitimate course to clear themselves. I am only responsible for my own view. I feel that this article contains a serious libel upon me. In the whole of my six and a half years of political life, nothing has happened which has caused me so much annoyance and mental pain as the allegation that I deliberately moved an amendment with the object of encouraging one of the worst forms of thievery in the industrial life of Australia. Whatever may have been the intention of the writer of the article, there can be no doubt whatever that the worst possible construction has been put upon my amendment. The article may now be regarded as unfortunate by those responsible for it, but we cannot get away from the fact that the amendment has been made to appear in the blackest possible light. I have listened with great respect to the remarks of the Prime Minister and the Attorney-General. Their observations were probably quite logical, but if the Attorney-General had seen in the press this morning a statement to the effect that he had moved an amendment with the object of causing the cancelled licence of an habitual pillager to be restored after three months, he would have felt just as annoyed and incensed as I do. But I do not desire to see my col league, the honorable member for Mara:noa, humiliated in this House. I do not think that he had any intention of committing a breach of privilege, if one has been committed. I have taken certain action to have this subject ventilated in another place, and I feel that the honorable member will there be able to remove any suggestion that he intended to reflect upon my political honesty. For that reason, I hope that nothing will be done now that will impugn his integrity or bona fides. I hope that the motion will not be carried.

Mr BRENNAN:

– Although the honorable member for Maranoa has treated the honorable member for New England with contempt?

Mr THOMPSON:

– I may be turning the other cheek, but I do it because I am convinced that the honorable member for Maranoa had no intention of committing a breach of privilege.

Mr McGRATH:
Ballarat

.- It was foolish to suggest that the effect of the amendment of the honorable member for New England, if carried, would have been to enable habitual criminals to have their licences restored in a week, for habitual criminals are not at large. They are in gaol, and they are kept there during the pleasure of the Crown. I bitterly resent the remarks in this article. The Prime Minister has said that matters like these should not be brought before the House. That attitude was not adopted sixteen years ago. About that time, in the course of some remarks I made in a speech at Ballarat, I criticized the then Speaker of the House of Representatives. I -was subsequently called to account for my statements, and although the truth of them was not questioned, I was suspended for two months. I do not think that the honorable member for Maranoa knew anything about this article until after it was published. I believe that the Treasurer (Dr. Earle Page) and the paid secretary of the Country party gave the interview to the Canberra Times. We must remember that the article will probably appear in every important journal in Australia, and that it will lay members of the Labour party and also some members of the Country party and Nationalist party open to the charge that they desire to protect the thieves who operate on our wharfs. I indignantly repudiate any suggestion that we stand for thievery of any character. The Labour party has always resisted thievery, whether on a large or small scale. It is for that reason that we are here. It is significant, however, that the honorable member for Maranoa has not taken one of the many opportunities he has had since this debate began, of clearing himself of the charges that have been levelled against him. It makes one wonder whether he is awaiting an opportunity to make an arrangement with the reporter to publish a denial of the statement and lay the whole of the blame for it upon the newspaper. At any rate his silence is significant. If he is innocent of the charge that has been laid against him, let him stand up and say so. If he keeps silence, I submit that this House would fail in its duty if it did not carry the motion of the honorable member for Batman.

Mr HUNTER:
Maranoa

.- Early in this debate I was sorely tempted to rise and speak to the motion, but I resisted the temptation for the simple reason that I was not much concerned with what my political opponents might think about me, and anything that the members of my own party thought on the subject I considered was a matter for the party room. I would not have risen now except that an effort has been made to make it appear I did not give the interview to the press, but that it was given by somebody else, and that I fathered it. I refute that statement. The interview was my own. I have not seen the newspaper, but I believe that the report of the interview is correct, with the exception that the one word “ even “ is not there. I do not think that anybody except a very thin-skinned person could believe that the intention of the amendment was to relieve convicted criminals of the effect of their acts.

Mr McGrath:

– The Treasurer said it was a statement of fact.

Mr HUNTER:

– Neither the Treasurer nor any one else on this side of the chamber said that the object of the amendment was to protect pillagers. What the Treasurer said was that it would have that result, for the simple reason that pillaging was one of the grounds for the cancellation of a licence.

These licences are issued and may be cancelled by public servants, whose duty it is to observe the law. It will be natural for them in most cases to make the minimum penalty the maximum. The result of the alteration would have been exactly what I have said; but I did not say or mean that that was the motive of the mover. ‘ It certainly must be a source of amusement to honorable members on this side to notice the seeming resentment of the members of the Labour party to this statement after all their derogatory statements about honorable members on this side. I have not seen the Canberra Times of to-day’s issue; but I am quite prepared to accept the paragraph referred to as being a correct report of my statement, except for the omission of the word “ even.” What I meant was that this would have applied even to the offence of pillaging. I resent the suggestion that any one else but myself had anything to do with the statement. I was solely responsible for it.

Mr STEWART:
Wimmera

.- I desire to associate myself with other honorable members who voted for the amendment moved by the honorable member for New England (Mr. Thompson), in protesting against the publication of an article which has distorted the truth. I have been waiting for the Treasurer to speak; but he has contented himself by interjecting. He clearly intimated that this was a statement of fact.

Dr Earle Page:

– And I repeat it.

Mr STEWART:

– Let us analyse the statement from that point of view. I showed the article in question to the honorable member for Maranoa (Mr. Hunter), and he lacked the courage to read it, so I shall read it for him. It is as follows : -

The Country party Whip (Mr. Hunter), seen with reference to the even vote on a sub-clause of the Waterside Transport Workers Bill, said yesterday that no significance at all was attached to the vote by the Government. Mr. Thompson moved an amendment to the effect that a man who may have been convicted as an habitual pillager, could have his licence restored within one week instead of six months as the bill provided. . . .

The Treasurer says that that is a statement of fact. I ask the Attorney-General whether an habitual pillager would be in possession of a licence under the provisions of this bill?

Mr Latham:

– He may be. If the honorable member wants an answer, I say that some are, unfortunately, in posses; sion of licences; but when they offend again they may be delicensed.

Mr STEWART:

– The AttorneyGeneral delights in legal technicalities. He considers that he is at home in that sphere, and that we on this side of the chamber are at sea. He states that, if an habitual pillager is caught he is delicensed.

Mr Latham:

– He may be delicensed.

Mr STEWART:

– The legal quibbles of the Attorney-General will deceive no one in this House. He knows well that an habitual pillager will, under this bill, have no licence at all to cancel.

Mr Latham:

– The honorable member has not read the bill.

Mr STEWART:

– I have read it, and, if it does not provide for an habitual pillager to be prohibited from obtaining a licence, it should include such provision.

Mr Latham:

– It does not.

Mr STEWART:

– So much for the statement of fact to which the Treasurer has referred. Everybody knows that if a man were caught pillaging from the wharfs the minimum penalty of one week would not be imposed. The honorable member for Maranoa (Mr. Hunter), the Whip of the Country party, who speaks for that party and the Government, has stated that the minimum always becomes the maximum when cases of this kind are being tried. I hold no brief for the timber workers, and I know little of the present dispute, but I know that when such a case as this is being tried, instead of the minimum becoming the maximum, the maximum becomes the minimum. But we are not discussing that point now. The facts are that this statement is deliberately intended to convey to the outside public the impression that the object of the honorable member for New England in moving the amendment, and of the other honorable members who supported it, was to obtain leniency for habitual pillagers. I consider, therefore, that the House should pass the motion that has been submitted by the honorable member for Batman (Mr. Brennan).

Mr McWILLIAMS:
Franklin

– As one who voted for the amendment moved by the honorable member for New England (Mr. Thompson), I wish to explain the reason for my action. Under the bill’ a man might be delicensed because he had refused to obey an order of those in authority, and in that way he would be deprived of his rightful occupation for six months. That was the issue on which I voted.

Mr Latham:

– But it applied to the other cases as well.

Mr McWILLIAMS:

– Then why was the Attorney-General prepared to accept a period of three months?

Mr Latham:

– That has nothing to do with this case.

Mr McWILLIAMS:

– I voted for the amendment moved by the honorable member for New England.I have read the article in the Canberra Times, and I regard it as stupid and cheap and not worthy of half the attention that has been given to it this afternoon. The honorable member for Maranoa (Mr. Hunter) has shown great bravery in admitting that he wrote the article.

Mr J FRANCIS:
MORETON, QUEENSLAND · NAT; UAP from 1931; LP from 1944

– And yet the honorable member for Wimmera (Mr. Stewart) says that he has shown cowardice.

Mr Stewart:

– He did show cowardice.

Mr McWILLIAMS:

– I am not prepared to sacrifice the honorable member for Maranoa for being foolish, because I believe that this is his first and will be the last attempt at anything of the kind.

Mr CURTIN:
Fremantle

.- There are two points which I shall submit to the House. The first relates to the restricted description by the honorable member for Maranoa (Mr. Hunter) in what appears to have been a circular communication to newspapers. I understand that many other newspapers have received this document, and in all probability will publish it. It is a species of political propaganda with which we are not unfamiliar. The article says “ Mr. Thompson moved an amendment to the effect that a man who may have been convicted, &c.” The only construction to be placed on that language is that the effect stated was the sole effect of the amendment moved by the honorable member for New England. The language is not that Mr. Thompson moved an amendment, the effect of which would have been, &c. Language of that description would have indicated that the amendment was of a general character, but included a particular thing which the Treasurer prides himself on being able to identify as a fact. The declaration that this description of what took place in respect of the amendment grossly libels every honorable member who voted for it, because to proclaim that description as a fact is to expose to the contempt of the people of Australia all those who voted for the amendment. Any one would infer from a reasonable reading of the article that the sole purpose of the amendment was to decrease the period of delicensing pillagers from six months to one week. The Attorney-General said that it was unfortunate that pillagers were licensed. He went on to say that if the offence was repeated they would not be granted another licence.

Mr Latham:

– I did not say that.

Mr CURTIN:

–There is nothing in the bill that makes it mandatory that every person making application for a licence shall be granted one, and if it be a fact that habitual pillagers are to-day in possession of licences to work upon the wharfs of this country, that is entirely because of the exercise of the discretion of the Minister in carrying out the provisions of this law.

Mr Latham:

– There is no discretion, and advisedly no discretion.

Mr CURTIN:

– -The bill provides that where an application is made under the last preceding section to a licensing officer he may issue to an applicant a licence in accordance with the prescribed form, bearing a number and the name of the port in respect of which it is issued.

Mr Latham:

– That has been drawn so as to apply a well-known legal principle, under which a man is entitled to obtain a licence if he makes an application.

Mr CURTIN:

– It would not be a breach of the law for a licensing officer to refuse to grant a licence to a person applying for one.

Mr Latham:

– A mandamus could be obtained and he would have to grant it.

Mr CURTIN:

– Would a convicted pillager have the resources and backing to apply to the court for a mandamus to upset a ruling of the licensing officer ?

Mr Latham:

– In other words the period of disqualification is not perpetual, but a period of twelve months, and that is so intended.

Mr CURTIN:

– Of all the effects of the amendment moved by the honorable member for New England, it is extraordinary that the honorable member for Maranoa should have selected only one in order to make the purport of the amendment plain to the public of Australia. He grossly misrepresented the general character of the amendment by restricting its significance to the protection of pillagers, when actually it involved a number of other things. That statement must certainly present to the public of this country an entirely distorted view of the intentions of honorable members who supported the amendment.

Mr MAXWELL:
Fawkner

.- I was at first inclined to think that too much was being made of the article in the Canberra Times, but that was because I had not grasped its exact terms. Now that it has been read by the honorable member for Wimmera (Mr. Stewart) it seems to me that it is a very serious indictment of those who voted for the amendment referred to. When he gave this communication to the press, the honorable member for Maranoa used words very unfortunately. I do not believe for a moment that he intended to convey the impression that the honorable member for New England, when he moved his amendment, desired to secure immunity from condign punishment for any man who was found guilty of habitual pilfering ; but the unfortunate manner in which he expressed himself undoubtedly conveys to any unprejudiced reader the idea that the object for which the amendment was moved was that a man who had been convicted of habitual pilfering might merely be delicensed for a week. The situation might be met if the honorable member for Maranoa would assure the House that he did not intend to convey such an impression.

Mr Latham:

– He has already done that.

Mr Forde:

– He has not.

Mr MAXWELL:

– He might also assure the House that all he meant to convey was that if the minimum period was reduced from six months to one week it might so happen that a man who was guilty of habitual pilfering would get off with a week. Even that, however, would be an absurd thing to say. After all, there was no necessity to fix any minimum; all that was necessary was to fix a maximum, and leave it to the discretion of a licensing inspector or a court of appeal to apportion whatever punishment the particular facts of the specific case warranted. The punishment provided for the crime of manslaughter is imprisonment for fifteen years, yet a man who has been found guilty of manslaughter may be sentenced to be imprisoned only until the rising of the court. Nothing would be too bad for any man who used words with the intention of conveying the idea that the framer of an amendment intended that a man who was guilty of a crime should get off with a nominal punishment.

Mr Scullin:

– Will the honorable member say what he thinks was in the mind of the writer when he referred only to pillagers?

Mr MAXWELL:

– I believe he intended to say that if the amendment had been passed, a licensing inspector would have had it in his power to delicense for only one week a wharf labourer who was guilty of habitual pilfering.

Mr Latham:

– That is what he has said.

Mr MAXWELL:

- His words were, “ The honorable member for New England moved an amendment to the effect,” Ac. Had he said, “ The honorable member for New England moved an amendment, the effect of which might have been, “ his words would have held a totally different meaning. His misuse of language has led to this trouble, and if any doubt still exists, I suggest that he should disclaim any intention to convey such an impression.

Mr COLEMAN:
Reid

.- The honorable member for Maranoa obviously refuses to retract, qualify or explain this article which he sent to a newspaper, and in the circumstances, there seems to be no course for this House to follow but to carry the motion.

Presumably, the article was sent to every newspaper in Australia. Unquestionably, it deliberately misrepresents an amendment that was submitted during the debate on the Transport Workers Bill. It is not ordinary political criticism, but a misrepresentation of an amendment, and should be considered from that angle. If the motion is defeated, it will appear that this Parliament condones the action of the honorable member for Maranoa; and certainly that would not be in keeping with the dignity of this House. If the honorable member withdrew and apologized, and undertook to explore all the channels by means of which his explanation could be conveyed to the different newspapers, the motion might be withdrawn. The honorable member for Franklin (Mr. Mc Williams) has suggested that we shall make a victim of the honorable member for Maranoa if we pass this motion. There is no question of making him a victim. This House is asked to say whether the statement attributed to the honorable member for Maranoa fairly represents a decision of this House. The language of the motion is perfectly clear and simple. It reads -

That in the opinion of this House, the honorable member for Maranoa has been guilty of a breach of the privileges of the House, in that he gravely misrepresented the tenor and purpose of an amendment moved by the honorable member for New England (Mr. Thompson) in connexion with the committee proceedings on the Transport Workers Bill, and in thathe failed to apologize or explain his action when called upon to do so.

If we carry that motion, we shall merely affirm facts, and certainly we shall help to maintain the few shreds of dignity that this Parliament still possesses.

Mr HUNTER:
Maranoa

.- (By leave.) - Evidently, when I spoke earlier, I did not convey to the minds of honorable members the fact that I had no intention of imputing to any honorable member a motive such as that which it is contended I have imputed. The honorable member for Fawkner (Mr. Maxwell) has made an exact statement of the position - it was an unfortunate misplacement of words. I should like honorable members to know that the expression “to the effect” should have been “could have the effect.” In the light of the explanation of the honorable member for Fawkner, I can realize that, if the word “even” had been inserted, meaning “even habitual pillagers,” the impression left upon the mind of the reader would have been that the effect mentioned could be one of the results. No honorable member of this House would be foolish enough to move an amendment with the object of reducing the punishment that could be meted out to pillagers. I regret that I made a wrong choice of words, and that the statement has been misunderstood.

Mr Scullin:

– As the honorable member for Maranoa has expressed regret, I suggest that the honorable member for Batman might withdraw the motion.

Mr Brennan:

– I agree to that course being taken.

Motion, by leave, withdrawn.

page 865

FINANCIAL AGREEMENT VALIDATION BILL

Second Reading

Debate resumed from 6th March (vide page 801), on motion by Mr. Bruce -

That the bill be now read a second time.

Upon which Mr. Mann had moved by way of amendment -

That all the words after “bill” be omitted with a view to inserting in lieu thereof the words “be withdrawn with a view to the Government submitting to the States a revised State Debts Agreement which shall include the restoration of the per capita payments of twenty-five shillings per head for a period of at least ten years.”

Mr WATT:
Balaclava

.- Mr. Speaker–

Mr Brennan:

-A new member ! Give him a fair hearing.

Mr WATT:

– The interjection of my honorable friend, who is rapidly becoming venerable, convinces me that honorable members will readily admit I have not unduly troubled the House since the removal of the Commonwealth Parliament from Melbourne to Canberra. I desire to make atonement now, by offering a few observations upon this important bill, the subject-matter of which has been discussed on many occasions, and at great length, in the parliaments of the Commonwealth and of the States, and on the public platforms of Australia. I cannot recall any measure which has been debated over such an extended period, and in connexion with which the issues are, or ought to be, so plain. I agree, with some honorable members, however, that the complicated nature of this measure might easily cause one who considered it for the first time to become bewildered as to the character of the agreement carried in its schedule.

I have always contended that to understand the subject intelligently one must study carefully the antecedent facts of its history. On more than one occasion I have endeavoured to give this House an outline of those facts in proper sequence, andI shall not now reviewthe ancient history of the matter. There are one or two comments, however, that I should like to make. One has relation to this very debate and the introductory speech of the right honorable the Prime Minister (Mr. Bruce). We have just witnessed the happy termination of what everybody regards as an unfortunate incident. The interview which was responsible for it should not have been granted at all, and the words used were ill-chosen. Adapting old Sam Weller’s advice to young Sam to “beware of vidders,” I would say to young politicians, “ Be careful what you say to pressmen, and use the most precise vocabulary to avoid misunderstandings.” The Prime Minister, in the course of his speech, made a statement concerning the action of the Labour party in connexion with the 1909-10 agreement which, I think, was similarly unfortunate. It was what a former member of this House on one occasion described as a lapsus memoranda. I was prominently associataed with the per capita arrangement, and I am in a position to say that the facts were stated in their proper order by the Leader of the Opposition. They were not merely subtially correct, but were historically accurate. There was, however, one fact that he did not sufficiently stress, and I may be permitted to dwell upon it briefly, but with pardonable emphasis. In 1909 the scheme put forward for the alteration of the Braddon section of the Constitution was proposed by the States themselves. All that they knew was that the Commonwealth was incurring increasing responsibilities, associated chiefly with the administration of old-age pensions and other cares that hitherto had reposed upon the shoulders of the States. They knew full well that when ten years had expired the Commonwealth Parliament would review the finances of the Commonwealth, and reduce the return of three-fourths of the customs and excise revenue which they then enjoyed. Therefore, with commendable discretion - I take leave to suggest - they prepared their alternative, during a two years’ debate, which commenced in March, 1909, and finished at a conference in Melbourne in 1910. The fixed per capita, which I opposed in the first place, was presented as the alternative to the 15s. in the £1 returned from customs and excise collections. Mr. Deakin, the Leader of the Federal Government, with Sir Joseph Cook as Treasurer, accepted the proposition, and they agreed to have it embodied in the Constitution. The opposition to that course came primarily from the Labour party, but they were supported by some prominent members sitting on the Government side of the House, notably Sir- William Irvine. He contended, on grounds of high principle, that we should not leg-rope the Commonwealth, and he supported the view of Andrew Fisher, that we should adopt the 25s. capitation scheme, but only for a period of ten years. The people accepted that view. Immediately the Labour party came into power, it adopted as its first measure, or at any rate, one of the earliest, this proposal, which was then carried by a unanimous parliament. At the time, I was disappointed that the arrangement was not embodied in the Constitution. I was then Treasurer of Victoria; but the subsequent widening of my experience in both State and Federal affairs, and the great

Avar and all that it involved, chiefly in the matter of expenditure, led me to consider that the people acted with wisdom at that time, whether the result was foreseen or not. It was a happy thing for the Commonwealth that the 25s. arrangement was not put into the Constitution. I hope that we shall dismiss from our minds the aspersions which have been cast on the 1909 negotiations. Both parties, in the Federal as well as in the State sphere, acted with honour and reason.

The other comment which I have to make, and it is made more in sorrow than in anger, has reference to the manner in which the present Government has dealt with this subject. In their hands it has had a strange and eventful history. I cannot account for, not even remember, all the many changes of policy and procedure for which the present Government is responsible. However, I am in a charitable mood to-day, and I am ready to assume that the methods and principles of the Prime Minister and his colleagues were prompted by a desire to settle this difficult, delicate, and important problem which other administrations have been unable to solve. I can understand that the Prime Minister, who has already achieved a record for administration, desires his name to be associated with the settlement of what, from the earliest stages of federation thought until now, had proved an inscrutable and well nigh insoluble problem. Therefore, I shall credit the right honorable gentleman with laudable, disinterested and national motives, and that I think is the spirit in which we should discuss the question. After all, while we may jibe at one another on lesser matters, on a basic thing like this we should recognize that the problem can never be the property of any one party.

This is not a party matter, and no attempts to excite antagonisms should be allowed to drag it down to the level of a party issue. With no desire to cast aspersions, but to assist the proper consideration of this matter, I say that I have always regarded the withdrawal of the per capita payments before an agreement was reached between the Commonwealth and the States as unfortunate. I said three years ago that I felt that such a course would bring about exactly what has occurred. That action deprived the States of the strength they formerly enjoyed in conference with the Commonwealth as sovereign entities; it established the dominance of the Commonwealth.. The States were no longer free agents. There was henceforth an atmosphere of coercion. There “was a feeling of doubt in the minds of the State representatives which had never before existed during the discussions between the sovereign Commonwealth and State Governments. After the passage of the withdrawal measure, the Commonwealth was supreme at the conference table. I take leave to say that this was duress of a subtle and powerful kind, and the spirit it created has affected all the latter day considerations of this problem. The present Government is primarily responsible, because it initiated this mode of procedure against the advice of some of us on this side who thought it dangerous. But the Commonwealth Government is not alone to blame. The States contributed to the impasse by refusing, for the first time in the history of such negotiations, to supply any alternative after they had rejected the Commonwealth’s proposals. That was surely neglect of opportunity, duty and responsibility. They said “ We will not have your scheme,” and went and sulked in their tents. The result was that further conference was, for the first time, impossible. They were responsible, too, for claiming, when they came back, the per capita payments as a moral right. We may argue until we are black in the face as to what “ moral right “ means in relation to matters of this kind, but at the convention, and later, when the Braddon section had expired, and later still during the eighteen years of the operation of the per capita system, the question of moral right did not enter into consideration. The endeavour throughout was to arrive at a business arrangement that would stand the strain of experience, and constitutional, moral, or legal aspects did not come into the discussions at all. I congratulate the Prime Minister for having disregarded the claim made on the score of moral right.

That is all I propose to say in retrospect. It may have had interest for some of the younger members now present, and, if time permits, after the guillotine has fallen, and the severed head lies in the bin with the sawdust, I recommend them to study the subject.

Mr Stewart:

– Does the honorable member approve of the guillotine?

Mr WATT:

– I like it. I invented it, and I feel sometimes that I should like to apply it to the honorable member, to stop his interminable attacks on the Treasurer, with whom he seems quite unable to effect a rapprochement.

With the past in mind let me, with the permission of honorable members, look at the situation as we now find it. We may have regrets because this or that course was not followed, but we are practical men, with responsibilities to bear, and whether we like what was done in the past or not, it is our duty now to find a way out of the difficulties in which we are placed. Therefore, I have been considering this matter since the electors of the Commonwealth gave, in the most extraordinary and unexpected way at the last referendum, permission to alter the Constitution. Various interpretations have been placed upon their action. I can speak of my own electorate, and I know something of those near it, and in my opinion the people did not, at the referendum, pass judgment either for or against the financial agreement. Some electors may have been muddled; but, broadly and deeply, the mandate which was given was not for the agreement. The Treasurer rather claims that it was, and the Prime Minister suggests that, as he made the agreement a prominent part of his election programme, it must have been approved. I consider that all that the people said was that the Commonwealth should have this enabling power, and that the Parliament would scan any proposed exercise of it. Otherwise, there would not have been that extraordinarily unanimous and forceful vote registered all over Australia.

It seems to me that the subject under discussion has three main features, and it is to them that I desire te direct attention. First of all, we are entitled to ask ourselves, How does this agreement treat the States? That question indicates the order of importance of the matters which I propose to discuss, though, as to that, others may not agree. I have heard men say that the agreement is over-generous to the States; others say that it is niggardly. The bulk of those who dislike the bill take, I think, the latter view, and say that the agreement does not treat the States with sufficient liberality. Personally, I line myself with those holding the former view. As an old State representative, who has been Treasurer in both State and Federal governments, I say that, taking all the facts into consideration, the provisions of the agreement amount to largesse by the Commonwealth to the States.

Mr Coleman:

– Is that because of its rigidity.

Mr WATT:

– Not only because of the rigidity of the proposal. That, however, is a matter to which I shall refer later; that and the protracted period of the contract. I say that the proposals amount to the bestowal of largesse because it Is proposed now to do, for an extended period, a thing which the States themselves were frequently warned could not be continued for any length of time.

Mr GREGORY:

– It is better for New South, Wales and Victoria than for some of the other States.

Mr WATT:

– I am not overlooking that. If it should be desirable, as the Prime Minister has said, that the development of Australia should proceed upon uniform lines - and those of us who live in the more heavily populated and capitalized parts would not object to sparing some of our money from revenue and loan for the development of the more sparselysettled areas - this could be brought about by some arrangement other than that which is here proposed. But while the States discharge a large and increasing functional responsibility, they also hold all the incremental assets of Australia. The Commonwealth has none such. The Northern Territory, the Federal Capital Territory, Papua, New Guinea, and the east-west railway will, perhaps for generations to come, be a drag and a liability upon us. On the other hand, most of the great assets of the States have an incremental value. I shall make one exception later. When I was Treasurer of Victoria fifteen years ago, the revenue of the State all told was £10,500,000 per annum; now it is £23,000,000. I admit that money has not now the same value, and that wages and stores are higher. Nevertheless, within (hose fifteen years, notwithstanding the trouble and stress of the times, the money received for governmental services and revenues has increased by over 100 per cent. But the States, although everything I have said of them is true - their revenues are growing and increments are accruing faster each year with population and industry - are, nevertheless, passing through a period of great peril and trial. This is an age of revolution in transport. Much of the loan capital of the States - half of them in some cases - is sunk in railways. Because of the challenge of the rubber-shod road vehicle, the lot of the Treasurer of a State having a heavy railway mileage is at present most unenviable. While this continues - and I believe the trouble to be transitory, and that it will solve itself - the Commonwealth can well afford to be liberal to the States. Otherwise, the bailiff will sit in the backyard of the State treasuries, and that will weaken credit and affect industry all over Australia. Until the States have passed through these difficulties, we must deal generously with them; as this agreement does. What it offers will be better for the States than any other cure I have seen suggested, for at least the first three to five years. We must, however, tell the States that they must learn to become business organizations rather than political! organizations. That is what the people hoped and expected they would become. Although I have never advocated unification, I’ have come to believe in the gradual extension of the functions of the Commonwealth for national purposes, and into this Parliament, as soon as you can have it, should come the main political issues that excite public attention in this country. The States should be treated as administrative organizations, controlling whatever is assigned to them - education, mines, lands, railways, local justice, and so on.

Mr Maxwell:

– Like municipal councils.

Mr WATT:

– Yes; but on a more democratic basis. I am not discussing how this may be brought about. Eventually there may be a devolution of the reserved powers, but we are not ready for that yet. I am speaking now in accordance with what I think is the growing thought among the students of

Australia as to the best track for this nation to follow. If that is so, there will probably come a time when the ambition of the Treasurer to bring about a divorce between State and Federal funds and financial responsibilities may be possible of realization. This agreement does not bring that about. He has forgotten his original aim, and this stops what he once proposed. The agreement makes a contract of almost indefinite duration - it is for a period of over half a century - during which the intimate financial relationship of the two parties is established on a different basis. But if by a trial of this agreement in the working we come to the idea that the States can assume tha business functions of the nation, and can thus support themselves from their own revenues and assets, there should be a final severance, and a revision. of the financial responsibilities and powers of both parties. At one time I was foolish enough to believe that the States would assent to the gradual shrinkage of the per capita payments which I proposed to them in 1919. Notwithstanding the comments of the Prime Minister, if we had adopted that scheme there would not have been any further resistance to it. However, the opportunity for bringing it about has passed by, and this new arrangement takes its place.

The second question I ask is, How will the control of borrowing embodied in this agreement operate? I noticed with surprise the comments of the honorable member for Perth yesterday, who wishes to return to the old system, under which seven Treasurers went to the money markets as applicants for loans. I have been in London as a State Treasurer and also as a Commonwealth Treasurer to borrow money, and if the honorable member were familiar with all the ramifications of the business connected with underwriting and the subscription of loans, he would say that in this matter the Government is on the right track, and like the Leader of tho Opposition, he would be prepared to pay a big price for a proper coordination of borrowing that provided a fair measure of control. When I was in London on one occasion, I met the Deputy Leader of the Opposition, Mr. Theodore, there with a wry face, because the money lenders were not subscribing readily to Queensland loans.

Mr THEODORE:

– No. I had succeeded when the right honorable gentleman had failed.

Mr WATT:

– I obtained £4,000,000 without conditions.

Mr Theodore:

– I got $40,000,000 without conditions.

Mr WATT:

– My friend had better not invite comparison between the period when he reigned in Queensland and what I might call the Victorian era, when we were borrowing money at 3f per cent.

Mr Theodore:

– That is not when the right honorable member met me in London.

Mr WATT:

– That is so. The honorable member knows the costs of flotation - underwriting, the British composition duty, advertising, and the rest - which normally before the war amounted to £2 12s. 6d. on every £100 raised, and now are a bit less. In London, the lender is king, and the borrower is courtier. The scheme of this bill for gathering up a loose control by the Commonwealth and State Treasurers, and substituting a coordinated and uniform order in the raising and allocating of loan moneys, is its best feature. I am prepared to forgive a number of its defects to secure that.

The sinking fund proposition is a godsend to the States. Our liability is a large commitment every year, plus 2s. 6d. per cent, for old loans and 5s. per cent, for new loans. The total commitment of the States after this, is 5s. per cent, to a sinking fund. Thirty years ago, the States of Australia, in some cases, were putting half of 1 per cent, or 1 per cent, into a sinking fund, and in Western Australia a specially ear-marked sinking fund was provided for the life of the asset. *

Mr BRUCE:
NAT

– Those funds, of course, still continue.

Mr WATT:

– Yes; but this is a very small commitment so far as the States are concerned. If this machine, which has now been operating loosely and tentatively for a few years, becomes a permanent mechanism, and operates efficiently and smoothly, I think we shall save more than the sinking fund we have to provide for. Thus the sinking funds may be costless, and by skilful and careful economy we may effect the repayment of our debts. That is another virtue of the schemewhich I would not lose. I believe it to be possible, as financial experts in other parts of the world have declared. Precisely how the sovereign rights of the States will operate in practice under this system I do not know, and I do not care. It will be a matter of give and take - of good will and understanding between the Commonwealth and the States. At all events it is an endeavour to stop the mad race over the precipice to ruin which Australia has been running for many a decade. If we take a few steps back in our history, we find that our public debt has increased from £200,000,000 at federation to - leaving out war debt - about £730,000,000 now. There has been an increase of £500,000,000 in 29 years, disregarding the war debt.

Mr Lazzarini:

– What about the sinking funds?

Mr WATT:

– I am not so concerned with the sinking funds, which are not relatively large, as I am to know if there are assets for all that indebtedness. The debt was mounting in 1910, when the Braddon section expired ; it was larger in 1913, the last year before the war ; it had grown greater by 1918, when the war ended; and it was still greater in 1928. Even the super-optimist would, I believe, say that it is a gambler’s climb we have been performing, and it must same day. ease or stop. The best agency to regulate our borrowing is a gathering of the administrations of Australia represented by their respective Treasurers, regardless of politics - Nationalists and Labourites mixing at the same table. They can then say to each other, “ We want so much ; but if that is all we can get at a fair price, we will take it.” One effect of this will be to lower the price of money, because there will not be such ravenous competition on the money market as there has been in the past. That would enable enterprises to be undertaken that cannot possibly be embarked upon to-day with money in the region of 5 per cent. and 5£ per cent. We built railways in the early days with money borrowed at 3 to 31/2 per cent., and they rapidly gave us back interest and working expenses; but to-day we start off scratch with money at nearly 6 per cent., and with wages and the cost of materials increased proportionately. Works such as formerly paid their way in a few years may now take 25 years to return working expenses, and some may never do so. Some of the lines in New South Wales and Victoria have been built for 30 years, and have not paid yet. If we can get cheaper money by restraining our appetite for borrowing, we can do the most desirable developmental work of the Commonwealth on cheap money, which will greatly improve our position from the stand-point of solvency and stability.

My third and last question is, What are the commitments of and the risk to the Commonwealth under this agreement ? First, the sinking fund will mop. up, during the currency of the agreement, a sum equivalent to the payments under the per capita charge.

Mr Scullin:

– Does the right honorable member say that the sinking fund contributions equal the per capita payments ?

Mr WATT:

– Our special contribution to the sinking fund is a permanent charge so long as the agreement lasts, and in addition there is this unascertainable, unlimited liability with regard to new loans, of 5s. per cent., which is double the rate we pay on the old loans. The Prime Minister has given us a statement as to what £40,000,000 a year will mean; but this will constantly grow through 58 years.

Mr Gregory:

– It will be impossible to get £40,000,000.

Mr WATT:

– No doubt the Australian and the London market will be raked to get the money needed to carry on; but if we continue borrowing, no matter at what pace, our commitments must rise. Once the Governor-General has assented to the bill, no alteration apparently can be made to the agreement for 58 years, except with the unanimous consent of the seven parties to it. This is the longest term contract in the history of the world and I am afraid of it. Although it offers other advantages which we should not hesitate to appraise properly, we ought to ask ourselves whether it is not possible to have some re-examination of this arrangement by which, if accepted as it stands, we shall hypothecate the income of the Commonwealth for over half a century. The agreement stretches away into what is, to most of us, eternity, and is to our children a legacy of which we should be cautious. If all should go well, the Commonwealth may be able to fulfil its commitments without difficulty, but if we should experience either of two paralyzing troubles - a drought for two or three years -

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Or war.

Mr WATT:

– It is possible that out of the hills of God the great hurricane of war may blow across the world again. Both these influences may operate, separately or concurrently. If a worldwide cataclysm should come, involving enormous dislocations such as occurred during the great war, it will be impossible for the Commonwealth to abide by the obligations to which, by this agreement, we are committing it.

Mr Maxwell:

– It would not be expected to do so.

Mr WATT:

– I do not know what would be expected of us, but our names would be attached to the bond. .The Minister for Trade and Customs (Mr. Gullett) before he rose to his present exalted office, made a speech in the House about a year ago in which he said that, after all, this agreement cannot be regarded as permanent; it is merely temporary. I wish I could take that view. If that is his opinion, and he can persuade his colleagues to adopt it, why pretend that the agreement is permanent? It is wrong to tell the States that this is a document upon which they can rely, because it cannot be altered without their consent, and during its currency they may expect the Commonwealth honorably to fulfil its obligations; and then to say within this Parliament or within the Cabinet room that the agreement is temporary, and that we are merely pretending that it is permanent. The honorable gentleman said also that he favoured a reduction of the customs and excise revenue of the Commonwealth.

Mr Gullett:

– I spoke only of revenue duties.

Mr WATT:

– I agree with the honorable gentleman, and will help him in that to the utmost of my power. I am aware of duties, some of which I helped to im pose, which have no protective incidence, and should have been removed long ago. But if the honorable gentleman persuades his colleagues to adopt that course, what will happen to our finances? If, in addition to the drop in our enormous customs revenue we are experiencing now, involving another deficit this year of probably £2,000,000 or £3,000,000, this Parliament deliberately forces certain reductions of duties, the Commonwealth will be in difficulties.

The States must not expect the impossible. They must not expect this Parliament, with or without the authority of the people, to give them an insurance policy for all time. They must share with the Commonwealth the shocks of time and chance. The things that pinch the Commonwealth will hurt them; the things that lift the Commonwealth will lift them. They cannot expect that the Commonwealth shall face the vicissitudes of peace and war, of prosperity and depression, while they sit in the comfortable position of secured creditors. We cannot afford to put them in that position. Nor can we affect to believe that by agreeing to this bill we are settling the financial relations of the Commonwealth and the States for all time. I am certain that some of my thoughtful friends in the House and in the constituencies would be glad to accept some of the advantages which this agreement offers, if they felt sure that it would come up for reconsideration at the end of ten years, as other arrangements of the sort have done in the past. When the Braddon section expired, ten years after the inauguration of the Commonwealth, conferences were held between representatives of the Commonwealth and the States, and the result was the per capita payments - an arrangement which was suitable at that time, notwithstanding the criticism that has been levelled against it by the Treasurer. That arrangement also had a fixed currency of ten years. If we could be sure that ten years hence the people’s representatives in this Parliament would have an opportunity to re-examine this agreement, I would vote for the bill.

Mr Coleman:

– But the agreement does not permit of that.

Mr WATT:

– It does, and it does not. I do not know whether the Prime Minister is prepared to consider that proposal, but it is conceivable that he and his colleagues may find means by which this matter can be considered by the States at once, and a promise given to this Parliament that at the expiration of ten years the whole incidence of the agreement will come before it for reexamination.

Mr Coleman:

– Would not that have to be incorporated in the agreement?

Mr WATT:

– I do not know. I make, the suggestion, and if the Prime Minister and his colleagues think that it is the wish of this Parliament, they must find a way to give effect to it.

Mr Hughes:

– The agreement might be made for ten years, or until Parliament otherwise provides.

Mr WATT:

– I would prefer a definite period of ten years, at the end of which the representatives of the Commonwealth and the States could gather about the council table and review the agreement in the light of the then existing circumstances, the changes and developments that had occurred in the first period of its operation, and the outlook for the future. Such a review would satisfy the States and give a measure of security in thought and fact to this Parliament. I commend the suggestion to the Prime Minister.

Mr BRUCE:
Prime Minister and Minister for External Affairs · Flinders · NAT

– The amendment submitted by the honorable member for Perth (Mr. Mann), and also the concluding remarks of the right honorable member for Balaclava (Mr. Watt), are based on the idea that a period should be put to this agreement, so that it may be reviewed at the end of ten years. The Government has always realized that although the agreement is for 58 years, it cannot be regarded as a solution of the financial problems of Australia for the whole of that time. Inevitably with the passing of years, the development of Australia, and the change of circumstances, both the Commonwealth and the States will realize that u review of the agreement will be to the advantage of all. But an essential feature of the agreement is that the Com monwealth shall take over State obligations amounting to over £600,000,000, and because of the provisions for sinking funds and other means of handling that great debt, a measure of permanency is essential. Nevertheless, the agreement is not inflexible; it can be altered at the will of the parties. I cannot agree to any departure from the provision that the agreement may be varied only with the unanimous concurrence of the Commonwealth and the States.

Mr Watt:

– I am not asking for that.

Mr BRUCE:

– I understand that. A departure from that arrangement wouk be a breach of faith, and would undermine the agreement. I believe, however, that the agreement will be reconsidered from time to time, possibly in the very near future, because of the very fact referred to by the right honorable member for Balaclava - the growing conviction amongst the people that we must bring about a more regular and balanced development of all parts of the Commonwealth. To enable that to be done, some assistance will have to be given by the Commonwealth on behalf of the richer and more developed States to those other States which have great problems of development, but only limited means and populations. To ensure that this agreement shall not automatically continue without further consideration for the whole 58 years, I am prepared to ask the States to concur in the view of the Commonwealth Parliament that, while the arrangement can be varied only with the unanimous concurrence of the parties, it should be reconsidered at the end of ten years in. the light of the then existing circumstances.

Mr Watt:

– I think the States would welcome that, and record it as their view.

Mr BRUCE:

– That is as far as I think we can go, bearing in mind that the agreement must have some permanency because of the liability which the Commonwealth is taking over from the States, and to ensure that the agreement cannot be varied at the will of any one party to it. We cannot definitely limit the agreement to ten years, or as the right honorable member for North Sydney (Mr. Hughes) suggested, “until Parliament otherwise provides,” because.. the taking over of the State debts and the mobilization and consolidation of Australian credit are vital features of it. The suggestion I make is that, if the House feels strongly that the agreement should be subject to review from time to time, we should record our opinion that, at the expiration of ten years, if the matter has not previously been discussed between the Commonwealth and the States, it should be re-examined to determine whether the basis of it should be altered in accordance with changed circumstances.

Mr THEODORE:
Dalley

.- The Prime Minister readily acquiesced in the suggestion of the right honorable member for Balaclava regarding the possibility of the agreement terminating at a date earlier than was contemplated by the signatories to it.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– Varied, not terminated.

Mr THEODORE:

– Any variation of the agreement by resolution of this Parliament will certainly bring it to an end.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– But it can be varied only by mutual consent.

Mr THEODORE:

– The right honorable member for Balaclava (Mr. Watt) suggested the possibility of cataclysmic occurrences - a disastrous drought, or even war - because of which the agreement will fail to run its full course. The Prime Minister met that suggestion by predicating that the agreement will not last for 58 years, which is its nominal currency. If Parliament feels strongly upon that point, it should intimate to the other parties that this agreement may be reviewed before its expiry or at the end of ten years. But has not the main virtue of this proposal, according to honorable members opposite, been that it will give the States security for at least 58 years? Its great advantage, we were told, was not that the Commonwealth would take over the State debts, or that it would contribute a certain amount to sinking fund payments, but that it would give the States security for 58 years. That was the very essence of the agreement. The Prime Minister has weakened upon that point - and it may be wise that he should weaken upon it. One has gained the im pression, not only from the remarks of the right honorable member for Balaclava, but also from those of other honorable members, that the consensus of opinion is that there may arise a necessity for revising the agreement long before the time fixed for its expiration. If this is a possibility, the States should be informed of it. If it is actually contemplated, there is still greater reason why they should be informed.

Mr Paterson:

– The amendment of the Constitution provides for that.

Mr THEODORE:

– Oh, no; it merely clothes Parliament with the power to make such an agreement.

Mr Paterson:

– Or to vary it with the consent of all parties.

Mr THEODORE:

– ‘That is a different matter. The variation would depend, not upon the Government only, but upon the Parliament and the other parties concerned. The Prime Minister made the statement that the variation of the agreement is actually contemplated by him, possibly at the expiration of ten years, or at a later date.

Mr Latham:

– But the variation could be made only by consent of all the parties.

Mr THEODORE:

– I understood the Prime Minister to say that he contemplated that circumstances might arise which would demand its variation, even without the consent of the other parties.

Mr Latham:

– Then the honorable member has misunderstood the Prime Minister.

Mr THEODORE:

– I certainly gathered that that was his opinion.

Mr Hughes:

– He said that we should not be able to amend the agreement except with the consent of all the parties.

Mr THEODORE:

– The right honorable member for Balaclava suggested that such calamities as drought or war might cause conditions to arise which would make it impossible to adhere to all the terms of the agreement. If that is so, the. States should be informed definitely on the point. Otherwise, they may encounter difficulties of a most serious character. It certainly appears now that the agreement will not afford them anything like the security that was prophesied. It has been said that it is impossible to embody the main features and virtues of this scheme in an agreement unless the term of it is 58 years ; but that is not so. It would be quite possible to make an agreement for the consolidation of State debts, the control of borrowing by a central authority, and the contribution of sinking fund payments by the Commonwealth, and at the same time provide in a supplementary agreement, or even in the same document, that the Commonwealth should for the next ten years, or for some other term, make certain contributions to the finances of the States. There is nothing whatever to prevent the drafting of a perfectly businesslike and logical agreement of that description.

The Treasurer said last night that the consolidation of the public debts had always been contemplated when questions involving the re-adjustment of Commonwealth and State finances had been under consideration. He even argued that the two questions were inseparably connected. I dispute that contention. As a matter of fact, the two subjects have been related by the Commonwealth only during the last 18 months or 2 years. It istrue that for a number of years suggestions have been made from time to time along these lines, but the two issues have not been considered inseparably interwoven until lately. While I was Premier and Treasurer of Queensland I made the suggestion, which was not acted upon, that the Commonwealth should take over the State debts upon a fair basis, under which the States would continue to meet their obligations - not for the sake of relieving them of any financial burden, but for the sake of making it easier to arrange conversion as the loans matured, and of obtaining easier terms. When my proposal was made public the following comment upon it appeared in one of the daily papers: -

Daily Telegraph, Sydney.

The consensus of opinion in London, our correspondent cables, is not in favour of Mr. E.. G. Theodore’s scheme, calculated to subordinate the States to the Commonwealth on the London money market. A leading authority explained that if the Commonwealth took over the States’ obligations, it would mean mass flotations periodically, which trustee investors would not be able to absorb; whereas, under the present system, frequent small State loans were readily absorbable by investors in trustee stocks, whose requirements usually were both limited and intermittent.

I refer to this point to show that while some overtureshave been made by leading State parliamentarians towards the consolidating of the public debts, the Commonwealth Government did not take up this part of the subject until the comparatively recent period in the controversy over Commonwealth and State financial relationships. As a matter of fact the financial authorities in London have always objected to the unifying of Australian borrowing and the consolidating of State debts, for they felt that it would adversely affect certain vested interests and make it difficult, if not impossible, for them to continue to exercise the degree of control over Australian loan finances which they have hitherto always had.

If the agreement which we are now considering had been arrived at by fair and free bargaining between the Commonwealth and the States, in which all parties had participated upon equal terms, a good deal less objection would have been raised to it; but we all know that it is not the result of completely free conferences. It is just as useless for the Prime Minister or the Treasurer to say that the agreement is wholly welcomed by the States as it is for them to suggest that the States desired that the per capita payments should be superseded by some other form of financial assistance. Such statements will carry no weight with any one who has followed the course of the events which have led us to the present position. I do not desire to enter upon a tedious examination of the history of the efforts that have been made to re-adjust the Commonwealth and State finances, but I shall refer to two or three salient points. When the Treasurer made his first proposals to the Premiers’ Conference of 1923 for a re-adjustment of Commonwealth and State finances, he did not suggest that the per capita payments should be terminated and that the Commonwealth should take over the public debts of the States and bear a certain definite proportion of the interest burden. The proposal was that the Commonwealth should arbitrarily terminate the per capita payments and at the same time evacuate a certain field of taxation, which should be allowed to revert to the States. The States did not agree to that suggestion, but were bitterly hostile to it. They considered it to be grossly unfair. Nevertheless the proposal was renewed from time to time, in one form or another, until 1926. I can remember the Prime Minister pleading with various premiers’ conferences to accept his proposals. He attempted to show how much better off the States would be if they surrendered the per capita payments and entered upon the field of taxation which the Commonwealth proposed to evacuate. It was only after the State treasurers had shown that the figures upon which the Commonwealth based its proposals were altogether erroneous and ill-founded and that the field of taxation which the Commonwealth proposed to make available to the States had not the potentialities claimed for it, that the Prime Minister and Treasurer dropped their scheme.

Mr Latham:

– Is the honorable member referring to the figures of 1923 or of 1926?

Mr THEODORE:

– The figures to which I am referring were placed in a vague way before the Premiers’ Conference of 1923 and were not submitted in a definite form until 1924.

Mr Latham:

– The figures of 1926 have never been successfully challenged.

Mr THEODORE:

– The figures to which I am referring were shown to be inaccurate to the extent of more than £1,000,000. At first the general principles of the scheme were outlined in a very loose way. The proposal was thrown at us, and we were told we could take it or leave it. The figures upon which it was based were compiled, apparently, by certain Commonwealth officers without sufficient research, and the State authorities were practically commanded to accept them, although they had not the least opportunity to investigate them. The error was revealed when it was shown, after careful calculations, that the field of taxation which the Government proposed to evacuate, was not nearly as valuable as the State authorities were asked to believe it was. The Commonwealth had also passed an act which then was in operation, reducing the income tax and increasing the exemptions It was shown by the States that they could never fully recover the income taxation that the Commonwealth had collected before passing that legislation, because the Commonwealth, by its system of assessment, was able to levy a higher individual income tax than could the States. It cannot be disputed that the Commonwealth figures were misleading. The figures of the States were accepted, and the Commonwealth Government did not persist in its proposals at that time. Included in the revenue that the Commonwealth proposed to hand over to the States were some arrears of previous years, which really had no relation to the year for which the revenue was computed. The figures were hurriedly prepared, and proved to be inaccurate. Since the early years of the history of this financial difficulty, the Commonwealth’s grounds for this change have altered. The Treasurer and the Prime Minister, in justifying this change, said that it was necessary to terminate the per capita payments to the States because a vicious principle was involved. They said that one government should not be compelled to collect revenue for another government to expend. That was the vicious principle, which could not be endorsed or continued by this Parliament. Yet is it not being continued in this bill ? Is not the Government taking over from the States definite obligations equivalent to the making of an anomaly payment of at least £8,000,000 to them ? It is true that under the agreement this money can be used Only for paying interest on State debts and establishing a sinking fund for their gradual elimination. Under the per capita system, the States were given nearly £8,000,000 per annum, which they were free to use for any purpose. There is no difference between the principle embodied in this bill and that contained in the State Grants Act relating to the per capita payments.

Mr Stewart:

– The vicious principle has gone where the new States movement has gone.

Mr THEODORE:

– The Treasurer has advanced the idea that this Government has accomplished a great stroke of policy by solving this difficult financial problem. He may claim some credit for what is contained in this bill, but his attitude to-day has certainly changed from what it was six years ago. He has somersaulted in respect of the grounds upon which this change should be made, and has considerably altered his policy. The Prime Minister, when introducing this bill, said “We were determined to find a solution of this problem inorder to remove the States from a position of uncertainty.” Was the Commonwealth concerned eighteen months ago with the interests of the States? Why, the attitude of the Prime Minister and the Treasurer from 1923 to early in 1927 was one of complete indifference to the interests of the States. The Prime Minister then said that the States had no claim, legal, constitutional or moral, upon the revenues of the Commonwealth. He made no effort to provide security for the States. He wanted security for himself, and freedom for the Commonwealth from the necessity of helping the States. That was the attitude of the members of this Government, as evidenced by their various speeches upon this subject. When the right honorable member for Balaclava (Mr. Watt) was Commonwealth Treasurer, he was not so sympathetic towards the States as he appears to be to-day. I had the opportunity of attending a number of interstate conferences of Ministers when the right honorable gentleman was Treasurer of the Commonwealth. As he frankly admitted this afternoon, in 1919 he proposed an annual reduction of the per capita payment by 2s. 6d., until the reduced payments should amount to 10s. a a year.

Mr McWILLIAMS:
FRANKLIN, TASMANIA · REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928

– That proposal was soon dropped.

Mr THEODORE:

– There was a great outcry, and the proposal was dropped. The fight honorable gentleman, in bringing forward that proposal, was actuated by motives of consideration for Commonwealth finance. He spoke about the tremendous burdens of the Commonwealth imposed by the war, and he could see no possibility of the Commonwealth granting aid to the States. About four years afterwards, when we knew more precisely what those burdens were, the less experienced Treasurer (Dr. Earle Page), and the less experienced Prime Minister (Mr. Bruce), committed a similar error, and came along with pro posals to diminish or to abolish the per capita payments altogether. Their principal ground for that was that the Commonwealth had financial burdens which required it to have full use of its own revenue without the States drawing upon it. None of the proposals to which I have referred originated with the Ministers who brought them before the interstate conferences. All this controversy and antagonism between the Commonwealth and the States has been the result of those Ministers adopting the figures and advice of certain Treasury officials who have little concern for the States, and whose main concern is for the Commonwealth. I know that the right honorable member for Balaclava, when Treasurer, based his expectation of tremendous financial burdens, not on his own knowledge, but on the calculations of certain Treasury officials. The present Prime Minister has been misled in the same way. His speeches at the interstate meetings of Premiers and Treasurers were largely the views of certain Treasury officials. His figures were compiled by those officials. The strained relations between the Commonwealth and the States have been the result of the schemes propounded by these officials, who do not take the full responsibility for them. I have not the slightest doubt that the agreement that we are now discussing - this solution of our financial difficulties, which, at any rate, is more acceptable than that placed before us early in 1927 - did not originate in the mind of the Treasurer, or in that of the Prime Minister.

Mr Parkhill:

– Is that anything unusual ?

Mr THEODORE:

– I do not suppose that it is unusual; but it is largely responsible for the serious breach in the relations of the Commonwealth and the States, arising from this financial change.

Mr Hughes:

– The Government is responsible for its officers.

Mr THEODORE:

– Yes; but the mind of the Treasurer has not been fertile in his ideas. He has not propounded any of these successive schemes. He did not propound the scheme which has replaced the very vicious one proposed two years ago. Let me say that the States were ready at any time to consolidate their debts, and to set up a borrowing authority to control the financial operations - of this country. The States have never raised any opposition to any such proposal.

Mr Bowden:

– New South Wales did.

Mr THEODORE:

– It was not because of any opposition on the part of the States that State debts have not been consolidated before now. Even in 1914 a loan council could have been established. I have taken part in what were virtually loan councils from 1915 onwards, from the first year of the war, when, under Mr. Fisher’s Government, the State Treasurers were called together periodically in Melbourne for the purpose of considering how we could best act in unison, utilize the resources of the Australian and overseas markets, and ration the loan moneys among the various spending authorities in Australia. I remember attending a conference in 1915, at which the right honorable member for North Sydney (Mr. Hughes) was present, as Attorney-General of the Commonwealth. In every succeeding year of the war these conferences were held, and New South Wales took part in them. That State subsequently withdrew from those conferences because of the attitude adopted by the Federal Treasurer. In 1924, I attended a conference of Premiers which was really a meeting of the Loan Council. Similar conferences were held for seven years before the present Treasurer took office. The State Governments have never objected to a central borrowing authority. The Commonwealth Government has now put forward a proposal in the form of a definite legislative agreement to consolidate the State debts, to provide a sinking fund for their gradual elimination, to establish a Loan Council, and to define its authority. Such a scheme could have been in operation ten years ago.

Mr Parkhill:

– Did not Mr. Lang, as Premier and Treasurer of New South Wales, say that he would not be bound by any action that the Loan Council might take?

Mr THEODORE:

- Mr. Lang may have said that, but how would that destroy my argument?

Mr Parkhill:

– It would show that there was not unanimity.

Mr THEODORE:

– I am referring to the period from 1915 onwards, during which time these conferences were attended on different occasions by Mr. Holman, Sir John Fuller, Mr. Oates, Mr. Dooley and Mr. Storey. I was associated with conferences attended by each of those gentlemen. I have not the slightest doubt that if an agreement that was mutually acceptable, and which conferred mutual advantages, had been placed before the States, Mr. Lang also would have been a party to it.

We must not exaggerate the advantages that will accrue from the consolidation of the debts of the States. That will not prove a panacea for all the troubles that arise out of our policy of borrowing and spending. The result will not be a lower rate of interest on the old debts; there will be very little difference in that respect. If the conversion of those loans is arranged through one authority, the result should be a saving in the cost of flotation by the creation of a consolidated stock which will probably find a more ready acceptance and make for successful conversion when the debts mature. There might even be a lowering ofl the interest rates. Any improvement in that direction, however, would be due to the fact that the stock was more generally known and more sought after as something comparable with the old British consols. There should be a decrease in the cost of underwriting loans. The States have been obliged to pay upon conversion an underwriting charge equal to what is paid on a new issue. That is entirely wrong. If the Loan Council fails to arrange for a lower underwriting charge - less brokerage, smaller advertising bills, and even a decreased allowance to the banks for keeping registers - I shall be surprised. But the aggregate advantage will not be so great as some honorable members imagine it will be.

I wish to refer to what I regard as the unwise practice of the Commonwealth Government of confining the underwriting of loans in New York, as it has always done in London, to one firm. For more than thirty-five years Nivison and Sons have controlled the underwriting of all Australian governmental and even municipal loans in London, and the breaking of that connexion may re-act to the disadvantage of the authority that ventured to take such a step. Rut in New York the case is different. There we have entered a new field. The Commonwealth Government, however, has announced its intention to follow the practice of confining the issue of loans to the J. Pierpont Morgan Banking Company. The first loans on the New York market were issued through the National City Bank, hut the business was taken from that institution. I hope that the Loan Council will not persist with that practice, which is an exceedingly bad one. It has the opportunity of securing advantageous terms by obtaining competitive bids. That is the usual method in New York in the flotation of large issues. A great deal of concern will be felt by houses that are interested in the issuing of loans if the Commonwealth Government should adhere to the practice of relying upon bids from one house only, thereby creating what would virtually be an underwriting monopoly. In London stamp duty has to be paid. Leaving that out of account, the underwriting charge and brokerage commission are much higher in New York than in London.

Under the bill the Loan Council is practically given plenary power; yet it will not have the power to control borrowing by local bodies. It will not be able to evolve a complete and satisfactory system for the control of Australian borrowing overseas until it possesses that power.

Mr Latham:

– Does not the honorable member agree that that would be a very difficult matter to arrange?

Mr THEODORE:

– I cannot see that any difficulty would be experienced. In the past the Treasurers of the States have exercised that control. Except in the case of those local bodies which have had the authority conferred upon them by the Parliaments of the States - and they are not many - no local body can borrow in either London or New York without the authority of their State Treasurer. During my experience as a State Treasurer I frequently had to exercise discretion as to whether I should grant to a local body the authority to borrow in either London or New York, or compel it. to rely upon the money that was available in Australia. The Loan Council should exercise a supervisory control over local as well as governmental borrowing.

One of the objections that I have to this method of determining the adjustment of the financial relations of the Commonwealth and the States is that it will constitute a financial overlordship in the Commonwealth. The Prime Minister said that it might lessen the sovereign rights and powers of the States, but that in equal measure it would lessen the sovereign rights of the Commonwealth. I do not agree with him. By exercising the powers that are to be conferred the Commonwealth will undoubtedly invade the functions of the States. As a matter of fact that has been the outcome of the financial policy of successive Commonwealth Governments. There has always been a tendency on the part of the Commonwealth to take more power than was postulated in the Constitution, and it has succeeded in doing so by reason of its enormous revenue resources. If honorable members will scrutinize the statutebook they will find upon it many acts providing for appropriations for Commonwealth departments, the intention being that the money should be used to invade the powers and rights of the States. Some recent acts of that kind are the Precious Metals Prospecting Act 1926, the Petroleum Prospecting Act 1926, the Oil Agreement Act 1920, the Science and Industry Research Act 1920, and the Western Australian Farmers Agreement Act 1920. There are numerous others, but I shall not weary the House by reciting them. Agricultural settlement functions have been invaded by means of the migration agreement. Such activities as the development of certain areas within the States, the setting up of marketing boards, and other functions of the kind can be better done by the Commonwealth than by the States, and some of these things can be effectively managed only if brought under some Commonwealth-wide scheme. I am willing to acknowledge that, but my point is that the Commonwealth has not gone the right way about getting the power it. wants. Parliament has made appropriations in aid of activities other than those which are enumerated in the Constitution as belonging to the Federal Parliament. The Commonwealth has utilized its advantageous financial position to take over or control State activities. Every one in this Parliament must accept his share of responsibility for this.

Mr Atkinson:

– We are not taking over powers; we are merely assisting the States.

Mr THEODORE:

– Similarly, on the ground of assisting the States, one might justify taking over such things as education, State railways, police forces, and the courts of justice. . Indeed, if the States are sufficiently starved financially, or if some satisfactory arrangement is not come to by which the States may obtain relief, the Commonwealth will have to take over some of these things.

Mr Parkhill:

– It would be necessary to obtain constitutional authority to take over such things as State railways, police forces, &c.

Mr THEODORE:

– If the States acquiesced it would not be necessary to make any alteration of the Constitution. That is what has been happening. The States will not raise objections while the Commonwealth is distributing largesse among them.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– In connexion with the grants which we have made to the States, we have actually embodied in the agreements conditions as to how they shall spend the money. This applies in the case of the roads grant.

Mr THEODORE:

– Exactly. It has been done in the case of the roads grant, and also in the land settlement schemes, the irrigation schemes, and so on. A departmental board has actually been set up to supervise matters which are essentially State activities. This is all wrong. There ought to be a re-adjustment of affairs between the States and the Commonwealth. I go as far as the right honorable member for Balaclava (Mr. Watt), and say that the Commonwealth Parliament should have full powers, and that the States should have conferred upon them by the Commonwealth Parliament such referred powers as are thought fit. That, I think, would be a workable scheme. I do not, however, believe that this should be brought about by the indirect, casual, and adventitious methods which have been adopted recently.

Mr Bowden:

Mr. Alfred Deakin said that the terms of the Constitution bound the States to the chariot wheels of the Commonwealth.

Mr THEODORE:

– Apparently he was very far-sighted, for that is what is happening. Some of the decisions of the judiciary have interpreted the Constitution in a manner contrary, I am sure, to the wishes of those who framed that instrument, and the effect has been to deprive the States of some of their powers, and hand them over to the Commonwealth. If it is desired to do that, proposals should be submitted to the people, and we, as a Parliament, should accept their decision. Until that is done, we should make no attempt to usurp the powers of the States. Let them carry on their present functions, and let us submit to the limitations of the present Constitution until the people awaken sufficiently to the need for amending it.

Mr PROWSE:
Forrest

.- I do not like this financial agreement. Since it was first introduced in this House I have done all I could to oppose its passage, and when an amendment was moved for the re-introduction of the per capita payments, I voted for it. I did, however, vote that the matter should be submitted to the electors of Australia. At any rate, I voted that the electors should be asked to say whether the Commonwealth Government should be empowered to ratify an agreement which had been tentatively made with the States. Notwithstanding the fact that the State Parliaments had come to an agreement, I was not able to vote in favour of the financial agreement, because I believed that they had come to it under duress. During the last election campaign I felt it my duty as the representative of the Forrest division to state my own attitude in regard to the agreement. I told my constituents distinctly that I was going to vote “ No “ at the referendum, and I gave them my reasons. Although they elected me to this Parliament by a considerable majority, they did not follow my example in respect to the referendum. I have a fair conceit of the value of my own opinion, but I feel that on a matter of this kind I must defer to the opinion of the electors. I recognize the importance of the analysis submitted by the honorable member for Perth (Mr. Mann), but I do not feel that it is within my province to argue about what my constituents meant when they voted in favour of the issue submitted at the referendum. “When they voted they knew that a financial agreement was to be dealt with by Parliament; they knew that all the State Parliaments had agreed to it; and they knew that if they returned the Bruce-Page Government to power, that Government would validate the agreement. Knowing all that, they voted that the powers asked for should be conferred upon the Commonwealth Parliament. I am prepared to believe that many of those who voted “ Yes “ were members of the Labour party, who openly avowed that if their party got into power they would not validate the financial agreement, but would re-introduce the per capita payments. Nevertheless, it remains true that a majority of the people voted in favour of the powers asked for. I believe that the people of Australia, particularly those of my own State, will regret having empowered the Government to put this agreement into effect. “Western Australia is the largest State in the Commonwealth in area, and the smallest in population, with the exception of Tasmania, and she has sold her birth-right for a mess of pottage. She Las sold out on a per capita basis when her population is only 400,000, while Victoria has sold out on a population basis of, 1,500,000, and New South Wales on a population basis of 2,000,000. New South Wales and Victoria have reached a further stage of development than has Western Australia, and have entered into this agreement on a more favorable basis. Every one recognizes that the great State of Western Australia will develop rapidly, and that she will probably have a population equal to that of Victoria before this agreement expires.

Sitting suspended from 6.15 to 8 p.m.

Mr PROWSE:

– While for eight or ten years the agreement would prove of distinct advantage to the States, it would be disadvantageous thereafter as compared with the per capita system. Western Aus tralia is greater in area than any other State, and with its small population, it needs much development, but it should not be asked to sell its birthright. Two of the States have very large populations, and for the period of 58 years they will be paid on the basis of population. It may be claimed by the advocates of the measure that Western Australia would benefit under the agreement because of the advantages to be derived with regard to loan money, but I venture to think that the borrowing of that State will not be greater per capita than those of the other States, and therefore, I cannot see any considerable advantage in that direction. The outlying States must necessarily suffer under this agreement. I was impressed by the following comments in an article entitled “ The Spirit of the West,” recently written by Mr. John Gunn, a member of the Development and Migration Commission, who has paid several visits to Western Australia : -

National wealth consists to an important extent of the producing power of the people. One type of population, it has been said, will make a rich and powerful country of land indifferently endowed, while another will be comparatively poor in the midst of natural opportunities. Looking at the achievements of Western Australia within the last 35 years, is there not reason for pride in the dominating spirit of its people? A State that embraces 975,920 square miles - slightly more than eight times the combined area of England, Scotland and Ireland - represents to a relatively small population a tremendous responsibility. The heirs to that vast estate have onerous obligations. They have faced them hitherto with the courage of conquering enterprise. The boldness of the great scheme that brought a bountiful water supply to the goldfields appalled weaker spirits. But stout hearts surmounted all difficulties and were amply justified. Originally designed to serve a mining population, this notable water supply service is steadily growing in value as a vital aid to development in all its interests. The long pipe-line has become a main artery, carrying the life-blood to an ever-extending area of land settlement and to centres that pulsate with a more vigorous life.

It would be deplorable if the spirit of the people of that great State were broken because of the disabilities under which they suffer. It is said that the position of Western Australia can be relieved because of the provision in the Constitution whereby assistance can be rendered to necessitous States; but when anything is done for that State, its people hear the gibe from the representatives of the larger States “Another sop to Western Australia.” While I give credit to the Government for what has been done for Western Australia by way of part of the grant recommended by the royal commission that recently enquired into its disabilities under federation, I remind the House that only the other week we granted a similar sum to New South Wales. I did not, however, describe it as another sop to that State. A glance at the list of bounties paid to manufacturers in the larger States shows how great are the sops that they have received. Western Australia, with its small population, has made gigantic efforts at development and her man power is engaged in the legitimate jobs of this country. I should be sorry to think that this agreement, or any other, would in any way break the spirit of those people. For a considerable time I thought that the only redeeming feature of the proposal was the arrangement for common borrowing on the London market, but I have come “to the conclusion that in that respect the agreement may not accomplish all that is claimed for it. When one analyzes the financial position in London, one finds that it would be advisable to have a regular loan on the London market that would always be available to investors. Owing to the daily settlement of estates, opportunities for investment are constantly looked for, and unless avenues for investment are open at all times, loan money is lost to the Commonwealth. The flotation of heavy loans three or four times a year would not enable us to get the benefit of all the money available for investment in Great Britain. That is why the honorable member for Perth (Mr. Mann) was able to show the disadvantages of the recent large loans as against recent State loan flotation.

In voting for the measure, I wish to emphasize the fact that I am deferring to the will of the electors. I hope that I am wrong, and that eventually, the agreement will be of advantage to the people generally. I am taking no cognizance of the fact that this Government, or any other, may say to the people “If you do not accept this arrangement, you will have nothing.” I was not elected to -pass this agreement; I told my con stituents that my intention was to record a “ No “ vote. I gave them my reasons for doing so, and I have stated some of them to-night. I said that I did not think that the Government should pledge posterity as it does under the agreement. The Government had no right to commit the country so heavily as it has done in the matter of roads. I believe that the Treasurer is beginning to realize the financial difficulty in which he is now placed because of the generosity that he showed at a peak period. If it were not for the fact that the people have decided this issue for themselves, I should persistently vote against the ratification of the agreement. When the electors said, “ We want power given to the Commonwealth Parliament to enable it to deal with the financial problem,” they knew that the Bruce-Page Government intended to bring forward this agreement. There fore, I defer to the decision of the six State Parliaments and of the overwhelming majority of the people.

Mr LAZZARINI:
Werriwa

.- To borrow the phraseology of the Prime Minister, the most amazing feature of the debate is the smug complacency with which honorable members opposite assume the attitude that the present system of finance, public and private, will continue for 58 years. In the short time at my disposal I shall try to show what will actually occur in the next 58 years if the present system’ of capitalistic finance continues for that period, and I shall endeavour to indicate the penalty that Australia will have to pay. I am opposed to the agreement more on constitutional and political than on financial grounds. I realize that capitalistic finance is becoming so impossible that it will finally break down of its own weight. The Prime Minister and his followers, like all anti-Labour governments, are endeavouring to devise ways and means of rehabilitating a rotten and corrupt financial system. The pooling of debts is a wise proceeding, possibly, from the point of view of capitalistic financiers, and it will enable the system to continue for a little while. Therefore, the Government, and honorable members who support them, no doubt feel justified, in favouring this agreement; but on every occasion I shall try to convince the people of the absolute stupidity of the present system as it has developed since the inauguration of the Bank of England in 1697.

My first objection to the agreement is that it is to have a currency of 58 years. No Commonwealth or State Government has a mandate to control this country for 58 years, or to make any agreement binding on the people for that length of time. The constitutional ideals of the Labour party are based on the conviction that the present generation has no right by written words to bind future generations. This Parliament is hampered by a Constitution framed when most of us were children, and we are rattling the bones of the dead to silence the clamour of the living. A financial agreement extending over 58 years will merely help to perpetuate that anomaly. Even with the agreement in force it will still be possible for the Labour party to realize its ideal of vesting supreme power in the Federal Parliament; which will then delegate certain powers to minor bodies to be known as States, provinces, or what you will. But this agreement will make the change more difficult, and will afford those interests which are served by the present division of government to complain that a solemn agreement has been treated as “ a scrap of paper.” That is a sufficient reason for my opposition to this proposal. I am not against it because of any belief in State rights, or because of the details of the financial provisions, because I realize that while we slavishly follow the present capitalistic system those provisions will have some advantages. The ideal of capitalism is division of government. The distribution of control between the Commonwealth, States and local governing bodies, enables the capitalists to play one authority off against the other, creating in politics the same condition as craft unionism produces in the industrial field. Those who believe in consolidation of forces in one big fight for general principles and ideals, realize that the present order must be swept away. And because the agreement will make our progress towards that ideal more difficult, I oppose it. The Prime Minister said that under the agreement a sinking fund will be established which will pay off the national debt in 58 years.

That statement is so stupid that one wonders at anybody outside a lunatic asylum making it. The present Treasurer claims to have invented the sinking fund, but I am under the impression. that even some of the despots of the middle ages had some idea of a system of amortisation. After the Napoleonic wars Pitt tried to wipe out the national debt of England by means of a sinking fund, but for every one million pounds he paid off, he borrowed ten million pounds at an increased rate of interest. But to prove the fallacy of sinking funds I need not look earlier than the history of the present Government. In 1923 the aggregate debt of the Commonwealth and the States was £905,848,946; in 1924, £951,800,000; in 1925, £963,100,000; in 1926, £1,014,6413,000; and in 1927, £1,043,731,921. Thus, notwithstanding the sinking funds, the debt has increased by £137,000,000 in five years. The Commonwealth was one of seven borrowing authorities, and its proportion of that increase was £50,000,000, or more than, one-third. With those figures to guide us, let us calculate what will happen to the national debt in the next 50 years. The right honorable member for Balaclava spoke of the possibility of droughts and war; he should be one of the last to envisage another war, having regard to the fact that he was one of those who, in the years 1914-1919, yelled most loudly in support of “ a war to end war.” In 50 years, allowing for the normal rate of increase, the national debt will expand by £1,654,595,484, making the total debt of the Commonwealth and the States £2,698,328,405. The interest paid during the 50 years will amount to £5,000j000,000, so that the burden of our people will have been increased to nearly £8,000,000,000. What is the use of hypnotizing the people by talking of sinking funds to wipe out debts that cannot be wiped out? No country ever paid off its national debt, because it is a debt that is never meant to be paid off. The person who tried to bail out the sea with a pannikin essayed a task infinitely easier than the redemption of the national debt by means of a sinking fund. During the recent election campaign the Treasurer claimed that he had reduced the national debt of the Commonwealth by £25,000,000. It is true that he has retired war bonds to the amount of £25,000,000 bearing interest at 4f per cent., but in the process he has borrowed £80,000,000 at from 5i per cent, to 6 per cent. Thus he reduced the national debt as effectively as every financier has reduced it since England incurred its first national debt, when the Bank of England was established in 1694 to help to finance the Netherlands wars of William of Orange. In the last year of the proposed agreement, the people of Australia will be required to pay £135,000,000 in interest.

Mr Atkinson:

– But the £600,000,000 of State debts that the Commonwealth is talking over will have been retired.

Mr LAZZARINI:

– And a new debt will have been incurred. One debt is paid off by incurring another, and each time the interest rate is increased. The only hope of salvation for this or any other country is the total abolition of capitalistic finance and the substitution of national control of banking, insurance, &c. That is a policy I have advocated on the platform ever since I entered this House. National debts are essential to the present capitalistic system, because they provide gilt-edged securities for the investment of the everincreasing profits of industry. If the £600,000,000 of accumulated profits which the people of Australia have invested in the national debt were re-invested in industry, the unemployment problem would not’ exist; if there were no national debt, the money would have to be put back into industry or lie idle. It is natural for honorable members opposite, who support the capitalistic system, to shut their eyes to the lessons of history. They will not realize that the present system is only a passing phase of our development. The capitalistic system evolved out of earlier systems, and it in turn will give way to something better. But honorable members opposite legislate as if evolution had ceased, and they seek to stabilize the existing conditions for 58 years. Every honorable member who seeks to bolster up the present system of society is helping to place on the backs of the Australian people the immense financial burden I have mentioned.

There is only one way to overcome the capitalistic system. Mr. Lloyd George said that the war had placed the world in a melting pot and with audacity .we could accomplish anything. I suggest that the capitalistic system has been developed by audacity and it can be ended by it. It is of no use for us to attempt to bolster up the system by artificial means, and my objection to this agreement is that it attempts to do that. Honorable members may say that now the war is over we shall borrow only for reproductive works. I am a pacifist. I would not take the life of a single human being to bring about the greatest- reform in the world; but I feel I could be brought to put those people who keep pawning their country to foreign money-lenders by borrowing abroad, against a wall and shoot them.

During the election campaign the Prime Minister said that Great Britain had financed Australia and that we should therefore be loyal to her. I have no wish to see the dismemberment of the commonwealth of nations known as the British Empire; but I do not admit for a moment that the people or the Government of Great Britain have financed Australia. Such money as we have bor-, rowed abroad has come from a hybrid crowd of Jewish and other money lenders who know no country, creed, or class. They are the only people in the world who have developed a true international spirit. They know no God but Mammon. They have lent us the money which we have spent, and they will take every care that our national debts are never extinguished.

Mr Maxwell:

– I should like the honorable member to indicate how we could possibly get rid of these debts.

Mr LAZZARINI:

– I have outlined a dozen times our proposals for doing it. We contend that the national control of banking, credit, insurance and currency will alone free the country from these Shylocks of international finance. The national credit should be developed in the interests of the nation, and not in the interests of speculators and so-called investors. The honorable- member and his colleagues opposite may laugh, but my solution is a sound one. I am prepared to debate it with any of them on any platform of Australia. I remind the honorable member for Fawkner that it was a gentleman with a cultured mind who called our attention to “the loud laugh that spoke the vacant mind.”

It is useless for us to think of rectifying the position by limiting borrowing to what are called reproductive works. I suppose that State railways would be considered to be reproductive works. In 1927 the gross revenue from them, excluding Commonwealth and privately owned lines, was £48,000,000, and the total working expenses were £39,000,000.. The credit balance excluding interest payments approached £9,000,000. But when the interest payments of- about £.14,000,000 were deducted the railways showed a loss of more than £5,000,000. The right honorable member for Balaclava said to-day that money had been borrowed at 3& per cent, for railway construction work in Australia. The trouble was that it was never paid back, and we had to redeem the loans raised at that rate of interest by loans which cost us from 5£ per cent, to 6-J- per cent. The national debt has been built up in this way. I frequently travel on the. New South Wales south coast railway. Some honorable members know the line very well. They will recollect that beyond Waterfall a deviation has been made from the original line with the result that huge earthworks and tunnels have been rendered useless. ‘ I suppose these were constructed with some of the money that was obtained at 3£ per cent. This shows how idle it is to talk about constructing only reproductive’ works. The trouble with the capitalistic system is that it is like a huge pyramid of credit balancing upon its apex instead of standing upon its base. The basis of national finance is national control.

Private control of finance has been designed to profit the few at the expense of the many. The associated banks of Australia which control our financial movements have never had in their possession at any one time more than £47,000,000 of legal currency, although they have owed £270,000,000 to their depositors on current account. If the whole of their customers had required their money at the one time the system would have completely broken down. To meet a cheque currency of £236,000,000 the banks have never had more than £47,000,000, and many of the cheques drawn have been as spurious as the £10- notes printed by the criminal who was recently gaoled in Victoria for issuing counterfeit notes. Our whole currency system is in the hands of capitalistic financiers, who are interested only in their own profits. They inflate or deflate the national credit to suit their own ends. I submit that the liquefying of the credit of the nation for private gain should be rendered impossible. Dozens of Supreme Court judgments in this country and hundreds in other countries declare that the cheque is an illegal document.

It has been said that we have borrowed something like £500,000,000 in Australia for certain works; but the fact is that we never have had £60,000,000 of actual currency in the country. The whole capitalistic system is. chaotic and stupid, notwithstanding anything that the Prime Minister or the Treasurer may say in defence of it. The agreement that we are now considering can do nothing effective to abolish national debts. We may talk about redeeming our debts, but we only redeem them by borrowing more money at a higher rate of interest than the old money cost us.

I am opposed to the ratification of this agreement, because it will place obstacles in the way of the realization of our ideal of the national control of banking, credit, and currency, and will make it more difficult than ever for us to effect certain constitutional reforms which will result in the setting up of one supreme parliament in Australia which will delegate certain powers to minor bodies.

Mr HUGHES:
North Sydney

– The Prime Minister has said that the subject of the financial relations of the Commonwealth and the States is most important. I agree with him. It is to be regretted that it has not been regarded from a non-party stand-point, for if anything is in its nature non-party, this is. By our decision to-night we shall affect not only the financial policy of this generation, but the generations that follow it. The influence of this measure covers the whole field of our national life, and stretches from the present into the future. We are to determine the limits within which the people of this progressive community shall adjust themselves to the ever-changing conditions of the years to come. It is most unfortunate that we have not been given better opportunity to consider and discuss this agreement. Still, we must deal with the situation as we find it. The outstanding feature of this proposal is that it is to be a final and permanent settlement. If it is not intended to be that, it has from the stand-point of the Government no merits whatever. The strongest argument of the Treasurer is that the proposal is to be a final and permanent settlement, that will give the States security. Whether a final and permanent settlement of the finances of a young and prosperous country like this, or indeed of any country, is possible, and if it be possible, whether it is desirable, is a question that we ought most seriously to consider. Perhaps I should at the outset state my attitude towards the per capita system, a subject which has been discussed in this Parliament on many occasions. My views have never changed. The opinions I held in 1909 still appear to me quite sound. Reference has been made during the course of the debate to those earlier attempts to effect a permanent settlement of the financial relations of the Commonwealth and the States, and I was glad to hear from the Leader of the Opposition a refutation of the charge that the Government and the party to which I at one time had the honour to belong, had taken nearly £3,000,000 from the States. The Leader of the Opposition was able to how that that was done not by the Government of which I was a member, or the party to which I then belonged, but by a Government headed by Mr. Deakin. When the measure depriving the States of revenue eventually came before Parliament, I spoke on it at some length. I have recently refreshed my memory of those stirring days by a perusal of the debates. The thing that struck me most and seems to warrant mention is this. We are now considering the settlement of the financial relations of the Commonwealth and the States for a period of- 58 years and that is, as far as we are concerned, for ever, yet the discussion of the second reading of the bill is to end at 10 o’clock to-night. By that time, we shall have discussed it during nine sittings for 17 hours and 25 minutes. When this matter was before the House in 1909, to say nothing of its subsequent appearance in 1910, we had 23 sittings and a discussion lasting nearly 98 hours. Whether we employed our time ill or well, must remain for posterity to determine, but at any rate there was ample leisure for discussion. And, as I have said, the attitude that I took then I take now. I have never been a champion of the per capita payments. 1 accepted that scheme as a temporary settlement, and having done so, I worked loyally under it. I had ample opportunity to force the States to accept other proposals, but I thought that the very nature of that agreement precluded recourse to such means. Now this agreement has been accepted, and its acceptance by the States has been put forward as another reason why we should validate it. That point has been made over and over again; but the States had no option. There was nothing for them to do except to take what the Com’monwealth offered. It is important to remember that, because we shall have to consider this proposal from another angle. In 1909 I was opposed to a permanent settlement of the financial relations of the Commonwealth and the States, and I am convinced that such a course is unwise to-day. I ask the Treasurer what would have happened if in 1910 a permanent settlement had been made of the per capita payment of 25s? He tells us this agreement is far better than the per capita scheme. But it is obvious that he would not have been in the position of being able to place this proposal before us if the per capita scheme had been made permanent. The beauty of a permanent scheme is that, no matter how egregiously unwise it is, or how much it trammels the limbs of a progressive people, it is there and nothing can alter it. The Treasurer said that this is a final and satisfactory settlement of the financial relations of the Commonwealth and the States. How can he say what will be the circumstances of this country 25 or 50 years hence? We know from our own experience how futile it is to attempt to make arrangements satisfactory for all time. The only permanent law of which we have had any experience is that of the Constitution. The men who made that law were among the wisest in the land. They had had long experience and had the precedents of other countries to guide them. That law was endorsed by the people and administered sympathetically, but ten years had hardly passed before it became abundantly clear to those who were responsible for the Government of this country, that the Constitution was not adapted to deal with conditions that had developed since it was drafted. Another nineteen years have passed and on all sides we see additional evidence of the futility of attempting to fetter the limbs of a progressive people by a rigid Constitution. Who could have foreseen in 1910 that a great war would break out, and subject this country to fearful strikes? Who could have foreseen the shifts to which we were put to bear the strain of the war burden? It was fortunate indeed for us in those dark days that there had been no final and permanent financial settlement. Who is able to say what the circumstances and needs of the future generation will be? When we remember what Australia was, say, in 1910, and consider it now, we see plainly that our financial circumstances have been revolutionized. And the pace at which the world is moving has been so speeded up that no man, no matter how vivid his imagination, can conjure up in his mind a picture of what Australia will be in 50 years’ time. If we go back 50 years we shall get some idea of the monumental changes that may be expected. In 1870 the population of Australia was 1,600,000, its expenditure was £9,000,000, and its revenue £9,000,000. Its public debt was £30,000,000 and its trade £45,000,000. In 1927 the population of the Commonwealth had increased to 6,139,000, its trade to £309,000,000, revenue to £78,000,000, expenditure to £75,000,000, public debt to £1,002,000,000 and post office revenue to £11,000,000. In 58 years the trade of Australia, which in 1870 was one-tenth of that of Great Britain, had increased to more than half of what the total trade of Great Britain was in 1870, while its revenue and expenditure had equalled that of Great Britain in 1870. In 1927 Australia’s public debt had grown to such proportions as to be £300,000,000 more than what Great Britain’s public debt was in 1870. One State of Australia to-day has a population far in excess of that of the Commonwealth in 1870. This is an agreement between the existing States and the Commonwealth, and it is to continue for 58 years. Exactly what the position will be then we cannot say, but it is most improbable that there will be only six States. Only a little while ago the Treasurer (Dr. Earle Page) was a banner-bearer for the party which stood for the creation of new States. Doubtless there will come a time when a leader will arise who will not sleep at his post, but will march forward, and we shall then see the number of States doubled or perhaps trebled. In the United States of America, in the first 50 years of their existence, the number of States increased from thirteen to 28. In all probability there will be a great many more States in Australia in 50 years, or in 25 years, than exist to-day. In what way will this agreement lend itself to such a change? There is no machinery which will make it possible for any new States to fit in with this scheme. We do not know what powers the States of Australia will then have; whether they will be quasi-sovereign as they are now, enjoying their present wide reserve powers, or whether there will be a redistribution of powers along the lines referred to by the honorable member for Werriwa (Mr. Lazzarini). It is probable, however, that development will proceed along the lines indicated by the right honorable member for Balaclava (Mr. Watt). The tendency is towards a redistribution of powers between the States and the Commonwealth. I think we may fairly say that, so far as the people of this country have any definite and settled opinions on this matter, they lean towards one Parliament rather than to seven. I am not now, nor have I ever been, a unificationist; but if it were possible to put the question before the people unaccompanied by any complications, it is my belief that they would vote for one Parliament instead of seven. When the Constitution was originally submitted to the people in 1901, the overwhelming majority, certainly in that part of the Commonwealth in which I then resided, were under the impression that they were voting for one Parliament and for the abolition of the State Legislatures. Tearful deputations of my faithful constituents came to me and expressed their regret at my departure for a new, august, and almost mysterious sphere. They said that, after all, the old place was not a bad one, and it was a pity it was going to be shut up, but they supposed that its time had come. However that may be, and although I am not to be numbered among those who stand for the abolition of State Parliaments; public opinion is certainly hardening in that direction. Those who contend that State Parliaments are likely to continue to exercise for any length of time the powers that they now possess, are blind to the trend of our age. One thing is certain, the future will see great changes and development, but this agreement does not provide for the expansion of the Commonwealth, does not and cannot because of its very nature, take these things into account. It ought not, therefore, to be made a permanent feature of our legislation.

The principle of the agreement is altogether wrong, for another reason. We have heard from the Treasurer a number of laudatory references to the great reforms that it will effect. We are told that we shall be able to borrow money more cheaply, curtail borrowing, and improve our credit. Some of these things the agreement probably may and will do. But how will it affect economy? The best way to enforce economy is to make the person who spends the money raise it. As things are now, we are never able to sheet home to either the State or the Commonwealth the charge of extravagance, which is perhaps the most serious sign of the times. The right honorable member for Balaclava deplored the unreasoning optimism of the people of this country, who borrow money with both hands and are careless of the future. I repeat that the best way to enforce economy is to make those who spend the money raise it; then the taxpayer can deal with the person who spends it. At the present time the Commonwealth raises huge revenues, which it disperses in various directions, and for the expenditure of which it takes no responsibility whatever. In this way, of course, it earns a cheap reputation, which secures for it the support of a large number of people in this country. It is in a position to, and does, spend millions. If the States had to raise their own revenues, they would spend much less money.

The Treasurer claims that this is a great reform; that it will make for economy of government. It will do nothing of the sort. The Commonwealth will have imposed upon it for all time very heavy liabilities, which it will be able to meet only so long as it can raise the necessary funds. Its present liabilities can now be met only because we are raising from customs and excise duties tens of millions of pounds more than we did twenty or even ten years ago. The revenue from the tariff has swollen prodigiously. During the last six years there has been raised from that source not far short of £100,000,000 in excess of the previous six years. And this has encouraged the Commonwealth to spend money lavishly. Supposing that one of these days a Government assumes office which does more than merely talk about reducing the tariff, how shall we be able to meet our liabilities under this agreement? The only means within our power will be to increase the income tax and the land tax.

Mr Gregory:

– The resultant increased prosperity will enable us to meet our obligations.

Mr HUGHES:

– What is the use of saying that, although we cut our revenues in half, we shall in some mysterious way be able still to live within our means without imposing additional taxation? I suppose the idea is that we shall wash ourselves into a satisfactory position on a wave of general prosperity. Our statutory liabilities effectively prevent economy. If we lose revenue from the tariff, we must fall back upon direct taxation. We are imposing liabilities that we will not have the means to meet unless we levy very heavy customs duties. From a protective point of view our present tariff is the least effective in the world; yet it imposes upon the people of this country huge burdens. For what purpose? To protect Australian industry? It does not do this. It undoubtedly increases the cost of production to the man on the land. Some day, as I have said, a government will do something more for the man on the land than talk about reducing the tariff. Where then, will the money come from to meet our obligations under this agreement? When the day arrives, as arrive it will, the then existing circumstances will compel the people to tear up this agreement.

That brings me to the point I wish to make: This agreement, the chief virtue of which, the States are told, is its permanency, is written in water. History proves conclusively the futility of attempting to make permanent agreements. Take, for example, that most sacred agreement which sanctioned the union of England and Scotland. I say nothing of the agreement between England and Ireland. If any agreement was sacred; if any was intended to be permanent, that was. The idea was to encircle it with a halo of sanctity. But we know very well that it was amended, that it is impossible for one generation to make laws that another may not or will not break. Some people refer to this agreement as though it were outside the power of this Parliament to vary it. It is only a law of this Parliament, and that is all it will ever be. To say that those who come after us will be bound by what we do now when their circumstances urgently demand a radical reform is absurd. Parliament can always get out by the same gate as it came in. The States are told that they are made secure for a period of 58 years, let me tell them that this agreement will last only so long as the people think it should, and not a day longer. I warn them not to accept it as a final settlement. I hope that this Parliament will not make it such. If it does, the people of this country will, in a comparatively short time, undo what it has done.

For some time there has been in existence a commission, the purpose of which has been to examine the Constitution and to suggest in what directions it requires amendment. In the fullness of time, perhaps before the 58 years covered by the agreement have elapsed, those of us who are alive at the time will have before us its report and recommendations, and will be asked to advise the people to agree to the amendment of the Constitution along the lines suggested. I do not know what these gentlemen are going to advise, nor do I know how much of their advice this Parliament will accept. But this I do know: The Constitution cannot continue long in its present form. We want industrial peace. We hear a great deal about it now, yet every one knows perfectly well, and the Prime Minister has said so from a hundred platforms, that it is impossible for this Parliament to secure industrial peace unless and until it has been granted wider powers, and in other vital matters we are in the same impotent position. If the country were suddenly confronted by a new and terrible upheaval, we might not be able to cope with it. The Commonwealth must progress or perish. Are we to allow this agreement to deflect the Commonwealth from the course it should pursue by imposing restrictions upon it for generations, or, as sensible men, make this agreement, about the merits of which I say nothing for the moment, operative only for a term of years? The right honorable member for Balaclava (Mr. Watt) made a suggestion, which I am sorry he did not develop at greater length, that the agreement should have effect for a period of ten years. The honorable member for Dalley (Mr. Theodore) carried the matter still further, and suggested that we should divide this agreement into its three constituent parts and deal with these separately. They were enumerated by the Leader of the Opposition ; the first relates to the granting by the Commonwealth to the States of an equivalent to the per capita payment; the second relates to the States’ debts; and the third to the Loan Council and sinking fund arrangements. I have no objection to an agreement being come to for a term of 58 years regarding State debts and sinking funds, because those matters are severable from the payments to the States, and a permanent settlement will not prejudice our future financial policy. The payments to the States, however, are in an entirely different category. The sensible course for the Commonwealth would be to limit the period in which the payments are to be made to ten years. Then the States and the Commonwealth could meet again, and in the light of experience, and the then existing circumstances, fight the battle over again. After this suggestion had been made by the right honorable member for Balaclava, I listened carefully to what the Prime Minister had to say about it. I admit that I may not have been able to deduce his meaning from his words; but what I gathered was this : He said that he did not regard this as a final and permanent settlement; he fully realized as time went on that the parties might come together and make other agreements, or vary this one. This matter is vital to the welfare of the country; yet I am at a loss to understand just where we are. Is this a final and permanent settlement, or is it not? Surely a plain, straightforward answer could be given to that. On page 557 of the Hansard report for the 22nd February, 1929, the Prime Minister is reported as having said -

The sentiment of Australia is in favour of the agreement being validated and made permanent, so that we may obtain a final and definite adjustment of the financial relations of the Commonwealth and the States.

That is a plain statement about which there ia no ambiguity. How, then, in the face of that, can the Prime Minister say that he contemplates subsequent re-adjustments of the agreement between the Commonwealth and the States? We are asked to believe that the States will voluntarily meet the Commonwealth in the future, and agree to a reduction. Perhaps the Prime Minister is not in the habit of reading his own speeches, and I do not censure him for that; but if he is, and if he read those of the Treasurer - that perhaps is asking too much - he would find that the reason given for the compulsory abolition of per capita payments was that it was absolutely impossible to get the States to agree to any alternative financial proposal. Human nature being what it is, I ask honorable members whether the States would ever agree voluntarily to abandon the per capita payments unless they were given better terms? They would never do it. It is merely throwing dust in our eyes to say, in answer to the suggestion that this agreement should be limited to a period of ten years, that the States and the Commonwealth Government will meet later, and come to some other agreement more favorable to the Commonwealth. The Prime Minister must know that nothing in the world could be more improbable. It is evident, therefore, that this arrangement is intended to be permanent. I have always stood for the rights of the Commonwealth Parliament, and I cannot endorse an agreement which limits those rights and fetters us and the generations that come after us. It is true that, as sure as the sun rises, those fetters will be broken ; but why should we deliberately do this thing?

I believe that the Loan Council is an excellent thing. It is a good thing to have one borrower, and I do not agree with the honorable member for Perth (Mr. Mann) when he said that we do not receive any benefit from it. We may not as yet have received any benefit in the way of reduced interest charges, but it must be evident that it is better for Australia to have one borrowing authority than seven. So far from condemning the arrangements for the consolidation of State debts, for a Loan Council and the provisions for sinking funds, I strongly favour them. But I am entirely opposed to the proposal to make the payments to the States binding for a period of 58 years. What, then, are we to do? What arguments can find favour with a House constituted as this is? It is of no use to tell ‘us that this is an agreement, and that, therefore, it must be accepted or rejected as a whole. That is not the way to present a document which has long been a matter of dispute between the parties in this country, and upon which very strong feelings exist. This agreement comes before us because the Commonwealth first of all took away from the States the per capita payments, and left them with no option but to accept the present arrangement. Now we are told that we have no option but to accept or reject the agreement as a whole. I bitterly resent that.. It is a wrong position in which to place this Parliament. We should have been given the right to discuss the agreement on its merits. There does not seem now to be any question in public life on which it is safe or expedient to express our honest opinion. We are called upon to ratify this agreement to-night, because the Government wants it to be done, not because the people want it. As the years roll by, and changes come, as come they must, this Parliament, and particularly those on this side, will have to accept the responsibility for this agreement. Yet, in very truth, we are not responsible at all. “We are all tied up with this machine of government, and of party politics. In this matter, at any rate, machine politics are incompatible with the welfare of the community. What is done to-night cannot be undone except by the people themselves. The people now go on their way heedless of what is happening. They leave to us the business of government, but as soon as the shoe pinches they will wake up. Then it will go badly with those who happen to have voted the wrong way. I cannot vote for this measure as it stands .now. I should willingly vote for it if the term of the payments to the States was limited to ten years; the State debts and sinking fund arrangements remaining as in the bill for 58 years. With the two last items I entirely agree, nor have I any criticisms to offer regarding the amount of the payments to be made for the first ten years. I am bound to say, however, that I do not think it was worth while changing the per capita system of payment merely to substitute what is now proposed. We were told at first that the Commonwealth would gain something by the arrangement. We have not gained anything; we have lost. But we are told that at the end of ten years we shall begin to gain something. Long before that the people will begin to wake up; then there will be an end of the arrangement, and our last state will be worse than the first. There is no justification for the substitution of this system for the per capita system. It is true the per capita system was wrong in essence. I myself must take my share of responsibility for not putting an end to it ; hut I was reluctant to force upon the States . any scheme against their will. The present Government was not troubled with such scruples. They simply bailed up the States in the good old-fashioned way, and forced them to accept .this agreement in which the payments to the States are over a period of ten years substantially the same as under the per capita system. There the matter rests. The agreement is before us now, and we must vote on it. If the Government really wishes to deal fairly by its supporters and by the people, it will, even at this eleventh hour, take heed of the suggestions made by the honorable member for Perth, and give the parties an opportunity of discussing the matter again at the end of ten years. The suggestion’s of the honorable member for Perth and Dalley are, at any rate, capable of being used as the basis for an arrangement by which we might do justice to the States, and at the same time safeguard the interests of the Commonwealth.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– This is one of the most important measures that has ever come before the House. Since the provisions of the agreement embodied in its schedule are not dependent on what has happened in the past, I shall not repeat the history of the negotiations between the Commonwealth and the States except so far as may be necessary to show that, although some honorable members have apparently assumed that there was some virtue in the payment of 25s. per head from the point of view of the States, that payment bears some relation to the necessities of the States at the time when it was fixed, that is not really the case. The sum of 25s. was fixed in regard to the Commonwealth requirements as estimated by the Government of the day. It was considered that the obligations of the Commonwealth for defence, old-age pensions and in other directions made 25s. the maximum sum that could be paid to the States, and accordingly- has no relation at all to State requirements. I do not suggest that the carrying of the referendum was an approval of this particular financial agreement. It is clear that the referendum proposal was one for the amendment of the Constitution which would make it possible to adopt this financial agreement or any other which satisfied the conditions. This agreement, however, was argued very fully before the people, and there is no doubt that it was thoroughly discussed, but I would not for one moment suggest that the referendum vote of, say, three to one, is a measure of the support of the financial agreement in the country. The agreement has been submitted to every Parliament in Australia - to every State House and to this House - and accordingly no measure has ever come before this House with the degree of approval of the representatives of the people that this measure carries. Honorable members appear to think that State Parliaments and State Governments of varied political complexions have all been dragooned somehow into the action they are taking. That appears to me to cast a remarkable reflection on both the State Parliaments and this House. I repeat that in the history of Australia there has never been any measure that has been so thoroughly examined and discussed, and so widely approved in the representative assemblies of the country, as has this proposal.

There are three main features of the agreement, and two of them I shall only mention. The consolidation of borrowing and the establishment of a loan council are now apparently almost universally approved, although the honorable member for Perth (Mr. Mann) urged that in general it was better to have separate than joint borrowing. I would invite the attention of that honorable member to the provision in the agreement that makes it possible, where the Loan Council approves, for States to borrow separately, and, accordingly, this agreement has the advantages of joint borrowing, together with the possibility of separate borrowing where that is thought more advisable. Secondly there are the provisions as to the sinking fund, which honorable members will recognize must be permanent in character. The third feature consists in the payments to the States, and most of the criticism has been directed against the permanence of these payments and the amount of them. From one quarter the criticism is that they” are too little, and from another that they are too large. It has been suggested that we should have the first two elements of the agreement, which I have described as the consolidation of borrowing and the sinking fund arrangements, without the third element. Well, this is a single agreement consisting of many terms. It has been said by the honorable member for Dalley (Mr. Theodore) that at all times the States were willing to agree to a general sinking fund for Commonwealth stock, which should comprehend the loans of all the States. If the honorable member meant that-

Mr THEODORE:

– The States were always willing to agree to a scheme for the consolidation of State debts.

Mr LATHAM:

– I am aware that the honorable member has had experience in this matter as a State Premier - an experience which I have not had - but I am not aware that there has ever been any statement by the States that they would agree to any particular scheme for either of these purposes. It is true that the establishment of a sinking fund for all the public debts of the Commonwealth has been discussed for many years, but this is the first time a scheme has been accepted for the control of borrowing or for the establishment of a common sinking fund. Those elements have now been agreed upon for the first time, and they are placed before the House as constituents of an agreement containing also the third element, namely, payments to the States. There has been discussion as to whether the amount of the payments to the States is too high or too low. Honorable members who think it is too low can have no real objection to validating the agreement on that ground, because the payments can be increased by this Parliament. Although the agreement can only be varied by universal consent of the parties, it is possible for this Parliament, under another constitutional power, to make payments to States in’ accordance with their individual needs. That power will persist under section 96. ^

Mr Hughes:

– So we. can increase the amount, but cannot diminish it.

Mr LATHAM:

– Exactly. When it is said that we may increase the payments, it does not mean that we may vary the agreement, but Parliament may make larger payments to the States than are covered in this agreement. Accordingly, there can be no valid objection on the part of those who say that the agreement gives too little to the States. It gives them a constitutional guarantee which can be obtained by no other method. The amendment to the Constitution provides that -

Every such agreement and any such variation thereof shall be binding upon the Common wealth and the States parties thereto notwithstanding anything contained in this Constitution or the Constitution of the several States or in any law of the Parliament of the Commonwealth or of any State.

The right honorable member for North Sydney (Mr. Hughes), said that it was impossible to bind our successors, and yet at the same time he referred to the Constitution under which this Parliament operates. The effect of this agreement will bc to bind our successors. At the same time I agree with the right honorable member that the people can change it if they desire, but they can change it only by constitutional means. The Prime Minister has indicated from the beginning of this discussion that it is not supposed that wisdom was born with the present Parliament, or will die with it, and that doubtless the variation of circumstances in the future may call for a review and reconsideration of the matters dealt with in the agreement. He mentioned that he was prepared to indicate to the States that that was his view; but that leaves untouched the fundamental fact that the agreement cannot be varied without the consent of all the parties to it, unless, indeed, an amendment was made to the Constitution, which is always within the power of the people. Therefore, I submit that the agreement offers improvement in credit to the Commonwealth authorities, and a probable lessening of the taxation to be borne by the people. It offers guaranteed sinking funds which cannot be obtained by any other means, and it offers security and safety to the States for the payments they are to receive. The amount can be increased, but cannot be diminished. Therefore, the agreement is all in the direction of the independence of the States. It makes them more independent of Commonwealth control than they have been since the beginning of federation.

Mr Maxwell:

– Does the honorable gentleman suggest that the agreement could be varied by an alteration of the Constitution f

Mr LATHAM:

– It would be possible for the amendment which has recently been put into the Constitution to be itself amended by the people. If the people thought proper, they could do anything of that character by a further amendment of the Constitution. That, I suggest, is an improbable thing in the case of an agreement such as this - it would not appeal to the people ; but I ‘ have mentioned it as a legal possibility.

Mr Hughes:

– Why should not the whole Constitution go into the melting pot?

Mr LATHAM:

– It might; but this is the maximum guarantee that can possibly be given under any constitution at all. There is the possibility of further grants to individual States, and therefore I sub- mit that the reasons adduced against tha agreement are not sufficiently weighty to entitle honorable members to oppose it.

I shall refer to one other matter in conclusion, the question whether the amounts to be paid to the States are too great or too little. I suggest that we are sometimes apt to draw more or less abstract distinctions, and make them too concrete. We speak. of the Commonwealth and the States, forgetting that they are, after all, the same people differently organized. I agree that it is not unimportant whether the Commonwealth raises money and hands it to the States for them to spend, or whether the States raise it directly; but whatever amount is adjudged by the representatives of the people of Australia in their various Parliaments to be necessary for the maintenance of their governmental agencies and for the other work for which their governments and parliaments are responsible, will be raised by one agency or another. It may be that a larger amount will be raised at one period by the Commonwealth, and at another period by the States, but that is not fundamental. No one can forecast the future with mathematical certainty. I therefore suggest to honorable members that the agreement represents a fair compromise between conflicting opinions, and may be safely accepted by this Parliament as an arrangement which -will probably confer great benefits on Australia as a whole.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

.- Having but a few minutes to speak before the guillotine falls, I commence by recording nay protest against the action of the Government in preventing honorable members from adequately discussing the most important financial 1 proposal that has even been submitted to this House. I feel very warmly on this subject. During the recent election campaign the Western Australian members, almost to a man, and irrespective of party, were opposed to this agreement. It is not a party matter, and has not been debated on party lines. Therefore, there is no reason why, when the division is taken, we should abandon the attitude we took up during the election campaign. If any honorable member from Western Australia imagines that he sees in the referendum vote a mandate to carry the agreement, the Attorney-General’s frank statement that it is not so regarded should convince him that he is mistaken. I commend the AttorneyGeneral’s remarks on the referendum to my fellow members from Western Australia. In endeavouring to clinch the Government’s arguments in favour of the agreement, the Attorney-General said that the historical aspects of the matter were of no consequence. If I had time I could show that they are of supreme importance. He went on to say that this agreement had been accepted by the six State Parliaments. It is common knowledge that in 1927, after several efforts to bring the State Treasurers to heel, and browbeat them into the acceptance of this unjust proposal put forward by the Commonwealth Government, this Parliament was induced to abolish the per capita payments that had been in operation since 1910. Thus, the States were stripped of every vestige of legal claim to the money they had been receiving up to that time, and, as was pointed out by the right honorable members for Balaclava and North Sydney, they had no alternative but to accept the small solatium that was offered by the Commonwealth Government. The Attorney-General has stated that, by this agreement, the finances of the States are stabilized for the next 58 years. In the limited time at my disposal, I shall endeavour to show that it will be impossible for them, under the terms of this arrangement, to carry out that development which they alone can effect. I do not propose to deal at length with the provisions relating to the establishment of a loan council, and the consolidation of the public debt. In the main I am in favour of them. As a matter of fact, they are not the children of this Government; similar proposals have been made for many years past. The only objection I have to them is that they have been introduced dishonestly. Good provisions are allied with infamous ones, and thus the people had not a fair chance to consider the agreement on its individual merits. On many occasions the Prime Minister has told us that the agreement is important. It is, and we who represent the States owe a duty to them. I am not a little Australian; I place my native land before anything else. But I should be lacking in my duty if, merely to aggrandize, at the expense of the States, a body of which I am a member, I voted for an agreement which will prevent the State Governments, the most important instrument in our political system, from functioning properly. What are the proposals of the Government? In effect the States are told that they can have, for the next 58 years, the £7,500,000 per annum that they were receiving by way of per capita payments on the 30th June, 1927, but that amount is to be earmarked for payment of the interest on State debts. In addition, a sinking fund of 7s. 6d. per annum is to be established for amortization of existing debts, and of that amount the States will contribute 5s. per cent, and the Commonwealth 2s. 6d. per cent. This will involve the Commonwealth in an additional annual expenditure of £801,000. But the “catch” in the agreement is that the annual payment of £7,500,000, plus the £801,000 in respect of the sinking fund, will cease at the end of 58 years, and the States will not be left with a feather to fly with. One small payment will continue, namely, the increased amount of £163,000 in respect of transferred properties. When certain properties, including post office buildings and customs houses, were transferred from the States to the Commonwealth, the latter, instead of purchasing them outright, agreed to pay 3£ per cent, on their capital value. That arrangement was fair enough before the war when 3£ per cent, was the current rate of interest. After a very hard fight, in which every State Treasurer complained of the parsimony of the Commonwealth Government, the latter has now agreed to pay interest at the rate of 5 per cent. in respect of the transferred properties, and because of this it claims that it is distributing largesse, is solving financial problems, and is helping the States. Yet, while it allows only 5 per cent. to fellow Australians in the States who are in difficulties, it is paying to the Jews of New York 51/4 per cent. for loans floated below par. I cannot be convinced that that arrangement is evidence of benevolence, or that the Federal Government has a national outlook. Some honorable members have baulked at trying to anticipate what the States will get from the Commonwealth through the 5s. per cent. per annum contribution towards the sinking fund on new debts. The States are to contribute another 5s. per annum, making the total sinking fund 10s. per cent. which will wipe out the debt within 53 years. The average increase of Australia’s population over a large number of years has been 2 per cent., and if that rate of increase continues - and by the law of averages it should - the population of the Commonwealth at the end of 58 years will be- 20,000,000. If the debt increases at the same rate as in the past, the States will be bearing the enormous liability of £1,792,000,000, and all that they will receive from the Commonwealth will be £4,500,000 per annum by way of comtribution towards the sinking fund. If the per capita payments were continued, £25,000,000 - nearly six times as much as the Commonwealth now proposes to give - would be divided amongst the States. I know there is a tendency to say “After us, the deluge,” but we have before us the bond between the Commonwealth and the States, and let us be honorable. What are the functions of the Commonwealth? Defence is important only in war time, and the only other big federal responsibility is the provision of postal, telegraph and telephonic services. But the States have to control lands, railways, timber, education, roads, police, and health. The , Prime Minister sought to drive a wedge between New South Wales and Western Australia. He asked whether New South Wales should continue to receive per capita payments in respect of a popula tion of 2,500,000, whereas poor Western Australia, with a large territory to develop, would receive payment on the basis of a population of only 400,000? The representatives of Western Australia answer “Yes. If New South Wales receives from the Commonwealth, in proportion to what it pays in customs and excise duties, Western Australia will not complain.” But, whereas the population of New South Wales increased between 1890 and 1927 by 100 per cent., that of Western Australia increased by 800 per cent., and it would have nothing to fear if the per capita payments continued. The Government of my State has the responsibility of developing one-third of the Continent, and its people are opposed to the control of domestic affairs by a federal government. Look at the condition of the Northern Territory after years of federal administration, and weep ! Look at everything this Commonwealth Government has attempted to do abroad ! The American colonies were lost to Great Britain through a centralized system of government. The representatives of Western Australia, irrespective of how we may vote, are convinced that this is an unjust agreement from the point of view of the States.

Mr SPEAKER:

– Order ! The time allotted for the second reading stage has expired.

Question - That the words proposed to be omitted stand part of the question - (Mr. Mann’s amendment) - put. The House divided.

AYES: 38

NOES: 32

Majority . . . . 6

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Question - That the bill be now read a second time - put. The House divided.

AYES: 38

NOES: 32

Majority 6

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Validation of agreement).

Mr GREGORY:
Swan

.- Certain aspects of the discussion on the second-reading debate surprised me. One was the suggestion of a possible alteration of the agreement, within a few years, and another the inference, particularly by the right honorable member for North Sydney, that the Commonwealth and the States are two entirely separate parties with little friendship between them. It should be realized at once that while this Parliament is situated in this remote spot, and is endowed with large powers under the Constitution, it must give every opportunity to the States to develop so that Australia as a whole may have unlimited prosperity. That will never come about if enmity exists between the Commonwealth and the States. We have heard to-night much about the possibilities of greater powers being given to the Commonwealth. I recently gave to this House a portion of a speech by Mr. Coolidge which was repeated also by the late honorable member for Wakefield. In it, Mr. Coolidge dealt with a position somewhat similar to ours. Representations had been made urging him to obtain increased powers for the National Parliament. He pointed out definitely the disadvantages of such action. He said that they had to govern a huge territory; that government should be brought as close as possible to the people; and that any increase of bureaucratic control would, to a great extent, be tyrannical and contrary to the interests of the people. The same thing applies here. We have a big territory to govern, and we have State Parliaments representative of the people who know their cond itions and requirements far better than we can. This National Parliament situated at Canberra, is to agreat extent influenced by Victoria and New South Wales, and it has little’ regard for the needs of the smaller States.

Mr Parkhill:

– Does Western Australia want all the revenue?

Mr GREGORY:

– We want some of it. When this agreement was first discussed, I strongly opposed it.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Why did not the honorable member vote on the second reading?

Mr GREGORY:

– Because there was nothing to be gained by voting. When the agreement was brought down, I did my utmost to oppose it, but now that it has been approved, not only by this Parliament, but also by the State Parliaments, and by the people by way of referendum, I feel that I cannot, in justice to the people, oppose their opinion. I have been compelled, against my will, to accept this agreement, but at the same time I decline to make myself responsible in any way for its accomplishment. I should not have spoken to-night had it not been for the statement that this agreement is likely to be repudiated later, notwithstanding that the Parliaments and the people of Australia have endorsed it. I wonder what is becoming of this National Parliament, when some of its members declare that in a few year’s time the Government will change and the agreement will be repudiated.

Mr Scullin:

– That is what the Prime Minister said.

Mr GREGORY:

– No. The Prime Minister said that it might be possible to vary the agreement.

Mr Scullin:

– He said that in all probability it would be considered again in ten years’ time.

Mr Bruce:

– The only variation would be by mutual consent.

Mr GREGORY:

– The statement was made iu this chamber that the agreement may be repudiated. Western Australia is trying more than any other State to do its duty to the Commonwealth. We are expending huge sums of money in bringing immigrants into this country for the purpose of settling them on the land and producing wealth. It is only by the production of wealth that we shall have prosperity in Australia. By increasing the number of settlers on the land, we increase the population of other parts of Australia, because the requirements of our settlers are supplied by the manufacturers of the eastern States. Every immigrant who is settled on the land in Western Australia, at huge expense to that State, increases the business and the population of the eastern States. The people of the West have to foot the bill. Western Australia will suffer severely as a result of the withdrawal of the per capita payments and the substitution of this agreement. We have heard a little ancient history to-night, but no mention was made of the fact that when the Constitution was framed, it specially provided that for all time, three-quarters of the customs revenue should be returned to the people of Australia. That was the condition under which they were urged to enter the federation. Huge sums of money must be borrowed by the States for developmental purposes, but. under this agreement, the chief source of revenue is taken from them.. The right honorable member for Balaclava (Mr. Watt) and the right honorable member for North Sydney (Mr. Hughes) both said that when federation took place the people believed that State Governments would be abolished. That is a fallacy and an absurdity. At federation we were told that the cost of the National Parliament would be a few hundred thousand pounds a year, and that the States would be left with sovereign rights unimpaired and with ample funds to carry out their developmental works. The intention was that the Commonwealth Parliament should look after big national matters and not make an effort to aggrandize itself at the expense of the States by obtaining control of all legislation pertaining to the development of this great country, A stranger whom. I met in the gallery only two nights ago, told me that when he voted for federation he believed that there would be only one Parliament; but when he had spent two nights in the galleries here, he caine to the conclusion that it was just as well they had a Parliament in their State, and that the National Parliament should not be given any greater powers than those which the Constitution at present confers upon it. There is no surer way to break up the federation than by neglecting to conserve the interests of the smaller States. For a long time there has been a feeling in Western Australia that it would be far better if that State were outside the federation, one effect of which has been the destruction of the mining industry, with a consequent throwing out of employment of thousands of miners. Let any honorable member go to the farmers in Western Australia and ask what they think of the conditions that have been imposed as a result of the legislation of the National Parliament. He would be told plainly that they would be exceedingly pleased if they could get outside the federation. This agreement will have a very bad effect upon that State. For the first seven or eight years, or probably for a slightly longer period, those who control its destinies may be in a better financial position through the passing of this act. But what will happen in the succeeding years ? The receipt of the per capita payments for another ten years would not do much good. If they could have been continued for a further 25 years, the results would have been beneficial; but there was no hope of obtaining that. The statement that the agreement can be repudiated in a very short period, makes one wonder what type of Parliament we have. It is degrading to have such suggestions made in this Parliament. Apparently the moral aspect was only a minor consideration in connexion with both the withdrawal of the per capita payments and the making of the agreement that we now have before us. I wish to make it clear that ‘ Western Australia has suffered severely under the operation of the laws of the Commonwealth. The high tariff, and the provisions of the Navigation Act, have detrimentally affected the development of that State. During the last election campaign I traversed a very large area of the south coast that I had not seen for years. The change that has taken place as a result of the experience gained, the application of science, and the widespread use of superphosphates, has been something wonderful. Land which formerly would not carry one sheep to every 50 acres, now carries, in some instances, as many as three sheep to the acre. An enormous area of wheat land is being opened up at the present time. It is country that must be developed cheaply. The farmers this year have an average of about 94 bushels to the acre. If the cost of production is not reduced, grave disaster will overtake them. A prosperous future for them will benefit both the Commonwealth and the States. It is possible that in the very near future 2.000 or 3,000 additional settlers will be placed upon the land, and be the means of increasing the avenues of employment for the whole of the people of Australia. The special grant to Western Australia is referred to as a “sop.” When one considers the enormous amounts that are paid out in New South Wales and Victoria by way of bounty, one realizes that the sum granted to Western Australia is indeed a small one. I hope that the Commonwealth will soon begin to display a different feeling towards the States, and not consider that it and the State Parliaments are at enmity. I trust that it will allow the States to control their domestic affairs, and confine itself to national questions. If we continue to interfere with the States we shall find, in the near .future, in the case of Western Australia at least, that there will be such a strong demand for secession that we shall be powerless to resist it. The people of that State are becoming tired of listening to wretched platitudes. When this Parliament realizes that it owes a duty to the poorer as well as to the richer States, it will assume the position that it should occupy. I have no time for the bill. I believe that a grave mistake was made when it was brought forward; but I accept the decision of the State Parliament and the vote of the people at the recent referendum while personally refusing to accept any responsibility by voting for it. I hope that there will be no question of the repudiation of the agreement which has been entered into, but that it will be given effect as far as possible. Further, I urge the Government to realize immediately the injury that has been done to the gold-mining industry in Western Australia. It has been a long time making up its mind as to what assistance should be given to that industry. It should also realize the disadvantages under which many of our settlers are labouring. If it wishes to preserve their loyalty, it must take action to remedy their grievances and realize the need of economic reform.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

. - It is a great pity that the people of Western Australia cannot see how some of their representatives are conducting themselves in this chamber to-night. The speech of the honorable member for Swan does him no credit, but rather the opposite. His is an amazing attitude.

Mr Gregory:

– It may be to the honorable member.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– lt is to everybody. He claims that Western Australia will be the greatest sufferer under this agreement. According to his own statement, he went through Western Australia during the last election campaign and denounced it wherever he spoke. Yet, when he is given the opportunity to register his disapproval in a practical manner, he dashes out of the chamber, presumably on the principle that, “He who fights and runs away, will live to fight another day.” I believe his time is occupied more in running away than in fighting. I think that the agreement will do a grave injustice to Western Australia as well as to the other States. Any one who listened to the honorable member for Kalgoorlie (Mr. A. Green) tonight, must ndni.it that Western Australia will suffer greatly under it. I expect that the speech which has just been delivered by the honorable member for Swan will be distributed among his constituents, and they will be asked to believe that he put up a heroic fight for the people of his State. They will be tola everything except the manner in which he ran away from the vote. There is something to be said for the honorable member for Forrest (Mr. Prowse). Although he voted contrary to the way in which his speeches indicated he would vote, he has the courage to proclaim that he is simply a party hack, and that he obeyed the crack of the party whip. But what can be said of an honorable member who tells us that Western Australia will be the greatest sufferer under this agreement, and yet when he is given the opportunity to do something in defence of the State which has been sending him here for many years, runs away? He made the amazing suggestion that the people of Western Australia voted for this agreement because they gave an affirmative vote on the question submitted to them. He failed to recognize that in that event they must have given an emphatic vote of want of confidence in him, because he travelled throughout Western Australia and advised them to vote against it. Does the honorable member admit that they expressed a want of confidence in him?

Mr Gregory:

– Did not the honorable member ask them to vote “ No “ ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member has been too long in Parliament to try to make us believe that there is any point in his interjection. We told the people that we were opposed to this agreement; but in common with all parties, we asked them to affirm the desirability of altering the Constitution to enable an agreement - not this agreement - to be made. The Prime Minister (Mr. Bruce) fairly explained that point, when he said, “ I made it definite and clear that the people were not asked to commit themselves to this agreement.” Yet the honorable member for Swan rises in his place and declares that the people of Western Australia, at any rate, believed that they were voting for this agreement. He knows well that that was not so.

Mr Gregory:

– The great majority did.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member knows that Senator Colebatch, who topped the poll for the Senate election in Western Australia, vigorously opposed the agreement.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– All the senators in that State, with the exception of Senator Kingsmill, did.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is so, I believe, and Senator Kingsmill only just secured election. If he had not been on the party ticket he would probably have been defeated. Things are coming to a pretty pass when, on a matter of this kind, members of this Parliament will disobey the instructions of their constituents, and go against their own convictions, so as to vote slavishly with the Government when the party whip is cracked. The honorable member for Balaclava (Mr. Watt) this afternoon expressed the pious hope that a non-party vote would be taken on this bill, and he emphatically committed himself to the limitation to ten years of the term during which payments were to be made to the States. After he had made his speech, he spent the remainder of the evening in conference with the Prime Minister. Whatever means the Prime Minister has for dealing with recalcitrant members of his party, they appear to be adequate, and the right honorable member for Balaclava, after his brave statements, cut a sorry figure when he returned to the chamber and voted in accordance, with the instructions of his party.

Mr Fenton:

– He is making a glorious exit from public life.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– If it is true that he is shortly making his exit from public life, he is certainly making a noteworthy one, but I should say that it was inglorious, rather than glorious. The honorable member for Forrest (Mr. Prowse), at any rate, makes it quite clear that whatever his own convictions may be, he is prepared to vote in accordance with the directions of his party leaders. In short, he admits that he is a party hack.

The CHAIRMAN:

– I remind the honorable member that the clause is under discussion, and not the conduct of other honorable members.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I am merely pointing out that the honorable member for Forrest, although he spoke very definitely against this agreement, voted for it to-night. This is what he said -

Under this agreement, and more particularly under the previous proposal, the States would become practically the vassals of the Commonwealth. I 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.’ . . . 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.

He then goes on to say -

If the fiscal beliefs of the majority in this Parliament are realized, the revenue derived 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 Government itself may get into difficulties.

That argument has been used frequently by other honorable members, but a good argument cannot be repeated too often. I repeat his statements now merely to show how much opposed they are to his action in voting for the bill. Then the honorable member went on to say what he would do when the elections came on. He said -

I propose to place my views impartially before the electors in my constituency when the referendum is taken. The amendment submitted by the Opposition is most reasonable, and I should be glad if the Government could accept it. If we refer this 58 years’ contract to the people directly, this Parliament would be absolved from pledging posterity on a most uncertain matter.

Notwithstanding these statements, the honorable member for Forrest is satisfied by his vote to-night to efface himself and his constituents. What is the explanation ? There is only one, and it is that the bill has been made a strictly party issue. The honorable member for Fawkner (Mr. Maxwell) has frequently by interjection indicated that he is opposed to this agreement. He has described it as Hobson’s choice. He said that the States agreed to it because they had no option. Yet he has not in this debate seen fit to stand in his place and tell us exactly what he thinks about the bill.

Mr Maxwell:

– I shall stand in my place, and say exactly what I think of it.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Yes, after the vote has been taken.

Mr Maxwell:

– No.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– But the vote has already been taken on the amendment to limit the period of payment to ten years, and on the second reading of the bill. Yet the honorable member has not seen fit to do his duty by his constituents, and tell them clearly what his attitude is on this measure. He should say whether he thinks that the agreement should stand for 58 years.

Mr Maxwell:

– The schoolmaster without a cane !

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– If I have no cane, I may point out that there is a whip on the other side, and the honorable member is well aware of the fact. What amazes one is that although the right honorable member for Balaclava (Mr. Watt) and others agreed with the amendment submitted by the honorable member for Perth they seem to be satisfied with the explanation df the Prime Minister. The right honorable member for Balaclava indicated clearly that he would not vote for the agreement unless some guarantee was given by the Prime

Minister that he would enter into an arrangement with the States to limit its operation to ten years. That could be done by having two agreements. The Prime Minister said the payments to the States had to be connected with the other proposal for the liquidation of the State debts, which clearly shows that the two matters could be kept separate. In what way can the Prime Minister commit future State governments? Those governments will not continue long in office, and this Government will not be in office very much longer either. If members, like the honorable member for Swan (Mr. Gregory), and the honorable member for Fawkner (Mr. Maxwell) would only vote as they speak, this Government would have been defeated long ago. The agreement is to last for 58 years. But this Government might not be in office for 58 weeks. To show that the States had no alternative but’ to accept the proposal, I need only quote the following recent remarks by the Prime Minister : -

The first step taken to solve this problem was the conference with the Premiers held in 1923 - just after this Government came into office. The subject was exhaustively discussed, and at one time it looked as if an agreement would be reached. Five of the six States approved the proposals of the Commonwealth in principle; but, unhappily, the negotiations fell through and the conference closed. The matter was pursued by negotiations with the States. A further conference was held in May, 1920, when it became evident that no solution of the difficulty would be found so long as the per capita payments were continued.

As the honorable member for Fawkner said, the States had Hobson’s choice, and, in order to give the States that choice, he voted with the Government. As pointed out by the right honorable member for North Sydney (Mr. Hughes) the agreement puts the idea of new States out of court for 58 years. The honorable member for New England (Mr. Thompson) has often told us that he was returned to this House for one purpose, and that was to bring about new States. The Treasurer has also informed us that one of the main reasons for the bringing into being of the Country party was the need for that reform. It now goes forth to the world that at the earliest there can be no new States for 58 years!

Mr. Holman, who was commissioned to inquire into the subject, reported against the proposal, but the Leader of the Country party said that his report was biased, and that his decisions were not based on the evidence.

Mr Killen:

– If this agreement is adopted, it will be easier to give effect to the Country party’s policy in the matter of new States.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member for Riverina (Mr. Killen) will now be able to tell his constituents that in agreeing to the Government’s proposals, he has assisted in shelving the new State movement for at least 58 years. The electors in the Riverina should support the Labour party, who believe in one central Parliament which would delegate powers to properly constituted authorities in provinces such as the Riverina, of which the honorable member represents an important part.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Does the honorable member know what is really embodied in the new State movement?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I know that the honorable member for Richmond strongly advocated the creation of new States prior to his election to this Parliament, but he now appears to have lost all interest in the subject. I do not think he has given sufficient attention to the financial agreement to realize the extent to which it interferes with the platform of the party of which he is a member. He will have difficulty in explaining to his constituents the vote he recorded on this measure. I find on referring to the division taken when this subject was last under discussion in this House, that Sir Elliot Johnson, Mr. DuncanHughes, Sir John Gellibrand, Dr. Nott, Mr. Seabrook, Mr. Manning and Mr. Ley supported the agreement. All of those gentlemen were defeated at the last election.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr PARSONS:
Angas

.- I have been a supporter of the proposed financial agreement between the Commonwealth and the States since it was first introduced; and although there was a certain amount of opposition in South Australia, to the Government’s proposals, I strongly advocated its acceptance during the last Parliament. I have endeavoured to influence public opinion in South Australia, and I can assure honorable members that, notwithstanding the views of some of my South Australian colleagues opposite, the general opinion in South Australia is now strongly in favour of the agreement. During the election campaign, I told the electors of Angas that in voting “Yes” at the referendum they were not necessarily supporting the financial agreement, but merely giving the Commonwealth power to enter into a financial arrangement with the States. At the same time, I informed them that if I were elected I would support the Government’s proposals. As I was returned with a majority of over 8,000 votes, which was 32 times greater than the majority I obtained at the preceding election, I am safe in assuming that the electors of Angas favour the agreement. After carefully considering its provisions and conferring with personal friends conversant with finance in all its ramifications, I have concluded that it will be of advantage not only to South Australia but to the whole Commonwealth. I always thought that honorable members opposite, as a party, thought only of the future, but they are continually referring to what happened years ago. As a progressive democrat I do not believe in living in the misty past. A lot of water has run under the bridges since the inception of federation. During the debates in the Federal Convention, Sir George Turner estimated that the expenditure of the Commonwealth would be only about £300,000 per annum, but that in a great national emergency it might increase to £1,000,000. As a result of that estimate of the financial requirements of the Commonwealth, the socalled Braddon “ blot “ was placed in the Constitution. During the ten years of its currency the Commonwealth took over a number of State obligations, including old-age pensions. When that provision expired the “per capita payments were substituted, and they also had a currency of ten years, but since that basis of assistance for the States was adopted in 1910, this country has experienced four years of war, and the national emergency which in pre-federation days was estimated to cost £1,000,000 involved the Commonwealth in an expenditure of approximately £400,000,000. To attempt to adjust the financial relations between the Commonwealth and the States for the next ten years on the basis of what was considered appropriate nearly thirty years ago would be childish. Honorable members opposite are opposed to this agreement because it is sound and statesmanlike, whereas Labour governments in both Federal and State Parliaments have been notorious for their hopeless muddling of the finances. Indeed, some of the troubles which South Australia is experiencing at the present time are the result of three years of Labour squandering, and the Liberal Government is now endeavouring to clean up the financial mess left by its predecessors. There are several features of, the agreement which should appeal to all true lovers of Australia. First, the Commonwealth is to take over the debts of the States amounting to over £600,000,000 and provide for the payment of interest thereon and a sinking fund for their redemption. Within the 58 years the States will be relieved entirely of the terrible incubus of this £600,000,000 of debt.

Secondly, the Commonwealth is to contribute 5s. per cent, towards a sinking fund for the redemption of all new borrowings. The Loan Council must commend itself to every thinking person. It is understandable that in some quarters there will be opposition to the agreement, because the Loan Council will act as a brake on spendthrift administration such as has characterized certain governments in recent years. In future, no individual government will be able to indulge in an orgy of expenditure, and thus increase the interest rate to be paid . by other governments and at the same time lower Australian credit in the money markets of the world. All the States are suffering more or less from the, existing economic position, and the immediate effect of the agreement will be that they will receive from the Commonwealth over a period of years a greater amount under the agreement than if the per capita payments had been continued. So the agreement is a very fine immediate palliative for the financial ills of the States. As democrats, we believe in majority rule. The recent referendum in regard to this agreement produced an overwhelming affirmative majority in every State, and I am prepared to make a liberal donation to any organization honorable members may nominate if any one of them can find in South Australia after interrogating at random any number of persons from 100 upwards, 5 per cent, who did not believe that in voting “ Yes “ they were indicating their support of the financial agreement.

At the present time the finances of South Australia are not in a healthy state. A royal commission has been investigating the disabilities of the State, and I am glad that the Prime Minister has asked it to expedite its report as much as possible. I am certain that when the matter comes before this Parliament, South Australia will receive, as it has a right to do, and as Tasmania and Western Australia have already received, a special grant to compensate it for the disabilities under which it labours as a result of federation. Although an attempt has been made in South Australia to manufacture opposition to the agreement because the report of the Disabilities Commission has not yet been made available, every one who understands anything about the subject realizes that the two things are entirely separate. I pledged myself to my electors that I would vote for the ratification of the agreement. Had honorable members opposite been able to advance a sound case against the agreement and I had felt compelled to vote against it, I should immediately thereafter have sent in my resignation as a member of the Parliament. Fortunately, I have no need to do that, for the case against the agreement has been extremely weak. I have had handed to me a copy of a telegram sent to the honorable member for Hindmarsh (Mr. Makin) on this subject. I received a similar telegram last evening and with the honorable member for Barker (Mr. Cameron), and the honorable member for Wakefield (Mr. Collins), who also received like telegrams, replied that the ratification of the agreement and the report of the Disabilities Commission were two entirely separate subjects which should not be confused. I and my colleagues from South Australia on this side of the chamber have no doubt that we are acting in the best interests of our State in doing all that we can to insure the adoption of the agreement. In years to come South Australia will point to the vote of my colleagues from Barker and Wakefield and myself and say these members voted in the interests of their native State.

Mr LACEY:
Grey

.- It is re’grettable that we should be forced to rush this bill through Parliament. I have been amazed at the attitude of the honorable member for Swan (Mr. Gregory) in connexion with it. He has just spoken against the bill, but he disregarded his opportunity to oppose the bill effectively. If he were sincere he would have voted against the secondreading of the measure, but when the vote was taken he was not in the chamber. The platform of the Labour party sets out quite clearly that until the Commonwealth Constitution has been amended the per capita payments to the States should be continued without diminution. The Prime Minister, the Treasurer, and the honorable member for Angas (Mr. Parsons) among others, have tried to argue that the affirmative vote at the referendum was equivalent to acceptance of the agreement; but both the Prime Minister and the Leader of the Opposition made it clear during the election campaign that the two questions were to be considered separately. For my own part I told my constituents that the Prime Minister would undoubtedly argue in Parliament that if the referendum were decided in the affirmative the agreement would have to be adopted. It has been declared that the States accepted the withdrawal of the per capita payments and the substitution of the proposals contained in this bill only under duress. That has been denied by honorable members opposite. I shall quote from a speech delivered by Mr. Hill, the Leader of the Opposition in the South Australian Parliament, which indicates how South Australia regards the financial agreement. It is not so much for the speech as the interjections that I wish to bring the utterance to the notice of honorable members. It reads -

Mr HILL:
ECHUCA, VICTORIA

– Instead of accepting this agreement, we should have maintained our hostility.

Mr. Reidy. ; What would we have done in the meantime?

Progress reported.

page 903

HOUE OF MEETING

Motion (by Mr. Bruce) agreed to -

That the House at its rising adjourn until 10.30 a.m. to-morrow.

House adjourned at 11.38 p.m.

Cite as: Australia, House of Representatives, Debates, 7 March 1929, viewed 22 October 2017, <http://historichansard.net/hofreps/1929/19290307_reps_11_120/>.